EX-99 2 ex_99-1.htm EX-99-1-PRESS RELEASE FINANCIALS

Exhibit 99.1

 


 

 

Contact:

 

 

Susan Hickey

 

 

NetRatings, Inc.

 

 

212-703-5909

 

 

shickey@netratings.com

 

                

NETRATINGS ANNOUNCES FIRST QUARTER 2007 FINANCIAL RESULTS

 

New York, May 10, 2007– NetRatings, Inc. (NASDAQ: NTRT), a global leader in Internet media and market research, today announced financial results for the first quarter ended March 31, 2007.

 

NetRatings reported revenues of $22 million for the first quarter of 2007, a 20 percent increase over revenues of $18.3 million in the first quarter of 2006.

 

Net income for the first quarter of 2007 was $193,000, or $0.01 per share, on approximately 35.4 million shares. This compares with a net loss of ($255,000), or ($0.01) per share, in the first quarter of 2006, on approximately 34.7 million shares. During the first quarter of 2007, NetRatings recorded $1.9 million in acquisition expenses related to its planned merger with The Nielsen Company B.V.

 

For the first quarter of 2007, on a pro forma EBITDA basis (a non-GAAP measure that reflects net income/loss excluding interest income/expense, taxes, depreciation, amortization of intangibles and stock-based compensation, as well as acquisition-related expenses and cumulative effect of change in accounting principles), NetRatings earned $3.7 million, or $0.11 per share, compared to pro forma EBITDA income in the first quarter of 2006 of $1 million, or $0.03 per share. A complete reconciliation of GAAP results to pro forma EBITDA results may be found in the accompanying financial tables and footnote.

 

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Merger Agreement

On Feb. 5, 2007, NetRatings announced that it had signed a definitive merger agreement pursuant to which The Nielsen Company and its subsidiaries will acquire the outstanding publicly held minority interest in NetRatings for $21.00 in cash per share. Nielsen beneficially owns approximately 60 percent of the company’s currently outstanding shares. NetRatings’ board of directors unanimously adopted and approved the merger agreement following the unanimous recommendation of a special committee of NetRatings’ board of directors comprised solely of independent directors. The merger is expected to be completed in the second quarter of 2007, subject to customary conditions and approvals. The exact timing is dependent on the review and clearance of necessary filings with the Securities and Exchange Commission. NetRatings will not hold a conference call or webcast regarding its first quarter results.

 

About NetRatings

NetRatings, Inc. (Nasdaq: NTRT) delivers leading Internet media and market research solutions, marketed globally under the Nielsen//NetRatings brand. With high quality, technology-driven products and services, Nielsen//NetRatings enables clients to make informed business decisions regarding their online strategies. The Nielsen//NetRatings product portfolio includes panel-based and site-centric Internet audience measurement services, online advertising intelligence, user lifestyle, demographic and product brand preferences data, Internet reach and frequency planning tools, and custom data, research and analysis. For more information, visit www.nielsen-netratings.com

 

Safe Harbor Statement

This news release contains “forward-looking statements.” Such statements include, but are not limited to, statements relating to anticipated financial and operating results, the companies’ plans, objectives, expectations and intentions and other statements including words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “will,” “should,” “may,” and other similar expressions. Such statements are based upon the current beliefs and expectations of Nielsen’s and NetRatings’ management and involve a number of significant risks and uncertainties. Actual results may differ materially from the results anticipated in these forward-looking statements. The following factors, among others, could cause or contribute to such material differences: change in general economic conditions; the performance of financial markets and interest rates; the ability to obtain governmental approvals of the merger transaction or to satisfy other conditions to the merger transaction on the proposed terms and schedule; increased competition and NetRatings’ business and financial results. Information about potential factors that may affect NetRatings’ business and financial results is included in its annual report on Form 10-K for the fiscal year ended Dec. 31, 2006 and its quarterly reports on Form 10-Q, including, without limitation, under the captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” Each of these documents is on file with the SEC and is available free of charge at the SEC’s Internet site (http://www.sec.gov). Readers of this press release are referred to such filings. We caution you not to place undue reliance on our forward-looking statements, which speak only as of the date of this news release or the date of the documents incorporated by reference in this news release.

 

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NetRatings, Inc.

Statements of Operations

(in thousands, except per share data)

 

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2007

 

 

 

2006

 

 

 

unaudited

 

 

 

unaudited

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

21,958

 

 

 

$

18,280

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

6,120

 

 

 

 

5,566

 

Gross profit

 

 

15,838

 

 

 

 

12,714

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

 

3,053

 

 

 

 

2,643

 

Sales and marketing

 

 

6,470

 

 

 

 

6,347

 

General and administrative

 

 

3,746

 

 

 

 

3,450

 

Acquisition-related expenses

 

 

1,888

 

 

 

 

 

Amortization of intangibles

 

 

594

 

 

 

 

594

 

Amortization of stock-based compensation

 

 

1,068

 

 

 

 

1,164

 

Total operating expenses

 

 

16,819

 

 

 

 

14,198

 

Loss from operations

 

 

(981

)

 

 

 

(1,484

)

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

1,956

 

 

 

 

1,161

 

Minority interest in gains of consolidated subsidiaries

 

 

(29

)

 

 

 

(163

)

 

 

 

 

 

 

 

 

 

 

Net income/(loss) before provision for income taxes and cumulative effect of change in accounting principle

 

 

946

 

 

 

 

(486

)

Provision for income taxes

 

 

(753

)

 

 

 

(138

)

 

 

 

 

 

 

 

 

 

 

Net income/(loss) before cumulative effect of change in accounting principle

 

$

193

 

 

 

$

(624

)

Cumulative effect of change in accounting principle

 

 

 

 

 

 

369

 

Net income/(loss)

 

$

193

 

 

 

$

(255

)

 

 

 

 

 

 

 

 

 

 

Basic net income/(loss) per common share:

 

 

 

 

 

 

 

 

 

Before cumulative effect of change in accounting principle

 

$

0.01

 

 

 

$

(0.02

)

Cumulative effect of change in accounting principle

 

 

 

 

 

 

0.01

 

Net income/(loss) per common share

 

$

0.01

 

 

 

$

(0.01

)

 

 

 

 

 

 

 

 

 

 

Diluted net income/(loss) per common share:

 

 

 

 

 

 

 

 

 

Before cumulative effect of change in accounting principle

 

$

0.01

 

 

 

$

(0.02

)

Cumulative effect of change in accounting principle

 

 

 

 

 

 

0.01

 

Net income/(loss) per common share

 

$

0.01

 

 

 

$

(0.01

)

 

 

 

 

 

 

 

 

 

 

Shares used to compute basic net income/(loss) and

 

 

 

 

 

 

 

 

 

Pro Forma EBITDA net income/(loss) per common share

 

 

35,397

 

 

 

 

34,705

 

 

 

 

 

 

 

 

 

 

 

Shares used to compute diluted net income/(loss) and

 

 

 

 

 

 

 

 

 

Pro Forma EBITDA net income/(loss) per common share

 

 

36,892

 

 

 

 

34,705

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2007

 

 

 

2006

 

 

 

unaudited

 

 

 

unaudited

 

 

 

 

 

 

 

 

 

 

 

Pro Forma EBITDA (1)

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

$

193

 

 

 

$

(255

)

Less:

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

(1,956

)

 

 

 

(1,161

)

Provision for income taxes

 

 

753

 

 

 

 

138

 

Depreciation

 

 

1,208

 

 

 

 

896

 

Acquisition-related expenses

 

 

1,888

 

 

 

 

 

Amortization of intangibles

 

 

594

 

 

 

 

594

 

Amortization of stock-based compensation

 

 

1,068

 

 

 

 

1,164

 

Cumulative effect of change in accounting principle

 

 

 

 

 

 

(369

)

Pro Forma EBITDA

 

$

3,748

 

 

 

$

1,007

 

 

 

 

 

 

 

 

 

 

 

Basic Pro Forma EBITDA income/(loss) per common share

 

$

0.11

 

 

 

$

0.03

 

 

 

 

 

 

 

 

 

 

 

Diluted Pro Forma EBITDA income/(loss) per common share

 

$

0.10

 

 

 

$

0.03

 

 

 

 

 

 

 

 

 

 

 

 

(1) Pro Forma EBITDA reflects net income/loss excluding interest income/expense, taxes, depreciation, acquisition-related expenses, amortization of intangibles and stock-based compensation, and cumulative effect of change in accounting principle. Management uses this measure internally to evaluate the company’s performance. NetRatings provides results, guidance, and associated reconciliation of this non-GAAP measure to the investment community, as we believe it provides consistent and comparable measures to help investors understand our current and future operating cash flow performance. Interest income/expense and provision for income taxes are excluded as it is not related to our operating performance. Acquisition-related expenses are excluded as they are one-time items not directly related to operations. Depreciation expenses, amortization of stock-based compensation, and cumulative effect of change in accounting principle are excluded as they are non-cash charges. NetRatings excludes amortization of intangibles as it is a non-cash charge not directly related to operations. Pro Forma EBITDA data is provided as a complement to results provided in accordance with GAAP, and should be considered in addition to, and not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP.

 

 

 

 

 

 

NetRatings, Inc.

Balance Sheets

(in thousands)

 

 

 

March 31,

 

 

 

 

December 31,

 

 

 

2007

 

 

 

 

2006

 

ASSETS

 

unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash, cash equivalents & short-term

 

 

 

 

 

 

 

 

 

marketable securities

 

$

172,811

 

 

 

$

171,693

 

Accounts receivable

 

 

26,070

 

 

 

 

26,329

 

Other current assets

 

 

4,004

 

 

 

 

3,544

 

Total current assets

 

 

202,885

 

 

 

 

201,566

 

 

 

 

 

 

 

 

 

 

 

Long-term marketable securities

 

 

12,927

 

 

 

 

15,320

 

Property and equipment

 

 

9,413

 

 

 

 

9,582

 

Intangibles

 

 

10,307

 

 

 

 

10,901

 

Goodwill

 

 

76,151

 

 

 

 

76,301

 

Other assets

 

 

1,848

 

 

 

 

1,803

 

Total assets

 

$

313,531

 

 

 

$

315,473

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

Accounts payable & accrued expenses

 

$

18,617

 

 

 

$

22,991

 

Deferred revenue

 

 

19,100

 

 

 

 

17,632

 

Restructuring liabilities

 

 

331

 

 

 

 

354

 

Total current liabilities

 

 

38,048

 

 

 

 

40,977

 

 

 

 

 

 

 

 

 

 

 

Restructuring liabilities, less current portion

 

 

 

 

 

 

64

 

Total liabilities

 

 

38,048

 

 

 

 

41,041

 

 

 

 

 

 

 

 

 

 

 

Minority interest

 

 

2,250

 

 

 

 

2,221

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

273,233

 

 

 

 

272,211

 

Total liabilities and stockholders’ equity

 

$

313,531

 

 

 

$

315,473

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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