EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1



August 3, 2010

4:00 p.m. Eastern

Market Leader® Announces Second Quarter Results

Strong Franchise Channel Sales Reinforce Growth Expectations for Second Half

KIRKLAND, Wash. – August 3, 2010 – Market Leader, Inc. (NASDAQ: LEDR) today announced results for the quarter ended June 30, 2010.

Financial Highlights



Second quarter revenue of $5.8 million matched results posted during the first quarter.



Net loss of $3.1 million in the second quarter compared to a net loss of $3.4 million in the first quarter.



Adjusted EBITDA loss of $1.6 million in the second quarter compared to $1.7 million in the first quarter.



Cash, cash equivalents and short-term investments totaled $51.9 million at the end of the quarter, an increase of $2.9 million compared to the end of the last quarter.

“We are very encouraged by the ringing endorsements we are receiving from some of the industry’s leading real estate franchise networks,” said Market Leader CEO Ian Morris. “Strong executive support from partners representing thousands of sales opportunities helped drive strong RealtyGenerator® adoption in the second quarter and bodes well for deeper penetration in the second half.”

Vision Growth and Business Transformation Continues

Second quarter revenue from Vision products of $3.4 million was $200,000 higher than the first quarter, and up more than 60 percent over the level just a year ago. Vision revenue growth in the second quarter was primarily driven by new agent customers for Growth LeaderTM.

The positive impact of the company’s Vision products – which now represent 58 percent of total revenue — continues to be evident in Market Leader’s customer metrics. Average revenue per customer rose for the fifth consecutive quarter to $367 per month while customer retention was again among the highest levels achieved in recent years. Vision was also the primary driver of new customer additions which reached their highest level in seven quarters.

Strong Traction with Brokerage Companies Via Franchise Channel

Market Leader signed more than 100 new brokerage offices and teams to its Vision based RealtyGenerator product via its franchise partners late in the second quarter. This record level of quarterly additions from this channel had minimal impact on the quarter but is expected to set the stage for top and bottom line benefits in the coming quarters.


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Business Outlook

Market Leader reaffirmed its expectation of revenue growth during the second half of this year. Although the RealtyGenerator signings via franchise partners had no material impact on second quarter, these new customers are expected to drive higher revenue and advertising expenses in the third quarter. Increased advertising costs and continued investment in customer acquisition and support activities are expected to contribute to a greater adjusted EBITDA loss in the third quarter compared to the second.

Conference Call

Market Leader will host a conference call and live Webcast to discuss second quarter results on Tuesday, August 3, 2010 at 4:30 p.m. Eastern time. To listen to the live conference call, please dial (719) 457-2623. A live Webcast of the call will be available from the Investor Relations section of the company’s Web site at http://www.marketleader.com. An audio replay of the call will also be available to investors beginning at 7:00 p.m. Eastern Time on August 3 until 7:00 p.m. Eastern Time on August 8 by dialing (719) 457-0820 and entering the passcode 4623936#.

Forward-Looking Statements

This release contains forward-looking statements relating to the company’s anticipated plans, products, services, and financial performance. The words “believe,” “expect,” “anticipate,” “intend” and similar expressions identify forward-looking statements, but their absence does not mean the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could affect the company’s actual results include its ability to retain and increase its customer base, to continue to grow revenues from Vision products, to continue to maintain current customer retention levels, to respond to competitive threats and real estate market conditions, to manage lead generation and other costs, to develop new products, and to expand into new lines of business. Please refer to the company’s 2009 Form 10-K filed with the Securities and Exchange Commission for a more detailed description of these and other risks that could materially affect actual results. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. The forward-looking statements are made as of today’s date and the company assumes no obligation to update any such statements to reflect events or circumstances after the date hereof.

Non-GAAP Measure

Adjusted EBITDA is a non-GAAP financial measure provided as a complement to results in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Adjusted EBITDA is not a substitute for measures determined in accordance with GAAP, and may not be comparable to Adjusted EBITDA as reported by other companies. Our use of the term “Adjusted EBITDA” refers to a financial measure defined as earnings or loss before net interest, income taxes, depreciation, amortization, equity in loss of an unconsolidated subsidiary, and stock-based compensation. We believe Adjusted EBITDA to be relevant and useful information to our investors as this measure is an integral part of our internal management reporting and planning process and is the primary measure used by our management to evaluate operating performance. See below for a reconciliation of net loss, the most comparable GAAP measure, to Adjusted EBITDA.


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Market Leader, Inc.


(In thousands)



     Three months ended  
     June 30, 2010     March 31, 2010     June 30, 2009  

Net loss

   $ (3,128   $ (3,449   $ (3,015



Interest income and expenses, net

     (90     (37     (59

Equity in loss of unconsolidated subsidiary

     55        136        61   

Depreciation and amortization of property and equipment

     619        664        780   

Amortization of acquired intangible assets

     479        479        480   

Stock-based compensation

     451        496        535   

Income tax expense

     1        3        2   

Adjusted EBITDA

   $ (1,613   $ (1,708   $ (1,216

About Market Leader, Inc.

Market Leader (NASDAQ: LEDR) provides real estate professionals with innovative marketing and technology solutions that enable them to grow and manage their business. Founded in 1999 by a second-generation real estate agent, Market Leader provides real estate agents, agent teams, and brokerage companies with subscription software and advertising products that enable them to generate a steady stream of prospects, as well as the tools and training they need to convert these prospects into clients.

With a long history of innovation, Market Leader pioneered online lead generation for real estate professionals a decade ago and today is the leading marketing partner to the real estate industry. The company also provides consumers with free access to the information and tools they need throughout the home buying and selling process through its national consumer real estate sites. These websites enable Market Leader to provide its customers with access to millions of future home buyers and sellers while providing these consumers with free access to the information they seek throughout the home buying and selling process.

For more information on Market Leader visit www.MarketLeader.com.


Investor Contact:

Mark Lamb

Director of Investor Relations

Market Leader, Inc.



Press Contact:

Matt Heinz

Heinz Marketing for Market Leader, Inc.




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Market Leader, Inc.


(In thousands, except per share data)



     Three months ended June 30,     Six months ended June 30,      
     2010     2009     2010     2009      


   $ 5,815      $ 5,947      $ 11,611      $ 12,476     



Sales and marketing (1)

     5,219        4,676        10,141        9,418     

Technology and product development (1)

     1,303        1,278        2,668        2,685     

General and administrative (1)

     1,357        1,744        3,070        3,713     

Depreciation and amortization of property and equipment

     619        780        1,283        1,583     

Amortization of acquired intangible assets

     479        480        958        962     

Total expenses

     8,977        8,958        18,120        18,361     

Loss from operations

     (3,162     (3,011     (6,509     (5,885  

Equity in loss of unconsolidated subsidiary

     (55     (61     (191     (155  

Interest income and expenses, net

     90        59        127        154     

Loss before income tax expense

     (3,127     (3,013     (6,573     (5,886  

Income tax expense

     1        2        4        4     

Net loss

   $ (3,128   $ (3,015   $ (6,577   $ (5,890  

Net loss per share - basic and diluted:

   $ (0.13   $ (0.13   $ (0.27   $ (0.24  

Number of shares used in per share calculations

     24,597        24,112        24,569        24,085     


(1)    Stock-based compensation is included in the expense line items above in the following amounts:

     2010     2009     2010     2009      

Sales and marketing

   $ 111      $ 184      $ 243      $ 388     

Technology and product development

     47        (50     101        33     

General and administrative

     293        401        603        825     
   $ 451      $ 535      $ 947      $ 1,246     


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Market Leader, Inc.


(In thousands, except share data)



     June 30,
    December 31,



Current assets:


Cash and cash equivalents

   $ 12,835      $ 25,434   

Short-term investments

     39,090        25,999   

Trade accounts receivable, net of allowance of $11 and $29

     17        39   

Income tax receivable

     —          4,920   

Prepaid expenses and other current assets

     852        918   

Total current assets

     52,794        57,310   

Property and equipment, net of accumulated depreciation of $15,716 and $14,433

     4,194        4,472   

Acquired intangible assets, net of accumulated amortization of $7,385 and $6,427

     1,306        2,265   

Investment in unconsolidated subsidiary

     149        340   

Total assets

   $ 58,443      $ 64,387   

Liabilities and Shareholders’ Equity


Current liabilities:


Accounts payable

   $ 1,026      $ 916   

Accrued compensation and benefits

     1,590        1,494   

Accrued expenses and other current liabilities

     523        812   

Deferred rent, current portion

     214        214   

Deferred revenue

     389        405   

Total current liabilities

     3,742        3,841   

Deferred rent, less current portion

     665        753   

Total liabilities

     4,407        4,594   

Shareholders’ equity:


Preferred stock, par value $0.001 per share, stated at amounts paid in; authorized 30,000,000 shares; none issued and outstanding

     —          —     

Common stock, par value $0.001 per share, stated at amounts paid in; authorized 120,000,000 shares; issued and outstanding 24,596,508 and 24,409,431 shares at June 30, 2010 and December 31, 2009, respectively

     71,040        70,220   

Accumulated deficit

     (17,004     (10,427

Total shareholders’ equity

     54,036        59,793   

Total liabilities and shareholders’ equity

   $ 58,443      $ 64,387   


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Market Leader, Inc.


(In thousands)



     Six months ended June 30,  
     2010     2009  

Cash flows from operating activities:


Net loss

   $ (6,577   $ (5,890

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:


Depreciation and amortization of property and equipment

     1,283        1,583   

Amortization of acquired intangible assets

     958        962   

Stock-based compensation

     947        1,246   

Equity in loss of unconsolidated subsidiary

     191        155   

Changes in certain assets and liabilities


Trade accounts receivable

     22        23   

Income tax receivable

     4,914        (4

Prepaid expenses and other current assets

     61        284   

Accounts payable

     100        (172

Accrued compensation and benefits

     96        (654

Accrued expenses and other current liabilities

     (170     (57

Deferred rent

     (88     463   

Deferred revenue

     (16     170   

Net cash provided by (used in) operating activities

     1,721        (1,891

Cash flows from investing activities:


Purchases of short-term investments

     (27,868     (19,981

Sales of short-term investments

     14,800        10,000   

Purchases of property and equipment

     (1,078     (1,425

Payments related to the Realty Generator acquisition

     —          (155

Net cash used in investing activities

     (14,146     (11,561

Cash flows from financing activities:


Payment of taxes due upon vesting of restricted stock

     (174     (41

Proceeds from exercises of stock options

     —          45   

Net cash (used in) provided by financing activities

     (174     4   

Net decrease in cash and cash equivalents

     (12,599     (13,448

Cash and cash equivalents at beginning of period

     25,434        47,668   

Cash and cash equivalents at end of period

   $ 12,835      $ 34,220   


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