EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1



August 4, 2011

4:00 p.m. Eastern

Market Leader® Grows Q2 Revenue 43%

Rapid adoption of SaaS platform expected to drive continued revenue growth

throughout 2011 and Adjusted EBITDA profitability for 2012

KIRKLAND, Wash. – August 4, 2011 – Market Leader, Inc. (NASDAQ: LEDR) today announced results for the quarter ended June 30, 2011.



Revenue of $8.3 million was up forty-three percent over the second quarter of 2010 and $1.1 million higher than last quarter, reflecting strong sales of software-as-a-service based products, including the first quarterly contribution from a recent franchise customer initiative



Net loss of $2.8 million compared to a net loss of $4.3 million in the first quarter



Adjusted EBITDA loss of $1.7 million improved $1.6 million from the first quarter, reflecting strong revenue growth, a shift toward higher margin software-as-a-service based revenue, as well as lower sales and marketing expense

“Our strong revenue growth was driven by increased demand for our industry-leading subscription software products,” said Market Leader CEO Ian Morris. “We have created the real estate industry’s first comprehensive and fully integrated cloud-based software platform to address the needs of leading franchise and brokerage companies across the United States and Canada,” he added.

Major Enhancements to Software Platform Continue

Market Leader is continuing to make major enhancements and extensions to its industry-leading real estate software platform. Earlier this week, the company launched Market Insider, a valuable tool for real estate professionals to engage buyers and sellers with customized, up-to-date reports of recent home sales, trends, demographics, and side-by-side comparisons of neighborhoods across the United States.

Additionally, Market Leader today announced the acquisition of SharperAgent, a leading provider of online and print marketing suites with more than 30,000 real estate agent users across North America. Market Leader will be adding SharperAgent’s robust marketing campaign, design, and print capabilities to its premium offerings in the upcoming months. This functionality addresses a core need of real estate professionals, and when integrated with Market Leader’s comprehensive platform is expected to create a highly differentiated offering that is unequaled in the marketplace.

The company expects that these enhancements will play a key role in driving real estate brokerage professionals to further embrace Market Leader’s software platform, at a time when cloud-based productivity software for real estate professionals is attracting increasing interest from leading franchise organizations and brokerage companies. These companies see Market Leader’s approach as an opportunity for them to differentiate themselves from their competition and better recruit, engage, and retain sales professionals, while lowering their technology costs.

Market Leader believes its unique approach will enable it to disrupt the highly-fragmented and inefficient real estate software space and replace the myriad of narrow functional solutions with its comprehensive, unified, and lower cost platform.

Business Outlook

Market Leader expects its momentum to continue throughout 2011, despite what the company believes will continue to be a sluggish macro real estate climate.

The company expects that revenue growth in the second half of this year, combined with a continued shift to high-margin software-as-a-service revenue, will diminish adjusted EBITDA losses throughout the year.

Market Leader also reaffirmed its expectation that the company will achieve positive adjusted EBITDA for 2012.

Conference Call

The company will host a conference call and live Webcast to discuss second quarter results on Thursday, August 4, 2011 at 4:30 p.m. Eastern time. To listen to the live conference call, please dial (719) 325-2353. A live Webcast of the call will be available from the Investor Relations section of the company’s Web site at http://www.investor.marketleader.com. An audio replay of the call will also be available to investors beginning on August 4 at 7:30 p.m. Eastern time and ending on August 9 at 4:30 p.m. Eastern time by dialing (719) 457-0820 and entering the passcode 4490246#.

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 the company’s software-as-a-service products, to continue to maintain current customer retention levels, to maintain conversion rates of customers acquired through promotional offers, 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 most recent 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, net loss attributable to non-controlling interest, 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.

Market Leader, Inc.


(In thousands)



     Three months ended  
     June 30, 2011     March 31, 2011     June 30, 2010  

Net loss

   $ (2,846   $ (4,344   $ (3,128



Interest income and expenses, net

     (18     (26     (90

Net loss attributable to noncontrolling interest

     (150     (140  

Equity in loss of unconsolidated subsidiary

     —          —          55   

Depreciation and amortization of property and equipment

     646        611        619   

Amortization of acquired intangible assets

     262        262        479   

Stock-based compensation

     387        363        451   

Income tax expense

     3        3        1   










Adjusted EBITDA

   $ (1,716   $ (3,271   $ (1,613










About Market Leader, Inc.

Market Leader (NASDAQ: LEDR) provides more than 50,000 real estate agents, teams and brokerage companies with a complete lead-to-close marketing and technology platform that enables them to grow and manage their business. Founded in 1999 by a second-generation real estate agent, Market Leader enables success for its customers with SaaS-based real estate marketing software that includes tools to generate leads, and a complete contact management system to engage and convert those leads into clients. For offices, teams, and regional management, the Market Leader platform also includes effective tools to recruit and retain agents, hold them accountable, and monitor and manage their business.

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. Market Leader’s national consumer real estate sites provide its customers with access to millions of future home buyers and sellers while providing 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.



Market Leader, Inc.


(In thousands, except share data)



     June 30,
    December 31,



Current assets:


Cash and cash equivalents

   $ 8,259      $ 16,687   

Short-term investments

     29,577        28,628   

Trade accounts receivable, net of allowance of $7 and $12, respectively

     735        30   

Prepaid expenses and other current assets

     1,172        1,249   







Total current assets

     39,743        46,594   

Property and equipment, net of accumulated depreciation of $18,146 and $17,047, respectively

     3,720        3,856   

Intangible assets, net of accumulated amortization of $8,723 and $8,199, respectively

     2,373        2,326   


     1,732        954   







Total assets

   $ 47,568      $ 53,730   







Liabilities, Shareholders’ Equity and Noncontrolling Interest


Current liabilities:


Accounts payable

   $ 710      $ 1,157   

Accrued compensation and benefits

     2,109        1,809   

Accrued expenses and other current liabilities

     1,249        1,175   

Deferred rent, current portion

     230        214   

Deferred revenue

     636        517   







Total current liabilities

     4,934        4,872   

Deferred rent, less current portion

     404        527   







Total liabilities

     5,338        5,399   

Shareholders’ equity and noncontrolling interest:


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 25,138,621 and


24,873,120 shares at June 30, 2011 and December 31, 2010, respectively

     73,269        71,889   

Accumulated deficit

     (31,901     (24,710







Total Market Leader, Inc. shareholders’ equity

     41,368        47,179   

Noncontrolling interest in subsidiary

     862        1,152   







Total shareholders’ equity and noncontrolling interest

     42,230        48,331   







Total liabilities, shareholders’ equity and noncontrolling interest

   $ 47,568      $ 53,730   







Market Leader, Inc.


(In thousands, except per share data)



     Three months ended June 30,     Six months ended June 30,  
     2011     2010     2011     2010  


   $ 8,320      $ 5,815      $ 15,562      $ 11,611   



Sales and marketing (1)

     6,710        5,219        14,143        10,141   

Technology and product development (1)

     1,890        1,303        3,730        2,668   

General and administrative (1)

     1,823        1,357        3,426        3,070   

Depreciation and amortization of property and equipment

     646        619        1,257        1,283   

Amortization of acquired intangible assets

     262        479        524        958   













Total expenses

     11,331        8,977        23,080        18,120   













Loss from operations

     (3,011     (3,162     (7,518     (6,509

Equity in loss of unconsolidated subsidiary

     —          (55     —          (191

Interest income and expense, net

     18        90        43        127   













Loss before income tax expense

     (2,993     (3,127     (7,475     (6,573

Income tax expense

     3        1        6        4   













Net loss

     (2,996     (3,128     (7,481     (6,577

Net loss attributable to noncontrolling interest

     (150     —          (290     —     













Net loss attributable to Market Leader

   $ (2,846   $ (3,128   $ (7,191   $ (6,577













Net loss per share - basic and diluted:

   $ (0.11   $ (0.13   $ (0.29   $ (0.27













Number of shares used in per share calculations

     25,133        24,597        25,117        24,569   













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


     2011     2010     2011     2010  

Sales and marketing

   $ 166      $ 111      $ 326      $ 243   

Technology and product development

     45        47        88        101   

General and administrative

     176        293        336        603   












   $ 387      $ 451      $ 750      $ 947   













Market Leader, Inc.


(In thousands)



     Six months ended June 30,  
     2011     2010  

Cash flows from operating activities:


Net loss

   $ (7,481   $ (6,577

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


Depreciation and amortization of property and equipment

     1,257        1,283   

Amortization of acquired intangible assets

     524        958   

Non-Cash stock-based compensation

     750        947   

Equity in loss of unconsolidated subsidiary

     0        191   

Changes in certain assets and liabilities, net of acquisitions:


Accounts receivable

     (705     22   

Income tax receivable

     (3     4,914   

Prepaid expenses and other current assets

     16        61   

Accounts payable

     (397     100   

Accrued compensation and benefits

     300        96   

Accrued expenses and other current liabilities

     65        (170

Deferred rent

     (107     (88

Deferred revenue

     119        (16







Net cash (used in) provided by operating activities

     (5,662     1,721   







Cash flows from investing activities:


Purchases of short-term investments

     (20,329     (27,868

Maturities of short-term investments

     19,397        14,800   

Purchases of property and equipment

     (1,061     (1,078

Cash paid for acquisition of kwkly

     (750     —     







Net cash used in investing activities

     (2,743     (14,146







Cash flows from financing activities:


Payment of taxes due upon vesting of restricted stock

     (37     (174

Proceeds from exercises of stock options

     14        —     







Net cash used in financing activities

     (23     (174







Net decrease in cash and cash equivalents

     (8,428     (12,599

Cash and cash equivalents at beginning of period

     16,687        25,434   







Cash and cash equivalents at end of period

   $ 8,259      $ 12,835