SAN
FRANCISCO, Aug. 9 /PRNewswire-FirstCall/ -- Banks.com, Inc. (NYSE Amex:
BNX),
operator of internet media properties that provide targeted online advertising
and services primarily in the financial services sector, today announced results
for the three months and the six months ended June 30, 2010.Second
Quarter Financial Performance
-- Banks.com, Inc. ("Banks.com") reported revenue of $2.9 million in
the
second quarter 2010, essentially flat compared to $3.0 million in the
prior year period. GAAP(1) net loss available to common stockholders was
$239,000
or $0.01 per diluted share in the second quarter of 2010
compared to GAAP
net loss available to common stockholders of $24,000 or
$0.00 per diluted
share in the second quarter of 2009.
-- Adjusted EBITDA(2) was $159,000, down
substantially from Adjusted EBITDA
of $924,000 for the quarter ended June
30, 2009. Adjusted EBITDA was
impacted by higher litigation related, legal
expenses and revenue
credits. These items totaled approximately $550,000 during
the period.
-- Gross profit declined 16% to $1.6 million in the second quarter
of 2010
from $1.9 million in the second quarter of 2009, and gross margin
contracted to 55% from 63% in the same period last year due to the
traffic
acquisition costs incurred on traffic associated with a charge
against revenue
of $226,000.
-- Operating expense was up 29% to $1.9 million in the second
quarter of
2010 from $1.5 million in the second quarter of 2009, inclusive
of the
higher legal expense. Six
Month Year over Year Performance
-- Revenue was $7.1 million for the six months ended June 30, 2010, an
increase
of 20% compared to $5.9 million in the prior year period. GAAP
net income
available to common stockholders was $51,000 or $0.00 per
diluted share, virtually
unchanged compared to GAAP net income available
to common stockholders of
$50,000 or $0.00 per diluted share in the same
period of 2009.
-- Adjusted
EBITDA was $1.5 million for the six months ended June 30, 2010,
a decrease
of 20% from Adjusted EBITDA of $1.9 million in the prior year
period. Adjusted
EBITDA was impacted by higher litigation related, legal
expenses and revenue
credits. These items totaled approximately $680,000
during the period.
-- Gross profit increased 7% to $4.3 million compared to $4.0 million for
the same period last year and gross margin contracted to 60% from 68% in
the
same period last year due to the traffic acquisition costs incurred
on traffic
associated with a charge against revenue of $226,000.
-- Operating expenses
increased 20% to $3.8 million compared to $3.1
million for the same period
last year inclusive of the higher legal
expense. "The
second quarter was clearly a very challenging one that was impacted by some large
expenses and an unusually weak top line in the month of June, which negated much
of the progress we made in the first two months of the quarter,"
stated
Dan O'Donnell, Chief Executive Officer of Banks.com. "We experienced substantial
litigation related expenses in connection with ongoing legal actions but are pleased
to report that we've now reached preliminary settlement with all of the parties,
with terms favorable to Banks.com. We were also recently notified of an unexpected
credit to revenue associated with traffic generated during the quarter. Together,
these expenses negatively impacted Adjusted EBITDA by approximately $550,000 during
the period. Despite these short term challenges, we are pleased at the positive
long term trends we are seeing as our organic traffic continues to increase as
a result of our rising search engine rankings on some popular and valuable financial
search terms." Business
Highlights
-- Launched RateCenter to syndicate interest rate content
-- Achieved page
one ranking on Bing for the search term "Mortgage Rates"
-- Launched
beta version of its new, deeper content, Banks.com site
(http://beta.banks.com) Conference
Call Banks.com
will host a conference calltoday at 2 p.m. PT / 5 p.m. ET to discuss its second
quarter 2010 results. To listen to the call and have the opportunity to ask questions,
please dial: 877-941-1427
(domestic) or 480-629-9664(International) five to 10 minutes before the call. A
replay of the call will be available by dialing: 877-870-5176
(domestic) or 858-384-5517 (international) and referencing Passcode 4339570 or
online at:
http://phx.corporate-ir.net/playerlink.zhtml?c=186230&s=wm&e=3255273. Questions
for the conference call will also be taken via email at:
stockwatch@banks.com
and can be sent any time prior to the conference call's starting time. Investors
will also have the opportunity to listen to the conference call and the replay
on the Investor Relations section of the Banks.com website at: www.Banks.com. Forward
Looking Statements This
press release contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties.
Forward looking statements, which are based on management's current expectations,
are generally identifiable by the use of terms, such as "anticipates,"
"believes," "could," "estimates," "expects,"
"intends," "may,"
"plans," "possible,"
"potential," "predicts," "projects," "should,"
"would" and similar expressions. The forward looking statements in this
press release include statements regarding: management's expectations regarding
our strategy, management's expectations regarding our future financial results,
the effect of recent events, our financial flexibility, our growth prospects,
and the overall outlook for our business. The potential risks and uncertainties
that could cause actual results to differ materially from those expressed or implied
herein include, among others, slowdown in the financial services vertical; market
acceptance of the Banks.com website; introduction of additional competitors in
the Internet search services space; diversion of advertising dollars away from
the Internet; slower than anticipated growth rate of our advertising base; dependence
on our search providers; market development of Internet advertising and paid search
services; the stability of our infrastructure; and continued weak economic conditions.
Further information on the factors that could affect our financial results is
included in our filings with the Securities and Exchange Commission, including
our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, our
quarterly reports on Form 10-Q and our Current Reports on Form 8-K. Except as
required by law, we assume no responsibility to update these forward looking statements
publicly, even if new information becomes available in the future. Non-GAAP
Financial Measures This
press release includes the following financial measure defined as a non-GAAP financial
measure by the Securities and Exchange Commission: Adjusted EBITDA. This supplemental
financial measure is not required by GAAP, nor is the presentation of this financial
information intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with GAAP. Management
recognizes that non-GAAP financial measures have limitations in that they do not
reflect all of the items associated with Banks.com's earnings results as determined
in accordance with GAAP. However, for the reasons described below, management
uses this non-GAAP measure to evaluate the performance of Banks.com's business.
Banks.com's management believes that it is important to provide investors with
these same tools,together with a reconciliation to GAAP, for evaluating the performance
of Banks.com's business, as it may provide additional insight into Banks.com's
financial results.See "Reconciliation of GAAP Net Earnings to Adjusted Earnings
Before Interest, Taxes, Depreciation, Amortization and Stock Compensation Expense
(Adjusted EBITDA)" table included in this press release for further information
regarding these non-GAAP financial measures. In addition, Adjusted EBITDA is presented
because management believes it is frequently used by securities analysts, investors
and others in the evaluation of companies. Adjusted
EBITDA is calculated by adding income taxes, interest expense, depreciation and
amortization to net earnings,adjusted for certain items management believes should
be excluded in order to reflect a more meaningful representation of Banks.com's
financial performance, including stock compensation expense.Banks.com's management
excludes the impact of equity-based compensation to eliminate the effects of this
non-cash item, which, because it is based upon estimates on the grant dates, may
bear little resemblance to the actual values realized upon the future exercise,
expiration, termination or forfeiture of the stock-based compensation. Adjusted
EBITDA is not defined under GAAP and should not be considered in isolation or
as a substitute for net earnings and other consolidated earnings data prepared
in accordance with GAAP or as a measure of Banks.com's profitability. About
Banks.com Banks.com,
Inc. operates Internet media properties that provide targeted online advertising
and services primarily in the financial services sector. Through the Banks.com
network, the Company provides access to financial content, including financial
news, blogs, business articles, interest-rate tables, stock quotes, stock tracking
and financial calculators. It also provides users access to financial services,
including online tax preparation and tax extensions through the Banks.com Tax
Center and online stock brokerage through MyStockFund.com, its online broker-dealer
subsidiary. In addition to Banks.com, it operates other search related websites
including Look.com. Banks.com, Inc. is headquartered in San Francisco, California
at 222 Kearny Street, Suite 550 and can be reached at 415.962.9700. Find up to
date information on Mortgage Rates, CD Rates & Home Equity Rates at: Banks.com.
Contact: Banks.com
Dan O'Donnell
President and Chief Executive Officer
415-962-9700
Investors:
David Fore, Hayden IR, 206-450-2151
dave@haydenir.com
BANKS.COM, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended
June 30,
--------
2010 2009
---- ----
Revenues $2,919 $3,029
Cost of revenues 1,324 1,123
----- -----
Gross profit 1,595 1,906
----- -----
Operating expenses:
Sales and marketing 282 183
General and administrative
1,655 1,318
----- -----
Total operating expenses 1,937 1,501
----- -----
(Loss) earnings from operations (342) 405
Interest expense 30 397
--- ---
(Loss) earnings before income tax expense
(benefit) (372) 8
Income tax expense (benefit) (141) 24
---- ---
Net (loss) earnings (231) (16)
Preferred stock dividends 8 8
--- ---
Net (loss) earnings available to common
stockholders $(239) $(24)
=====
==== Basic (loss)
earnings per share $(0.01) $-
====== ===
Diluted (loss) earnings per share $(0.01) $-
====== ===
Six Months Ended
June 30,
--------
2010 2009
---- ----
Revenues $7,088 $5,885
Cost of revenues 2,823 1,904
----- -----
Gross profit 4,265 3,981
----- -----
Operating expenses:
Sales and marketing 642 372
General and administrative
3,118 2,757
----- -----
Total operating expenses 3,760 3,129
----- -----
Earnings from operations 505 852
Interest expense 349 707
--- ---
Earnings before income tax expense 156 145
Income tax expense 90 80
--- ---
Net earnings 66 65
Preferred stock dividends 15 15
--- ---
Net earnings available to common stockholders $51 $50
=== ===
Basic earnings per share $- $-
=== ===
Diluted earnings per share $- $-
=== ===
BANKS.COM, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
June 30, December 31,
2010 2009
---- ----
Assets
Current assets:
Cash $196 $176
Accounts receivable 1,461 2,019
Prepaid
expenses and other 228 285
Deferred income taxes 122 125
--- ---
Total current assets 2,007 2,605
Property and Equipment, net 468 674
Debt issuance costs, net - 176
Patents
and trademarks, net 12 27
Domains, net 10,383 10,902
Other intangible
assets, net 626 750
Other assets 15 5
Deferred income taxes 754 764
--- --- Total
Assets $14,265 $15,903
======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,158 $1,261
Accrued liabilities
536 667
Deferred revenue 18 107
Revolving line of credit 627 -
Notes
payable, net of discount - 2,128
--- -----
Total current liabilities 2,339 4,163
----- -----
Total liabilities 2,339 4,163
----- -----
Stockholders' equity:
Preferred stock 3 3
Common stock 26 26
Additional
paid-in capital 10,966 10,831
Retained earnings 931 880
--- ---
Total stockholders' equity 11,926 11,740
------ ------
Total Liabilities and Stockholders' Equity $14,265 $15,903
======= =======
BANKS.COM, INC. AND SUBSIDIARIES
Reconciliation of GAAP Net Earnings to Earnings
Before
Interest, Taxes, Depreciation, Amortization, and Stock Compensation
Expense (Adjusted EBITDA)
(In thousands)
(Unaudited)
Three Months Ended
June 30,
--------
2010 2009
---- ----
Net (loss) earnings available to common
stockholders $(239) $(24)
Preferred stock dividends 8 8
--- ---
Net (loss) earnings (231) (16)
Income taxes (benefit) (141) 24
---- ---
(Loss) earnings before income taxes (372) 8
Interest expense 30 397
--- ---
(Loss) earnings from operations (342) 405
Depreciation 106 120
Amortization 321 323
Stock compensation expense 74 76
--- ---
Adjusted earnings before interest, taxes,
depreciation, $159 $924
amortization,
and stock compensation expense
(Adjusted EBITDA) ==== ====
Six Months Ended
June 30,
--------
2010 2009
---- ----
Net earnings available to common stockholders $51 $50
Preferred stock dividends 15 15
--- ---
Net earnings 66 65
Income taxes 90 80
--- ---
Earnings before income taxes 156 145
Interest expense 349 707
--- ---
Earnings from operations 505 852
Depreciation 219 239
Amortization 657 644
Stock compensation expense 134 150
--- ---
Adjusted earnings before interest, taxes,
depreciation, $1,515 $1,885
amortization, and stock compensation expense (Adjusted
EBITDA) (1)
Generally accepted accounting principles in the United States of America. (2)
Adjusted EBITDA is calculated by adding income taxes, interest expense, depreciation
and amortization to net earnings, adjusted for certain items management believes
should be excluded in order to reflect a more meaningful representation of our
financial performance, including stock compensation expense. Adjusted EBITDA is
a non-GAAP financial measure. This measure may be different from non-GAAP financial
measures used by other companies. We encourage investors to review the section
above entitled "Non-GAAP Financial Measures" and to review the reconciling
adjustments between the GAAP and non-GAAP measures attached to this press release.
SOURCE
Banks.com, Inc.
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