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01/11/04 FINDWHAT.COM ANNOUNCES RECORD THIRD QUARTER RESULTS - Revenue of $58.3 Million; EBITDA of $11.2 Million; FY 2004 EBITDA Guidance Raised - FORT MYERS, FL - NOVEMBER 1, 2004 - FINDWHAT.COM, INC. (NASDAQ: FWHT), a global leader in developing and providing performance-based marketing and commerce enabling services, today reported record financial results for the three and nine months ended September 30, 2004. Highlights include:
Craig Pisaris-Henderson, chairman and chief executive officer of FindWhat.com, stated, "This was truly a historic quarter for FindWhat.com as we continued to execute our global plan. In Q3 2004 we achieved record revenue and earnings, meeting and in some areas, greatly exceeding, our expectations. We completed the Espotting transaction, expanding our operations into eight European countries, and helped Mitsui launch a paid listings service in Japan, establishing one of the largest global footprints within our sector. We also are pleased to announce that Espotting's financial results were accretive to our earnings in Q3 2004, and that both our U.S. and European divisions grew revenue sequentially in the third quarter. I believe that the results announced today demonstrate our global team's ability to focus on building our business, while simultaneously integrating two large operations." Pisaris-Henderson continued,"FindWhat.com continued to lead the industry with the launch of innovative products, such as our pioneering Pay-Per-Call initiative which provides advertisers with an opportunity to receive local or national phone calls based on geographic parameters they determine in a performance-based environment. Further, we announced new relationships intended to benefit our global, national, and local clients. In summary, our worldwide team continues to execute on our collective vision, leveraging our aggregated assets and the result of their work and dedication is evident in this quarter's financial, operating and strategic performance." FindWhat.com reported record revenue in Q3 2004 of $58.3 million versus Q3 2003 revenue of $17.8 million. For the nine months ended September 30, 2004, FindWhat.com reported record revenue of $110.7 million, an increase of 116% compared with revenue of $51.2 million for the same period in 2003. FindWhat.com reported record net income in Q3 2004 of $4.8 million, or $0.15 per diluted share, an increase of 72% compared to Q3 2003 net income of $2.8 million, or $0.12 per diluted share. For the nine months ended September 30, 2004, FindWhat.com reported record net income of $12.3 million, or $0.46 per diluted share, versus net income of $8.2 million, or $0.37 per diluted share, for the same period in 2003. EBITDA in Q3 2004 was a record $11.2 million, an increase of 129% versus Q3 2003 EBITDA of $4.9 million. For the nine months ended September 30, 2004, FindWhat.com reported record EBITDA of $25.6 million, an increase of 81% compared with EBITDA of $14.2 million for the same period in 2003. In Q3 2004 Adjusted Pre-tax Income increased 123% to a record $10.2 million, or $0.32 per diluted share, versus Q3 2003 Adjusted Pre-tax Income of $4.6 million, or $0.20 per diluted share. For the nine months ended September 30, 2004, FindWhat.com's Adjusted Pre-tax Income increased 78% to a record $23.7 million, or $0.88 per diluted share, compared with Adjusted Pre-tax Income of $13.3 million, or $0.60 per diluted share, for the same period in 2003. FindWhat.com believes that "EBITDA," "Adjusted Pre-tax Income" and "Adjusted Pre-tax EPS" can provide meaningful comparisons of the Company's current and projected operating performance with its historical results due to a) historical and projected changes in FindWhat.com's effective tax rate over time, and b) its significant increase in non-cash amortization expense beginning Q1 2004 primarily due to certain intangible assets resulting from acquisitions. FindWhat.com defines EBITDA as net income before interest, income taxes, depreciation, and amortization, and defines Adjusted Pre-tax Income as net income before income taxes and amortization. FindWhat.com uses EBITDA, Adjusted Pre-tax Income and Adjusted Pre-tax EPS as internal barometers of its business, and sets goals and awards bonuses in part based on performance relative to these measurements, but does not believe their use lessens the importance of GAAP measures. FindWhat.com has acquired five businesses in the first nine months of 2004: Miva® (which recently acquired the assets of MvCool) on January 1; Comet Systems on March 22; B&B Enterprises on June 4; and Espotting on July 1. Accordingly, FindWhat.com's results for the three months ended September 30, 2004 include the operations of Miva, Comet, B&B and Espotting for the entire period. FindWhat.com's results for the nine months ended September 30, 2004 include the operations of Miva for the entire period, but only include the results of Comet, B&B, and Espotting from the dates of their respective acquisitions. In Q1 2004, Miva and Comet contributed less than $1 million to the Company's reported consolidated revenue; in Q2 2004, Miva, Comet and B&B contributed less than $4 million; and in Q3 2004, Miva, Comet, and B&B contributed approximately $5 million to the reported consolidated revenue. Espotting contributed approximately $28.3 million to the Company's consolidated Q3 2004 revenue. In the future, the Company believes that the recognition of revenue by various divisions will not be comparable from period to period given opportunities to direct revenue from one division to another; for example, by targeting paid listings based on the Internet user's location, rather than the home country of the distribution partner. During 2004 the Company has provided projections based on Adjusted Pre-tax Income rather than Adjusted Net Income or GAAP Net Income, as the Company could not reasonably estimate its global effective tax rate prior to closing the Espotting merger. However, from the experience gained by the addition of Espotting's results for a full quarter, the Company now believes that its global effective tax rate for the next several quarters will be approximately 40%. Accordingly, FindWhat.com currently intends to apply its global effective tax rate and report and project "Adjusted Net Income" and "Adjusted EPS", which are defined as net income before tax-adjusted amortization expense on an absolute and per diluted share basis, respectively. 2004 Guidance Listed below are FindWhat.com's actual and projected quarterly results for 2004 revenue, EBITDA, Adjusted EPS and EPS. The projections include contributions from all publicly announced mergers, acquisitions and strategic initiatives. The projections also take into account the FindWhat.com Network's recent decision to cease displaying online gambling-related advertising to users on the FindWhat.com Network with IP addresses originating from the United States or IP addresses in which the Company cannot determine the country of origin, which took effect in October. Over the last year there has been a growing trend within the U.S. paid listings industry to limit certain types of online advertising content from being displayed to internet users in certain jurisdictions for a variety of reasons, including the avoidance of potential cultural and legal divergences. The Company's recent decision regarding online gambling-related ads is in keeping with these industry trends. FindWhat.com currently expects full year 2004 revenue between $168.8 and $175.8 million, EBITDA between $36.6 and $38.6 million, Adjusted EPS between $0.70 and $0.73, and EPS between $0.60 and $0.63, which assumes approximately 28.7 million average diluted shares outstanding. 2004 Revenue Q1 2004 actual: $24.7 million Total 2004 estimated: $168.8-$175.8 million 2004 EBITDA Q1 2004 actual: $6.8 million Total 2004 estimated: $36.6-$38.6 million 2004 Adjusted EPS Q1 2004 actual: $0.16 (24.1 million diluted shares outstanding) Total 2004 estimated: $0.70-$0.73 (assumes 28.7 million average diluted shares outstanding) 2004 EPS Q1 2004 actual: $0.16 (24.1 million diluted shares outstanding) Total 2004 estimated: $0.60-$0.63 (assumes 28.7 million average diluted shares outstanding) Management Comments and Operating Metrics Brenda Agius, chief financial officer, said, "We saw solid growth in Q3 2004 from a number of areas, including our U.S. and European paid listings operations, our private label partnerships and our Primary Traffic division. The integration of Espotting was a major focus for the quarter, and although there is still much to be done to leverage the resources we now have available, we are pleased with the progress we have made so quickly. We maintain our goal of lifting the company's consolidated EBITDA margin above 20%, and in fact came very close to reaching that goal in Q3 2004, our first full quarter together and a year ahead of schedule. While we were pleased with the efficiency of our global operations in Q3 2004, we want to balance that efficiency with investing in new initiatives and expanding our resources in the near-term, which we anticipate will add revenue in 2005 and beyond. As a result of this balanced approach, we currently believe EBITDA margins may stay below 20% in Q4 2004, but we anticipate they will be above 20% for fiscal 2005." Beginning with Q2 2004, FindWhat.com reported two new operating metrics to provide better insight into the progress of its business: Paid Click-throughs and Active Relationships. The information reported below for Q3 2004 includes actual information from all divisions. Information for Q2 2004 is presented on a pro forma basis, including metrics for the entire quarter from B&B and Espotting, even though B&B was not part of the Company for the full quarter, and Espotting was not part of the Company until July 1, 2004. The Q2 2004 metrics are presented on a pro forma basis to provide a better comparison to results in subsequent quarters. FindWhat.com is including the metrics of these acquired/merged companies for the pre-closing periods, based on information obtained from their records during those periods.
Note: The amounts above for Q2 2004 are presented on a pro forma basis to include metrics from Miva, Comet, B&B and Espotting as if all companies were wholly-owned on April 1, 2004. * FindWhat.com defines active relationships for a fiscal quarter to be those which have had a paying transaction with the Company during the quarter. However, FindWhat.com has relationships with over 100,000 online businesses, including businesses which are using its Miva Merchant storefront software, or which have made deposits in their FindWhat.com or Espotting Network accounts to fund future transactions, but have not purchased any products or services from the Company during the quarter and hence are not included in the active relationships metric. |
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