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8-K - FORM 8-K - HARRIS INTERACTIVE INC | l42526e8vk.htm |
Exhibit 99.1
Press Contact: Michael T. Burns Investor Relations Harris Interactive Inc. 800-866-7655 x7328 mburns@harrisinteractive.com |
Harris Interactive
® Reports Third Quarter Fiscal 2011 Results
New York, N.Y. April 28, 2011 Harris Interactive Inc. (NASDAQ: HPOL), a leading
innovative global market research firm, today announced its third quarter fiscal 2011 financial
results. Excluding foreign exchange rate differences, revenue was down 9%, driven by declines in
the U.K. and U.S., and bookings decreased 13% as a result of declines in the U.K., U.S., Canada and
Asia. The Companys operating loss grew from $0.9 million for last years third quarter to $1.9
million for the third quarter of fiscal 2011, and was largely caused by the decline in revenue for
the quarter.
Kimberly Till, President and Chief Executive Officer of Harris Interactive, said, While Q3 has
traditionally been a weak quarter seasonally, our results were very disappointing and it is clear
that we have more work to do to achieve acceptable operating performance. We are in the process of
thoroughly reviewing our operations and business model to identify the changes we need to make
to address this problem. To assist in this review, we have engaged the services
of Angrisani Turnarounds, LLC, led by Al Angrisani, who previously served as the President and
Chief Operating Officer of Harris Interactive and Chief Executive Officer of Greenfield Online
until its 2008 sale to Microsoft. Mr. Angrisani has presented the Company with a report with specific recommendations that
we are currently evaluating as part of our efforts to improve the Companys operating profitability.
Financial Highlights
For the Three Months | For the Nine Months | |||||||||||||||
Ended March 31, | Ended March 31, | |||||||||||||||
$ in millions unaudited | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Revenue |
$ | 38.1 | $ | 41.2 | $ | 120.0 | $ | 124.8 | ||||||||
Operating loss |
$ | (1.9 | ) | $ | (0.9 | ) | $ | (2.3 | ) | $ | (0.7 | ) | ||||
Net loss |
$ | (2.3 | ) | $ | (1.6 | ) | $ | (3.3 | ) | $ | (0.9 | ) | ||||
Fully diluted net loss per share |
$ | (0.04 | ) | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.02 | ) | ||||
Adjusted EBITDA* |
$ | 0.1 | $ | 1.3 | $ | 4.0 | $ | 6.0 | ||||||||
Adjusted EBITDA* with add-back
of restructuring and other
charges |
$ | 0.6 | $ | 1.4 | $ | 5.1 | $ | 6.7 |
* | EBITDA is a non-GAAP measure. Adjusted EBITDA, also a non-GAAP measure, is EBITDA less stock-based compensation and non-cash goodwill impairment charges. |
Key Financial Statistics
| Total revenue for the third quarter of fiscal 2011 was $38.1 million, as compared with $41.2 million for the same prior year period. Excluding foreign currency exchange rate differences, revenue for |
©2011 Harris Interactive Inc. | All rights reserved. | |
the third quarter was down 9% compared with the same prior year period. Total revenue for the first nine months of fiscal 2011 was $120.0 million, as compared with $124.8 million for the same prior year period. Excluding foreign currency exchange rate differences, revenue for the first nine months of fiscal 2011 was down 4% compared with the same prior year period. | |||
| Operating loss for the third quarter of fiscal 2011 was $(1.9) million, as compared with an operating loss of $(0.9) million for the same prior year period. Our operating loss for the third quarter of fiscal 2011 included $0.4 million of restructuring and other charges, as compared with $0.1 million for the same prior year period. Our operating loss for the first nine months of fiscal 2011 was $(2.3) million, as compared with an operating loss of $(0.7) million for the same prior year period. Our operating loss for the first nine months of fiscal 2011 included $1.1 million of restructuring and other charges, as compared with $0.6 million for the same prior year period. | ||
| Net loss for the third quarter of fiscal 2011 was $(2.3) million, or $(0.04) per fully diluted share, as compared with a net loss of $(1.6) million, or $(0.03) per fully diluted share for the same prior year period. Out net loss for the first nine months of fiscal 2011 was $(3.3) million, or $(0.06) per fully diluted share, as compared with a net loss of $(0.9) million, or $(0.02) per fully diluted share, for the same prior year period. | ||
| As of March 31, 2011, we had $12.5 million in cash and $12.0 million in outstanding debt. During the first nine months of fiscal 2011, we made $3.6 million in debt principal payments. | ||
| Cash provided by operations for the third quarter of fiscal 2011 was $0.1 million, as compared with $0.9 million provided by operations for the same prior year period. Cash provided by operations for the first nine months of fiscal 2011 was $1.1 million, as compared with $2.0 million provided by operations for the same prior year period. | ||
| Bookings for the third quarter of fiscal 2011 were $40.9 million, as compared with $44.9 million for the same prior year period. Excluding foreign currency exchange rate differences, bookings for the third quarter were down 13% compared with the same prior year period. | ||
| Secured revenue for the third quarter of fiscal 2011 was $56.5 million, as compared with $52.9 million for the same prior year period. Excluding foreign currency exchange rate differences, secured revenue for the third quarter was up 5% compared with the same prior year period. | ||
| Non-GAAP adjusted EBITDA* with add-back of restructuring and other charges for the third quarter of fiscal 2011 was $0.6 million, as compared with $1.4 million for the same prior year period. Non-GAAP adjusted EBITDA* with add-back of restructuring and other charges for the first nine months of fiscal 2011 was $5.1 million, as compared with $6.7 million for the same prior year period. |
Third Quarter Fiscal 2011 Results Conference Call and Webcast Access
Kimberly Till, President and Chief Executive Officer, will host a conference call to discuss
these results on Thursday, April 28, 2011, at 5:00 p.m. ET. Formal remarks will be followed by
a question and answer session.
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To access the conference call, please dial toll-free 877.303.9858 in the United States and
Canada, or 408.337.0139 internationally.
A live webcast of the conference call also will be accessible via the Investor Relations
section of our website at http://ir.harrisinteractive.com/, where an archived replay of the
webcast will be available for 30 days following the call. No telephone replay of the
conference call will be provided. This media release will be available under the Investor
Relations section of our website at http://ir.harrisinteractive.com/ prior to the call.
Cautionary Note Regarding Forward Looking Statements
Certain statements in this press release and oral statements made by the Company on its
conference call in relation to this release constitute forward-looking statements for purposes
of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995.
These statements include, among others, statements as to future economic performance,
projections as to financial items, estimates, and plans and objectives for future operations,
products and services. In some cases, you can identify forward-looking statements by
terminology such as, may, should, expects, plans, anticipates, feel, believes,
estimates, predicts, potential, continue, consider, possibility, or the negative
of these terms or other comparable terminology. These forward-looking statements involve a
number of risks and uncertainties that could cause actual results to differ materially from
those in the forward looking statements. Such risks and uncertainties include, without
limitation, risks detailed in the Risk Factors section of the Companys most recent Annual
Report on Form 10-K, as updated quarterly in our Quarterly Reports on Form 10-Q to reflect
additional material risks. The Company has filed its reports on Forms 10-K and 10-Q with the
Securities and Exchange Commission, and they are available under the Investor Relations
section of our website at http://ir.harrisinteractive.com/. Risks and uncertainties also
include the continued volatility of the global macroeconomic environment and its impact on the
Company and its clients, the Companys ability to sustain and grow its revenue base, the
Companys ability to maintain and improve cost efficient operations, the impact of
reorganization, restructuring and related charges, quarterly variations in financial results,
actions of competitors, the Companys ability to develop and maintain products and services
attractive to the market, and uncertainties surrounding compliance with certain NASDAQ listing
requirements.
You are urged to consider these factors carefully in evaluating such forward-looking
statements and are cautioned not to place undue reliance on them. The forward-looking
statements are qualified in their entirety by this cautionary statement.
About Harris Interactive
Harris Interactive is one of the worlds leading custom market research firms, leveraging research,
technology, and business acumen to transform relevant insight into actionable foresight. Known
widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers
expertise in a wide range of industries including healthcare, technology, public affairs, energy,
telecommunications, financial services, insurance, media, retail, restaurant, and consumer package
goods. Serving clients in over 215 countries and territories through our North American, European,
and Asian offices and a network of independent market research firms, Harris specializes in
delivering research solutions that help us and our clients stay ahead of whats next. For
more information, please visit www.harrisinteractive.com.
HPOL E
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HARRIS INTERACTIVE INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
March 31, | June 30, | |||||||
2011 | 2010 | |||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 12,500 | $ | 14,158 | ||||
Accounts receivable, net |
23,614 | 23,735 | ||||||
Unbilled receivables |
8,200 | 7,566 | ||||||
Prepaids and other current assets |
4,682 | 3,722 | ||||||
Deferred tax assets |
547 | 375 | ||||||
Total current assets |
49,543 | 49,556 | ||||||
Property, plant and equipment, net |
3,964 | 5,626 | ||||||
Other intangibles, net |
15,217 | 16,382 | ||||||
Other assets |
1,589 | 1,566 | ||||||
Total assets |
$ | 70,313 | $ | 73,130 | ||||
Liabilities and Stockholders Equity |
||||||||
Accounts payable |
$ | 6,742 | $ | 8,952 | ||||
Accrued expenses |
16,697 | 16,768 | ||||||
Current portion of long-term debt |
4,794 | 4,794 | ||||||
Deferred revenue |
14,942 | 11,612 | ||||||
Total current liabilities |
43,175 | 42,126 | ||||||
Long-term debt |
7,191 | 10,787 | ||||||
Deferred tax liabilities |
2,363 | 2,391 | ||||||
Other long-term liabilities |
1,518 | 1,792 | ||||||
Total stockholders equity |
16,066 | 16,034 | ||||||
Total liabilities and stockholders equity |
$ | 70,313 | $ | 73,130 | ||||
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HARRIS INTERACTIVE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Three months ended | Nine months ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenue from services |
$ | 38,087 | $ | 41,203 | $ | 120,041 | $ | 124,767 | ||||||||
Operating expenses: |
||||||||||||||||
Cost of services |
25,138 | 26,569 | 78,892 | 79,083 | ||||||||||||
Selling, general and administrative |
12,870 | 13,829 | 37,745 | 40,641 | ||||||||||||
Depreciation and amortization |
1,517 | 1,656 | 4,560 | 5,130 | ||||||||||||
Restructuring and other charges |
448 | 92 | 1,127 | 623 | ||||||||||||
Total operating expenses |
39,973 | 42,146 | 122,324 | 125,477 | ||||||||||||
Operating loss |
(1,886 | ) | (943 | ) | (2,283 | ) | (710 | ) | ||||||||
Operating margin |
-5.0 | % | -2.3 | % | -1.9 | % | -0.6 | % | ||||||||
Interest and other income |
(13 | ) | (30 | ) | (35 | ) | (57 | ) | ||||||||
Interest expense |
285 | 524 | 1,070 | 1,560 | ||||||||||||
Loss from operations before income taxes |
(2,158 | ) | (1,437 | ) | (3,318 | ) | (2,213 | ) | ||||||||
Provision (benefit) for income taxes |
177 | 121 | 12 | (1,354 | ) | |||||||||||
Net loss |
$ | (2,335 | ) | $ | (1,558 | ) | $ | (3,330 | ) | $ | (859 | ) | ||||
Basic and diluted net loss per share |
$ | (0.04 | ) | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.02 | ) | ||||
Basic and diluted weighted average shares outstanding |
54,658,105 | 54,247,286 | 54,516,793 | 54,027,408 | ||||||||||||
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Reconciliation of GAAP Net Loss to EBITDA and Adjusted EBITDA
Three months ended | Nine months ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
GAAP net loss |
$ | (2,335 | ) | $ | (1,558 | ) | $ | (3,330 | ) | $ | (859 | ) | ||||
Interest income |
(13 | ) | (30 | ) | (35 | ) | (57 | ) | ||||||||
Interest expense |
285 | 524 | 1,070 | 1,560 | ||||||||||||
Provision (benefit) for income taxes |
177 | 121 | 12 | (1,354 | ) | |||||||||||
Depreciation and amortization |
1,820 | 2,011 | 5,715 | 6,225 | ||||||||||||
EBITDA |
$ | (66 | ) | $ | 1,068 | $ | 3,432 | $ | 5,515 | |||||||
Stock-based compensation (1) |
173 | 203 | 523 | 523 | ||||||||||||
Adjusted EBITDA |
$ | 107 | $ | 1,271 | $ | 3,955 | $ | 6,038 | ||||||||
Adjusted EBITDA |
$ | 107 | $ | 1,271 | $ | 3,955 | $ | 6,038 | ||||||||
Add-back of restructuring and other charges |
448 | 92 | 1,127 | 623 | ||||||||||||
Adjusted EBITDA with add-back of
restructuring and other charges |
$ | 555 | $ | 1,363 | $ | 5,082 | $ | 6,661 | ||||||||
(1) | Stock-based compensation expense represents the cost of stock-based compensation awarded by the Company to its employees under the FASB guidance for stock-based compensation |
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