NTRT Netratings (MM)

Reports $0.03 Per Share Net Income NEW YORK, Aug. 2 /PRNewswire-FirstCall/ -- NetRatings, Inc. (NASDAQ:NTRT), a global leader in Internet media and market research, today announced financial results for the second quarter ended June 30, 2006. NetRatings' revenues for the second quarter of 2006 were $19.9 million, a 17 percent increase over revenues of $17.1 million in the second quarter of 2005, and a 9 percent increase over revenues of $18.3 million in the first quarter of 2006. Net income for the second quarter of 2006 was $931,000, or $0.03 per share, on approximately 34.8 million shares. This compares with a net loss of ($2.3 million), or ($0.06) per share, in the second quarter of 2005, on approximately 36 million shares. On an EBITDA basis (a non-GAAP measure that reflects net income/loss excluding interest income/expense, taxes, depreciation, and amortization of intangibles and stock-based compensation), the company earned $2.2 million or $0.06 per share during the second quarter of 2006. This compares with an EBITDA loss in the second quarter of 2005 of ($577,000), or ($0.02) per share. A complete reconciliation of GAAP results to EBITDA results may be found in the accompanying financial tables and footnote. "NetRatings had an extremely productive quarter on all fronts, including financial results that exceeded our forecasts and delivered our first quarter of net income profitability" said William Pulver, president and CEO, NetRatings. "Strong product sales, complemented by the contribution from our patent licensing program, drove solid revenue growth. Product rollouts, including AdRelevance in China and an expanded NetView service in our key European markets, are progressing as planned. Finally, the expansion of our services to include measurement of all online digital and audio content is well underway. Today we are working with leading media companies to deliver streaming content metrics based on SiteCensus and metered panel data, and later this year will implement our next generation meter to capture and report all online streaming content - whether consumed live or via replay. In addition, we are working jointly with Nielsen Media Research to develop fused data sets and a single source panel to help clients understand the convergence of TV and Internet consumption." Managing Director Appointed in Europe NetRatings also announced today the appointment of Louise Ainsworth as managing director of its European business, effective Sept. 4, 2006. Ms. Ainsworth joins from OgilvyOne Worldwide in London where she was managing partner, consulting and planning. Previously, she was with OgilvyInteractive, most recently as managing director, with overall responsibility for the agency's UK business. Prior to this, Ms. Ainsworth held a leadership role with Organic Online (now Agency.com), strategy roles with the BBC in London and worked as a management consultant for Bain & Company. She has a BA in Engineering & Economics from Oxford, an MSc in Management Science & Operational Research from Warwick and an MBA from INSEAD France. Mr. Pulver commented, "Louise brings extremely relevant agency and media experience, and a foundation of leadership and strategic planning skills, to NetRatings. I am confident she will be a terrific addition to the organization and we look forward to welcoming her in September and to working with her to re-energize our European business." Guidance For the third quarter ending Sept. 30, 2006, NetRatings is projecting the following: -- Revenue is expected to be between $20.8 million and $21.2 million -- EPS on a GAAP basis is expected to be between $0.01 and $0.03 -- EBITDA per share is expected to be between $0.06 and $0.08 For the full year 2006, NetRatings is projecting the following: -- Revenue is expected to be between $79 million and $81 million -- EPS on a GAAP basis is expected to be between $0.04 and $0.06 -- EBITDA per share is expected to be between $0.20 and $0.22 Second Quarter 2006 Conference Call Today at 4:30 p.m. ET, NetRatings management will host a conference call and Webcast to discuss its second quarter 2006 results and outlook. The company welcomes all members of the financial and media communities to visit http://www.netratings.com/financial_results.htm to listen to the conference call via live Webcast. About NetRatings NetRatings, Inc. delivers leading Internet media and market research solutions, marketed globally under the Nielsen//NetRatings brand. With high quality, technology-driven products and services, Nielsen//NetRatings is the global standard for Internet audience measurement and premier source for online advertising intelligence, enabling clients to make informed business decisions regarding their Internet and digital strategies. The Nielsen//NetRatings portfolio includes panel-based and site-centric Internet audience measurement services, online advertising intelligence, user lifestyle and demographic data, e-commerce and transaction metrics, and custom data, research and analysis. For more information, please visit http://www.nielsen-netratings.com/. Safe Harbor Statement This press release contains statements that may constitute forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and assumptions and involve a number of uncertainties and risks that could cause actual results to differ materially from those currently expressed in any such forward-looking statements. Information about potential factors that may affect NetRatings' business and financial results is included in its annual report on Form 10-K for the fiscal year ended Dec. 31, 2005 and its quarterly reports on Form 10-Q, including, without limitation, under the captions "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors That May Affect Our Performance." Each of these documents is on file with the SEC and is available free of charge. Readers of this press release are referred to such filings. The forward-looking statements herein speak only as of the date of this press release. NetRatings does not undertake to update any forward-looking statement that may be made from time to time by it or on behalf of NetRatings. CONTACT: Susan Hickey of NetRatings, Inc., +1-212-703-5909, or . NetRatings, Inc. Statements of Operations (in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005 unaudited unaudited Revenue $19,934 $17,105 $38,214 $33,538 Cost of revenue 5,659 6,018 11,225 11,586 Gross profit 14,275 11,087 26,989 21,952 Operating expenses: Research and development 2,761 2,629 5,404 5,684 Sales and marketing 6,244 6,664 12,591 13,050 General and administrative 3,660 3,023 7,110 6,021 Amortization of intangibles 595 710 1,189 1,533 Amortization of stock-based compensation 987 1,169 2,151 1,169 Total operating expenses 14,247 14,195 28,445 27,457 Income/(loss) from operations 28 (3,108) (1,456) (5,505) Interest income, net 1,770 988 2,931 1,905 Minority interest in income of consolidated subsidiaries (358) (201) (521) (406) Equity in earnings of joint ventures - - - 56 Net income/(loss) before provision for income taxes and cumulative effect of change in accounting principle 1,440 (2,321) 954 (3,950) Provision for income taxes (509) - (647) - Net income/(loss) before cumulative effect of change in accounting principle 931 (2,321) 307 (3,950) Cumulative effect of change in accounting principle - - 369 - Net income/(loss) $931 $(2,321) $676 $(3,950) Basic net income/(loss) per common share: Before cumulative effect of change in accounting principle $0.03 $(0.06) $0.01 $(0.11) Cumulative effect of change in accounting principle - - 0.01 - Net income/(loss) per common share $0.03 $(0.06) $0.02 $(0.11) Diluted net income/(loss) per common share: Before cumulative effect of change in accounting principle $0.03 $(0.06) $0.01 $(0.11) Cumulative effect of change in accounting principle - - 0.01 - Net income/(loss) per common share $0.03 $(0.06) $0.02 $(0.11) Shares used to compute basic net income/(loss) and EBITDA net income/(loss) per common share 34,833 36,014 34,772 35,893 Shares used to compute diluted net income/(loss) and EBITDA net income/(loss) per common share 35,773 36,014 35,741 35,893 EBITDA (1) Net income/(loss) $931 $(2,321) $676 $(3,950) Less: Interest income, net (1,770) (988) (2,931) (1,905) Provision for income taxes 509 - 647 - Depreciation 918 853 1,814 1,671 Amortization of intangibles 595 710 1,189 1,533 Amortization of stock-based compensation 987 1,169 2,151 1,169 Cumulative effect of change in accounting principle - - (369) - EBITDA $2,170 $(577) $ 3,177 $(1,482) Basic EBITDA income/ (loss) per common share $0.06 $(0.02) $0.09 $(0.04) Diluted EBITDA income/ (loss) per common share $0.06 $(0.02) $0.09 $(0.04) (1) EBITDA reflects net income/loss excluding interest income/expense, taxes, depreciation, amortization of intangibles and stock-based compensation, and cumulative effect of change in accounting principle. Management uses this measure internally to evaluate the company's performance.NetRatings provides results, guidance, and associated reconciliation of this non-GAAP measure to the investment community, as we believe it provides consistent and comparable measures to help investors understand our current and future operating cash flow performance.Interest income/expense is excluded as it is not related to our operating performance.Depreciation expenses, amortization of stock-based compensation, and cumulative effect of change in accounting principle are excluded as they are non-cash charges.NetRatings excludes amortization of intangibles as it is a non- cash charge not directly related to operations. EBITDA data is provided as a complement to results provided in accordance with GAAP, and should be considered in addition to, and not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. Reconciliation of net income per share to EBITDA per share for third quarter and full year 2006 guidance. Three months ending Full year ending Sept. 30, 2006 Dec. 31, 2006 Net income $0.01 $0.03 $0.04 $0.06 Adjustments Interest income, net (0.05) (0.05) (0.19) (0.19) Provision for income taxes 0.02 0.02 0.04 0.04 Depreciation 0.03 0.03 0.11 0.11 Amortization of intangibles 0.02 0.02 0.07 0.07 Amortization of stock-based compensation 0.03 0.03 0.12 0.12 Cumulative effect of change in accounting principle - - 0.01 0.01 Basic EBITDA per share guidance range $0.06 $0.08 $0.20 $0.22 NetRatings, Inc. Balance Sheets (in thousands) June 30, December 31, 2006 2005 ASSETS unaudited Current assets Cash, cash equivalents & short-term marketable securities $170,244 $151,671 Accounts receivable 17,843 16,537 Other current assets 4,057 3,867 Total current assets 192,144 172,075 Long-term marketable securities 7,973 28,581 Property and equipment 9,320 7,827 Intangibles 12,089 13,278 Goodwill 76,438 76,856 Other assets 1,747 1,637 Total assets $299,711 $300,254 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable & accrued expenses $20,519 $21,436 Deferred revenue 14,568 12,666 Restructuring liabilities 346 1,038 Total current liabilities 35,433 35,140 Restructuring liabilities, less current portion 243 418 Total liabilities 35,676 35,558 Minority interest 1,819 1,298 Stockholders' equity 262,216 263,398 Total liabilities and stockholders' equity $299,711 $300,254 DATASOURCE: NetRatings, Inc. CONTACT: Susan Hickey of NetRatings, Inc., +1-212-703-5909, or Web site: http://www.netratings.com/

Copyright