Move, Inc. (MOVE)
Q3 2008 Earnings Call
November 5, 2008 5:00 pm ET
Todd Friedman - Investor Relations
W. Michael Long – Chief Executive Officer
Lorna M. Borenstein – President
Lewis R. Belote, III – Chief Financial Officer
William Morrison – ThinkEquity
Mark May – Needham & Co.
Jason Helfstein – Oppenheimer & Co.
Previous Statements by MOVE
» Move, Inc. Q2 2009 Earnings Call Transcript
» Move, Inc. Q1 2009 Earnings Call Transcript
» Move, Inc. Q4 2008 Earnings Call Transcript
Good afternoon and welcome everyone to our third quarter 2008 earnings call. On the call today are Mike Long, our Chief Executive Officer; Lorna Borenstein, our President; and Lew Belote, our Chief Financial Officer.
Today’s call is being webcast from the Investor Relations section of our website, www.investor.move.com, and will be available for replay shortly after we conclude. A copy of our press release issued earlier this afternoon is also available on our website.
Please be advised that some of the comments that will be made today constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act that involve potential risks and uncertainties concerning Move’s expected financial performance as well as Move’s strategic and operational plans. These potential risks and uncertainties include, among others, decreases or delays in advertising spending and market acceptance of new products and services. Additional factors are discussed in the company’s annual and quarterly reports which are filed with the SEC and available on our website. All information discussed on this call is as of November 5, 2008, and Move undertakes no duty to update this information. Results projected on the call today may differ materially from actual results and should not be considered as a guarantee of future performance.
On the call today we will also be discussing non-GAAP financial measures in talking about the company's performance. Reconciliations of those measures to GAAP measures can be found in the table attached to our press release.
I’ll now turn the call over to Mike Long.
W. Michael Long
Thank you all for joining us today. Our third quarter results demonstrate how Move is leveraging the significant advantages and benefits of our market leadership, comprehensive industry knowledge, and deep customer relationships in the most difficult real estate market in a generation.
The unprecedented and rapid deterioration of the real estate market during 2008 makes comparisons with prior year results less meaningful. Because the market has changed so quickly, we have focused the company on real time adjustments to market conditions while preserving our strategic investments that will protect and extend the company’s leadership position when real estate markets recover.
Revenue in the third quarter was $61.2 million, essentially the same as last quarter, as was EBITDA, coming in at $5.7 million. Our balance sheet is strong with $114.0 million in cash with positive cash flow from operations.
In addition during the quarter we took a one-time charge totaling $22.0 million consisting of a $4.0 million restructuring charge associated with the expense reduction program we announced last quarter and an $18.0 million write-down of the value of Welcome Wagon, which we previously announced we are selling.
We achieved these revenue and EBITDA results in the face of the housing meltdown, the mortgage freeze, government bailouts, and global economic uncertainty. Both Realtor.com and Top Producer grew quarter-over-quarter. Our rentals business was up slightly from last quarter as well, while not surprisingly, our new homes business declined from last quarter due to weakness in the new home sector as homebuilders substantially reduced their ad spending.
Maintaining this level of financial performance in these challenging market conditions far exceeds our competitors and is due to the strong support of our industry partners and the commitment of our employees to deliver the best products and services to meet the needs of both consumers and real estate professionals during these extraordinary times.
During the third quarter we made significant progress towards our goal of adjusting Moves business operations to optimize our financial performance, while retaining our focus on assets and capabilities and development initiatives that are essential to our strategic health.
Three of the major examples of this commitment are first, the expense reduction program we announced last quarter is proceeding according to plan. We expect to achieve our goal of reducing our annual cost by $20.0 million by year-end. The full benefit of these savings will not be realized until the first quarter of 2009. Lew will share with you in a moment more specifics of this program and our progress to date.
Second, we have made progress towards the sale of our Welcome Wagon subsidiary. We are working closely with our investment bankers and are in discussions with potential buyers. Welcome Wagon’s principal markets are small businesses in communities across America.
Small businesses have been particularly impacted by the economic disruption of the last several months. We cannot confirm when or if the sale of the business will occur at this time but we have decided to take a conservative view by essentially writing down the full value we had been carrying for Welcome Wagon in our financial statements.
Third, last quarter we said we would make smart expense reductions while continuing to make investments necessary to sustain and grow our market leadership today and after the real estate market recovers. I am pleased to announce that on October 23 we launched in full production the most comprehensive new design of Realtor.com and Move.com in the company’s history.