Harris Interactive® Reports Fourth Quarter and Full Year Fiscal 2013 Results

Key Financial Statistics (1)

USD in millions – unaudited

For the Three Months
Ended June 30,

For the Twelve Months
Ended June 30,

2013

2012

2013

2012

Revenue (2)

$     36.7

$     36.5

$ 140.3

$  147.5

Operating income (loss) (3)(7)

$       1.5

$      (0.3)

$     7.5

$    (2.7)

Income (loss) from continuing operations

$       1.3

$      (0.9)

$     6.9

$    (3.7)

Loss from discontinued operations

$       ----

$       ----

$     ----

$    (1.9)

Net income (loss)

$       1.3

$      (0.9)

$     6.9

$    (5.6)

Fully diluted net income (loss) per share – continuing operations

$     0.02

$    (0.02)

$   0.12

$  (0.07)

Fully diluted net income (loss) per share – discontinued operations

$       ----

$       ----

$     ----

$  (0.03)

Fully diluted net income (loss) per share

$     0.02

$    (0.02)

$   0.12

$  (0.10)

Adjusted EBITDA (4)(7)

$       2.9

$       1.7

$   14.0

$     4.7

Adjusted EBITDA with add-back of restructuring and other charges (4)(7)

$       4.2

$       3.9

$   15.3

$   12.3

Cash provided by operations

$       3.6

$       0.3

$   11.0

$     3.9

Bookings (5)

$     28.2

$     28.5

$ 144.3

$ 145.3

At June 30:

2013

2012

Cash and cash equivalents

$     15.7

$    11.5

Outstanding debt

$       ----

$      6.0

Secured revenue (6)

$     46.5

$    42.5

(2)

Amounts include the impact of foreign currency exchange rate differences. Excluding the impact of foreign currency exchange rate differences, revenue for the three and twelve months ended June 30, 2013 decreased by 1% and 4%, respectively, over the same prior year periods.

(3)

Operating income for both the three and twelve months ended June 30, 2013 included $1.3 million in restructuring or other charges, compared with $2.2 million and $7.5 million, respectively, for the same prior year periods.

(4)

EBITDA is a non-GAAP measure. Adjusted EBITDA, also a non-GAAP measure, is EBITDA with stock-based compensation added back.

(5)

Amounts include the impact of foreign currency exchange rate differences. Excluding the impact of foreign currency exchange rate differences, bookings for the three and twelve months ended June 30, 2013 decreased by 2% and 1%, respectively, over the same prior year periods.

(6)

Amounts include the impact of foreign currency exchange rate differences. Excluding the impact of foreign currency exchange rate differences, secured revenue at June 30, 2013 increased by 10% over the same prior year period.

(7)

During the three and twelve months ended June 30, 2012, the Company recorded $0.2 million in French business tax expense and initially presented that expense within the selling, general and administrative line of its consolidated statement of operations. During the three and twelve months ended June 30, 2013, the Company recorded $0.2 million in such expenses and presented them in the provision for income taxes line of its consolidated statement of operations, given that they were derived from an income-based measure. The prior year presentation has been revised to conform to the current year presentation.

HARRIS INTERACTIVE INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

June 30,

June 30,

2013

2012

Assets

   Cash and cash equivalents

$         15,744

$    11,456

   Accounts receivable, net

19,165

19,940

   Unbilled receivables

8,337

7,513

   Prepaids and other current assets

3,889

3,859

   Deferred tax assets

286

243

Total current assets

47,421

43,011

   Property, plant and equipment, net

2,466

2,500

   Other intangibles, net

8,061

10,795

   Other assets

536

1,080

Total assets

$         58,484

$    57,386

Liabilities and Stockholders' Equity

   Accounts payable

$          7,273

$      7,628

   Accrued expenses

20,170

21,643

   Current portion of long-term debt

-

4,794

   Deferred revenue

11,584

10,088

   Liabilities from discontinued operations

-

181

Total current liabilities

39,027

44,334

   Long-term debt

-

1,199

   Deferred tax liabilities

1,286

1,696

   Other long-term liabilities

2,569

4,072

Total stockholders' equity

15,602

6,085

Total liabilities and stockholders' equity

$         58,484

$    57,386

HARRIS INTERACTIVE INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

Three Months Ended

Twelve Months Ended

June 30,

June 30,

2013 (7)

2012 (7)

2013 (7)

2012 (7)

Revenue from services

$       36,671

$       36,501

$     140,322

$     147,503

Operating expenses:

   Cost of services

22,596

23,103

83,962

91,902

   Selling, general and administrative

10,431

10,537

43,917

46,116

   Depreciation and amortization

850

1,005

3,663

4,607

   Restructuring and other charges

1,302

2,182

1,302

7,530

   Total operating expenses

35,179

36,827

132,844

150,155

Operating income (loss)

1,492

(326)

7,478

(2,652)

Operating margin

4.1%

-0.9%

5.3%

-1.8%

Interest expense, net

79

133

316

689

   Income (loss) from continuing operations before income taxes

1,413

(459)

7,162

(3,341)

Provision for income taxes

93

473

254

388

   Income (loss) from continuing operations

1,320

(932)

6,908

(3,729)

   Loss from discontinued operations

-

-

-

(1,854)

   Net income (loss)

$         1,320

$          (932)

$         6,908

$        (5,583)

Basic net income (loss) per share:

   Continuing operations

$          0.02

$         (0.02)

$          0.12

$         (0.07)

   Discontinued operations

-

-

-

(0.03)

Basic net income (loss) per share

$          0.02

$         (0.02)

$          0.12

$         (0.10)

Diluted net income (loss) per share:

   Continuing operations

$          0.02

$         (0.02)

$          0.12

$         (0.07)

   Discontinued operations

-

-

-

(0.03)

Diluted net income (loss) per share

$          0.02

$         (0.02)

$          0.12

$         (0.10)

Weighted average shares outstanding:

Basic

56,344,628

55,733,313

56,186,583

55,383,780

Diluted

58,426,274

55,733,313

58,114,355

55,383,780

Three and Twelve Months Ended June 30, 2013

Reconciliation of GAAP Net Income (Loss) to EBITDA and Adjusted EBITDA

Amounts in thousands of USD

Three months ended

Twelve months ended

June 30,

June 30,

2013 (7)

2012 (7)

2013 (7)

2012 (7)

GAAP net income (loss)

$      1,320

$       (932)

$      6,908

$  (5,583)

 Loss from discontinued operations

-

-

-

1,854

Interest expense, net

79

133

316

689

Provision for income taxes

93

473

254

388

Depreciation and amortization

962

1,182

4,239

5,555

EBITDA

$      2,454

$        856

$    11,717

$   2,903

Stock-based compensation (8)

484

830

2,301

1,827

Adjusted EBITDA

$      2,938

$     1,686

$    14,018

$   4,730

Adjusted EBITDA

$      2,938

$     1,686

$    14,018

$   4,730

Add-back of restructuring and other charges

1,302

2,182

1,302

7,530

Adjusted EBITDA with add-back of restructuring and other charges

$      4,240

$     3,868

$    15,320

$ 12,260

(8) Stock-based compensation expense represents the cost of stock-based compensation accounted for under the FASB guidance for stock-based compensation.

Full Year Fiscal 2014 Guidance

Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA

Amounts in millions of USD

For the Fiscal Year
Ending June 30,
2014 (1)(2)

GAAP net income

$                    9.3

Interest expense, net

-

Provision for income taxes

0.6

Depreciation and amortization

3.7

EBITDA

$                  13.6

Stock-based compensation (3)

1.9

Adjusted EBITDA

$                  15.5

Adjusted EBITDA

$                  15.5

Add-back of restructuring and other charges

-

Adjusted EBITDA with add-back of restructuring and other charges

$                  15.5

(1) This reconciliation is based on the midpoint of the Adjusted EBITDA guidance range provided in this press release.

(2) The amounts expressed in this column are based on current estimates as of the date of this press release.

(3) Stock-based compensation expense represents the cost of stock-based compensation accounted for under the FASB guidance for stock-based compensation.