Harris Interactive® Reports Third Quarter Fiscal 2013 Results

Raises Adjusted EBITDA Guidance; Introduces Fiscal 2013 Revenue Guidance

News provided by

Harris Interactive

May 02, 2013, 04:00 ET

ROCHESTER, N.Y., May 2, 2013 /PRNewswire/ -- Harris Interactive Inc. (NASDAQ: HPOL), a leading global market research firm, today announced its third quarter fiscal 2013 financial results.

(Logo: http://photos.prnewswire.com/prnh/20100518/NY06801LOGO)

Al Angrisani, President and Chief Executive Officer of Harris Interactive, commented, "Raising adjusted EBITDA guidance on strong Q3 results demonstrates further improvement in our business model and the turnaround effort. Sales remain a challenge, but essentially flat year-to-date sales versus the prior year are indicative of a gradual improvement across many, but not all, of our business units."

Eric Narowski, Chief Financial Officer of Harris Interactive, commented, "Based on current market conditions and forecasts, we are raising our adjusted EBITDA guidance for the fiscal year ending June 30, 2013 to between $14.0 and $15.0 million. Additionally, we are introducing full fiscal 2013 revenue guidance of between $139.0 and $141.0 million. Performance at these levels will allow us to continue to improve our balance sheet and pay off our remaining bank debt by fiscal year end."

Key Financial Statistics (1)

 

 

 

USD in millions – unaudited

 

For the Three Months Ended March 31,

 

For the Nine Months Ended March 31,

2013

2012

2013

2012

Revenue (2)

$     33.6

$     34.1

$   103.7

$  111.0

Operating income (loss) (3)

$       1.1

$      (0.4)

$     6.0

$    (2.3)

Net income (loss)

$       1.0

$      (0.3)

$     5.6

$    (4.7)

Fully diluted net income (loss) per share

$     0.02

$    (0.01)

$   0.10

$  (0.08)

Adjusted EBITDA (4)

$       2.7

$      1.5

$    11.1

$     3.0

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

$       2.7

$      1.5

$    11.1

$     8.4

Cash provided by operations

$       5.5

$      0.1

$      7.4

$      3.6

Bookings (5)

$     34.4

$    39.5

$  116.1

$ 116.8

At March 31:

2013

2012

Cash and cash equivalents

$      14.9

$    13.2

Outstanding debt

$        2.4

$      7.2

Secured revenue (6)

$      55.0

$    50.5

________

  1. All amounts shown reflect our Asian operations as discontinued operations.
  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 nine months ended March 31, 2013 decreased by 1% and 6%, respectively, over the same prior year periods.
  3. Operating income for the three and nine months ended March 31, 2013 did not include any restructuring or other charges, compared with $(19) thousand and $5.3 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 nine months ended March 31, 2013 decreased by 10% and 0.2%, 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 March 31, 2013 increased by 10% over the same prior year period.

Third Quarter Fiscal 2013 Results Conference Call and Webcast Access

Al Angrisani, President and Chief Executive Officer, will host a conference call to discuss these results on Thursday, May 2, 2013, at 5:00 p.m. ET. Formal remarks will be followed by a question and answer session.

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 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 Company's 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 Company's ability to sustain and grow its revenue base, the Company's ability to maintain and improve cost efficient operations, the impact of reorganization, restructuring and related charges, quarterly variations in financial results, the Company's ability to maintain compliance with certain NASDAQ listing requirements, actions of competitors, the Company's ability to develop and maintain products and services attractive to the market, and the Company's ability to remain in compliance with the financial covenants in its credit agreement.

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 world's leading 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 proprietary solutions in the areas of market and customer insight, corporate brand and reputation strategy, and marketing, advertising, public relations and communications research. Harris possesses expertise in a wide range of industries including health care, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant, and consumer package goods. Additionally, Harris has a portfolio of multi-client offerings that complement our custom solutions while maximizing our client's research investment. Serving clients in more than 196 countries and territories through our North American and European offices, Harris specializes in delivering research solutions that help us - and our clients-stay ahead of what's next. For more information, please visit www.harrisinteractive.com.

HPOL – E

HARRIS INTERACTIVE INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)













March 31,

June 30,





2013

2012

Assets

   Cash and cash equivalents

$         14,947

$    11,456

   Accounts receivable, net

20,220

19,940

   Unbilled receivables

6,317

7,513

   Prepaids and other current assets

4,425

3,859

   Deferred tax assets


161

243

Total current assets

46,070

43,011








   Property, plant and equipment, net

2,315

2,500

   Other intangibles, net

8,766

10,795

   Other assets


513

1,080

Total assets

$         57,664

$    57,386
















Liabilities and Stockholders' Equity

   Accounts payable


$           6,878

$      7,628

   Accrued expenses


17,839

21,643

   Current portion of long-term debt

2,397

4,794

   Deferred revenue


12,373

10,088

   Liabilities from discontinued operations

-

181

Total current liabilities

39,487

44,334








   Long-term debt


-

1,199

   Deferred tax liabilities

1,491

1,696

   Other long-term liabilities

2,870

4,072









Total stockholders' equity

13,816

6,085

Total liabilities and stockholders' equity

$         57,664

$    57,386

HARRIS INTERACTIVE INC.


CONSOLIDATED STATEMENTS OF OPERATIONS


(In thousands, except share and per share data)


(Unaudited)













Three Months Ended

Nine Months Ended



March 31,

March 31,



2013

2012

2013

2012








Revenue from services

$       33,554

$       34,117

$     103,650

$     111,002








Operating expenses:






   Cost of services

20,013

20,791

61,366

68,799

Selling, general and administrative 

11,501

12,580

33,487

35,579

Depreciation and amortization

902

1,136

2,813

3,602

Restructuring and other charges

-

(19)

-

5,348

Total operating expenses

32,416

34,488

97,666

113,328

Operating income (loss)

1,138

(371)

5,984

(2,326)

Operating margin

3.4%

-1.1%

5.8%

-2.1%

Interest expense, net

67

196

237

557

    Income (loss) from continuing operations before income taxes

1,071

(567)

5,747

(2,883)

Provision (benefit) for income taxes

118

(88)

161

(85)

   Income (loss) from continuing operations

953

(479)

5,586

(2,798)

   Income (loss) from discontinued operations

-

156

-

(1,854)

   Net income (loss)

$            953

$          (323)

$         5,586

$       (4,652)








Basic net income (loss) per share:






   Continuing operations

$           0.02

$         (0.01)

$           0.10

$         (0.05)

   Discontinued operations

-

0.00

-

(0.03)

Basic net income (loss) per share

$           0.02

$         (0.01)

$           0.10

$         (0.08)








Diluted net income (loss) per share:






   Continuing operations

$           0.02

$         (0.01)

$           0.10

$         (0.05)

   Discontinued operations

-

0.00

-

(0.03)

Diluted net income (loss) per share

$           0.02

$         (0.01)

$           0.10

$         (0.08)








Weighted average shares outstanding:





     Basic

56,301,471

55,572,845

56,134,161

55,287,089

     Diluted

58,206,271

55,572,845

57,846,756

55,287,089

Harris Interactive Inc.




Three and Nine Months Ended March 31, 2013




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



Amounts in thousands of USD











Three Months Ended

Nine Months Ended

March 31,

March 31,

2013

2012

2013

2012

GAAP net income (loss)

$         953

$       (323)

$   5,586

$  (4,652)

 (Income) loss from discontinued operations 

-

(156)

-

1,854

Interest expense, net

67

196

237

557

Provision (benefit) for income taxes

118

(88)

161

(85)

Depreciation and amortization

1,034

1,393

3,277

4,373

EBITDA

$       2,172

$     1,022

$   9,261

$   2,047

Stock-based compensation (7)

569

447

1,817

997

Adjusted EBITDA

$       2,741

$     1,469

$ 11,078

$   3,044






Adjusted EBITDA

$       2,741

$     1,469

$ 11,078

$   3,044

Add-back of restructuring and other charges

-

(19)

-

5,348

Adjusted EBITDA with add-back of restructuring and other charges

$       2,741

$     1,450

$ 11,078

$   8,392






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

Full Year Fiscal 2013 Guidance


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

Amounts in millions of USD









For the Fiscal
Year Ending
June 30,
2013 (1)(2)

For the Fiscal
Year Ended
June 30, 2012

GAAP net income (loss)

$                     7.3

$              (5.6)

Loss from discontinued operations, net of tax

-

1.9

Interest expense, net

0.3

0.7

Provision for income taxes

0.2

0.2

Depreciation and amortization

4.3

5.6

EBITDA

$                   12.1

$               2.8

Stock-based compensation (3)

2.4

1.8

Adjusted EBITDA

$                   14.5

$               4.6




Adjusted EBITDA

$                   14.5

$               4.6

Add-back of restructuring and other charges

-

7.5

Adjusted EBITDA with add-back of restructuring and other charges

$                   14.5

$             12.1




(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.

SOURCE Harris Interactive

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