April 28, 2011

Harris Interactive® Reports Third Quarter Fiscal 2011 Results

NEW YORK, April 28, 2011 /PRNewswire/ -- 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 Company's operating loss grew from $0.9 million for last year's 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.

(Logo:  http://photos.prnewswire.com/prnh/20110412/MM81191 )

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 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 our operating profitability."

Financial Highlights



For the Three

Months Ended

March 31,

For the Nine

Months 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 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.

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 https://harrisinteractives.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 https://harrisinteractives.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 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 https://harrisinteractives.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, actions of competitors, the Company's 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 world's 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 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,






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
























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,




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






































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















Press Contact:
Michael T. Burns
Investor Relations
Harris Interactive Inc.
800-866-7655 x7328
mburns@harrisinteractive.com

SOURCE Harris Interactive

News Provided by Acquire Media


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