Move, Inc. Announces Fourth Quarter and Full Year 2007 Financial Results

RISMEDIA, March 3, 2008-Move, Inc. reported financial results for the fourth quarter and full year ended December 31, 2007. Revenue for the full year 2007 was $286.3 million compared to $280.1 million for the full year 2006. The net loss applicable to common stockholders (“net loss”) for the full year 2007 was $(4.0) million, or $(0.03) per share, compared to net income of $17.2 million, or $0.11 per diluted share, for the full year 2006. Results for the full year 2007 included an impairment charge of $6.1 million, a litigation settlement charge of $3.9 million and a loss from discontinued operations of $2.8 million. Net income for the full year 2006 included $15.7 million in “Other Income” from the sale of investments. Excluding the effect of these unusual items, our net income in 2007 would have been $8.9 million compared to $2.3 million in 2006.

These results reflect the reclassification of the Company’s Homeplans business to discontinued operations as well as the restated results for the quarters ended June 30 and September 30, 2007 as described more fully below.

“Despite the sharp downturn and volatility in the real estate market in 2007, we grew revenue in our real estate businesses, namely REALTOR.com®, Top Producer and New Homes,” said Mike Long, Move’s CEO. “For the year we also delivered the highest EBITDA margin in our history and generated positive cash flow for the third consecutive year.”

Total revenue for the fourth quarter was $71.7 million compared to $69.9 million in the fourth quarter of 2006. Net loss applicable to common stockholders (“net loss”) for the fourth quarter of 2007 was $(5.3) million, or $(0.03) per share, compared to net income of $17.2 million, or $0.09 per diluted share, for the fourth quarter of 2006. Results for the fourth quarter of 2007 included an impairment charge of $6.1 million and a loss from discontinued operations of $2.2 million. Net income in the fourth quarter of 2006 included $15.7 million in “Other Income” from the sale of investments. Excluding the effect of these unusual items, our net income in the fourth quarter of 2007 would have been $3.0 million compared to $1.7 million in the fourth quarter of 2006.

Move’s EBITDA (earnings before interest, restructuring charges and certain other non-cash and non-recurring items, principally impairment charges, litigation settlement charges, stock-based compensation charges, depreciation, and amortization) on a non-GAAP basis for the full year 2007 was $30.2 million, compared to $24.8 million for the full year 2006. EBITDA for the fourth quarter of 2007 was $8.7 million, compared to $8.8 million for the fourth quarter of 2006. The Company has reported EBITDA because management uses it to monitor and assess the Company’s performance and believes it is helpful to investors in understanding the Company’s business.

“We continued to grow in a real estate market with declining home values and fewer transactions,” said Lorna Borenstein, Move’s president. “We are shoring up our core real estate business while we transform others. 2008 is about setting ourselves up with new products, a growing consumer audience, new revenue streams and a world class team.”

Homeplans Divestiture

In the fourth quarter of 2007, the Company decided to divest its Homeplans business, which had been reported as part of the Consumer Media segment. A sale of the business is anticipated before the end of 2008. As a result, the operating results of this business have been reclassified as discontinued operations and the assets and liabilities for this business have been reclassified as assets and liabilities from discontinued operations on the balance sheet for all periods presented.

Share Repurchase Program

Under the share repurchase program announced in mid-September, during the fourth quarter, Move, Inc. repurchased 4.2 million shares of its common stock at an average purchase price of $2.40 per share, or a total of $10.0 million.

Restated Financial Statements for Second and Third Quarters of 2007

Today the Company filed amended Form 10-Q/As for the second and third quarter of 2007. The amendments are a result of the need to restate those quarters for a correction in accounting for stock-based compensation related to the Company’s restricted stock unit awards. As previously disclosed, the Company amended the awards in the second quarter of 2007 and at the time, it concluded that with the changes to the awards, the likelihood of attaining those targets was still “probable” and continued to recognize the stock-based compensation expense from the awards. Upon an updated analysis of the awards and FAS 123R, the Company should have concluded that without the amendment, the likelihood was “improbable” and should have stopped recognizing expense. As a result, in the restated numbers, in the second quarter of 2007, the Company reversed all stock-based compensation expense related to the awards from inception, which was the second quarter of 2006, through the first quarter of 2007. In addition, the Company reversed the additional expense previously recognized in the second and third quarter of 2007 in those restated quarters. All of the adjustments made are non-cash charges and do not impact revenue or reported EBITDA in any of those periods. However, the GAAP net loss of $(3.5) million previously reported in the second quarter of 2007 is now net income of $4.4 million, and the net loss previously reported in the third quarter of 2007 of $(4.6) million decreased to $(3.3) million. The details are available in the amendments to the second and third quarter 10-Q/As filed today and in attached tables.

Investments in Auction Rate Securities

As of December 31, 2007 the Company’s cash and short-term investments were $175.6 million, which includes $129.9 million of investments in auction rate securities. These are high-grade (AAA rated) student loan, federal government-backed, auction rate securities issued by student loan funding organizations, which loans are 97% guaranteed under FFELP (Federal Family Education Loan Program). Historically these securities had been considered short term investments and were highly liquid as the interest rates generally reset every 28 days and allowed investors to either roll over their holdings or sell them at par. However, as has been reported in the press, earlier this month the auctions for auction rate securities backed by student loans failed. The auction rate securities continue to pay interest at LIBOR plus 1.5% and there has been no change in the rating of these securities.

As a result of the failed auctions, these securities are currently not liquid. While the Company remains confident it has enough cash to continue to execute its current business plans, it may not be able to access these funds until a future auction of these investments is successful or they are redeemed by the issuer or they mature. Maturity dates range from June 2030 to November 2047.

At this time, there is no evidence that these investments are impaired even though the market for these investments is presently uncertain. The Company will continue to monitor and evaluate these investments on an ongoing basis for impairment. If the credit ratings of the security issuers deteriorate or if normal market conditions do not return in the near future, the Company may be required to reduce the value of its investments through an impairment charge and reflect them as long-term investments on its March 31, 2008, and any future, balance sheets.

For more information, visit http://www.move.com.