Move Inc. Reports Operating Results (10-Q/A)
Homestore Inc. is a leading destination on the Internet for real estate information, advertising products and services. The family of web sites, consisting of homestore.com, REALTOR.com, HomeBuilder.com, SpringStreet.com and CommercialSource.com provides the most comprehensive source of real estate listings and content on the Internet. Through the family of web sites, they provide a wide variety of information and tools for consumers, real estate industry professionals, advertisers and providers of real estate related products and services. Move Inc. has a market cap of $256.41 million; its shares were traded at around $1.66 with and P/S ratio of 1.06. Highlight of Business Operations: In the third and fourth quarters of 2008, our Board of Directors approved restructuring and integration plans with the objective of eliminating duplicate resources and redundancies and implementing a new operating structure to lower total operating expenses. As a result of these plans, we incurred a restructuring charge from continuing operations of $4.4 million for the year ended December 31, 2008. Included in this charge were lease obligations and related charges of $3.0 million for the consolidation of our operations in Westlake Village, California and the vacancy of a portion of the leased facility. In addition, the charge included severance and other payroll-related expenses of $1.4 million associated with the reduction in workforce of 74 employees whose positions with us were eliminated. These workforce reductions affected 27 employees in cost of revenue positions, 31 employees in sales and marketing, 5 employees in product and web site development and 11 employees in general and administrative positions. We incurred a restructuring charge from discontinued operations of $1.6 million associated with severance and other payroll-related expenses for 199 employees who were terminated.
Revenue decreased $7.1 million, or 11%, to $54.9 million for the three months ended March 31, 2009, compared to $62.0 million for the three months ended March 31, 2008. The decrease in revenue was due to decreases of $5.3 million in the Real Estate Services segment and $1.8 million in the Consumer Media segment. These changes by segment are explained in the segment information below.
$11.4 million for the three months ended March 31, 2008. The increase was primarily due to higher product fulfillment costs of $1.4 million partially offset by $0.2 million in other cost decreases.
Sales and marketing. Sales and marketing expenses decreased $3.4 million, or 14%, to $20.7 million for the three months ended March 31, 2009, compared to $24.1 million for the three months ended March 31, 2008. The decrease was primarily due to a decrease in online distribution costs of $4.1 million, partially offset by an increase in sales compensation costs of $0.7 million.
General and administrative. General and administrative expenses increased $0.7 million, or 3%, to $23.6 million for the three months ended March 31, 2009, compared to $22.9 million for the three months ended March 31, 2008. The increase was primarily a result of a $6.2 million increase in non-cash stock based compensation primarily due to the acceleration and modification of options upon the termination of two executive officers and restricted stock awards and options granted to the new Chief Executive Officer that were immediately vested. These increases were partially offset by a decrease in personnel related costs of $3.1 million, a decrease in legal costs of $0.8 million, a decrease in rent expense of $0.4 million as a result of our restructuring efforts, a $0.4 million decrease in consulting costs and other cost decreases of $0.8 million.
Real Estate Services expenses decreased $6.2 million, or 14%, to $38.1 million for the three months ended March 31, 2009, compared to $44.3 million for the three months ended March 31, 2008. There was a $5.1 million decrease in general and administrative expenses primarily due to a $4.3 million decrease in personnel related expenses and other cost reductions of $0.8 million. The decrease in personnel related expenses included $1.3 million associated with non-cash stock based compensation decreases and $2.0 million of severance costs included in the three months ended March 31, 2008. Sales and marketing expenses decreased $1.4 million primarily due to a $2.3 million decrease in online distribution costs, partially offset by increased personnel related costs of $0.8 million and other cost increases of $0.1 million. Product and web site development costs decreased $0.4 million due to reduced outside consulting costs. These decreases were partially offset by an increase in cost of revenue of $0.8 million primarily due to an increase in product fulfillment costs associated with improvements to the Featured CommunityTM products.
Read the The complete ReportMOVE is in the portfolios of Ron Baron of Baron Funds.