LoopNet, Inc. Announces First Quarter 2009 Financial Results

SAN FRANCISCO--(Business Wire)--
LoopNet, Inc. (NASDAQ:LOOP), today announced financial results for the first
quarter ended March 31, 2009.

Revenue for the first quarter of 2009 was $20.1 million, compared to $20.6
million in the first quarter of 2008. GAAP net income for the first quarter of
2009 was $2.8 million or $0.08 per diluted share, compared to $4.9 million or
$0.12 per diluted share in the first quarter of 2008. Non-GAAP net income (net
income before stock-based compensation and litigation related costs) for the
first quarter of 2009 was $4.6 million or $0.13 per diluted share, compared to
$6.0 million or $0.15 per diluted share in the first quarter of 2008.

LoopNet`s Adjusted EBITDA (earnings before interest, tax, depreciation,
amortization, stock-based compensation and litigation related costs) for the
first quarter of 2009 was $8.4 million, compared to $9.6 million in the first
quarter of 2008. The Company has reported Adjusted 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.

"Our business performed well in the first quarter, despite significant economic
and industry-specific headwinds," said LoopNet Chairman and CEO Richard Boyle.
"We believe that our leading position in the market, healthy profit margins, and
cash-rich balance sheet are allowing us to execute against our plan through this
downturn, while presenting us with numerous opportunities to expand our business
and set the stage for future growth."

The number of LoopNet registered members, which includes both basic and premium
members, grew to 3,421,023 during the first quarter of 2009, a 23% increase over
the first quarter of 2008. The number of LoopNet premium members as of the end
of the first quarter of 2009 was 74,329, a 16% decline from the first quarter of
2008. The average monthly price of premium membership increased to $66.18, a 12%
increase over the first quarter of 2008. There were 687,000 total commercial
real estate listings active on the LoopNet marketplace as of the end of the
first quarter of 2009, a 15% increase over the first quarter of 2008. In
addition, there were 33.0 million profile views of listings on the LoopNet
marketplace during the first quarter of 2009, a 25% decline over the first
quarter of 2008. Average monthly unique visitors during the first quarter of
2009, as reported by comScore Media Metrix, were approximately 992,000, a 5%
increase over the first quarter of 2008.

Balance Sheet and Liquidity

As of March 31, 2009, LoopNet had $68.7 million of cash, cash equivalents and
short-term investments and no debt. In addition, on April 14, 2009, the Company
received $48 million (net of transaction costs) from the private equity
investment that the Company announced on March 30, 2009, which is not included
in the cash balance as of March 31, 2009. As part of the private equity
investment, the Company issued convertible preferred stock that is convertible
into 7,440,476 shares of common stock. The preferred stock does not pay or
accrue any dividends.

Business Outlook

Based on current visibility, the Company expects revenue for the quarter ending
June 30, 2009 to be in the range of $18.8 to $19.1 million,Adjusted EBITDA to be
in the range of $7.2 to $7.5 million and non-GAAP net income to be in the range
of $0.08 to $0.09 per diluted share, assuming a fully diluted share count of
approximately 43.2 million and an effective tax rate of approximately 42%. The
Company expects stock-based compensation to be approximately $0.03 per share
(net of tax benefit) in the quarter ending June 30, 2009. The Adjusted EBITDA
and non-GAAP net income guidance for the quarter ending June 30, 2009 exclude
stock-based compensation and litigation related costs.

Conference Call Information

LoopNet, Inc. will discuss these financial results in a conference call at 1:30
p.m. PDT, 4:30 p.m. EDT, today. To participate in the conference call, please
dial 888-419-5570 if you are calling from within the United States or
617-896-9871 if you are calling from outside the United States, and enter pass
code number 40052268. Investors may also listen to a live web cast of the
conference call on the investor relations section of our website at
investor.LoopNet.com/events.cfm. For investors unable to participate in the live
conference call, an audio replay will be available until Friday, May 1, 2009 at
8:59 p.m. PDT. To access the audio replay, dial 888-286-8010 within the United
States or 617-801-6888 internationally and enter pass code number 55623415. A
web cast replay of the call will be available on the investor relations section
of our website at http://investor.LoopNet.com/events.cfm approximately two hours
after the conclusion of the call and will remain available for 30 calendar days.

Non-GAAP Financial Measures

This press release includes discussions of Adjusted EBITDA, non-GAAP net income
and non-GAAP net income per share, which are non-GAAP financial measures
provided as a complement to results provided in accordance with accounting
principles generally accepted in the United States of America ("GAAP"). The term
"Adjusted EBITDA" refers to a financial measure that we define as earnings
before net interest, income taxes, depreciation, amortization, stock-based
compensation and litigation related costs. The term "non-GAAP net income" refers
to a financial measure that we define as net income before stock-based
compensation and litigation related costs. Non-GAAP net income is also provided
on a per share basis, using shares outstanding at the relevant period of
measurement. Adjusted EBITDA, non-GAAP net income and non-GAAP net income per
share are not substitutes for measures determined in accordance with GAAP, and
may not be comparable to Adjusted EBITDA, non-GAAP net income and non-GAAP net
income per share as reported by other companies. We believe Adjusted EBITDA to
be relevant and useful information to our investors as this measure is an
integral part of our internal management reporting and planning process and is
the primary measure used by our management to evaluate the operating performance
of our business. The components of Adjusted EBITDA include the key revenue and
expense items for which our operating managers are responsible and upon which we
evaluate their performance, and we also use Adjusted EBITDA for planning
purposes and in presentations to our board of directors. We believe non-GAAP net
income and non-GAAP net income per share to be relevant and useful information
to our investors as they provide meaningful insight into the Company`s
performance while excluding infrequent and non-recurring items that may not be
considered directly related to our on-going business operations. We believe that
non-GAAP net income and non-GAAP net income per share are also used by companies
and investors to evaluate performance in the online marketplace and platform
industry. We also believe that Adjusted EBITDA, non-GAAP net income and non-GAAP
net income per share allow for a more accurate comparison of our operating
results over historical periods. A limitation of Adjusted EBITDA, non-GAAP net
income and non-GAAP net income per share is that they do not include all items
that impact our net income for the period. Management compensates for this
limitation by also relying on the comparable GAAP financial measure of net
income, which includes the items that are excluded from Adjusted EBITDA,
non-GAAP net income and non-GAAP net income per share. Management believes that
these non-GAAP measures should be considered as a complement to, and not as a
substitute for, or superior to, the corresponding measures calculated in
accordance with GAAP. A reconciliation of these non-GAAP measures to GAAP is
provided in the attached tables. Reconciliations of Company expectations for
Adjusted EBITDA and non-GAAP net income per share for the quarter ending June
30, 2009 to Company expectations for GAAP net income for the quarter ending June
30, 2009 are not provided, as GAAP net income expectations for this period is
not accessible. GAAP net income expectations are not accessible for this period
due to the uncertain nature of the timing and amount of potential litigation
related costs.

About LoopNet, Inc.

LoopNet, Inc. is the leading online marketplace for commercial real estate and
businesses for sale in the United States. The LoopNet.com online marketplace
enables commercial real estate agents, working on behalf of property owners and
landlords, to list properties for sale or for lease by submitting detailed
property listing information in order to find a buyer or tenant. Commercial real
estate brokers, agents, buyers and tenants use the LoopNet online marketplace to
search for available property listings that meet their commercial real estate
criteria. By connecting the sources of commercial real estate supply and demand
in an efficient manner, LoopNet enables commercial real estate participants to
initiate and complete transactions more cost-effectively. LoopNet also delivers
technology and information services to commercial real estate organizations to
manage their online listing presence and optimize property marketing.

LoopNet customers include virtually all of the top commercial real estate firms
in the U.S., including CB Richard Ellis, Century 21 Commercial, Coldwell Banker
Commercial, Colliers International, The CORE Network, Cushman & Wakefield, First
Industrial Realty Trust, Grubb & Ellis, Jones Lang LaSalle, Lee & Associates,
Lincoln Property Company, Marcus & Millichap, NAI Global, ONCOR International,
ProLogis, Prudential CRES, RE/MAX, Sperry Van Ness, Staubach Retail and TCN
Worldwide.

Forward Looking Statements

This release contains forward-looking statements regarding LoopNet`s
expectations regarding its future financial results as well as trends in the
commercial real estate industry. These statements are based on current
information and expectations that are inherently subject to change and involve a
number of risks and uncertainties. Actual events or results might differ
materially from those in any forward-looking statement due to various factors,
including, but not limited to economic events or trends in the commercial real
estate market or in general, the effects of recent economic and consumer
confidence trends on global and domestic financial markets, our ability to
continue to attract new registered members, convert them into premium members
and retain such premium members, seasonality, our ability to manage our growth,
our ability to successfully integrate the technologies, operations and personnel
of acquired businesses in a timely manner, our ability to obtain the expected
strategic and financial benefits from recent and future acquisitions, our
ability to introduce new or upgraded products or services and customer
acceptance of such services, our ability to obtain or retain listings from
commercial real estate brokers, agents and property owners and competition from
current or future companies. Additional information concerning factors that
could cause actual events or results to differ materially from those in any
forward looking statement are contained in our Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission ("SEC"), and subsequent SEC
filings made by us. Copies of filings made by us with the SEC are available on
the SEC`s website or at http://investor.loopnet.com/sec.cfm. LoopNet does not
intend to update the forward-looking statements included in this press release
which are based on information available to us as of the date of this release.

LOOPNET, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

December 31, March 31,
2008 2009
(unaudited)
Assets
Current
assets:
Cash and cash $ 61,325 $ 65,409
equivalents
Short-term 3,262 3,296
investments
Accounts 1,564 1,498
receivable,
net of
allowance of
$121 and
$128,
respectively
Prepaid 1,530 2,353
expenses and
other current
assets
Deferred 607 607
income taxes
Total current 68,288 73,163
assets

Property and 2,208 2,095
equipment,
net
Goodwill 23,056 23,243
Intangibles, 5,678 5,376
net
Deferred 5,829 5,361
income taxes
Deposits and 3,151 3,118
other
noncurrent
assets
Total assets $ 108,210 $ 112,356

Liabilities
and
stockholders`
equity
Current
liabilities:
Accounts $ 622 $ 928
payable
Accrued 2,020 2,103
liabilities
Accrued 2,759 2,034
compensation
and benefits
Deferred 10,358 10,330
revenue
Total current 15,759 15,395
liabilities

Commitments
and
contingencies
Stockholders`
equity:
Common stock, 39 39
$.001 par
value,
125,000,000
shares
authorized;
39,218,665
and
39,332,848
shares
issued,
respectively;
and
34,292,704
and
34,406,887
shares
outstanding,
respectively
Additional 114,915 116,872
paid in
capital
Other (276 ) (512 )
comprehensive
loss
Treasury (54,556 ) (54,556 )
stock, at
cost,
4,925,961
shares
Retained 32,329 35,118
earnings
Total 92,451 96,961
stockholders`
equity
Total $ 108,210 $ 112,356
liabilities
and
stockholders`
equity

LOOPNET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(unaudited)

Three months ended March 31,
2008 2009

Revenues $ 20,590 $ 20,102
Cost of revenue (1) 2,414 2,892
Gross margin 18,176 17,210

Operating expenses (1):
Sales and marketing 4,841 4,507
Technology and product development 1,993 2,559
General and administrative 4,056 5,437
Total operating expenses 10,890 12,503
Income from operations 7,286 4,707

Interest and other income, net 975 12
Income before tax 8,261 4,719

Income tax expense 3,407 1,930
Net income $ 4,854 $ 2,789

Net income per share
Basic $ 0.13 $ 0.08
Diluted $ 0.12 $ 0.08

Weighted average shares
Basic 37,460 34,302
Diluted 39,117 35,219

(1) Stock-based compensation is allocated as follows:

Cost of revenue $ 115 $ 167
Sales and marketing 553 600
Technology and product development 246 486
General and administrative 438 590
Total $ 1,352 $ 1,843

LOOPNET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)

Three months ended March 31,
2008 2009

Cash flows from operating activities:
Net income $ 4,854 $ 2,789
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense 419 617
Stock-based compensation 1,352 1,843
Tax benefits from exercise of stock options (249 ) (59 )
Deferred income tax 298 469
Changes in operating assets and liabilities:
Accounts receivable (275 ) 66
Prepaid expenses and other assets 104 (808 )
Income taxes payable 1,913 59
Accounts payable (171 ) 306
Accrued expenses and other current liabilities 652 83
Accrued compensation and benefits (773 ) (725 )
Deferred revenue 777 (29 )
Net cash provided by operating activities 8,901 4,611

Cash flows from investing activities:
Purchase of property and equipment (182 ) (203 )
Purchase of investments (250 ) (250 )
Acquisitions, net of acquired cash (1,300 ) (188 )
Net cash used in investing activities (1,732 ) (641 )

Cash flows from financing activities:
Net proceeds from stock-based award activity 127 55
Repurchase of common stock (39,145 ) -
Tax benefits from exercise of stock options 249 59
Net cash provided by (used in) financing activities (38,769 ) 114

Net increase (decrease) in cash and cash equivalents (31,600 ) 4,084

Cash and cash equivalents at beginning of period 104,564 61,325

Cash and cash equivalents at end of period $ 72,964 $ 65,409

LOOPNET, INC.
Reconciliation of GAAP Net Income to Adjusted EBITDA
(In thousands, except per share data)

Three months ended March 31,
2008 2009

GAAP net income $ 4,854 $ 2,789

Add back (deduct):
Income tax expense 3,407 1,930
Depreciation and amortization 419 617
Interest and other income, net (975 ) (12 )
Stock-based compensation 1,352 1,843
Litigation related costs 529 1,183
Adjusted EBITDA $ 9,586 $ 8,350

Reconciliation of GAAP Net Income to Non-GAAP Net Income
(In thousands, except per share data)

Three months ended March 31,
2008 2009

GAAP net income $ 4,854 $ 2,789

Add back (deduct):
Stock-based compensation 1,352 1,843
Litigation related costs 529 1,183
Income taxes associated with non-GAAP adjustments (775 ) (1,238 )
Non-GAAP net income $ 5,960 $ 4,577

Diluted net income per share:
GAAP $ 0.12 $ 0.08
Non-GAAP $ 0.15 $ 0.13

Shares used in GAAP and non-GAAP diluted net income per share calculation 39,117 35,219

LoopNet, Inc.
Brent Stumme, 415-284-4310
Chief Financial Officer
Derek Brown, 415-284-4310
VP, Investor Relations & Corporate Planning

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