Conference Call Scheduled for Wednesday, August 13, 2008 at 10:00
A.M. (EDT)
NEW YORK--(Business Wire)--
Reis, Inc. (NASDAQ:REIS) ("Reis" or the "Company") announced its
financial results and operational achievements for the three and six
months ended June 30, 2008.
Results and Performance
Reis presents financial information for its two operating
segments: the information services segment, which we refer to as Reis
Services, and the Residential Development Activities segment. The
Company believes that the utilization of segment reporting will assist
investors in analyzing the two separate businesses. For comparison
purposes, the Company has included pro forma financial information for
the three and six months ended June 30, 2007, which is presented as if
the May 30, 2007 merger (the "Merger") had been consummated between
Reis, Inc., then a privately held real estate information company
("Private Reis"), and a wholly owned subsidiary of Wellsford Real
Properties, Inc. ("Wellsford") as of January 1, 2006.
Consolidated Financial Results
For the three months ended June 30, 2008, the Company's
consolidated net income was $1,024,554, as compared to a consolidated
pro forma net loss of ($8,239,790) for the three months ended June 30,
2007. Total revenue for the three months ended June 30, 2008 and 2007
were $12,903,418 (actual) and $10,985,246 (pro forma), respectively.
During the 2008 period, revenue was comprised of subscription revenue
of $6,504,703 and revenue from sales of residential units of
$6,398,715. During the 2007 pro forma period, revenue was comprised of
subscription revenue of $5,488,542 and revenue from sales of
residential units of $5,496,704. These amounts represent an 18.5%
increase in subscription revenue and a 16.4% increase in revenue from
sales of residential units from the 2007 pro forma period.
For the six months ended June 30, 2008, the Company's consolidated
net income was $1,472,436, as compared to a consolidated pro forma net
loss of ($10,515,813) for the six months ended June 30, 2007. Total
revenues for the six months ended June 30, 2008 and 2007 were
$27,698,347 (actual) and $24,554,670 (pro forma), respectively. During
the 2008 period, revenue was comprised of subscription revenue of
$12,915,807 and revenue from sales of residential units of
$14,782,540. During the 2007 pro forma period, revenue was comprised
of subscription revenue of $10,926,441 and revenue from sales of
residential units of $13,628,229. These amounts represent an 18.2%
increase in subscription revenue and an 8.5% increase in revenue from
sales of residential units from the 2007 pro forma period.
The 2008 periods include a tax benefit of $1,165,000 which
resulted from a change in estimate of net operating losses allocable
for income tax purposes to the fiscal 2007 period subsequent to the
Merger.
Reis Services EBITDA
Management uses EBITDA to monitor and assess Reis Services's
performance and believes it is helpful to investors in understanding
Reis Services's business (see Reconciliation of Net Income to EBITDA
and Adjusted EBITDA below). For the three months ended June 30, 2008,
EBITDA for the Reis Services segment was approximately $2,858,000,
representing a 43.9% EBITDA margin and a 74.4% EBITDA growth rate over
pro forma second quarter 2007 EBITDA of approximately $1,639,000. For
the six months ended June 30, 2008, EBITDA for the Reis Services
segment was approximately $5,550,000, representing a 43.0% EBITDA
margin and 64.4% EBITDA growth rate over 2007 pro forma EBITDA of
approximately $3,376,000.
The increase in EBITDA over the 2007 pro forma periods is
primarily the result of (i) the revenue growth of 18.5% and 18.2% for
the three and six months ended June 30, 2008, respectively, over the
2007 pro forma periods, (ii) the effect of a significant portion of
the revenue growth translating directly to EBITDA growth as a result
of our fixed cost structure (as demonstrated by the increase in EBITDA
margin from 29.9% to 43.9% from the second quarter of 2007 to the
second quarter of 2008 and an increase from 30.9% to 43.0% for the six
months ended June 30, 2007 to the 2008 period) and (iii) higher
expenses in the 2007 pro forma periods as a result of accruals for
lease termination and other operational obligations of Private Reis
that were not Merger related costs or costs of the merged entities.
Consolidated Balance Sheet Information
At June 30, 2008, Reis had consolidated assets of $132,862,451,
including $22,651,415 of cash and cash equivalents, $50,854,401 of
consolidated liabilities and consolidated stockholders' equity of
$82,008,050 or $7.47 per common share based upon 10,984,517 shares
outstanding. Officers and directors of Reis beneficially own
approximately 25% of the common shares outstanding.
Wellsford's primary operating activities immediately prior to the
Merger were the development, construction and sale of three
residential projects and its approximate 23% ownership interest in
Private Reis. At June 30, 2008, the Company's equity in its remaining
real estate assets was approximately $13,415,000 (or 16.4% of
consolidated stockholders' equity).
Operational Highlights
Following are recent operational highlights for Reis:
-- Introduced coverage in May 2008 of an additional 50
metropolitan office markets, concentrated in Florida and
California;
-- Broadened our distribution channels through an agreement with
Thomson Reuters to provide a quarterly sample of our national
level commercial real estate research findings, which would
expose Reis information to potential international
subscribers;
-- Grew the number of companies under signed contracts to
approximately 780;
-- Continued sales at our Gold Peak project towards our goal of a
complete sell-out by the end of the first quarter of 2009;
-- Extended construction financing on our East Lyme project to
June 2009;
-- Reduced our liquidity requirement from $10,000,000 to
$6,146,000 at June 30, 2008;
-- Reduced construction debt by $6,012,000 from the December 31,
2007 balance with the expectation that the Gold Peak debt will
be repaid by the end of the third quarter;
-- Entered into a listing agreement authorizing a broker to sell
lots at our East Lyme project;
-- Completed model homes and infrastructure at our Claverack
project with a grand opening on August 1, 2008;
-- Recognized a tax benefit of $1,165,000 in the current quarter;
-- Consolidated corporate office space and identified other cost
reductions resulting in the elimination of approximately
$75,000 of net G&A costs per month commencing September 1,
2008; and
-- Included in the Russell Microcap Index as of June 30, 2008.
The Russell Microcap Index captures the 1,000 smallest U.S.
stocks in the Russell 2000 Index, plus the next 1,000 largest
securities based on market capitalization.
Basis of Accounting
The previously announced plan of liquidation of the Company was
terminated as a result of the Merger and the Company returned to the
going concern basis of accounting from the liquidation basis of
accounting. For accounting purposes, the Merger was deemed to have
occurred at the close of business on May 31, 2007 and the statements
of operations include the operations of Reis Services effective
June 1, 2007.
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
EBITDA is defined as earnings before interest, taxes, depreciation
and amortization. Adjusted EBITDA is defined as earnings before
interest, taxes, depreciation, amortization, impairment losses on real
estate assets under development and stock based compensation. Although
EBITDA and Adjusted EBITDA are not measures of performance calculated
in accordance with GAAP, senior management uses EBITDA and Adjusted
EBITDA to measure operational and management performance. Management
believes that EBITDA and Adjusted EBITDA are appropriate metrics that
may be used by investors as supplemental financial measures to be
considered in addition to the reported GAAP basis financial
information to assist investors in evaluating and understanding the
Company's business from year to year or period to period, as
applicable. Further, these measures provide the reader with the
ability to understand our operational performance while isolating
non-cash charges, such as depreciation and amortization expenses, as
well as other non-operating items, such as interest income, interest
expense and income taxes, and in the case of Adjusted EBITDA, isolates
non-cash charges for impairment losses on real estate assets under
development and stock based compensation. Management also believes
that disclosing EBITDA and Adjusted EBITDA will provide better
comparability to other companies in Reis Services's type of business.
However, investors should not consider these measures in isolation or
as substitutes for net income, operating income, or any other measure
for determining operating performance that is calculated in accordance
with GAAP. In addition, because EBITDA and Adjusted EBITDA are not
calculated in accordance with GAAP, they may not necessarily be
comparable to similarly titled measures employed by other companies.
Reconciliations of EBITDA and Adjusted EBITDA to the most comparable
GAAP financial measure, net income, follow for each identified period:
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(amounts in thousands)
Reconciliation of Net Income to Residential
EBITDA and Adjusted EBITDA Development
for the Three Months Ended June 30, Reis Activities
2008 Services and Other* Consolidated
----------------------------------- --------- ----------- ------------
Net income $ 1,024
Income tax (benefit) (1,192)
------------
Income (loss) before income taxes $1,532 $(1,700) (168)
Add back:
Depreciation and amortization
expense 1,081 64 1,145
Interest expense (income), net 245 (138) 107
--------- ----------- ------------
EBITDA 2,858 (1,774) 1,084
Add back:
Stock based compensation
expense, net -- 358 358
--------- ----------- ------------
Adjusted EBITDA $2,858 $(1,416) $ 1,442
========= =========== ============
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Reconciliation of Net Income to Residential
EBITDA and Adjusted EBITDA Development
for the Six Months Ended June 30, Reis Activities
2008 Services and Other* Consolidated
----------------------------------- --------- ----------- ------------
Net income $ 1,472
Income tax (benefit) (792)
------------
Income (loss) before income taxes $2,781 $(2,101) 680
Add back:
Depreciation and amortization
expense 2,147 129 2,276
Interest expense (income), net 622 (353) 269
--------- ----------- ------------
EBITDA 5,550 (2,325) 3,225
Add back:
Stock based compensation
expense, net -- 327 327
--------- ----------- ------------
Adjusted EBITDA $5,550 $(1,998) $ 3,552
========= =========== ============
(amounts in thousands)
Reconciliation of Net Income to Residential
EBITDA and Adjusted EBITDA Development
for the Period June 1, 2007 to June Reis Activities
30, 2007 Services and Other* Consolidated
----------------------------------- --------- ----------- ------------
Net income $ 835
Income tax expense 4
------------
Income before income taxes $ 217 $ 622 839
Add back:
Depreciation and amortization
expense 292 21 313
Interest expense (income), net 179 (75) 104
--------- ----------- ------------
EBITDA 688 568 1,256
Add back:
Stock based compensation
benefit, net -- (1,053) (1,053)
--------- ----------- ------------
Adjusted EBITDA $ 688 $ (485) $ 203
========= =========== ============
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Reconciliation of Pro Forma Net
(Loss) to Pro Forma EBITDA Residential
and Pro Forma Adjusted EBITDA Development
for the Three Months Ended June 30, Reis Activities
2007 Services and Other* Consolidated
----------------------------------- --------- ----------- ------------
Pro forma net (loss) $(8,240)
Income tax (benefit) (45)
------------
(Loss) before income taxes $ (50) $(8,235) (8,285)
Add back:
Depreciation and amortization
expense 1,105 64 1,169
Interest expense (income), net 584 (256) 328
--------- ----------- ------------
Pro forma EBITDA 1,639 (8,427) (6,788)
Add back:
Impairment loss on real estate
assets under development -- 2,740 2,740
Stock based compensation
benefit, net -- (1,059) (1,059)
--------- ----------- ------------
Pro Forma Adjusted EBITDA $1,639 $(6,746) $(5,107)
========= =========== ============
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Reconciliation of Pro Forma Net
(Loss) to Pro Forma EBITDA Residential
and Pro Forma Adjusted EBITDA Development
for the Six Months Ended June 30, Reis Activities
2007 Services and Other* Consolidated
----------------------------------- --------- ----------- ------------
Pro forma net (loss) $(10,516)
Income tax (benefit) (3)
------------
(Loss) before income taxes $ (95) $(10,424) (10,519)
Add back:
Depreciation and amortization
expense 2,270 128 2,398
Interest expense (income), net 1,201 (532) 669
--------- ----------- ------------
Pro forma EBITDA 3,376 (10,828) (7,452)
Add back:
Impairment loss on real estate
assets under development -- 2,740 2,740
Stock based compensation
benefit, net -- (874) (874)
--------- ----------- ------------
Pro forma Adjusted EBITDA $3,376 $ (8,962) $ (5,586)
========= =========== ============
-----------------------------------
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* Includes Gold Peak, East Lyme, the Company's other developments
and corporate level income and expenses.
Revenue was stable from the first quarter of 2008 to the second
quarter of 2008. Reis Services is able to grow revenue through new
business as well as price increases in connection with renewals.
Although we cannot make assurances as to future periods, Reis Services
has historically experienced higher revenue during the second half of
any calendar year because a greater number of our contracts have
renewed, coupled with price increases, in the second half of each
year. This results from several historical operating facts:
-- First, Reis SE was launched in June 2001 and, as a result, our
initial contracts were bunched in the end of that year.
-- Second, historically, Private Reis's fiscal year ended on
October 31 of each year, and many contracts were executed
and/or renewed shortly before the end of that fiscal year.
-- Third, many of our customers prefer to sign contracts in the
fourth calendar quarter in conjunction with spending remaining
funds for the current year's budget or determining allocations
with respect to future budgets.
-- Fourth, we are a subscription-based business, where the
majority of our contracts are for an annual or multi-year
period. We recognize subscription revenue on a straight line
basis over the life of the relevant contract. Therefore, any
increase in revenue related to a contract renewal would only
occur in the period in which the renewal occurs. Following
that quarterly period, there would be no consecutive
quarter-over-quarter revenue growth until the period in which
the next renewal, coupled with a price increase, occurs.
Accordingly, meaningful revenue growth occurs in heavy renewal
periods in conjunction with any price increases. Also, other factors
may impact consecutive quarter-over-quarter growth, including (i) the
lengthening of subscription terms beyond 12 months to as long as 36
months (in an effort to spread renewals more evenly throughout the
year), (ii) the introduction of new products and (iii) non-recurring
consulting or valuation work. These items did not have a material
impact in evaluating revenue growth for the first and second quarters
of 2008. However, revenue and EBITDA growth in the third and fourth
quarters of 2008 as compared to the third and fourth quarters of 2007
may not be as robust as our current period growth numbers indicate, as
non-recurring consulting and valuation work in those 2007 periods were
greater by up to approximately $300,000 per quarter over the current
quarterly run rate. Generally, this type of special project and
consulting revenue is not a substantial amount in any given period.
Residential Development Activities
At June 30, 2008, the Company's residential development activities
and other investments were comprised primarily of the following:
-- The 259 unit Gold Peak condominium development in Highlands
Ranch, Colorado ("Gold Peak"). Sales commenced in January 2006
and 220 Gold Peak units were sold as of June 30, 2008, with an
additional nine units under contract with nominal down
payments.
-- The Orchards, a single family home development in East Lyme,
Connecticut, upon which the Company could build 161 single
family homes on 224 acres ("East Lyme"). Sales commenced in
June 2006 and 24 homes were sold as of June 30, 2008, with an
additional home under contract for which a deposit of 10% of
the contract sale price was provided by the buyer.
-- The Stewardship, a single-family home development in
Claverack, New York ("Claverack"), which is subdivided into 48
developable single-family home lots on 235 acres.
The following table presents Gold Peak and East Lyme sales
information for the respective periods:
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For the For the Project
Three Months Ended Six Months Ended Total
June 30, June 30, Through
--------------------- -----------------------
June 30,
2008 2007 2008 2007 2008
---------- ---------- ----------- ----------- -----------
Gold Peak:
Number of
units sold 15 14 35 35 220
Gross sales
proceeds $4,211,000 $4,029,000 $11,043,000 $10,576,000 $67,011,000
East Lyme:
Number of
homes sold 3 2 5 4 24
Gross sales
proceeds $2,188,000 $1,468,000 $ 3,740,000 $ 2,852,000 $17,127,000
*T
On June 30, 2008, the Company entered into a listing agreement
authorizing a broker to sell the remaining lots at East Lyme (which
are comprised of improved lots with road and infrastructure in place
and unimproved lots without road and infrastructure in place). In
addition, the Company has made the decision to halt any new home
construction pending exploration of a bulk sale of lots at East Lyme.
There can be no assurance that the Company will be able to sell the
remaining lots at East Lyme at acceptable prices, or within a specific
time period, or at all.
In April 2008, the Company extended, with term modifications, its
existing financing on the East Lyme project (the "East Lyme
Construction Loan"). The interest rate for the East Lyme Construction
Loan increased from LIBOR + 2.15% to LIBOR + 2.50% over the extension
period which matures in June 2009. The extension terms also require
minimum principal repayments if repayments from sales proceeds are not
sufficient to meet required repayment amounts. The minimum liquidity
requirement was also reduced to $7,500,000 from $10,000,000 with
additional reductions based upon principal repayments. The required
minimum liquidity level at June 30, 2008 was approximately $6,146,000
related to the Company's construction debt. The balance of the East
Lyme Construction Loan was approximately $6,242,000 and $6,966,000 at
June 30, 2008 and December 31, 2007, respectively.
Regarding the other residential development projects, the balance
of the Gold Peak Construction Loan was approximately $1,129,000 and
$6,417,000 at June 30, 2008 and December 31, 2007, respectively, and
the Claverack project is unencumbered at each balance sheet date.
Depending on the sale velocity and amount of proceeds from sales at
Gold Peak, the Gold Peak Construction Loan is expected to be repaid in
full by the end of the third quarter of 2008.
Investor Conference Call
The Company will host a conference call on Wednesday, August 13,
2008, at 10:00 AM (EDT). This call is for the benefit of existing and
prospective stockholders, stock analysts, and other interested parties
to discuss the second quarter 2008 operating results and other
matters. The Company has a policy of not providing quarterly or annual
guidance.
The U.S. dial-in number for this teleconference is (800) 860-2442.
The international dial-in number is (412) 858-4600. A replay of the
conference call will be available from shortly after the conference
call through 5:00 PM (EDT) on August 28, 2008 by using U.S. dial-in
number (877) 344-7529 and entering the following passcode: 422145#
(international callers may use dial-in number (412) 317-0088 and use
the same passcode). An audio webcast of the conference call will be
available on Reis's website at www.reis.com/events and will remain on
the website for a period of time following the call.
About Reis
The Company was formed through a May 2007 merger between Private
Reis and Wellsford. Reis carries on the businesses of Private Reis and
Wellsford.
Private Reis was founded in 1980 as a provider of commercial real
estate market information. Reis maintains a proprietary database
containing detailed information on commercial real properties in
neighborhoods and metropolitan markets throughout the U.S. The
database contains information on apartment, retail, office and
industrial properties and is used by real estate investors, lenders
and other professionals to make informed buying, selling and financing
decisions. In addition, Reis data is used by debt and equity investors
to assess and quantify the risks of default and loss associated with
individual mortgages, properties, portfolios and real estate backed
securities. Reis currently provides its information services to many
of the nation's leading lending institutions, equity investors,
brokers and appraisers.
Reis's flagship product is Reis SE, which provides online access
to information and analytical tools designed to facilitate both debt
and equity transactions. In addition to trend and forecast analysis at
neighborhood and metropolitan levels, the product offers detailed
building-specific information such as rents, vacancy rates and lease
terms, property sale information, new construction listings and
property valuation estimates. Reis SE is designed to meet the demand
for timely and accurate information to support the decision-making of
property owners, developers and builders, banks and non-bank lenders,
and equity investors, all of whom require access to information on
both the performance and pricing of assets, including detailed data on
market transactions, supply and absorption. This information is
critical to all aspects of valuing assets and financing their
acquisition, development, and construction.
For more information regarding Reis's products and services, visit
www.reis.com.
Prior to the Merger, Wellsford was a public company operating as a
real estate merchant banking firm which acquired, developed, financed
and operated real properties and invested in private real estate
companies. The Company's primary operating activities immediately
prior to the Merger were the development, construction and sale of its
three residential projects and its approximate 23% ownership interest
in Private Reis. The Company continues to develop, construct and sell
these existing residential projects in an effort to ultimately exit
this business in order to focus solely on the Reis Services business.
Cautionary Statement Regarding Forward-Looking Statements
The Company makes forward-looking statements in this press
release. These forward-looking statements may relate to the Company's
or management's outlook or expectations for earnings, revenues,
expenses, asset quality or other future financial or business
performance, strategies or expectations, or the impact of legal,
regulatory or supervisory matters on the Company's business's
operations or performance. Specifically, forward-looking statements
may include:
-- statements relating to future services and product development
of the Reis Services segment;
-- statements relating to future business prospects, potential
acquisitions, revenue, expenses, income, cash flows, valuation
of assets and liabilities and other business metrics of the
Company and its businesses, including EBITDA and Adjusted
EBITDA; and
-- statements preceded by, followed by or that include the words
"estimate," "plan," "project," "intend," "expect,"
"anticipate," "believe," "seek," "target" or similar
expressions.
These statements reflect management's judgment based on currently
available information and involve a number of risks and uncertainties
that could cause actual results to differ materially from those in the
forward-looking statements. With respect to these forward-looking
statements, management has made certain assumptions. Future
performance cannot be assured. Actual results may differ materially
from those in the forward-looking statements. Some factors that could
cause actual results to differ include:
-- revenues may be lower than expected;
-- the possibility of litigation arising as a result of
terminating the plan of liquidation;
-- adverse changes in the real estate industry and the markets in
which the Company operates;
-- the inability to retain and increase the Company's customer
base;
-- competition;
-- inability to attract and retain sales and senior management
personnel;
-- difficulties in protecting the security, confidentiality,
integrity and reliability of the Company's data;
-- legal and regulatory issues;
-- changes in accounting policies or practices; and
-- the risk factors listed under "Item 1A. Risk Factors" in the
Company's annual report on Form 10-K for the year ended
December 31, 2007, which was filed with the Securities and
Exchange Commission on March 14, 2008.
You are cautioned not to place undue reliance on any
forward-looking statements, which speak only as of the date of this
press release. Except as required by law, the Company undertakes no
obligation to publicly update or release any revisions to these
forward-looking statements to reflect any events or circumstances
after the date of this press release or to reflect the occurrence of
unanticipated events.
Financial Information
The following financial information should be read in conjunction
with Reis's unaudited consolidated financial statements and the notes
thereto and Management's Discussion and Analysis of Financial
Condition and Results of Operations, both of which are included in
Reis's quarterly report on Form 10-Q for the three and six months
ended June 30, 2008, which was filed with the Securities and Exchange
Commission on August 7, 2008.
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CONSOLIDATED BALANCE SHEETS
(GOING CONCERN BASIS)
June 30, December 31,
2008 2007
------------- -------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 22,651,415 $ 23,238,490
Restricted cash and investments 3,151,331 3,663,789
Receivables, prepaid and other assets 5,101,482 8,068,675
Real estate assets under development 12,575,840 20,731,762
------------- -------------
Total current assets 43,480,068 55,702,716
Furniture, fixtures and equipment, net 1,997,718 2,257,045
Other real estate assets 7,622,353 6,040,204
Intangible assets, net of accumulated
amortization of $3,867,570 and
$1,967,608, respectively 24,370,757 25,353,030
Goodwill 54,824,648 54,824,648
Other assets 566,907 670,829
------------- -------------
Total assets $ 132,862,451 $ 144,848,472
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of loans and other
debt $ 182,247 $ 175,610
Current portion of Bank Loan 2,500,000 1,500,000
Construction payables 501,936 2,791,896
Construction loans payable 7,370,999 13,382,780
Accrued expenses and other liabilities 7,074,539 8,629,376
Reserve for option liability 119,795 527,034
Deferred revenue 10,939,142 13,262,114
------------- -------------
Total current liabilities 28,688,658 40,268,810
Non-current portion of Bank Loan 21,000,000 22,750,000
Other long-term liabilities 742,163 816,741
Deferred tax liability, net 423,580 1,313,580
------------- -------------
Total liabilities 50,854,401 65,149,131
------------- -------------
Commitments and contingencies
Stockholders' equity:
Common stock, $.02 par value per
share, 101,000,000 shares authorized,
10,984,517 shares issued and
outstanding 219,690 219,690
Additional paid in capital 99,772,357 98,936,084
Retained earnings (deficit) (17,983,997) (19,456,433)
------------- -------------
Total stockholders' equity 82,008,050 79,699,341
------------- -------------
Total liabilities and stockholders' equity $ 132,862,451 $ 144,848,472
============= =============
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(GOING CONCERN BASIS)
(Unaudited)
Pro Forma
For the For the
Three Three For the Six
Months Months Months
Ended Ended Ended
June 30, June 30, June 30,
2008 2007 2008
------------ ------------ ------------
Revenue:
Subscription revenue $ 6,504,703 $ 5,488,542 $12,915,807
Revenue from sales of
residential units 6,398,715 5,496,704 14,782,540
------------ ------------ ------------
Total revenue 12,903,418 10,985,246 27,698,347
------------ ------------ ------------
Cost of sales:
Cost of sales of
subscription revenue 1,376,768 1,301,343 2,705,648
Cost of sales of residential
units 5,523,644 4,864,820 12,451,685
Impairment loss on real
estate assets under
development -- 2,740,384 --
------------ ------------ ------------
Total cost of sales 6,900,412 8,906,547 15,157,333
------------ ------------ ------------
Gross profit 6,003,006 2,078,699 12,541,014
------------ ------------ ------------
Operating expenses:
Sales and marketing 1,380,867 1,477,973 2,736,140
Product development 437,468 422,359 962,710
Property operating expenses 284,232 189,395 533,831
General and administrative
expenses 3,960,425 7,412,997 7,382,165
------------ ------------ ------------
Total operating expenses 6,062,992 9,502,724 11,614,846
------------ ------------ ------------
Total other income (expenses) (107,460) (861,054) (245,732)
------------ ------------ ------------
(Loss) income before income
taxes (167,446) (8,285,079) 680,436
Income tax (benefit) expense (1,192,000) (45,289) (792,000)
------------ ------------ ------------
Net income (loss) $ 1,024,554 $(8,239,790) $ 1,472,436
============ ============ ============
Net income (loss) per common
share:
Basic $ 0.09 $ (0.76) $ 0.13
============ ============ ============
Diluted $ 0.09 $ (0.76) $ 0.10
============ ============ ============
Weighted average number of
common shares outstanding:
Basic 10,984,517 10,823,505 10,984,517
============ ============ ============
Diluted 11,064,845 10,823,505 11,182,472
============ ============ ============
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(GOING CONCERN BASIS)
(Unaudited)
For the
Period
Pro Forma June 1,
For the Six 2007 to
Months Ended June 30,
June 30, 2007 2007
------------- -----------
Revenue:
Subscription revenue $ 10,926,441 $ 1,873,934
Revenue from sales of residential units 13,628,229 1,157,267
------------- -----------
Total revenue 24,554,670 3,031,201
------------- -----------
Cost of sales:
Cost of sales of subscription revenue 2,619,194 404,662
Cost of sales of residential units 11,844,767 949,877
Impairment loss on real estate assets
under development 2,740,384 --
------------- -----------
Total cost of sales 17,204,345 1,354,539
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Gross profit 7,350,325 1,676,662
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Operating expenses:
Sales and marketing 2,963,859 447,933
Product development 849,089 104,876
Property operating expenses 405,257 69,277
General and administrative expenses 12,471,132 110,658
------------- -----------
Total operating expenses 16,689,337 732,744
------------- -----------
Total other income (expenses) (1,180,090) (105,252)
------------- -----------
(Loss) income before income taxes (10,519,102) 838,666
Income tax (benefit) expense (3,289) 4,000
------------- -----------
Net income (loss) $(10,515,813) $ 834,666
============= ===========
Net income (loss) per common share:
Basic $ (0.98) $ 0.08
============= ===========
Diluted $ (0.98) $ (0.03)
============= ===========
Weighted average number of common shares
outstanding:
Basic 10,773,997 10,977,448
============= ===========
Diluted 10,773,997 11,152,225
============= ===========
*T
Reis, Inc.
Mark P. Cantaluppi, 212-921-1122
Vice President, Chief Financial Officer
Copyright Business Wire 2008
