IVIL Ivillage (MM)

Year-over-Year Fourth Quarter Revenue Increases 65%, With Full-Year 2005 Revenue Increasing 36% Compared to 2004 NEW YORK, Feb. 13 /PRNewswire-FirstCall/ -- iVillage Inc. (NASDAQ:IVIL), The Internet For Women(TM), a leading women's media company and the number one source for women's content and community online, today announced financial results for the fourth quarter and full-year ended December 31, 2005. Fourth quarter 2005 revenue totaled $30.1 million, a 65% increase when compared to revenues of $18.2 million for the same period one year ago. Net income for the fourth quarter of 2005 was $8.8 million, or $0.12 per share, compared to net income of $2.4 million, or $0.03 per share, for the fourth quarter of 2004. iVillage reported Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(1) of $11.1 million for the fourth quarter of 2005 compared to $3.2 million for the fourth quarter of 2004. Douglas W. McCormick, Chairman & Chief Executive Officer, iVillage Inc., said, "Our record results continue to demonstrate the sustainable operating leverage we've established in our strong online platform. The online advertising marketplace remains robust and we believe we are well-positioned to accelerate growth through our leading women and health offerings. We continue to focus on initiatives that will set iVillage apart, including augmenting our video and multimedia content, implementing our aggressive search optimization strategy and growing our unique visitors and page views. With our resources and the profitable growth opportunities we are pursuing, we believe iVillage is on track to achieve another record performance in 2006." Full-year 2005 revenue totaled $91.1 million, a 36% increase when compared to revenues of $66.9 million for the full-year 2004. Net income for the full-year 2005 was $9.5 million, or $0.12 per share, compared to net income of $2.7 million, or $0.04 per share, for the full-year 2004. iVillage reported full-year 2005 EBITDA of $17.0 million, which includes approximately $0.5 million primarily in one-time legal expenses. This compares to $7.8 million in EBITDA for the full-year 2004. As of December 31, 2005, iVillage had $55.9 million in cash and cash equivalents on its balance sheet. The Company continues to carry no debt. First Quarter and Full-Year 2006 Business Outlook For the first quarter of 2006, iVillage expects to generate revenues between $21.5 million and $23.5 million, which compares to $17.3 million in revenue for the first quarter of 2005. The Company currently anticipates reporting EBITDA between $1.5 million and $2.5 million for the first quarter of 2006, which compares to EBITDA of $0.1 million for the first quarter of 2005. Additionally, in the first quarter of 2006, iVillage expects to report a net loss of between $1.3 million and $0.3 million, which includes an estimated $0.8 million in non-cash, stock-based compensation expenses. This compares to a $1.3 million net loss for the first quarter of 2005. For the full-year 2006, iVillage expects to generate revenue between $105.0 million and $113.0 million and EBITDA of between $24.0 million and $29.0 million. The Company also expects to report net income between $13.8 million and $18.8 million for the full-year 2006, which includes an estimated $3.2 million in non-cash, stock-based compensation expenses. iVillage does not undertake any obligation to update its financial outlook, but reserves the right to do so at any time for any reason. Metrics * According to comScore Media Metrix, iVillage delivered approximately 14.5 million unique monthly visitors and the iVillage Network was the 41st most visited Web site in the U.S. in January 2006. According to the same report, iVillage reaches approximately 8.5% of the total U.S. online population and nearly 11% of U.S. women 18+ online monthly. Visitors return more than 2 times per month on average. * Also according to the comScore Media Metrix January 2006 report, iVillage is the #1 women's community site, the #4 community site overall and, when combined, the iVillage health properties rank 5th among the most visited commercial, full-service health web properties and 8th among the overall most visited health web properties. * iVillage delivered approximately 362 million average monthly page views for the fourth quarter of 2005. 2005 Highlights * iVillage announced the renewal of a content publication agreement with the MSN(R) network during the fourth quarter of 2005. Under the agreement, MSN will continue to present select iVillage content on its lifestyle channel, MSN Lifestyle, located at http://lifestyle.msn.com/. * During the third quarter of 2005, iVillage entered into a distribution agreement with Yahoo! Search Marketing. The agreement, which went into effect on September 1, 2005, brings Yahoo!'s comprehensive suite of sponsored search, Content Match(TM) and Yahoo! Search products to iVillage visitors. * During the second quarter of 2005, iVillage acquired all of the outstanding equity of HealthCentersOnline, Inc., a privately-held, leading online destination for physician-edited information on health conditions, treatments and preventative care for patients. * Also during the second quarter of 2005, iVillage completed its acquisition of the iVillage.co.uk website and certain related assets. iVillage UK is one of the top destinations in the region for women. * iVillage announced during the first quarter of 2005 that it had acquired Healthology, Inc., a leading producer and distributor of streaming video health programs and physician-authored articles on the Internet. * Kicking off its 10-year anniversary, the Company relaunched iVillage.com at the beginning of 2005. The redesigned site offers the latest trends and news for women, enhanced navigation and new, customizable features. Advertising & Sponsorship Highlights * iVillage.com revenue increased approximately 68% for the full-year 2005 when compared to the full-year 2004(2). * iVillage continued to receive substantial advertising commitments from blue-chip advertisers, with Consumer Package Goods (CPG) and Pharmaceutical/Healthcare categories showing the highest growth. Fourth quarter advertisers included: American Express, AstraZeneca, Citibank, Colgate-Palmolive, DreamWorks, General Mills, Kraft, Norelco, Pfizer, Procter & Gamble, and Sony Pictures, among others. * The Company continued to make strides and execute on its strategy to develop and distribute compelling original multimedia and video features that also are attractive advertising vehicles. iVillage recently launched its first original Web TV show, "What Men Won't Tell You, but Women Need to Know," hosted by Dr. Bob Berkowitz. Additionally, the Company launched audio/slide shows based on two best-selling books, "Teenage Waistland" and "A Day in the Life of the American Woman." Conference Call iVillage will hold a conference call to discuss its fourth quarter and full-year 2005 financial results today at 4:30 PM (EST). The conference call will be broadcast live on the Internet and will be available on iVillage's Investor Relations Web site, located at http://www.ivillage.com/investor, and on Street Events, located at http://www.streetevents.com/. A replay of the conference call will be available on the iVillage Investor Relations Web site approximately one hour after the call ends on Monday, February 13, 2006 until 5:30 PM (EST) on Monday, February 20, 2006. A transcript of the conference call will be available on the iVillage Investor Relations Web site thereafter. About iVillage Inc. iVillage is "the Internet for women" and consists of several online and offline media-based properties that seek to enrich the lives of women, teenage girls and parents through the offering of unique content, community applications, tools and interactive features. iVillage Inc. (NASDAQ:IVIL) was established in 1995 and is headquartered in New York City. Average monthly page views for iVillage.com and its affiliate Web sites ("The iVillage Network") totaled 362 million for the quarter ended December 31, 2005. In January 2006, according to comScore Media Metrix, The iVillage Network ranked 41st among the top 100 Web and Digital Media properties with approximately 14.5 million unique visitors in the United States and had an average reach of approximately 8.5% of the total online population and nearly 11% of women 18+ online. Also, according to the same report, The iVillage Network was the number one "women's community site" and the number four "community site" overall on the Web. For more information about iVillage, visit http://www.ivillage.com/. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: iVillage Inc. has included in this press release certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 concerning iVillage's business, operations and financial condition. The words or phrases "can be," "expects," "may affect," "anticipates," "may depend," "believes," "estimates," "plans," "projects" and similar words and phrases are intended to identify such forward-looking statements. These forward-looking statements are subject to various known and unknown risks and uncertainties and iVillage cautions you that any forward-looking information provided by or on behalf of iVillage is not a guarantee of future results, performance or achievements. Actual results could differ materially from those anticipated in these forward-looking statements due to a number of factors, some of which are beyond iVillage's control. In addition to those risks discussed in iVillage's other press releases, public filings and statements by iVillage's management, factors that may cause iVillage's actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied in such forward looking statements include: (i) the volatile and competitive nature of the Internet industry and the media industry, (ii) changes in domestic and foreign economic, political and market conditions, (iii) the effect of federal, state and foreign regulation on iVillage's business, (iv) the impact of recent and future acquisitions and joint ventures on iVillage's business and financial condition, (v) iVillage's ability to establish and maintain relationships with advertisers, sponsors, and other third-party providers and partners, (vi) iVillage's ability to maintain or increase user traffic levels, (vii) the loss of one or more of iVillage's major customers, (viii) the effect of seasonal fluctuations in traditional online advertising purchasing patterns on iVillage's results of operations and (ix) the impact of pending litigation on iVillage's business, results of operations and financial condition. All such forward-looking statements are current only as of the date on which such statements were made. iVillage does not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events. (1) To supplement its consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP") in the United States, iVillage uses non-GAAP measures of operating results and net income, such as EBITDA (defined by iVillage as Earnings (Loss) Before Interest, Taxes, Depreciation and Amortization), which are adjusted from results based on GAAP to exclude certain expenses. These non-GAAP adjustments are provided to enhance individuals' overall understanding of the Company's current financial performance and its prospects for the future. Specifically, iVillage believes the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses that are not indicative of the Company's core operating results. In addition, since iVillage has historically reported non-GAAP results to the investment community, the Company believes the inclusion of non-GAAP financial measures provides consistency in its financial reporting. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting in future periods, as well as for executive compensation. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Please refer to iVillage's unaudited consolidated financial statements accompanying this press release for a reconciliation of any non-GAAP financial measures included in this press release to the corresponding GAAP financial measures. Although EBITDA is frequently used as a measure of operating performance, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. (2) Please see the attached financial tables for a reconciliation of iVillage.com revenue. iVillage Inc. and Subsidiaries Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) Three months ended Year ended December 31, December 31, 2005 2004 2005 2004 Revenues $30,111 $18,200 $91,061 $66,903 Operating expenses: Editorial, product development and technology 8,257 6,639 33,702 28,903 Sales and marketing 7,324 5,352 26,865 19,022 General and administrative 3,439 2,994 13,535 11,227 Depreciation and amortization 2,393 1,114 8,906 6,011 Total operating expenses 21,413 16,099 83,008 65,163 Income from operations 8,698 2,101 8,053 1,740 Interest income, net 452 338 1,561 642 Other income, net 28 110 96 207 Gain on sale of joint venture interest -- 76 101 395 Income from continuing operations before income taxes 9,178 2,625 9,811 2,984 Provision for income taxes (355) (307) (355) (307) Income from continuing operations $8,823 2,318 9,456 2,677 Discontinued operations 25 69 25 69 Net income $8,848 $2,387 $9,481 $2,746 Basic (per share data): Income from continuing operations $0.12 $0.03 $0.13 $0.04 Income from discontinued operations $0.00 $0.00 $0.00 $0.00 Net income $0.12 $0.03 $0.13 $0.04 Diluted (per share data): Income from continuing operations $0.11 $0.03 $0.12 $0.04 Income from discontinued operations $0.00 $0.00 $0.00 $0.00 Net income $0.11 $0.03 $0.12 $0.04 Weighted-average shares of common stock outstanding used in computing basic net income per share 72,634 71,668 72,307 65,054 Weighted-average shares of common stock outstanding used in computing diluted net income per share 77,363 75,829 76,587 69,853 iVillage Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands) (unaudited) December 31, December 31, 2005 2004 ASSETS: Current assets: Cash and cash equivalents $55,881 $83,046 Accounts receivable, net 20,820 9,708 Prepaid rent 318 318 Other current assets 5,374 3,740 Total current assets 82,393 96,812 Fixed assets, net 12,272 8,381 Goodwill and intangible assets, net 59,495 32,073 Prepaid rent, net of current portion 3,051 3,203 Other assets 104 79 Total assets $157,315 $140,548 LIABILITIES and STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable and accrued expenses $11,735 $10,142 Deferred revenue 4,157 2,080 Other liabilities 144 168 Total current liabilities 16,036 12,390 Deferred rent, net of current portion 1,196 1,339 Total liabilities 17,232 13,729 Commitments and contingencies Stockholders' equity 140,083 126,819 Total liabilities and stockholders' equity $157,315 $140,548 iVillage Inc. and Subsidiaries Quarterly Income Statement ($ in million except for per share amounts) (unaudited) Mar-04 Jun-04 Sep-04 Dec-04 FY 04 Revenue $15.507 $16.498 $16.698 $18.200 $66.903 Growth q-q -2% 6% 1% 9% Growth Y/y 23% 25% 23% 15% 21% Editorial, product development & technology 7.511 7.013 7.740 6.639 28.903 % of Revenues 48% 43% 46% 36% 43% Sales and marketing 4.385 4.723 4.562 5.352 19.022 % of Revenues 28% 29% 27% 29% 28% General and administrative 2.908 2.885 2.440 2.994 11.227 % of Revenues 19% 17% 15% 16% 17% Depreciation and amortization 1.804 1.953 1.140 1.114 6.011 % of Revenues 12% 12% 7% 6% 9% Total operating expenses 16.608 16.574 15.882 16.099 65.163 % of Revenues 107% 100% 95% 88% 97% (Loss) income from operations (1.101) (0.076) 0.816 2.101 1.740 Interest income, net 0.018 0.050 0.236 0.338 0.642 Other income, net 0.052 0.034 0.011 0.110 0.207 Gain on sale of joint venture interest 0.167 0.076 0.076 0.076 0.395 Provision for income taxes -- -- -- (0.307) (0.307) (Loss) income from continuing operations (0.864) 0.084 1.139 2.318 2.677 Discontinued operations -- -- -- 0.069 0.069 Net (loss) income $(0.864) $0.084 $1.139 $2.387 $2.746 Basic (per share data): (Loss) income from continuing operations $(0.01) $0.00 $0.02 $0.03 $0.04 Income from discontinued operations -- -- -- 0.00 0.00 Net (loss) income $(0.01) $0.00 $0.02 $0.03 $0.04 Diluted (per share data): (Loss) income from continuing operations $(0.01) $0.00 $0.02 $0.03 $0.04 Income from discontinued operations -- -- -- 0.00 0.00 Net (loss) income $(0.01) $0.00 $0.02 $0.03 $0.04 Weighted average shares of common stock outstanding - basic 58.4 59.1 70.9 71.7 65.1 Weighted average shares of common stock outstanding - diluted 58.4 64.4 75.2 75.8 69.9 Additional Financial Information Revenue from barter 0.844 1.119 1.204 1.363 4.530 % of Revenues 5% 7% 7% 7% 7% Mar-05 Jun-05 Sep-05 Dec-05 FY 05 Revenue $17.274 $21.080 $22.596 $30.111 $91.061 Growth q-q -5% 22% 7% 33% Growth Y/y 11% 28% 35% 65% 36% Editorial, product development & technology 8.239 8.921 8.285 8.257 33.702 % of Revenues 48% 42% 37% 27% 37% Sales and marketing 5.936 7.001 6.604 7.324 26.865 % of Revenues 34% 33% 29% 24% 30% General and administrative 2.989 3.572 3.535 3.439 13.535 % of Revenues 17% 17% 16% 11% 15% Depreciation and amortization 1.804 2.311 2.398 2.393 8.906 % of Revenues 10% 11% 11% 8% 10% Total operating expenses 18.968 21.805 20.822 21.413 83.008 % of Revenues 110% 103% 92% 71% 91% (Loss) income from operations (1.694) (0.725) 1.774 8.698 8.053 Interest income, net 0.352 0.358 0.399 0.452 1.561 Other income, net -- 0.016 0.052 0.028 0.096 Gain on sale of joint venture interest 0.076 0.025 -- -- 0.101 Provision for income taxes -- -- -- (0.355) (0.355) (Loss) income from continuing operations (1.266) (0.326) 2.225 8.823 9.456 Discontinued operations -- -- -- 0.025 0.025 Net (loss) income $(1.266) $(0.326) $2.225 $8.848 $9.481 Basic (per share data): (Loss) income from continuing operations $(0.02) $(0.00) $0.03 $0.12 $0.13 Income from discontinued operations -- -- -- 0.00 0.00 Net (loss) income $(0.02) $(0.00) $0.03 $0.12 $0.13 Diluted (per share data): (Loss) income from continuing operations $(0.02) $(0.00) $0.03 $0.11 $0.12 Income from discontinued operations -- -- -- 0.00 0.00 Net (loss) income $(0.02) $(0.00) $0.03 $0.11 $0.12 Weighted average shares of common stock outstanding - basic 71.9 72.2 72.4 72.6 72.3 Weighted average shares of common stock outstanding - diluted 71.9 72.2 76.6 77.4 76.6 Additional Financial Information Revenue from barter 1.680 1.606 1.232 1.062 5.580 % of Revenues 10% 8% 5% 4% 6% iVillage Inc. and Subsidiaries Supplemental Financial Data (in thousands) (unaudited) Three months ended Year ended December 31, December 31, 2005 2004 2005 2004 EBITDA reconciliation: Net income $8,848 $2,387 $9,481 $2,746 Addback: Depreciation and amortization 2,393 1,114 8,906 6,011 Interest income, net (452) (338) (1,561) (642) Other income, net (28) (110) (96) (207) Gain on sale of joint venture interest -- (76) (101) (395) Provision for income taxes 355 307 355 307 Discontinued operations (25) (69) (25) (69) EBITDA $11,091 $3,215 $16,959 $7,751 Revenues by property: iVillage.com (1) $22,709 $12,520 $67,882 $40,377 Astrology.com 1,494 925 5,109 3,461 IVPN 3,920 2,921 13,779 18,662 PAG 1,988 1,834 4,291 4,403 Total revenues $30,111 $18,200 $91,061 $66,903 iVillage.com organic revenue growth excluding recent acquisitions and Hearst advertising legacy deal: iVillage.com (1) $22,709 $12,520 $67,882 $40,377 Less: Recent acquisitions (6,441) -- (16,921) -- Hearst advertising legacy deal -- -- -- (1,443) iVillage.com (1) organic revenue growth excluding recent acquisitions and Hearst advertising legacy deal $16,268 $12,520 $50,961 $38,934 iVillage.com (1) organic revenue growth % excluding recent acquisitions and Hearst advertising legacy deal 30% 31% (1) Included in iVillage.com revenues are iVillage.com, Healthology, Inc., HealthCentersOnline, Inc., iVillage Limited, Promotions.com, Substance.com, Women.com and GardenWeb properties and gURL.com, iVillage Consulting and iVillage Solutions divisions. iVillage Inc. and Subsidiaries Quarterly Supplemental Financial Data ($ in million except for per share amounts) (unaudited) Mar-04 Jun-04 Sep-04 Dec-04 FY 04 EBITDA reconciliation: Net (loss) income $(0.864) $0.084 $1.139 $2.387 $2.746 Addback: Depreciation and amortization 1.804 1.953 1.140 1.114 6.011 Interest income, net (0.018) (0.050) (0.236) (0.338) (0.642) Other income, net (0.052) (0.034) (0.011) (0.110) (0.207) Gain on sale of joint venture interest (0.167) (0.076) (0.076) (0.076) (0.395) Provision for income taxes -- -- -- 0.307 0.307 Discontinued operations -- -- -- (0.069) (0.069) EBITDA $0.703 $1.877 $1.956 3.215 $7.751 Mar-05 Jun-05 Sep-05 Dec-05 FY 05 EBITDA reconciliation: Net (loss) income $(1.266) $(0.326) $2.225 $8.848 $9.481 Addback: Depreciation and amortization 1.804 2.311 2.398 2.393 8.906 Interest income, net (0.352) (0.358) (0.399) (0.452) (1.561) Other income, net -- (0.016) (0.052) (0.028) (0.096) Gain on sale of joint venture interest (0.076) (0.025) -- -- (0.101) Provision for income taxes -- -- -- 0.355 0.355 Discontinued operations -- -- -- (0.025) (0.025) EBITDA 0.110 1.586 4.172 11.091 16.959 First Call Analyst: FCMN Contact: edj@abmac.com DATASOURCE: iVillage Inc. CONTACT: Carl R. Fischer IV of iVillage Inc., +1-212-600-6502, ; or Carina Davidson, , or Eliza Johnson, , both of The Abernathy MacGregor Group, +1-212-371-5999, for iVillage Inc. Web site: http://www.ivillage.com/

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