Harris Interactive, Inc. ( HPOL) F2Q2011 (Qtr End 12/31/2010) Earnings Call January 27, 2010 5:00 pm ET Executives Michael Burns - VP IR and External Reporting Kimberly Till - President and CEO Pavan Bhalla - EVP, CFO and Treasurer Eric Narowski - Interim PAO and SVP Global Controller Analysts Darshana Magan - Royce & Associates Jeff Oyster - BCM Capital Presentation Operator
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» Harris Interactive Inc. F2Q10 (Qtr End 12/31/10) Earnings Call Transcript
We would like to take this opportunity to remind you that certain statements made during this conference call are forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. These statements include beliefs, predictions and expectations related to the company's future financial performance, and other business and operating metrics, as well as statements regarding the company's future plans and operations. They involve a number of risks, known and unknown, that could cause actual results, performance and/or achievements of the company to be materially different from the beliefs, predictions and expectations discussed on this call.Factors that could cause the company's results to materially differ from the forward-looking statements made today and which are incorporated by reference herein are more fully described in today's press release, as well as the company's SEC filings, particularly under the Risk Factors section of the company's most recent annual report on Form 10-K as updated quarterly in our quarterly reports on Form 10-Q to reflect additional material risks. You are urged to consider these factors carefully in evaluating such forward-looking statements and are cautioned not to place undue reliance on them. The forward-looking statements are only made as of the date of this presentation, and the company undertakes no obligation to publicly update them to reflect subsequent events or circumstances. We will also be discussing non-GAAP financial measures, including adjusted EBITDA with the add-back of restructuring and other charges. These items are reconciled to GAAP financial measures in today's press release and are posted on the Investor Relations section of our website. It is now my pleasure to turn the call over to Harris Interactive's President and Chief Executive Officer, Kimberly Till. Kimberly? Kimberly Till Thank you, Mike. Good afternoon, everyone, and thank you for joining us. As many of you will recall last year's Q2 was our most profitable quarter since Q2 fiscal 2008. I am pleased to report that we experienced growth in bookings, revenue and operating income in this year's Q2 versus the same period last year.
Pavan will cover our Q2 results in more detail later, but let me touch briefly on some of the highlights of the quarter. Our consolidated revenue for Q2 was up 2% in the quarter compared with last year's Q2, excluding foreign currency exchange rate differences, due to revenue increases in the U.K., Canada, France, Germany, and Asia.Our consolidated bookings for Q2 were up 4% compared with Q2 of last year, excluding foreign currency exchange rate differences. This growth was driven by increased bookings in Canada, France, and Germany. Q2 operating income for Q2 was $874,000 representing an improvement of nearly $300,000 or 47% for last year's Q2. Q2 operating income included $679,000 in restructuring and other charges compared with $383,000 for last year's Q2. Q2 adjusted EBITDA with the add back of restructuring and other charges was $3.7 million, a 14% improvement from $3.2 million fro last year's Q2. As these numbers show, we continue to make progress in stabilizing our overall business. I will share further commentary regarding Q2 performance as well as our plans after, Pavan, provides more detail on our Q2 numbers. Pavan? Pavan Bhalla Thank you, Kimberly, and good afternoon everyone. Consolidated revenue for Q2 was $44.9 million, up 1% when compared with $44.6 million for last year's Q2. Excluding foreign currency exchange rate differences, consolidated Q2 revenue was up 2% from the same prior year period. To better understand Q2 revenue, we'll now look at it geographically and in local currency compared with last year's Q2. U.S. revenue was down 8%, driven mainly by two sectors. The healthcare sector was down 17%, due to the continued revenue impact of booking decreases experienced during the second half of FY '10 and the beginning of Q1. As we have previously shared, we changed management in the sector in Q1. New management made significant enhancements to the staffing of the sales and research team.
The other sector that significantly contributed to the revenue decline in the U.S. was financial services, which experienced a 25% revenue decrease versus last year's Q2. This is due in large part to the continued impact of the loss of large tracking study in the prior year. The revenue decline from the healthcare and financial services sectors were partially offset by revenue increases of 13% in technology, media and telecom and 30% in our service bureau research business.Read the rest of this transcript for free on seekingalpha.com