United Online Management Discusses Q2 2012 Results - Earnings Call Transcript

United Online (UNTD)

Q2 2012 Earnings Call

August 01, 2012 5:00 pm ET

Executives

David Bigelow

Mark R. Goldston - Chairman, Chief Executive Officer, President and Member of Secondary Compensation Committee

Neil P. Edwards - Chief Financial Officer, Chief Accounting Officer, Executive Vice President and Treasurer

Analysts

Anil K. Gupta - Imperial Capital, LLC, Research Division

Daniel L. Kurnos - The Benchmark Company, LLC, Research Division

Michael Crawford - B. Riley & Co., LLC, Research Division

George F. Sutton - Craig-Hallum Capital Group LLC, Research Division

Presentation

Operator

Good day, everyone, and welcome to the United Online Second Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn conference over to Mr. David Bigelow, Vice President, Investor Relations. Please go ahead, sir.

David Bigelow

Thanks, Jane. Hello, and welcome to United Online's Conference Call to Discuss our Financial Results for the Second Quarter ended June 30, 2012. With me today is Mark Goldston, our Chairman, President and Chief Executive Officer; and Neil Edwards, our Executive Vice President and Chief Financial Officer.

Before I get started, I'd like to mention we've created a PowerPoint presentation that summarizes our second quarter 2012 financial results and operating metrics. I would encourage you to download a copy of this presentation by going to our website, www.unitedonline.com, and click on Investor Relations at the top and going to the Earnings Release section.

On today's call, in today's press release and in the accompanying slides that are available within the Investor Relations section of our website, which can be found at www.unitedonline.com, we will refer to certain financial measures that are not determined in accordance with accounting principles generally accepted in the U.S., or GAAP, and should be considered an addition to, and not as a substitute for, in referring to the financial measures determined in accordance with GAAP. Definitions of these non-GAAP financial measures are provided in today's press release and in the accompanying slides on our website, along with certain reconciliations to their most comparable GAAP financial measures.

In addition, the company applies the Safe Harbor provisions, as outlined in today's press release, to any forward-looking statements that may be made on this call. Statements regarding our current expectations or estimates about our future operations, financial performance, net interest expense, amortization, share numbers, capital expenditures, taxes, operating metrics, the proposed spinoff of the FTD segment and the expected benefits thereof, the review of strategic alternatives for other businesses, a review of monetization opportunities for our patent portfolio, newly planned business initiatives, products, services, features, applications and functionality, expected benefits from our acquisitions, strategies and marketing programs, among other things, are forward-looking statements that are subject to a number of risks and uncertainties that could cause actual events to differ -- actual results or events to differ materially from those described or implied in the forward-looking statements. More information about potential risks that could affect the company's business and its financial results is included in today's press release under the caption Cautionary Information Regarding Forward-looking Statements and in the United Online's most recent filings with the Securities and Exchange Commission, including the company's annual reports on Form 10-K and quarterly reports on Form 10-Q.

Guidance, projections and other non-historical information provided in the press release and in today's call are based on information available to management at this time, and management expects that internal projections and expectations may change over time. However, the company does not intend to revise or update this information except as required by law and may not provide this type of information in the future.

And with that, we're going to start out with a few comments from Mark and Neil, and then we'll open up for questions. So I will now give the floor over to our Chairman, President and Chief Executive Officer, Mark Goldston.

Mark R. Goldston

Thank you, Dave. Welcome to United Online's Earnings Call for the Second Quarter ended June 30, 2012. I'm going to provide an overview of our results in the second quarter, and then Neil Edwards, our CFO, will conclude our prepared remarks with a look at the numbers for the quarter and our guidance going forward.

First, I wanted to start off by highlighting some exciting news. Today, United Online announced that our Board of Directors has approved the preliminary plan to separate United Online into 2 independent, publicly traded companies. As part of the separation, FTD will become an independent publicly traded company, which shall include the worldwide operations of our FTD segment. The other public company will be United Online, which will continue to operate the business of our Content & Media and Communications segment. The company also announced that it's also reviewing strategic alternatives for our Content & Media and Communications businesses, including the potential spinoff of the Content & Media segment as an additional separate independent publicly traded company.

While the breadth and strength of our businesses had served our stockholders well for many years, we believe that it's currently in the best interest of United Online and its stockholders to separate these distinct businesses. We expect the separation, not only to unlock value for the benefit of our stockholders, but also to provide significant operational and strategic flexibility for those businesses to better position and to capitalize on their well-recognized brands and enhance the long-term stockholder value. This approach also is consistent with the input we received from various stockholders over the past year, many of whom have expressed their view that the market price of our shares does not adequately reflect the inherent value of our businesses. It's our hope that the separation of these assets will add clarity to the individual investment theme and allow current and future stockholders to realize the incremental value associated each of these corporate assets.

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