Revenues of $127.3 Million
Operating Income of $20.6 Million
Adjusted OIBDA of $34.6 Million
Quarterly Cash Dividend of $0.20 per Share
WOODLAND HILLS, Calif., May 3, 2006 (PRIMEZONE) -- United Online, Inc. (Nasdaq:UNTD), a leading provider of consumer Internet and media services, today reported results for its first quarter ended March 31, 2006. The company also announced that its Board of Directors has declared a quarterly cash dividend of $0.20. The record date for the dividend is May 12, 2006 and the dividend is payable on May 31, 2006. In addition, effective today, the company will begin reporting its operating results by segments: Communications -- consisting of its Internet access, email and VoIP businesses; and Content & Media -- consisting of its social-networking, Web-hosting and photo-sharing businesses.
"With 32% growth in Content & Media revenues and our 19th consecutive quarter of record consolidated adjusted OIBDA, United Online's first quarter results have 2006 off to a terrific start," said Mark R. Goldston, chairman, CEO and president of United Online. "Strong organic growth in Content & Media revenues and our recent acquisitions of MyPoints.com and Namesdatabase.com demonstrate our continued focus on diversification. With over 60 million registered accounts across all of our businesses, United Online's strategy is to create long-term value by growing Content & Media revenues while managing our Communications businesses primarily for adjusted OIBDA contribution."
First Quarter 2006 Consolidated Results:
----------------------------------------
-- Total revenues were $127.3 million versus $130.5 million for
the year-ago quarter.
-- Operating income was $20.6 million, or 16.2% of revenues,
versus operating income of $21.0 million, or 16.1% of revenues,
in the year-ago quarter.
-- Adjusted operating income before depreciation and amortization
("OIBDA")(1) was a record $34.6 million, or 27.2% of revenues, an
increase of 10% versus adjusted OIBDA of $31.5 million, or 24.1%
of revenues, in the year-ago quarter.
-- Pay accounts(2) increased by 84,000 during the quarter to 5.1
million; active accounts(2) totaled 18.7 million at March 31,
2006. During the quarter, the company acquired Namesdatabase.com
which, at the date of acquisition, had approximately 58,000 pay
accounts and approximately 2.7 million active accounts.
-- Net income was $12.7 million or $0.20 per share (including
$3.9 million of stock-based compensation expense, net
of tax, and a $1.0 million, net of tax, cumulative effect
adjustment in connection with the adoption of Financial
Accounting Standards Board Statement No. 123R ("FAS 123R"),
"Share-Based Payment", an increase of 10% versus $11.5 million
or $0.18 per share, for the year-ago quarter (including
$0.9 million of stock-based compensation expense, net of tax,
recorded under the intrinsic value method).
-- Adjusted net income(3) was $18.1 million, an increase of 11%
versus $16.2 million for the year-ago quarter. On a per share
basis, adjusted net income for the quarter was $0.27 per share,
an increase of 8% versus $0.25 per share for the year-ago
quarter. Adjusted net income is calculated in a manner consistent
with the analyst consensus estimate as reported by First Call.
"United Online's new segment reporting format is driven by the evolution of our business and recent developments including acquisitions, the growing scale of our Content & Media properties, and the maturation of our access business," said Charles S. Hilliard, executive vice president, finance and CFO. "As our strong first quarter results demonstrate, we continue to grow our Content & Media services in a financially disciplined manner by selectively investing in our Communications business, which declined by 104,000 pay access accounts and added 6,000 pay VoIP accounts in Q1."
Segment Reporting
A primary component of the company's strategy is to diversify its revenues beyond its legacy Internet access business. In order to focus resources towards the company's growth opportunities, including its growing social networking business, management has realigned the internal financial reporting structure into two business units.
As a result, the company's reportable segments now include the following, organized on the basis of products and services provided:
Segment Internet Services
------- -----------------
Communications Internet access, email and VoIP
Content & Media Social networking, Web hosting and photo sharing;
commencing on April 10, 2006, this segment will
also include online loyalty marketing.
First Quarter 2006 Segment Results:
-----------------------------------
Management has determined that adjusted OIBDA is the appropriate
measure for assessing performance and for allocating resources among
its segments.
-- Communications revenues were $100.3 million, or 78.8% of
consolidated revenues, versus $110.0 million, or 84.3% of
consolidated revenues in the year-ago quarter.
-- Content & Media revenues were $27.0 million, or 21.2% of
consolidated revenues, an increase of 32% versus $20.5 million,
or 15.7% of consolidated revenues, in the year-ago quarter.
-- Communications adjusted OIBDA was $33.5 million, or 33.4% of
Communications revenues, an increase of 2% versus $32.8 million,
or 29.8% of Communications revenues, in the year-ago quarter.
-- Content & Media adjusted OIBDA was $6.3 million, or 23.3% of
Content & Media revenues, an increase of 97% versus $3.2 million,
or 15.6% of Content & Media revenues, in the year-ago quarter.
-- Other reconciling items (unallocated corporate expenses) to
arrive at consolidated adjusted OIBDA were ($5.1) million versus
($4.5) million in the year-ago quarter.
Additional Highlights:
----------------------
-- Cash balances at March 31, 2006 were $175.3 million, including
cash, cash equivalents and short-term investments. During the
quarter, the company repaid the remaining $54.2 million balance
of its senior term loan facility and acquired
Namesdatabase.com for $10.0 million in cash.
-- Cash flows from operations were $14.2 million versus $31.7
million for the year-ago quarter. In connection with the adoption
of FAS 123R, certain tax benefits from exercised stock options
that were previously reflected in the operating section of the
statement of cash flows are now presented in the financing
section.
-- Free cash flow(4) was $8.6 million versus $28.2 million for the
year-ago quarter.
-- On April 10, 2006 the company acquired MyPoints.com for
approximately $56.0 million in cash.
Business Outlook:
The following forward-looking information includes certain projections made by management as of the date of this release. United Online does not intend to revise or update this information and may not provide this type of information in the future. Due to a variety of factors, actual results may differ significantly from those projected. Factors include, without limitation, the factors referenced later in this announcement under the caption "Cautionary Information Regarding Forward-Looking Statements." These and other factors are discussed in more detail in the company's filings with the Securities and Exchange Commission.
Following is the company's guidance for the June 2006 quarter and the year ending December 31, 2006:
--------------- --------------------------------
(in millions) Jun '06 Q Est. CY'06 Est. Prior CY'06 Est.
--------------- --------------------------------
Operating income $18.1 - $20.1 $76.0 - $81.0 $73.6 - $79.6
Depreciation 5.1 20.0 20.5
Amortization 4.9 19.0 15.9
Stock-based
compensation 4.9 19.0 21.0
--------------- --------------------------------
Adjusted operating
income before
depreciation and
amortization(1) $33.0 - $35.0 $134.0 - $139.0 $131.0 - $137.0
--------------- --------------------------------
Weighted average
diluted shares 67.5 - 68.5 68.0 - 69.0 67.5 - 68.5
-- Total revenues for the June 2006 quarter are estimated to be
between $130 million and $132 million.
(1) Adjusted operating income before depreciation and amortization
(adjusted OIBDA) is defined as operating income before depreciation,
amortization and stock-based compensation. Management believes that
because adjusted OIBDA excludes certain non-cash expenses (such as
depreciation, amortization and stock-based compensation), this
measure provides investors with additional useful information to
measure the company's performance, particularly with respect to
changes in performance from period to period. Management uses
adjusted OIBDA to measure the company's performance and previously
monitored adjusted OIBDA to ensure compliance with specific financial
performance covenants under its term loan, which was repaid in
January 2006. The company's Board of Directors uses this measure in
determining certain compensation incentives for certain members of
the company's management. Adjusted OIBDA is not determined in
accordance with generally accepted accounting principles (GAAP) and
should be considered in addition to, not as a substitute for or
superior to, financial measures determined in accordance with GAAP. A
limitation associated with the use of adjusted OIBDA is that it does
not reflect the periodic costs of certain capitalized tangible and
intangible assets used in generating revenues in the company's
business. Management evaluates the costs of such tangible and
intangible assets through other financial measures such as capital
expenditures and purchase accounting. An additional limitation
associated with this measure is that it does not include stock
compensation expenses related to the company's workforce. Management
compensates for this limitation by providing supplemental information
about stock compensation expense on the face of the consolidated
statements of operations. Management does not believe either of these
limitations is material, particularly when such measure is disclosed
with its most comparable GAAP financial measure, operating income. A
reconciliation to operating income is provided in the accompanying
tables.
(2) A pay account represents a unique billing relationship with a
customer who subscribes to one or more of the company's services. A
pay account does not equate to a unique subscriber since one
subscriber could have several pay accounts. Active accounts are
defined as all free access, VoIP, social-networking and email users
that logged on to our services at least once during the preceding 31
days, together with all pay accounts. Additionally, active accounts
include the number of free Web sites that received at least one
unique visitor within the preceding 90 days and the number of free
photo-sharing users that logged on to the service at least once
within the preceding 90 days. A table entitled "Analysis of Pay
Accounts" is presented elsewhere in this release.
(3) Adjusted net income is defined as net income before the after-tax
effect of amortization of intangible assets, stock-based compensation
and the cumulative effect of a change in accounting principle as a
result of the adoption of FAS 123R. Management believes that adjusted
net income provides investors with additional useful information to
measure the company's financial performance, particularly from period
to period, exclusive of certain non-cash expenses (such as
amortization and stock-based compensation). Management also uses
adjusted net income for this purpose. Adjusted net income is not
determined in accordance with generally accepted accounting
principles (GAAP) and should be considered in addition to, not as a
substitute for or superior to, financial measures determined in
accordance with GAAP. The limitations of adjusted net income are
that, similar to adjusted OIBDA, it does not include certain costs,
and the term adjusted net income does not have a standardized
meaning. Therefore, other companies may use the same, or a similarly
named measure but exclude different items, which may not provide
investors a comparable view of the company's performance in relation
to other companies in the same industry. Management compensates for
this limitation by presenting the most comparable GAAP measure, net
income, directly ahead of adjusted net income in this earnings
release and by providing a reconciliation that shows and describes
the adjustments made. Management does not believe these limitations
are material, particularly when such measure is disclosed with its
most comparable GAAP financial measure, net income. A reconciliation
to net income is provided in the accompanying tables.
(4) Free cash flow is defined as net cash provided by operating
activities, less capital expenditures and including the excess tax
benefits from stock-based compensation. Management believes that free
cash flow provides investors with additional useful information to
measure operating liquidity because it reflects the company's
operating cash flows after investing in capital assets. This measure
is used by management, and may also be useful for investors, to
assess the company's ability to pay its quarterly dividend, repay
debt obligations and generate cash flow for a variety of strategic
opportunities, including reinvestment in the business, and effecting
potential acquisitions and share repurchases. Free cash flow is not
determined in accordance with generally accepted accounting
principles (GAAP) and should be considered in addition to, not as a
substitute for or superior to, financial measures determined in
accordance with GAAP. The limitation of free cash flow is that it
does not represent the total increase or decrease in cash during the
period. Management does not believe that this is a material
limitation, particularly when such measure is disclosed with its most
comparable GAAP financial measure, net cash provided by operating
activities. A reconciliation to net cash provided by operating
activities is provided in the accompanying tables.
About United Online
United Online, Inc. (Nasdaq:UNTD) is a leading provider of consumer Internet and media services through a number of brands, including NetZero, Juno, Classmates and MyPoints. The company's Communications services include Internet access, email and VoIP. The company's Content & Media services include social networking and online loyalty marketing. United Online is headquartered in Woodland Hills, CA, with offices in New York City, NY; Renton, WA; San Francisco, CA; Schaumburg, IL; Orem, UT; Erlangen, Germany; and Hyderabad, India. For more information about United Online, please visit http://www.untd.com.
United Online will be hosting a conference call today at 2:00PM PT (5:00PM ET) to discuss its quarterly results. A live Web cast of the call can be accessed on the Investors section of the company's Web site at www.untd.com. A recording of the call will be available on the site for seven days.
Cautionary Information Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Statements containing words such as "guidance," "may," "believe," "will," "expect," "project," "projections," "business outlook" and "estimate" or similar expressions constitute forward-looking statements. These statements include, without limitation, expectations regarding: guidance for future financial performance; changes in pay accounts; weighted average diluted shares; depreciation and amortization; and stock-based compensation. Actual results may differ materially from those predicted and reported results should not be considered an indication of future performance. Potential risks and uncertainties include, among others: the effect of competition, including adoption of broadband services and changes in the company's pricing or competitors' pricing, and the use of promotional offers to acquire or retain subscribers; the company's inability to retain its existing subscribers and the rate at which new subscribers sign up for the company's services; changes in the mix of pay accounts; the effects of changes in marketing expenditures or shifts in marketing expenditures to support new products and services; the effects of seasonality and changes in Internet usage; changes in the projected number of weighted average diluted shares due to the issuance of stock, restricted stock units and stock options, stock repurchases, fluctuations in the company's stock price or other factors; changes in the projected amortization and depreciation figures due to capital spending or other factors; potential impairment of goodwill and intangibles; changes in usage by subscribers, additional telecommunications costs or other factors negatively impacting the company's cost of revenue; changes in active accounts; the company's inability to maintain its agreements with telecommunications providers on attractive terms; the company's ability to successfully integrate acquisitions; problems associated with the company's billing systems; the company's inability to retain key customers and key personnel; technological problems or developments; risks associated with litigation; and governmental regulation. From time to time, the company considers acquisitions that, if consummated, could be material. Forward-looking statements regarding financial metrics are based upon the assumption that no such acquisition is consummated during the relevant periods. If an acquisition were consummated, actual results could differ materially from any forward-looking statements. More information about potential factors that could affect the company's business and financial results is included in the company's annual and quarterly reports filed with the Securities and Exchange Commission (http://www.sec.gov), including, without limitation, information under the captions "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors."
UNITED ONLINE, INC.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
March 31, December 31,
2006 2005
--------- ---------
ASSETS
Cash, cash equivalents and short-term
investments $ 175,299 $ 244,362
Accounts receivable, net 17,858 19,201
Deferred tax assets, net 67,896 68,355
Property and equipment, net 35,440 33,093
Goodwill and intangible assets, net 146,270 139,837
Other assets 15,512 16,340
--------- ---------
Total assets $ 458,275 $ 521,188
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 39,024 $ 46,955
Accrued liabilities 27,165 36,249
Deferred revenue 58,670 56,284
Capital leases 648 698
Term loan -- 54,208
Other liabilities 3,820 4,379
--------- ---------
Total liabilities 129,327 198,773
--------- ---------
Stockholders' equity 328,948 322,415
--------- ---------
Total liabilities and stockholders' equity $ 458,275 $ 521,188
========= =========
UNITED ONLINE, INC.
Unaudited Consolidated Statements of Operations
(in thousands, except per share amounts)
----------------------
Three Months Ended
March 31,
----------------------
2006 2005
--------- ---------
Revenues $ 127,332 $ 130,531
Operating expenses:
Cost of revenues(a) 29,890 27,779
Sales and marketing(a) 43,419 54,083
Product development(a) 12,816 9,106
General and administrative(a) 16,246 12,600
Amortization of intangible assets 4,389 5,978
--------- ---------
Total operating expenses 106,760 109,546
--------- ---------
Operating income 20,572 20,985
Interest and other income, net 1,716 1,417
Interest expense (1,716) (2,002)
--------- ---------
Income before income taxes 20,572 20,400
Provision for income taxes 8,921 8,913
--------- ---------
Income before cumulative effect of change
in accounting principle 11,651 11,487
Cumulative effect of a change in
accounting principle, net of tax 1,041 --
--------- ---------
Net income $ 12,692 $ 11,487
========= =========
Basic net income per share
Income before cumulative effect of change
in accounting principle $ 0.19 $ 0.19
Cumulative effect of change in accounting
principle, net of tax 0.01 --
--------- ---------
Basic net income per share $ 0.20 $ 0.19
========= =========
Diluted net income per share
Income before cumulative effect of change
in accounting principle $ 0.18 $ 0.18
Cumulative effect of change in accounting
principle, net of tax 0.02 --
--------- ---------
Diluted net income per share $ 0.20 $ 0.18
========= =========
Shares used to calculate basic net
income per share 62,511 60,393
========= =========
Shares used to calculate diluted net
income per share 64,889 63,038
========= =========
Shares outstanding at end of period 63,527 60,669
========= =========
(a) Stock-based compensation was
allocated as follows:
Cost of revenues $ 237 $ 25
Sales and marketing 944 100
Product development 1,466 63
General and administrative 2,322 887
--------- ---------
Total stock-based compensation $ 4,969 $ 1,075
========= =========
UNITED ONLINE, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
----------------------
Three Months Ended
March 31,
----------------------
2006 2005
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,692 $ 11,487
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, amortization and
stock-based compensation 14,065 10,527
Deferred taxes and other 1,135 (107)
Tax benefits from stock-based compensation 1,873 3,947
Excess tax benefits from stock-based
compensation (1,414) --
Cumulative effect of change in accounting
principle, net of tax (1,041) --
Change in operating assets and liabilities
(excluding the effects of acquisitions):
Accounts receivable 1,394 295
Other assets (730) 2,986
Accounts payable and accrued liabilities (15,541) (2,856)
Other liabilities (40) 825
Deferred revenue 1,846 4,581
--------- ---------
Net cash provided by operating activities 14,239 31,685
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (7,061) (3,455)
Purchases of rights, patents and trademarks (509) (5,500)
Purchases of short-term investments (124,121) (98,317)
Proceeds from maturities and sales of
short-term investments 115,320 115,858
Cash paid for acquisitions, net
cash acquired (10,990) (8,540)
--------- ---------
Net cash provided by (used for)
investing activities (27,361) 46
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on term loan (54,209) (30,833)
Payments on capital leases (50) (288)
Proceeds from exercises of stock options 2,622 1,821
Repurchases of common stock (1,643) (14,207)
Payments for dividends (12,868) --
Excess tax benefits from stock-based
compensation 1,414 --
--------- ---------
Net cash used for financing activities (64,734) (43,507)
--------- ---------
Effect of exchange rate changes on cash
and cash equivalents 28 (14)
Change in cash and cash equivalents (77,828) (11,790)
Cash and cash equivalents, beginning of period 100,397 56,512
--------- ---------
Cash and cash equivalents, end of period $ 22,569 $ 44,722
========= =========
UNITED ONLINE, INC.
Reconciliation of Net Income to Adjusted Net Income(3)
(in thousands, except per-share data)
Three Months Ended
March 31,
------------------------
2006 2005
-------- --------
Net income $ 12,692 $ 11,487
Add (deduct):
Stock-based compensation 4,969 1,075
Amortization of intangible assets 4,389 5,978
Cumulative effect of a change in
accounting principle, net of tax(a) (1,041) --
-------- --------
21,009 18,540
Income tax effect of adjusting entries (2,923) (2,315)
-------- --------
Adjusted net income $ 18,086 $ 16,225
======== ========
Adjusted basic net income per share $ 0.29 $ 0.27
======== ========
Adjusted diluted net income per share $ 0.27 $ 0.25
======== ========
Shares used to calculate
adjusted basic net income per share 62,511 60,393
======== ========
Shares used to calculate adjusted
diluted net income per share(b) 65,817 63,713
======== ========
---------------------------------------------------------------------
(a) Cumulative effect adjustment for estimated forfeitures is an
adjustment of previously recognized compensation cost for
restricted stock awards outstanding at the adoption date of FAS
123R that the company does not expect to vest.
(b) Includes the adjustment of shares used to calculate diluted
net income per share resulting from the elimination of
stock-based compensation.
UNITED ONLINE, INC.
Reconciliation of Non-GAAP Financial Data
(in thousands)
Three Months Ended March 31,
---------------------------
2006 2005
------- -------
Adjusted Operating Income Before
Depreciation and Amortization(1)
Operating income $20,572 $20,985
Depreciation 4,707 3,474
Amortization 4,389 5,978
------- -------
Operating income before
depreciation and amortization 29,668 30,437
Stock-based compensation 4,969 1,075
------- -------
Adjusted operating income before
depreciation and amortization $34,637 $31,512
======= =======
Three Months Ended March 31,
---------------------------
2006 2005
------- -------
Free Cash Flow(4)
Net cash provided by operating activities $14,239 $31,685
Add (deduct):
Capital expenditures (7,061) (3,455)
Excess tax benefits from stock-based
compensation(a) 1,414 --
------- -------
Free cash flow $ 8,592 $28,230
======= =======
---------------------------------------------------------------------
(a) In accordance with FAS 123R, certain tax benefits from
exercised stock options that were previously reflected in the
operating section of the statement of cash flows are now
presented in the financing section.
UNITED ONLINE, INC.
Supplemental Schedule of Segment Information
(in thousands)
Three Months Ended March 31, 2006
---------------------------------------------------
Unallocated
Content & Corporate
Communications Media Expenses Total
-------------- --------- ------------ --------
Billable services $ 90,659 $ 20,497 $ -- $111,156
Advertising 9,683 6,493 -- 16,176
-------- -------- -------- --------
Total revenues 100,342 26,990 -- 127,332
-------- -------- -------- --------
Operating expenses:
Cost of revenue 25,581 4,072 237 29,890
Sales and marketing 30,342 12,133 944 43,419
Product development 8,628 2,722 1,466 12,816
General and
administrative 5,160 3,639 7,447 16,246
Amortization of
intangible assets 684 3,705 -- 4,389
-------- -------- -------- --------
Total operating
expenses 70,395 26,271 10,094 106,760
-------- -------- -------- --------
Operating income 29,947 719 (10,094) 20,572
-------- -------- -------- --------
Depreciation 2,837 1,870 -- 4,707
Amortization 684 3,705 -- 4,389
-------- -------- -------- --------
Operating income before
depreciation and
amortization 33,468 6,294 (10,094) 29,668
Stock-based
compensation -- -- 4,969 4,969
-------- -------- -------- --------
Adjusted operating
income before
depreciation and
amortization $ 33,468 $ 6,294 $ (5,125) $ 34,637
======== ======== ======== ========
Three Months Ended March 31, 2005
---------------------------------------------------
Unallocated
Content & Corporate
Communications Media Expenses Total
-------------- --------- ------------ --------
Billable services $101,156 $ 15,072 $ -- $116,228
Advertising 8,859 5,444 -- 14,303
-------- -------- -------- --------
Total revenues 110,015 20,516 -- 130,531
-------- -------- -------- --------
Operating expenses:
Cost of revenue 23,805 3,949 25 27,779
Sales and marketing 43,905 10,078 100 54,083
Product development 7,326 1,717 63 9,106
General and
administrative 4,077 3,132 5,391 12,600
Amortization of
intangible assets 853 5,125 -- 5,978
-------- -------- -------- --------
Total operating
expenses 79,966 24,001 5,579 109,546
-------- -------- -------- --------
Operating income 30,049 (3,485) (5,579) 20,985
-------- -------- -------- --------
Depreciation 1,919 1,555 -- 3,474
Amortization 853 5,125 -- 5,978
-------- -------- -------- --------
Operating income
before depreciation
and amortization 32,821 3,195 (5,579) 30,437
Stock-based
compensation -- -- 1,075 1,075
-------- -------- -------- --------
Adjusted operating
income before
depreciation and
amortization $ 32,821 $ 3,195 $ (4,504) $ 31,512
======== ======== ======== ========
UNITED ONLINE, INC.
Selected Quarterly Historical Financial Data and Key Metrics(a)
Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31,
2006 2005 2005 2005 2005
-------- -------- -------- -------- --------
Revenue
(in thousands) $127,332 $130,232 $132,778 $131,520 $130,531
Net income
(in thousands) $ 12,692 $ 12,374 $ 12,594 $ 10,672 $ 11,487
Net income per
diluted share $ 0.20 $ 0.19 $ 0.20 $ 0.17 $ 0.18
Pay accounts(2)
(in thousands) 5,093 5,009 5,040 5,033 4,952
Active accounts(2)
(in millions) 18.7 17.6 16.9 16.9 17.0
Number of
employees at end
of period 912 900 868 828 769
---------------------------------------------------------------------
(a) More information on the financial results for these quarters
can be found in the company's filings with the Securities and
Exchange Commission.
UNITED ONLINE, INC.
Analysis of Pay Accounts (2)
(in thousands)
Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31,
2006 2005 2005 2005 2005
-------- -------- -------- -------- --------
Communications(a)
Access 2,751 2,855 2,980 3,078 3,130
Other 321 313 301 286 259
-------- -------- -------- -------- --------
Total 3,072 3,168 3,281 3,364 3,389
-------- -------- -------- -------- --------
Content & Media(b)
Social networking 1,945 1,766 1,686 1,599 1,505
Other 76 75 73 70 58
-------- -------- -------- -------- --------
Total 2,021 1,841 1,759 1,669 1,563
-------- -------- -------- -------- --------
Total pay
accounts(2) 5,093 5,009 5,040 5,033 4,952
======== ======== ======== ======== ========
---------------------------------------------------------------------
(a) Communications includes Internet access, VoIP, premium
content, premium email and security suite.
(b) Content & Media includes social networking, Web hosting and
photo sharing.