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Reis, Inc. Announces Fourth Quarter and Annual 2014 Results

Annual Revenue Grows 19%; Reis Services EBITDA Margin at 40.8% for the Year
– Net Cash Grows by 68% to $17.7 Million –

NEW YORK, March 5, 2015 (GLOBE NEWSWIRE) -- Reis, Inc. (Nasdaq:REIS) ("Reis" or the "Company"), a leading provider of commercial real estate market information and analytical tools, announced its financial results and operational achievements for the fourth quarter and year ended December 31, 2014.

Consolidated revenue, which is comprised entirely of subscription revenue generated by the Company's Reis Services segment, was $10,725,794 for the three months ended December 31, 2014, as compared to $9,208,239 for the three months ended December 31, 2013, an increase of 16.5%. This is the Company's 19th consecutive quarterly increase in subscription revenue over the prior year's corresponding quarter. For the year ended December 31, 2014, subscription revenue was $41,335,155 as compared to $34,721,088 for the year ended December 31, 2013, an increase of 19.0%. All of the Company's revenue growth has been organically generated.

Reis Services EBITDA was $4,410,000 during the three months ended December 31, 2014, an increase of $622,000, or growth of 16.4%, over the three months ended December 31, 2013 amount of $3,788,000. This is the Company's 17th consecutive quarterly increase in Reis Services EBITDA over the prior year's corresponding quarter. The Reis Services EBITDA margin was 41.1% for the three months ended December 31, 2014 and 2013. For the years ended December 31, 2014 and 2013, Reis Services EBITDA was $16,852,000 and $14,307,000, respectively, an increase of $2,545,000, or growth of 17.8%. The Reis Services EBITDA margins were 40.8% and 41.2% for the years ended December 31, 2014 and 2013, respectively. Management uses metrics, such as EBITDA, to monitor and assess the performance of its operating business, Reis Services, and believes it is helpful to investors in understanding the Reis Services business (see below for a definition and reconciliations of income from continuing operations to EBITDA and Adjusted EBITDA for the Reis Services segment and on a consolidated basis).

Reis's CEO, Lloyd Lynford, stated, "Since January 1, 2011, revenue and Reis Services EBITDA have grown at a CAGR of 14.3% and 15.4%, respectively. Reis's business plan and execution have resulted in enviable financial and equity performance, of which we are extremely proud. The recent doubling of our seniors housing coverage, the imminent launch of our student housing product and the development of the affordable housing and medical office products in 2016, position the Company to create greater value for our subscribers and shareholders."

Income from continuing operations for the three months ended December 31, 2014 was $1,524,479, or $0.14 per basic and $0.12 per diluted share. This is a 40.2% increase over adjusted income from continuing operations for the three months ended December 31, 2013 of $1,086,975, or $0.10 per basic share and $ 0.09 per diluted share. For the year ended December 31, 2014, income from continuing operations was $4,616,385, or $0.42 per basic share and $0.39 per diluted share, an increase of 70.0% over adjusted income from continuing operations for the year ended December 31, 2013 of $2,715,935, or $0.25 per basic share and $0.24 per diluted share.

Net income, on a consolidated basis, was $1,476,120, or $0.13 per basic share and $0.11 per diluted share for the three months ended December 31, 2014. This is a 48.2% increase over net income, as adjusted, for the three months ended December 31, 2013 of $996,355, or $0.09 per basic share and $0.08 per diluted share. For the year ended December 31, 2014, the Company's net income was $4,047,122, or $0.37 per basic share and $0.34 per diluted share, an increase of 70.1% over the year ended December 31, 2013 net income, as adjusted, of $2,379,446 or $0.22 per basic share and $0.21 per diluted share. Adjusted income from continuing operations and net income, as adjusted, for the three months and year ended December 31, 2013 exclude the effect of a $15,217,000 reduction in the valuation allowance related to the Company's deferred tax assets. There was no corresponding tax benefit recorded in any period in 2014. See below for the definitions and reconciliations of income from continuing operations to adjusted income from continuing operations and net income to net income, as adjusted.

Financial and Operational Highlights

Following are recent financial and operational highlights for Reis:

  • revenue growth was 16.5% in the fourth quarter of 2014 over the 2013 fourth quarter, and represents the 19th consecutive quarterly increase in subscription revenue over the prior year's corresponding quarter;
  • annual revenue growth was 19.0% in 2014 over 2013;
  • Reis Services EBITDA growth was 16.4% in the fourth quarter of 2014 over 2013, and represents the 17th consecutive quarterly increase in Reis Services EBITDA over the prior year's corresponding quarter;
  • consolidated Adjusted EBITDA was $3,889,000 for the fourth quarter of 2014 (see reconciliations below), growth of 21.1% over the fourth quarter of 2013, with a margin of 36.3%;
  • year to date consolidated Adjusted EBITDA was $14,325,000, growth of 26.4% over the comparable 2013 period, with a margin of 34.7%;
  • Reis SE renewal rates for the trailing twelve months ended December 31, 2014 were 87% overall and 89% for institutional subscribers;
  • deferred revenue ($22,885,000), Aggregate Revenue Under Contract ($45,402,000) and the forward twelve month component of Aggregate Revenue Under Contract ($30,516,000) were all historic highs for the Company at December 31, 2014 and continued to demonstrate a strong revenue base and visibility into our future revenue;
  • the continued investment in our databases including the expansion of coverage in the seniors housing sector to 302 submarkets in 110 metropolitan areas in February 2014;
  • ongoing expansion of our student housing, affordable housing and medical office databases;
  • declared and paid quarterly dividends to shareholders of $0.11 per share during each of the second, third and fourth quarters of 2014, or $3,698,000 in the aggregate;
  • announced on February 2, 2015 a $0.03 per share increase in the dividend payable on March 18, 2015 to $0.14 per common share; and
  • generated net cash of $7,185,000 in 2014 (after investing $3,823,000 in our databases and websites and utilizing $3,698,000 for dividends), bringing our cash balance to approximately $17,745,000 at December 31, 2014, an increase of 68% during the year.

2014 Revenue Performance

All of the Company's revenue is generated by the Reis Services's segment. Reis Services's revenue increased by approximately $1,517,000, or 16.5%, from the fourth quarter of 2013 to the fourth quarter of 2014 and $6,614,000, or 19.0%, for the year ended December 31, 2014 over the comparable 2013 annual period. The revenue increase over the corresponding prior quarterly period is the 19th consecutive quarterly increase in revenue over the prior year's quarter. In addition, revenue increased by approximately $257,000, or 2.5%, from the third quarter of 2014 to the fourth quarter of 2014. In general, these revenue increases in 2014 reflect: (1) additional new Reis SE business; (2) revenue growth from Mobiuss; and (3) revenue growth from ReisReports.

The Company's revenue growth reflects not just a single strong quarter, but also the momentum created by sustained contract growth during 2013 and throughout 2014. The Company continues to post record bookings performance with respect to the dollar value of contracts. Fiscal 2013, as well as the fourth quarter of 2013, represented unprecedented contract signings, surpassed again by 2014's annual and fourth quarter results. The Company was able to achieve the revenue growth rates reported above while its renewal rates have been modestly trending lower over the past few quarters. The Company's overall renewal rates were 87% and 91% for the trailing twelve months ended December 31, 2014 and 2013, respectively (for institutional subscribers, the renewal rates were 89% and 93% for the trailing twelve months ended December 31, 2014 and 2013, respectively). The decline in the renewal rates reflects the Company's decision to be more aggressive on renewal pricing, particularly in instances where customer usage levels are significantly greater than what was initially estimated as annual usage for that customer. The Company believes that aligning client report consumption with appropriate annual fees, while remaining respectful of subscriber need for Reis information, is more important in the long-term, than a modest decline in the current renewal rate. Also, based upon past experience, management believes that many non-renewing customers ultimately renew with Reis as their information and analytic needs may not be fully addressed by competitive offerings.

Reis's revenue model is based primarily on annual subscriptions that are paid in accordance with contractual billing terms. Reis recognizes revenue from its contracts on a ratable basis; for example, one-twelfth of the value of a one-year contract is recognized monthly. Therefore, increases in the dollar value of new contracts are spread evenly over the life of a contract, thereby moderating an immediate impact on revenue. Historically, the largest percentage of our contracts are executed in the fourth quarter of each year and 2014 was not an exception to that trend.

Deferred Revenue and Aggregate Revenue Under Contract

Two additional metrics management utilizes are deferred revenue and Aggregate Revenue Under Contract. Analyzing these amounts can provide additional insight into Reis Services's future financial performance. Deferred revenue, which is a GAAP basis accounting concept and is reported by the Company on the consolidated balance sheet, represents revenue from annual or longer term contracts for which we have billed and/or received payments from our subscribers related to services we will be providing over the remaining contract period. It does not include future revenue under non-cancellable contracts for which we do not yet have the contractual right to bill; this aggregate number we refer to as Aggregate Revenue Under Contract. Deferred revenue will be recognized as revenue ratably over the remaining life of a contract. The following table reconciles deferred revenue to Aggregate Revenue Under Contract at December 31, 2014 and 2013, respectively.

December 31,
2014 2013
Deferred revenue (GAAP basis) $ 22,885,000 $ 20,284,000
Amounts under non-cancellable contracts for which the Company does not yet have the contractual right to bill at the period end (A) 22,517,000 20,046,000
Aggregate Revenue Under Contract $ 45,402,000 $ 40,330,000
(A) Amounts are billable subsequent to December 31 of each year and represent (i) non-cancellable contracts for subscribers with multi-year subscriptions where the future years are not yet billable, or (ii) subscribers with non-cancellable annual subscriptions with interim billing terms.

Included in Aggregate Revenue Under Contract at December 31, 2014 was approximately $30,516,000 related to amounts under contract for the forward twelve month period through December 31, 2015. The remainder reflects amounts under contract beyond December 31, 2015. The forward twelve month Aggregate Revenue Under Contract amount is approximately 74% of revenue on a trailing twelve month basis at December 31, 2014. For comparison purposes, at December 31, 2013 and 2012, the forward twelve month Aggregate Revenue Under Contract was $27,338,000 and $23,947,000, respectively, and as a percentage of that year's revenue was approximately 79% and 77%, respectively.

Both deferred revenue and Aggregate Revenue Under Contract are influenced by: (1) the timing and dollar value of contracts signed and billed; (2) the quantity and timing of contracts that are multi-year; and (3) the impact of recording revenue ratably over the life of a multi-year contract, which moderates the effect of price increases after the first year. The then record new business and contract signings in 2013, exceeded by the historic level of new business contracted in 2014 and the increased number of multi-year contracts signed in 2014, has had a significant positive impact on our reported amounts of deferred revenue and Aggregate Revenue Under Contract at December 31, 2014.

2014 Reis Services EBITDA Performance

Reis Services's EBITDA for the three months ended December 31, 2014 was $4,410,000, an increase of $622,000, or 16.4%, over the fourth quarter 2013 amount. The Reis Services EBITDA increase over the corresponding prior quarterly period is the 17th consecutive quarterly increase in Reis Services EBITDA over the prior year's quarter. For the year ended December 31, 2014, Reis Services EBITDA was $16,852,000, an increase of $2,545,000, or 17.8%, over the comparable 2013 period. On a consecutive quarter basis, Reis Services EBITDA increased $125,000, or 2.9%, from the third quarter of 2014 to the fourth quarter of 2014. These increases were primarily derived from the increases in revenue, as described above. Operating expenses also continued to grow, the net effect of which resulted in the Reis Services EBITDA margins of 41.1% and 40.8% for the three months and year ended December 31, 2014, respectively, consistent with the reported Reis Services EBITDA margins of 41.1% and 41.2% in the 2013 comparable periods.

Investment in our business remains a priority. This includes the development of new products and functionality, introducing new, or expanding existing databases, adding resources to grow our customer base and generate more revenue. Separately, as Reis's business continues to grow, we are devoting additional resources to expand our sales pipeline through marketing efforts and sales force expansion. The expectation for spending in 2015 may result in margins for future quarters being at or below the approximate 41% Reis Services EBITDA margin we reported for the year ended December 31, 2014.

Reconciliations of Income from Continuing Operations to EBITDA and Adjusted EBITDA

We define EBITDA as earnings (income (loss) from continuing operations) before interest, taxes, depreciation and amortization. We define Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization 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 supplemental financial measures to be considered in addition to the reported GAAP basis financial information which may assist investors in evaluating and understanding: (1) the performance of the Reis Services segment, the primary business of the Company and (2) the Company's continuing consolidated results, 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 stock based compensation. Management also believes that disclosing EBITDA and Adjusted EBITDA will provide better comparability to other companies in the information services sector. However, 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. EBITDA and Adjusted EBITDA are presented both for the Reis Services segment and on a consolidated basis. We believe that these metrics, for Reis Services, provide the reader with valuable information for evaluating the financial performance of the core Reis Services business, excluding public company costs, and for making assessments about the intrinsic value of that stand-alone business to a potential acquirer. Management primarily monitors and measures its performance, and is compensated, based on the results of the Reis Services segment. EBITDA and Adjusted EBITDA, on a consolidated basis, allow the reader to make assessments about the current trading value of the Company's common stock, including expenses related to operating as a public company. However, investors should not consider these measures in isolation or as substitutes for net income (loss), income from continuing operations, operating income, or any other measure for determining operating performance that is calculated in accordance with GAAP. Reconciliations of EBITDA and Adjusted EBITDA to the most comparable GAAP financial measure, income from continuing operations, follow for each identified period on a segment basis (including the Reis Services segment), as well as on a consolidated basis:

(amounts in thousands)
Reconciliation of Income from Continuing Operations to EBITDA and By Segment
Adjusted EBITDA for the Three Months Ended December 31, 2014 Reis Services Other (A) Consolidated
Income from continuing operations $ 1,524
Income tax expense 768
Income (loss) before income taxes and discontinued operations $ 3,073 $ (781) 2,292
Add back:
Depreciation and amortization expense 1,315 2 1,317
Interest expense (income), net 22 22
EBITDA 4,410 (779) 3,631
Add back:
Stock based compensation expense, net 258 258
Adjusted EBITDA $ 4,410 $ (521) $ 3,889
Adjusted EBITDA margin – Reis Services and consolidated (B) 41.1% 36.3%
Reconciliation of Income from Continuing Operations to EBITDA and By Segment
Adjusted EBITDA for the Year Ended December 31, 2014 Reis Services Other (A) Consolidated
Income from continuing operations $ 4,616
Income tax expense 2,842
Income (loss) before income taxes and discontinued operations $ 11,559 $ (4,101) 7,458
Add back:
Depreciation and amortization expense 5,202 9 5,211
Interest expense (income), net 91 91
EBITDA 16,852 (4,092) 12,760
Add back:
Stock based compensation expense, net 1,565 1,565
Adjusted EBITDA $ 16,852 $ (2,527) $ 14,325
Adjusted EBITDA margin – Reis Services and consolidated (B) 40.8% 34.7%
Reconciliation of Income from Continuing Operations to EBITDA and By Segment
Adjusted EBITDA for the Three Months Ended December 31, 2013 Reis Services Other (A) Consolidated
Income from continuing operations $ 16,304
Income tax (benefit) (14,751)
Income (loss) before income taxes and discontinued operations $ 2,511 $ (958) 1,553
Add back:
Depreciation and amortization expense 1,251 2 1,253
Interest expense (income), net 26 26
EBITDA 3,788 (956) 2,832
Add back:
Stock based compensation expense, net 379 379
Adjusted EBITDA $ 3,788 $ (577) $ 3,211
Adjusted EBITDA margin – Reis Services and consolidated (B) 41.1% 34.9%
Reconciliation of Income from Continuing Operations to EBITDA and By Segment
Adjusted EBITDA for the Year Ended December 31, 2013 Reis Services Other (A) Consolidated
Income from continuing operations $ 17,933
Income tax (benefit) (13,670)
Income (loss) before income taxes and discontinued operations $ 9,183 $ (4,920) 4,263
Add back:
Depreciation and amortization expense 5,021 9 5,030
Interest expense (income), net 103 103
EBITDA 14,307 (4,911) 9,396
Add back:
Stock based compensation expense, net 1,941 1,941
Adjusted EBITDA $ 14,307 $ (2,970) $ 11,337
Adjusted EBITDA margin – Reis Services and consolidated (B) 41.2% 32.7%

(amounts in thousands)
Reconciliation of Income from Continuing Operations to EBITDA and By Segment
Adjusted EBITDA for the Year Ended December 31, 2012 Reis Services Other (A) Consolidated
Income from continuing operations $ 8,013
Income tax (benefit) (5,427)
Income (loss) before income taxes and discontinued operations $ 7,683 $ (5,097) 2,586
Add back:
Depreciation and amortization expense 4,974 9 4,983
Interest expense (income), net 105 (1) 104
EBITDA 12,762 (5,089) 7,673
Add back:
Stock based compensation expense, net 2,295 2,295
Adjusted EBITDA $ 12,762 $ (2,794) $ 9,968
Adjusted EBITDA margin – Reis Services and consolidated (B) 40.9% 31.9%
Reconciliation of Income from Continuing Operations to EBITDA and By Segment
Adjusted EBITDA for the Three Months Ended September 30, 2014 Reis Services Other (A) Consolidated
Income from continuing operations $ 1,130
Income tax expense 743
Income (loss) before income taxes and discontinued operations $ 2,924 $ (1,051) 1,873
Add back:
Depreciation and amortization expense 1,339 2 1,341
Interest expense (income), net 22 22
EBITDA 4,285 (1,049) 3,236
Add back:
Stock based compensation expense, net 437 437
Adjusted EBITDA $ 4,285 $ (612) $ 3,673
Adjusted EBITDA margin – Reis Services and consolidated (B) 40.9% 35.1%
(A) Includes interest and other income, depreciation expense and general and administrative expenses (including public company related costs) that are not associated with the Reis Services segment. Since the reconciliations start with income from continuing operations, the effects of the discontinued operations (Residential Development Activities) are excluded from these reconciliations for all periods presented.
(B) Reflects an Adjusted EBITDA margin on the Reis Services segment and on a consolidated basis, both of which exclude the impact of discontinued operations.

Reconciliations of Income from Continuing Operations to Adjusted Income from Continuing Operations and Net Income to Net Income, As Adjusted

We define adjusted income from continuing operations and net income, as adjusted, as income from continuing operations and net income, as applicable, adjusted to exclude the effect of a $15,217,000 reduction in the valuation allowance related to the Company's deferred tax assets during the three months and year ended December 31, 2013. There was no corresponding tax benefit recorded in any period in 2014. Reconciliations of adjusted income from continuing operations and net income, as adjusted, to their most comparable GAAP financial measures, income from continuing operations and net income, respectively, follow for each identified period:

Reconciliation of Income from Continuing Operations to
Adjusted Income from Continuing Operations
For the Three Months Ended
December 31,
For the Years Ended
December 31,
(Unaudited)
2014
(Unaudited)
2013

2014

2013
Income from continuing operations $ 1,524,479 $ 16,304,471 $ 4,616,385 $ 17,933,431
Less:
Tax benefit recorded in December 2013 attributable to the reduction of the valuation allowance related to the Company's deferred tax assets 15,217,496 15,217,496
Adjusted income from continuing operations $ 1,524,479 $ 1,086,975 $ 4,616,385 $ 2,715,935
Per share amounts — basic:
Income from continuing operations $ 0.14 $ 1.49 $ 0.42 $ 1.65
Less:
Tax benefit recorded in December 2013 attributable to the reduction of the valuation allowance related to the Company's deferred tax assets 1.39 1.40
Adjusted income from continuing operations $ 0.14 $ 0.10 $ 0.42 $ 0.25
Per share amounts — diluted:
Income from continuing operations $ 0.12 $ 1.42 $ 0.39 $ 1.57
Less:
Tax benefit recorded in December 2013 attributable to the reduction of the valuation allowance related to the Company's deferred tax assets 1.33 1.33
Adjusted income from continuing operations $ 0.12 $ 0.09 $ 0.39 $ 0.24

Reconciliation of Net Income to Net Income, as Adjusted
For the Three Months Ended December 31, For the Years Ended
December 31,
(Unaudited)
2014
(Unaudited)
2013

2014

2013
Net income $ 1,476,120 $ 16,213,851 $ 4,047,122 $ 17,596,942
Less:
Tax benefit recorded in December 2013 attributable to the reduction of the valuation allowance related to the Company's deferred tax assets 15,217,496 15,217,496
Net income, as adjusted $ 1,476,120 $ 996,355 $ 4,047,122 $ 2,379,446
Per share amounts — basic:
Net income $ 0.13 $ 1.49 $ 0.37 $ 1.62
Less:
Tax benefit recorded in December 2013 attributable to the reduction of the valuation allowance related to the Company's deferred tax assets 1.40 1.40
Net income, as adjusted $ 0.13 $ 0.09 $ 0.37 $ 0.22
Per share amounts — diluted:
Net income $ 0.11 $ 1.41 $ 0.34 $ 1.54
Less:
Tax benefit recorded in December 2013 attributable to the reduction of the valuation allowance related to the Company's deferred tax assets 1.33 1.33
Net income, as adjusted $ 0.11 $ 0.08 $ 0.34 $ 0.21

Discontinued Operations

The loss from discontinued operations was $(569,000) for the year ended December 31, 2014 and primarily reflected legal and professional fees of $977,000 in connection with our recovery efforts (related to the 2012 Gold Peak settlement of $17,000,000), offset by $26,000 of recoveries during the period and an income tax benefit of $382,000. The loss from discontinued operations was $(336,000) for the year ended December 31, 2013 and primarily reflected $646,000 of legal and professional fees in connection with our recovery efforts related to the Gold Peak settlement, offset by $80,000 of recoveries during the period and an income tax benefit of $230,000.

Future cash flows from discontinued operations are expected to be solely comprised of expenditures incurred as part of our cash recovery efforts from insurance companies and other potentially responsible parties and, to the extent that we are successful in these efforts, cash inflows from any future recoveries; however, there can be no assurance that the Company will recover any amounts in the short or long term.

Investor Conference Call

The Company will host a conference call on Thursday, March 5, 2015, at 11:00 AM (EST). This call is for the benefit of existing and prospective stockholders, stock analysts, and other interested parties to discuss the fourth quarter and year end 2014 results and other matters.

The dial-in number from inside the U.S. or Canada for this teleconference is (877) 390-5537. The dial-in number for outside the U.S. and Canada is (760) 666-3763. The conference ID is 94773274, or "Reis." A replay of the conference call will be available from shortly after the conference call through midnight (EST) on March 7, 2015 by dialing (855) 859-2056 from inside the U.S. or Canada or (404) 537-3406 from outside the U.S. and Canada, and referring to the conference ID: 94773274, or "Reis". An audio webcast of the conference call will also 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

Reis provides commercial real estate market information and analytical tools to real estate professionals through its Reis Services subsidiary. Reis Services, including its predecessors, was founded in 1980. Reis maintains a proprietary database containing detailed information on commercial properties in metropolitan markets and neighborhoods throughout the U.S. The database contains information on apartment, office, retail, warehouse/distribution, flex/research & development, self storage and seniors housing 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, quantify and manage 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.

The Company's product portfolio features: Reis SE, its flagship delivery platform aimed at larger and mid-sized enterprises; ReisReports, aimed at prosumers and smaller enterprises; and Mobiuss Portfolio CRE, or Mobiuss, aimed primarily at risk managers and credit administrators at banks and non-bank lending institutions. It is through these products that Reis provides online access to a proprietary database of commercial real estate information and analytical tools designed to facilitate debt and equity transactions as well as ongoing asset and portfolio evaluations. Depending on the product or level of entitlement, users have access to market trends and forecasts at metropolitan and neighborhood levels throughout the U.S. and/or detailed building-specific information such as rents, vacancy rates, lease terms, property sales, new construction listings and property valuation estimates. Reis's products are designed to meet the demand for timely and accurate information to support the decision-making of property owners, developers, builders, banks and non-bank lenders, equity investors and service providers. These real estate professionals require access to timely information on both the performance and pricing of assets, including detailed data on market transactions, supply, absorption, rents and sale prices. 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 and www.ReisReports.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements may relate to the Company's or management's outlook or expectations for earnings, revenues, expenses, margins, asset quality, or other future financial or business performance, strategies, prospects or expectations, or the impact of legal, regulatory or supervisory matters on our business, 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 business prospects, potential acquisitions, sources and uses of cash, revenue, expenses, margins, income (loss) from continuing or discontinued operations, cash flows, valuation of assets and liabilities and other business metrics of the Company and its businesses, including EBITDA, Adjusted EBITDA and Aggregate Revenue Under Contract; and
  • statements preceded by, followed by or that include the words "estimate," "plan," "project," "intend," "expect," "anticipate," "believe," "seek," "target" or similar expressions relating to future periods.

Forward-looking 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 contemplated by the forward-looking statements. Some factors that could cause actual results to differ include:

  • lower than expected revenues and other performance measures such as income from continuing operations, EBITDA and Adjusted EBITDA;
  • inability to retain and increase the Company's subscriber base;
  • inability to execute properly on new products and services, or failure of subscribers to accept these products and services;
  • competition;
  • inability to attract and retain sales and senior management personnel;
  • inability to access adequate capital to fund operations and investments in our business;
  • difficulties in protecting the security, confidentiality, integrity and reliability of the Company's data;
  • changes in accounting policies or practices;
  • legal and regulatory issues;
  • the results of pending, threatening or future litigation; and
  • the risk factors listed under "Item 1A. Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission ("SEC"), including the "Risk Factors" section of these filings, and the Company's other filings with the SEC available at the SEC's website (www.sec.gov).

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this 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 release or to reflect the occurrence of unanticipated events.

Financial Information

REIS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
2014 2013
ASSETS
Current assets:
Cash and cash equivalents $ 17,745,077 $ 10,559,899
Restricted cash and investments 212,625 216,702
Accounts receivable, net 12,627,063 11,386,584
Prepaid and other assets 4,164,320 2,787,909
Assets attributable to discontinued operations 3,500 8,500
Total current assets 34,752,585 24,959,594
Furniture, fixtures and equipment, net of accumulated depreciation of $2,158,647 and $1,905,933, respectively 850,866 853,377
Intangible assets, net of accumulated amortization of $33,589,746 and $28,764,189, respectively 14,681,410 15,687,117
Deferred tax asset, non-current portion, net 18,638,737 21,316,520
Goodwill 54,824,648 54,824,648
Other assets 139,797 225,528
Total assets $ 123,888,043 $ 117,866,784
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of debt $ — $ —
Accrued expenses and other liabilities 4,170,687 3,578,227
Liability for option cancellations 268,341
Deferred revenue 22,885,287 20,284,178
Liabilities attributable to discontinued operations 299,025 342,138
Total current liabilities 27,354,999 24,472,884
Other long-term liabilities 419,638 522,941
Total liabilities 27,774,637 24,995,825
Commitments and contingencies
Stockholders' equity:
Common stock, $0.02 par value per share, 101,000,000 shares authorized, 11,156,571 and 10,916,441 shares issued and outstanding, respectively 223,131 218,328
Additional paid in capital 105,605,803 102,717,693
Retained earnings (deficit) (9,715,528) (10,065,062)
Total stockholders' equity 96,113,406 92,870,959
Total liabilities and stockholders' equity $ 123,888,043 $ 117,866,784
REIS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended December 31, For the Years Ended
December 31,
(Unaudited)
2014
(Unaudited)
2013

2014

2013
Subscription revenue $ 10,725,794 $ 9,208,239 $ 41,335,155 $ 34,721,088
Cost of sales of subscription revenue 2,073,455 1,862,555 8,037,019 6,973,772
Gross profit 8,652,339 7,345,684 33,298,136 27,747,316
Operating expenses:
Sales and marketing 2,568,886 2,251,995 10,235,349 8,349,544
Product development 950,303 772,153 3,472,875 3,121,729
General and administrative expenses 2,818,944 2,742,291 12,040,343 11,909,462
Total operating expenses 6,338,133 5,766,439 25,748,567 23,380,735
Other income (expenses):
Interest and other income 6,625 2,509 22,016 9,981
Interest expense (28,352) (28,352) (113,200) (113,200)
Total other income (expenses) (21,727) (25,843) (91,184) (103,219)
Income before income taxes and discontinued operations 2,292,479 1,553,402 7,458,385 4,263,362
Income tax expense (benefit) 768,000 (14,751,069) 2,842,000 (13,670,069)
Income from continuing operations 1,524,479 16,304,471 4,616,385 17,933,431
(Loss) from discontinued operations, net of income tax benefit of $(31,000), $(230,000), $(382,000) and $(230,000), respectively (48,359) (90,620) (569,263) (336,489)
Net income $ 1,476,120 $ 16,213,851 $ 4,047,122 $ 17,596,942
Per share amounts – basic:
Income from continuing operations $ 0.14 $ 1.49 $ 0.42 $ 1.65
Net income $ 0.13 $ 1.49 $ 0.37 $ 1.62
Per share amounts – diluted:
Income from continuing operations $ 0.12 $ 1.42 $ 0.39 $ 1.57
Net income $ 0.11 $ 1.41 $ 0.34 $ 1.54
Weighted average number of common shares outstanding:
Basic 11,145,031 10,909,024 11,086,690 10,884,533
Diluted 11,688,289 11,463,881 11,593,079 11,396,559
Dividends declared per common share $ 0.11 $ — $ 0.33 $ —

CONTACT: Press Contact: Mark P. Cantaluppi Vice President, Chief Financial Officer Reis, Inc. (212) 921-1122

Source:Reis, Inc.