x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| Washington (State or other
jurisdiction of incorporation or organization) |
91-1996083 (I.R.S.
Employer Identification No.) | |
| 13810 SE Eastgate Way, Ste. 400 Bellevue, WA (Address of Principal Executive Office) |
98005 (Zip Code)
|
| Page | ||||
| PART I. Financial Information | ||||
| Item 1. |
3 | |||
| 3 | ||||
| 4 | ||||
| 5 | ||||
| 6 | ||||
| 7 | ||||
| Item 2. |
18 | |||
| Item 3. |
38 | |||
| PART II. Other Information | ||||
| Item 1. |
39 | |||
| Item 2. |
39 | |||
| Item 4. |
39 | |||
| Item 5. |
40 | |||
| Item 6. |
41 | |||
| 41 | ||||
| Three Months Ended June
30, |
Six Months Ended June
30, |
|||||||||||||||
| 2001 |
2002 |
2001 |
2002 |
|||||||||||||
| Agency revenues |
$ |
43,900 |
|
$ |
54,800 |
|
$ |
77,249 |
|
$ |
106,541 |
| ||||
| Merchant revenues |
|
25,886 |
|
|
85,727 |
|
|
40,180 |
|
|
143,377 |
| ||||
| Advertising and other revenues |
|
8,688 |
|
|
4,351 |
|
|
18,267 |
|
|
10,966 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Revenues |
|
78,474 |
|
|
144,878 |
|
|
135,696 |
|
|
260,884 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Cost of agency revenues (excluding recognition of stock-based compensation of $100 and $6 for the three months ended
June 30, 2001 and 2002, and $245 and $31 for the six months ended June 30, 2001 and 2002) |
|
15,850 |
|
|
20,457 |
|
|
30,070 |
|
|
39,960 |
| ||||
| Cost of merchant revenues (excluding recognition of stock-based compensation of $(10) and $8 for the three months ended
June 30, 2001 and 2002, and $81 and $33 for the six months ended June 30, 2001 and 2002) |
|
6,409 |
|
|
26,334 |
|
|
9,488 |
|
|
41,127 |
| ||||
| Cost of advertising and other revenues (excluding recognition of stock-based compensation of $27 and $0 for the three
months ended June 30, 2001 and 2002, and $55 and $4 for the six months ended June 30, 2001 and 2002) |
|
904 |
|
|
597 |
|
|
1,690 |
|
|
1,445 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Cost of revenues |
|
23,163 |
|
|
47,388 |
|
|
41,248 |
|
|
82,532 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Gross profit |
|
55,311 |
|
|
97,490 |
|
|
94,448 |
|
|
178,352 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Operating expenses: |
||||||||||||||||
| Product development (excluding recognition of stock-based compensation of $2,615 and $794 for the three months ended
June 30, 2001 and 2002, and $6,727 and $2,356 for the six months ended June 30, 2001 and 2002) |
|
7,261 |
|
|
8,152 |
|
|
13,550 |
|
|
16,879 |
| ||||
| Sales and marketing (excluding recognition of stock-based compensation of $206 and $59 for the three months ended June
30, 2001 and 2002, and $694 and $155 for the six months ended June 30, 2001 and 2002) |
|
26,599 |
|
|
41,213 |
|
|
51,382 |
|
|
76,049 |
| ||||
| General and administrative (excluding recognition of stock-based compensation of $1,001 and $674 for the three months
ended June 30, 2001 and 2002 and $2,614 and $1,499 for six months ended June 30, 2001 and 2002) |
|
6,647 |
|
|
11,545 |
|
|
11,887 |
|
|
19,786 |
| ||||
| Amortization of goodwill |
|
5,921 |
|
|
10,709 |
|
||||||||||
| Amortization of intangibles |
|
9,509 |
|
|
4,218 |
|
|
20,253 |
|
|
12,986 |
| ||||
| Recognition of stock-based compensation |
|
3,939 |
|
|
1,541 |
|
|
10,416 |
|
|
4,078 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Total operating expenses |
|
59,876 |
|
|
66,669 |
|
|
118,197 |
|
|
129,778 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Income (loss) from operations |
|
(4,565 |
) |
|
30,821 |
|
|
(23,749 |
) |
|
48,574 |
| ||||
| Net interest income and other |
|
215 |
|
|
2,485 |
|
|
1,781 |
|
|
5,168 |
| ||||
| Share of joint venture net loss |
|
(151 |
) |
|
(398 |
) | ||||||||||
| USA merger-related expenses |
|
(9,860 |
) | |||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Income (loss) before provision for income taxes |
|
(4,350 |
) |
|
33,155 |
|
|
(21,968 |
) |
|
43,484 |
| ||||
| Provision for income taxes |
|
(14,059 |
) |
|
(18,673 |
) | ||||||||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Net income (loss) |
$ |
(4,350 |
) |
$ |
19,096 |
|
$ |
(21,968 |
) |
$ |
24,811 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Net income (loss) per common share: |
||||||||||||||||
| Basic |
$ |
(0.09 |
) |
$ |
0.34 |
|
$ |
(0.45 |
) |
$ |
0.45 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Diluted |
$ |
(0.09 |
) |
$ |
0.29 |
|
$ |
(0.45 |
) |
$ |
0.39 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Weighted average number of shares outstanding: |
||||||||||||||||
| Basic |
|
49,014 |
|
|
56,442 |
|
|
48,403 |
|
|
55,377 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Diluted |
|
49,014 |
|
|
64,846 |
|
|
48,403 |
|
|
63,279 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| December 31, 2001 |
June 30, 2002 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
238,374 |
|
$ |
337,266 |
| ||
| Marketable securities |
|
115,077 |
| |||||
| Accounts receivable, net of allowance of $1,412 and $1,653 |
|
17,649 |
|
|
36,361 |
| ||
| Prepaid merchant bookings |
|
8,726 |
|
|
23,046 |
| ||
| Prepaid expenses and other current assets |
|
7,192 |
|
|
15,287 |
| ||
| |
|
|
|
|
| |||
| Total current assets |
|
271,941 |
|
|
527,037 |
| ||
| Property and equipment, net |
|
21,447 |
|
|
28,244 |
| ||
| Investments and restricted deposits |
|
12,897 |
|
|
21,440 |
| ||
| Deferred tax assets |
|
9,300 |
| |||||
| Intangible assets, net |
|
19,380 |
|
|
41,986 |
| ||
| Goodwill, net |
|
78,890 |
|
|
111,631 |
| ||
| |
|
|
|
|
| |||
| Total assets |
$ |
404,555 |
|
$ |
739,638 |
| ||
| |
|
|
|
|
| |||
| LIABILITIES |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
34,097 |
|
$ |
59,514 |
| ||
| Accrued expenses |
|
66,818 |
|
|
113,279 |
| ||
| Deferred merchant bookings |
|
52,965 |
|
|
189,866 |
| ||
| Unearned revenue |
|
1,574 |
|
|
3,688 |
| ||
| |
|
|
|
|
| |||
| Total current liabilities |
|
155,454 |
|
|
366,347 |
| ||
| |
|
|
|
|
| |||
| Commitments and contingencies (Note 10) |
||||||||
| STOCKHOLDERS EQUITY |
||||||||
| Common stock, $.01 par value, 120,000 and 600,000 shares authorized, 52,870 and 22,546 issued and
outstanding |
|
529 |
|
|
225 |
| ||
| Class B common stock, $.01 par value, 0 and 150,000 shares authorized, 0 and 34,507 issued and outstanding
|
|
345 |
| |||||
| Preferred stock, $.01 par value, 10,000 and 20,000 shares authorized, none issued and outstanding |
||||||||
| Stockholder warrants |
|
77,839 |
| |||||
| Additional paid-in-capital |
|
448,998 |
|
|
461,330 |
| ||
| Contribution from parent |
|
75,296 |
| |||||
| Contribution receivable from parent |
|
(69,492 |
) | |||||
| Unearned stock-based compensation |
|
(9,681 |
) |
|
(7,299 |
) | ||
| Retained deficit |
|
(190,946 |
) |
|
(166,135 |
) | ||
| Accumulated other comprehensive income |
|
201 |
|
|
1,182 |
| ||
| |
|
|
|
|
| |||
| Total stockholders equity |
|
249,101 |
|
|
373,291 |
| ||
| |
|
|
|
|
| |||
| Total liabilities and stockholders equity |
$ |
404,555 | ||||||