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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
 
 
FORM 10-Q
 
(Mark One)
 
  
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
 
For the quarterly period ended March 31, 2004
 
 
 
OR
 
 
  
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
 
For the transition period from __________ to __________
 
 
 
Commission File Number 000-25469
 
iVillage Inc.
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware
 
13-3845162
(State or Other Jurisdiction of Incorporation or Organization)
 
(IRS Employer Identification No.)
 
 
 
500 Seventh Avenue, New York, New York
 
10018
(Address of Principal Executive Offices)
 
(Zip Code)
 
(212) 600-6000
(Registrant’s Telephone Number, Including Area Code)
 
(Former Name, Former Address and Former Fiscal Year,
if Changed since Last Report)
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No 
 
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes   No 
 
As of May 10, 2004, the registrant had outstanding 58,971,439 shares of common stock.
 
iVillage Inc.
Form 10-Q
For the Quarter ended March 31, 2004
 
INDEX
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TRADEMARKS
 
iVillage®, iVillage.com®, gURL.com®, Newborn Channel®, WebStakes.com®, iVillage Consulting®, iVillage Solutions® and iVillageAccess® are registered trademarks of iVillage Inc. The stylized iVillage logo, “the Internet for Women”, Astrology.com, Baby Steps, Public Affairs Group, Inc., Business Women’s Network, Business Women’s Network Government, Diversity Best Practices, Best Practices In Corporate Communications and Promotions.com are trademarks of iVillage Inc. All other brand names, trademarks or service marks referred to in this report are the property of their owners.
 
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PART I
FINANCIAL INFORMATION
 
Item 1. Financial Statements.
iVillage Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)
 
 
 
March 31,
2004
 
December 31,
2003
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
16,365
 
$
15,823
 
Accounts receivable, less allowance for doubtful accounts of  $1,134 as of March 31, 2004 and December 31, 2003, respectively
 
 
6,617
 
 
7,517
 
Prepaid rent
 
 
318
 
 
318
 
Other current assets
 
 
3,778
 
 
3,520
 
 
 
 
 
Total current assets
 
 
27,078
 
 
27,178
 
Fixed assets, net
 
 
7,179
 
 
7,269
 
Goodwill, net
 
 
22,580
 
 
22,580
 
Intangible assets, net
 
 
10,819
 
 
11,989
 
Prepaid rent, net of current portion
 
 
3,316
 
 
3,354
 
Other assets
 
 
158
 
 
158
 
 
 
 
 
Total assets
 
$
71,130
 
$
72,528
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
$
9,518
 
$
10,441
 
Deferred revenue
 
 
3,151
 
 
3,323
 
Deferred rent
 
 
144
 
 
144
 
Other current liabilities
 
 
97
 
 
190
 
 
 
 
 
Total current liabilities
 
 
12,910
 
 
14,098
 
Deferred rent, net of current portion
 
 
1,447
 
 
1,483
 
 
 
 
 
Total liabilities
 
 
14,357
 
 
15,581
 
Commitments and contingencies
 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
 
 
Preferred stock – par value $.01, 5,000,000 shares authorized; no shares issued and outstanding as of March 31, 2004 and December 31, 2003, respectively
 
 
—
 
 
—
 
Common stock - par value $.01, 200,000,000 shares authorized;  59,872,283 and 57,233,470 shares issued at March 31, 2004 and December 31, 2003, respectively; 58,868,837 and 56,230,024 shares outstanding as of March 31, 2004 and December 31, 2003, respectively
 
 
599
 
 
572
 
Additional paid-in capital
 
 
551,441
 
 
550,892
 
Treasury stock at cost (1,003,446 shares)
 
 
(430
)
 
(430
)
Stockholders’ notes receivable
 
 
(127
)
 
(241
)
Accumulated deficit
 
 
(494,710
)
 
(493,846
)
 
 
 
 
Total stockholders’ equity
 
 
56,773
 
 
56,947
 
 
 
 
 
Total liabilities and stockholders’ equity
 
$
71,130
 
$
72,528
 
 
 
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements
 
1
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iVillage Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
 
 
 
Three months ended
March 31,
 
 
 
 
 
 
 
 
2004
 
 
2003
 
 
 
 
 
Revenues
 
$
15,507
 
$
12,592
 
Operating expenses:
 
 
 
 
 
 
 
Editorial, product development and technology
 
 
7,511
 
 
7,575
 
Sales and marketing
 
 
4,385
 
 
5,442
 
Sales and marketing – Hearst Communications, Inc.
 
 
—
 
 
83
 
General and administrative
 
 
2,908
 
 
3,032
 
Depreciation and amortization
 
 
1,804
 
 
2,723
 
 
 
 
 
Total operating expenses
 
 
16,608
 
 
18,855
 
 
 
 
 
Loss from operations
 
 
(1,101
)
 
(6,263
)
Interest income, net
 
 
18
 
 
89
 
Other income, net
 
 
52
 
 
—
 
Gain on sale of joint venture interest
 
 
167
 
 
25
 
 
 
 
 
Net loss before minority interest
 
 
(864
)
 
(6,149
)
Minority interest
 
 
—
 
 
13
 
 
 
 
 
Net loss
 
$
(864
)
$
(6,136
)
 
 
 
 
Per share data:
 
 
 
 
 
 
 
Basic and diluted net loss per share
 
$
(0.01
)
$
(0.11
)
 
 
 
 
Weighted average shares of common stock outstanding used in computing basic and diluted net loss per share
 
 
58,443
 
 
55,534
 
 
 
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements
 
2
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iVillage Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
 
 
 
Three months ended
March 31,
 
 
 
 
 
 
2004
 
2003
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
 
 
 
Net loss
 
$
(864
)
$
(6,136
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
 
 
1,804
 
 
2,723
 
Deferred rent amortization
 
 
(36
)
 
(86
)
Gain on sale of joint venture interest
 
 
(167
)
 
(25
)
Bad debt expense
 
 
—
 
 
98
 
Non-cash print advertising expense
 
 
—
 
 
83
 
Expense recognized in connection with issuance/modification of terms of stock options
 
 
—
 
 
46
 
Minority interest
 
 
—
 
 
(13
)
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable
 
 
900
 
 
1,493
 
Prepaid rent
 
 
38
 
 
—
 
Restricted cash and other assets
 
 
(258
)
 
483
 
Accounts payable and accrued expenses
 
 
(923
)
 
(811
)
Deferred revenue
 
 
(172
)
 
(343
)
 
 
 
 
Net cash provided by (used in) operating activities
 
 
322
 
 
(2,488
)
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
Purchase of fixed assets
 
 
(545
)
 
(515
)
Cash paid less cash acquired for acquisition of Promotions.com, Inc. ..
 
 
—
 
 
(9
)
Proceeds from the sale of joint venture interest
 
 
75
 
 
492
 
 
 
 
 
Net cash used in investing activities