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U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2005

or

o 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 0-21989

Medialink Worldwide Incorporated
(Exact name of registrant as specified in its charter)

Delaware
52-1481284
(State or other jurisdiction
(I.R.S. Employer
of incorporation or
Identification Number)
organization)
  

708 Third Avenue, New York, New York 10017
(Address of principal executive offices) (Zip Code)
(212) 682-8300
(Registrant's telephone number, including area code)


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 x No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.) Yes o No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of business on May 13, 2005:

Common Stock - 6,032,082


TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
     
ITEM 1.
Financial Statements
3
     
 
Consolidated Balance Sheets as of March 31,
  
 
2005 (unaudited) and December 31, 2004
3
     
 
Unaudited Consolidated Statements of Operations
  
 
for the three months ended March 31, 2005 and 2004
4
     
 
Unaudited Consolidated Statements of Cash Flows
  
 
for the three months ended March 31, 2005 and 2004
5
     
 
Notes to Unaudited Consolidated Financial Statements
6 - 11
     
ITEM 2.
Management's Discussion and Analysis of Financial Condition
  
 
and Results of Operations
12 - 19
     
ITEM 3.
Quantitative and Qualitative Disclosure About Market Risk
20
     
ITEM 4.
Controls and Procedures
20
     
PART II. OTHER INFORMATION
     
ITEM 1.
Legal Proceedings
21
     
ITEM 2.
Unregistered Sales of Equity Securities and
 
 
Use of Proceeds
21
     
ITEM 3.
Defaults Upon Senior Securities
21
     
ITEM 4.
Submission of Matters to a Vote of Security Holders
21
     
ITEM 5.
Other Information
21
     
ITEM 6.
Exhibits
21

 
 
MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of March 31, 2005 and December 31, 2004
           
   
March 31,
  
December 31,
  
   
2005
  
2004
  
   
(Unaudited)
      
           
ASSETS
          
Current Assets:
          
Cash and cash equivalents
  
$
9,897,241
  
$
11,674,828
  
Accounts receivable, net of allowance for doubtful accounts of
              
$538,255 and $592,781
    
5,460,916
   
6,144,658
 
Prepaid expenses
    
674,303
   
625,457
 
Prepaid and refundable taxes
    
905,589
   
565,004
 
Other current assets
    
1,153,169
   
1,882,990
 
Total current assets
    
18,091,218
   
20,892,937
 
               
Property and equipment, net
    
4,000,654
   
4,068,987
 
               
Goodwill, net of accumulated amortization of $2,338,473
    
13,006,137
   
13,006,137
 
Other assets
    
1,085,265
   
804,480
 
Total assets
  
$
36,183,274
  
$
38,772,541
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
Current Liabilities:
              
Current portion of obligations under capital lease
  
$
115,000
  
$
113,332
  
Accounts payable
    
2,344,718
   
2,497,813
 
Accrued expenses and other current liabilities
    
5,215,165
   
6,357,928
 
Taxes payable
    
—
   
340,000
 
Total current liabilities
    
7,674,883
   
9,309,073
 
               
Convertible debentures, net of unamortized discount of $1,107,000 and $1,167,000
    
3,893,000
   
3,833,000
 
Capital lease obligation, net of current portion
    
42,857
   
97,428
 
Other long-term liabilities
    
464,739
   
453,777
 
Total liabilities
    
12,075,479
   
13,693,278
 
               
Stockholders' Equity:
              
Common stock; $.01 par value. Authorized 15,000,000 shares; issued
              
6,133,203 shares in 2005 and 6,055,430 shares in 2004
    
61,332
   
60,554
 
Additional paid-in capital
    
26,515,697
   
26,291,385
 
Accumulated deficit
    
(1,862,117
)
  
(733,235
)
Accumulated other comprehensive loss
    
(263,753
)
  
(196,077
)
     
24,451,159
   
25,422,627
 
Less common stock in treasury (at cost, 101,121shares)
    
(343,364
)
  
(343,364
)
               
Total stockholders' equity
    
24,107,795
   
25,079,263
 
Total liabilities and stockholders' equity
  
$
36,183,274
  
$
38,772,541
  

See accompanying notes to consolidated financial statements

3
 

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2005 and 2004
           
   
2005
  
2004
  
           
Revenues
  
$
8,547,690
  
$
8,487,767
  
               
Direct costs
    
3,485,996
   
2,946,196
 
               
Gross Profit
    
5,061,694
   
5,541,571
 
               
Operating expenses:
              
Selling, general and administrative expenses
    
5,912,073
   
5,367,723
 
Depreciation and amortization
    
439,027
   
490,372
 
Loss from joint venture
    
—
   
94,688
 
Impairment of investments
    
—
   
342,000
 
Total Operating Expenses
    
6,351,100
   
6,294,783
 
Operating loss
    
(1,289,406
)
  
(753,212
)
Interest expense, net
    
(119,697
)
  
(79,664
)
Loss from continuing operations before taxes
    
(1,409,103
)
  
(832,876
)
Income tax benefit
    
(220,000
)
  
(90,000
)
Loss from continuing operations
    
(1,189,103
)
  
(742,876
)
Discontinued operations:
              
Loss from discontinued operations
    
—
   
(334,890
)
Gain on sale of division
    
60,222
   
—
 
Income (loss) on discontinued operations before income taxes
    
60,222
   
(334,890
)
Income tax benefit
    
—
   
(60,000
)
Income (loss) on discontinued operations
    
60,222
   
(274,890
)
Net loss
  
$
(1,128,881
)
$
(1,017,766
)
               
Basic and diluted loss per share from continuing operations
  
$
(0.20
)
$
(0.12
)
Basic and diluted income (loss) per share from discontinued operations
  
$
0.01
  
$
(0.05
)
Basic and diluted net loss per share
  
$
(0.19
)
$
(0.17
)
               
Shares used in per share calculations:
              
Basic and diluted
    
5,987,487
   
5,992,890
 
               

See accompanying notes to consolidated financial statements
 
4
 

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2005 and 2004
           
   
2005
  
2004