UNITED STATES
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, 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 0-25131
INFOSPACE, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 91-1718107 | |
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
| 601 108th Avenue NE, Suite 1200 Bellevue, Washington |
98004 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (425) 201-6100
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 ¨.
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange act). Yes x No ¨.
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class |
Outstanding at April 23, 2004 | |
| Common Stock, Par Value $.0001 | 31,908,335 |
FORM 10-Q
TABLE OF CONTENTS
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
| March 31, 2004 |
December 31, 2003 |
|||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 297,738 | $ | 223,858 | ||||
| Short-term investments, available-for-sale |
51,100 | 71,465 | ||||||
| Accounts receivable, net of allowance of $727 and $911 |
37,511 | 24,585 | ||||||
| Notes and other receivables, net of allowance of $11,580 and $11,841 |
6,778 | 4,454 | ||||||
| Payroll tax receivable |
13,214 | 13,214 | ||||||
| Prepaid expenses and other current assets |
6,131 | 3,425 | ||||||
| Assets of discontinued operations |
— | 58,366 | ||||||
| Total current assets |
412,472 | 399,367 | ||||||
| Long-term investments, available-for-sale |
30,882 | — | ||||||
| Property and equipment, net |
13,245 | 13,281 | ||||||
| Other investments |
480 | 1,396 | ||||||
| Goodwill |
57,238 | 57,378 | ||||||
| Other intangible assets, net |
18,402 | 20,143 | ||||||
| Other long-term assets |
754 | 750 | ||||||
| Total assets |
$ | 533,473 | $ | 492,315 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
6,594 | 4,363 | ||||||
| Accrued expenses and other current liabilities |
32,024 | 29,530 | ||||||
| Deferred revenue |
7,059 | 3,315 | ||||||
| Liabilities of discontinued operations |
— | 8,501 | ||||||
| Total current liabilities |
45,677 | 45,709 | ||||||
| Long-term deferred revenue |
— | 75 | ||||||
| Total liabilities |
45,677 | 45,784 | ||||||
| Contingencies (Note 7) |
||||||||
| Stockholders’ equity: |
||||||||
| Preferred stock, par value $.0001—Authorized, 15,000,000 shares; issued and outstanding, 2 shares |
||||||||
| Common stock, par value $.0001—Authorized, 900,000,000 shares; issued and outstanding, 31,429,438 and 30,957,371 shares |
3 | 3 | ||||||
| Additional paid-in capital |
1,712,159 | 1,707,617 | ||||||
| Accumulated deficit |
(1,225,611 | ) | (1,262,294 | ) | ||||
| Accumulated other comprehensive income |
1,245 | 1,205 | ||||||
| Total stockholders’ equity |
487,796 | 446,531 | ||||||
| Total liabilities and stockholders’ equity |
$ | 533,473 | $ | 492,315 | ||||
See accompanying notes to unaudited Condensed Consolidated Financial Statements.
3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(Amounts in thousands, except per share data)
| Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| Revenues |
$ | 48,081 | $ | 30,283 | ||||
| Operating expenses: |
||||||||
| Content and distribution |
16,886 | 3,539 | ||||||
| Systems and network operations |
3,218 | 3,421 | ||||||
| Product development |
4,438 | 6,010 | ||||||
| Sales and marketing |
5,458 | 4,556 | ||||||
| General and administrative |
9,494 | 7,477 | ||||||
| Depreciation |
1,799 | 3,295 | ||||||
| Amortization of intangible assets |
1,741 | 1,622 | ||||||
| Restructuring charges and other, net |
1,041 | 4,123 | ||||||
| Total operating expenses |
44,075 | 34,043 | ||||||
| Operating income (loss) |
4,006 | (3,760 | ) | |||||
| Gain on equity investments |
458 | 413 | ||||||
| Other income, net |
985 | 1,170 | ||||||
| Income (loss) from continuing operations before income taxes |
5,449 | (2,177 | ) | |||||
| Income tax benefit (expense) |
(32 | ) | 259 | |||||
| Income (loss) from continuing operations |
5,417 | (1,918 | ) | |||||
| Discontinued operations: |
||||||||
| Income from discontinued operations, net of tax of $20 and $329 |
2,277 | 611 | ||||||
| Gain on sale of discontinued operations, net of tax of $260 |
28,989 | — | ||||||
| Income from discontinued operations |
31,266 | 611 | ||||||
| Net income (loss) |
$ | 36,683 | $ | (1,307 | ) | |||
| Earnings per share – Basic |
||||||||
| Income (loss) from continuing operations |
$ | 0.17 | $ | (0.06 | ) | |||
| Income from discontinued operations |
0.99 | 0.02 | ||||||
| Net income (loss) per share |
$ | 1.16 | $ | (0.04 | ) | |||
| Weighted average shares outstanding used in computing basic net income (loss) per share |
31,568 | 30,979 | ||||||
| Earnings per share - Diluted |
||||||||
| Income (loss) from continuing operations |
$ | 0.15 | $ | (0.06 | ) | |||
| Income from discontinued operations |
0.88 | 0.02 | ||||||
| Net income (loss) per share |
$ | 1.03 | $ | (0.04 | ) | |||
| Weighted average shares outstanding used in computing diluted net income (loss) per share |
35,564 | 30,979 | ||||||
| Comprehensive income (loss): |
||||||||
| Net income (loss) |
$ | 36,683 | $ | (1,307 | ) | |||
| Foreign currency translation adjustment |
(70 | ) | 191 | |||||
| Unrealized gain (loss) on investments |
110 | (59 | ) | |||||
| Comprehensive income (loss) |
$ | 36,723 | $ | (1,175 | ) | |||
See accompanying notes to unaudited Condensed Consolidated Financial Statements.
4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
| Three months ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| Operating activities: |
||||||||
| Net income (loss) |
$ | 36,683 | $ | (1,307 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
| Income from discontinued operations |
(31,266 | ) | (611 | ) | ||||
| Depreciation and amortization |
3,540 | 4,917 | ||||||
| Warrant and stock related revenue |
— | (135 | ) | |||||
| Warrant and stock-based compensation expense |
981 | 10 | ||||||
| Bad debt expense (recoveries) |
194 | (168 | ) | |||||
| Gain on equity investments |
(458 | ) | (413 | ) | ||||
| Other |
(327 | ) | 479 | |||||
| Cash provided (used) by changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
(13,120 | ) | (606 | ) | ||||
| Notes and other receivables |
(1,025 | ) | 1,601 | |||||
| Prepaid expenses and other current assets |
(2,706 | ) | (3,066 | ) | ||||
| Other long-term assets |
(4 | ) | (55 | ) | ||||
| Accounts payable |
2,231 | (248 | ) | |||||
| Accrued expenses and other current liabilities |
2,543 | 1,707 | ||||||
| Deferred revenue |
3,669 | 233 | ||||||
| Discontinued operations net assets |
— | (1,802 | ) | |||||
| Net cash provided by operating activities |
935 | 536 | ||||||
| Investing activities: |
||||||||
| Proceeds from the sale of assets |
320 | — | ||||||
| Purchases of property and equipment |
(1,900 | ) | (71 | ) | ||||
| Proceeds from the sale of discontinued operations |
82,000 | — | ||||||
| Proceeds from the sale of equity investments |
— | 7,768 | ||||||
| Short-term investments, net |
20,365 | 16,983 | ||||||
| Long-term investments, net |
(30,882 | ) | — | |||||
| Net cash provided by investing activities |
69,903 | 24,680 | ||||||
| Financing activities: |
||||||||
| Proceeds from exercise of stock options |
2,568 | 90 | ||||||
| Proceeds from issuance of stock through employee stock purchase plan |
474 | 474 | ||||||
| Net cash provided by financing activities |
3,042 | 564 | ||||||
| Net increase in cash and cash equivalents |
73,880 | 25,780 | ||||||
| Cash and cash equivalents: |
||||||||
| Beginning of period |
223,858 | 120,092 | ||||||
| End of period |
$ | 297,738 | $ | 145,872 | ||||
| Supplemental disclosure of non-cash activities: |
||||||||
| Non-cash activities resulting from purchase transactions: |
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