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 September 30, 2004
| ¨ | 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 October 29, 2004 | |
| Common Stock, Par Value $.0001 | 32,726,394 |
FORM 10-Q
TABLE OF CONTENTS
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
| September 30, 2004 |
December 31, 2003 |
|||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 194,046 | $ | 223,858 | ||||
| Short-term investments, available-for-sale |
46,111 | 71,465 | ||||||
| Accounts receivable, net of allowance of $903 and $911 |
44,763 | 24,585 | ||||||
| Notes and other receivables, net of allowance of $90 and $11,841 |
6,881 | 4,454 | ||||||
| Payroll tax receivable |
13,214 | 13,214 | ||||||
| Prepaid expenses and other current assets |
4,680 | 3,425 | ||||||
| Assets of discontinued operations |
— | 58,366 | ||||||
| Total current assets |
309,695 | 399,367 | ||||||
| Long-term investments, available-for-sale |
70,259 | — | ||||||
| Property and equipment, net |
15,085 | 13,281 | ||||||
| Other investments |
— | 1,396 | ||||||
| Goodwill |
149,870 | 57,133 | ||||||
| Other intangible assets, net |
41,509 | 20,388 | ||||||
| Other long term assets |
1,447 | 750 | ||||||
| Total assets |
$ | 587,865 | $ | 492,315 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 3,364 | $ | 4,363 | ||||
| Accrued expenses and other current liabilities |
34,168 | 29,529 | ||||||
| Deferred revenue |
9,971 | 3,315 | ||||||
| Liabilities of discontinued operations |
— | 8,501 | ||||||
| Total current liabilities |
47,503 | 45,708 | ||||||
| Long-term liabilities |
||||||||
| Long-term deferred revenue |
— | 75 | ||||||
| Deferred taxes |
5,390 | — | ||||||
| Total long-term liabilities |
5,390 | 75 | ||||||
| Total liabilities |
52,893 | 45,783 | ||||||
| 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 32,519,439 and 31,470,635 shares |
3 | 3 | ||||||
| Additional paid-in capital |
1,732,983 | 1,707,617 | ||||||
| Accumulated deficit |
(1,198,750 | ) | (1,262,294 | ) | ||||
| Accumulated other comprehensive income |
736 | 1,206 | ||||||
| Total stockholders’ equity |
534,972 | 446,532 | ||||||
| Total liabilities and stockholders’ equity |
$ | 587,865 | $ | 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 September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Revenues (including related party revenues of $0, $7, $0, and $190, respectively) |
$ | 67,151 | $ | 31,232 | $ | 169,680 | $ | 93,200 | ||||||||
| Operating expenses: |
||||||||||||||||
| Content and distribution |
24,537 | 7,389 | 60,034 | 16,271 | ||||||||||||
| Systems and network operations |
3,498 | 2,240 | 10,529 | 8,404 | ||||||||||||
| Product development |
6,436 | 3,747 | 16,454 | 13,610 | ||||||||||||
| Sales and marketing |
6,212 | 3,999 | 16,753 | 12,655 | ||||||||||||
| General and administrative |
9,565 | 7,372 | 28,057 | 24,376 | ||||||||||||
| Depreciation |
1,681 | 2,342 | 5,225 | 8,852 | ||||||||||||
| Amortization of intangible assets |
3,061 | 1,622 | 6,804 | 4,867 | ||||||||||||
| Impairment of other intangible assets |
— | 1,151 | — | 1,151 | ||||||||||||
| Restructuring charges and other, net |
(246 | ) | 1,405 | (2,856 | ) | 15,830 | ||||||||||
| Total operating expenses |
54,744 | 31,267 | 141,000 | 106,016 | ||||||||||||
| Operating income (loss) |
12,407 | (35 | ) | 28,680 | (12,816 | ) | ||||||||||
| Gain (loss) on equity investments |
(33 | ) | 74 | 425 | (11,940 | ) | ||||||||||
| Other income, net |
1,000 | 681 | 3,161 | 7,470 | ||||||||||||
| Income (loss) from continuing operations before income taxes |
13,374 | 720 | 32,266 | (17,286 | ) | |||||||||||
| Income tax benefit (expense) |
(18 | ) | 85 | (121 | ) | 152 | ||||||||||
| Income (loss) from continuing operations |
13,356 | 805 | 32,145 | (17,134 | ) | |||||||||||
| Discontinued operations: |
||||||||||||||||
| Income from discontinued operations, net of taxes |
— | 787 | 31,399 | 927 | ||||||||||||
| Net income (loss) |
$ | 13,356 | $ | 1,592 | $ | 63,544 | $ | (16,207 | ) | |||||||
| Earnings per share - Basic: |
||||||||||||||||
| Income (loss) from continuing operations |
$ | 0.42 | $ | 0.03 | $ | 1.01 | $ | (0.55 | ) | |||||||
| Income from discontinued operations |
$ | — | $ | 0.02 | $ | 0.98 | $ | 0.03 | ||||||||
| Basic net income (loss) per share |
$ | 0.42 | $ | 0.05 | $ | 1.99 | $ | (0.52 | ) | |||||||
| Weighted average shares outstanding used in computing basic net income (loss) per share |
32,183 | 31,337 | 31,889 | 31,157 | ||||||||||||
| Earnings per share - Diluted: |
||||||||||||||||
| Income (loss) from continuing operations |
$ | 0.37 | $ | 0.03 | $ | 0.90 | $ | (0.55 | ) | |||||||
| Income from discontinued operations |
$ | — | 0.02 | $ | 0.87 | 0.03 | ||||||||||
| Diluted net income (loss) per share |
$ | 0.37 | $ | 0.05 | $ | 1.77 | $ | (0.52 | ) | |||||||
| Weighted average shares outstanding used in computing diluted net income (loss) per share |
36,411 | 33,259 | 35,955 | 31,157 | ||||||||||||
| Comprehensive income (loss): |
||||||||||||||||
| Net income (loss) |
$ | 13,356 | $ | 1,592 | $ | 63,544 | $ | (16,207 | ) | |||||||
| Foreign currency translation adjustment |
88 | (19 | ) | (81 | ) | 538 | ||||||||||
| Unrealized gain (loss) on investments |
198 | (58 | ) | (389 | ) | (506 | ) | |||||||||
| Comprehensive income (loss) |
$ | 13,642 | $ | 1,515 | $ | 63,074 | $ | (16,175 | ) | |||||||
See accompanying notes to unaudited condensed consolidated financial statements.
4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
| Nine Months Ended September 30, |
||||||||
| 2004 |
2003 |
|||||||
| Operating activities: |
||||||||
| Net income (loss) |
$ | |||||||