U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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
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: 000-26357
LOOKSMART, LTD.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 13-3904355 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
625 Second Street
San Francisco, California 94107
(Address of Principal Executive Offices and Zip Code)
(415) 348-7000
(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 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 ¨
As of November 1, 2004, there were 113,184,323 shares of the registrant’s common stock outstanding.
INDEX
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PART I — FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
| September 30, 2004 |
December 31, 2003 |
|||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 50,590 | $ | 63,866 | ||||
| Short-term investments |
3,683 | 6,068 | ||||||
| Trade accounts receivable, net of allowance for doubtful accounts of $1,193 at September 30, 2004 and $2,504 at December 31, 2003 |
4,787 | 22,265 | ||||||
| Prepaid expenses |
1,220 | 2,308 | ||||||
| Other current assets |
453 | 372 | ||||||
| Total current assets |
60,733 | 94,879 | ||||||
| Property and equipment, net |
6,660 | 8,444 | ||||||
| Other assets |
3,708 | 6,124 | ||||||
| Long term investments |
11,331 | — | ||||||
| Intangible assets, net |
7,970 | 5,713 | ||||||
| Goodwill |
14,422 | 10,932 | ||||||
| Total assets |
$ | 104,824 | $ | 126,092 | ||||
| LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Long term debt, current portion |
$ | 47 | $ | 101 | ||||
| Trade accounts payable |
1,075 | 3,600 | ||||||
| Other accrued liabilities |
8,853 | 27,125 | ||||||
| Deferred revenue and customer deposits |
2,641 | 5,362 | ||||||
| Total current liabilities |
12,616 | 36,188 | ||||||
| Long term debt |
249 | 283 | ||||||
| Other long term liabilities |
5,172 | 3,324 | ||||||
| Total liabilities |
18,037 | 39,795 | ||||||
| Commitments and contingencies (Note 6) |
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| Stockholders’ equity: |
||||||||
| Common stock, $.001 par value; Authorized: 200,000 at September 30, 2004 and December 31, 2003; Issued and Outstanding: 113,358, and 107,808 at September 30, 2004 and December 31, 2003 |
112 | 106 | ||||||
| Additional paid-in capital |
270,563 | 261,792 | ||||||
| Other equity |
833 | 773 | ||||||
| Accumulated deficit |
(184,721 | ) | (176,374 | ) | ||||
| Total stockholders’ equity |
86,787 | 86,297 | ||||||
| Total liabilities and stockholders’ equity |
$ | 104,824 | $ | 126,092 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME/(LOSS)
(In thousands, except per share data)
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Revenues: |
||||||||||||||||
| Listings |
$ | 17,490 | $ | 30,068 | $ | 60,283 | $ | 85,833 | ||||||||
| Licensing |
— | 3,594 | 188 | 11,298 | ||||||||||||
| Total revenues |
17,490 | 33,662 | 60,471 | 97,131 | ||||||||||||
| Cost of revenues |
9,563 | 17,885 | 34,389 | 51,461 | ||||||||||||
| Gross profit |
7,927 | 15,777 | 26,082 | 45,670 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Sales and marketing |
1,495 | 3,597 | 6,044 | 11,118 | ||||||||||||
| Product development |
5,033 | 7,274 | 18,315 | 20,337 | ||||||||||||
| General and administrative |
1,958 | 2,558 | 7,321 | 8,589 | ||||||||||||
| Restructuring costs |
98 | — | 4,152 | — | ||||||||||||
| Total operating expenses |
8,584 | 13,429 | 35,832 | 40,044 | ||||||||||||
| Income (loss) from operations |
(657 | ) | 2,348 | (9,750 | ) | 5,626 | ||||||||||
| Non-operating income (expense): |
||||||||||||||||
| Interest and other non-operating income (expense), net |
327 | (14 | ) | 474 | (1,025 | ) | ||||||||||
| Share of joint venture loss |
(100 | ) | — | (100 | ) | (563 | ) | |||||||||
| Income (loss) from continuing operations before income taxes and extraordinary gain |
(430 | ) | 2,334 | (9,376 | ) | 4,038 | ||||||||||
| Income tax expense |
(117 | ) | (236 | ) | (117 | ) | (809 | ) | ||||||||
| Income (loss) from continuing operations before extraordinary gain |
(547 | ) | 2,098 | (9,493 | ) | 3,229 | ||||||||||
| Gain (loss) from discontinued operations, net of tax |
562 | (240 | ) | 1,146 | 727 | |||||||||||
| Income (loss) before extraordinary gain |
15 | 1,858 | (8,347 | ) | 3,956 | |||||||||||
| Extraordinary gain from the purchase of BTLS joint venture entities, net of tax |
— | — | — | 202 | ||||||||||||
| Net income (loss) |
15 | 1,858 | (8,347 | ) | 4,158 | |||||||||||
| Other comprehensive income (loss): |
||||||||||||||||
| Change in unrealized gain on investments |
61 | 1 | 62 | 1 | ||||||||||||
| Change in translation adjustment |
(37 | ) | (103 | ) | (54 | ) | 112 | |||||||||
| Comprehensive income (loss) |
$ | 39 | $ | 1,756 | $ | (8,339 | ) | $ | 4,271 | |||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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LOOKSMART, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME/(LOSS), CONTINUED
(In thousands, except per share data)
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
| 2004 |
2003 |
2004 |
2003 | ||||||||||||
| Income (loss) per share: |
|||||||||||||||
| Basic net income (loss) per share: |
|||||||||||||||
| Income (loss) from continuing operations |
$ | (0.00 | ) | $ | 0.02 | $ | (0.09 | ) | $ | 0.03 | |||||
| Gain (loss) from discontinued operations |
0.00 | (0.00 | ) | 0.01 | 0.01 | ||||||||||
| Extraordinary gain from the purchase of BTLS joint venture entities |
— | — | — | 0.00 | |||||||||||
| Net income (loss) |
$ | 0.00 | $ | 0.02 | $ | (0.08 | ) | $ | 0.04 | ||||||
| Diluted net income (loss) per share: |
|||||||||||||||
| Income (loss) from continuing operations |
$ | (0.00 | ) | $ | 0.02 | $ | (0.09 | ) | $ | 0.03 | |||||
| Gain (loss) from discontinued operations |
0.00 | (0.00 | ) | 0.01 | 0.01 | ||||||||||
| Extraordinary gain from the purchase of BTLS Joint Venture entities |
— | — | — | 0.00 | |||||||||||
| Net income (loss) |
$ | 0.00 | $ | 0.02 | $ | (0.08 | ) | $ | 0.04 | ||||||
| Weighted average shares outstanding used in per share calculation—basic |
112,530 | 104,730 | 110,661 | 102,596 | |||||||||||
| Weighted average shares outstanding used in per share calculation—diluted |
113,508 | 113,375 | 110,661 | 110,208 | |||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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