Print page
Email page
Download PDF
« Previous Release | Next Release »
BELLEVUE, Wash., Apr 26, 2007 (BUSINESS WIRE) -- InfoSpace, Inc. (NASDAQ:INSP) today announced financial results for the three months ended March 31, 2007.
Revenues for the first quarter of 2007 were $86.6 million, reflecting a $3.6 million or 4% decrease over the first quarter of 2006. Net loss for the first quarter of 2007 was $0.5 million or $0.02 per share versus net income of $3.0 million or $0.09 per diluted share in the first quarter of 2006.
Cash, cash equivalents, and marketable investments as of March 31, 2007 totaled $412.9 million, a net increase of $11.0 million from the end of 2006. At the end of the quarter, the Company had no debt obligations.
"Although mobile media revenues declined as expected, revenues from our core online and mobile businesses showed strong sequential increases and generated strong cash flow," said Jim Voelker, chairman and chief executive officer of InfoSpace, Inc. "The recent announcement of several key partnerships including AT&T, Vodafone's SFR, and Google reflect our strength and give us good reason to be optimistic for the year ahead."
First Quarter Highlights and Recent Developments
InfoSpace:
-- Extended its partnership agreement with Google to deliver their results on the InfoSpace online network into 2011.
-- Signed six new online distribution partners and two contract extensions with existing ISP customers.
-- Renewed its partnership with AT&T to power the popular MEdia Net Service into 2008. In addition, InfoSpace will continue to provide AT&T with customized mobile search and messaging solutions, as well as professional hosting and management services.
-- Launched a customized mobile search engine for Vodafone's SFR as part of a trial by SFR to offer its customers extended mobile services.
-- Launched InfoSpace Find It! for BlackBerry devices. InfoSpace Find It! is a premium local search application that allows users to easily locate and navigate to nearby points of interest.
-- Announced new partnerships with FAST and InfoGin to enhance the Company's mobile search offerings.
First Quarter 2007 Segment Information and Adjusted EBITDA
Online
Online revenues were $45.0 million in the first quarter of 2007, a decrease of $1.1 million or 2% from the first quarter of 2006. Online segment income was $18.0 million or 40% of revenues in the first quarter 2007.
Mobile
Mobile revenues were $41.6 million in the first quarter of 2007, a decrease of $2.5 million or 6% from the first quarter of 2006. Mobile segment loss was $3.4 in the first quarter 2007.
Adjusted Earnings Before Interest, Taxes, Depreciation & Amortization ("Adjusted EBITDA")
Adjusted EBITDA was $9.0 million in the first quarter of 2007, compared to Adjusted EBITDA of $12.7 million in the first quarter of 2006. InfoSpace's Adjusted EBITDA is calculated by adjusting GAAP net income, which includes the effects of the restructuring charges and sale of non-core operations, to exclude the effects of income taxes, depreciation, amortization of intangible assets, stock-based compensation expense, and other income, net (including such items as interest income, foreign currency gains or losses, and gains or losses from the disposal of assets), as detailed in the accompanying table to the condensed consolidated financial statements.
InfoSpace's management believes that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding certain expenses and gains that are not indicative of our core business operating results. InfoSpace believes that management and the investors benefit from referring to this non-GAAP financial measure in assessing InfoSpace's performance. Adjusted EBITDA should be evaluated in light of the Company's financial results prepared in accordance with GAAP. A table reconciling the Company's Adjusted EBITDA to net income in accordance with GAAP accompanies the condensed consolidated financial statements in this release.
Second Quarter and Full Year Outlook
The Company's guidance excludes the potential impact of any future one-time gains or losses. The Adjusted EBITDA guidance below has been prepared in a manner consistent with the historical Adjusted EBITDA data provided above and in the accompanying table.
For the second quarter of 2007, the Company expects revenue to be between $70 million and $72 million. Additionally, the Company expects Adjusted EBITDA to be between $1 million and $2 million and GAAP net loss to be between $4 million and $5 million, or $0.12 and $0.15 per share.
For the full year, the Company expects revenue to be between $270 million and $280 million. Additionally, the Company expects Adjusted EBITDA to be between $28 million and $32 million and GAAP net loss to be between $1 million and $3 million, or $0.03 and $0.09 per share.
A conference call will be held today at 2 p.m. Pacific/ 5 p.m. Eastern. The live Webcast can be accessed in the Investor Relations section of the InfoSpace corporate Web site, at http://www.infospaceinc.com. A replay of the call will be available approximately one hour after the call through May 6, 2007, at 7:30 p.m. Pacific/ 10:30 p.m. Eastern.
About InfoSpace, Inc.
InfoSpace, Inc. is a leading developer of tools and technologies to help people discover and enjoy content and information - whether on a mobile phone or on the PC. The Company's mobile platform and applications, such as InfoSpace Find It! (www.infospacefindit.com), create programming and sales opportunities for carriers, while satisfying consumer demand for highly relevant mobile functionality and content. InfoSpace uses its proprietary metasearch technology to power a portfolio of branded Web sites, including Dogpile (www.dogpile.com) and Zoo (www.zoo.com), a new kid-friendly search engine, and provide private-label search and online directory services to consumers on a global basis. More information can be found at www.infospaceinc.com.
This release contains forward-looking statements relating to InfoSpace, Inc.'s operating results that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward looking. Forward-looking statements include without limitation statements regarding our continuing generation of cash flow, our projected financial performance for the second quarter and full year 2007, and optimism for the year ahead. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect InfoSpace's actual results include general economic, industry and market sector conditions, the progress and costs of the development of our products and services, the timing and extent of market acceptance of those products and services, our dependence on companies to distribute our products and services, the ability to successfully integrate acquired businesses and the successful execution of the Company's strategic initiatives and restructuring plans. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in InfoSpace's most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q as filed from time to time, in the section entitled "Risk Factors." Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. InfoSpace undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.
InfoSpace, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(Amounts in thousands, except per share data)
Three months
ended
-----------------
March March
31, 31,
2007 2006
-------- --------
Revenues $86,643 $90,274
Operating expenses: (1)
Content and distribution 41,617 41,612
Systems and network operations 6,725 7,108
Product development 14,742 9,308
Sales and marketing 8,949 9,563
General and administrative 13,694 14,086
Depreciation 4,591 3,317
Amortization of intangible assets 1,802 3,708
Restructuring and other, net (2) (833) -
-------- --------
Total operating expenses 91,287 88,702
-------- --------
Operating income (loss) (4,644) 1,572
Other income, net 5,191 3,872
-------- --------
Income before income taxes 547 5,444
Provision for income taxes (1,087) (2,439)
-------- --------
Net income (loss) $(540) $3,005
======== ========
Net income (loss) per share - Basic $(0.02) $0.10
======== ========
Weighted average shares outstanding used in
computing basic net income (loss) per share 31,461 31,083
======== ========
Net income (loss) per share - Diluted $(0.02) $0.09
======== ========
Weighted average shares outstanding used in
computing diluted net income (loss) per share 31,461 32,917
======== ========
(1) Stock-based compensation expense for the three months ended March
31, 2007 and 2006 is allocated among the following captions (in
thousands):
Three months
ended
-----------------
March March
31, 31,
2007 2006
-------- --------
Systems and network operations $554 $190
Product development 1,625 415
Sales and marketing 2,092 1,042
General and administrative 3,014 2,462
-------- --------
Total stock-based compensation expense $7,285 $4,109
======== ========
(2) Amount consists of a gain on the sale of the assets related to a
games studio of $1.3 million and restructuring charges of $433,000.
InfoSpace, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands)
March 31, December 31,
2007 2006
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $220,621 $163,505
Short-term investments, available-for-sale 192,301 238,444
Accounts receivable, net 65,767 78,742
Other receivables 2,781 3,402
Prepaid expenses and other current assets 10,899 14,753
----------- ------------
Total current assets 492,369 498,846
Property and equipment, net 38,208 33,212
Goodwill 104,424 104,424
Other intangible assets, net 17,763 19,565
Deferred tax assets, net 101,571 101,571
Other long-term assets 7,407 8,221
----------- ------------
Total assets $761,742 $765,839
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $11,033 $13,031
Accrued expenses and other current
liabilities 51,028 61,156
Short-term deferred revenue 5,900 6,708
----------- ------------
Total current liabilities 67,961 80,895
Long-term liabilities:
Other liabilities and long-term deferred
revenue 650 877
Deferred tax liabilities 5,502 5,502
----------- ------------
Total long-term liabilities 6,152 6,379
Total liabilities 74,113 87,274
Stockholders' equity:
Common stock 3 3
Additional paid-in capital 1,722,493 1,712,897
Accumulated deficit (1,036,153) (1,035,613)
Accumulated other comprehensive income 1,286 1,278
----------- ------------
Total stockholders' equity 687,629 678,565
----------- ------------
Total liabilities and stockholders' equity $761,742 $765,839
=========== ============
Summary of cash and short-term investments:
Cash and cash equivalents $220,621 $163,505
Short-term investments, available-for-
sale 192,301 238,444
----------- ------------
Cash and short-term investments $412,922 $401,949
=========== ============
InfoSpace, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in thousands)
Three months ended
-------------------
March 31, March 31,
2007 2006
--------- ---------
Operating activities:
Net income (loss) $(540) $3,005
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 6,393 7,025
Stock-based compensation 7,285 4,109
Deferred income taxes 1,012 1,967
Gain on sale of assets (1,266) -
Restructuring 433 -
Other 189 (187)
Cash provided (used) by changes in operating
assets and liabilities:
Accounts receivable 12,926 7,551
Other receivables 621 804
Prepaid expenses and other current assets 2,842 2,477
Other long-term assets 814 (1,625)
Accounts payable (3,619) (2,549)
Accrued expenses and other current and long-
term liabilities (10,730) (302)
Deferred revenue (1,047) (332)
--------- ---------
Net cash provided by operating activities 15,313 21,943
Investing activities:
Purchases of property and equipment (8,238) (4,308)
Proceeds from the sale of assets and equity
investments 1,515 33
Proceeds from sales and maturities of
investments 70,826 76,930
Purchases of investments (24,700) (92,691)
--------- ---------
Net cash provided (used) by investing activities 39,403 (20,036)
Financing activities:
Proceeds from exercise of stock options 1,659 1,229
Proceeds from issuance of stock through
employee stock purchase plan 741 943
--------- ---------
Net cash provided by financing activities 2,400 2,172
--------- ---------
Net increase in cash and cash equivalents 57,116 4,079
Cash and cash equivalents:
Beginning of period 163,505 153,013
--------- ---------
End of period $220,621 $157,092
========= =========
InfoSpace, Inc.
Segment Information (1)
(Unaudited)
(Amounts in thousands)
Three Months Ended
-----------------------
March 31, March 31,
2007 2006
--------- ---------
Online
Revenue $45,040 $46,130
Content and distribution expenses (2) 16,317 16,275
Operating expenses 10,711 (3) 9,794 (4)
--------- ---------
Segment income 18,012 20,061
Segment margin 40.0% 43.5%
Mobile
Revenue 41,603 44,144
Content and distribution expenses (2) 25,300 25,337
Operating expenses 19,700 (3) 19,267 (4)
--------- ---------
Segment loss (3,397) (460)
Segment margin -8.2% -1.0%
Total
Total revenue 86,643 90,274
Total content and distribution expenses
(2) 41,617 41,612
Total segment operating expenses 30,411 (3) 29,061 (4)
--------- ---------
Total segment income 14,615 19,601
Total segment margin 16.9% 21.7%
Corporate
Operating expenses 6,414 6,895
Depreciation 4,591 3,317
Amortization of intangible assets 1,802 3,708
Stock-based compensation 7,285 4,109
Restructuring and other, net (5) (833) -
Other income, net (5,191) (3,872)
Provision for income taxes 1,087 2,439
--------- ---------
Net income (loss) $(540) $3,005
========= =========
(1) In the three months ended March 31, 2007, the Company
realigned its operations and, as a result, changed the way it
presents its financial information to its chief operating
decision maker to better reflect how management measures
operating performance.
(2) Amounts primarily include revenue sharing arrangements with
the Company's Online distribution partners as well as online
content and data licenses, and primarily include royalties and
license fees related to the Company's Mobile products and other
content or data licenses.
(3) Amount includes expenses directly attributable to the
reportable business units and, in addition, include certain
indirect expenses allocated to the reportable business units
based on internal usage measurements. Segment operating
expenses do not include allocations for certain indirect general
and administrative expenses, depreciation and amortization
expense, stock-based compensation expense, restructuring and
other charges, non-operating gains and losses, income taxes or
interest income.
(4) Amount includes certain indirect expenses allocated to the
reportable business units based on the manner in which the
Company currently operates. Segment operating expenses do not
include allocations for certain indirect general and
administrative expenses, depreciation and amortization expense,
stock-based compensation expense, restructuring and other
charges, non-operating gains and losses, income taxes or
interest income.
(5) Amount consists of a gain on the sale of the assets related
to a games studio of $1.3 million and restructuring charges of
$433,000.
InfoSpace, Inc.
Segment Information (1)
(Unaudited)
(Amounts in thousands)
Year
Three Months Ended Ended
------------------------------------ ---------
March September December December
31, June 30, 30, 31, 31,
2006 2006 2006 2006 2006
-------- -------- --------- -------- ---------
Online
Revenue $46,130 $50,373 $48,567 $41,831 $186,901
Content and distribution
expenses (2) 16,275 18,122 18,217 14,058 66,672
Operating expenses (3) 9,794 9,419 10,096 11,531 40,840
-------- -------- --------- -------- ---------
Segment income 20,061 22,832 20,254 16,242 79,389
Segment margin 43.5% 45.3% 41.7% 38.8% 42.5%
Mobile
Revenue 44,144 45,473 47,731 47,488 184,836
Content and distribution
expenses (2) 25,337 27,999 29,487 28,832 111,655
Operating expenses (3) 19,267 25,140 24,487 21,869 90,763
-------- -------- --------- -------- ---------
Segment loss (460) (7,666) (6,243) (3,213) (17,582)
Segment margin -1.0% -16.9% -13.1% -6.8% -9.5%
Total
Total revenue 90,274 95,846 96,298 89,319 371,737
Total content and
distribution expenses
(2) 41,612 46,121 47,704 42,890 178,327
Total segment operating
expenses (3) 29,061 34,559 34,583 33,400 131,603
-------- -------- --------- -------- ---------
Total segment income 19,601 15,166 14,011 13,029 61,807
Total segment margin 21.7% 15.8% 14.5% 14.6% 16.6%
Corporate
Operating expenses 6,895 6,267 7,544 6,633 27,339
Depreciation 3,317 3,457 4,635 4,674 16,083
Amortization of
intangible assets 3,708 3,611 3,046 1,848 12,213
Stock-based compensation 4,109 4,635 4,807 3,312 16,863
Restructuring - - 57,789 4,527 62,316
Other income, net (3,872) (4,723) (5,405) (5,381) (19,381)
Income tax provision
(benefit) 2,439 900 (11,676) (30,201) (38,538)
-------- -------- --------- -------- ---------
Net income (loss) $3,005 $1,019 $(46,729) $27,617 $(15,088)
======== ======== ========= ======== =========
(1) In the three months ended March 31, 2007, the Company realigned
its operations and, as a result, changed the way it presents its
financial information to its chief operating decision maker to better
reflect how management measures operating performance.
(2) Amounts primarily include revenue sharing arrangements with the
Company's Online distribution partners as well as online content and
data licenses, and primarily include royalties and license fees
related to the Company's Mobile products and other content or data
licenses.
(3) Amounts include certain indirect expenses allocated to the
reportable business units based on the manner in which the Company
currently operates. Segment operating expenses do not include
allocations for certain indirect general and administrative expenses,
depreciation and amortization expense, stock-based compensation
expense, restructuring and other charges, non-operating gains and
losses, income taxes or interest income.
InfoSpace, Inc.
Reconciliations of Non-GAAP Financial Measures to the Nearest
Comparable GAAP Measure
Adjusted EBITDA Reconciliation (1)
(Unaudited)
(Amounts in thousands)
Three months ended
---------------------
March 31, March 31,
2007 2006
----------- ---------
Net income (loss) (2) $(540) $3,005
Depreciation 4,591 3,317
Amortization of intangible
assets 1,802 3,708
Stock-based compensation 7,285 4,109
Other income, net (3) (5,191) (3,872)
Provision for income taxes 1,087 2,439
----------- ---------
Adjusted EBITDA $9,034 $12,706
=========== =========
Adjusted EBITDA Reconciliation for Forward Looking Guidance
(Amounts in thousands)
Ranges for the three
months ended Ranges for the
year ended
----------------------------------------
June 30, 2007 December 31, 2007
--------------------- ------------------
Net loss $(5,000) $ (4,000) $ (3,000) $(1,000)
Depreciation and amortization
of intangible assets 7,500 7,500 24,000 24,000
Stock-based compensation 7,600 6,800 27,400 27,800
Other income, net (3) (5,000) (5,000) (20,000) (20,000)
Income tax provision (benefit) (4,100) (3,300) (400) 1,200
----------- --------- --------- --------
Adjusted EBITDA $1,000 $2,000 $28,000 $32,000
=========== ========= ========= ========
(1) Adjusted Earnings before Interest, Taxes, Depreciation and
Amortization ("EBITDA") is a non-GAAP financial measure and is
reconciled to net income (loss), which the Company's management
believes to be the most comparable generally accepted accounting
principles ("GAAP") measure. Adjusted EBITDA results are calculated
by adjusting GAAP net income (loss) to exclude the effects of income
taxes, depreciation, amortization of intangible assets, stock-based
compensation expense and other income, net (including such items as
interest income, litigation settlements and contingencies, foreign
currency gains or losses, and gains or losses from the disposal of
assets), as detailed above. The Company uses this non-GAAP financial
measure for internal management purposes, when publicly providing
guidance on possible future results, and as a means to evaluate
period to period comparisons. The Company's management believes that
this non-GAAP financial measure is a common measure used by investors
and analysts to evaluate its performance. This non-GAAP financial
measure is used in addition to and in conjunction with results
presented in accordance with GAAP and reflect an additional way of
viewing aspects of the Company's operations that, when viewed with
GAAP results and the accompanying reconciliations to corresponding
GAAP financial measures, provide a more complete understanding of the
results of operations and trends affecting the Company's business.
This non-GAAP financial measure should be considered as a supplement
to, and not as a substitute for, or superior to, income from
continuing operations in accordance with GAAP.
(2) As presented in the unaudited Condensed Consolidated Statements of
Operations.
(3) Other income, net, primarily consists of interest income, gains or
losses from the disposal of assets, and foreign currency transaction
gains or losses.
SOURCE: InfoSpace, Inc.
InfoSpace Stacy Ybarra, 425-709-8127 stacy.ybarra@infospace.com
Copyright Business Wire 2007
News Provided by COMTEX