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BELLEVUE, Wash., Apr 30, 2008 (BUSINESS WIRE) -- InfoSpace, Inc. (NASDAQ:INSP) today announced financial results for the three months ended March 31, 2008.
"We are extremely pleased with our first quarter results. Revenue, EBITDA and income from operations all performed well above our expectations," said Jim Voelker, chairman and chief executive officer of InfoSpace, Inc.
Revenues for the first quarter of 2008 were $42.2 million, reflecting a $6.3 million or 18% increase over the first quarter of 2007 and an increase of $3.1 million or 8% sequentially.
Adjusted EBITDA from continuing operations was $7.1 million in the first quarter of 2008, compared to Adjusted EBITDA from continuing operations of $7.1 million in the first quarter of 2007.
Net loss for the first quarter of 2008 was $2.8 million or $0.08 per share versus net loss of $0.5 million or $0.02 per diluted share in the first quarter of 2007. Net loss in the first quarter of 2008 includes an impairment charge of $6.7 million on the Company's investments in auction rate securities.
Cash, cash equivalents, and marketable securities as of March 31, 2008 totaled $220.7 million, which includes an investment of $29.7 million in auction rate securities. At the end of the quarter, the Company had no debt obligations.
First Quarter Highlights and Recent Developments
InfoSpace:
-- Unveiled key upgrades to Dogpile.com, including an improved search algorithm, new visual design and the addition of a SearchSpy social networking widget;
-- Announced a partnership with Kosmix to provide comprehensive health information for Dogpile.com users;
-- Entered into agreements with five new search distribution partners; and
-- Strengthened its management team with the promotion of Michael Glover to vice president, business development. Glover is responsible for all aspects of InfoSpace's strategic partner strategy and will continue to develop our strong relationships with current partners and new opportunities to grow the business.
Second Quarter Outlook
For the second quarter of 2008, the Company expects revenue to be between $34 million and $36 million. Additionally, the Company expects Adjusted EBITDA to be between $2.5 million and $4.0 million and net loss to be between $1.9 million and $0.4 million, or $0.06 and $0.01 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 7, 2008 at 9:00 p.m. Pacific/ 10:30 p.m. Eastern.
Non-GAAP Financial Measures
InfoSpace's Adjusted EBITDA from continuing operations is calculated by adjusting GAAP income (loss) from continuing operations to exclude the effects of income taxes, depreciation, stock-based compensation expense, loss on investments, net, 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 preliminary 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 income (loss) from continuing operations in accordance with GAAP accompanies the preliminary condensed consolidated financial statements in this release.
About InfoSpace, Inc.
InfoSpace, Inc. is a leading developer of metasearch products to help people easily search and discover the web. InfoSpace uses its proprietary metasearch technology that combines the top results from the leading search engines to power a portfolio of branded Web sites, including Dogpile (www.dogpile.com) and WebFetch (www.webfetch.com.) For the second consecutive year, Dogpile ranked highest in customer satisfaction among search engines, according to JD Power and Associates. 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 expectations with respect to our relationships with our current partners and the development of new opportunities for the growth of our business, and our expectations regarding our financial performance for the second quarter of 2008. 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 our 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.
Preliminary Condensed Consolidated Statements of Operations(1)
(Unaudited)
(Amounts in thousands, except per share data)
Three months ended
-------------------
March 31, March 31,
2008 2007
--------- ---------
Revenues $42,182 $35,864
Operating expenses:(2)
Content and distribution 21,792 14,948
Systems and network operations 2,442 2,279
Product development 2,209 2,279
Sales and marketing 3,789 4,825
General and administrative 7,722 9,642
Depreciation 1,487 1,383
Restructuring and other, net(3) 140 (833)
--------- ---------
Total operating expenses 39,581 34,523
--------- ---------
Operating income 2,601 1,341
Loss on investments, net (6,707) -
Other income, net 2,243 5,325
--------- ---------
Income (loss) from continuing operations before
income taxes (1,863) 6,666
Income tax expense (182) (3,075)
--------- ---------
Income (loss) from continuing operations (2,045) 3,591
--------- ---------
Discontinued operations:(1)
Loss from discontinued operations, net of taxes (490) (4,131)
Loss on sale of discontinued operations, net of
taxes (238) -
--------- ---------
Net loss $(2,773) $ (540)
========= =========
Earnings (loss) per share - Basic
Income (loss) from continuing operations $ (0.06) $ 0.11
Loss from discontinued operations (0.01) (0.13)
Loss on sale of discontinued operations (0.01) -
--------- ---------
Net loss per share - Basic $ (0.08) $ (0.02)
========= =========
Weighted average shares outstanding used in
computing basic income (loss) per share 34,298 31,461
========= =========
Earnings (loss) per share - Diluted
Income (loss) from continuing operations $ (0.06) $ 0.11
Loss from discontinued operations (0.01) (0.13)
Loss on sale of discontinued operations (0.01) -
--------- ---------
Net loss per share - Diluted $ (0.08) $ (0.02)
========= =========
Weighted average shares outstanding used in
computing diluted income (loss) per share 34,298 33,644
========= =========
InfoSpace, Inc.
Preliminary Condensed Consolidated Statements of Operations(1)
(Unaudited)
(Amounts in thousands, except per share data)
(1) In 2007, the Company completed the sale of its directory business.
The operating results of the directory business have been presented
as discontinued operations for all periods presented. Amounts include
stock-based compensation expense of $45,000 and $0.6 million for the
three months ended March 31, 2008 and March 31, 2007, respectively.
Income taxes related to discontinued operations were an expense of
$1,000 and $1.8 million for the three months ended March 31, 2008 and
2007, respectively. Revenue, operating expenses and income taxes, and
income of these discontinued operations are presented below (in
thousands):
Three months ended
-------------------
March 31, March 31,
Directory 2008 2007
--------- ---------
Revenue $ - $ 9,175
Operating expenses and income taxes (212) 6,691
--------- ---------
Income from discontinued operations, net of taxes $ 212 $ 2,484
========= =========
Loss on sale of discontinued operations, net of
taxes $ (15) $ -
========= =========
In 2007, the Company completed the sale of its mobile services
business. The operating results of the mobile services business have
been presented as discontinued operations for all periods presented.
Amounts include stock-based compensation expense of $12,000 and $2.3
million for the three months ended March 31, 2008 and March 31, 2007,
respectively. Income taxes related to discontinued operations were a
benefit of $0.2 million and $3.8 million for the three months ended
March 31, 2008 and 2007, respectively. A loss, net of taxes of $0.2
million, on the sale of the mobile services business was recorded in
the three months ended March 31, 2008. Revenue, operating expenses
and income taxes, loss and the gain on sale of these discontinued
operations are presented below (in thousands):
Three months ended
-------------------
March 31, March 31,
Mobile 2008 2007
--------- ---------
Revenue $ 27 $41,604
Operating expenses and income taxes 729 48,219
--------- ---------
Loss from discontinued operations, net of taxes $ (702) $(6,615)
========= =========
Loss on sale of discontinued operations, net of
taxes $ (223) $ -
========= =========
(2) Stock-based compensation expense for the three months ended March
31, 2008 and 2007 is allocated among the following captions (in
thousands):
Three months ended
-------------------
March 31, March 31,
2008 2007
--------- ---------
Systems and network operations $ 367 $ 201
Product development 593 569
Sales and marketing 853 1,312
General and administrative 1,214 2,325
--------- ---------
Total stock-based compensation expense $ 3,027 $ 4,407
========= =========
(3) Amounts for the three months ended March 31, 2008 and 2007 consist
of gains on the sale of certain non-core assets of $0 and $1.3
million, respectively, and restructuring charges comprised of the
following (in thousands):
Three months ended
-------------------
March 31, March 31,
2008 2007
--------- ---------
Employee separation costs $ 80 $ (111)
Stock-based compensation expense 60 (154)
Losses on contractual commitments - 412
Estimated future lease losses - 286
--------- ---------
$ 140 $ 433
========= =========
InfoSpace, Inc.
Preliminary Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands)
March 31, December 31,
2008 2007
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $163,850 $498,326
Short-term investments, available-for-sale 27,108 39,019
Accounts receivable, net 17,488 17,081
Notes and other receivables 1,203 7,104
Prepaid expenses and other current assets 1,717 1,902
Assets of discontinued operations 236 4,730
----------- ------------
Total current assets 211,602 568,162
Property and equipment, net 12,659 10,945
Long-term investments, available-for-sale 29,737 37,472
Goodwill and other intangible assets, net 44,123 44,123
Other long-term assets 9,920 10,722
----------- ------------
Total assets $308,041 $671,424
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,971 $5,148
Accrued expenses and other current
liabilities 32,742 78,703
Special dividend payable - 299,296
Liabilities of discontinued operations 3,753 21,753
----------- ------------
Total current liabilities 41,466 404,900
Other long-term liabilities: 634 634
----------- ------------
Total liabilities 42,100 405,534
Stockholders' equity:
Common stock 3 3
Additional paid-in capital 1,289,904 1,286,219
Accumulated deficit (1,023,807) (1,021,034)
Accumulated other comprehensive income
(loss) (159) 702
----------- ------------
Total stockholders' equity 265,941 265,890
----------- ------------
Total liabilities and stockholders' equity $308,041 $671,424
=========== ============
Summary of cash, short-term and long-term
investments:
Cash and cash equivalents $163,850 $498,326
Short-term investments, available-for-sale 27,108 39,019
Long-term investments, available-for-sale 29,737 37,472
----------- ------------
Cash, short-term and long-term investments $220,695 $574,817
=========== ============
InfoSpace, Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in thousands)
Three months ended
-------------------
March 31, March 31,
2008 2007
--------- ---------
Operating activities:
Net loss $(2,773) $(540)
Adjustments to reconcile net loss to net cash
used by operating activities:
Loss from discontinued operations 490 4,131
Loss on sale of discontinued operations 238 -
Loss on investments 6,707 -
Stock-based compensation 3,027 4,407
Depreciation 1,487 1,383
Restructuring 140 433
Deferred income taxes (149) 1,012
Net gain on sale of non-core assets - (1,256)
Other 71 29
Cash provided (used) by changes in operating
assets and liabilities:
Accounts receivable (487) (4,013)
Notes and other receivables 5,901 169
Prepaid expenses and other current assets 185 585
Other long-term assets 1,805 290
Accounts payable (1,781) (5,064)
Accrued expenses and other current and long-
term liabilities (46,117) (8,577)
--------- ---------
Net cash used by operating activities (31,256) (7,011)
Investing activities:
Purchases of property and equipment (1,127) (704)
Other long-term assets (1,003) -
Proceeds from the sale of assets - 1,251
Proceeds from sales and maturities of
investments 12,000 70,826
Purchases of investments - (24,700)
--------- ---------
Net cash provided by investing activities 9,870 46,673
Financing activities:
Special dividend paid (299,146) -
Proceeds from stock option exercises 14 1,659
Proceeds from issuance of stock through
employee stock purchase plan 219 741
--------- ---------
Net cash provided (used) by financing activities (298,913) 2,400
--------- ---------
Discontinued operations:
Net cash provided (used) by operating
activities attributable to discontinued
operations (14,177) 17,268
Net cash used by investing activities
attributable to discontinued operations - (4,200)
--------- ---------
Net cash provided (used) by discontinued
operations (14,177) 13,068
--------- ---------
Net increase (decrease) in cash and cash
equivalents (334,476) 55,130
Cash and cash equivalents:
Beginning of period 498,326 162,387
--------- ---------
End of period $163,850 $217,517
========= =========
InfoSpace, Inc.
Reconciliations of Non-GAAP Financial Measures to the Nearest
Comparable GAAP Measure
Preliminary Adjusted EBITDA from Continuing Operations
Reconciliation(1)
(Unaudited)
(Amounts in thousands)
Three months ended
-------------------
March 31, March 31,
2008 2007
--------- ---------
Income (loss) from continuing operations (2) $ (2,045) $ 3,591
Depreciation 1,487 1,383
Stock-based compensation 3,027 4,407
Loss on investments, net 6,707 -
Other income, net (3) (2,243) (5,325)
Income tax expense 182 3,075
--------- ---------
Adjusted EBITDA from continuing operations $ 7,115 $ 7,131
========= =========
Preliminary Adjusted EBITDA from Continuing Operations Reconciliation
for Forward-Looking Guidance(4)
(Amounts in thousands)
Ranges for the
three months
ending
June 30, 2008
-------------------
Loss from continuing operations $ (1,900) $ (400)
Depreciation 1,700 1,700
Stock-based compensation 4,000 4,000
Other income, net (3) (1,500) (1,500)
Income tax expense 200 200
--------- ---------
Adjusted EBITDA from continuing operations $ 2,500 $ 4,000
========= =========
(1) Adjusted Earnings before Interest, Taxes, Depreciation and
Amortization ("EBITDA") from continuing operations is a non-GAAP
financial measure and is reconciled to income (loss) from continuing
operations, which the Company's management believes to be the most
comparable generally accepted accounting principles ("GAAP") measure.
Adjusted EBITDA from continuing operations results are calculated by
adjusting GAAP income (loss) from continuing operations to exclude
the effects of income taxes, depreciation, stock-based compensation
expense, loss on investments, net, 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. This calculation
excludes the directory and mobile businesses, as they have been
classified as discontinued operations in all periods presented. 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 (loss) from continuing operations in
accordance with GAAP.
(2) As presented in the preliminary 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.
(4) Adjusted EBITDA from continuing operations reconciliation for
forward looking guidance excludes the results of discontinued
operations in future periods.
SOURCE: InfoSpace, Inc.
InfoSpace, Inc. Stacy Ybarra, 425-709-8127 stacy.ybarra@infospace.com
Copyright Business Wire 2008
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