InfoSpace, Inc. (NASDAQ:INSP) today announced financial results
for the second quarter ended June 30, 2009.
“I am extremely pleased with our results in the second quarter,”
said Will Lansing, president and chief executive officer of
InfoSpace. “We achieved revenue growth and greater profitability in
a tough economy. At the same time, we continue to invest in new
product initiatives including the launch of two new metasearch
sites in the quarter.”
Revenues for the second quarter of 2009 were $43.8 million,
reflecting a $5.4 million or 14% increase from the second quarter
of 2008.
Adjusted EBITDA was $5.4 million for the second quarter of 2009,
compared to Adjusted EBITDA of $9.7 million for the second quarter
of 2008.
Net income for the second quarter of 2009 was $2.9 million, or
$0.08 per share, compared to net income of $1.9 million, or $0.06
per share for the second quarter of 2008.
Cash, cash equivalents, and marketable securities as of June 30,
2009 totaled $208.3 million, including $8.2 million of auction rate
securities. At the end of the second quarter, the Company had no
debt obligations.
Second Quarter Highlights and Recent Developments
InfoSpace:
- Re-launched InfoSpace.com, a
search engine that further expands the value of metasearch with new
content and features; key upgrades include the addition of
real-time Twitter results and the ability to filter results by
search engine provider,
- Introduced DoGreatGood.com, a
new philanthropic search engine that generates donations for
charities, and
- Signed nine new distribution
partners.
Third Quarter 2009 Outlook
For the third quarter of 2009, the Company expects revenue to be
between $47 million and $49 million, Adjusted EBITDA to be between
$4.5 million and $5.5 million, and operating results to be between
a net loss of $0.5 million and net income of $0.5 million, or a net
loss of $0.01 per share to net income of $0.01 cents per share.
Conference Call and Webcast
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 9 p.m. Pacific on
August 12, 2009 and 12:00 a.m. Eastern on August 13, 2009.
Use of Non-GAAP Financial Measures
InfoSpace’s Adjusted EBITDA is calculated by adjusting GAAP net
income (loss) to exclude the effects of discontinued operations,
income taxes, depreciation, amortization of intangible assets,
stock-based compensation expense, gain (loss) on investments, and
other income, net (including such items as interest income,
resolution of gain contingencies, foreign currency gains or losses,
and gains or losses from the disposal of assets), as detailed in
the accompanying table to the preliminary unaudited condensed
consolidated financial statements.
InfoSpace’s management believes that this non-GAAP financial
measure provides meaningful supplemental information regarding the
Company’s performance by excluding certain expenses and gains that
are not indicative of its core business operating results.
InfoSpace believes that management and 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 (loss) in accordance with GAAP accompanies the preliminary
unaudited condensed consolidated financial statements in this
release.
About InfoSpace, Inc.
InfoSpace, Inc., a leading developer of metasearch products, is
focused on bringing the best of the Web to Internet users.
InfoSpace's proprietary metasearch technology combines the top
results from several of the largest online search engines,
providing fast and comprehensive search results on InfoSpace sites
including Dogpile® (www.dogpile.com), DoGreatGood™
(www.dogreatgood.com), MetaCrawler® (www.metacrawler.com),
WebCrawler® (www.webcrawler.com), and WebFetch® (www.webfetch.com).
InfoSpace's metasearch technology is also available on nearly 100
partner sites, including content, community, and connectivity
sites. More information may be found at www.infospaceinc.com.
InfoSpace.com, InfoSpace, Dogpile, DoGreatGood, MetaCrawler,
WebCrawler, and WebFetch and other marks are trademarks of
InfoSpace, Inc. The names of other companies and products mentioned
herein may be the trademarks of their respective owners.
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 expectation that we will continue to focus on
improving efficiency, managing costs and developing new initiatives
for future growth and profitability; and statements regarding our
expectations for our financial performance and results of
operations for the third quarter of 2009. 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: the
completion of the review of our financial statements for the second
quarter of 2009; 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; the successful execution of the
Company’s strategic initiatives, operating plans, and marketing
strategies; and the condition of our cash investments. 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" and elsewhere in such documents.
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 (Unaudited) (Amounts in thousands,
except per share data) Three months ended Six
months ended June 30, June 30, June 30, June 30, 2009
2008 2009 2008 Revenues $
43,763 $ 38,328 $ 82,833 $ 80,510 Operating expenses: (1)
Content and distribution 24,309 18,062 44,686 39,854 Systems
and network operations 2,369 2,774 4,790 5,216 Product development
1,603 2,929 3,009 5,138 Sales and marketing 5,139 6,041 12,082
9,830 General and administrative 6,366 4,960 12,568 12,682
Depreciation and amortization 1,811 1,731 3,622 3,218 Restructuring
and other, net - (2,011 ) -
(1,871 ) Total operating expenses 41,597
34,486 80,757 74,067
Operating income 2,166 3,842 2,076 6,443 Gain
(loss) on investments, net(2) 335 (4,362 ) (5,016 ) (11,069 ) Other
income, net 466 2,654 1,073
4,897 Income (loss) from continuing
operations before income taxes 2,967 2,134 (1,867 ) 271
Income tax benefit (expense) (82 ) 577
(283 ) 395 Income (loss) from continuing
operations 2,885 2,711 (2,150 )
666 Discontinued operations: Loss from
discontinued operations, net of taxes - (821 ) - (1,311 ) Gain
(loss) on sale of discontinued operations, net of taxes -
43 - (195 ) Net
income (loss) $ 2,885 $ 1,933 $ (2,150 ) $ (840 )
Earnings (loss) per share - Basic Income (loss) from
continuing operations $ 0.08 $ 0.08 $ (0.06 ) $ 0.02 Loss from
discontinued operations - (0.02 ) - (0.04 ) Gain (loss) on sale of
discontinued operations - 0.00 -
(0.00 ) Net income (loss) per share - Basic $
0.08 $ 0.06 $ (0.06 ) $ (0.02 )
Weighted average shares
outstanding used in computing basic income (loss) per share
35,044 34,334 34,949
34,316 Earnings (loss) per share - Diluted
Income (loss) from continuing operations $ 0.08 $ 0.08 $
(0.06 ) $ 0.02 Loss from discontinued operations - (0.02 ) - (0.04
) Gain (loss) on sale of discontinued operations -
0.00 - 0.00 Net
income (loss) per share - Diluted $ 0.08 $ 0.06 $
(0.06 ) $ (0.02 )
Weighted average shares
outstanding used in computing diluted income (loss) per share
35,069 34,755 34,949
34,628
(1) Stock-based compensation
expense for the three and six months ended June 30, 2009 and 2008
is allocated among the following captions (in thousands):
Three months ended Six months ended June 30, 2009 June 30,
2008 June 30, 2009 June 30, 2008 Systems and network operations $
105 $ 446 $ 314 $ 813 Product development 9 1,047 322 1,640 Sales
and marketing 85 1,038 449 1,891 General and administrative
1,190 1,643 2,355 2,857
Total stock-based compensation expense $ 1,389 $
4,174 $ 3,440 $ 7,201
(2) In the three and six months
ended June 30, 2009, the Company recorded a gain of $0.3 million
and net other-than-temporary impairment charges of $5.0 million,
respectively, relating to the auction rate securities investments
that it holds. In the three and six months ended June
30, 2008, the Company recorded other-than-temporary impairment
charges relating to the auction rate securities investments that it
holds of $4.4 million and $11.1 million, respectively.
InfoSpace, Inc. Preliminary Condensed Consolidated
Balance Sheets (Unaudited) (Amounts in thousands) June
30, December 31, 2009 2008 ASSETS
Current assets: Cash and cash equivalents $ 64,175 $ 49,936
Short-term investments, available-for-sale 135,906 141,592 Accounts
receivable, net 18,188 15,423 Notes and other receivables 2,197
1,349 Prepaid expenses and other current assets 2,590
1,767 Total current assets 223,056 210,067
Property and equipment, net 14,821 18,078 Long-term
investments, available-for-sale 8,200 13,916 Goodwill and other
intangible assets, net 45,367 44,123 Other long-term assets
4,598 4,949 Total assets $ 296,042
$ 291,133 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable $ 4,918 $ 6,518
Accrued expenses and other current liabilities 26,518 19,707
Liabilities of discontinued operations - 1,109
Total current liabilities 31,436 27,334 Other
long-term liabilities 1,155 1,475
Total liabilities 32,591 28,809 Stockholders' equity:
Common stock 4 3 Additional paid-in capital 1,296,358 1,292,360
Accumulated deficit (1,034,729 ) (1,032,579 ) Accumulated other
comprehensive income 1,818 2,540
Total stockholders' equity 263,451 262,324
Total liabilities and stockholders' equity $ 296,042
$ 291,133 Summary of cash, short-term and
long-term investments: Cash and cash equivalents $ 64,175 $ 49,936
Short-term investments, available-for-sale 135,906 141,592
Long-term investments, available-for-sale 8,200
13,916 Cash, short-term and long-term
investments $ 208,281 $ 205,444
InfoSpace,
Inc. Preliminary Condensed Consolidated Statements of Cash
Flows (Unaudited) (Amounts in thousands) Six months ended June
30, June 30, 2009 2008
Operating activities: Net loss $ (2,150 ) $ (840 )
Adjustments to reconcile net loss to net cash provided (used) by
operating activities: Loss from discontinued operations - 1,311
Loss on sale of discontinued operations - 195 Loss on investments,
net 5,016 11,069 Stock-based compensation 3,440 7,201 Depreciation
and amortization 3,622 3,218 Deferred income taxes 186 (819 ) Gain
on sale of non-core assets - (1,897 ) Loss on disposals of property
and equipment 613 1 Other 7 65 Cash provided (used) by changes in
operating assets and liabilities: Accounts receivable (2,757 ) 847
Notes and other receivables (1,097 ) 5,741 Prepaid expenses and
other current assets (823 ) 114 Other long-term assets 247 2,442
Accounts payable (1,200 ) (991 ) Accrued expenses and other current
and long-term liabilities 4,839 (55,030 ) Net
cash provided (used) by operating activities 9,943 (27,373 )
Investing activities: Business acquisition, net of cash
acquired (395 ) - Purchases of property and equipment (1,448 )
(5,715 ) Other long-term assets 104 (1,003 ) Proceeds from the sale
of assets 320 2,316 Proceeds from sales and maturities of
investments 43,700 27,300 Purchases of investments (38,144 )
(17,984 ) Net cash provided by investing activities 4,137
4,914
Financing activities: Special dividend paid -
(299,146 ) Proceeds from stock option exercises - 15 Proceeds from
issuance of stock through employee stock purchase plan 252 219
Repayment of capital lease obligations (93 ) (32 )
Net cash provided (used) by financing activities 159 (298,944 )
Discontinued operations: Net cash used by operating
activities attributable to discontinued operations -
(15,299 )
Net increase (decrease) in cash and cash
equivalents 14,239 (336,702 )
Cash and cash
equivalents: Beginning of period 49,936
498,326 End of period $ 64,175 $ 161,624
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 Six months ended June 30, June 30,
June 30, June 30, 2009 2008 2009
2008 Net income (loss) (2) $ 2,885 $ 1,933 $
(2,150 ) $ (840 ) Discontinued operations - 778 - 1,506
Depreciation and amortization 1,811 1,731 3,622 3,218 Stock-based
compensation 1,389 4,174 3,440 7,201 Loss (gain) on investments,
net (335 ) 4,362 5,016 11,069 Other income, net (3) (466 ) (2,654 )
(1,073 ) (4,897 ) Income tax expense (benefit) 82
(577 ) 283 (395 ) Adjusted EBITDA from
continuing operations $ 5,366 $ 9,747 $ 9,138
$ 16,862
Preliminary Adjusted EBITDA
Reconciliation for Forward-Looking Guidance (Amounts in
thousands) Ranges for the Three months ending September 30,
2009 Net income (loss) $ (500 ) $ 500 Depreciation and amortization
1,900 1,900 Stock-based compensation 3,400 3,400 Loss on
investments - - Other income, net (3) (500 ) (500 ) Income tax
expense 200 200 Adjusted EBITDA $ 4,500
$ 5,500
(1) Adjusted Earnings before
Interest, Taxes, Depreciation and Amortization ("EBITDA") from
continuing operations 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 from
continuing operations results are calculated by adjusting GAAP net
income (loss) to exclude the effects of discontinued operations,
income taxes, depreciation, amortization of intangible assets,
stock-based compensation expense, gains or losses on investments,
net, and other income, net (including such items as interest
income, resolution of gain 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, net income (loss) in accordance with GAAP.
(2) As presented in the
Preliminary Condensed Consolidated Statements of Operations
(unaudited).
(3) Other income, net, primarily
consists of interest income, resolution of gain contingencies,
gains or losses from the disposal of assets, and foreign currency
transaction gains or losses.
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