CMGI Announces First Quarter Fiscal 2003 Financial Results
ANDOVER, Mass.--(BUSINESS WIRE)--Dec. 12, 2002--CMGI, Inc. (Nasdaq: CMGI) today reported financial results for the fiscal quarter ended October 31, 2002.
CMGI's results of operations and cash balances discussed herein exclude the results of operations and cash balances of CMGI's former majority-owned subsidiaries, Engage, Inc. ("Engage"), and NaviSite, Inc. ("NaviSite"). On September 9, 2002, CMGI divested all of its equity and debt ownership interests in Engage. On September 11, 2002, CMGI sold all of its equity and debt ownership interests in NaviSite to ClearBlue Technologies, Inc. As a result of these transactions, the historical results of operations of Engage and NaviSite have been accounted for as discontinued operations in accordance with generally accepted accounting principles, and are not included in CMGI's results of continuing operations or cash balances discussed herein. Additionally, on August 1, 2002, CMGI adopted SFAS No. 142, "Goodwill and Other Intangible Assets" and ceased amortizing goodwill.
Key Performance Highlights:
Q1 2003 Over Q4 2002
-- Total Net Revenue, Up 35 percent
-- Total Operating Loss, Down 65 percent
-- Net Loss, Down 51 percent
-- Pro Forma operating loss(1), Down 21 percent
Cash, Cash Equivalents and Marketable Securities Balances as of
October 31, 2002
-- Cash and Cash Equivalents Balance, $193 million
-- Marketable Securities Balance (excluding equity securities),
$10 million
-- Total Cash, Cash Equivalents and Marketable Securities Balance
(excluding equity securities), $203 million
First Quarter
CMGI reported net revenue of $191 million for the first fiscal quarter ended October 31, 2002. This compares to net revenue of $142 million for the quarter ended July 31, 2002, an increase of 35%. This increase primarily reflects the full quarter impact of SL Supply Chain Services International Corp., which acquired substantially all of the worldwide assets and operations of iLogistix during the fourth quarter of fiscal year 2002. This increase was partially offset by revenue declines within CMGI's other eBusiness and Fulfillment operations.
CMGI reported a total operating loss of $49 million for the quarter ended October 31, 2002, compared to a total operating loss of $140 million for the quarter ended July 31, 2002, representing a 65% decrease in operating loss quarter over quarter. Included in the first quarter loss were charges related to amortization of intangible assets and stock-based compensation ("amortization charges") and depreciation totaling $13 million, long-lived asset impairment charges of $0.2 million, and net restructuring charges of $2 million. Fourth quarter fiscal 2002 total operating loss included charges related to amortization and depreciation totaling $64 million, long lived asset impairment charges of $25 million and net restructuring charges of $7 million.
Excluding the effects of charges related to in-process research and development, depreciation, amortization, long-lived asset impairment and restructuring, CMGI reported a pro forma operating loss(1) of $34 million or ($0.09) pro forma operating loss(1) per share for the quarter ended October 31, 2002 versus a pro forma operating loss(1) of $43 million or ($0.11) pro forma operating loss(1) per share in the previous quarter ended July 31, 2002, representing a 21% decrease.
CMGI reported a net loss of $94 million or ($0.24) loss per share for the first quarter of fiscal 2003, compared to a net loss of $190 million or ($0.48) loss per share for the fourth quarter ended July 31, 2002.
As of October 31, 2002, CMGI had a consolidated cash and cash equivalents balance of $193 million. Total cash, cash equivalents and marketable securities balance (excluding equity securities) was $203 million. Total cash, cash equivalents and marketable securities (excluding equity securities) usage in the first quarter was $36 million, versus $41 million for the previous quarter.
George McMillan, President and Chief Executive Officer of CMGI, Inc., said:
"We are pleased with CMGI's financial performance in the first quarter as it shows that we are making progress on all fronts - with higher revenue, significantly lower pro forma operating loss(1) and higher cash and cash equivalents balances than originally projected. We are confident that our performance leads to break even on a consolidated pro forma operating basis(1) in Q3. Our emphasis continues to be on reaching profitability, and generating higher margin revenue."
Outlook
Consolidated net revenue for the second quarter of fiscal 2003 is expected to be approximately $150 million to $155 million. The major reason for the decline in revenue projection for the second quarter is the company's continued focus on reducing under performing categories and products from uBid's offerings. This strategy has significantly improved uBid profit margins.
Pro forma operating loss(1) for the second quarter of fiscal 2003 is expected to be approximately $10 million to $15 million. The company continues to expect to reach break even on a consolidated pro forma operating basis(1) in the third quarter of fiscal 2003.
Both of CMGI's pro forma operating results(1) guidance estimates depend on the timing of actual divestitures of certain non-core assets and/or the costs related to shutdown of certain subsidiaries for which a buyer cannot be found.
Consolidated cash, cash equivalents and marketable securities balance (excluding equity securities) exiting the second quarter of fiscal 2003 is expected to be approximately $169 million. The usage of cash, cash equivalents and marketable securities in the second quarter of fiscal year 2003 is expected to be $34 million, of which it is estimated that approximately $10 million would relate to cash in companies being considered for divestiture in the second quarter.
About CMGI
CMGI, Inc. (Nasdaq: CMGI) provides technology and e-commerce solutions that help businesses market, sell and distribute their products and services. CMGI offers targeted solutions including industry-leading global supply chain management; web-based distribution and fulfillment; web-driven direct marketing; and enterprise-oriented professional services.
CMGI's corporate headquarters are located at 100 Brickstone Square, Andover, Mass. 01810. For additional information, see www.cmgi.com.
(1)The pro forma operating results are not a recognized measure for financial statement presentation under the United States generally accepted accounting principles (U.S. GAAP). Non-U.S. GAAP earnings measures do not have any standardized definition and are therefore unlikely to be comparable to similar measures presented by other reporting companies. This pro forma measure is provided to assist readers in evaluating CMGI's operating performance and each of the items listed (in-process research and development, depreciation, amortization of assets and stock-based compensation, long-lived asset impairment and restructuring) were excluded because they were considered to be of a non-operational nature. Readers are encouraged to consider this pro forma measure in conjunction with CMGI's U.S. GAAP results.
This release contains forward-looking statements which address a variety of subjects including, for example, the expected financial results of CMGI and its operating companies for the second quarter of fiscal 2003 and beyond, and the expected ability of CMGI to reduce its cash usage, preserve its capital resources, grow its businesses and reach profitability. All statements other than statements of historical fact, including without limitation, those with respect to CMGI's goals, plans and strategies set forth herein are forward-looking statements. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: CMGI's ability to reach profitability in the time frame set forth herein is dependent on additional divestitures; CMGI's success is dependent upon its ability to integrate its operating companies in accordance with its business strategy; CMGI's success, including its ability to decrease its cash burn rate, improve its cash position, grow its businesses and revenues and reach profitability, depends on its ability to execute on its business strategy and the continued and increased demand for and market acceptance of CMGI's and its operating companies' products, services, and web sites and the Internet in general; CMGI may experience difficulties integrating technologies, operations and personnel in accordance with its business strategy; CMGI derives a significant portion of its revenue from a small number of customers and the loss of any of those customers would significantly damage CMGI's business; and increased competition and technological changes in the markets in which CMGI competes. For a detailed discussion of cautionary statements that may affect CMGI's future results of operations and financial results, please refer to CMGI's filings with the Securities and Exchange Commission, including CMGI's most recent Annual Report on Form 10-K. Forward-looking statements represent management's current expectations and are inherently uncertain. We do not undertake any obligation to update forward-looking statements made by us.
CMGI, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands)
(Unaudited)
Three months ended
October 31, July 31, October 31,
2002 2002 2001
Net revenue:
Enterprise Software and
Services $ 27,963 $ 26,069 $ 35,615
eBusiness and Fulfillment 162,415 115,440 132,698
Managed Application Services 136 205 5,453
Portals -- -- 2,813
Other -- -- --
--------- --------- ---------
$ 190,514 $ 141,714 $ 176,579
Operating loss:
Enterprise Software and
Services $ (16,721) $ (78,810) $ (73,153)
eBusiness and Fulfillment (16,751) (44,243) (40,743)
Managed Application Services 136 27 809
Portals -- 4,644 (7,796)
Other (15,506) (21,873) (13,842)
--------- --------- ---------
$ (48,842) $ (140,255) $ (134,725)
Pro forma operating loss:
Enterprise Software and
Services $ (9,141) $ (17,941) $ (18,128)
eBusiness and Fulfillment (11,301) (11,940) (8,123)
Managed Application Services 136 1,024 (13,612)
Portals -- 5,568 (1,206)
Other (13,854) (20,138) (9,867)
--------- --------- ---------
$ (34,160) $ (43,427) $ (50,936)
Note: Pro forma operating loss represents total operating loss,
excluding net charges related to in-process research and development,
depreciation, amortization of intangible assets and stock-based
compensation, long-lived asset impairment and restructuring.
TABLE RECONCILING GAAP OPERATING LOSS TO PRO FORMA OPERATING LOSS
GAAP operating loss $ (48,842) $ (140,255) $ (134,725)
Adjustments:
Depreciation 8,235 8,514 12,609
Amortization of intangibles and
stock-based compensation 4,325 55,882 56,784
Long-lived asset impairment 192 25,184 9,263
Restructuring 1,930 7,248 5,133
-------- -------- --------
Proforma operating loss $ (34,160) $ (43,427) $ (50,936)
CMGI, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three months ended
October 31, July 31, October 31,
2002 2002 2001
Net revenue $ 190,514 $ 141,714 $ 176,579
Operating expenses:
Cost of revenue 164,414 120,188 158,721
Research and development 8,682 10,164 12,845
Selling 24,035 43,295 34,066
General and administrative 35,778 20,008 34,492
Amortization of intangible
assets and stock-based
compensation 4,325 55,882 56,784
Impairment of long-lived assets 192 25,184 9,263
Restructuring 1,930 7,248 5,133
Total operating expenses 239,356 281,969 311,304
Operating loss (48,842) (140,255) (134,725)
Other income (deductions):
Other losses, net (55,045) (34,525) (8,550)
Minority interest (2,284) 1,528 9,644
Equity in losses of affiliates (515) (12) (12,249)
Interest income 1,443 5,058 6,211
Interest benefit (expense), net 26,855 15,019 (6,720)
Total (29,546) (12,932) (11,664)
Loss from continuing
operations before income taxes (78,388) (153,187) (146,389)
Income tax expense (benefit) 856 (3,216) 12,579
Loss from continuing operations (79,244) (149,971) (158,968)
Discontinued operations, net of
income taxes:
Loss from discontinued
operations (14,340) (40,134) (65,836)
Net loss (93,584) (190,105) (224,804)
Preferred stock accretion -- -- (1,890)
Net loss available to
common stockholders $ (93,584) $(190,105) $ (226,694)
Basic and diluted loss
per share available to
common stockholders:
Loss from continuing
operations $ (0.20) $ (0.38) $ (0.46)
Loss from discontinued
operations (0.04) (0.10) (0.19)
Net loss available to
common stockholders $ (0.24) $ (0.48) $ (0.65)
Shares used in computing
basic and diluted
loss per share 392,682 392,380 351,052
Supplemental Disclosure:
Net loss available to
common stockholders
as reported $ (93,584) $(190,105) $(226,694)
Add back: goodwill
and workforce-in-place
amortization expense,
net of tax -- 51,924 51,343
Adjusted net loss available
to common stockholders $ (93,584) $(138,181) $(175,351)
Basic and diluted loss
per share as reported $ (0.24) $ (0.48) $ (0.65)
Add back: goodwill and
workforce-in-place
amortization expense,
net of tax -- 0.13 0.15
Adjusted basic and
diluted loss per share $ (0.24) $ (0.35) $ (0.50)
CONTACT: CMGI, Inc. (Media)
John Stevens, 978/684-3655
jstevens@cmgi.com
or
CMGI, Inc. (Investors-Financial)
Tom Oberdorf
ir@cmgi.com
|
Thread abonnieren
