WEBM Webmediabrands (MM)

WebMediaBrands Inc. (Nasdaq: WEBM), an Internet media company concentrating on BtoB communities, today reported results for the quarter ended June 30, 2009.

Revenues from our continuing operations for the second quarter of 2009 were $5.8 million compared to revenues of $8.9 million for the same period in 2008. Loss from continuing operations was $1.2 million for the second quarter of 2009 compared to $7.6 million for the same period in 2008. Net loss was $1.2 million, or $0.03 per share, for the second quarter of 2009 and included lease termination expense of $308,000, or $0.01 per share.

"Our online ad sales operations showed slight improvement during the second quarter and were up 8% compared to the first quarter of 2009. Also, operating costs in this quarter reflect significant cost savings that we believe will be in effect for the balance of the year and into 2010," stated Alan M. Meckler, Chairman and CEO of WebMediaBrands.

In February 2009, WebMediaBrands completed the sale of its Online images business to Getty Images, Inc. for an aggregate purchase price of $96.0 million in cash, subject to a working capital purchase price adjustment. As a result of the sale, these financial results reflect WebMediaBrands’s Online images segment as a discontinued operation, and continuing operations are comprised solely of the Online media business, in accordance with Statement of Financial Accounting Standards No. 144. Prior year financial results have been presented to reflect WebMediaBrands’s Online images segment as a discontinued operation.

WebMediaBrands Inc. 2nd Quarter 2009 Financial Results Conference Call Alert

WebMediaBrands Inc. invites you to participate in its conference call reviewing 2009 second quarter results on Tuesday, August 11, 2009 at 5:00 pm EDT.

The conference call number is 877-856-1968 for domestic participants and 719-325-4761 for international participants; pass code “254 2184”. Please call five minutes in advance to ensure that you are connected prior to the presentation. The conference call replay will be available until Tuesday, August 25, 2009. Replay call numbers are 888-203-1112 for domestic participants and 719-457-0820 for international participants; pass code “254 2184.”

       

WebMediaBrands Inc.

Unaudited Consolidated Condensed Statements of Operations

For the Three and Six Months Ended June 30, 2008 and 2009

(in thousands, except per share amounts)

 

Three Months Ended

June 30,

Six Months Ended

June 30,

2008 2009 2008 2009 Revenues

$

8,910

  $ 5,829   $ 17,314   $ 11,603   Cost of revenues (exclusive of items shown separately below) 4,940 2,830 9,043 7,414 Advertising, promotion and selling 2,278 1,490 4,193 3,389 General and administrative 6,051 2,342 11,763 7,892 Depreciation 230 274 462 548 Amortization 829 205 1,621 484 Impairment — — — 662 Restructuring charge   —     308     —     875   Total operating expenses   14,328     7,449     27,082     21,264   Operating loss from continuing operations (5,418 ) (1,620 ) (9,768 ) (9,661 ) Other income (loss), net (3 ) 67 (5 ) 131 Interest income 1 157 6 158 Interest expense (1,847 ) (185 ) (3,573 ) (1,492 ) Loss on extinguishment of debt — — — (2,119 ) Gain (loss) on fair value of interest rate swap   —     438     —     (6,732 ) Loss from continuing operations before income taxes and noncontrolling interest (7,267 ) (1,143 ) (13,340 ) (19,715 ) Provision (benefit) for income taxes 325 66 33 (2,580 ) Noncontrolling interest   2     —     (6 )   11   Loss from continuing operations   (7,590 )   (1,209 )   (13,379 )   (17,124 ) Income from discontinued operations 3,015 — 7,727 208 Gain (loss) on sale of discontinued operations — (4 ) — 7,059 Provision (benefit) for income taxes from discontinued operations   (1,289 )   —     (1,256 )   25   Net loss $ (3,286 ) $ (1,213 ) $ (4,396 ) $ (9,882 ) Income (loss) her share: Basic Loss from continuing operations $ (0.21 ) $ (0.03 ) $ (0.37 ) $ (0.47 ) Income from discontinued operations   0.12     —     0.25     0.20   Net loss $ (0.09 ) $ (0.03 ) $ (0.12 ) $ (0.27 ) Diluted Loss from continuing operations $ (0.21 ) $ (0.03 ) $ (0.37 ) $ (0.47 ) Income from discontinued operations   0.12     —     0.25     0.20   Net loss $ (0.09 ) $ (0.03 ) $ (0.12 ) $ (0.27 ) Shares used in computing income (loss) per share: Basic   35,967     36,399     35,967     36,155   Diluted   35,967     36,399     35,967     36,155      

WebMediaBrands Inc.

Consolidated Condensed Balance Sheets

December 31, 2008 and June 30, 2009

(in thousands, except share and per share amounts)

 

December 31,

2008

June 30,

2009

(unaudited) ASSETS Current assets: Cash and cash equivalents $ 3,755 $ 5,520 Accounts receivable, net of allowances of $438 and $102, respectively 6,673 4,559 Prepaid expenses and other current assets 4,040 2,074 Deferred income taxes 53 — Assets of discontinued operations   14,138     —   Total current assets 28,659 12,153   Property and equipment, net of accumulated depreciation of $9,947 and $9,558, respectively 2,424 2,199 Intangible assets, net 3,060 2,458 Goodwill 26,062 27,524 Investments and other assets 2,564 1,219 Assets held for sale and of discontinued operations   101,324     3,200   Total assets $ 164,093   $ 48,753     LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,074 $ 1,087 Accrued payroll and related expenses 1,557 1,335 Accrued expenses and other current liabilities 5,224 3,408 Deferred income taxes — 33 Current portion of long-term debt 81,213 — Deferred revenues 2,347 2,052 Liabilities of discontinued operations   25,937     —   Total current liabilities 117,352 7,915   Long-term debt — 7,197 Deferred revenues 108 99 Deferred income taxes 1,266 1,462 Fair value of interest rate swap 7,559 — Other long-term liabilities 205 211 Liabilities of discontinued operations   2,727     —   Total liabilities   129,217     16,884     Commitments and contingencies   Stockholders’ equity: Preferred stock, $.01 par value, 4,000,000 shares authorized, no shares issued — — Common stock, $.01 par value, 75,000,000 shares authorized, 36,032,152 and 36,786,882 shares issued, respectively 360 368 Additional paid-in capital 273,324 275,938 Accumulated deficit (234,479 ) (244,361 ) Treasury stock, 65,000 shares at cost (106 ) (106 ) Accumulated other comprehensive income (loss)   (4,223 )   30   Total stockholders’ equity   34,876     31,869   Total liabilities and stockholders’ equity $ 164,093   $ 48,753    

WebMediaBrands Inc.

Unaudited Consolidated Condensed Statements of Cash Flows

Six Months Ended June 30, 2008 and 2009

(in thousands)

 

Six Months Ended

June 30,

2008   2009 Cash flows from operating activities: Net loss $ (4,396 ) $ (9,882 ) Less: Income from discontinued operations, net of tax 8,983 183 Less: Gain on sale of discontinued operations   —     7,059   Loss from continuing operations (13,379 ) (17,124 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Loss on fair value of swap — 6,732 Depreciation and amortization 2,083 1,032 Impairment — 662 Stock-based compensation 3,116 2,426 Provision (benefit) for losses on accounts receivable (132 ) 55 Noncontrolling interest 6 (11 ) Other (income) loss, net — (151 ) Amortization of debt issuance costs 157 3 Loss on extinguishment of debt — 2,119 Deferred income taxes (2,635 ) (2,628 ) Changes in operating assets and liabilities (net of businesses acquired/disposed): Accounts receivable, net 459 1,887 Prepaid expenses and other assets 986 2,435 Accounts payable and accrued expenses and other liabilities (548 ) (2,138 ) Deferred revenues 110 (304 ) Discontinued operations   19,496     (1,319 ) Net cash provided by (used in) operating activities   9,719     (6,324 ) Cash flows from investing activities: Purchases of property and equipment (1,500 ) (315 ) Purchases of businesses, assets and other (565 ) (1,584 ) Proceeds from sale of discontinued operations — 91,205 Discontinued operations   (4,751 )   (217 ) Net cash provided by (used in) investing activities   (6,816 )   89,089   Cash flows from financing activities: Debt issuance costs (15 ) (383 ) Borrowings under long term obligations — 7,197 Settlement of interest rate swap — (6,732 ) Repayment of borrowings under credit facilities (4,375 ) (81,213 ) Proceeds from exercise of stock options   7     196   Net cash used in financing activities   (4,383 )   (80,935 ) Effects of exchange rates on cash and cash equivalents   32     (65 ) Net change in cash and cash equivalents (1,448 ) 1,765 Cash and cash equivalents, beginning of period   7,300     3,755   Cash and cash equivalents, end of period $ 5,852   $ 5,520   Supplemental disclosures of cash flow: Cash refund of income taxes, net $ 573   $ 1,301   Cash paid for interest $ 2,938   $ 1,469     Non-cash investing activities: Acquisitions of long-lived assets $ 1,296   $ 99    

About WebMediaBrands Inc.

WebMediaBrands Inc. (Nasdaq: WEBM, www.webmediabrands.com), headquartered in Darien, CT, is an Internet media company concentrating on BtoB communities. WebMediaBrands has three online communities: Internet.com for IT managers and Web developers; Mediabistro.com for media professionals and Graphics.com for design and creative professionals. All three communities offer job boards, marketplaces, online education offerings and events.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release that are not historical facts are "forward-looking statements" under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The potential risks and uncertainties address a variety of subjects including, for example, the competitive environment in which WebMediaBrands competes; the unpredictability of WebMediaBrands’s future revenues, expenses, cash flows and stock prices; and WebMediaBrands’s dependence on a limited number of advertisers. For a more detailed discussion of such risks and uncertainties, refer to WebMediaBrands’s reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. The forward-looking statements included herein are made as of the date of this press release, and WebMediaBrands assumes no obligation to update the forward-looking statements after the date hereof, except as required by law.

All current WebMediaBrands press releases can be found online at www.webmediabrands.com/corporate/press.html