WEBM Webmediabrands (MM)

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

Revenues from continuing operations for the third quarter of 2009 were $4.5 million compared to revenues of $7.6 million for the same period in 2008. Loss from continuing operations was $4.6 million for the third quarter of 2009 compared to $21.8 million for the same period in 2008.

“Despite the continued downturn in the economy, which had an impact on our online advertising sales operations during the third quarter, revenues from our job board operations showed improvement during the third quarter and were up 26% compared to the second 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 August 2009 WebMediaBrands entered into an asset purchase agreement to sell its Internet.com division to QuinStreet, Inc. for an aggregate purchase price of $18.0 million in cash, subject to a working capital purchase price adjustment. The Company anticipates consummating the transaction on or about November 30, 2009, subject to stockholder approval.

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. Prior year financial results have been presented to reflect WebMediaBrands’s online images segment as a discontinued operation.

WebMediaBrands Inc. 3rd Quarter 2009 Financial Results Conference Call Alert

WebMediaBrands Inc. invites you to participate in its conference call reviewing 2009 third quarter results on Thursday, November 12, 2009 at 5:00 pm EST.

The conference call number is 800-967-7134 for domestic participants and 719-457-1506 for international participants; pass code “677 5406.” Please call five minutes in advance to ensure that you are connected prior to the presentation. The conference call replay will be available until Thursday, November 26, 2009. Replay call numbers are 888-203-1112 for domestic participants and 719-457-0820 for international participants; pass code “677 5406.”

 

WebMediaBrands Inc.

Unaudited Consolidated Condensed Statements of Operations

For the Three and Nine Months Ended September 30, 2008 and 2009

(in thousands, except per share amounts)

          Three Months EndedSeptember 30, Nine Months EndedSeptember 30,   2008     2009     2008     2009   Revenues

$

7,575

  $ 4,540   $ 24,889   $ 16,143     Cost of revenues (exclusive of items shown separately below) 4,265 2,899 13,308 10,313 Advertising, promotion and selling 2,005 1,406 6,198 4,795 General and administrative 4,488 2,319 16,251 10,211 Depreciation 299 276 761 824 Amortization 811 216 2,432 700 Impairment — — — 662 Restructuring charge   —     —     —     875     Total operating expenses   11,868     7,116     38,950     28,380     Operating loss from continuing operations (4,293 ) (2,576 ) (14,061 ) (12,237 ) Other income (loss), net (6 ) 48 (11 ) 179 Interest income 6 3 12 161 Interest expense (1,625 ) (182 ) (5,198 ) (1,674 ) Loss on extinguishment of debt — — — (2,119 ) Loss on fair value of interest rate swap   —     —     —     (6,732 )  

Loss from continuing operations before income taxes and noncontrolling  interest

(5,918 ) (2,707 ) (19,258 ) (22,422 ) Provision (benefit) for income taxes 15,908 1,898 15,941 (682 ) Noncontrolling interest   (19 )   —     (25 )   11     Loss from continuing operations (21,845 ) (4,605 ) (35,224 ) (21,729 )   Income (loss) from discontinued operations (38,641 ) — (30,914 ) 208 Gain (loss) on sale of discontinued operations — (40 ) — 7,019 Provision for income taxes from discontinued operations   2,136     —     880     25   Net loss $ (62,622 ) $ (4,645 ) $ (67,018 ) $ (14,527 )   Income (loss) per share: Basic Loss from continuing operations $ (0.61 ) $ (0.13 ) $ (0.98 ) $ (0.60 ) Income (loss) from discontinued operations   (1.13 )   —     (0.88 )   0.20   Net loss $ (1.74 ) $ (0.13 ) $ (1.86 ) $ (0.40 )   Diluted Loss from continuing operations $ (0.61 ) $ (0.13 ) $ (0.98 ) $ (0.60 ) Income (loss) from discontinued operations   (1.13 )   —     (0.88 )   0.20   Net loss $ (1.74 ) $ (0.13 ) $ (1.86 ) $ (0.40 )   Shares used in computing income (loss) per share: Basic   35,967     36,813     35,967     36,377   Diluted   35,967     36,813     35,967     36,377    

WebMediaBrands Inc.

Consolidated Condensed Balance Sheets

December 31, 2008 and September 30, 2009

(in thousands, except share and per share amounts)

          December 31,2008

September 30,2009

(unaudited) ASSETS Current assets: Cash and cash equivalents $ 3,755 $ 4,134 Accounts receivable, net of allowances of $438 and $167, respectively 6,673 3,229 Prepaid expenses and other current assets 4,040 2,219 Deferred income taxes 53 — Assets of discontinued operations   14,138     —     Total current assets 28,659 9,582   Property and equipment, net of accumulated depreciation of $9,947 and $9,814, respectively 2,424 2,114 Intangible assets, net 3,060 2,362 Goodwill 26,062 27,378 Investments and other assets 2,564 1,137 Assets held for sale and of discontinued operations   101,324     3,200  

 

Total assets $ 164,093   $ 45,773     LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,074 $ 716 Accrued payroll and related expenses 1,557 1,533 Accrued expenses and other current liabilities 5,224 1,893 Current portion of long-term debt 81,213 — Deferred revenues 2,347 2,127 Liabilities of discontinued operations   25,937     —     Total current liabilities 117,352 6,269   Loan from related party — 7,197 Deferred revenues 108 100 Deferred income taxes 1,266 1,530 Fair value of interest rate swap 7,559 — Other long-term liabilities 205 158 Liabilities of discontinued operations   2,727     —     Total liabilities   129,217     15,254       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 36,976,237  shares issued, respectively

360 370 Additional paid-in capital 273,324 279,233 Accumulated deficit (234,479 ) (249,006 ) Treasury stock, 65,000 shares at cost (106 ) (106 ) Accumulated other comprehensive income (loss)   (4,223 )   28     Total stockholders’ equity   34,876     30,519     Total liabilities and stockholders’ equity $ 164,093   $ 45,773    

WebMediaBrands Inc.

Unaudited Consolidated Condensed Statements of Cash Flows

For the Nine Months Ended September 30, 2008 and 2009

(in thousands)

    Nine Months EndedSeptember 30,

2008

    2009 Cash flows from operating activities: Net loss $ (67,018 ) $ (14,527 ) Less: Income (loss) from discontinued operations, net of tax (31,794 ) 183 Less: Gain on sale of discontinued operations   —     7,019   Loss from continuing operations (35,224 ) (21,729 ) 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 3,193 1,524 Impairment — 662 Stock-based compensation 3,972 2,447 Provision for losses on accounts receivable 99 48 Noncontrolling interest 25 (11 ) Other income, net — (150 ) Amortization of debt issuance costs 223 11 Loss on extinguishment of debt — 2,119 Deferred income taxes 15,193 (2,561 ) Excess tax benefit from stock-based compensation — (3,226 ) Changes in operating assets and liabilities (net of businesses acquired/disposed): Accounts receivable, net 870 3,220 Prepaid expenses and other assets 1,452 4,520 Accounts payable and accrued expenses and other liabilities (1,231 ) (2,734 ) Deferred revenues 117 (228 ) Discontinued operations   23,529     (1,359 ) Net cash provided by (used in) operating activities   12,218     (10,715 ) Cash flows from investing activities: Purchases of property and equipment (1,973 ) (539 ) Purchases of businesses, assets and other (854 ) (1,630 ) Proceeds from sale of assets and other 295 — Proceeds from sale of discontinued operations — 91,205 Discontinued operations   (7,569 )   (217 ) Net cash provided by (used in) investing activities   (10,101 )   88,819   Cash flows from financing activities: Debt issuance costs (15 ) (384 ) Borrowings under long-term obligations 1,600 7,197 Settlement of interest rate swap — (6,732 ) Repayment of borrowings under credit facilities (6,615 ) (81,213 ) Proceeds from exercise of stock options 7 246 Excess tax benefit from stock-based compensation   —     3,226   Net cash used in financing activities   (5,023 )   (77,660 ) Effects of exchange rates on cash and cash equivalents   29     (65 ) Net change in cash and cash equivalents (2,877 ) 379 Cash and cash equivalents, beginning of period   7,301     3,755   Cash and cash equivalents, end of period $ 4,424   $ 4,134   Supplemental disclosures of cash flow: Cash refund of income taxes, net $ 1,204   $ 1,320   Cash paid for interest $ 5,062   $ 1,660     Non-cash investing activities: Acquisitions of long-lived assets $ 219   $ 23  

About WebMediaBrands Inc.

WebMediaBrands Inc. (Nasdaq: WEBM, www.webmediabrands.com) 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 successful completion of the sale of the Internet.com business to QuinStreet, Inc.; general economic conditions; 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