WEBM Webmediabrands (MM)

WebMediaBrands Inc. (Nasdaq: WEBM) today reported results for the quarter ended December 31, 2009.

Revenues for the fourth quarter of 2009 were $1.7 million compared to revenues of $1.8 million for the same period in 2008. Operating expenses, excluding impairment, for the fourth quarter of 2009 were $3.5 million compared to $7.6 million for the same period in 2008. Loss from continuing operations was $13.2 million during the fourth quarter of 2009 compared to $13.5 million during the same period in 2008. Loss from continuing operations during the fourth quarter of 2009 included a non-cash impairment charge of $12.6 million related to the write-down of goodwill, intangible assets and building and land.

“Revenues from our online advertising sales operations improved during the fourth quarter and were up 54% compared to the third quarter of 2009 and 148% for the same period in 2008. In addition, revenues from our job board operations continued to show steady improvement and were up 7% compared to the fourth quarter of 2008. Also, operating costs in this quarter reflect cost savings that we believe will continue into 2010,” stated Alan M. Meckler, Chairman and CEO of WebMediaBrands.

In November 2009, WebMediaBrands completed the sale of the assets related to its Internet.com business to QuinStreet, Inc. for an aggregate purchase price of $18.0 million in cash, subject to a working capital purchase price adjustment. Prior year financial results have been presented to include WebMediaBrands’s Internet.com business as a discontinued operation for the periods presented.

In February 2009, WebMediaBrands completed the sale of its online images business to Getty Images, Inc. Prior year financial results have been presented to reflect WebMediaBrands’s online images segment as a discontinued operation for the periods presented.

WebMediaBrands Inc. 4th Quarter 2009 Financial Results Conference Call Alert

WebMediaBrands Inc. invites you to participate in its conference call reviewing 2009 fourth quarter results on Tuesday, March 30, 2010 at 5:00 pm EDT.

The conference call number is 877-795-3613 for domestic participants and 719-325-4802 for international participants; confirmation code “4239586.” 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, April; 13, 2010. Replay call numbers are 888-203-1112 for domestic participants and 719-457-0820 for international participants; confirmation code “4239586.”

 

WebMediaBrands Inc.

Unaudited Consolidated Condensed Statements of Operations

For the Three and Twelve Months Ended December 31, 2008 and 2009

(in thousands, except per share amounts)

   

Three Months EndedDecember 31,

  Twelve Months EndedDecember 31, 2008   2009 2008   2009 Revenues

$

1,824

  $ 1,659   $ 8,858   $ 6,103   Cost of revenues (exclusive of items shown separately below) 1,753 1,116 5,279 4,217 Advertising, promotion and selling 848 409 2,179 1,759 General and administrative 3,704 1,690 19,113 11,272 Depreciation 195 183 588 698 Amortization 1,089 103 2,999 333 Impairment 4,617 12,634 4,617 13,296 Restructuring charge   —     —     —     876   Total operating expenses   12,206     16,135     34,775     32,451   Operating loss from continuing operations (10,382 ) (14,476 ) (25,917 ) (26,348 ) Other income (loss), net (71 ) (90 ) (59 ) 126 Interest income 1 3 13 164 Interest expense (1,954 ) (235 ) (7,152 ) (1,902 ) Loss on extinguishment of debt — — — (2,125 ) Loss on fair value of interest rate swap   —     —     —     (6,732 ) Loss from continuing operations before income taxes (12,406 ) (14,798 ) (33,115 ) (36,817 ) Provision (benefit) for income taxes   1,112     (1,646 )   8,074     (3,248 ) Loss from continuing operations (13,518 ) (13,152 ) (41,189 ) (33,569 )   Income (loss) from discontinued operations, net of taxes (36,145 ) 259 (75,492 ) (827 ) Gain on sale of discontinued operations, net of taxes   —     1,219     —     8,195   Net loss $ (49,663 ) $ (11,674 ) $ (116,681 ) $ (26,201 ) Income (loss) per share: Basic Loss from continuing operations $ (0.38 ) $ (0.36 ) $ (1.14 ) $ (0.92 ) Income (loss) from discontinued operations   (1.00 )   0.04     (2.10 )   0.20   Net loss $ (1.38 ) $ (0.32 ) $ (3.24 ) $ (0.72 ) Diluted Loss from continuing operations $ (0.38 ) $ (0.36 ) $ (1.14 ) $ (0.92 ) Income (loss) from discontinued operations   (1.00 )   0.04     (2.10 )   0.20   Net loss $ (1.38 ) $ (0.32 ) $ (3.24 ) $ (0.72 ) Shares used in computing income (loss) per share: Basic   35,967     36,931     35,967     36,516   Diluted   35,967     36,931     35,967     36,516      

WebMediaBrands Inc.

Unaudited Consolidated Condensed Balance Sheets

December 31, 2008 and 2009

(in thousands, except share and per share amounts)

    December 31,2008

December 31,2009

  ASSETS Current assets: Cash and cash equivalents $ 3,755 $ 15,012 Accounts receivable, net of allowances of $168 and $90, respectively 455 500 Prepaid expenses and other current assets 3,870 2,879 Assets of discontinued operations   20,578     —   Total current assets 28,658 18,391   Property and equipment, net 1,649 1,086 Intangible assets, net 2,002 990 Goodwill 16,314 9,495 Investments and other assets 2,549 1,051 Assets held for sale and of discontinued operations   112,921     2,000   Total assets $ 164,093   $ 33,013     LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 701 $ 566 Accrued payroll and related expenses 1,109 811 Accrued expenses and other current liabilities 4,971 2,516 Current portion of long-term debt 81,213 — Deferred revenues 1,204 955 Liabilities of discontinued operations   28,153     —   Total current liabilities 117,351 4,848   Loan from related party — 6,197 Deferred revenues 108 92 Deferred income taxes 2,190 1,122 Other long-term liabilities 7,764 586 Liabilities of discontinued operations   1,804     —   Total liabilities   129,217     12,845     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 37,060,723 shares issued at December 31, 2008 and 2009, respectively 360 371 Additional paid-in capital 273,324 280,556 Accumulated deficit

(234,479

)

(260,680 ) Treasury stock, 65,000 shares, at cost

(106

)

(106 ) Accumulated other comprehensive income (loss)  

(4,223

)

  27   Total stockholders’ equity   34,876     20,168   Total liabilities and stockholders’ equity $ 164,093   $ 33,013      

WebMediaBrands Inc.

Unaudited Consolidated Condensed Statements of Cash Flows

For the Years Ended December 31, 2008 and 2009 (in thousands)

  Year Ended December 31, 2008   2009 Cash flows from operating activities: Net loss

$

(116,681

)

$ (26,201 ) Less: Loss from discontinued operations, net of tax (75,492 ) (827 ) Less: Gain on sale of discontinued operations, net of tax   —     8,195   Loss from continuing operations (41,189 ) (33,569 ) Adjustments to reconcile net loss to net cash provided by operating activities: Loss on fair value of swap — 6,732 Impairment 4,617 13,296 Depreciation and amortization 3,587 1,031 Stock-based compensation 3,592 2,090 Provision for losses on accounts receivable 76 9 Other income, net 18 210 Amortization of debt issue costs 208 19 Loss on extinguishment of debt — 2,125 Deferred income taxes 5,460 (2,367 ) Excess tax benefit from stock-based compensation (1,813 ) (3,969 ) Changes in current assets and liabilities (net of businesses acquired): Accounts receivable, net 647 (58 ) Prepaid expenses and other assets 1,173 4,648 Accounts payable and accrued expenses

(131

)

(3,133 ) Deferred revenues

(178

)

(265

)

Discontinued operations   36,097     (1,009 ) Net cash provided by (used in) operating activities   12,164     (14,210 ) Cash flows from investing activities: Purchases of property and equipment

(1,323

)

(570

)

Acquisitions of businesses and other (1,369 )

(2,678

)

Proceeds from sale of discontinued operations — 106,806 Discontinued operations  

(9,855

)

 

(217

)

Net cash provided by (used in) investing activities  

(12,547

)

  103,341   Cash flows from financing activities: Borrowings from related party — 7,197 Borrowings under credit facilities 3,900 — Settlement of interest rate swap —

(6,732

)

Debt issuance costs (483 )

(364

)

Repayment of borrowings from related party —

(1,000

)

Repayment of borrowings under credit facilities

(6,813

)

(81,213

)

Proceeds from exercise of stock options 7 275 Excess tax benefit from stock-based compensation   1,813     3,969   Net cash used in financing activities   (1,576 )   (77,868 ) Effect of exchange rates on cash   (1,587 )   (6 ) Net increase (decrease) in cash and cash equivalents (3,546 ) 11,257 Cash and cash equivalents, beginning of year   7,301     3,755   Cash and cash equivalents, end of year $ 3,755   $ 15,012   Supplemental disclosures of cash flow: Cash refund of income taxes, net $ 1,026   $ 1,320   Cash paid for interest $ 7,008   $ 1,855   Non-cash investing activities: Acquisitions of long-lived assets $ 372   $ 28   Accrued acquisition contingency $ 61   $ 1,556    

About WebMediaBrands Inc.

WebMediaBrands Inc. (Nasdaq: WEBM, www.webmediabrands.com) is an Internet media company that provides content, education, trade shows and online job board services to media and business professionals.

"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: general economic conditions; the competitive environment in which WebMediaBrands competes; and the unpredictability of WebMediaBrands’s future revenues, expenses, cash flows and stock prices. 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