CMGI Announces First Quarter Fiscal 2004 Financial Results.Business Editors/High-Tech Writers CHARLESTOWN Charlestown, town, St. Kitts-Nevis Charlestown, town (1991 pop. 1,411) on the island of Nevis, St. Kitts and Nevis, West Indies. Charlestown is the chief town and port of the island. , Mass.--(BUSINESS WIRE)--Dec. 8, 2003 CMGI CMGI Commonly Maintained Grounds Infrastructures CMGI College Marketing Group Information (Services) , Inc. (Nasdaq: CMGI) today reported financial results for its fiscal 2004 first quarter ended October October: see month. 31, 2003. Key Financial Metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. : Q1 2004 Over Q4 2003 -- Total Net Revenue, Down 3% -- Total Operating Loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. , Improved 79% -- Net Income, Up 282% -- Non-GAAP operating loss(1), Improved 35% First Quarter CMGI reported net revenue from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $94.9 million for its fiscal 2004 first quarter ended October 31, 2003. This compares to net revenue of $97.9 million for the fourth quarter ended July July: see month. 31, 2003, a decrease of $3.0 million, or 3%. This decrease was primarily due to lower order volumes in the U.S. supply chain management business of the Company's SalesLink subsidiary. CMGI reported an operating loss from continuing operations of $7.1 million for the first quarter ended October 31, 2003, compared to an operating loss of $33.9 million for the fourth quarter ended July 31, 2003, representing a $26.8 million, or 79%, decrease in operating loss from continuing operations quarter over quarter. The fiscal 2004 first quarter operating loss from continuing operations included charges related to the amortization of stock-based compensation and depreciation totaling $2.3 million and net restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $1.7 million. Included in the Company's fourth quarter operating loss from continuing operations were charges related to the amortization of stock-based compensation and depreciation totaling $2.9 million, and net restructuring charges of $26.2 million. The restructuring charges in the fourth quarter included a $15.4 million charge related to the buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. of the Company's lease for its former headquarters building in Andover Andover (ăn`dōvər), town (1990 pop. 29,151), Essex co., NE Mass.; inc. 1646. Chiefly a textile producer in the 19th cent., Andover now makes toiletries, electronic and computer equipment, chemicals, medical instruments, rubber products, Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. , and a $4.6 million charge related to facility lease
obligations from SalesLink's restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of its North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. supply chain capacity.
CMGI reported net income of $29.9 million, or $0.07 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of , for the first quarter of fiscal 2004, compared to a net loss of $16.4 million, or ($0.04) diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. loss per share, for the fourth quarter ended July 31, 2003. Net income in the first quarter of fiscal 2004 included net non-operating gains of approximately $42.1 million, of which approximately $40.5 million represents the gain on the sale by AltaVista (AltaVista Company, Palo Alto, CA, www.altavista.com) The first search engine to index every word on a page and provide a retrieval system to extract relevant information. Developed by Digital's Research Labs in Palo Alto in 1995, the AltaVista search engine is available in more than 25 of approximately 3.2 million shares of Overture overture, instrumental musical composition written as an introduction to an opera, ballet, oratorio, musical, or play. The earliest Italian opera overtures were simply pieces of orchestral music and were called sinfonie. Services, Inc. common stock. Net income in the first quarter of fiscal 2004 also included a loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $0.5 million, or $0.00 loss per share. Net loss in the fourth quarter of fiscal 2003 primarily included income from discontinued operations of $13.2 million, or $0.03 earnings per share. The income from discontinued operations during the fourth quarter of fiscal 2003 included a $10.5 million benefit related to the reversal of net liabilities of a subsidiary that entered into an assignment for the benefit of creditors in June June: see month. 2001. The reversal was triggered by the conclusion of the assignment for the benefit of creditors proceedings as they related to CMGI. Excluding the effects of charges related to depreciation, amortization and restructuring, CMGI reported a non-GAAP operating loss(1) from continuing operations of $3.2 million for the first quarter ended October 31, 2003, a 35% improvement versus the non-GAAP operating loss(1) from continuing operations of $4.9 million in the fourth quarter ended July 31, 2003. The decrease in non-GAAP operating loss(1) from continuing operations in the first quarter was primarily the result of lower operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. in the first quarter as compared to the fourth quarter as a result of continued cost reduction efforts. The Company believes that its non-GAAP measure of operating income/(loss) from continuing operations ("non-GAAP operating income/(loss) (1)") provides investors with a useful supplemental measure of the Company's operating performance by excluding the impact of one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gains/(losses), non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. , and restructuring activities. Historically, the Company has recorded significant one-time gains/(losses), and impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. and restructuring charges and therefore management uses non-GAAP operating income/(loss)(1) to assist in evaluating the Company's operating performance. These non-GAAP results should be evaluated in light of the Company's financial results prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). A table reconciling the Company's non-GAAP operating loss to its GAAP net income/(loss) is included in the consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge in this release. As of October 31, 2003, CMGI had consolidated cash, cash equivalents and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of $269.7 million, versus consolidated cash, cash equivalents and marketable securities of $276.1 million for the prior quarter. Cash, cash equivalents and marketable securities decreased in the first quarter of fiscal year 2004 primarily due to cash usage from operating activities of continuing operations of approximately $4.6 million. This cash usage for operating activities of continuing operations was significantly better than the comparable cash usage of $43.5 million for the fourth quarter of fiscal year 2003. George McMillan George Duncan Hastie McMillan, Jr. (born October 11 1943) is an American politician who served as Lieutenant Governor of Alabama from 1979 to 1983. External links
Basis of Presentation The Company's results of continuing operations discussed herein exclude the results of operations of the Company's former operating companies operating company A business that engages in transactions with outsiders. AltaVista and uBid, each of which sold substantially all of their assets, Engage, NaviSite, Yesmail, and Tallan, each of which were divested, and ProvisionSoft, which ceased operations, during the fiscal year ended July 31, 2003. The results of operations of each of these former operating companies have been reported as discontinued operations in accordance with generally accepted accounting principles. As of October 31, 2003, the Company's operating businesses included its wholly-owned subsidiary, SalesLink Corporation ("SalesLink") and SL Supply Chain Services International Corp., a wholly-owned subsidiary of SalesLink, each of which operate within the Company's eBusiness and Fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. segment. The Company also continues to hold investments in various companies through its @Ventures venture capital affiliates. Conference Call Scheduled for December 8th CMGI will hold a conference call to discuss its fiscal 2004 first quarter results at 5:00 p.m. Eastern Time on December 8, 2003. Investors can listen to the conference call on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.cmgi.com/investor. To listen to the live call, go to the Web site at least 15 minutes prior to the start time to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install the necessary audio software. About CMGI CMGI, Inc. (Nasdaq: CMGI) provides technology and commerce solutions that help businesses market, sell and distribute their products and services. CMGI offers industry-leading global supply chain management and distribution and fulfillment services. For additional information, see www.cmgi.com. (1) The non-GAAP operating results are not a recognized measure for financial statement presentation under United States generally accepted accounting principles (U.S. GAAP). Non-U.S. GAAP earnings measures do not have any standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. definition and are therefore unlikely to be comparable to similar measures presented by other reporting companies. This non-GAAP measure is provided to assist readers in evaluating CMGI's operating performance and each of the items listed (depreciation, amortization of stock-based compensation and restructuring) were excluded because they were considered to be of a non-operational nature. Readers are encouraged to consider this non-GAAP measure in conjunction with CMGI's U.S. GAAP results. Previously, CMGI referred to this measure as "pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma operating income/(loss)." This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , which address a variety of subjects including, for example, the expected outlook for the markets in which CMGI operates and the expected ability of CMGI to preserve and utilize its capital resources to grow its businesses. 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 success, including its ability to decrease its cash burn rate, improve its cash position, expand its operations 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 its products and services; CMGI may not be able to expand its operations in accordance with its business strategy, 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 financial condition and results of operations; 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three months ended
October 31, July 31, October 31,
2003 2003 2002
-------- -------- --------
Net revenue $ 94,888 $ 97,882 $ 113,222
Operating expenses:
Cost of revenue 87,410 90,389 104,363
Research and development - - 332
Selling 1,197 1,446 2,087
General and administrative 11,637 13,741 22,121
Amortization of stock-based
compensation 102 54 55
Restructuring, net 1,686 26,204 165
-------- -------- --------
Total operating expenses 102,032 131,834 129,123
-------- -------- --------
Operating loss (7,144) (33,952) (15,901)
Other income (deductions):
Other gains (losses), net 42,144 4,363 (57,540)
Minority interest (2,281) 69 65
Equity in income (losses) of
affiliates, net 44 163 (515)
Interest income 974 734 1,167
Interest (expense) recovery, net (396) (409) 26,887
-------- -------- --------
Total 40,485 4,920 (29,936)
-------- -------- --------
Income (loss) from continuing
operations before income taxes 33,341 (29,032) (45,837)
Income tax expense 2,989 582 856
-------- -------- --------
Income (loss) from continuing
operations 30,352 (29,614) (46,693)
Discontinued operations, net of
income taxes:
Income (loss) from discontinued
operations (491) 13,224 (46,891)
Net income (loss) $ 29,861 $ (16,390) $ (93,584)
======== ======== ========
Basic earnings (loss) per share:
Earnings (loss) from continuing
operations $ 0.08 $ (0.07) $ (0.12)
Earnings (loss) from discontinued
operations $ - $ 0.03 $ (0.12)
-------- -------- --------
Earnings (loss) $ 0.08 $ (0.04) $ (0.24)
======== ======== ========
Diluted earnings (loss) per share:
Earnings (loss) from continuing
operations $ 0.07 $ (0.07) $ (0.12)
Earnings (loss) from discontinued
operations $ - $ 0.03 $ (0.12)
-------- -------- --------
Earnings (loss) $ 0.07 $ (0.04) $ (0.24)
======== ======== ========
Shares used in computing basic
earnings (loss) per share 395,735 394,514 392,682
======== ======== ========
Shares used in computing diluted
earnings (loss) per share 402,535 394,514 392,682
======== ======== ========
CMGI, Inc. and Subsidiaries
Consolidated Statements of Operations Information
(In thousands)
(Unaudited)
Three months ended
October 31, July 31, October 31,
2003 2003 2002
-------- -------- --------
Net revenue:
------------
eBusiness and Fulfillment $ 94,723 $ 97,545 $ 112,859
Enterprise Software and Services - - 227
Managed Application Services 165 337 136
------- -------- --------
$ 94,888 $ 97,882 $ 113,222
======= ======== ========
Operating income (loss):
------------------------
eBusiness and Fulfillment $ 812 $ (7,036) $ 282
Enterprise Software and Services - 120 (966)
Managed Application Services 161 (904) 136
Portals - (436) -
Other (8,117) (25,696) (15,353)
------- -------- --------
$ (7,144) $ (33,952) $ (15,901)
======= ======== ========
Non-GAAP operating income (loss):
---------------------------------
eBusiness and Fulfillment $ 2,190 $ 695 $ 1,741
Enterprise Software and Services - 50 (911)
Managed Application Services 161 652 136
Portals - 55 -
Other (5,506) (6,333) (13,854)
------- -------- --------
$ (3,155) $ (4,881) $ (12,888)
======= ======== ========
Note: Non-GAAP operating income (loss) represents total operating
income (loss), excluding net charges related to depreciation,
amortization of stock-based compensation and restructuring.
TABLE RECONCILING GAAP OPERATING INCOME (LOSS) TO NON-GAAP
OPERATING INCOME (LOSS)
GAAP Operating Loss $ (7,144) $ (33,952) $ (15,901)
Adjustments:
Depreciation 2,201 2,813 2,793
Amortization of stock-based
compensation 102 54 55
Restructuring, net 1,686 26,204 165
------- -------- --------
Non-GAAP Operating Loss $ (3,155) $ (4,881) $ (12,888)
======= ======== ========
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