CMGI Announces Fourth Quarter and Year End Fiscal 2002 Financial Results.Business Editors 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, , Mass.--(BUSINESS WIRE)--Oct. 24, 2002 CMGI CMGI Commonly Maintained Grounds Infrastructures CMGI College Marketing Group Information (Services) , Inc. (Nasdaq: CMGI) today reported financial results for the fourth quarter and fiscal year ended July July: see month. 31, 2002. The Company's results of operations discussed herein exclude the results of operations of the Company's former majority-owned subsidiary majority-owned subsidiary A firm in which more than 50% of outstanding voting stock is owned by the parent company. , NaviSite, Inc. ("NaviSite"). On September September: see month. 11, 2002, the Company sold all of its equity and debt ownership interests in NaviSite to ClearBlue Technologies, Inc. ("ClearBlue"). As a result of the transaction, the historical results of operations of NaviSite have been accounted for as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. 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 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 , and are not included in the Company's results of 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 discussed herein. Fourth Quarter CMGI reported net revenue of $145 million for the fourth fiscal quarter ended July 31, 2002. This compares to net revenue of $177 million for the quarter ended April 30, 2002, a decrease of 18%. CMGI reported a 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. of $189 million for the quarter ended July 31, 2002, compared to a total operating loss of $132 million for the quarter ended April 30, 2002, representing a 43% increase in operating loss quarter over quarter. Included in the fourth quarter operating loss was a non-recurring charge of $20 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the amendment of the Company's stadium naming rights Naming rights are the right to name a piece of property, either tangible property or an event, usually granted in exchange for financial considerations. Institutions like schools, places of worship and hospitals have a tradition of granting donors the right to name facilities in arrangement with the New England Patriots  Editing of this page by unregistered or newly registered users is currently disabled until (UTC) due to vandalism. . Also included in the fourth
quarter loss were charges related to amortization of intangible assets Intangible AssetAn asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and stock-based compensation ("amortization charges") and depreciation totaling $72 million, long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. asset 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. charges of $56 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 $10 million. Third quarter fiscal 2002 total operating loss included charges related to amortization and depreciation totaling $73 million, long lived asset impairment charges of $3 million and a net restructuring charge of $4 million. Excluding the effects of charges related to in-process research and development, depreciation, amortization, long-lived asset impairment and 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). , CMGI reported a 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 loss(1) of $50 million or ($0.13) pro forma operating loss(1) per share for the quarter ended July 31, 2002 versus a pro forma operating loss(1) of $51 million or ($0.13) pro forma operating loss(1) per share in the previous quarter ended April 30, 2002. Included in the fourth quarter pro forma loss(1) was a $20 million non-recurring charge related to the amendment of the Company's naming rights and sponsorship arrangement with the New England Patriots, and a benefit of $8 million from the finalization Writing the table of contents (TOC) on a recordable CD or DVD disc. The finalization process ensures that the disc can be played back on most CD and DVD players. See disc-at-once. of estimates associated with the closure activities of certain of the Company's subsidiaries. Excluding the charge and benefit, our pro forma operating loss(1) would have been $38 million. CMGI reported a net loss of $217 million or ($0.55) loss per share for the fourth quarter of fiscal 2002, compared to a net loss of $125 million or ($0.32) loss per share for the quarter ended April 30, 2002. As of July 31, 2002, CMGI had a consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: cash and cash equivalents balance of $257 million. Total cash and cash equivalent usage in the fourth quarter was $44 million, versus $79 million for the previous quarter. The fourth quarter cash usage included a net cash outlay of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $44 million for the acquisition of the worldwide assets and operations of iLogistix, offset by cash proceeds from the maturities of available-for-sale securities of $16 million. Excluding the impact of the iLogistix acquisition our cash balance would have been $301 million. 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
tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. segment through acquisition, significantly expanding the Company's presence in supply chain management by acquiring iLogistix, a profitable and cash positive business. After the quarter closed, CMGI sold its equity and debt ownership interests in Engage, sold its equity and debt ownership interests in NaviSite, and sold its equity ownership in Equilibrium equilibrium, state of balance. When a body or a system is in equilibrium, there is no net tendency to change. In mechanics, equilibrium has to do with the forces acting on a body. . We continue to be disciplined in our cash management to ensure that we have the necessary capital to grow our business. The cash acquisition of iLogistix illustrates this point. "CMGI will continue to invest in e-Commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. and e-Commerce related Services, Technology Services and Supply Chain Management. CMGI continues to focus on product development, customer acquisition, strategic competitive position and profitability," Mr. McMillan Mc·Mil·lan , Edwin Mattison 1907-1991. American physicist and chemist. He shared a 1951 Nobel Prize for the discovery of neptunium (1940). concluded. CMGI's portion of @Ventures investments made during the quarter totaled $747,000, consisting of follow-on fol·low-on adj. Following as a related or consequent aspect or development: "Such contracts involve follow-on sales of maintenance services" Christian Science Monitor. investments in Realm REALM. A kingdom; a country. 1 Taunt. 270; 4 Campb. 289; Rose, R. 387. Business Solutions, Inc. Investments for the fiscal year ended July 31, 2002, totaled $8.2 million. Fiscal Year CMGI reported net revenue of $708 million for the fiscal year ended July 31, 2002. This compares to net revenue of $1.17 billion for the year ended July 31, 2001, a decrease of 39%. CMGI reported a total operating loss of $591 million for the year ended July 31, 2002, compared to a total operating loss of $5.75 billion for the year ended July 31, 2001, representing a 90% decrease in operating loss from the prior year. Included in the fiscal 2002 operating loss were charges related to amortization of intangible assets and stock based compensation ("amortization charges") and depreciation totaling $298 million, long-lived asset impairment charge of $73 million, and net restructuring charges of $26 million. Fiscal 2001 total operating loss included charges related to amortization and depreciation totaling $1.63 billion, long lived asset impairment charges of $3.36 billion and a net restructuring charge of $209 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 $194 million or ($0.51) pro forma operating loss(1) per share for the year ended July 31, 2002 versus a pro forma operating loss(1) of $550 million or ($1.67) pro forma operating loss(1) per share in the previous year ended July 31, 2001. CMGI reported a net loss of $552 million for fiscal 2002, compared to a net loss of $5.49 billion for fiscal 2001. CMGI's net loss available to common stockholders for fiscal 2002 was $490 million, or ($1.29) loss per share, compared to a net loss available to common stockholders of $5.50 billion, or $(16.67) loss per share, for fiscal 2001. Outlook Consolidated net revenue for the first quarter of fiscal 2003 is expected to be approximately $178 million to $182 million. Pro forma operating loss(1) for the first quarter of fiscal 2003 is expected to be approximately $37 million to $40 million. This amount includes $5 million in losses related to divested companies. Consolidated cash and cash equivalents balance exiting the first quarter of fiscal 2003 is expected to be approximately $180 million. In addition, total cash and cash equivalents usage in the first quarter of fiscal 2003 is expected to be approximately $77 million, of which approximately $15 million relates to the cash and cash equivalent balances of Engage and Equilibrium, which were divested subsequent to July 31, 2002. The $77 million also includes payments for lease terminations and payments related to CMGI's Series C payment obligations. "We have made significant progress this year but there is still more work to be done. Going forward, we will continue to complete key acquisitions and divestitures to ensure we have the right composition of core businesses as defined by our strategic plan. We remain focused on strengthening our competitive position and achieving profitability," said McMillan. Our prior guidance indicated we expected to reach break even on a consolidated pro forma operating basis in the first half of fiscal year 2003. We currently expect a $10 - $15 million pro forma operating loss(1) in the second quarter of fiscal 2003, and to reach break even on a consolidated pro forma operating basis in the third quarter of fiscal 2003, both dependent on the actual timing of divestitures of certain non core assets and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. the costs related to shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down of certain subsidiaries for which a buyer cannot be found. 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 (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. . 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 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 (U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). Non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .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 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 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 financial results of CMGI and its operating companies operating company A business that engages in transactions with outsiders. for the first 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, web sites and 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 in general; CMGI may experience difficulties integrating technologies, operations and personnel in accordance with its business strategy; 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 Quarterly Report on Form 10-Q Form 10-Q See 10-Q. . 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 Fiscal Year ended
July 31, April 30, July 31, July 31, July 31,
2002 2002 2001 2002 2001
Net revenue:
Enterprise Software
and Services $ 29,489 $ 36,522 $ 60,496 $ 152,163 $ 410,732
eBusiness and
Fulfillment 115,440 140,582 162,890 542,913 691,414
Managed Application
Services 205 139 11,370 6,158 49,054
Portals - 211 3,304 6,536 19,053
$ 145,134 $ 177,454 $ 238,060 $ 707,770 $ 1,170,253
Operating loss:
Enterprise Software
and Services $(127,592) $(68,279) $(772,190) $(350,793)$(4,869,854)
eBusiness and
Fulfillment (44,243) (53,536) (44,746) (179,558) (179,375)
Managed Application
Services 27 232 (73,454) 2,368 (301,244)
Portals 4,644 (95) (121,646) (1,747) (301,396)
Other (21,873) (10,368) (32,562) (61,230) (102,770)
$(189,037)$(132,046)$(1,044,598)$(590,960)$(5,754,639)
Pro forma operating loss:
Enterprise Software
and Services $ (24,988) $ (22,598)$ (36,474) $ (88,451) $ (267,410)
eBusiness and
Fulfillment (11,940) (20,690) (6,453) (49,364) (16,461)
Managed Application
Services 1,024 32 (18,774) (12,056) (138,269)
Portals 5,568 353 (2,142) 5,628 (42,138)
Other (20,138) (8,497) (20,385) (49,384) (85,858)
$(50,474) $(51,400) $(84,228) $(193,627) $(550,136)
Note: Pro forma operating income (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 $(189,037) $(132,046)$(1,044,598)$(590,960)$(5,754,639)
Adjustments:
In-process research
and development - - - - 1,462
Depreciation 9,365 9,516 14,682 41,998 73,607
Amortization of
intangibles and
stock-based
compensation 63,074 63,476 178,624 256,012 1,556,909
Long-lived asset
impairments 56,361 3,438 685,254 73,114 3,363,317
Restructuring
charge (benefit) 9,763 4,216 81,810 26,209 209,208
Pro forma operating
loss $(50,474) $(51,400) $(84,228) $(193,627) $(550,136)
CMGI, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three months ended Fiscal Year ended
July 31, April 30, July 31, July 31, July 31,
2002 2002 2001 2002 2001
Net revenue $ 145,134 $ 177,454 $ 238,060 $ 707,770 $ 1,170,253
Operating expenses:
Cost of revenue 123,399 157,780 211,365 608,028 1,038,894
Research and
development 12,180 12,457 22,333 53,738 144,886
In-process research
and development - - - - 1,462
Selling 47,164 32,257 55,306 153,274 361,417
General and
administrative 22,230 35,876 47,966 128,355 248,799
Amortization of
intangible assets
and stock-based
compensation 63,074 63,476 178,624 256,012 1,556,909
Impairment of
long-lived
assets 56,361 3,438 685,254 73,114 3,363,317
Restructuring 9,763 4,216 81,810 26,209 209,208
Total operating
expenses 334,171 309,500 1,282,658 1,298,730 6,924,892
Operating loss (189,037) (132,046)(1,044,598) (590,960)(5,754,639)
Other income (deductions):
Gains (losses) on
issuance of stock
by subsidiaries and
affiliates, net - - (644) - 121,794
Other losses,
net (33,708) (8,080) (481,492) (68,503) (409,095)
Minority interest 13,768 5,239 127,106 44,295 493,814
Equity in losses of
affiliates (12) (2,003) (6,285) (15,408) (45,661)
Interest income 5,153 2,103 9,220 16,793 51,280
Interest (expense)
benefit, net 14,634 (1,802) (8,397) 19,293 (46,310)
Total (165) (4,543) (360,492) (3,530) 165,822
Loss from continuing
operations before income
taxes and extraordinary
item (189,202) (136,589)(1,405,090) (594,490)(5,588,817)
Income tax
benefit (3,216) (15,000) (107,644) (7,431) (184,404)
Loss from continuing
operations before
extraordinary
item (185,986) (121,589)(1,297,446) (587,059)(5,404,413)
Discontinued operations,
net of income taxes:
Loss from discontinued
operations (4,119) (3,623) (29,597) (69,140) (83,507)
Estimated loss on
disposal of discontinued
operations (26,717) - - (26,717) -
Extraordinary item,
net of income taxes:
Gain on extinguishment
of notes payable to
Hewlett Packard
Company - - - 131,281 -
Net loss (216,822) (125,212)(1,327,043) (551,635)(5,487,920)
Preferred stock
accretion - - (1,890) (2,301) (7,499)
Gain on repurchase
of Series C Convertible
Preferred Stock - - - 63,505 -
Net loss available
to common
stockholders $(216,822) $(125,212)$(1,328,933)$(490,431)$(5,495,419)
Basic and diluted
loss per share
available to common
stockholders:
Loss from continuing
operations before
extraordinary
item $(0.47) $(0.31) $(3.75) $(1.39) $(16.42)
Loss from discontinued
operations (0.01) (0.01) (0.09) (0.18) (0.25)
Estimated loss on
disposal of discontinued
operations (0.07) - - (0.07) -
Gain on extinguishment
of notes payable to
Hewlett Packard
Company - - - 0.35 -
Net loss available
to common
stockholders $(0.55) $(0.32) $(3.84) $(1.29) $(16.67)
Shares used in computing
basic and diluted
loss per share 392,380 392,025 345,834 379,800 329,623
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