CMGI Reports First Quarter Fiscal Year 2005 Financial Results; Revenue and Operating Results up Significantly as a Result of Modus Acquisition.WALTHAM Waltham (wôl`thăm, –thəm), city (1990 pop. 57,878), Middlesex co., E Mass., a suburb of Boston, on the Charles River; settled c.1634, set off from Watertown 1738, inc. as a city 1884. , Mass. -- CMGI CMGI Commonly Maintained Grounds Infrastructures CMGI College Marketing Group Information (Services) , Inc. (Nasdaq: CMGI) today reported financial results for its first quarter ended October October: see month. 31, 2004. Q1 2005 vs. Q1 2004 Operating Highlights --Total Net Revenue, increased 171% to $257.1 million --Total Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , improved by 134% to $2.4 million --Non-GAAP Operating Income, improved by 385% to $9.0 million "I am pleased with today's announcement. The Modus MODUS, civil law. Manlier; means; way. MODUS, eccl. law. Where there is by custom a particular manner of tithing allowed, different from the general law of taking tithes in kind, as a pecuniary compensation, or the performance of labor, or when any means are adopted by which the Media acquisition, completed on August 2, has made CMGI a stronger company. The first quarter results, which are the first to include the results of the acquisition, reflect significant improvement in our operating and financial performance. Compared to a year ago, our revenues have more than doubled, with an operating income of $2.4 million. This is the company's first quarterly operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. in 9 years and demonstrates the progress we are making focusing on operations and executing our integration plan," said Joseph C. Lawler Lawler can refer to: People
CMGI reported net revenue of $257.1 million for the quarter ended October 31, 2004. This compares to net revenue of $94.9 million for the same period in fiscal 2004, an increase of $162.2 million, or 171%, year over year. This increase was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the acquisition of Modus, as well as new U.S.-based supply chain management customer programs awarded during the third quarter of fiscal 2004. CMGI reported operating income of $2.4 million for the first quarter of fiscal 2005, compared to an 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 $7.1 million for the same period in fiscal 2004, an increase of $9.5 million, or 134%, year over year. The increase in operating income was largely the result of the acquisition of Modus, and to a lesser extent, reductions in 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). costs and general and administrative expenses. In addition, including the impact of the acquisition of Modus, gross margins increased from 8% to 12%, year over year. Operating income for the first quarter of fiscal 2005 included charges related to the amortization of intangible assets Intangible Asset An 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 and depreciation totaling $5.2 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 $1.4 million. Included in the Company's operating loss for the first quarter of fiscal 2004 were charges related to the amortization of stock-based compensation and depreciation totaling $2.3 million, and net restructuring charges of $1.7 million. CMGI reported a net loss of $0.6 million, or ($0.00) 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 first quarter of fiscal 2005. This compares to 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 and represents a year over year decrease of $30.5 million, or 102%. Net income in the first quarter of fiscal 2004 included non-operating gains of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $42.1 million, of which approximately $40.5 million represents the gain on the sale 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. Excluding the effects of charges related to depreciation, amortization of intangible assets and stock-based compensation, 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. , and restructuring, CMGI reported non-GAAP operating income of $9.0 million for the first quarter of fiscal 2005. This compares to a non-GAAP operating loss of $3.2 million for the same period of the prior year, and represents an increase of $12.2 million, or 385%, year over year. The improvement in non-GAAP operating income was primarily attributable to the Modus acquisition, and to a lesser extent, reductions in general and administrative expenses within the Company's base business. The Company believes that its non-GAAP measure of operating income/(loss) ("non-GAAP operating income/(loss)") provides investors with a useful supplemental measure of the Company's operating performance by excluding the impact of 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. Each of these items was excluded because they may be considered to be of a non-operational nature. Historically, the Company has recorded significant impairment and restructuring charges and therefore management uses non-GAAP operating income/(loss) to assist in evaluating the performance of the Company's core operations. Non-GAAP operating income/(loss) does 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 therefore is unlikely to be comparable to similar measures presented by other reporting companies. These non-GAAP results should not be evaluated in isolation of, or as a substitute for 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 income/(loss) to its GAAP operating income/(loss) is included in the statements of operations information in this release. As of October 31, 2004, CMGI had 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, 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 $180.2 million, versus consolidated cash, cash equivalents and marketable securities of $272.2 million at the end of the prior quarter. Cash, cash equivalents and marketable securities decreased in the first quarter of fiscal 2005 primarily due to a net cash payment of approximately $66.2 million to retire retire v. 1) to stop working at one's occupation. 2) to pay off a promissory note, and thus "retire" the loan. 3) for a jury to go into the jury room to decide on a verdict after all evidence, argument and jury instructions have been completed. the Modus' debt and pay certain deal-related costs. The additional cash usage during the quarter was primarily related to funding the ongoing operating activities of the Company and certain remaining obligations relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc prior restructuring initiatives. Conference Call Scheduled for December December: see month. 6th CMGI will hold a conference call to discuss its fiscal 2005 first quarter results at 5:00 p.m. Eastern Time on December 6, 2004. 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), through its subsidiaries, ModusLink and SalesLink, provides technology and product solutions that help businesses market, sell and distribute their products and services. CMGI's venture capital affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. , @Ventures, invests venture capital in a variety of technology ventures. For additional information see www.cmgi.com. 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 benefits of the Modus acquisition and our integration efforts, and our anticipated operating performance in our target markets. 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 To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution on its business strategy and the continued and increased demand for and market acceptance of its products and services; the possibility that expected benefits of the Modus acquisition or the financial forecasts of CMGI following the Modus acquisition may not be achieved, due to problems or unexpected costs that may arise in successfully integrating the Modus business or an inability to realize expected synergies or make expected future investments in the combined businesses; CMGI's management may face strain on managerial and operational resources as they try to oversee the expanded operations; CMGI may not be able to expand its operations in accordance with its business strategy; CMGI's cash balances may not be sufficient to allow CMGI to meet all of its business and investment goals; 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,
2004 2004 2003
----------- -------- -----------
Net revenue $ 257,126 $ 96,466 $ 94,888
Operating expenses:
Cost of revenue 225,475 90,392 87,410
Selling 5,550 1,751 1,197
General and administrative 19,479 9,469 11,637
Amortization of intangible
assets and stock-based
compensation 2,852 71 102
Restructuring, net 1,336 38 1,686
----------- -------- -----------
Total operating expenses 254,692 101,721 102,032
----------- -------- -----------
Operating income (loss) 2,434 (5,255) (7,144)
Other income (deductions):
Other gains (losses), net (1,870) (85) 42,144
Minority interest 3 43 (2,281)
Equity in income (losses)
of affiliates, net 199 (785) 44
Interest income 630 748 974
Interest expense (423) (505) (396)
----------- -------- -----------
Total (1,461) (584) 40,485
----------- -------- -----------
Income (loss) from continuing
operations before income taxes 973 (5,839) 33,341
Income tax expense 1,526 649 2,989
----------- -------- -----------
Income (loss) from continuing
operations (553) (6,488) 30,352
Discontinued operations, net
of income taxes:
Loss from discontinued
operations - (314) (491)
----------- -------- -----------
Net income (loss) $ (553) $ (6,802) $ 29,861
=========== ======== ===========
Basic earnings (loss) per share:
Earnings (loss) from
continuing operations $ (0.00) $ (0.02) $ 0.08
Loss from discontinued
operations $ (0.00) $ (0.00) $ (0.00)
----------- -------- -----------
Earnings (loss) $ (0.00) $ (0.02) $ 0.08
=========== ======== ===========
Diluted earnings (loss) per share:
Earnings (loss) from
continuing operations $ (0.00) $ (0.02) $ 0.07
Loss from discontinued
operations $ (0.00) $ (0.00) $ (0.00)
----------- -------- -----------
Earnings (loss) $ (0.00) $ (0.02) $ 0.07
=========== ======== ===========
Shares used in computing
basic earnings (loss) per share 469,720 400,845 395,735
=========== ======== ===========
Shares used in computing
diluted earnings (loss) per share 469,720 400,845 402,535
=========== ======== ===========
CMGI, Inc. and Subsidiaries
Consolidated Statements of Operations
Information
(In thousands)
(Unaudited)
Three months ended
October 31, July 31, October 31,
2004 2004 2003
----------- --------- --------
Net revenue:
-----------
eBusiness and Fulfillment
Americas $ 107,266 $ 55,261 $ 51,720
Asia 51,329 7,350 9,242
Europe 98,453 33,744 33,761
----------- --------- --------
Total eBusiness and Fulfillment 257,048 96,355 94,723
Managed Application Services 78 111 165
----------- --------- --------
$ 257,126 $ 96,466 $ 94,888
=========== ========= ========
Operating income (loss):
-----------------------
eBusiness and Fulfillment
Americas $ 313 $ 130 $ (33)
Asia 6,907 (129) (246)
Europe (1,205) (409) 1,091
----------- --------- --------
Total eBusiness and Fulfillment 6,015 (408) 812
Enterprise Software and Services - 23 -
Managed Application Services 78 85 161
Other (3,659) (4,955) (8,117)
----------- --------- --------
$ 2,434 $ (5,255) $ (7,144)
=========== ========= ========
Non-GAAP operating income (loss):
---------------------------------
eBusiness and Fulfillment
Americas $ 2,593 $ 1,574 $ 1,268
Asia 9,179 (129) (217)
Europe 447 (409) 1,139
----------- --------- --------
Total eBusiness and Fulfillment 12,219 1,036 2,190
Managed Application Services 78 111 161
Other (3,297) (4,895) (5,506)
----------- --------- --------
$ 9,000 $ (3,748) $ (3,155)
=========== ========= ========
Note: Non-GAAP operating income (loss) represents total operating
income (loss), excluding net charges related to depreciation,
amortization of intangible assets and stock-based compensation
and restructuring.
TABLE RECONCILING GAAP OPERATING INCOME (LOSS) TO NON-GAAP
OPERATING INCOME (LOSS)
GAAP Operating income (loss) $ 2,434 $ (5,255) $ (7,144)
Adjustments:
Depreciation 2,378 1,398 2,201
Amortization of intangible assets
and stock-based compensation 2,852 71 102
Restructuring, net 1,336 38 1,686
----------- --------- --------
Non-GAAP Operating income
(loss) $ 9,000 $ (3,748) $ (3,155)
=========== ========= ========
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