InfoSpace Reports Fourth Quarter and Year End Financial Results; Merchant Services Processed More Than $1 Billion in Transactions During the Quarter.Business Editors BELLEVUE, Wash.--(BUSINESS WIRE)--Jan. 29, 2002 Renewed Agreements with ALLTEL and AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. , Among Others; Wireless Revenues From the U.S. and Europe Grew More Than 10% Over Last Quarter InfoSpace, Inc. (Nasdaq:INSP INSP Inspection INSP Inspector INSP Inspect INSP Inspirational Network INSP Institut des Nanosciences de Paris (French) INSP International Nuclear Safety Program INSP International Network on Strategic Philanthropy ), a provider of wireless and Internet software and application services See ASP and Web services. , today announced fourth quarter revenues of $31.4 million and full year revenues of $161.9 million. 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 net loss for the fourth quarter was $5.4 million, or a loss of $0.02 per basic share. Pro forma net loss for the year was $18.2 million, or $0.06 per basic share. Pro forma excludes amortization of intangibles and certain other items as detailed in the footnotes in the following financial tables. Based on 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). ), net loss for the fourth quarter was $98.8 million, or a loss of $0.32 per basic share. Net loss for the year was $498.8 million, or a loss of $1.57 per basic share. Financial and operating highlights: -- Merchant services processed more than $1 billion in transactions during the quarter, up from $700 million reported last quarter. Number of transactions processed grew to more than 12 million, up from 9 million reported last quarter. -- Wireless revenues from the U.S. and Europe grew more than 10% over last quarter. -- Renewed agreements with ALLTEL and AOL, among others, and announced new agreements with merchant partners Dominion (Verizon Canada), Barnes&Noble.com and Moneris and wireline partners Overture and AT&T. -- Net cash used in operations was $3.6 million. -- Balance sheet remains strong with no debt. InfoSpace has cash, investment grade securities and a federal payroll tax receivable totaling $307 million. In addition, the Company has investments in private and public securities of $47 million. "We are feeling better about our near and long-term prospects and believe we have turned a corner in our business," said Naveen Jain BIO Naveen Jain is a founder and CEO at Intelius, headquartered in Bellevue, Washington. Intelius was started in Janurary 2003 with a mission to empower consumers with online information for personal protection and intelligent decisions. , chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of InfoSpace. "My optimism stems from our ability to renew existing contracts, as we did with ALLTEL and AOL, launch new services with existing partners, as we did with AT&T, Verizon and Cingular and sign new customers, as we did with Dominion dominion, power to rule, or that which is subject to rule. Before 1949 the term was used officially to describe the self-governing countries of the Commonwealth of Nations—e.g., Canada, Australia, or India. (Verizon Canada), Omne Communications and Moneris, among others." "We are pleased with our results as they demonstrate that we are focused on securing long-term recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenue streams, capitalizing on our strong balance sheet by investing in our future, and reaching our number one goal of pro-forma break-even by the end of 2002," said Tammy Halstead, chief financial officer of InfoSpace. Wireless InfoSpace's Wireless group continues to expand its position as a leading provider of innovative solutions designed to help wireless carriers increase usage and drive new revenue streams. For the year, InfoSpace exceeded its guidance of more than 5 million registered wireless subscribers. During the fourth quarter, InfoSpace renewed contracts with partners, launched new wireless data solutions with carriers in the U.S. and Europe, and announced the availability of innovative new solutions designed to further drive adoption and usage of mobile data services. InfoSpace launched new commerce services with AT&T. The services enable AT&T subscribers to shop from more than 60 merchants directly from their mobile device and purchase products from multiple merchants at once with just a few keystrokes on their mobile device. In addition, InfoSpace launched special event alerts campaigns for the 2001 baseball playoffs and for the NCAA NCAA abbr. National Collegiate Athletic Association football bowl season with several partners including Verizon Wireless Cellco Partnership, doing business as Verizon Wireless, owns and operates the second largest wireless telecommunications network in the United States, based on total wireless customers. , Cingular Wireless, ALLTEL and Cincinnati Bell Cincinnati Bell is the dominant telephone company for Cincinnati, Ohio and its nearby suburbs in Ohio, Indiana and Kentucky. The parent company is named Cincinnati Bell Inc. . InfoSpace's baseball playoff play·off also play-off n. Sports 1. A final game or series of games played to break a tie. 2. A series of games played to determine a championship. Noun 1. alerts campaign helped increase new wireless alerts users across carrier partners who deployed the service by more than 35 percent. In Dec., InfoSpace acquired substantially all of the assets of GiantBear, Inc. The acquired technologies include new SMS (1) (Storage Management System) Software used to routinely back up and archive files. See HSM. (2) (Systems Management Server) Systems management software from Microsoft that runs on Windows NT Server. capabilities that make it faster and easier for wireless subscribers to instantly access personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. information by pressing just a few keys. To request information, a user need only press the "pound" key twice followed by a pre-configured number then press "send." Within seconds, an SMS message SMS message SMS n → (message m) SMS m containing the requested information will be delivered to the user's mobile device. For example, a user could press "pound-pound-one" for the latest traffic reports or "pound-pound-two" to receive personalized stock quotes or sports scores. This innovative "pound-pound" technology uses the existing global SS7 network standard as an input mechanism, allowing the delivery of services to any digital wireless device, even handsets that are not WAP (1) (Wireless Access Point) See access point. (2) (Wireless Application Protocol) A standard for providing cellular phones, pagers and other handheld devices with secure access to e-mail and text-based Web pages. or two-way SMS capable. In addition, Streaming Wireless Audio Technology enhances InfoSpace's wireless entertainment services, and extends their reach to include even analog wireless phones. This service offers users anytime, anywhere access to personalized, Internet-based streaming multimedia over the voice channel of their mobile handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. . Sources can include any Internet-based streaming audio A one-way audio transmission over a data network. It is widely used on the Web as well as company networks to play audio clips and Internet radio. Computers in home networks stream audio (mostly music) to digital media hubs connected to home theaters. such as live and pre-recorded news and radio, personal music sources and more. The acquisition also brings to InfoSpace new carrier relationships including Western Wireless, among others. InfoSpace also announced a research and development (R&D) speech initiative under which Bell Mobility Investments (BMI BMI body mass index. BMI abbr. body mass index Body mass index (BMI) A measurement that has replaced weight as the preferred determinant of obesity. ), a Canadian corporate venture company created by Bell Canada Bell Canada Enterprises (TSX: BCE, NYSE: BCE), legally BCE Inc., is a major Canadian telecommunications company. Through its subsidiaries including Bell Canada, Bell Aliant, Northwestel, Télébec, and NorthernTel, it is the incumbent local exchange carrier for and Bell Mobility, will fund a portion of InfoSpace's R&D activities including VoiceXML-based voice activated dialing (VAD (Value Added Dealer) Same as VAR. ) application. Merchant During the fourth quarter, Merchant services Merchant services is the name given in the United States to a broad category of financial services intended for use by businesses. In its most specific use, it usually refers to the service that enables a business to accept a transaction payment by use of the customer's credit or processed more than $1 billion in transactions for the quarter, up from the $700 million reported last quarter. Also, InfoSpace continues to see strong growth in the number of transactions processed which grew to more than 12 million, up from 9 million reported last quarter. Merchant Services continues to show growth in merchant transactions such as payment processing, shopping and merchant promotions. In late October, InfoSpace announced a strategic five-year relationship with Dominion Information Services See Information Systems. Inc., Canada's second largest directory publisher that is owned by U.S.-based Verizon Information Services. Verizon Information Services and InfoSpace announced a similar U.S. agreement in April of 2001. During the fourth quarter, InfoSpace announced an agreement with Moneris Solutions Moneris Solutions (Solutions Moneris in French) is Canada’s largest processor/acquirer of debit and credit card payment processing. Moneris was established in December 2000 as a joint investment between RBC Royal Bank and BMO Bank of Montreal. Moneris’ U.S. , Inc. Under the agreement, Moneris will offer InfoSpace's Authorize.Net(TM) payment processing solutions to its merchant customers. Finally, InfoSpace announced that the company's Authorize.Net payment processing platform will offer real-time payer authentication (1) Verifying the integrity of a transmitted message. See message integrity, e-mail authentication and MAC. (2) Verifying the identity of a user logging into a network. anti-fraud technology that meets Verified by Visa Verified by Visa is a system used by Visa as an added layer of security for online credit and debit cards transactions. A similar system is used by MasterCard under the name SecureCode (which is completely separate from verified by Visa, although it uses the same protocol). compliance standards. The new service, which complies with the guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. set forth under the Visa 3-D Secure global interoperability The capability of two or more hardware devices or two or more software routines to work harmoniously together. For example, in an Ethernet network, display adapters, hubs, switches and routers from different vendors must conform to the Ethernet standard and interoperate with each other. standard, offers participating merchants a fast and effective means to confirm the identity of a user, increasing the security of online transactions. Wireline and Broadband During the quarter more than 3.6 billion queries were made to InfoSpace's wireline services. Wireline's fourth quarter was highlighted by the purchase of certain Excite.com assets significantly increasing the Company's position and distribution for its search and directory products. With search being a primary focus of Wireline, during the quarter InfoSpace announced a renewed search agreement with 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. , formerly GoTo, until 2004. Also during the quarter, America Online See AOL. , Inc. renewed its wireline agreement for InfoSpace to continue to power directory services for several of AOL's Web properties. On the broadband front, InfoSpace recently announced a new relationship with U.K. cable operator Omne Communications. Omne selected InfoSpace to provide a platform of Internet applications and services across the PC and TV. The services will be available to subscribers within Omne's digital network enabling them to access and personalize per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. information, applications and services from either the PC or TV. The launch of Omne's Portal Services is expected during the first quarter of 2002 in conjunction with the roll-out and availability of Omne's dial-up, DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary (Digital Subscriber Line See DSL. (communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and ), TV and telephony services. A replay of the conference call will be available in the investor relations Investor relations The process by which the corporation communicates with its investors. section of the Web site www.infospace.com approximately one hour after the call until Fri., Feb. 1 at 6 p.m. PST PST Paroxysmal supraventricular tachycardia, see there . About InfoSpace, Inc. InfoSpace, Inc. (Nasdaq:INSP) provides wireless and Internet software and application services. The Company develops software technologies that enable customers to efficiently offer a broad array of network-based services under their own brand to any device. 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. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the development of InfoSpace, Inc.'s products and services and future operating results, that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect InfoSpace's actual results include the progress and costs of the development of our products and services and the timing of market acceptance of those products and services. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in InfoSpace's 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. , in the section entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Factors Affecting Our Operating Results, Business Prospects and Market Price of Stock." Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. InfoSpace undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.
InfoSpace, Inc.
Pro Forma Consolidated Statements of Operations (1)
(Amounts in thousands, except per share data)
Three months ended Year ended
December 31, December 31,
2001 2000 2001 2000
(unaudited) (unaudited) (unaudited)
Revenues $ 31,363 $ 65,462 $161,921 $214,530
Cost of revenues 9,965 11,092 41,760 35,627
Gross profit 21,398 54,370 120,161 178,903
Operating expenses:
Product development 7,658 14,011 39,065 40,624
Sales, general and
administrative 22,227 36,464 116,042 130,867
Total operating
expenses 29,885 50,475 155,107 171,491
Income (loss) from
operations (8,487) 3,895 (34,946) 7,412
Other income, net 3,035 5,851 17,362 9,222
Income tax expense (80) 51 664 137
Pro forma income
(loss) $ (5,372) $ 9,695 $(18,248) $ 16,497
Pro forma basic
earnings (loss)
per share $ (0.02) $ 0.03 $ (0.06) $ 0.05
Pro forma diluted
earnings (loss)
per share $ (0.02) $ 0.03 $ (0.06) $ 0.05
Shares used in
computing pro forma
basic earnings
(loss) per share 304,713 315,301 318,395 304,480
Shares used in
computing pro forma
diluted earnings
(loss) per share 304,713 356,817 318,395 358,587
(1) Pro forma results exclude non-cash charges, non-recurring
charges and items unrelated to the Company's core operations. This
financial statement excludes restricted stock compensation expense,
amortization and impairment of intangibles, acquisition-related
expenses, restructuring charges, other non-recurring charges,
including reserve of notes receivable, losses on investments and
cumulative effect of change in accounting principle, which are
summarized in the following table. They do not purport to be financial
statements prepared in accordance with accounting principles generally
accepted in the United States (GAAP). The following table reconciles
the pro forma net income (loss) in accordance with GAAP for the
periods presented.
InfoSpace, Inc.
Reconciliation of Pro Forma Net Income (Loss)
(Amounts in thousands, except per share data)
Three months ended Year ended
December 31, December 31,
2001 2000 2001 2000
(unaudited)(unaudited)(unaudited)
Pro forma net income
(loss) $ (5,372) $ 9,695 $(18,248) $ 16,497
Restricted stock
compensation (851) - (851) -
Amortization of intangibles (54,301) (55,255) (235,289) (171,336)
Impairment of intangibles (8,573) (8,952) (107,729) (8,952)
Acquisition and related
charges - (29,790) 3,504 (123,998)
Other non-recurring charges (9,366) (7,833) (12,850) (4,946)
Restructuring charges (982) (151) (16,392) (2,322)
Gain (loss) on investments,
net of minority interest (19,320) (7,989) (107,788) 14,701
Cumulative effect of change
in accounting principle - - (3,171) (2,056)
Net loss $(98,765) $(100,275) $(498,814) $(282,412)
InfoSpace, Inc.
Consolidated Statements of Operations
(Amounts in thousands, except per share data)
Three months ended Year ended
December 31 December 31,
2001 2000 2001 2000
(unaudited)(unaudited)(unaudited)
Revenues $ 31,363 $ 65,462 $161,921 214,530
Cost of revenues 10,046 11,092 41,841 35,627
Gross Profit 21,317 54,370 120,080 178,903
Operating expenses:
Product development 8,044 14,011 39,451 40,624
Sales, general and
administrative 22,611 36,464 116,426 130,867
Amortization of intangibles 54,301 55,255 235,289 171,336
Impairment of intangibles 8,573 8,952 107,729 8,952
Acquisition and related charges - 29,790 (3,504) 123,998
Other non-recurring charges 9,366 7,833 12,850 4,946
Restructuring charges 982 151 16,392 2,322
Total operating expenses 103,877 152,456 524,633 483,045
Loss from operations (82,560) (98,086) (404,553) (304,142)
Gain (loss) on investments (19,320) (9,062) (107,771) 17,872
Other income, net 3,035 5,851 17,362 9,222
Loss before income tax expense,
minority interest and
cumulative effect of change
in accounting principle (98,845) (101,297) (494,962) (277,048)
Minority interest - (1,073) 17 3,171
Income tax expense (80) 51 664 137
Loss before cumulative effect
of change in accounting
principle (98,765) (100,275) (495,643) (280,356)
Cumulative effect of change in
accounting principle - - (3,171) (2,056)
Net loss $(98,765)$(100,275) (498,814) (282,412)
Basic loss per share $ (0.32) $ (0.32) $ (1.57) (0.93)
Shares used in computing
basic net loss per share 304,713 315,301 318,395 304,480
InfoSpace, Inc.
Condensed Consolidated Balance Sheets
(Amounts in thousands)
December 31, December 31,
2001 2000
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 118,561 $ 153,913
Short-term investments 80,319 216,235
Accounts receivable, net 16,305 33,881
Payroll tax receivable 13,214 620
Notes and other receivables, net 13,860 21,701
Prepaid expenses and other
current assets 8,372 14,491
Total current assets 250,631 440,841
Property and equipment, net 40,565 51,137
Long-term investments 94,891 32,451
Other investments 47,474 121,574
Intangibles, net 404,985 621,032
Other long-term assets 1,403 5,075
Total assets $ 839,949 $1,272,110
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,139 $ 4,537
Accrued expenses and other
current liabilities 22,465 37,999
Deferred revenue 15,794 31,430
Total current liabilities 47,398 73,966
Long-term liabilities and
minority interest:
Long-term deferred revenue 3,693 7,973
Long-term facility obligation 2,896 -
Minority interest - 21,599
Total liabilities 53,987 103,538
Stockholders' equity:
Common stock 31 32
Additional paid-in capital 1,702,633 1,596,213
Accumulated deficit (907,462) (408,646)
Deferred expense - warrants (680) (1,495)
Unearned compensation - stock
options (7,881) (1,500)
Accumulated other comprehensive
loss (679) (16,032)
Total stockholders' equity 785,962 1,168,572
Total liabilities and
stockholders' equity $ 839,949 $1,272,110
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