MOUNTAIN VIEW, Calif., Nov. 4 /PRNewswire-FirstCall/ -- Geeknet,
Inc. (NASDAQ:LNUX), formerly known as SourceForge, Inc., today
announced financial results for its third quarter ended September
30, 2009. (Logo:
http://www.newscom.com/cgi-bin/prnh/20091104/SF04925LOGO) Total
revenue for the third quarter of 2009 was $10.8 million compared to
$11.5 million of revenue for the third quarter of 2008. Net loss
for the third quarter of 2009 was $4.5 million or $0.08 per share
compared to a net loss of $2.7 million or $0.04 per share, for the
same period a year ago. Adjusted EBITDA loss for the third quarter
of 2009 was $3.4 million, compared to adjusted EBITDA loss of $1.4
million for the same period a year ago. A reconciliation of our net
loss as reported to adjusted EBITDA is included in this release.
"Today's announcement that we have renamed our company Geeknet is
the latest development in the rapid transformation of our
business," said Scott L. Kauffman, President & CEO, Geeknet.
"While I am disappointed in our media results this quarter, I am
pleased with the continued growth of ThinkGeek. And with Geeknet as
our calling card on Madison Avenue, we are now able to craft a more
holistic and compelling story for the advertising community that
will clearly define our audience and lead to more media revenue."
Third Quarter Highlights: -- Media revenue was $3.7 million for the
third quarter of 2009, compared to $5.1 million for the third
quarter of 2008. Revenue for the third quarter of 2009 included
$1.6 million from our premium advertising products compared to $0.8
million of premium revenue for the same period last year. --
E-commerce revenue was $7.1 million for the third quarter of 2009,
compared to $6.4 million for the third quarter of 2008. -- Total
cash and investments balance, including restricted cash, at the end
of the third quarter of 2009 was $35.6 million. Supplemental
schedules of the Company's quarterly statements of operations and
operational statistics for the quarterly periods in the year ended
December 31, 2008 and the nine months ended September 30, 2009 are
available on the Company's web site at geek.net/cyresults. A
conference call and audio webcast will be held at 2:00 p.m. PT or
5:00 p.m. ET on November 4, 2009 and may be accessed by calling
877-407-8035 or 201-689-8035 or by visiting geek.net. Replays of
both the telephonic audio and audio webcast will be available for
90 days. To access the conference call replay, dial 877-660-6853 or
201-612-7415, referencing replay account 286 and call ID 334637.
Use of Non-GAAP Financial Measures In addition to reporting
financial results in accordance with generally accepted accounting
principles, or GAAP, we also report adjusted EBITDA. Adjusted
EBITDA should be considered in addition to results prepared in
accordance with GAAP, but should not be considered a substitute
for, or superior to, GAAP results. We believe that adjusted EBITDA
provides useful information to both management and investors and is
an additional measurement which may be used to evaluate our
operating performance. Our management and Board of Directors use
adjusted EBITDA as part of their reporting and planning process and
it is the primary measure we use to evaluate our operating
performance. In addition, we have historically reported Adjusted
EBITDA or non-GAAP earnings, from which adjusted EBITDA can be
derived, to the investment community. We also believe that the
financial analysts who regularly follow and report on us and the
business sector in which we compete use adjusted EBITDA to prepare
their financial performance estimates to measure our performance
against other sector participants and to project our future
financial results. We define adjusted EBITDA as net loss which is
adjusted for interest and other income (expense) net and income
taxes as well as stock-based compensation, restructuring charges
and depreciation and amortization. The method we use to produce
adjusted EBITDA is not computed according to GAAP, is likely to
differ from the methods used by other companies and should not be
regarded as a substitute for results prepared in accordance with
accounting principles generally accepted in the United States.
Adjusted EBITDA, as we compute it, excludes certain expenses that
we believe are not indicative of our core operating results, as
well as income taxes, stock-based compensation and depreciation and
amortization. We consider our core operating results to include
revenue recorded in a particular period and the related expenses
that are intended to directly drive operating income during that
period. The EBITDA calculation excludes interest, income taxes and
depreciation and amortization by its nature. In addition, when we
compute adjusted EBITDA we exclude stock-based compensation and
restructuring charges and other amounts included in the Interest
income and other income (expense) net caption as we believe that
these amounts represent income and expenses that are not directly
related to our core operations. Although some of the items may
recur on a regular basis, management does not consider activities
associated with these items as core to its operations. With respect
to stock-based compensation, we recognize expenses associated with
stock-based compensation that require management to make
assumptions about our common stock, such as expected future stock
price volatility, the anticipated duration of outstanding stock
options and awards and the rate at which we recognize the
corresponding stock-based compensation expense over the course of
future fiscal periods. While other forms of expenses (such as cash
compensation, inventory costs and real estate costs) are reasonably
correlated to our underlying business and such costs are incurred
principally or wholly in the particular fiscal period being
reported, stock-based compensation expense is not reasonably
correlated to the particular fiscal period in question, but rather
is based on expected future events that have no relationship (and
in certain instances, an inverse relationship) with how well we
currently operate our business. Restructuring costs are excluded
from adjusted EBITDA because they represent non-cash charges which
are not representative of our core operations. About Geeknet, Inc.
Geeknet is the online network for the global geek community. Our
sites include: SourceForge, Slashdot, ThinkGeek, Ohloh and
freshmeat. We serve an audience of more than 40 million users* each
month and provide the tech-obsessed with content, culture,
connections, commerce, and all the things that geeks crave. Want to
learn more? Check out geek.net. (*October 2009 Unique Visitors 42M.
Source: Google Analytics and Omniture) Geeknet is a trademark of
Geeknet, Inc. SourceForge, Slashdot, ThinkGeek, Ohloh, and
freshmeat are registered trademarks of Geeknet, Inc. in the United
States and other countries. All other trademarks or product names
are property of their respective owners. NOTE REGARDING
FORWARD-LOOKING STATEMENTS: This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are
based on our current expectations, and involve risks and
uncertainties. Forward-looking statements contained herein include
statements regarding the potential benefits of our corporate
rebranding for us and the advertising community, and growth
strategies and prospects for our online media and e-commerce
businesses. Actual results may differ materially from those
expressed or implied in such forward-looking statements due to
various factors, including: our ability to attract and retain
qualified personnel; success in designing and offering innovative
online advertising programs; decreases or delays in online
advertising spending, especially in light of current macroeconomic
challenges and uncertainty; our effectiveness at planning and
managing our e-commerce inventory; our ability to achieve and
sustain higher levels of revenue; our ability to protect and defend
our intellectual property rights; rapid technological and market
change; unforeseen expenses that we may incur in future quarters;
and competition with, and pricing pressures from larger and/or more
established competitors. Investors should consult our filings with
the Securities and Exchange Commission, sec.gov, including the risk
factors section of our Annual Report on Form 10-K for the year
ended July 31, 2008, and our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2009, for further information regarding
these and other risks of our business. All forward-looking
statements included in this press release are based upon
information available to us as of the date hereof, and we do not
assume any obligations to update such statements or the reasons why
actual results could differ materially from those projected in such
statements. GEEKNET, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per share data) (unaudited) Three
Months Nine Months Ended September Ended September 30, 30,
---------------- ---------------- 2009 2008 2009 2008 ---- ----
---- ---- Online Media revenue $3,683 $5,055 $11,801 $14,658
E-commerce revenue 7,104 6,417 21,142 20,000 ----- ----- ------
------ Net revenue 10,787 11,472 32,943 34,658 ------ ------ ------
------ Online Media cost of revenue 1,630 2,140 5,255 6,061
E-commerce cost of revenue 6,053 5,104 17,815 16,084 ----- -----
------ ------ Cost of revenue 7,683 7,244 23,070 22,145 ----- -----
------ ------ Gross margin 3,104 4,228 9,873 12,513 ----- -----
----- ------ Operating expenses: Sales and marketing 3,201 2,304
7,468 6,518 Research and development 2,144 1,472 5,816 3,854
General and administrative 2,238 2,977 6,587 9,018 Amortization of
intangible assets 83 - 110 - Restructuring costs - - - 765 --- ---
--- --- Total operating expenses 7,666 6,753 19,981 20,155 -----
----- ------ ------ Operating loss (4,562) (2,525) (10,108) (7,642)
Interest and other income (expense), net 18 (277) (5,543) 197 ---
---- ------ --- Loss before income taxes (4,544) (2,802) (15,651)
(7,445) Benefit for income taxes (7) (138) (102) (112) --- ----
---- ---- Net loss $(4,537) $(2,664) $(15,549) $(7,333) =======
======= ======== ======= Earnings per share: Basic and diluted
$(0.08) $(0.04) $(0.25) $(0.11) ====== ====== ====== ====== Shares
used in computing earnings per share: Basic and diluted 59,909
67,670 61,042 67,548 ====== ====== ====== ====== Reconciliation of
net loss as reported to adjusted EBITDA: Net loss - as reported
$(4,537) $(2,664) $(15,549) $(7,333) Reconciling items: Interest
and other income (expense), net (18) 277 5,543 (197) Income taxes
(7) (138) (102) (112) Stock-based compensation expense included in
COGS 92 71 246 205 Stock-based compensation expense included in Op
Ex. 609 518 1,763 2,776 Restructuring costs - - - 765 Depreciation
and amortization 479 560 1,637 1,500 --- --- ----- ----- Adjusted
EBITDA $(3,382) $(1,376) $(6,462) $(2,396) ======= ======= =======
======= GEEKNET, INC. CONDENSED CONSOLIDATED BALANCE SHEET (In
thousands) (unaudited) September 30, December 31, 2009 2008
------------- ------------ ASSETS Current assets: Cash and cash
equivalents $25,128 $40,511 Short-term investments, including
restricted cash 10,472 563 Accounts receivable, net 3,091 4,418
Inventories 4,868 3,264 Prepaid expenses and other current assets
4,079 1,841 ----- ----- Total current assets 47,638 50,597 Property
and equipment, net 2,736 4,748 Long-term investments, including
long-term restricted cash - 9,947 Other assets 5,053 8,874 -----
----- Total assets $55,427 $74,166 ======= ======= LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $4,012
$4,021 Accrued restructuring liabilities 2,027 2,862 Deferred
revenue 770 591 Accrued liabilities and other 2,326 2,702 -----
----- Total current liabilities 9,135 10,176 Other long-term
liabilities 197 1,423 --- ----- Total liabilities 9,332 11,599
----- ------ Stockholders' equity: Common stock 61 65 Treasury
stock (492) (331) Additional paid-in capital 798,275 799,037
Accumulated other comprehensive income 13 9 Accumulated deficit
(751,762) (736,213) -------- -------- Total stockholders' equity
46,095 62,567 ------ ------ Total liabilities and stockholders'
equity $55,427 $74,166 ======= ======= GEEKNET, INC. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited)
Nine months ended September 30, ------------- 2009 2008 ---- ----
Cash flows from operating activities: Net loss $(15,549) $(7,333)
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation and amortization 1,637 1,500 Stock-based
compensation expense 2,009 2,981 Provision for bad debts 97 80
Provision for excess and obsolete inventory 34 103 Loss on disposal
of assets 1,020 3 Loss on sale of investments - 308 Impairment of
investments 4,585 108 Non-cash restructuring expense - 765 Changes
in assets and liabilities: Accounts receivable 1,235 (743)
Inventories (1,638) (598) Prepaid expenses and other assets (841)
(1,336) Accounts payable (16) (1,819) Accrued restructuring
liabilities (2,089) (2,150) Deferred revenue 179 (89) Accrued
liabilities and other (412) 35 Other long-term liabilities 28 14
--- --- Net cash used in operating activities (9,721) (8,171)
------ ------ Cash flows from investing activities: Purchase of
property and equipment (738) (1,902) Purchases of marketable
securities - (26,441) Maturities or sale of marketable securities
559 49,926 Acquisitions (2,613) - Proceeds from sale of intangible
assets, net 172 - Purchases of intangible assets (106) - ---- ---
Net cash (used in) provided by investing activities (2,726) 21,583
------ ------ Cash flows from financing activities: Proceeds from
issuance of common stock 259 18 Repurchase of common stock (3,195)
(242) ------ ---- Net cash used in financing activities (2,936)
(224) ------ ---- Cash flows from discontinued operations: Net cash
provided by operating activities - 42 --- --- Net cash provided by
discontinued operations - 42 --- --- Net increase (decrease) in
cash and cash equivalents (15,383) 13,230 ------- ------ Cash and
cash equivalents, beginning of period 40,511 25,037 ------ ------
Cash and cash equivalents, end of period $25,128 $38,267 =======
======= http://www.newscom.com/cgi-bin/prnh/20091104/SF04925LOGO
http://photoarchive.ap.org/ DATASOURCE: Geeknet, Inc. CONTACT: Todd
Friedman or Stacie Bosinoff, both of The BlueShirt Group,
+1-415-217-5868, , for Geeknet, Inc. Web Site: http://www.geek.net/
Copyright