EX-99.2 3 dex992.htm UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA Unaudited Pro Forma Condensed Consolidated Statements of Operations Data

Exhibit 99.2

CNET Networks, Inc.

Unaudited Pro Forma Condensed Consolidated Financial Data

 

(in thousands, except per share data)                                           
     Q1 '06     Q2 '06     Q3 '06     Q4 '06     Q1 '07     Q2 '07     Q3 '07  

Revenues

   $ 79,130     $ 87,789     $ 89,236     $ 113,104     $ 89,077     $ 94,602     $ 96,663  

Operating expenses:

              

Cost of revenues (1)

     38,810       38,026       39,676       43,369       41,892       40,418       40,604  

Sales and marketing (1)

     22,016       23,699       22,313       26,417       25,168       26,729       26,733  

General and administrative (1)

     14,757       13,590       14,876       18,548       16,046       15,917       17,224  

Stock option investigation

     —         1,401       5,825       6,519       4,429       2,859       406  

Depreciation

     4,556       4,961       5,517       6,457       7,059       6,571       6,364  

Amortization of intangible assets

     1,671       1,641       2,135       2,175       2,152       2,140       2,361  

Goodwill impairments

     —         —         1,418       1,375       —         —         —    

Total operating expenses

     81,810       83,318       91,760       104,860       96,746       94,634       93,692  
                                                        

Operating income (loss)

     (2,680 )     4,471       (2,524 )     8,244       (7,669 )     (32 )     2,971  
                                                        

Non-operating income (expense):

              

Realized gains on investments, net

     500       —         58       —         —         1,600       590  

Interest income

     1,152       1,280       1,565       874       638       934       1,019  

Interest expense

     (659 )     (659 )     (696 )     (3,009       (1,346 )     (1,327 )     (1,231 )

Other, net

     140       (83 )     (7 )     (646 )     301       (223 )     862  
                                                        

Total non-operating expense

     1,133       538       920       (2,781 )     (407 )     984       1,240  
                                                        

Income (loss) before income taxes

     (1,547 )     5,009       (1,604 )     5,463       (8,076 )     952       4,211  

Income tax expense

     76       205       420       633       182       95       1,426  
                                                        

Income (loss) from continuing operations

   $ (1,623 )   $ 4,804     $ (2,024 )   $ 4,830     $ (8,258 )   $ 857     $ 2,785  
                                                        

Income (loss) per share from continuing operations:

              

Basic

   $ (0.01 )   $ 0.03     $ (0.01 )   $ 0.03     $ (0.05 )   $ 0.01     $ 0.02  

Diluted

   $ (0.01 )   $ 0.03     $ (0.01 )   $ 0.03     $ (0.05 )   $ 0.01     $ 0.02  

Shares used in calculating income (loss) from continuing operations per share

 

       

Basic

     148,733       149,549       149,792       149,805       150,386       151,333       151,665  

Diluted

     148,733       152,775       149,792       152,559       150,386       152,751       152,793  

(1)    Includes stock compensation expense, which was allocated as follows:

      

       

Cost of revenues

   $ 1,772     $ 1,777     $ 1,959     $ 1,434     $ 1,680     $ 1,191     $ 940  

Sales and marketing

     889       869       995       822       842       571       545  

General and administrative

     1,925       1,818       1,879       2,933       2,555       2,275       3,179  

See accompanying note to unaudited pro forma condensed consolidated financial data.


Note to Unaudited Pro Forma Condensed Consolidated Financial Data

On August 2, 2004, CNET Networks acquired Twofold Photos, Inc. which operated the website www.Webshots.com (Twofold Photos, Inc. and Webshots are collectively referred to as “Webshots”). The results of operations of Webshots were included in CNET Networks’ historical statements of operations from the date of acquisition.

The unaudited pro forma condensed consolidated financial data presented herein give effect to the sale of our Webshots business unit for approximately $45 million in cash on October 25, 2007 (“Asset Sale”), and are derived from the unaudited pro forma condensed consolidated financial statements for the nine months ended September 30, 2007 included in exhibit 99.1 to our Current Report on Form 8-K filed on January 17, 2008, and the unaudited pro forma condensed consolidated financial statements for the year ended December 31, 2006 included in exhibit 99.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on October 31, 2007 (the “2007 8-K”). The accompanying unaudited pro forma condensed consolidated financial data for the three months ended September 30, 2007, June 30, 2007, March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, presents the Company’s results of operations as if the Asset Sale had occurred on January 1, 2006.

The unaudited pro forma condensed consolidated financial data statements presented herein are based on estimates and information that is currently available and may change as additional information becomes available. Certain amounts presented differ from the amounts reported in the unaudited pro forma condensed consolidated financial information included in the 2007 8-K due to the refinement of the amounts. Such changes are not considered to be material.

In accordance with the provisions of SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets, we will reflect the results (including the results of the sale) of the Webshots business unit as a discontinued operation in our historical financial statements beginning with our Annual Report on Form 10-K for the fiscal year ended December 31, 2007. The unaudited pro forma condensed consolidated financial data presented herein should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, filed with the Securities and Exchange Commission on March 1, 2007, our Quarterly Report on Form 10-Q for the period ended September 30, 2007, filed with the Securities and Exchange Commission on November 5, 2007 and our Current Report on Form 8-K filed with the Securities and Exchange Commission on October 31, 2007.