-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M8v7l3b3jT2N3J+plDzReDDtN7vXaF0nm88ij53L2ClY2IOw4F4FwKrYrnbDHyvi oUIAeiq8tezdWsIEwJLs0A== 0000950117-02-000253.txt : 20020414 0000950117-02-000253.hdr.sgml : 20020414 ACCESSION NUMBER: 0000950117-02-000253 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020128 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020211 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOUBLECLICK INC CENTRAL INDEX KEY: 0001049480 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING [7310] IRS NUMBER: 133870996 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23709 FILM NUMBER: 02533613 BUSINESS ADDRESS: STREET 1: 450 W 33RD ST STREET 2: 16TH FL CITY: NEW YORK STATE: NY ZIP: 10001 BUSINESS PHONE: 2126830001 MAIL ADDRESS: STREET 1: 450 W 33RD ST STREET 2: 16TH FL CITY: NEW YORK STATE: NY ZIP: 10001 8-K 1 a32028.txt DOUBLECLICK INC. FORM 8-K - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 11, 2002 (JANUARY 28, 2002) -------------------- DOUBLECLICK INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OR OTHER JURISDICTION OF INCORPORATION) 000-23709 13-3870996 (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.) 450 WEST 33RD STREET NEW YORK, NEW YORK 10001 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(212) 683-0001 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) N.A. (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) - -------------------------------------------------------------------------------- ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On January 28, 2002, DoubleClick Inc. ("DoubleClick") completed the previously announced sale of its European media business to AdLINK Internet Media AG ("AdLINK"). Under the terms of the transaction, which was negotiated at arm's-length, AdLINK acquired DoubleClick's European media business in exchange for EUR 30.5 million and the assumption of certain liabilities associated with DoubleClick's European media business. Intercompany liabilities in an amount equal to EUR 5.0 million were settled through a cash payment by AdLINK to DoubleClick. In addition, DoubleClick will receive reimbursement from AdLINK for certain restructuring costs to be incurred. DoubleClick also entered into an option agreement with United Internet AG ("United Internet"), AdLINK's largest shareholder, under which United Internet received the option to sell 15% of AdLINK's shares to DoubleClick in exchange for EUR 35.5 million. United Internet exercised its option with effect on February 8, 2002. DoubleClick also holds an option, exercisable under certain conditions, to acquire an additional 21% of AdLINK's shares from United Internet at no additional cost. In addition, DoubleClick will be represented on the AdLINK Board of Directors. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (b) Pro Forma Financial Information UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS The following unaudited pro forma condensed financial statements of DoubleClick Inc. have been prepared to illustrate the estimated effects of: - The January 28, 2002 sale by DoubleClick of its European Media operations to AdLINK Internet Media AG, or AdLINK, and the acquisition by DoubleClick of 15% of the outstanding common shares of AdLINK; - the April 23, 2001 acquisition by DoubleClick of all the outstanding shares of FloNetwork Inc., or FloNetwork, in exchange for approximately $17.1 million in cash, approximately 2,800,000 shares of DoubleClick common stock and the assumption by DoubleClick of FloNetwork options and warrants which, under the terms of the acquisition, converted into options and warrants to acquire approximately 430,000 shares of DoubleClick common stock; and - the February 2, 2001 acquisition by DoubleClick of all the outstanding shares of @plan.inc, or @plan, in exchange for approximately $39.1 million in cash, approximately 3,200,000 shares of DoubleClick common stock and the assumption by DoubleClick of @plan options and warrants which, under the merger of those two companies, converted into options and warrants to acquire approximately 1,200,000 shares of DoubleClick common stock. Pro forma amounts have been derived by applying pro forma adjustments to the historical consolidated financial information of DoubleClick, FloNetwork and @plan. Recent accounting pronouncements In July 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards, or SFAS, No. 141 "Business Combinations" and SFAS No. 142 "Goodwill and Other Intangible Assets." SFAS No. 141 establishes new standards for accounting and reporting requirements for business combinations and requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. Use of the pooling-of-interests method is prohibited. SFAS No. 142 establishes new standards for goodwill acquired in a business combination, eliminates the amortization of goodwill and sets forth methods to periodically evaluate goodwill for impairment. Intangible assets with a determinable useful life will continue to be amortized over that life. SFAS 141 and SFAS 142 are effective for business combinations completed after June 30, 2001. DoubleClick adopted these statements on January 1, 2002; however, as noted above, there are provisions of these new standards that also apply to acquisitions completed after June 30, 2001. The sale of DoubleClick's European Media operations and the acquisition of a 15% interest in AdLINK On January 28, 2002, DoubleClick completed the sale of its European Media operations to AdLINK, a German provider of Internet advertising solutions in exchange for EUR 30.5 million and the assumption by AdLINK of liabilities associated with DoubleClick's European Media operations. Intercompany liabilities in an amount equal to EUR 5.0 million were settled through a cash payment by AdLINK to DoubleClick at the closing of the transaction. Following the closing of the transaction described above, United Internet AG, or United Internet, AdLINK's largest shareholder, exercised its right with effect on February 8, 2002 to sell to DoubleClick 15% of the outstanding common shares of AdLINK in exchange for EUR 35.5 million. Pursuant to its agreement with United Internet, the exercise of this right caused DoubleClick's option to acquire an additional 21% of AdLINK common shares from United Internet to vest. This option is only exerciseable over a two-year period if AdLINK has achieved EBITDA-positive results for two out of three consecutive fiscal quarters before December 2003. Should AdLINK fail to achieve these results, the option will expire unexerciseable in December 2003. As the result of the transactions described above, DoubleClick sold its European Media operations and received a 15% interest in AdLINK. Its option to acquire an additional 21% of the outstanding common shares of AdLINK from United Internet also vested. The approximately $8.3 million value of the 15% of the outstanding common stock of AdLINK, approximately 3.9 million shares, has been determined based on these shares' average market prices, as quoted on the Neuer Markt, for the day before, the day of, and the day immediately after the number of shares due to DoubleClick became irrevocably fixed pursuant to its agreements with AdLINK and United Internet. The unaudited pro forma statements of operations for the year ended December 31, 2000 and the nine month period ended September 30, 2001 have been prepared as if these transactions had occurred on January 1, 2000. The unaudited pro forma condensed balance sheet as of September 30, 2001 has been prepared as if these transactions occurred on September 30, 2001. The pro forma adjustments are described in the accompanying notes. The acquisition of FloNetwork On April 23, 2001 DoubleClick completed its acquisition of FloNetwork, a privately-held Canadian provider of email marketing technology services. The purchase price of FloNetwork has been calculated based on the average market price of DoubleClick common stock, as quoted on the Nasdaq National Market, for the day immediately prior to, the day of and the day immediately after the number of shares and the amount of cash consideration due to FloNetwork shareholders became irrevocably fixed pursuant to the agreement under which FloNetwork was acquired, plus the fair value of options and warrants assumed, which was determined using the Black-Scholes option pricing model. Portions of the purchase price have been allocated to acquired technology, customer lists and in-process research and development projects. The amounts allocated to customer lists of $2.2 million and acquired technology of approximately $4.3 million are being amortized on a straight-line basis over 2 and 3 years, respectively. The amounts attributed to in-process research and development projects were charged to operations as they had not reached technological feasibility as of the date of the acquisition and were determined to have no alternative future uses. The remainder of the excess of the purchase price over the fair value of net assets acquired of approximately $45.0 million has been allocated to goodwill and is being amortized on a straight-line basis over three years. In accordance with SFAS 142, DoubleClick has ceased amortizing this goodwill effective January 2002. The unaudited pro forma condensed statements of operations for the year ended December 31, 2000 and the nine month period ended September 30, 2001 have been prepared as if the FloNetwork acquisition had occurred on January 1, 2000. No pro forma balance sheet information has been provided as FloNetwork's net assets are reflected in the financial position of DoubleClick as of September 30, 2001. The pro forma adjustments are described in the accompanying notes. The acquisition of @plan On February 2, 2001 DoubleClick completed its acquisition of @plan, a leading provider of online target market research planning systems. The purchase price of @plan has been determined based on the average market price of DoubleClick common stock, as quoted on the Nasdaq National Market, for the day immediately prior to and the day of the final determination of the number of shares and cash consideration due @plan shareholders pursuant to the merger agreement, plus the fair value of options assumed, which was calculated using the Black-Scholes option pricing model. The excess of the purchase price over the fair value of the net assets acquired of approximately $79.1 million has been allocated to goodwill and is being amortized over three years. In accordance with SFAS 142, DoubleClick has ceased amortizing this goodwill effective January 2002. The unaudited pro forma statements of operations for the year ended December 31, 2000 and the nine month period ended September 30, 2001 have been prepared as if the @plan acquisition occurred on January 1, 2000. No pro forma balance sheet information has been provided as @plan's net assets are reflected in the financial position of DoubleClick as of September 30, 2001. The pro forma adjustments are described in the accompanying notes. Reclassifications Certain costs and other deductions in the consolidated statements of operations of FloNetwork and @plan have been reclassified to conform to the line item presentation in the pro forma condensed statements of operations. Unaudited pro forma financial information The unaudited pro forma financial information should not be considered indicative of the actual results that would have been achieved had the transactions described above been consummated on the dates indicated and does not purport to indicate balance sheet data or results of operations as of any future date or any future period. The unaudited pro forma financial information should be read in conjuction with the historical financial statements of DoubleClick. UNAUDITED PRO FORMA CONDENSED BALANCE SHEET AS OF SEPTEMBER 30, 2001 (dollars in thousands)
Less DoubleClick European Media Pro forma ---------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $ 185,932 $ $ 185,932 Investments in marketable securitites 379,512 379,512 Accounts receivable, net 80,502 (4,818) 75,684 Prepaid expenses and other current assets 41,295 (807) 40,488 -------------------------------------------------- Total current assets 687,241 (5,625) 681,616 Investments in marketable securities 213,038 213,038 Property and equipment, net 166,265 (2,394) 163,871 Goodwill, net 63,581 (5,277) 58,304 Intangible assets, net 18,518 18,518 Investments in affiliates 16,696 8,343 (1) 25,039 Other assets 9,579 (1,426) 8,153 -------------------------------------------------- Total assets $ 1,174,918 $ (6,379) $ 1,168,539 ================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payables and accrued expenses $ 122,174 $ (8,150) $ 114,024 Deferred revenue 20,057 (1,470) 18,587 -------------------------------------------------- Total current liabilities 142,231 (9,620) 132,611 Long-term obligations and notes 18,044 (423) 17,621 Convertible subordinated notes 229,700 229,700 Minority interest 20,086 20,086 Stockholders equity: Common stock 134 134 Treasury stock (4,464) (4,464) Additional paid in capital 1,264,412 1,264,412 Accumulated deficit (484,528) (7,433)(2) (491,961) Other comprehensive loss (10,697) 11,097 400 -------------------------------------------------- Total stockholders' equity 764,857 3,664 768,521 -------------------------------------------------- Total liabilities and stockholders' equity $ 1,174,918 $ (6,379) $ 1,168,539 ==================================================
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 (dollars in thousands, except for per share amounts)
Pro forma Pro forma DoubleClick @plan FloNetwork adjustments combined -------------------------------------------------------------------------- Revenues $ 309,498 $ 1,275 $ 6,920 $ -- $ 317,693 Cost of revenues 136,620 788 2,349 478(3) 140,235 European Media sales commissions -- -- -- -- -------------------------------------------------------------------------- Total cost of revenue 136,620 788 2,349 478 140,235 -------------------------------------------------------------------------- Gross profit 172,878 487 4,571 (478) 177,458 Operating expenses: Sales and marketing 148,170 766 4,452 366(3) 153,754 General and administrative 52,790 776 1,199 54,765 Product development 42,472 -- 1,962 44,434 Amortization of intangible assets 42,358 -- -- 7,173(4) 49,531 Goodwill impairment charges 63,287 -- -- 63,287 Restructuring and in-process research and development charges 37,239 -- -- 37,239 -------------------------------------------------------------------------- Total operating expense 386,316 1,542 7,613 7,539 403,010 Loss from operations (213,438) (1,055) (3,042) (8,017) (225,552) Equity in losses of affiliates (2,599) -- -- (2,599) Impairment of equity investment (11,735) -- -- (11,735) Gain on issuance of affiliate stock 1,924 -- -- 1,924 Interest and other, net 18,949 146 (132) 18,963 --------------------------------------------------------------------------- Total other income 6,539 146 (132) 6,553 Loss before income taxes (206,899) (909) (3,174) (8,017) (218,999) Provision for income taxes 269 8 86 363 --------------------------------------------------------------------------- Loss before minority interest (207,168) (917) (3,260) (8,017) (219,362) Minority interest 1,718 -- -- 1,718 --------------------------------------------------------------------------- Net loss before extraordinary item $(205,450) $ (917) $ (3,260) $(8,017) $(217,644) =========================================================================== Weighted-average number of shares used in calculation of basic and diluted EPS: 130,869 132,457 Basic and diluted EPS: $(1.57) $(1.64) Less Pro forma European Media combined ------------------------------ Revenues $ (21,896) $ 295,797 Cost of revenues (12,284) 127,951 European Media sales commissions 417 (5) 417 ------------------------------ Total cost of revenue (11,867) 128,368 ------------------------------ Gross profit (10,029) 167,429 Operating expenses: Sales and marketing (27,435) 126,319 General and administrative (1,873) 52,892 Product development -- 44,434 Amortization of intangible assets (3,076) 46,455 Goodwill impairment charges -- 63,287 Restructuring and in-process research and development charges (318) 36,921 ------------------------------ Total operating expense (32,702) 370,308 Loss from operations 22,673 (202,879) Equity in losses of affiliates -- (2,599) Impairment of equity investment -- (11,735) Gain on issuance of affiliate stock -- 1,924 Interest and other, net (13) 18,950 ------------------------------ Total other income (13) 6,540 Loss before income taxes 22,660 (196,339) Provision for income taxes (561) (198) ------------------------------ Loss before minority interest 23,221 (196,141) Minority interest -- 1,718 ------------------------------ Net loss before extraordinary item $ 23,221 $(194,423) ============================== Weighted-average number of shares used in calculation of basic and diluted EPS: 132,457 Basic and diluted EPS: $(1.47)
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2000 (dollars in thousands, except for per share amounts)
Pro forma DoubleClick @plan FloNetwork adjustments ----------- ----- ---------- ----------- Revenues $ 505,611 $13,514 $ 11,871 $ Cost of revenues 228,083 10,572 4,659 1,433(3) European Media sales commissions -- -- -- Write-off of advance to publisher 18,487 -- -- -------------------------------------------------------------- Total cost of revenue 246,570 10,572 4,659 1,433 -------------------------------------------------------------- Gross profit 259,041 2,942 7,212 (1,433) Operating expenses Sales and marketing 227,229 6,407 10,270 1,100(3) General and administrative 83,227 2,998 2,488 Product development 44,789 -- 4,231 Amortization of intangible assets 41,153 -- -- 41,148(4) Goodwill impairment, restructuring and deal-related charges 51,760 -- 1,403 -------------------------------------------------------------- Total operating expense 448,158 9,405 18,392 42,248 Loss from operations (189,117) (6,463) (11,180) (43,681) Equity in losses of affiliates (6,789) -- -- Impairment of equity investment (24,052) -- -- Gain on affiliate stock 11,026 -- -- Interest and other, net 53,801 1,982 160 -------------------------------------------------------------- Total other income 33,986 1,982 160 Loss before income taxes (155,131) (4,481) (11,020) (43,681) Provision for income tax 1,497 101 164 -------------------------------------------------------------- Loss before minority interest (156,628) (4,582) (11,184) (43,681) Minority interest 647 -- -- -------------------------------------------------------------- Net loss $(155,981) $(4,582) $(11,184) $ (43,681) ============================================================== Weighted-average number of shares used in calculation of basic and diluted EPS: 121,278 Basic and diluted EPS: $(1.29) Pro forma Less Pro forma combined European Media combined -------- -------------- -------- Revenues $ 530,996 $ (52,507) $ 478,489 Cost of revenues 244,747 (33,535) 211,212 European Media sales commissions -- 4,395(5) 4,395 Write-off of advance to publisher 18,487 -- 18,487 --------------------------------------------- Total cost of revenue 263,234 (29,140) 234,094 --------------------------------------------- Gross profit 267,762 (23,367) 244,395 Operating expenses Sales and marketing 245,006 (47,181) 197,825 General and administrative 88,713 (1,599) 87,114 Product development 49,020 (21) 48,999 Amortization of intangible assets 82,301 (28,460) 53,841 Goodwill impairment, restructuring and deal-related charges 53,163 (49,758) 3,405 --------------------------------------------- Total operating expense 518,203 (127,019) 391,184 Loss from operations (250,441) 103,652 (146,789) Equity in losses of affiliates (6,789) -- (6,789) Impairment of equity investment (24,052) -- (24,052) Gain on affiliate stock 11,026 -- 11,026 Interest and other, net 55,943 191 56,134 --------------------------------------------- Total other income 36,128 191 36,319 Loss before income taxes (214,313) 103,843 (110,470) Provision for income tax 1,762 (614) 1,148 ---------------------------------------------- Loss before minority interest (216,075) 104,457 (111,618) Minority interest 647 -- 647 ---------------------------------------------- Net loss $(215,428) $104,457 $(110,971) ============================================== Weighted-average number of shares used in calculation of basic and diluted EPS: 127,255 127,255 Basic and diluted EPS: $(1.69) $(0.87)
NOTES TO THE UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS 1. This amount reflects the acquisition of the 15% interest in AdLINK. The value of the approximately 3.9 million shares of AdLINK common stock that were purchased from United Internet has been determined based on their average market price, as quoted on the Neuer Markt, for the day immediately prior to, the day of, and the day immediately after the signing of the Option Agreement, dated as of November 12, 2001, by and among DoubleClick, Channon Management Limited and United Internet. 2. This amount represents the loss associated with the sale of DoubleClick's European Media operations. 3. These amounts represent the amortization of technology and customer lists acquired in connection with the purchase of FloNetwork. Such amounts are classified as costs of revenue and sales and marketing expenses, respectively. 4. This represents the amortization of goodwill generated on the acquisitions of @plan and FloNetwork for the period reported. The amount of pro forma amortization expense attributable to each acquisition is broken out as follows: For the nine months ended September 30, 2001: @plan $ 2,180 FloNetwork 4,993 ------- Total $ 7,173 ======= For the year ended December 31, 2000: @plan $26,170 FloNetwork 14,978 ------- Total $41,148 =======
In accordance with SFAS 142, DoubleClick has ceased amortizing this and all other goodwill effective January 1, 2002. On a pro forma basis, DoubleClick estimates that the adoption of SFAS 142 would have reduced its amortization expense by approximately $37 million for the nine months ended September 30, 2001, and approximately $78 million for the year ended December 31, 2000. 5. These amounts represent commissions payable to DoubleClick's European Media operations for its sales on other geographic networks. Such intercompany commissions are eliminated in DoubleClick's consolidated statements of operations. (c) Exhibits 2.1 Business Purchase Agreement, dated as of November 12, 2001, by and among DoubleClick Inc., several of its European subsidiaries, Channon Management Limited, AdLINK Internet Media AG, several of its European subsidiaries, and United Internet AG. Incorporated by reference to Exhibit 2.1 of DoubleClick Inc.'s Form 8-K filed with the Securities and Exchange Commission (the "Commission") on November 21, 2001. 2.2 Option Agreement, dated as of November 12, 2001, by and among DoubleClick Inc., Channon Management Limited and United Internet AG. Incorporated by reference to Exhibit 2.2 of DoubleClick Inc.'s Form 8-K filed with the Commission on November 21, 2001. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. DOUBLECLICK INC. --------------------------------------- (Registrant) By: /s/ Elizabeth Wang ----------------------------------- Name: Elizabeth Wang Title: Vice President and Secretary Dated: February 11, 2002
EXHIBIT EXHIBIT INDEX - ------- ------------- 2.1 Business Purchase Agreement, dated as of November 12, 2001, by and among DoubleClick Inc., several of its European subsidiaries, Channon Management Limited, AdLINK Internet Media AG, several of its European subsidiaries, and United Internet AG. Incorporated by reference to Exhibit 2.1 of DoubleClick Inc.'s Form 8-K filed with the Commission on November 21, 2001. 2.2 Option Agreement, dated as of November 12, 2001, by and among DoubleClick Inc., Channon Management Limited and United Internet AG. Incorporated by reference to Exhibit 2.2 of DoubleClick Inc.'s Form 8-K filed with the Commission on November 21, 2001.
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