-----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, BBOC2j1wCXN9ErSm47k17x2LJjVlPD5JJJreZGnPAnw8r1+w/vZSOa/qKrGVAqws Ngyj8yha7+KLctfsuHhArA== 0000950123-04-012637.txt : 20041028 0000950123-04-012637.hdr.sgml : 20041028 20041028160849 ACCESSION NUMBER: 0000950123-04-012637 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041028 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041028 DATE AS OF CHANGE: 20041028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOUBLECLICK INC CENTRAL INDEX KEY: 0001049480 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] 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: 041102831 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 y67973e8vk.txt 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): OCTOBER 28, 2004 (OCTOBER 28, 2004) ---------- 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.) 111 EIGHTH AVENUE, 10TH FLOOR NEW YORK, NEW YORK 10011 (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) ------------------------------ Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On October 28, 2004, DoubleClick Inc. ("DoubleClick" or the "Company") announced its financial results for the third quarter ended September 30, 2004. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information in this Form 8-K (including Exhibit 99.1) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing. The attached press release contains non-GAAP financial measures. The non-GAAP measures included in the press release should be considered in addition to, not as a substitute for, or superior to other measures of the Company's financial position prepared in accordance with generally accepted accounting principles. The attached press release discloses the Company's net cash position as of September 30, 2004, which may be considered to be a non-GAAP financial measure, and reconciles the Company's net cash position to its cash, cash equivalents, restricted cash and investments in marketable securities as of September 30, 2004, as determined in accordance with GAAP. Net cash is considered a liquidity measure and provides useful information to management and investors about the amount of cash available to the Company after taking into account the principal amount of outstanding debt. Management uses this financial measure in making operating decisions, for budget planning purposes and in considering strategic opportunities, including strategic acquisitions and repurchasing stock or bonds. The attached press release also discloses EBITDA, a non-GAAP financial measure which represents net income as presented in the statement of operations under GAAP before interest, taxes, depreciation and amortization, and reconciles EBITDA to GAAP net income. EBITDA, as defined above, may not be similar to EBITDA measures used by other companies. We believe that EBITDA provides useful information to investors about the Company's performance because it eliminates the effects of period to period changes in costs associated with capital investments and income from interest on our cash and marketable securities that are not directly attributable to the underlying performance of the Company's business operations. Management uses EBITDA in evaluating the overall performance of the Company's business operations. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed: 99.1 Press Release issued by the Company on October 28, 2004. SIGNATURE 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. By: /s/ Bruce Dalziel -------------------- Name: Bruce Dalziel Title: Chief Financial Officer Dated: October 28, 2004
EXHIBIT EXHIBIT INDEX - ------- --------------- 99.1 Press Release dated October 28, 2004.
EX-99.1 2 y67973exv99w1.txt PRESS RELEASE Exhibit 99.1 [DOUBLECLICK LOGO] For Immediate Release INVESTOR CONTACT: Jason McGruder Manager, Investor Relations 212-381-5182 PRESS CONTACT: Jennifer Miller VP, Corporate Communications 212-381-5705 DOUBLECLICK REPORTS THIRD QUARTER 2004 RESULTS Company posts record revenue for Abacus and overall Data Segment; updates 2004 outlook NEW YORK, NY, October 28, 2004 - DoubleClick Inc. (NASDAQ: DCLK), the leading provider of data and technology solutions for marketers, advertising agencies and web publishers, today announced financial results for the third quarter ended September 30, 2004, and updated its business outlook for 2004. Third Quarter Results - --------------------- DoubleClick reported revenue for the third quarter of $81.0 million versus $74.8 million in the year-ago period. GAAP net income for the most recent quarter was $15.4 million, or $0.12(1) per share, compared with $6.3 million, or $0.04 per share, in the third quarter of 2003. The Company achieved gross margins of 73.4% during the quarter compared to 66.1% in the year-ago period. EBITDA2 was $23.9 million for the third quarter of 2004 compared to $23.8 million in 3Q03. Total GAAP operating expenses were $52.0 million in the quarter, versus $45.7 million in the third quarter of 2003. Total company headcount was 1,526 as of September 30, 2004, against 1,214 twelve months prior. -------------------------------------------------------- 3Q04 3Q03 -------------------------------------------------------- Revenue (000's) $80,954 $74,790 -------------------------------------------------------- GAAP Net Income (000's)(1) $15,364 $ 6,340 -------------------------------------------------------- GAAP EPS(1) $ 0.12 $ 0.04 -------------------------------------------------------- "I am pleased to report that we have made good progress in our core businesses," said Kevin Ryan, Chief Executive Officer, DoubleClick. "The Data segment reported record revenues and Abacus operating margins were at an all-time high, while gross and operating margins continued to expand in Ad Management. In addition, our new Performics division performed ahead of our expectations. We believe that recent initiatives taken to enhance our core businesses have laid the foundations for improved performance by the Company. We continue to evaluate every aspect of our business, with a goal of maximizing our potential for growth." - ---------- (1) GAAP earnings and EBITDA for the third quarters of 2004 and 2003 were impacted by a number of items described herein. These items added a net total of approximately $0.05 to GAAP EPS in 3Q04 and lowered net income by approximately $0.03 per share in the year-ago period. (2) EBITDA, (or Earnings Before Interest, Tax, Depreciation, and Amortization), is a non-GAAP financial measure. Please see the attached schedule for a reconciliation of GAAP net income to EBITDA. Please see the Form 8-K filed on October 28, 2004 by the Company with the SEC for a discussion of why the Company believes EBITDA is a useful financial measure to investors and of how and when management uses EBITDA. GAAP earnings and EBITDA for the third quarter of 2004 benefited from a non-operating gain of approximately $7.1 million from the Company's sale of its 15% interest in AdLINK Internet Media AG. In addition, DoubleClick recorded a restructuring credit relating to its Louisville, Colorado facility, which lowered operating expenses by $4.5 million. GAAP net income and EBITDA were negatively affected in 3Q04 by a write-down of DoubleClick's Enterprise Marketing Solutions (EMS) business, which consists of its Campaign Management and Marketing Resource Management products. The write-down was necessary primarily due to lower than expected revenue generated to date and reduced estimates for future revenue from the Company's Campaign Management products. A valuation by the Company, with the assistance of a third party, and based on recent market multiples of publicly traded comparables and a discounted cash flow analysis, resulted in an impairment charge of $5.6 million. Third quarter 2003 GAAP earnings were negatively impacted by $8.3 million in accelerated depreciation charges associated with the relocation of the Company's New York headquarters and the termination of the lease for its San Francisco facility. Third quarter 2003 GAAP earnings and EBITDA benefited from a net restructuring credit of $2.2 million associated with these facilities and $1.4 million received by the Company in connection with an insurance claim. Cash Flow and Balance Sheet - --------------------------- DoubleClick generated $22.1 million in cash flow from operations during the third quarter. The Company had $523.9 million in cash and marketable securities, and had a net cash(3) position of $388.9 million, or $3.10 per share, as of September 30, 2004. This reflects the $9.5 million received for the sale of DoubleClick's AdLINK shares and the $38.8 million used in connection with the open market repurchase of approximately 6.4 million shares of DoubleClick's common stock in 3Q04. Data - ---- DoubleClick reported Data segment revenue of $33.1 million in 3Q04, compared to $31.3 million in 3Q03. Abacus quarterly revenue was $30.4 million versus $28.8 million in the year-ago period. Data Management Solutions (DMS) recorded $2.8 million in revenue for 3Q04 against the year-ago quarter's $2.5 million. Overall Data gross margins were 73.0% for the quarter, against 71.7% in 3Q03. Data operating margins before corporate expenses were 39.1%, versus 35.3% a year ago. Data segment quarterly gross and operating margins improved compared to 3Q03 primarily because of increased revenues in each of the segment's divisions. Margins also improved due to slightly higher gross margins and lower operating expenses in Abacus. DMS revenues came in lower than DoubleClick's prior outlook primarily due to the timing of some product installations. During the quarter, DoubleClick added 47 net new Abacus Alliance members globally, bringing the total to over 2,400. In addition, the Company has signed over 20 new deals for the use of its other Data products since the beginning of 3Q04. - ---------- (3) Net cash may be considered a non-GAAP financial measure and is defined as gross cash and cash equivalents of $95.6 million, restricted cash of $15.3 million, and investments in marketable securities of $413.0 million minus zero coupon convertible subordinated notes of $135.0 million. Please see the Form 8-K filed on October 28, 2004 by the Company with the SEC for a discussion of why the Company believes net cash is a useful financial measure to investors and of how and when management uses this measure. 2 "We are very pleased that the Data Segment achieved record revenues, gross profits, and operating profits in the quarter," said David Rosenblatt, President of DoubleClick. "The measures we recently took to reorganize that segment paid off, as we saw year-on-year quarterly revenue increases across the board in Data, including in the Abacus U.S. Business-to-Consumer, U.S. Business-to-Business, and International Alliances." TechSolutions - ------------- The TechSolutions segment reported third quarter revenue of $47.8 million versus $43.5 million in 3Q03. The year-over-year improvement in revenue is primarily a result of the SmartPath and Performics acquisitions coupled with an increase in Email revenues. This increase more than offset the decline in Ad Management revenue. TechSolutions gross margins were 73.7%, an increase from 62.0% in the September quarter of 2003. Gross margins improved primarily as a result of a decrease in cost of revenue. TechSolutions operating margins before corporate expenses were negative 2.0%, versus negative 4.1% in the third quarter of 2003. 3Q04 TechSolutions expenses were adversely affected by the EMS write-down of approximately $5.6 million, while 3Q03 TechSolutions expenses included roughly $6.4 million in accelerated depreciation charges related to the Company's facilities. Ad Management The Company's Ad Management revenue was $29.8 million in 3Q04 versus $31.0 million in the year-ago period. The year-over-year revenue decline was principally due to pricing declines outweighing volume increases in the Company's Publisher business. This decline was partially offset by an increase in revenues from DoubleClick's Advertiser products. DoubleClick has recently signed several new contracts for use of its Ad Management solutions. These wins include Date.com, UNext, Universal McCann Asia Pacific/Cathay Central, and Wieden + Kennedy. In addition, the Company's Rich Media product was fully certified for use on AOL and MSN. Marketing Automation The Company's Marketing Automation products had revenue of $13.0 million in the most recent quarter, against $12.5 million in 3Q03. The year-over-year revenue increase was due to the acquisition of SmartPath and organic growth from the Email business, which was partially offset by a shortfall in Campaign Management revenue. New Marketing Automation deals have been struck with clients including the American Homeowners Association, British American Tobacco, Capital One, CoolSavings, FOLKSAM, InterContinental Hotels Group, and Patagonia. "Our Email revenue continued to grow year-over-year in the quarter and the business remained profitable," added Ryan. "Nonetheless, we are not satisfied with the results for the rest of Marketing Automation and we continue to explore ways to improve the performance of this division." Performics DoubleClick acquired privately-held Performics on June 24, 2004. The results for this new division are now included in the TechSolutions segment. Performics recorded revenue of $5.1 million in 3Q04, $1.1 million over 3Q04 guidance. 3 Agreements to use Performics's solutions have recently been reached with American Girl, AT&T Wireless, Blockbuster, The Body Shop, Creative Catalogs, Crutchfield, Finishline, OfficeMax, Safeway, and Wells Fargo. Revised 2004 Outlook - -------------------- DoubleClick is adjusting its full-year 2004 outlook due to lower estimated revenue from Marketing Automation and DMS and better-than-anticipated results from Abacus and Performics. The revised guidance takes into account the items described above that impacted 3Q04 results. Fourth Quarter 2004 DoubleClick now expects 4Q04 revenue to be between $72 million and $77 million. The Company expects total Company gross margins to be in the low 70s percentage range. GAAP operating expenses are expected to be between $50 million and $52 million. Items in interest and other, net and taxes are expected to be approximately $1 million, based on an assumed tax rate of approximately 15%. The Company anticipates recording GAAP earnings of between $0.01 and $0.04 per share. The Company's segment projections for 4Q04 are as follows: >> TechSolutions revenue is expected to be between $46 million and $50 million, including $28 million to $31 million from Ad Management and $11 million to $13 million from Marketing Automation. Approximately $6 million to $7 million of TechSolutions' revenue is expected to be generated by Performics. Overall TechSolutions gross margins are expected to be in the mid 70s percentage range. >> Data revenue is expected to be between $25 million and $28 million, including approximately $3 million to $3.5 million from DMS; overall Data gross margins should be in the mid 60s percentage range. Full Year 2004 DoubleClick now expects 2004 revenue to be between $290 million and $295 million. The Company expects total Company gross margins to be in the high 60s to low 70s percentage range. GAAP operating expenses are expected to be between $187 million and $189 million, including the approximately $5.6 million charge for the EMS write-down partially offset by the $4.5 million gain related to the Company's Louisville facility. Items in interest and other, net and taxes are expected to be approximately $15 million, including the $2.4 million distribution from an affiliate in 1Q04 and the $7.1 million gain from the sale of AdLINK shares in 3Q04. This guidance is based on an assumed tax rate of approximately 15%. The Company anticipates recording GAAP earnings of between $0.21 and $0.24 per share. DoubleClick's previous 2004 outlook was for revenue of between $290 million and $305 million; operating expenses of between $185 million and $195 million; interest and other, net and taxes of approximately $3.5 million; and GAAP earnings of $0.13 to $0.17 per share. The Company's segment projections for full year 2004 are as follows: >> TechSolutions revenue is expected to be between $185 million and $190 million, including $123 million to $126 million from Ad Management and $50 million to $53 million from 4 Marketing Automation. Approximately $11 million to $12 million of TechSolutions' revenue is expected to be generated by Performics. Overall TechSolutions gross margins are expected to be in the low 70s percentage range. >> Data revenue is expected to be between $103 million and $106 million, including $11 million to $12 million from DMS; overall Data gross margins should be in the mid 60s percentage range. "We continued to keep a tight rein on operating expenses even as we ramped up investment in key areas," said Bruce Dalziel, Chief Financial Officer, DoubleClick. "This should enable us to increase 2004 GAAP net income while launching several new products and feature enhancements in Ad Management and Data. This in turn should help us maintain profitability and our leading position in these areas." Conference Call Today - --------------------- The DoubleClick Conference Call to discuss this earnings press release is scheduled for today at 5:00 p.m. EDT. This call will be available live via Webcast, and on a replay basis afterward on the Company's website www.doubleclick.net under Investor Relations or at ir.doubleclick.net. The Webcast is also being distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call at www.fulldisclosure.com or by visiting any of the investor sites in CCBN's Individual Investor Network. Institutional investors can access the call via www.streetevents.com. Additional financial metrics can be found in the "Financial Reports" section of DoubleClick's Investor Relations website, at ir.doubleclick.net. About DoubleClick - ----------------- DoubleClick is the leading provider of solutions for advertising agencies, marketers, and web publishers to plan, execute, and analyze their marketing programs. DoubleClick's marketing solutions (online advertising, search engine marketing, affiliate marketing, email marketing, database marketing, data management, and marketing resource management) help clients yield the highest return on their marketing dollar. In addition, the company's marketing analytics tools help clients measure performance within and across channels. DoubleClick Inc. has global headquarters in New York City and maintains 22 offices around the world. Note: This press release includes forward-looking statements, including earnings and revenue projections and plans set forth under the sections titled "Revised 2004 Outlook" above, as well as sentences using the words "expects," "plans," "should," or "believes" and all other statements that are not purely historical. The results or events predicted in these statements may vary materially from actual future events or results. Factors that could cause actual events or results to differ from anticipated events or results include: lack of growth or decline in online advertising or marketing, changes in government regulation, intense competition in DoubleClick's industry, failure to manage the integration of acquired companies, failure to successfully manage the Company's international operations and other risks that are contained in documents which the Company files from time to time with the Securities and Exchange Commission, including the Company's most recent reports on Form 10-K and Form 10-Q. In addition, any forward-looking statements represent the Company's estimates only as of today and should not be relied upon as representing the Company's estimates as of any subsequent date. While the Company may elect to update forward-looking statements at some point in the future, it may choose not to do so, even if the Company's estimates change. # # # - -Continued - 5 DOUBLECLICK INC. CONSOLIDATED BALANCE SHEETS
September 30, December 31, 2004 2003 ------------- ------------- (Unaudited, in thousands, except share amounts) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 95,582 $ 183,484 Investments in marketable securities 230,699 151,898 Restricted cash 3,659 16,328 Accounts receivable, net of allowances of $9,108 and $7,519, respectively 76,429 51,491 Prepaid expenses and other current assets 13,271 17,473 ------------- ------------- Total current assets 419,640 420,674 Investment in marketable securities 182,339 312,434 Restricted cash 11,668 11,668 Property and equipment, net 76,330 75,786 Goodwill 66,551 18,658 Intangible assets, net 25,472 10,847 Investment in affiliates 5,759 13,422 Other assets 13,228 14,408 ------------- ------------- Total assets $ 800,987 $ 877,897 ============= ============== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 21,969 $ 4,164 Accrued expenses and other current liabilities 46,854 63,152 Deferred revenue 10,594 8,188 ------------- -------------- Total current liabilities 79,417 75,504 Convertible subordinated notes - Zero Coupon, due 2023 135,000 135,000 Other long term liabilities 21,267 27,046 STOCKHOLDERS' EQUITY: Preferred stock, par value $0.001; 5,000,000 shares authorized, none outstanding - - Common stock, par value $0.001; 400,000,000 shares authorized, 140,428,420 and 139,329,875 shares issued, respectively 140 139 Treasury stock, 14,864,925 and 1,846,170 shares, respectively (109,223) (10,396) Additional paid-in capital 1,293,573 1,287,775 Accumulated deficit (622,585) (649,523) Other accumulated comprehensive income 3,398 12,352 ------------- -------------- Total stockholders' equity 565,303 640,347 ------------- -------------- Total liabilities and stockholders' equity $ 800,987 $ 877,897 ============= ==============
DOUBLECLICK INC. CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended September 30, September 30, -------------------------- -------------------------- 2004 2003 2004 2003 ------------- ----------- ------------ ------------ (Unaudited, in thousands, except per share amounts) REVENUE: Technology $ 47,823 $ 43,514 $ 139,485 $ 128,511 Data 33,131 31,276 78,669 69,889 ------------- ----------- ------------ ------------ Revenue 80,954 74,790 218,154 198,400 Cost of revenue 21,519 25,383 65,913 69,778 ------------- ----------- ------------ ------------ Gross profit 59,435 49,407 152,241 128,622 Operating expenses: Sales and marketing 26,320 27,175 75,475 67,683 General and administrative 9,040 8,459 25,974 25,685 Product development 13,802 10,685 33,286 27,258 Amortization of intangibles 1,764 1,561 3,589 4,880 Goodwill and other impairments 5,592 - 5,592 - Restructuring credits, net (4,514) (2,221) (4,514) (9,092) ------------- ----------- ------------ ------------ Total operating expenses 52,004 45,659 139,402 116,414 Income from operations 7,431 3,748 12,839 12,208 Other income (expense) Equity in losses of affiliates (314) (126) (884) (2,439) Loss on early extinguishment of debt - - - (4,406) Gain on distribution from affiliate - - 2,400 - Gain on sale of investment in affiliate 7,125 - 7,125 - Interest and other, net 2,661 3,491 8,452 9,123 ------------- ----------- ------------ ------------ Total other income 9,472 3,365 17,093 2,278 Income before income taxes 16,903 7,113 29,932 14,486 Provision for income taxes (1,539) (773) (2,994) (1,409) ------------- ----------- ------------ ------------ NET INCOME $ 15,364 $ 6,340 $ 26,938 $ 13,077 ============= =========== ============ ============ Basic net income per share $ 0.12 $ 0.05 $ 0.20 $ 0.10 ============= =========== ============ ============ Weighted average shares used in basic net income per share 127,080 137,366 133,001 136,908 ============= =========== ============ ============ Diluted net income per share $ 0.12 $ 0.04 $ 0.20 $ 0.09 ============= =========== ============ ============ Weighted average shares used in diluted net income per share 128,589 142,351 135,770 140,515 ============= =========== ============ ============
DOUBLECLICK INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended Nine Months Ended September 30, September 30, ------------------------- --------------------------- 2004 2003 2004 2003 ------------ ----------- ------------ ------------ (Unaudited, in thousands) (Unaudited, in thousands) OPERATING ACTIVITIES Net income $ 15,364 $ 6,340 $ 26,938 $ 13,077 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and leasehold amortization 5,708 17,112 19,505 37,465 Amortization of intangible assets 3,510 2,503 7,119 7,483 Equity in losses of affiliates 314 126 884 2,439 Gain on distribution from affiliate - - (2,400) - Gain on sale of investment in affiliate (7,125) (7,125) Loss on early extinguishment of debt - - - 4,406 Restructuring credit (4,514) (2,221) (4,514) (9,092) Goodwill and other impairments 5,592 - 5,592 - Other non-cash items 517 105 1,914 1,307 Provisions for bad debts and advertiser discounts 4,513 3,109 10,471 6,367 Changes in operating assets and liabilities, net of the effect of acquisitions: Accounts receivable (14,782) (8,951) (17,968) (9,022) Prepaid expenses and other assets 6,099 (1,178) 6,416 2,714 Accounts payable 592 1,581 1,324 (2,096) Lease termination and related payments - (56,474) (7,625) (70,874) Accrued expenses and other liabilities 5,502 (2,698) (10,689) (24,656) Deferred revenue 831 (2,735) (97) 1,449 ------------ ----------- ------------ ------------ Net cash provided by (used in) operating activities 22,121 (43,381) 29,745 (39,033) INVESTING ACTIVITIES Purchases of investments in marketable securities - (98,000) (95,084) (334,195) Maturities of investments in marketable securities 36,685 89,347 143,277 424,486 Restricted cash 69 28,161 12,669 (2,650) Purchases of property and equipment (6,418) (6,007) (18,541) (17,234) Proceeds from distribution from affiliate - - 2,400 - Proceeds from sale of investment in affiliates 9,519 - 9,519 656 Proceeds from sale of intangible asset, net - - - 900 Investment in Abacus Germany (334) - (805) - Acquisition of businesses, net of cash assumed - - (72,002) (2,757) ------------ ----------- ------------ ------------ Net cash provided by (used in) investing activities 39,521 13,501 (18,567) 69,206 FINANCING ACTIVITIES Proceeds from the issuance of common stock 531 2,184 3,885 4,450 Proceeds from issuance of convertible subordinated notes, net - - - 131,963 Proceeds used in repurchase of convertible bonds - (157,952) (157,952) Purchases of treasury stock (40,404) - (98,827) - Payments under capital lease obligations and notes payable (3,390) (4,627) (3,675) (8,308) ------------ ----------- ------------ ------------ Net cash used in financing activities (43,263) (160,395) (98,617) (29,847) Effect of exchange rate changes on cash (319) 2 (463) 2,695 ------------ ----------- ------------ ------------ Net increase (decrease) in cash and cash equivalents 18,060 (190,273) (87,902) 3,021 Cash and cash equivalents at beginning of period $ 77,522 $ 316,965 $ 183,484 $ 123,671 ------------ ----------- ------------ ------------ Cash and cash equivalents at end of period $ 95,582 $ 126,692 $ 95,582 $ 126,692 ============ =========== ============ ============
DOUBLECLICK INC. RECONCILIATION OF EBITDA TO GAAP NET INCOME (Unaudited, in thousands)
Three Months Ended September 30, 2004 --------------------- 2004(2) 2003(3) --------- --------- GAAP Net Income $ 15,364 $ 6,340 Plus: tax provision 1,539 773 Less: interest income, net (2,233) (2,904) Plus: amortization of intangibles (1) 3,511 2,503 Plus: depreciation and leasehold amortization 5,708 17,112 --------- --------- EBITDA $ 23,889 $ 23,824 ========= ========= Diluted net income per share $ 0.12 $ 0.04 ========= =========
(1) For the three months ended September 30, 2004 and September 30, 2003, $1.7M and $0.9M, respectively, of amortization expenses of intangible assets relating to purchased technology was included as a component of cost of revenue in the Consolidated Statement of Operations. (2) 2004 GAAP Net Income and EBITDA benefited from a $7.1 million non-operating gain from the sale of the Company's 15% interest in AdLINK Internet Media AG and a $4.5 million restructuring credit relating to the Company's Louisville, Colorado facility. These benefits were partially offset by a $5.6 million impairment charge resulting from the write-down of the Company's Enterprise Marketing Solutions business. These items added a net total of approximately $0.05 per share to GAAP net income in 3Q04. (3) 2003 GAAP Net Income was negatively impacted by $8.3 million in accelerated depreciation charges associated with the relocation of the Company's New York headquarters and the termination of a lease for the Company's San Francisco facility. GAAP Net Income and EBITDA benefited from a net restructuring credit of $2.2 million associated with these facilities and $1.4 million received by the Company in connection with an insurance claim. These items lowered net income by approximately $0.03 per share in 3Q03. -----END PRIVACY-ENHANCED MESSAGE-----