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WebMediaBrands Inc. Reports Financial Results for Its Third Quarter Ended September 30, 2012

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NEW YORK--(BUSINESS WIRE)--

WebMediaBrands Inc. (Nasdaq: WEBM) today reported financial results for the quarter ended September 30, 2012.

Highlights for the third quarter of 2012 include:

  Revenues for the third quarter of 2012 were $2.9 million and revenues from research and advertising increased 13% and 12%, respectively, compared to the same period last year.
 
Net loss for the third quarter of 2012 was $1.2 million. Non-GAAP loss, excluding interest, taxes, depreciation, amortization and stock-based compensation expense, or EBITDA, was $773,000 during the third quarter of 2012, and included severance-related costs and a loss on the sale of certain assets totaling $352,000. We track the EBITDA metric and present it here because we believe it helps in the analysis of the performance of our core operations. Non-cash stock-based compensation expense was $121,000 during the third quarter of 2012.

“The third quarter results were anticipated and were discussed in both our first and second quarterly conference calls,” stated Alan M. Meckler, Chairman and CEO of WebMediaBrands, Inc. “Our third quarter results are typically impacted by the fewer number of trade shows we hold and by the type of education courses we offer. We have continued to invest in our product offerings, specifically with our research business. In addition, we have identified cost efficiencies in certain areas of the business and we have entered into a new lease for our New York City location, which will reduce our annual lease expense by more than $250,000,” added Meckler.

WebMediaBrands Inc. Third Quarter 2012 Financial Results Conference Call Alert

WebMediaBrands Inc. invites you to participate in its conference call reviewing 2012 third quarter results on Wednesday, October 24, 2012 at 5:00 pm ET.

The conference call number is 888-452-4023 for domestic participants and 719-325-2329 for international participants; confirmation code “6944647.” Please call five minutes in advance to ensure that you are connected prior to the presentation. The conference call replay will be available until Monday, October 29, 2012. Replay call numbers are 888-203-1112 for domestic participants and 719-457-0820 for international participants; confirmation code “6944647.”

WebMediaBrands Inc.
Unaudited Consolidated Condensed Statements of Operations
For the Three and Nine Months Ended September 30, 2012 and 2011
(in thousands, except per share amounts)
   
Three Months Ended
September 30,
Nine Months Ended
September 30,
2012   2011 2012   2011
Revenues $ 2,917 $ 3,008 $ 10,642 $ 9,054
Cost of revenues 1,678 1,686 5,830 5,257
Advertising, promotion and selling 614 472 1,920 1,537
General and administrative 1,306 1,359 3,938 4,080
Depreciation 78 77 238 242
Amortization 137 160 409 371
Contingent acquisition consideration         329
Total operating expenses   3,813   3,754   12,335   11,816
 
Operating loss (896 ) (746 ) (1,693 ) (2,762 )
Other loss, net (213 ) (4 ) (216 ) (7 )
Interest income 1 1 3 41
Interest expense   (63 )   (178 )   (209 )   (535 )
 
Loss before income taxes (1,171 ) (927 ) (2,115 ) (3,263 )
Provision (benefit) for income taxes   11   (437 )   30   (417 )
 
Net loss $ (1,182 ) $ (490 ) $ (2,145 ) $ (2,846 )
 
 

Loss per share:

Basic net loss $ (0.20 ) $ (0.08 ) $ (0.36 ) $ (0.49 )
Diluted net loss $ (0.20 ) $ (0.08 ) $ (0.36 ) $ (0.49 )
 
Weighted average shares used in computing loss per share:
Basic   6,009   6,082   5,983   5,765
Diluted   6,009   6,082   5,983   5,765
 

Shares outstanding and per share data have been adjusted to give effect to the one-for-seven reverse stock
split implemented on August 16, 2012.

WebMediaBrands Inc.
Consolidated Condensed Balance Sheets
September 30, 2012 and December 31, 2011
(in thousands, except share and per share amounts)
   
September 30,
2012
(Unaudited)

December 31,
2011

ASSETS
Current assets:
Cash and cash equivalents $ 2,479 $ 3,438
Accounts receivable, net of allowances of $37 and $11, respectively 617 489
Prepaid expenses and other current assets   583   575
Total current assets 3,679 4,502
 
Property and equipment, net of accumulated depreciation of $1,582 and $1,350, respectively 346 477
Intangible assets, net of accumulated amortization of $1,109 and $722, respectively 2,403 2,626
Goodwill 15,116 15,116
Investments and other assets   794   1,146
Total assets $ 22,338 $ 23,867
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 362 $ 367
Accrued payroll and related expenses 397 391
Accrued expenses and other current liabilities 476 662
Deferred revenues   1,555   1,288
Total current liabilities 2,790 2,708
 
Loan from related party 7,647 7,647
Deferred revenues 20 22
Deferred income taxes 470 444
Other long-term liabilities   63   60
Total liabilities   10,990   10,881
 
Commitments and contingencies
 
Stockholders' equity:
Preferred stock, $.01 par value, 4,000,000 shares authorized, no shares issued and outstanding

Common stock, $.01 par value, 18,750,000 shares authorized, 6,128,879 and 6,077,957 shares issued
and 6,009,594 and 5,958,672 shares outstanding at September 30, 2012 and December 31, 2011,
respectively

61 61
Additional paid-in capital 289,543 289,036
Accumulated deficit (277,760 ) (275,615 )
Treasury stock, 119,285 shares at cost   (496 )   (496 )
Total stockholders' equity   11,348   12,986
Total liabilities and stockholders' equity $ 22,338 $ 23,867
 

Shares outstanding and per share data have been adjusted to give effect to the one-for-seven reverse stock
split implemented on August 16, 2012.

WebMediaBrands Inc.
Unaudited Consolidated Condensed Statements of Cash Flows
For the Nine Months Ended September 30, 2012 and 2011
(in thousands)
 
Nine Months Ended
September 30,
2012   2011
Cash flows from operating activities:
Net loss $ (2,145 ) $ (2,846 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 647 613
Stock-based compensation 380 372
Provision for losses on accounts receivable 27 15
Amortization of debt issuance costs 27 22
Other, net 210 (3 )
Deferred income taxes 25 (422 )
Changes in assets and liabilities (net of businesses acquired):
Accounts receivable, net (155 ) (53 )
Prepaid expenses and other assets 130 434
Accounts payable, accrued expenses and other liabilities (195 ) (566 )
Deferred revenues   265   309
Net cash used in operating activities   (784 )   (2,125 )
Cash flows from investing activities:
Purchases of property and equipment (91 ) (39 )
Acquisitions of businesses, assets and other   (186 )   (9,020 )
Net cash used in investing activities   (277 )   (9,059 )
Cash flows from financing activities:
Debt issuance costs (23 )
Repayment of borrowings from related party (50 )
Proceeds from exercise of stock options   125   144
Net cash provided by financing activities   102   94
Net decrease in cash and cash equivalents (959 ) (11,090 )
Cash and cash equivalents, beginning of period   3,438   12,970
Cash and cash equivalents, end of period $ 2,479 $ 1,880

About WebMediaBrands Inc.

WebMediaBrands Inc. (Nasdaq: WEBM) (http://www.webmediabrands.com) is a leading Internet media company that provides content, education, and career services to social media, traditional media, and creative professionals through a portfolio of vertical online properties, communities, and trade shows. The Company's online business includes: (i) mediabistro.com, a leading blog network providing content, education, community, and career resources (including the industry's leading online job board) about major media industry verticals including new media, social media, Facebook, TV news, advertising, public relations, publishing, design, and mobile; (ii)InsideNetwork.com, a leading network of online properties providing original market research, data services, news, and job listings on the Facebook platform, on social gaming, and on mobile applications ecosystems; and (iii)SemanticWeb.com, a leading blog providing content, education, community resources and career resources on the commercialization and application of Semantic Technologies, Linked Data, and Big Data. The Company's online business also includes community, membership and e-commerce offerings including a freelance listing service, a marketplace for designing and purchasing logos (stocklogos.com) and premium membership services. The Company's trade show and educational offerings include conferences, online and in-person courses, and video subscription libraries on topics covered by the Company's online business.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release that are not historical facts are "forward-looking statements" under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The potential risks and uncertainties address a variety of subjects including, for example: general economic conditions; the competitive environment in which WebMediaBrands competes; and the unpredictability of WebMediaBrands's future revenues, expenses, cash flows and stock prices. For a more detailed discussion of such risks and uncertainties, refer to WebMediaBrands's reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. The forward-looking statements included herein are made as of the date of this press release, and WebMediaBrands assumes no obligation to update the forward-looking statements after the date hereof, except as required by law.

All current WebMediaBrands press releases can be found online at http://www.webmediabrands.com/corporate/press.html

WebMediaBrands
Caitlin McKinney, 212-547-7870
press@webmediabrands.com

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