MOUNTAIN VIEW, Calif., Aug. 28, 2008 (GLOBE NEWSWIRE) -- SourceForge, Inc. (Nasdaq:LNUX), the leader in IT community-driven media and e-commerce, today announced financial results for its fourth quarter and fiscal year ended July 31, 2008.
Revenue from continuing operations for the year ended July 31, 2008 grew 21% to $55.3 million, compared to $45.6 million for the year ended July 31, 2007. Fourth quarter fiscal 2008 revenue from continuing operations grew 13% to $11.3 million, compared to fourth quarter fiscal 2007 revenue of $10.1 million.
For the year ended July 31, 2008, the company's net loss from continuing operations on a GAAP basis was $4.3 million, or $(0.06) per share, compared to GAAP net income from continuing operations of $6.0 million, or $0.09 per share, for the year ended July 31, 2007. On a GAAP basis, the fourth quarter fiscal 2008 loss from continuing operations was $5.0 million, or $(0.07) per share, compared to fourth quarter fiscal 2007 GAAP income from continuing operations of $0.7 million, or $0.01 per share. On a GAAP basis, including discontinued operations, net income for fiscal year 2007 was $8.7 million, or $0.13 per share and net income for the fourth quarter of fiscal 2007 was $0.6 million, or $0.01 per share.
The net loss for the year ended July 31, 2008 included charges of $2.0 million of total severance costs related to the resignation of the company's former CEO (composed of $0.9 million of cash costs and $1.1 million of stock-based compensation, which is included in the non-GAAP reconciliation), $2.2 million of restructuring charges relating to the Company's former headquarters, $0.4 million of legal expenses relating to the resolution of a long-term outstanding claim and a net realized loss on investment of $0.4 million. The net loss for the quarter ended July 31, 2008 included charges of $2.0 million of total severance costs related to the resignation of the company's former CEO (composed of $0.9 million of cash costs and $1.1 million of stock-based compensation expense which is included in the non-GAAP reconciliation), $0.8 million of restructuring charges relating to the Company's former headquarters, $0.4 million of legal expenses relating to the resolution of a long-term outstanding claim and a realized loss on investment of $0.2 million.
Excluding the impact of stock-based compensation and restructuring charges, non-GAAP income from continuing operations for the year ended July 31, 2008 was $1.4 million, or $0.02 per share, compared to $7.4 million, or $0.11 per share for the year ended July 31, 2007. Non-GAAP loss for the fourth quarter of fiscal 2008 was $2.2 million, or $(0.03) per share, compared to non-GAAP income from continuing operations of $1.3 million, or $0.02 per share, for the fourth quarter of fiscal 2007. A reconciliation of income from continuing operations as reported to non-GAAP income from continuing operations is included in this release.
Cash and investments balance at the end of the fourth fiscal quarter was $53.7 million.
"In a quarter of significant change and focus on long-term investment, we had solid performance from our media division and exceptional performance from our eCommerce business," said Bob Neumeister, Interim CEO, SourceForge, Inc. "We are committed to our investment strategy to increase engagement, enhance our product offerings and provide long-term shareholder value with growth to the top line."
A conference call and audio webcast will be held at 2:00 p.m. PT or 5:00 p.m. ET on August 28, 2008 and may be accessed by calling 877-407-0782 or 201-689-8567. Replays of both the telephonic audio and audio webcast will be available for 90 days on the company's corporate web site at www.sourceforge.com. To access the conference call replay, dial 877-660-6853 or 201-612-7415, referencing replay account 286 and call ID 292741.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, SourceForge also reports non-GAAP financial results. Non-GAAP income from continuing operations and non-GAAP earnings per share from continuing operations reflect income from continuing operations and exclude stock-based compensation expense and restructuring costs. These non-GAAP financial results are provided to enhance the reader's overall understanding of SourceForge's current financial performance and prospects for the future. Specifically, SourceForge believes that non-GAAP results provide useful information to both management and investors by excluding certain expenses that SourceForge believes are not indicative of its core operating results and stock-based compensation. SourceForge considers its 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. In addition, because SourceForge has historically reported non-GAAP results to the investment community, SourceForge believes the inclusion of non-GAAP numbers provides consistency in financial reporting. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting in future periods. The method SourceForge uses to produce non-GAAP results 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.
These non-GAAP financial results are derived from GAAP income from continuing operations by excluding restructuring charges and stock-based compensation expenses. Restructuring costs are excluded from SourceForge's GAAP financial measures because they represent non-cash charges which are not representative of SourceForge's core operations. With respect to stock-based compensation, SourceForge recognizes that expenses associated with stock-based compensation that requires management to make assumptions about SourceForge's common stock such as expected future stock price volatility, the anticipated duration of outstanding stock options and awards and the rate at which SourceForge recognizes the corresponding stock-based compensation expense over the course of future fiscal periods. While other forms of SourceForge expense (such as cash compensation, inventory costs and real estate costs) are reasonably correlated to SourceForge's 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 SourceForge currently operates its business.
These non-GAAP financial measures are used by management and investors in addition to and in conjunction with results presented in accordance with GAAP. These non-GAAP financial measures reflect an additional way of viewing aspects of SourceForge's operations that, when viewed with our GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provide a more complete understanding of SourceForge's underlying operational results and trends in our performance. Further, SourceForge believes that the financial analysts who regularly follow and report on SourceForge and the business sector in which SourceForge competes exclude items such as these when analyzing performance relative to our guidance, as well as their financial performance estimates and the performance of other sector participants, and in projecting future financial results.
About SourceForge, Inc.
SourceForge's media and e-commerce web sites connect millions of influential technology professionals and enthusiasts each day. Combining user-developed content, online marketplaces and e-commerce, SourceForge is the global technology community's nexus for information exchange, goods for geeks, and open source software distribution and services. SourceForge's network of web sites serves 33 million unique visitors each month* and includes: SourceForge.net, Slashdot, ThinkGeek, Linux.com, freshmeat.net, ITManagersJournal and NewsForge. For more information or to view the media kit online, visit www.sourceforge.com. (*Source: Google Analytics and Omniture, July 2008.)
The SourceForge, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3878
SourceForge, SourceForge.net, Slashdot, freshmeat, and ThinkGeek are registered trademarks of SourceForge, 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 management's current expectations, and involve risks and uncertainties. Forward-looking statements contained herein include statements regarding growth strategies and prospects for SourceForge's 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: SourceForge's ability to attract and retain qualified personnel; success in designing and offering innovative online advertising programs; decreases or delays in online advertising spending; SourceForge's ability to achieve and sustain higher levels of revenue; SourceForge's ability to protect and defend its intellectual property rights; rapid technological and market change; unforeseen expenses that SourceForge may incur in future quarters; and competition with, and pricing pressures from larger and/or more established competitors. Investors should consult SourceForge's filings with the Securities and Exchange Commission, www.sec.gov, including the risk factors sections of its Annual Report on Form 10-K/A for the fiscal year ended July 31, 2007, and the Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2008, for further information regarding these and other risks of SourceForge's business. All forward-looking statements included in this press release are based upon information available to SourceForge as of the date hereof, and SourceForge does not assume any obligations to update such statements or the reasons why actual results could differ materially from those projected in such statements.
SOURCEFORGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
July 31, July 31,
------------------- --------------------
2008 2007 2008 2007
-------- -------- -------- --------
Online Media revenue $ 4,756 $ 4,893 $ 18,506 $ 17,496
E-commerce revenue 6,584 5,186 36,820 28,103
-------- -------- -------- --------
Net revenue 11,340 10,079 55,326 45,599
-------- -------- -------- --------
Online Media cost of
revenue 2,080 1,249 7,268 4,733
E-commerce cost of
revenue 5,111 3,878 27,860 21,200
-------- -------- -------- --------
Cost of revenue 7,191 5,127 35,128 25,933
-------- -------- -------- --------
Gross margin 4,149 4,952 20,198 19,666
-------- -------- -------- --------
Operating expenses:
Sales and marketing 2,409 1,824 8,346 6,108
Research and
development 1,376 1,011 4,382 3,771
General and
administrative 4,720 2,111 11,127 6,443
Restructuring costs 765 -- 2,179 --
-------- -------- -------- --------
Total operating
expenses 9,270 4,946 26,034 16,322
-------- -------- -------- --------
Operating income (loss)
from continuing
operations (5,121) 6 (5,836) 3,344
Interest and other
income, net 89 746 1,638 2,896
-------- -------- -------- --------
Income (loss) from
continuing operations
before income taxes (5,032) 752 (4,198) 6,240
Provision (benefit) for
income taxes (50) 46 128 285
-------- -------- -------- --------
Income (loss) from
continuing operations (4,982) 706 (4,326) 5,955
Income (loss) from
discontinued
operations -- (105) -- 2,773
-------- -------- -------- --------
Net income (loss) $ (4,982) $ 601 $ (4,326) $ 8,728
======== ======== ======== ========
Income (loss) per
share from
continuing
operations:
Basic $ (0.07) $ 0.01 $ (0.06) 0.09
========= ======= ========= ========
Diluted $ (0.07) $ 0.01 $ (0.06) 0.09
========= ======= ========= ========
Income per share
from discontinued
operations:
Basic $ 0.00 $ 0.00 $ 0.00 0.04
========= ======= ========= ========
Diluted $ 0.00 $ 0.00 $ 0.00 0.04
========= ======= ========= ========
Net income (loss)
per share:
Basic $ (0.07) $ 0.01 $ (0.06) 0.13
========= ======= ========= ========
Diluted $ (0.07) $ 0.01 $ (0.06) 0.13
========= ======= ========= ========
Shares used in
computing earnings
per share:
Basic 67,555 67,807 67,469 66,254
========= ======= ========= ========
Diluted 67,555 69,353 67,469 68,489
========= ======= ========= ========
SOURCEFORGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
July 31, July 31,
------------------- -------------------
2008 2007 2008 2007
-------- -------- -------- --------
Reconciliation of income
(loss) from continuing
operations as reported
to non-GAAP income from
continuing operations:
Income (loss) from
continuing operations
- as reported $ (4,982) $ 706 $ (4,326) $ 5,955
Non cash charges:
Stock-based
compensation
expense included
in COGS 101 36 249 101
Stock-based
compensation expense
included in Op Ex. 1,914 525 3,344 1,343
Restructuring costs 765 -- 2,179 --
-------- -------- -------- ---------
Non-GAAP income (loss)
from continuing
operations $ (2,202) $ 1,267 $ 1,446 $ 7,399
======== ======== ======== =========
Non-GAAP income/(loss)
per share from
continuing operations:
Basic $ (0.03) $ 0.02 $ 0.02 $ 0.11
======== ======== ======== =========
Diluted $ (0.03) $ 0.02 $ 0.02 $ 0.11
======== ======== ======== =========
Shares used in
computing non-GAAP
per share amounts:
Basic 67,555 67,807 67,469 66,254
======== ======== ======== =========
Diluted 67,555 69,353 67,702 68,489
======== ======== ======== =========
SOURCEFORGE, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(unaudited)
July 31, July 31,
2008 2007
--------- ---------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $ 42,453 $ 42,769
Accounts receivable, net 4,413 5,309
Inventories 2,985 2,052
Prepaid expenses and other current assets 1,353 1,529
Current assets of discontinued operations -- 92
--------- ---------
Total current assets 51,204 51,751
Property and equipment, net 4,800 2,640
Long-term investments, including long-term
restricted cash 11,249 14,871
Other assets 7,280 7,601
--------- ---------
Total assets $ 74,533 $ 76,863
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,783 $ 2,348
Accrued restructuring liabilities 2,788 1,781
Deferred revenue 585 733
Accrued liabilities and other 2,115 2,786
--------- ---------
Total current liabilities 8,271 7,648
Accrued restructuring liabilities, net of
current portion 2,444 3,267
Other long-term liabilities 166 854
--------- ---------
Total liabilities 10,881 11,769
--------- ---------
Stockholders' equity:
Common stock 69 69
Additional paid-in capital and treasury stock 800,873 797,418
Accumulated other comprehensive loss (597) (26)
Accumulated deficit (736,693) (732,367)
--------- ---------
Total stockholders' equity 63,652 65,094
--------- ---------
Total liabilities and stockholders' equity $ 74,533 $ 76,863
========= =========
SOURCEFORGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Year Ended July 31,
--------------------
2008 2007
-------- -------
Cash flows from operating activities:
Net income (loss) $ (4,326) $ 8,728
Income from discontinued operations -- 2,773
-------- -------
Income (loss) from continuing operations $ (4,326) $ 5,955
Adjustments to reconcile income (loss) from
continuing operations to net cash provided
by operating activities:
Depreciation and amortization 1,481 574
Stock-based compensation expense 3,593 1,443
Tax benefit from employee option plan -- 213
Provision for bad debts 154 27
Provision for excess and obsolete inventory 43 (33)
Loss on sale of assets 8 42
Loss on sale of investments, net 413 --
Non-cash restructuring expense 2,179 --
Changes in assets and liabilities, net of
disposition:
Accounts receivable 742 (2,493)
Inventories (976) (928)
Prepaid expenses and other assets 497 (679)
Accounts payable 435 1,252
Accrued restructuring liabilities (1,870) (1,640)
Deferred revenue (148) 440
Accrued liabilities and other (671) 300
Other long-term liabilities (688) (260)
-------- -------
Net cash provided by operating activities
from continuing operations 866 4,213
-------- -------
Cash flows from investing activities from
continuing operations:
Purchase of property and equipment (3,774) (2,626)
Purchase of marketable securities (40,885) (81,331)
Sale of marketable securities 77,386 71,337
-------- -------
Net cash provided by (used in) investing
activities from continuing operations 32,727 (12,620)
-------- -------
Cash flows from financing activities from
continuing operations:
Proceeds from issuance of common stock, net 51 4,219
Repurchase of common stock (189) --
-------- -------
Net cash provided by (used in) financing
activities from continuing operations (138) 4,219
-------- -------
Cash flows from discontinued operations:
Net cash provided by (used in) operating
activities 92 (1,550)
Net cash used in investing activities -- (658)
-------- -------
Net cash provided by (used in) discontinued
operations 92 (2,208)
-------- -------
Net increase (decrease) in cash and cash
equivalents 33,547 (6,396)
Cash and cash equivalents, beginning of
period 8,357 14,753
-------- -------
Cash and cash equivalents, end of period $ 41,904 $ 8,357
======== =======