Total Revenue Growth -- Up 17 Percent Year-Over-Year
Record Media Revenue -- Up 23 Percent Year-Over-Year
and 14 Percent Sequentially
MOUNTAIN VIEW, Calif., Nov. 25, 2008 (GLOBE NEWSWIRE) -- SourceForge, Inc. (Nasdaq:LNUX), the leader in IT community-driven media and e-commerce, today announced financial results for its first quarter of fiscal 2009, which ended October 31, 2008.
Total revenue for the first quarter of fiscal 2009 grew 17% to $12.1 million, as compared to $10.3 million for the first quarter of fiscal 2008.
On a GAAP basis, net loss for the first quarter of fiscal 2009 was ($0.4) million, or ($0.01) per share, which includes $0.6 million of other income related to the Company's fair value accounting for certain of its assets. This compares to a GAAP net loss of ($1.1) million, or ($0.02) per share, for the same period a year ago.
Non-GAAP income for the first fiscal quarter of fiscal 2009 was $0.1 million, or $0.00 per share, compared to non-GAAP income of $0.9 million, or $0.01 per share, for the same period a year ago. Non-GAAP income excludes stock-based compensation and restructuring charges. A reconciliation of our GAAP net loss as reported to non-GAAP income is included in this release.
Total cash and investments balance at the end of the first fiscal quarter of 2009 was $47.2 million.
"We are pleased that we delivered a solid quarter of revenue growth and met our guidance for the first quarter, while continuing to make progress on our strategic initiatives. Our Online Media business recorded its highest ever revenue quarter - clear evidence that we are executing on our strategy - and our e-commerce business delivered year-over-year double-digit growth," said Bob Neumeister, Interim CEO, SourceForge, Inc. "Although we are mindful of current economic challenges and uncertainties, we remain committed to our key initiatives which are 1) in media to increase engagement, grow our audience, and improve our monetization; and 2) in e-commerce to continue to build our proprietary products and scale our merchandising. We believe these efforts will help to provide long-term shareholder value."
First Quarter Highlights:
Media revenue totaled $5.4 million for the first quarter of fiscal 2009, representing a 23% increase over first quarter of fiscal 2008 revenue of $4.4 million and 14% sequential growth over fourth quarter fiscal 2008 revenue of $4.8 million.
E-commerce revenue totaled $6.7 million for the first quarter of fiscal 2009, representing a 13% increase over first quarter fiscal 2008 revenue of $5.9 million.
Other Media highlights for the first quarter of fiscal 2009 as compared to the fourth quarter of fiscal 2008:
* Ad Network revenue increased 67%; * Premium product revenue grew 85% to $1 million; * Media uniques grew 5% to 36 million; * RPM increased to $11.57 from $10.86; * Page views increased 7%; * Revenue per user increased from $0.55 to $0.59; and * Page views per unique remained relatively constant at 4 pages.
Other E-commerce highlights:
* ThinkGeek shipped 96,000 orders in the first quarter of fiscal 2009, a 19% increase from the first quarter of fiscal 2008; and * Average order size decreased to $69 in the first quarter of fiscal 2009 from $72 in the first quarter of fiscal 2008.
A conference call and audio webcast will be held at 2:00 p.m. PT or 5:00 p.m. ET on November 25, 2008 and may be accessed by calling 877-407-0782 or 201-689-8567 or by visiting www.sourceforge.com. Replays of both the telephonic audio and audio webcast will be available for 90 days. To access the conference call replay, dial 877-660-6853 or 201-612-7415, referencing replay account 286 and call ID 301621.
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 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 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 34 million unique visitors each month* and includes: SourceForge.net, Slashdot, ThinkGeek, Linux.com and freshmeat.net. For more information or to view the media kit online, visit www.sourceforge.com. (*Source: Google Analytics and Omniture, October 2008.)
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.
The SourceForge, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3878
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, especially in light of current macroeconomic challenges and uncertainty; SourceForge's effectiveness at planning and managing its e-commerce inventory; 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 section of its Annual Report on Form 10-K for the fiscal year ended July 31, 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
October 31,
------------------
2008 2007
-------- --------
Online Media revenue $ 5,417 $ 4,409
E-commerce revenue 6,668 5,893
-------- --------
Net revenue 12,085 10,302
-------- --------
Online Media cost of revenue 2,190 1,424
E-commerce cost of revenue 5,212 4,329
-------- --------
Cost of revenue 7,402 5,753
-------- --------
Gross margin 4,683 4,549
-------- --------
Operating expenses:
Sales and marketing 2,152 1,791
Research and development 1,480 853
General and administrative 2,314 2,256
Restructuring costs -- 1,414
-------- --------
Total operating expenses 5,946 6,314
-------- --------
Operating loss (1,263) (1,765)
Interest and other income, net 782 697
-------- --------
Loss before income taxes (481) (1,068)
Provision (benefit) for income taxes (36) 2
-------- --------
Net loss $ (445) $ (1,070)
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Net loss per share:
Basic ($ 0.01) ($ 0.02)
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Diluted ($ 0.01) ($ 0.02)
======== ========
Shares used in computing loss per share:
Basic 67,730 67,401
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Diluted 67,730 67,401
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SOURCEFORGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended
October 31,
------------------
2008 2007
-------- --------
Reconciliation of net loss as reported to non-GAAP
income:
Net loss - as reported $ (445) $ (1,070)
Non cash charges:
Stock-based compensation expense included in COGS 62 49
Stock-based compensation expense included in
Op Ex 452 480
Restructuring costs -- 1,414
-------- --------
Non-GAAP income $ 69 $ 873
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Non-GAAP income per share:
Basic $ 0.00 $ 0.01
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Diluted $ 0.00 $ 0.01
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Shares used in computing non-GAAP per share
amounts:
Basic 67,730 67,401
======== ========
Diluted 67,801 67,950
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SOURCEFORGE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
October 31, July 31,
2008 2008
---------- ----------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $ 36,967 $ 42,453
Accounts receivable, net 4,754 4,413
Inventories 6,647 2,985
Prepaid expenses and other current assets 2,588 1,353
---------- ----------
Total current assets 50,956 51,204
Property and equipment, net 4,880 4,800
Long-term investments, including long-term
restricted cash 10,238 11,249
Other assets 8,951 7,280
---------- ----------
Total assets $ 75,025 $ 74,533
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,012 $ 2,783
Accrued restructuring liabilities 2,836 2,788
Deferred revenue 420 585
Accrued liabilities and other 2,266 2,115
---------- ----------
Total current liabilities 9,534 8,271
Accrued restructuring liabilities, net of
current portion 1,740 2,444
Other long-term liabilities 168 166
---------- ----------
Total liabilities 11,442 10,881
---------- ----------
Stockholders' equity:
Common stock 69 69
Treasury stock (331) (193)
Additional paid-in capital 801,580 801,066
Accumulated other comprehensive loss 3 (597)
Accumulated deficit (737,738) (736,693)
---------- ----------
Total stockholders' equity 63,583 63,652
---------- ----------
Total liabilities and stockholders' equity $ 75,025 $ 74,533
========== ==========
SOURCEFORGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Three Months Ended
October 31,
------------------
2008 2007
-------- --------
Cash flows from operating activities:
Net loss $ (445) $ (1,070)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 565 149
Stock-based compensation expense 514 529
Provision for bad debts (52) 12
Provision for excess and obsolete inventory (23) 10
Gain on sale of assets -- (1)
Net gain in fair value of assets (601) --
Non-cash restructuring expense -- 1,414
Changes in assets and liabilities:
Accounts receivable (289) 710
Inventories (3,639) (3,870)
Prepaid expenses and other assets (1,294) (754)
Accounts payable 1,229 1,573
Accrued restructuring liabilities (656) 159
Deferred revenue (165) 100
Accrued liabilities and other 151 (392)
Other long-term liabilities 2 (707)
-------- --------
Net cash used in operating activities (4,703) (2,138)
-------- --------
Cash flows from investing activities:
Purchase of property and equipment (645) (936)
Purchase of marketable securities (8) (11,862)
Sale of marketable securities -- 15,309
-------- --------
Net cash provided by (used in) investing
activities (653) 2,511
-------- --------
Cash flows from financing activities:
Proceeds from issuance of common stock, net -- 32
Repurchase of common stock (138) (85)
-------- --------
Net cash used in financing activities (138) (53)
-------- --------
Cash flows from discontinued operations:
Net cash provided by operating activities -- 24
-------- --------
Net cash provided by discontinued operations -- 24
-------- --------
Net increase (decrease) in cash and cash
equivalents (5,494) 344
Cash and cash equivalents, beginning of period 41,904 8,357
-------- --------
Cash and cash equivalents, end of period $ 36,410 $ 8,701
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