LookSmart Announces Fourth Quarter and Full Year 2011 Financial Results
Revenues for the fourth quarter of 2011 were
Loss from continuing operations for the fourth quarter of 2011 was
For the full year 2011, revenues were
Commenting on the results, Dr.
Dr. Dexmier continued, "The intermediary business model experienced a significant change in the fourth quarter. We have ceased business with several of our intermediary customers and do not expect significant future revenue growth in this area. Our future growth will come largely from direct search advertisers, self-service search advertisers and other digital advertising models under development."
Revenues from the Company's Advertiser Network were
Gross margin from continuing operations increased to 45% in the fourth quarter of 2011 from 40% in the fourth quarter of 2010, and increased from 43% in the third quarter of 2011. Total operating expenses in the fourth quarter of 2011 were
Non-GAAP net loss (net income (loss) before discontinued operations and excluding stock-based compensation) for the fourth quarter of 2011 was
An explanation of
Capital expenditures, including capitalization of internally developed software, in the fourth quarter of 2011 were
The Company ended the year with
Q4 2011 Key Metrics Performance
- Total paid clicks for the fourth quarter of 2011 were 122 million, compared to 145 million for the fourth quarter of 2010 and 151 million for the third quarter of 2011.
-
Average Advertising Network revenue per click (RPC) for the fourth quarter of 2011 was
$0.040 , a decrease from$0.065 in the fourth quarter of 2010 and$0.047 in the third quarter of 2011. -
Traffic acquisition costs (TAC) for
LookSmart's Ad Network decreased to 51.9% from 58.2% in the fourth quarter of 2010, and from 54.0% in the third quarter of 2011.
Conference Call
About
The
GAAP to Non-GAAP Reconciliation
We provide a reconciliation of GAAP net income (loss) to non-GAAP net income (loss) below:
| Three Months Ended | |||
| (000's) |
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| GAAP net income (loss) | $ (1,843) | $ (224) | $ 122 |
| Add: Stock-based compensation from continuing operations | 99 | 98 | 125 |
| Subtract: Income from discontinued operations | -- | -- | (91) |
| Non-GAAP net income (loss) | $ (1,744) | $ (126) | $ 156 |
|
Year Ended |
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| (000's) | 2011 | 2010 | |
| GAAP net income (loss) * | $ (2,508) | $ 975 | |
| Add: Stock-based compensation from continuing operations | 362 | 679 | |
| Add: (Income) loss from discontinued operations | -- | (358) | |
| Add: Restructuring charges | 889 | -- | |
| Non-GAAP net income (loss) | $ (1,257) | $ 1,296 | |
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* Net loss for the year ended |
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Use of Non-GAAP Measures
Regulation G, "Conditions for Use of Non-GAAP Financial Measures," and other provisions of the Securities Exchange Act of 1934, as amended, define and prescribe the conditions for use of certain non-GAAP financial information.
The Company believes this non-GAAP financial measure provides important supplemental information to management and investors. This non-GAAP financial measure reflects an additional way of viewing aspects of the Company's operations that the Company believes, when viewed with the GAAP results and the accompanying reconciliation to corresponding GAAP financial measures, provides useful information regarding factors and trends affecting the Company's business and results of operations.
For the non-GAAP financial measure non-GAAP net income (loss), the adjustment provides management with information about
This non-GAAP financial measure is used in addition to, and in conjunction with, results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review the Company's consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. In addition, the Company expects to continue to incur expenses similar to the non-GAAP adjustments described above, in particular stock-based compensation expense, and exclusion of these items from the Company's non-GAAP measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring.
Forward-Looking Statements
This press release contains forward-looking statements, such as references to our business prospects. These statements, including their underlying assumptions, are subject to risks and uncertainties and are not guarantees of future performance. Results may differ due to various factors such as the possibility that our continued efforts to control expenses may not be successful, that our efforts to increase revenue and improve gross margin may not succeed, that we may not be able to achieve or sustain profitability, that we may not succeed in lowering traffic acquisition costs; that our efforts to increase traffic quality may not be successful; that we may be unable to gain or maintain customer acceptance of our publisher solutions or ad backfill products, that existing and potential customers for our products may opt to work with, or favor the products of, others due to more favorable
products or pricing terms, that we may be limited in our ability or unable to retain and grow our ad and customer base, and that we may be limited in our ability to, or be unable to, enhance our products or our network of distribution partners. Additional risks that could cause actual results to differ materially from those projected are discussed in our Annual and Quarterly Reports filed with the
The statements presented in this press release speak only as of the date of the release. Please note that except as required by applicable law we undertake no obligation to revise or update publicly any forward-looking statements for any reason.
NOTE: "LookSmart" is a trademark of
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| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (In thousands) | ||
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| 2011 | 2010 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 17,950 | $ 22,119 |
| Short-term investments | 6,809 | 3,250 |
| Total cash, cash equivalents and short-term investments | 24,759 | 25,369 |
| Trade accounts receivable, net | 1,588 | 3,267 |
| Prepaid expenses and other current assets | 604 | 680 |
| Total current assets | 26,951 | 29,316 |
| Long-term investments | -- | 1,577 |
| Property and equipment, net | 1,941 | 3,082 |
| Capitalized software and other assets, net | 1,220 | 1,750 |
| Total assets | $ 30,112 | $ 35,725 |
| LIABILITIES & STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Trade accounts payable | $ 1,682 | $ 2,503 |
| Accrued liabilities | 895 | 2,615 |
| Deferred revenue and customer deposits | 1,143 | 1,004 |
| Current portion of capital lease obligations | 515 | 1,048 |
| Total current liabilities | 4,235 | 7,170 |
| Capital lease and other obligations, net of current portion | 296 | 902 |
| Total liabilities | 4,531 | 8,072 |
| Commitments and contingencies | -- | -- |
| Stockholders' equity: | ||
|
Convertible preferred stock, |
-- | -- |
|
Common stock, |
17 | 17 |
| Additional paid-in capital | 262,201 | 261,740 |
| Accumulated other comprehensive income (loss) | (24) | 1 |
| Accumulated deficit | (236,613) | (234,105) |
| Total stockholders' equity | 25,581 | 27,653 |
| Total liabilities and stockholders' equity | $ 30,112 | $ 35,725 |
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| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (In thousands, except per share data) | ||||
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Three Months Ended |
Year Ended |
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| 2011 | 2010 | 2011 | 2010 | |
| Revenue | $ 5,284 | $ 9,901 | $ 27,634 | $ 47,479 |
| Cost of revenue | 2,914 | 5,947 | 15,195 | 28,832 |
| Gross profit | 2,370 | 3,954 | 12,439 | 18,647 |
| Operating expenses: | ||||
| Sales and marketing | 1,085 | 948 | 2,853 | 4,331 |
| Product development and technical operations | 1,831 | 1,941 | 6,742 | 9,039 |
| General and administrative | 1,299 | 1,022 | 4,791 | 4,635 |
| Restructuring charge | -- | -- | 889 | -- |
| Total operating expenses | 4,215 | 3,911 | 15,275 | 18,005 |
| Income (loss) from operations | (1,845) | 43 | (2,836) | 642 |
| Interest income | 21 | 18 | 89 | 68 |
| Interest expense | (17) | (31) | (81) | (148) |
| Other income, net | (2) | 1 | 323 | 60 |
| Income (loss) from continuing operations before income taxes | (1,843) | 31 | (2,505) | 622 |
| Income tax expense | -- | -- | (3) | (5) |
| Income (loss) from continuing operations | (1,843) | 31 | (2,508) | 617 |
| Income from discontinued operations, net of tax | -- | 91 | -- | 358 |
| Net income (loss) | $ (1,843) | $ 122 | $ (2,508) | $ 975 |
| Net income (loss) per share - Basic and Diluted | ||||
| Income (loss) from continuing operations | $ (0.11) | $ -- | $ (0.15) | $ 0.04 |
| Income from discontinued operations, net of tax | -- | 0.01 | -- | 0.02 |
| Net income (loss) per share - Basic and Diluted | $ (0.11) | $ 0.01 | $ (0.15) | $ 0.06 |
| Weighted average shares outstanding used in computing basic net income (loss) per share | 17,287 | 17,221 | 17,287 | 17,179 |
| Weighted average shares outstanding used in computing diluted net income (loss) per share | 17,287 | 17,345 | 17,287 | 17,236 |
CONTACT:Bill O'Kelly , Senior Vice President Operations and Chief Financial Officer (415) 348-7208 bo'kelly@looksmart.netICR, Inc. John Mills , Senior Managing Director (310) 954-1100 john.mills@icrinc.com
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