-----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, G6do3nw3IncyxPnxSnLnTn5EkAQ6p1e/ZFhw6oU3KXcxfpt2LqDf//+xPFHCNicJ wDi/6wjrhkIlBDv5XNTLJw== 0000950123-03-008394.txt : 20030722 0000950123-03-008394.hdr.sgml : 20030722 20030722164104 ACCESSION NUMBER: 0000950123-03-008394 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030722 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030722 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: 03796777 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 y88567e8vk.txt DOUBLECLICK INC. ---------------------------------------------------- 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): JULY 22, 2003 (JULY 22, 2003) ------------- 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.) 450 WEST 33RD STREET NEW YORK, NEW YORK 10001 (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) ---------------------------------------------------- ITEM 9. REGULATION FD DISCLOSURE INFORMATION FURNISHED PURSUANT TO ITEM 12. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION On July 22, 2003, DoubleClick announced its financial results for the fiscal quarter ended June 30, 2003 and certain other information. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K. In accordance with the procedural guidance in SEC Release No. 33-8216, the information in this Form 8-K and the Exhibit attached hereto is being furnished under "Item 9. Regulation FD Disclosure" rather than under "Item 12. Disclosure of Results of Operations and Financial Condition." The information 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 discloses the Company's net cash position as of June 30, 2003, 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 June 30, 2003, 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 outstanding debt and capital lease obligations. Management refers to this financial measure in making operating decisions, for budget planning purposes and in considering strategic opportunities including strategic acquisitions and repurchasing stock or bonds. This measure should be considered in addition to, not as a substitute for, or superior to or other measures of the Company's financial position prepared in accordance with generally accepted accounting principles. EXHIBIT NUMBER 99.1 Press Release dated July 22, 2003. SIGNATURES 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. ----------------------------------- (Registrant) By: /s/ Bruce Dalziel ----------------------------------- Name: Bruce Dalziel Title: Chief Financial Officer Dated: July 22, 2003
EXHIBIT EXHIBIT INDEX - ------- ------------- 99.1 Press Release dated July 22, 2003
EX-99.1 3 y88567exv99w1.txt PRESS RELEASE [DOUBLECLICK LOGO] For Immediate Release INVESTOR and PRESS CONTACT: Jennifer Blum VP, Corporate Communications 212-381-5705 DOUBLECLICK REPORTS STRONG SECOND QUARTER 2003 FINANCIAL RESULTS Company exceeds its Total Revenue and EPS Guidance New York, NY, July 22, 2003 -- DoubleClick Inc. (Nasdaq: DCLK), the leading provider of data and technology tools for direct marketers, web publishers and advertisers, today announced financial results for the second quarter ending June 30, 2003, and updated its business outlook for full year 2003. DoubleClick reported revenues for the second quarter of $63.6 million versus $75.7 million in the year ago period. Revenues increased sequentially by 5.8%, though they declined 16.0% year-over-year largely due to the divestitures of businesses in 2002. Total GAAP operating expenses were $32.1 million, a decline of 45% versus $58.4 million in the second quarter of 2002. GAAP net income for the most recent quarter was $5.8 million, with a GAAP EPS of $0.04, compared with $4.1 million and a GAAP EPS of $0.03 in the second quarter of 2002. Total company headcount at the end of the second quarter was 1,082, down 15% from 1,270 at the end of the second quarter of 2002. The Company's expenses declined in the second quarter of 2003 versus the year ago period due to the divestitures of its Media, DoubleClick Japan, and Research businesses, and because of ongoing cost-cutting initiatives. Second quarter 2003 GAAP earnings and expenses also benefited from a net restructuring credit of $6.9 million, which resulted from a $14.3 million reversal of DoubleClick's real estate reserve for its New York facility offset by $7.4 million in additional restructuring charges in connection with certain of the Company's other facilities. In addition, 2Q03 GAAP earnings were reduced by a $4.4 million loss in connection with the redemption of the Company's 4.75% convertible subordinated notes and $1.0 million in equity losses associated with the Company's minority investments. Last year's second-quarter results included a $7.3 million restructuring charge related to the Company's real estate and a $11.9 million gain related to the sale of the Company's @plan research product line. The Company used $0.6 million in cash flow from operations during the second quarter of 2003. This figure included a payment of $14.4 million in connection with the termination of a portion of the lease on the Company's New York headquarters. The Company ended the quarter with $873.2 million in cash and marketable securities, and had a net cash position of $580.2 million, or $4.23 per share.(a) On June 23, 2003, the Company issued $135 million of zero coupon convertible subordinated notes due 2023, the proceeds of which, together with existing cash, will be used to redeem the Company's $154.8 million of 4.75% convertible subordinated notes due 2006 on July 24, 2003. "DoubleClick's business continues to thrive despite the continued softness in marketing and technology spending," said Kevin Ryan, Chief Executive Officer, DoubleClick. "During the quarter, we were able to successfully complete a convertible bond offering, continue to build our suite of marketing technology tools through the acquisition of a data management company, as well as sign on large customers. In addition, we eliminated some excess real estate exposure in New York, which will help cash flow in future quarters." - ----------------------- (a) Net cash is defined as gross cash and cash equivalents of $317.0 million, restricted cash of $55.9 million, and investments in marketable securities of $500.3 million minus 4.75 % convertible subordinated notes of $154.8 million, 0.0 % convertible subordinated notes of $135.0 million and capital lease obligations of $3.2 million. Please see the Form 8-K filed today by the Company with the SEC for a discussion of why the Company believes net cash is a useful financial measure to investors and how it is used by management. - ----------------------------------------------------------------------- 2Q03 1Q03 2Q02 - ----------------------------------------------------------------------- Revenue (000's) $63,556 $60,054 $75,651 - ----------------------------------------------------------------------- GAAP Net Income (000's) $5,831 $906 $4,074 - ----------------------------------------------------------------------- GAAP EPS $0.04 $0.01 $0.03 - ----------------------------------------------------------------------- TECHSOLUTIONS The global TechSolutions division reported second quarter revenues of $43.5 million. Total TechSolutions gross margins were 61.9%, a decline from 65.1% in the second quarter of 2002. DoubleClick's global DART and DARTmail platforms delivered 151.1 billion impressions in the second quarter of 2003. The Company's Ad Management products had revenues of $32.6 million in 2Q03, versus $38.1 million in the year ago period. In the second quarter of 2003, DoubleClick's DART for Advertisers product saw a strong volume increase, which is attributable to existing customers running more online campaigns throughout the system, as well as from the enrollment of new agencies. During the quarter, eBay signed a multi-year deal to use DoubleClick's ad management solution. In addition, the Company launched a new version of its ad management software, DART Enterprise, and began the beta phase of its new rich media product, DART Motif, which derived from a partnership with Macromedia. On the planning side of DoubleClick's business, the Company completed the integration of the IMS reach and frequency tool, Web RF, with DoubleClick's MediaVisor tool. Customers of both Web RF and MediaVisor now have the ability to plan their online advertising campaigns using reach and frequency data, the standard metrics used to plan television campaigns as well as other offline media. DoubleClick's email management and delivery platform, DARTmail, reported revenues of $9.2 million for 2Q03, versus $9.9 million in the year ago period. In the second quarter DoubleClick unveiled several initiatives designed to help marketers and the email marketing industry better understand and leverage policy, research, education, and technology, in the fight against spam, and to further differentiate legitimate marketing communications from unwanted and unsolicited email. As part of these initiatives, DoubleClick plans to issue quarterly reports on government and ISP developments; hold an industry event in the fall which will be exclusively focused on the spam crisis; increase its investment in technology solutions that enhance email delivery; and continue to field both consumer and marketer research on this issue. In addition, DoubleClick recently completed a large study with AOL in order to better understand consumers' attitudes and reactions to unwanted and unsolicited email. Primary results will be available in the third quarter and the full findings will be presented at the Advertising Research Foundation (ARF) conference in September. DoubleClick's TechSolutions segment also includes its Campaign Management product, Ensemble, and its web analytics tool, SiteAdvance. The Company completed two large customer installations of the Ensemble product during the second quarter, and remains on schedule with its plan to release the latest version, 6.5, in December. This version will include integration with DoubleClick's DARTmail product. Web publishers continue to use SiteAdvance in order to understand how their customers are interacting with the publishers' websites. During the second quarter, SiteAdvance launched in international markets, starting with customers such as Dixons Group PLC and Loyalty Management. The product also added a new feature that allows e-commerce sites to use DARTmail to remarket to consumers who abandoned items within online shopping carts. "Our portfolio of technology and data marketing solutions continues to grow in terms of both product offerings and client base," said David Rosenblatt, President, DoubleClick. "We continue the momentum within each of our divisions as clients and prospects recognize the value of our integrated solutions and overall R&D investment, coupled with the advantages of working with a company that has the expertise and the financial resources to help them grow their businesses." DATA DoubleClick Data revenue increased 12.3% to $20.1 million in 2Q03 versus $17.9 million in 2Q02. Excluding $0.8 million in revenue associated with DoubleClick's former research products, DoubleClick Data revenue increased 17.5%. Gross margins were 70.7%, a slight dip from the year ago period. Abacus's business-to-consumer alliance revenues grew 13.6% year-over-year. The U.S. Business-to-Business segment of Abacus continued its strong growth in the second quarter, increasing its revenue 78.4%. 2 "We are particularly happy with the second quarter results from the Data segment," continued Rosenblatt. "The Abacus teams in the U.S. and U.K. have done an exceptional job in outperforming the catalog industry." In the second quarter of 2003, DoubleClick launched Abacus Japan as part of its international operations. Japan is the second largest catalog market in the world, and interest from the country's catalog companies has been very encouraging. In the long term, DoubleClick believes that this market has the potential to be the second largest in the world, after the U.S. Going forward, the Data business will also include DoubleClick's new Data Management division. This division was formed as a result of the Company's recent acquisition of CSC Advanced Database Solutions (CSC), a privately held data management solutions company that specializes in building, maintaining and providing access to customer marketing databases. Almost all of DoubleClick's Abacus, email, and campaign management customers use a data management solution, which represents great synergy with DoubleClick's business as well as an opportunity to incrementally grow revenues. DoubleClick plans to continue to offer CSC's products as stand-alone products in addition to integrating many of DoubleClick's products into the data management solution in the future. THIRD QUARTER 2003 OUTLOOK DoubleClick is expecting third quarter revenues to be between $73 million and $77 million. GAAP earnings for the third quarter are projected to be between $0.00 and $0.04 per share. Segment projections for the third quarter of 2003 are as follows: >> Data revenues are estimated to be between $31 million and $33 million, with gross margins in the low 70's percentage range, including $2.5 million from Data Management. >> TechSolutions revenues are estimated to be between $42 million and $45 million, with gross margins in the low 60's percentage range. >> Within TechSolutions, Email technology is expected to generate revenues between $9.5 million and $10 million and new initiatives should account for about $2.5 million of revenues. Total company gross margins are expected to be in the mid 60's percentage range. Total company GAAP operating expenses are expected to be between $48 million and $50 million. Gross margin and operating cost estimates include the impact of charges of $0.8 million and $7.5 million, respectively, for leasehold improvements associated with the planned exit of certain real estate facilities by year-end. Items in interest and other are expected to add roughly $1.5 million in after-tax income. FULL YEAR 2003 UPDATE Based on strong results to date, DoubleClick is narrowing its full year 2003 earnings guidance towards the high end. The Company now expects GAAP earnings per share in the range of $0.07 to $0.12 for the full year 2003, versus the previous range of $0.03 to $0.12. Full year revenue guidance is also being tightened, to $260 to $275 million from $250 to $300 million previously. "Even as we invest in new products and clean up excess real estate exposure, profitability continues to improve, indicating that the fundamentals of the business are very healthy," said Bruce Dalziel, Chief Financial Officer, DoubleClick. "We will continue to focus on growing revenues as well as expanding our product lines to meet the needs of our customers." The DoubleClick Conference Call to discuss this earnings press release is scheduled for today at 5:00pm EST. 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 http://ir.doubleclick.net. 3 ABOUT DOUBLECLICK DoubleClick (www.doubleclick.net) is the leading provider of data and technology for advertisers, direct marketers and web publishers to plan, execute and analyze their marketing programs. DoubleClick's online advertising, email marketing and database marketing solutions 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 21 offices around the world. NOTE: This press release includes forward-looking statements, including earnings and revenue projections and future plans set forth under the sections titled "Third Quarter 2003 Outlook and Full Year 2003 Update" above. 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 - - DOUBLECLICK INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three Months Ended Six Months Ended June 30, June 30, -------- -------- 2003 2002 2003 2002 ---- ---- ---- ---- REVENUE: Technology $ 43,469 $ 48,010 $ 84,997 $ 98,436 Data 20,087 17,892 38,613 36,110 Media -- 10,783 -- 27,120 Intersegment elimination -- (1,034) -- (2,359) --------- --------- --------- --------- Total revenue 63,556 75,651 123,610 159,307 Cost of revenue 22,448 27,866 44,395 59,865 --------- --------- --------- --------- Gross profit 41,108 47,785 79,215 99,442 Operating expenses: Sales and marketing 20,852 25,639 40,508 55,460 General and administrative 8,360 12,056 17,226 24,083 Product development 8,528 10,418 16,573 21,320 Amortization of intangibles 1,240 3,010 3,319 6,154 Restructuring (credits) charges (6,871) 7,318 (6,871) 8,758 --------- --------- --------- --------- Total operating expenses 32,109 58,441 70,755 115,775 Income (loss) from operations 8,999 (10,656) 8,460 (16,333) Other income (expense) Equity in (losses) income of affiliates (1,048) 159 (2,313) 219 Gain on sale of businesses -- 11,881 -- 10,509 Interest and other, net 2,589 2,806 5,632 6,198 Loss from early extinguishment of debt (4,406) -- (4,406) -- --------- --------- --------- --------- Total other income (expense) (2,865) 14,846 (1,087) 16,926 Income before income taxes 6,134 4,190 7,373 593 Provision for income taxes (303) (766) (636) (3,400) --------- --------- --------- --------- Income (loss) before minority interest 5,831 3,424 6,737 (2,807) Minority interest in results of consolidated subsidiaries -- 650 -- 837 --------- --------- --------- --------- NET INCOME (LOSS) $ 5,831 $ 4,074 $ 6,737 $ (1,970) ========= ========= ========= ========= Basic net income (loss) per share $ 0.04 $ 0.03 $ 0.05 $ (0.01) ========= ========= ========= ========= Weighted average shares used in basic net income (loss) per share 136,922 136,173 136,679 135,696 ========= ========= ========= ========= Diluted net income (loss) per share $ 0.04 $ 0.03 $ 0.05 $ (0.01) ========= ========= ========= ========= Weighted average shares used in diluted net income (loss) per share 140,434 139,323 139,597 135,696 ========= ========= ========= =========
DOUBLECLICK INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED, IN THOUSANDS EXCEPT SHARE AMOUNTS)
June 30, December 31, 2003 2002 ---- ---- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 316,965 $ 123,671 Investments in marketable securities 214,975 306,974 Accounts receivable, net of allowances of $9,028 and $13,704, respectively 47,503 48,850 Prepaid expenses and other current assets 20,467 24,324 ----------- ----------- Total current assets 599,910 503,819 Investment in marketable securities 285,312 294,249 Restricted cash 55,902 25,091 Property and equipment, net 89,919 98,545 Goodwill 25,711 20,572 Intangible assets, net 8,499 13,378 Investment in affiliates 10,435 12,125 Other assets 11,531 9,128 ----------- ----------- Total assets $ 1,087,219 $ 976,907 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 4,706 $ 7,218 Accrued expenses and other current liabilities 144,519 117,320 Current portion of capital lease obligations 3,135 6,163 Convertible subordinated notes - 4.75% Coupon, due 2006 154,800 -- Deferred revenue 10,609 6,245 ----------- ----------- Total current liabilities 317,769 136,946 Convertible subordinated notes - 0% Coupon, due 2023 135,000 -- Convertible subordinated notes - 4.75% Coupon, due 2006 -- 154,800 Long term portion of capital lease obligations 65 852 Other long term liabilities 11,316 73,747 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, 138,861,683 and 137,854,385 shares issued, respectively 139 138 Treasury stock, 1,680,670 shares (8,949) (8,949) Additional paid-in capital 1,284,631 1,281,244 Accumulated deficit (659,704) (666,441) Other accumulated comprehensive income 6,952 4,570 ----------- ----------- Total stockholders' equity 623,069 610,562 ----------- ----------- Total liabilities and stockholders' equity $ 1,087,219 $ 976,907 =========== ===========
DOUBLECLICK INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED, IN THOUSANDS)
Three Months Ended Six Months Ended June 30 June 30, ------- -------- 2003 2002 2003 2002 ---- ---- ---- ---- OPERATING ACTIVITIES Net income (loss) $ 5,831 $ 4,074 $ 6,737 $ (1,970) Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Depreciation and leasehold amortization 10,164 10,219 20,353 20,972 Amortization of intangible assets 2,031 3,452 4,980 7,038 Equity in losses (income) of affiliates 1,048 (159) 2,313 (219) Gain on sale of businesses -- (11,881) -- (11,881) Lease termination payment (14,400) -- (14,400) -- Other non-cash items 6,138 8,128 8,866 14,230 Other changes in working capital (11,379) (2,649) (24,501) (10,289) --------- --------- --------- --------- Cash (used in) provided by operating activities (567) 11,184 4,348 17,881 INVESTING ACTIVITIES Purchases of property and equipment (3,030) (4,304) (11,227) (6,016) Purchases of investments in marketable securities (106,116) (120,708) (236,195) (233,987) Maturities of investments in marketable securities 157,964 87,281 335,139 225,329 Restricted cash (26,861) -- (30,811) -- Acquisition of businesses and intangible assets, net of cash acquired (2,757) (2,604) (2,757) (5,178) Proceeds from sale of businesses -- 12,000 656 13,960 Proceeds from sale of intangible asset, net 900 -- 900 -- --------- --------- --------- --------- Cash provided by (used in) investing activities 20,100 (28,335) 55,705 (5,892) FINANCING ACTIVITIES Proceeds from the issuance of common stock and the exercise of stock options, net 1,356 435 2,266 3,877 Proceeds from issuance of convertible subordinated notes, net 131,963 -- 131,963 -- Payments under capital lease obligations and notes payable (1,890) (3,838) (3,681) (12,575) Other -- -- -- (1,000) --------- --------- --------- --------- Cash provided by (used in) financing activities 131,429 (3,403) 130,548 (9,698) Effect of exchange rate changes on cash 2,802 5,849 2,693 5,294 --------- --------- --------- --------- Net increase (decrease) in cash and cash equivalents 153,764 (14,705) 193,294 7,585 Cash and cash equivalents at beginning of period $ 163,201 $ 121,801 $ 123,671 $ 99,511 --------- --------- --------- --------- Cash and cash equivalents at end of period $ 316,965 $ 107,096 $ 316,965 $ 107,096 ========= ========= ========= =========
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