0001140361-12-046864.txt : 20121113 0001140361-12-046864.hdr.sgml : 20121112 20121113163051 ACCESSION NUMBER: 0001140361-12-046864 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20121113 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20121113 DATE AS OF CHANGE: 20121113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LOOKSMART LTD CENTRAL INDEX KEY: 0001077866 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 133904355 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26357 FILM NUMBER: 121199141 BUSINESS ADDRESS: STREET 1: 55 SECOND STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 BUSINESS PHONE: 4153487000 MAIL ADDRESS: STREET 1: 55 SECOND STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 8-K 1 form8k.htm LOOKSMART LTD 8-K 11-13-2012 form8k.htm
UNITED STATES
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): November 13, 2012
 
 
LookSmart, Ltd.
(Exact name of registrant as specified in its charter)
 
 
Delaware
000-26357
13-3904355
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
 
555 California Street, Suite 324
San Francisco, CA 94105
(Address of principal executive offices, with zip code)
 
(415) 348-7000
(Registrant’s telephone number, including area code)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o
Written Communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 
Item 2.02. Results of Operations and Financial Condition.
 
On November 13, 2012, LookSmart, Ltd. (“LookSmart” or the “Company”) announced its financial results for the third quarter ended September 30, 2012. A copy of LookSmart’s press release is attached as Exhibit 99.1 hereto and incorporated by reference herein.
 
The press release attached as an exhibit to this report includes “safe harbor” language pursuant to the Private Securities Litigation Reform Act of 1995, as amended, indicating that certain statements about the Company’s business and other matters contained in the press release are “forward-looking” rather than “historic.” The press release also states that a more thorough discussion of certain factors which may affect the Company’s operating results is included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and its other public filings which are on file with the SEC and available at the SEC’s website (http://www.sec.gov).
 
Item 9.01. Financial Statements and Exhibits.
 
 
(d)
The exhibit listed below is being furnished with this Form 8-K.
 
Exhibit 99.1  Press Release entitled “LookSmart Reports Third Quarter 2012 Results” dated November 13, 2012.
 
 
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 thereunto duly authorized.
 
 
LookSmart, Ltd.
 
(Registrant)
     
 
By:
/s/ William F. O’Kelly
   
William F. O’Kelly
   
Chief Financial Officer
 
Date: November 13, 2012
 
 
INDEX TO EXHIBITS
 
Exhibit
Number
  
 
Description
   
  
Press Release entitled “LookSmart Reports Third Quarter 2012 Results” dated November 13, 2012.

 
 EX-99.1 2 ex99_1.htm EXHIBIT 99.1 ex99_1.htm
Exhibit 99.1
 
LOOKSMART REPORTS THIRD QUARTER 2012 RESULTS
 
SAN FRANCISCO, November 13, 2012 (GLOBE NEWSWIRE) -- LookSmart, Ltd. (NASDAQ:  LOOK), an online search advertising network solutions company, today announced financial results for the third quarter ended September 30, 2012.
 
Revenues for the third quarter of 2012 were $3.9 million, compared to $7.4 million in the third quarter of 2011 and $3.6 million in the second quarter of 2012. Revenues from the Company's Advertiser Networks were $3.7 million in the third quarter of 2012, $7.0 million in the third quarter of 2011 and $3.3 million in the second quarter of 2012. Revenues from the Company's Publisher Solutions were $0.2 million in the third quarter of 2012, $0.3 million in the third quarter of 2011, and $0.3 million in the second quarter of 2012.
 
Net loss for the third quarter of 2012 was $2.7 million, or ($0.15) per diluted share. This compares to a net loss for the third quarter of 2011 of $0.2 million, or ($0.01) per diluted share. Net loss for the second quarter of 2012 was $2.4 million, or ($0.14) per diluted share.
 
Commenting on the results, Dr. Jean-Yves Dexmier, Chief Executive Officer, said, “We are discontent with our performance and results in the third quarter.  The Special Committee of the LookSmart Ltd. Board of Directors continues to seek and evaluate indications of interest and other strategic alternatives”
 
Gross margin was 35% in the third quarter of 2012, 43% in the third quarter of 2011, and 34% in the second quarter of 2012.
 
Total operating expenses in the third quarter of 2012 were $4.0 million, which included $0.6 million of expense related to the unsolicited tender offer by PEEK Investments LLC, $0.2 million in restructuring expenses, and $0.1 million of non-cash, share-based compensation charges. Operating expenses for the third quarter of 2011 were $3.4 million, which included $0.1 million of non-cash, share-based compensation charges. Operating expenses for the second quarter of 2012 were $3.6 million, which included $0.1 million of non-cash, share-based compensation.
 
Non-GAAP net loss for the third quarter of 2012 was $2.4 million compared to non-GAAP net loss of $0.1 million in the third quarter of 2011. Non-GAAP net loss for the second quarter of 2012 was $2.3 million.
 
An explanation of LookSmart's use of non-GAAP financial measures, including the limitations of such measures relative to GAAP measures and reconciliation between GAAP and non-GAAP measures where appropriate, is included later in this release.
 
Capital expenditures, including capitalization of internally developed software, in the third quarter of 2012 were $0.4 million, compared to $0.2 million in the third quarter of 2011, and $0.7 million in the second quarter of 2012. Depreciation and amortization in the third quarter of 2012 was $0.5 million, compared to $0.6 million in the third quarter of 2011 and $0.5 million in the second quarter of 2012.
 
The Company ended the quarter with $17.6 million in cash, cash equivalents, and investments, compared to $24.8 million at December 31, 2011.
 
Q3 2012 Key Metrics Performance

 
·
Total paid clicks for the third quarter of 2012 were 55 million, compared to 151 million for the third quarter of 2011 and 52 million for the second quarter of 2012.
 
·
Average Advertising Network RPC for the third quarter of 2012 was $0.066 compared to $0.047 in the third quarter of 2011 and $0.063 in the second quarter of 2012.
 
·
Traffic acquisition costs (TAC) for LookSmart's Ad Networks were 60% in the third quarter of 2012, 54% in third quarter of 2011 and 61% in the second quarter of 2012.

 
 
 

About LookSmart, Ltd.
 
LookSmart is a pioneer in online advertising. Founded in 1997, LookSmart has been connecting advertisers and agencies to high quality sources of inventory for performance marketing, and helps online publishers monetize their inventory through our award winning Ad Center platform. Our highly scalable technology processes billions of search queries on a daily basis, enabling marketers to bid in real time across search and display inventory, and leverage intent data to get performance that meets aggressive campaign goals. LookSmart is based in San Francisco, CA, with offices in Los Angeles and New York City. For more information, visit www.looksmart.com or call 415-348-7500.
 
The LookSmart, Ltd. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8717
 
GAAP to Non-GAAP Reconciliation
 
We provide a reconciliation of GAAP net loss to non-GAAP net loss below:
 
   
Three Months Ended
  
(000's)
  
September 30, 2012 (unaudited)
    
June 30, 2012
(unaudited)
    
September 30, 2011 (unaudited)
  
GAAP net loss
   $ (2,654 )   $ (2,359 )   $ (224 )
Add: Share-based compensation
     48       54       98  
Add: Restructuring charges
     159       -       -  
Non-GAAP net loss
   $ (2,447 )   $ (2,305 )   $ (126 )
 
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. LookSmart provides "non-GAAP net income (loss)," which is a non-GAAP financial measure. Non-GAAP net income (loss) consists of net income (loss) before (a) share-based compensation expense and (b) restructuring charges.
 
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 loss, the adjustment provides management with information about LookSmart's operating performance that enables comparison of its operating financial results in different reporting periods. Additionally, our management uses non-GAAP net loss as a supplemental measure in the evaluation of our business, and believes that non-GAAP net loss provides visibility into our ability to meet our future capital expenditures and working capital requirements.
 
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 share-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 the technology projects on which we are working or our anticipated releases are delayed for any reason. Additional risks that could cause actual results to differ materially from those projected are discussed in our Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof.
 
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 LookSmart, Ltd., and/or its subsidiaries in the U.S. and other countries. All other trademarks mentioned are the property of their respective owners.

 
SOURCE:  LOOKSMART, LTD.

 
Bill O’Kelly, Senior Vice President Operations and Chief Financial Officer
(415) 348-7208
bo’kelly@looksmart.net

ICR, Inc.
John Mills, Senior Managing Director
(310) 954-1100
john.mills@icrinc.com

 
 
 
 
LOOKSMART, LTD.
 
CONSOLIDATED BALANCE SHEETS
 
(In thousands, except per share data)
 
   
September 30, 2012
    
December 31, 2011
  
ASSETS
  
(Unaudited)
        
Current assets:
            
Cash and cash equivalents
   $ 6,506     $ 17,950  
Short-term investments
     11,118       6,809  
Total cash, cash equivalents and short-term investments
     17,624       24,759  
Trade accounts receivable, net
     2,018       1,588  
Prepaid expenses and other current assets
     571       604  
Total current assets
     20,213       26,951  
Property and equipment, net
     1,179       1,941  
Capitalized software and other assets, net
     1,784       1,220  
Total assets
   $ 23,176     $ 30,112  
                 
LIABILITIES & STOCKHOLDERS' EQUITY
                
Current liabilities:
                
Trade accounts payable
   $ 1,909     $ 1,682  
Accrued liabilities
     1,207       895  
Deferred revenue and customer deposits
     1,125       1,143  
Current portion of capital lease obligations
     208       515  
Total current liabilities
     4,449       4,235  
Capital lease and other obligations, net of current portion
     150       296  
Total liabilities
     4,599       4,531  
Stockholders' equity:
                
Convertible preferred stock, $0.001 par value; Authorized: 5,000 shares at September 30, 2012 and December 31, 2011; Issued and Outstanding: none at September 30, 2012 and December 31, 2011
     -       -  
Common stock, $0.001 par value; Authorized: 80,000 shares; Issued and Outstanding: 17,306 shares and 17,288 shares at September 30, 2012 and December 31, 2011, respectively
     17       17  
Additional paid-in capital
     262,402       262,201  
Accumulated other comprehensive loss
     (32 )     (24 )
Accumulated deficit
     (243,776 )     (236,613 )
Treasury stock at cost:  40 shares at September 30, 2012
     (34 )     -  
Total stockholders' equity
     18,577       25,581  
Total liabilities and stockholders' equity
   $ 23,176     $ 30,112  

 
 
 
 
LOOKSMART, LTD.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(In thousands, except per share data)
 
(Unaudited)
 
   
Three Months Ended September 30,
    
Nine Months Ended September 30,
  
   
2012
    
2011
    
2012
    
2011
  
Revenue
   $ 3,915     $ 7,356     $ 11,502     $ 22,350  
Cost of revenue
     2,564       4,187       7,149       12,281  
Gross profit
     1,351       3,169       4,353       10,069  
Operating expenses:
                                
Sales and marketing
     682       565       2,141       1,732  
Product development and technical operations
     1,437       1,767       4,780       4,911  
General and administrative
     1,743       1,066       4,468       3,528  
Restructuring charge
     159       -       159       889  
Total operating expenses
     4,021       3,398       11,548       11,060  
Loss from operations
     (2,670 )     (229 )     (7,195 )     (991 )
Non-operating income (expense), net
                                
Interest income
     23       21       64       68  
Interest expense
     (7 )     (11 )     (28 )     (64 )
Other income (expense), net
     -       (1 )     (4 )     325  
Loss from operations before income taxes
     (2,654 )     (220 )     (7,163 )     (662 )
Income tax expense
     -       (4 )     -       (3 )
Net loss
   $ (2,654 )   $ (224 )   $ (7,163 )   $ (665 )
Net loss per share - Basic and Diluted
   $ (0.15 )   $ (0.01 )   $ (0.41 )   $ (0.04 )
Weighted average shares outstanding used in computing basic and diluted net loss per share
     17,306       17,284       17,306       17,265