This summary is based on the first quarter fiscal 2008 earnings call conducted by CNET Networks Inc. (CNET: chart) on April 24, 2008.
Management:
CEO: Neil Ashe
CFO: Zander Lurie
IR, The Blueshirt Group: Todd Friedman
Key Investor Issues:
- Q1 revenues increased 3% from last year Q1 level of $89.1 million.
- The Q1 net loss was 4 cents a share versus net loss of 6 cents a share in the year ago quarter.
- Full year revenues are forecast to be in the range of $440 million to $460 million.
- The management reduced the US workforce by 10% during the quarter.
First-Quarter Financial Highlights
On a reported basis, the operating loss totaled $18 million during the first quarter of 2008.
- This is in comparison with an operating loss of $7.7 million in the previous year quarter.
- The reported quarterly operating loss reflects restructuring charges of $5.1 million.
- The loss also includes $2 million of costs related to stockholder proposals and $300,000 of expenses related to the company’s stock option investigation pertaining to costs offset by a $2.2 million insurance recovery for litigation expenses.
- For the quarter, the reported operating loss reflects $4.4 million in stock option investigation related costs.
- The non-GAAP operating income before depreciation, amortization, stock compensation expense, restructuring charges and stockholder proposals and stock option investigation related costs, net, was $1.7 million versus $11 million in the same period last year.
International revenues for the quarter increased 26% to $22.4 million.
- The growth was driven by increases in display revenue from both the existing properties and recent acquisitions.
- Adjusted for foreign exchange, international growth would have grown 18% from the first quarter of 2007.
- Strong growth was particularly recorded in China.
- The company continues to experience high renewal rates from the top advertisers.
- About 93% of the company’s top 100 US customers that transacted with the company during Q4 of 2007 reportedly came back and renewed in Q1 of 2008.
The net loss for the quarter was 4 cents per share compared with a net loss of 6 cents per share for the first quarter last year.
Excluding depreciation, amortization, stock compensation expense, restructuring charges, expenses associated with stockholder proposals and stock option investigation related costs, net, discontinued operations and certain non-operating gains, non-GAAP net loss for the first quarter of 2008 was $4.3 million, or 3 cents per share versus non-GAAP net income of $500,000 during the first quarter of 2007.
The net cash from operating activities for the quarter was $15.9 million.
- This represents an increase of $11 million versus the Q1 of 2007 figures.
- The CapEx for the quarter were $7.7 million compared with $7.2 million in the first quarter of 2007.
- Excluding the costs of $2 million associated with stockholder proposals costs and a net recovery related to the company’s stock option investigation related costs of $1.9 million in the first quarter of 2008. The last year same period figure was $8.3 million.
Total cash operating expenses, before stock compensation expense, depreciation, amortization of intangible assets, restructuring charges, stockholder proposals and stock option investigation and related costs during the quarter, were $89.7 million.
- This is an increase of 15% from $78 million in the year ago quarter.
- Approximately $7 million of the $11.7 million year-over-year increase related to investments in core domestic brands such as CNET and BNET, specifically in the acquisition of TechTracker and FindArticles.
- The management reported that the company’s global network of Internet properties reached an average of 161 million unique monthly users during the quarter.
- The average daily page views were nearly 90 million during the quarter.
The company, together with Yahoo! Inc., announced a broad, multi-year agreement that encompasses advertising, content and search marketing. 
