JUPM Jupitermedia (MM)

Jupitermedia Corporation (Nasdaq: JUPM) announced today that it identified an adjustment to its financial results for the third quarter ended September 30, 2008, which results were previously announced on November 6, 2008. The adjustment to the results for the third quarter ended September 30, 2008 was due to the recording of a non-cash impairment charge to goodwill in the amount of $40.0 million. In connection with the recently announced agreement to sell its Online images business to Getty Images, Inc., Jupitermedia concluded that goodwill was impaired as of September 30, 2008 based on the negotiations with Getty Images that occurred during the third quarter ended September 30, 2008. Jupitermedia has included its Statements of Operations, Balance Sheet and Statement of Cash Flows as of and for the three and nine months ended September 30, 2008 in this press release reflecting the aforementioned impairment of goodwill. These same financial statements will be available in Jupitermedia�s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2008, which will be filed November 12, 2008. Jupitermedia Corporation Unaudited Consolidated Condensed Statements of Operations For the Three and Nine Months Ended September 30, 2007 and 2008 (in thousands, except per share amounts) � � � � Three Months Ended September 30, Nine Months Ended September, 30 2007 Restated � 2008 � � 2007 Restated � 2008 � Revenues $ 34,766 � $ 31,041 � $ 104,206 � $ 100,587 � � Cost of revenues (exclusive of items shown separately below) 14,524 14,092 43,825 45,109 Advertising, promotion and selling 7,168 6,919 21,534 22,270 General and administrative 6,511 6,997 21,221 22,671 Depreciation 1,128 1,249 3,353 3,731 Amortization 3,381 3,892 9,669 11,837 Impairment of goodwill � � � � 40,000 � � � � � 40,000 � Total operating expenses � 32,712 � � 73,149 � � 99,602 � � 145,618 � Operating income (loss) 2,054 (42,108 ) 4,604 (45,031 ) � Other loss, net (39 ) (853 ) (372 ) (58 ) Interest income 62 70 140 176 Interest expense � (2,328 ) � (1,625 ) � (5,232 ) � (5,198 ) Loss before income taxes and minority interests (251 ) (44,516 ) (860 ) (50,111 ) Provision (benefit) for income taxes 233 18,045 (113 ) 16,821 Minority interests � (30 ) � (61 ) � (109 ) � (86 ) Net loss $ (514 ) $ (62,622 ) $ (856 ) $ (67,018 ) � Loss per share: Basic net loss $ (0.01 ) $ (1.74 ) $ (0.02 ) $ (1.86 ) Diluted net loss $ (0.01 ) $ (1.74 ) $ (0.02 ) $ (1.86 ) � Shares used in computing loss per share: Basic � 35,990 � � 35,967 � � 35,921 � � 35,967 � Diluted � 35,990 � � 35,967 � � 35,921 � � 35,967 � Jupitermedia Corporation Unaudited Consolidated Condensed Balance Sheets December 31, 2007 and September 30, 2008 (in thousands, except share and per share amounts) � � December 31, 2007 September 30, 2008 ASSETS Current assets: Cash and cash equivalents $ 7,301 $ 4,424 Accounts receivable, net of allowances of $2,026 and $1,790, respectively 25,689 21,410 Prepaid expenses and other current assets 5,797 4,452 Deferred income taxes � 1,441 � � 1,530 � Total current assets 40,228 31,816 � Property and equipment, net of accumulated depreciation of $17,364 and $21,174, respectively 13,022 15,053 Intangible assets, net 74,002 67,072 Goodwill 139,813 97,864 Deferred income taxes 13,049 � Investments and other assets � 2,575 � � 2,296 � Total assets $ 282,689 � $ 214,101 � � � LIABILITIES AND STOCKHOLDERS� EQUITY Current liabilities: Accounts payable $ 7,153 $ 7,119 Accrued payroll and related expenses 3,383 4,596 Accrued expenses and other current liabilities 11,822 10,526 Current portion of long-term debt 750 750 Deferred revenues � 15,121 � � 15,155 � Total current liabilities 38,229 38,146 � Long-term debt 83,375 78,350 Deferred revenues 507 392 Deferred income taxes � 2,457 Other long-term liabilities � 3,586 � � 3,596 � Total liabilities � 125,697 � � 122,941 � � Commitments and contingencies � Stockholders� equity: Preferred stock, $.01 par value, 4,000,000 shares authorized, no shares issued � � Common stock, $.01 par value, 75,000,000 shares authorized, 36,001,732 and 36,032,152 shares issued, respectively 360 360 Additional paid-in capital 266,858 270,838 Accumulated deficit (117,798 ) (184,816 ) Treasury stock, 65,000 shares at cost (106 ) (106 ) Accumulated other comprehensive income � 7,678 � � 4,884 � Total stockholders� equity � 156,992 � � 91,160 � Total liabilities and stockholders� equity $ 282,689 � $ 214,101 � Jupitermedia Corporation Unaudited Consolidated Condensed Statements of Cash Flows Nine Months Ended September 30, 2007 and 2008 (in thousands) � � Nine Months Ended September 30, 2007 Restated 2008 Cash flows from operating activities: Net loss $ (856 ) $ (67,018 ) Adjustments to reconcile net loss to net cash provided by operating activities: Impairment of goodwill � 40,000 Depreciation and amortization 13,022 15,568 Stock-based compensation 2,363 3,972 Provision (benefit) for losses on accounts receivable 62 (171 ) Minority interests 109 86 Other income, net (142 ) (27 ) Amortization of debt issuance costs � 223 Deferred income taxes 39 15,778 Excess tax benefit from stock-based compensation (863 ) � Changes in operating assets and liabilities (net of businesses acquired): Accounts receivable (1,587 ) 3,706 Prepaid expenses and other assets (449 ) 2,121 Accounts payable and accrued expenses and other liabilities (3,239 ) (3,300 ) Deferred revenues � 1,563 � � 27 � Net cash provided by operating activities � 10,022 � � 10,965 � Cash flows from investing activities: Purchases of property and equipment (4,003 ) (5,597 ) Acquisitions of businesses, images and other (30,246 ) (3,325 ) Proceeds from sales of assets and other � 142 � � 335 � Net cash used in investing activities � (34,107 ) � (8,587 ) Cash flows from financing activities: Borrowings under credit facilities 94,900 1,600 Debt issuance costs (1,537 ) (15 ) Repayment of borrowings under credit facilities (72,986 ) (6,625 ) Proceeds from exercise of stock options 1,115 7 Excess tax benefit from stock-based compensation � 863 � � � � Net cash provided by (used in) financing activities � 22,355 � � (5,033 ) Effects of exchange rates on cash and cash equivalents � 272 � � (222 ) Net change in cash and cash equivalents (1,458 ) (2,877 ) Cash and cash equivalents, beginning of period � 8,891 � � 7,301 � Cash and cash equivalents, end of period $ 7,433 � $ 4,424 � Supplemental disclosures of cash flow: Cash paid for (refund of) income taxes $ 7,818 � $ (610 ) Cash paid for interest $ 2,854 � $ 5,062 � Non-cash investing activities: Accrual of acquisitions of long-lived assets $ � � $ 2,191 � Accrual of purchase obligation $ � � $ 1,041 � About Jupitermedia Corporation Jupitermedia Corporation (Nasdaq: JUPM, http://www.jupitermedia.com), headquartered in Darien, CT, is a leading global provider of images, news and original information, career Web sites and events for information technology, business, media and creative professionals. Jupitermedia includes Jupiterimages, one of the leading images companies in the world with over 10.0 million images online serving creative professionals. The JupiterOnlineMedia division of Jupitermedia�consists of five distinct�online networks: internet.com and EarthWeb.com for IT and business professionals;�DevX.com for developers; and Mediabistro.com and Graphics.com for media and creative professionals. These networks include more than 150 Web sites and over 150 e-mail�newsletters that are viewed by over 15 million users monthly. JupiterOnlineMedia also includes specialized career Web sites for select professional communities which can be found on Mediabistro.com and JustTechJobs.com. In addition, JupiterOnlineMedia includes JupiterEvents and Mediabistro�s media-related events, which produce offline conferences and trade shows�focused on IT and business-specific topics including ISPCON, Mediabistro Circus, Web 3.0 Conference & Expo, Mobile Content & Marketing Expo and UGCX � User Generated Content Conference & Expo. Important Additional Information Regarding the Stock Purchase Agreement dated as of October 22, 2008 by and between Jupitermedia Corporation and Getty Images, Inc. will be filed with the SEC. This communication is not a solicitation of a proxy from any security holder of Jupitermedia. In connection with the stock purchase agreement, Jupitermedia Corporation will file with the U.S. Securities and Exchange Commission a preliminary proxy statement and a definitive proxy statement. THE PROXY STATEMENT WILL BE SENT TO JUPITERMEDIA CORPORATION STOCKHOLDERS, WHO ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND THE PARTIES TO THE STOCK PURCHASE AGREEMENT. Jupitermedia Corporation investors and security holders may obtain free copies of these documents (when they are available) and other documents filed with the Securities and Exchange Commission at its web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the Securities and Exchange Commission by going to Jupitermedia Corporation�s Investors page on its corporate website at http://www.Jupitermedia.com/corporate/investors.html. Jupitermedia Corporation and its directors and officers may be deemed to be participants in the solicitation of proxies from the stockholders of Jupitermedia Corporation in connection with the stock purchase agreement and the proposed transaction. Information about Jupitermedia Corporation and its directors and officers can be found in its proxy statements on Schedule 14A and annual reports on Form 10-K filed with the Securities and Exchange Commission, as well as on Jupitermedia Corporation�s Investors page on its corporate website at http://www.Jupitermedia.com/corporate/investors.html. Additional information regarding the interests of those persons may be obtained by reading the proxy statement for the proposed transaction when it becomes available. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995 Statements in this press release which are not historical facts are "forward-looking statements" that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements include, for example, the competitive environment in which Jupitermedia and Jupiterimages compete; the unpredictability of Jupitermedia�s and Jupiterimages� respective future revenues, expenses, cash flows and stock price; Jupitermedia�s and Jupiterimages� respective ability to integrate acquired businesses, products and personnel into their existing businesses; Jupitermedia�s and Jupiterimages� respective ability to protect their intellectual property; Jupitermedia�s dependence on a limited number of advertisers; the conditions to the completion of the transactions contemplated by the stock purchase agreement may not be satisfied, or the regulatory approvals and clearances required for the transactions contemplated by the stock purchase agreement may not be obtained on the terms expected or on the anticipated schedule (if at all); the parties� ability to meet expectations regarding the timing for completion of the transactions contemplated by the stock purchase agreement; the retention of certain key employees at Jupitermedia and Jupiterimages; and the outcome of any legal proceedings that may be instituted against Jupitermedia Corporation and others following the announcement of the stock purchase agreement. For a more detailed discussion of such risks and uncertainties, refer to Jupitermedia�s reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. The forward-looking statements included herein are made as of the date of this press release, and Jupitermedia assumes no obligation to update the forward-looking statements after the date hereof. All current Jupitermedia press releases can be found online at www.jupitermedia.com/corporate/press.html.