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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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):
April 19, 2000
CNET Networks, Inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
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<S> <C> <C>
Delaware 0-20939 13-3696170
(STATE OR OTHER (COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
JURISDICTION OF
INCORPORATION)
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150 Chestnut Street
San Francisco, California 94111
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code:
(415) 364-8900
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ITEM 5. OTHER EVENTS.
On January 19, 2000, CNET Networks, Inc. announced its operating
results for the three months ended March 31, 2000. The results reflect the
February 29, 2000 acquisition of mySimon based on the pooling method of
accounting. As discussed below, the Company's stock repurchase program may
cause the accounting for that acquisition to be changed to the purchase method.
The results are as follows:
CNET Networks, Inc., the parent company of CNET and mySimon, inc., reported pro
forma net income of $1.5 million or $.02 per share for the quarter ended March
31, 2000, excluding goodwill amortization, merger costs, net losses on
investment sales, stock based compensation and related taxes. Net revenues for
CNET Networks increased 126 percent to $45.4 million in the first quarter, the
company's highest annual revenue growth rate in two years.
Including goodwill amortization, merger costs, net losses on investments, stock
based compensation and related taxes, CNET Networks net loss for the first
quarter ended March 31, 2000 was $19.5 million, or $0.23 per share.
CNET
Revenues for CNET were $43.6 million for the first quarter, a 117 percent
increase over revenues of $20.1 million in the first quarter of 1999. Operating
income before amortization was $5.6 million, a 173 percent increase over
operating income of $2.1 million in the first quarter of 1999.
mySIMON
On February 29, 2000, CNET Networks completed its acquisition of mySimon, inc.,
the Internet's leading comparison shopping service. Net revenues for mySimon
were $1.8 million for the quarter ended March 31, 2000, a 40 percent increase
over the fourth quarter of 1999. Operating loss for the first quarter was $4.9
million.
STOCK REPURCHASE PROGRAM
CNET Networks also announced that the Board of
Directors has authorized the repurchase from time to time of up to $100 million
of its common stock as market and business conditions warrant. There can be no
assurance that the program will be completed. Purchases may be made on the open
market or in private transactions and no time limit was set for completion of
the program.
The company's repurchases could cause the accounting treatment of the mySimon
acquisition to be changed from pooling of interests to the purchase method. As a
result the company may incur a material increase in amortization expense.
Unaudited financial statements for the three months ended March 31, 2000 are
attached as Exhibit 99.1.
This Current Report on Form 8-K contains forward-looking statements that are
subject to significant risks and uncertainties. Although the Company believes
that the expectations reflected in its forward looking statements are
reasonable, it can give no assurance that such expectations or any of its
forward-looking statements will prove to be correct. Important cautionary
statements and risk factors that could cause actual results to differ materially
from those reflected in the Company's forward looking statements are disclosed
under "Risk Factors" in the Company's latest annual
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report on Form 10-K, and in the Company's earnings' release, copies of which may
be obtained from the Company.
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.
Dated: April 26, 2000 CNET NETWORKS, INC.
By: /s/ Shelby Bonnie
Name: Shelby Bonnie
Title: Chief Executive Officer
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
99.1 Unaudited financial statements for the three-months ended March 31, 2000.
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INDEX TO EXHIBITS
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EXHIBIT # DESCRIPTION
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99.1 Unaudited financial statements for the three-months ended
March 31, 2000, including the effect of the acquisition of
mySimon, Inc. on February 29, 2000 based on the pooling
method of accounting.
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CNET NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(000s)
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<CAPTION>
March 31, December 31,
2000 1999
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ASSETS
Current assets:
Cash and cash equivalents $ 169,760 $ 70,019
Investments in marketable debt securities 51,116 65,985
Investments in marketable equity securities 495,831 785,909
Accounts receivable, net 31,834 25,701
Other current assets 27,731 18,773
Restricted cash 901 740
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Total current assets 777,173 967,127
Investments in marketable debt securities 111,818 109,802
Investments in marketable equity securities 53,828 --
Property and equipment, net 34,572 32,203
Other assets 191,655 141,560
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1,169,046 1,250,692
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 6,921 12,282
Accrued liabilities 21,870 22,068
Current portion of long-term debt 6,083 6,083
Income taxes payable -- 5,398
Deferred tax liability 250,444 306,352
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Total current liabilities 285,318 352,183
Long-term debt 253,387 179,781
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Total liabilities 538,705 531,964
Stockholders' equity:
Common stock 8 7
Additional paid in capital 271,941 258,838
Other comprehensive income and deferred compensation 31,568 113,535
Retained earnings (deficit) 326,824 346,348
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Total stockholders' equity 630,341 718,728
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$1,169,046 $1,250,692
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CNET NETWORKS
- --------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(000's Omitted)
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THREE MONTHS ENDED
MARCH 31,
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2000 1999
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Revenues:
Online $ 43,044 $ 18,462
Broadcast 2,323 1,652
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Total revenues 45,367 20,114
Cost of revenues:
Online 14,136 7,081
Broadcast 2,722 1,607
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Total cost of revenues 16,858 8,688
Gross profit 28,509 11,426
Operating expenses:
Sales & marketing 18,400 5,720
Development 3,099 2,100
Corporate 6,285 3,065
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Total operating expenses before amortization 27,784 10,885
Total operating profit before amortization,
mySimon transaction costs and stock based
compensation 725 541
Amortization 9,546 306
mySimon transaction costs 1,456 --
Stock based compensation 5,354 --
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Total operating profit (loss) (15,631) 235
Other income (expense)
Gain (loss) on investment sales (4,622) 19,875
Interest income (expense), net 730 262
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Total other income (expense) (3,892) 20,137
-------- --------
Net income (loss) before income taxes (19,523) 20,372
Income taxes -- --
-------- --------
Net income (loss) $(19,523) $ 20,372
======== ========
Basic net income (loss)
per share $ (0.23) $ 0.25
======== ========
Diluted net income (loss)
per share $ (0.23) $ 0.23
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Shares used in calculating
basic per share data 85,656 80,202
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Shares used in calculating
diluted per share data 85,656 87,166
======== ========
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