<PAGE>
Exhibit 99.1
Financial Statements
uBid, Inc.
BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
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2000 1999
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ASSETS (unaudited)
<S> <C> <C>
Current assets:
Cash......................................................................... $ 37,601 $ 51,544
Restricted cash.............................................................. -- 2,092
Accounts receivable, net of allowances of $149 and $113, respectively........ 6,369 3,615
Merchandise inventories...................................................... 19,238 15,098
Prepaid expenses and other................................................... 2,924 2,374
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Total current assets...................................................... 66,132 74,723
Fixed assets, net............................................................ 6,238 4,543
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Total assets.............................................................. $ 72,370 $ 79,266
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable................................................................. 3,331 3,331
Accounts payable............................................................. $ 23,497 $ 19,995
Accrued marketing............................................................ 3,867 4,753
Accrued expenses and other current liabilities............................... 3,478 5,925
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Total current liabilities................................................. 34,173 34,004
Stockholders' equity (deficit):
Preferred Stock; $.001 par value; 5,000,000 shares authorized; no shares
issued or outstanding....................................................... -- --
Common Stock; $.001 par value; 20,000,000 shares authorized;
11,667,966 and 11,543,842 shares issued and outstanding as of March 31,
2000 and December 31, 1999, respectively.................................... 4 4
Additional paid-in-capital................................................... 86,233 85,752
Deferred compensation expense................................................ (4,020) (4,517)
Accumulated deficit.......................................................... (44,020) (35,977)
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Total stockholders' equity................................................ 38,197 45,262
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Total liabilities and stockholders' equity................................ $ 72,370 $ 79,266
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</TABLE>
See notes to the financial statements
<PAGE>
uBid, Inc.
STATEMENTS OF OPERATIONS
(in thousands, except share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
------------------------------
<S> <C> <C>
Net revenues..................................................................... $ 85,859 $ 34,314
Cost of revenues................................................................. 77,471 31,337
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Gross profit..................................................................... 8,388 2,977
Operating expenses:
Sales and marketing........................................................... 7,392 2,660
Technology and development.................................................... 1,774 644
General and administrative.................................................... 6,692 2,341
Merger related expense........................................................ 530 --
Stock option compensation..................................................... 497 885
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Total operating expenses.................................................. 16,885 6,530
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Loss from operations............................................................. (8,497) (3,553)
Interest income.................................................................. 521 271
Interest expense................................................................. (67) (70)
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Net loss......................................................................... $ (8,043) $ (3,352)
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Basic and diluted net loss per share............................................. $ (0.69) $ (0.37)
=========== ==========
Shares used to compute basic and diluted net loss per share...................... 11,593,801 9,146,883
</TABLE>
See notes to the financial statements
<PAGE>
uBid, Inc.
STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
2000 1999
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<S> <C> <C>
Cash flows from operating activities:
Net loss..................................................................... $ (8,043) $(3,352)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization................................................ 398 69
Non cash compensation expense................................................ 497 885
Changes in operating assets and liabilities:
Accounts receivable, net................................................. (2,754) 141
Merchandise inventories, net............................................. (4,140) (746)
Prepaid expenses......................................................... (550) 31
Accounts payable......................................................... 3,502 3,262
Accrued marketing expense................................................ (886) 733
Accrued expenses and other current liabilities........................... (2,447) (452)
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Net cash (used in) provided by operating activities............................. (14,423) 571
Cash flows from investing activities:
Purchases of property and equipment.......................................... (2,093) (715)
Decrease in restricted cash.................................................. 2,092 --
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Net cash used in investing activities........................................... (1) (715)
Cash flows from financing activities:
Proceeds from exercises of stock options..................................... 481 --
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Net cash provided by financing activities....................................... 481 --
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Net change in cash and cash equivalents......................................... (13,943) (144)
Cash and cash equivalents at beginning of period................................ 51,544 26,053
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Cash and cash equivalents at end of period...................................... $ 37,601 $25,909
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</TABLE>
See notes to the financial statements
<PAGE>
uBid, Inc.
NOTES TO FINANCIAL STATEMENTS
(in thousands, except share data)
(unaudited)
1. Description of Company and Summary of Significant Accounting Policies
Description of Company
The Company is engaged in the retail sale of merchandise, including new,
close-out, and refurbished products, utilizing an interactive online auction.
The Company currently specializes in selling primarily brand name computers,
consumer electronics, housewares, jewelry, and sporting goods and memorabilia
over the World Wide Web to consumers and small and medium-sized businesses.
The Company was established by Creative Computers ("Creative") in April
1997 and was incorporated in Delaware in September 1997 as a wholly-owned,
indirect subsidiary of Creative. Beginning on April 1, 1997 ("Inception"), prior
to the formation of the Company, Creative began funding certain startup and
development costs related to the Company's business. On September 19, 1997,
assets and liabilities related to the Company were recorded by the Company at
Creative's basis. The financial statements have been prepared as if the Company
operated as a stand-alone entity since Inception.
Cash Equivalents
All highly liquid debt instruments purchased with a maturity of three
months or less are considered cash equivalents.
Revenue Recognition
The Company sells merchandise purchased from suppliers under two types of
arrangements. The Company either purchases merchandise for inventory or
purchases merchandise at the time of sale under consignment-type revenue sharing
agreements. For the three months ended March 31, 2000 and 1999, the Company's
sales of merchandise purchased for inventory comprised approximately 88% and 93%
of product revenues, respectively, with merchandise purchase under consignment-
type revenue sharing agreements representing approximately 12% and 7% of product
revenues, respectively.
The Company recognizes revenue for advertising placed on its Website during
the period in which the advertisement is displayed, provided that no significant
Company obligations remain at the end of the period and collection of the
resulting receivable is probable. The Company recognizes software licensing
revenue when all the criteria of American Institute of Certified Public
Accountants (AICPA) Statement of Position (SOP) 97-2, Software Revenue
Recognition are met. The Company recognizes revenue from payments for
professional services as the related services are performed. The Company derives
revenue from premium and exclusive placements of vendors in their related
category on the Company's Website on a straight-line basis over the term of the
related vendor contract. Commissions and fees from the sale of equipment and
merchandise through the Company's co-branded business-to-business Websites are
recognized on the date the related auction is concluded.
Accounting for Stock Option Compensation
The Company accounts for stock options as prescribed by APB Opinion No. 25
and includes pro forma information in the Stock options footnote, as permitted
by Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation.
<PAGE>
Stock Splits
On June 25, 1998, the Company effected a 100,000-for-1 split of its Common
Stock. On November 30, 1998, the Company effected a .7329883-for-1 reverse split
of its common stock. All common shares and per share data have been
retroactively adjusted to reflect these stock splits.
Net Loss per Share
Basic net loss per share excludes dilution and is computed by dividing net
loss by the weighted average number of common shares outstanding during the
reported periods. Diluted net loss per share reflects the potential dilution
that could occur if stock options and other commitments to issue common stock
were exercised. During the three month periods ended March 31, 2000 and 1999,
options to purchase 2,900,120 and 1,423,603 common shares, respectively, were
anti-dilutive and have been excluded from the weighted average share
computation.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles and, in the opinion of
management, reflect all adjustments, which include only normal recurring
adjustments, necessary to present fairly the Company's financial position,
results of operations and cash flows as of March 31, 2000 and for the three
month periods ended March 31, 2000 and 1999. These financial statements should
be read in conjunction with the Company's audited financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1999. The results of operations for the three month periods ended
March 31, 2000 are not necessarily indicative of the results to be expected for
any subsequent quarter or for the year ending December 31, 2000.
2. Segment Information
The Company operates in a single reportable segment as an online auction
for computer, consumer electronics and housewares, and sports and recreation
products in the United States. The Company's product revenues accounted for 98%
and 100% of total revenues for the three month period ended March 31, 2000 and
1999, respectively, and are divided into two categories; sales of merchandise
held in inventory by the Company and sales of merchandise purchased at the time
of sale under consignment-type revenue sharing agreements with vendors. The
Company sources its products from over 470 vendors and offers, on average, over
7,600 items in each of its daily auctions. Product offerings are divided into
the following four categories, with their corresponding percentage of net
product revenues for the three month period ended March 31, 2000 and 1999:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
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2000 1999
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<S> <C> <C>
Computer Products - including desktops, portable computers, computer 66% 76%
accessories, disk drives, modems, monitors / video equipment, components,
printers, scanners, digital cameras, software and home office products.
Consumer Electronics - including home theater equipment, home audio equipment, 26% 15%
speakers, televisions, camcorders, VCR's, DVD players, portable audio players
and automobile audio equipment.
Housewares - including kitchen appliances, vacuum cleaners, personal care 5% 6%
devices, furniture, gifts, photography, jewelry and sunglasses.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Sports and Recreation - including sports memorabilia, golf and tennis, health 3% 3%
and fitness, outdoor sports, bicycles, water sports, and team sports
equipment.
</TABLE>
3. SUBSEQUENT EVENT
On April 28, 2000, CMGI, Inc., a Delaware corporation ("CMGI"), completed
its acquisition of the Company for total consideration of approximately $390.1
million, consisting of shares of CMGI common stock and CMGI stock options. CMGI
issued .2628 shares of its common stock for every share of the Company's common
stock held on April 28, 2000.
