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
October 31, 2007
Date of earliest event reported
INFOSPACE, INC.
(Exact name of Registrant as specified in its charter)
| DELAWARE | 000-25131 | 91-1718107 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
601 108th Avenue N.E., Suite 1200
Bellevue, Washington 98004
(Address of Principal Executive Offices)
425-201-6100
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:
| ¨ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.01 | Completion of Acquisition or Disposition of Assets |
On October 31, 2007, InfoSpace, Inc. (“InfoSpace” or the “Company”) completed the sale of certain assets and the transfer of certain liabilities related to its online directory business, including its online yellow and white pages services (collectively, the “Directory Business”) to Idearc Inc. (“Idearc”), pursuant to the terms of a definitive Asset Purchase Agreement (the “Purchase Agreement”), dated September 15, 2007, by and between the Company and Idearc, for total consideration of approximately $225 million in cash, subject to certain purchase price adjustments set forth in the Purchase Agreement.
The foregoing summary of the Purchase Agreement does not purport to be complete and is qualified in its entirety by the Purchase Agreement, which was attached as Exhibit 2.1 to the Company’s current report on Form 8-K, filed with the Securities and Exchange Commission on September 19, 2007, and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits |
(b) Pro Forma Financial Information
The information to be included in the unaudited pro forma condensed consolidated balance sheet of InfoSpace as of September 30, 2007, and the related unaudited pro forma condensed consolidated statement of operations of InfoSpace for the nine months ended September 30, 2007, are reflected in InfoSpace’s Quarterly Report on Form 10-Q for the three months ended September 30, 2007, filed with the Securities and Exchange Commission on November 6, 2007, and are incorporated herein by reference.
The unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2006, 2005, and 2004 (collectively, the “Pro Forma Condensed Consolidated Statements of Operations”), are attached hereto as Exhibit 99.1. These Pro Forma Condensed Consolidated Statements of Operations give effect to the Company’s sale of its Directory Business to Idearc as if it had occurred on January 1, 2004.
The unaudited Pro Forma Condensed Consolidated Statements of Operations have been prepared by InfoSpace’s management and are provided for informational purposes only. The unaudited Pro Forma Condensed Consolidated Statements of Operations do not purport to reflect the results of operations that would have existed or occurred had such transaction taken place on the date indicated, nor do they purport to reflect the financial condition or results of operations that will exist or occur in the future. The unaudited Pro Forma Condensed Consolidated Statements of Operations, including the notes thereto, are qualified in their entirety by reference to, and should be read in conjunction with, the Company’s historical consolidated financial statements and the notes thereto included in its Quarterly Report on Form 10-Q for the three months ended September 30, 2007 and in its Annual Report on Form 10-K for the year ended December 31, 2006.
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INFOSPACE, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year ended December 31, 2006
(amounts in thousands, except per share data)
| Historical InfoSpace(1) |
Directory(2) | Pro Forma InfoSpace |
||||||||||
| Revenues |
$ | 371,737 | $ | 33,103 | $ | 338,634 | ||||||
| Operating expenses: |
||||||||||||
| Content and distribution |
178,327 | 4,327 | 174,000 | |||||||||
| Systems and network operations |
31,222 | 978 | 30,244 | |||||||||
| Product development |
46,340 | 4,905 | 41,435 | |||||||||
| Sales and marketing |
46,518 | 2,664 | 43,854 | |||||||||
| General and administrative |
51,725 | 154 | 51,571 | |||||||||
| Depreciation |
16,083 | 2,457 | 13,626 | |||||||||
| Amortization of intangible assets |
12,213 | 2,836 | 9,377 | |||||||||
| Restructuring and other, net |
62,316 | — | 62,316 | |||||||||
| Total operating expenses |
444,744 | 18,321 | 426,423 | |||||||||
| Operating income (loss) |
(73,007 | ) | 14,782 | (87,789 | ) | |||||||
| Other income, net |
19,381 | (34 | ) | 19,415 | ||||||||
| Income (loss) before income taxes |
(53,626 | ) | 14,748 | (68,374 | ) | |||||||
| Income tax benefit (provision) |
38,538 | (5,162 | )(3) | 43,700 | ||||||||
| Net income (loss) |
$ | (15,088 | ) | $ | 9,586 | $ | (24,674 | ) | ||||
| Net loss per share - Basic and Diluted |
$ | (0.48 | ) | $ | (0.79 | ) | ||||||
| Weighted average shares outstanding used in computing basic and diluted net loss per share |
31,254 | 31,254 | ||||||||||
See notes to the unaudited pro forma condensed consolidated financial statements.
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INFOSPACE, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year ended December 31, 2005
(amounts in thousands, except per share data)
| Historical InfoSpace(1) |
Directory(2) | Pro Forma InfoSpace | ||||||||
| Revenues |
$ | 339,968 | $ | 38,552 | $ | 301,416 | ||||
| Operating expenses: |
||||||||||
| Content and distribution |
145,351 | 8,112 | 137,239 | |||||||
| Systems and network operations |
21,375 | 1,052 | 20,323 | |||||||
| Product development |
31,203 | 4,285 | 26,918 | |||||||
| Sales and marketing |
31,062 | 2,135 | 28,927 | |||||||
| General and administrative |
40,234 | 595 | 39,639 | |||||||
| Depreciation |
9,061 | 797 | 8,264 | |||||||
| Amortization of intangible assets |
15,265 | 3,798 | 11,467 | |||||||
| Total operating expenses |
293,551 | 20,774 | 272,777 | |||||||
| Operating income |
46,417 | 17,778 | 28,639 | |||||||
| Other income, net |
89,476 | (48 | ) | 89,524 | ||||||
| Income before income taxes |
135,893 | 17,730 | 118,163 | |||||||
| Income tax benefit (provision) |
23,475 | (6,206 | )(3) | 29,681 | ||||||
| Net income |
$ | 159,368 | $ | 11,524 | $ | 147,844 | ||||
| Net income per share - Basic |
$ | 4.94 | $ | 4.58 | ||||||
| Weighted average shares outstanding used in computing basic net income per share |
32,284 | 32,284 | ||||||||
| Net income per share - Diluted |
$ | 4.47 | $ | 4.15 | ||||||
| Weighted average shares outstanding used in computing diluted net income per share |
35,616 | 35,616 | ||||||||
See notes to the unaudited pro forma condensed consolidated financial statements.
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INFOSPACE, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year ended December 31, 2004
(amounts in thousands, except per share data)
| Historical InfoSpace(1) |
Directory(2) | Pro Forma InfoSpace |
||||||||||
| Revenues |
$ | 249,354 | $ | 36,166 | $ | 213,188 | ||||||
| Operating expenses: |
||||||||||||
| Content and distribution |
92,688 | 10,376 | 82,312 | |||||||||
| Systems and network operations |
14,220 | 642 | 13,578 | |||||||||
| Product development |
23,142 | 3,216 | 19,926 | |||||||||
| Sales and marketing |
23,486 | 2,490 | 20,996 | |||||||||
| General and administrative |
36,348 | 693 | 35,655 | |||||||||
| Depreciation |
6,974 | 346 | 6,628 | |||||||||
| Amortization of intangible assets |
9,920 | 2,690 | 7,230 | |||||||||
| Restructuring and other, net |
(2,981 | ) | — | (2,981 | ) | |||||||
| Total operating expenses |
203,797 | 20,453 | 183,344 | |||||||||
| Operating income |
45,557 | 15,713 | 29,844 | |||||||||
| Other income, net |
5,416 | (15 | ) | 5,431 | ||||||||
| Income before income taxes |
50,973 | 15,698 | 35,275 | |||||||||
| Income tax benefit (provision) |
29 | (5,494 | )(3) | 5,523 | ||||||||
| Income from continuing operations |
$ | 51,002 | $ | 10,204 | $ | 40,798 | ||||||
| Income from continuing operations per share - Basic |
$ | 1.59 | $ | 1.27 | ||||||||
| Weighted average shares outstanding used in computing basic income per share |
32,109 | 32,109 | ||||||||||
| Income from continuing operations per share - Diluted |
$ | 1.40 | $ | 1.12 | ||||||||
| Weighted average shares outstanding used in computing diluted income per share |
36,541 | 36,541 | ||||||||||
See notes to the unaudited pro forma condensed consolidated financial statements.
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INFOSPACE, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended December 31, 2006, 2005, and 2004
The accompanying Pro Forma Condensed Consolidated Financial Statements consist of the historical Condensed Consolidated Financial Statements of the Company, adjusted to exclude the historical operating results of the Company’s Directory Business, as described below:
| 1. | Represents the historical results of operations of the Company and were derived from the Company’s Condensed Consolidated Statements of Operations as previously reported in its Annual Report on Form 10-K for the years ended December 31, 2006, 2005, and 2004, before reflecting its Directory Business as discontinued operations. |
| 2. | Represents the historical operating results of the Company’s Directory Business for the periods presented. |
| 3. | Represents income taxes attributed to the Company’s Directory Business at an effective rate of 35%. |
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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 hereunto duly authorized.
Date: November 6, 2007
| INFOSPACE, INC. | ||
| By: | /s/ Allen M. Hsieh | |
| Allen M. Hsieh | ||
| Chief Financial Officer | ||
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