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Webmediabrands Inc Reports Operating Results (10-Q)

August 12, 2010 | About:

10qk

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Webmediabrands Inc (WEBM) filed Quarterly Report for the period ended 2010-06-30.

Webmediabrands Inc has a market cap of $27.7 million; its shares were traded at around $0.7399 with and P/S ratio of 4.5. WEBM is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Cost of revenues primarily consists of payroll and benefits costs for technology and editorial personnel, freelance costs, communications infrastructure and Website hosting. Cost of revenues excludes depreciation and amortization. Cost of revenues was $923,000 for the three months ended June 30, 2009 and $1.4 million for the three months ended June 30, 2010, representing an increase of 52%. This change was primarily due to an increase in employee-related costs of $215,000, trade show costs of $184,000 and freelance contributor costs of $81,000.

Cost of revenues was $2.2 million for the six months ended June 30, 2009 and $2.7 million for the six months ended June 30, 2010, representing an increase of 25%. This change was primarily due to an increase in employee-related costs of $370,000 and freelance contributor costs of $232,000. These increases were partially offset by a decrease in education-related costs due to fewer courses being held during the second quarter of 2010 compared to the second quarter of 2009.

General and administrative expenses consist primarily of payroll and benefits costs for administrative personnel, office-related costs and professional fees. General and administrative expenses were $2.1 million for the three months ended June 30, 2009 and $1.4 million for the three months ended June 30, 2010, representing a decrease of 36%. This decrease was due primarily to a decrease in employee-related costs of $325,000, a decrease in professional fees of $215,000, a decrease in office-related costs of $114,000 and a decrease in insurance-related costs of $95,000.

General and administrative expenses were $7.4 million for the six months ended June 30, 2009 and $3.0 million for the six months ended June 30, 2010, representing a decrease of 59%. This change was primarily due to a decrease in stock-based compensation of $1.8 million, a decrease in employee-related costs of $998,000, a decrease in professional fees of $986,000, a decrease in office-related costs of $242,000 and a decrease in insurance-related costs of $188,000. The reduction in employee-related costs, professional fees and insurance-related costs during the periods presented was primarily due to cost reduction efforts initiated in conjunction with the sales of our Online images and Internet.com businesses and the decreased size of the continuing business. The decrease in office-related costs during the periods presented was due to the termination of our Darien, Connecticut office lease during the second quarter of 2009.

Amortization expense was $49,000 for the three months ended June 30, 2009 and $21,000 for the three months ended June 30, 2010, representing a decrease of 57%. Amortization expense was $168,000 for the six months ended June 30, 2009 and $32,000 for the six months ended June 30, 2010, representing a decrease 81%. These decreases are due primarily to the write-off of amortized intangible assets during the fourth quarter of 2009.

We recorded a provision for income taxes of $24,000 and a benefit for income taxes of $2.9 million during the three and six months ended June 30, 2009, respectively. During the six months ended June 30, 2009, the benefit for income taxes consisted primarily of a net tax benefit of $2.9 million recorded on the reclassification of the fair value adjustments on the interest rate swap from other comprehensive income to loss from continuing operations. We recorded a provision for income taxes of $17,000 and $20,000 during the three and six months ended June 30, 2010, respectively.

Read the The complete Report

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10qk
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