InfoSpace Inc. (INSP, Financial) filed Quarterly Report for the period ended 2009-03-31.
InfoSpace Inc. is a leading global Internet information infrastructure services company. InfoSpace provides commerce information and communication infrastructure services to wireless devices merchants and Web sites. The company's affiliates include a network of wireless and other non-PC devices including PCs cellular phones pagers screen telephones television set-top boxes online kiosks and personal digital assistants. These include relationships with AirTouch Vodafone GTE Intel Ericsson Nokia NeoPoint Mitsui and Acer America. (PRESS RELEASE) InfoSpace Inc. has a market cap of $251.5 million; its shares were traded at around $7.2 with a P/E ratio of 25.7 and P/S ratio of 1.7.
Other income, net for the three months ended March 31, 2009 was $607,000, as compared to $2.2 million in the three months ended March 31, 2008. The decrease was primarily attributable to a decrease in interest income as a result of a decline in interest rates. Additionally, we recorded an income tax expense from continuing operations of $201,000 in the three months ended March 31, 2009, as compared to expense of $182,000 in the same period in 2008.
The second type of ARS has no maturity date and, in the event of default or liquidation of the collateral or ARS trust by the ARS issuer, we or the ARS trust are entitled to receive non-convertible preferred shares in the ARS issuer; ARS of that type are also known as auction rate preferred securities (ARPS). For the remaining ARPS which have a fair value above zero ($0), for which we paid $7.0 million, there was a single issuer, and we determined their fair values to be an aggregate $850,000 at March 31, 2009 by using discounted cash flow models for the ARPS trust payments, weighted by our estimated probability of trust default. The models relied upon certain unobservable inputs, including our estimate of the holding periods, which was 40 years, the annual discount rate applied to future cash flows, which was primarily based on the historical credit default swap rates for the ARPS issuer, ranging from 21% to 51% in excess of LIBOR, and our estimate of the probabilities of trust default, which was 0%.
In 2008, an issuer of certain of our ARPS terminated the ARPS trusts and issued us non-cumulative perpetual preferred shares in the ARPS issuer. We paid $7.0 million for those ARPS, and the fair value of the preferred shares at March 31, 2009 was $700,000, which was primarily based on a redemption offer from the issuer, and was an increase of $335,000 from a fair value of $365,000 at December 31, 2008. The increase in fair value was recorded to other comprehensive income in the three months ended March 31, 2009. In April 2009, we accepted the redemption offer and received $700,000 in cash for the aforementioned preferred shares.
Depreciation. Depreciation of property and equipment includes depreciation of network servers and data center equipment, computers, software, office equipment and fixtures and leasehold improvements. Depreciation of property and equipment increased to $1.8 million for the three months ended March 31, 2009 compared to $1.5 million for the three months ended March 31, 2008. This increase was primarily due to equipment purchased for the new data centers that we opened in 2008.
As of March 31, 2009, we had cash and marketable investments of $205.4 million, consisting of cash and cash equivalents of $55.4 million, available-for-sale short-term investments of $141.1 million, and available-for-sale long-term investments of $8.9 million. We generally invest our excess cash in high quality marketable investments. These investments include securities issued by U.S. government agencies, certificates of deposit, money market funds, and taxable municipal bonds.
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InfoSpace Inc. is a leading global Internet information infrastructure services company. InfoSpace provides commerce information and communication infrastructure services to wireless devices merchants and Web sites. The company's affiliates include a network of wireless and other non-PC devices including PCs cellular phones pagers screen telephones television set-top boxes online kiosks and personal digital assistants. These include relationships with AirTouch Vodafone GTE Intel Ericsson Nokia NeoPoint Mitsui and Acer America. (PRESS RELEASE) InfoSpace Inc. has a market cap of $251.5 million; its shares were traded at around $7.2 with a P/E ratio of 25.7 and P/S ratio of 1.7.
Highlight of Business Operations:
Content and distribution costs from continuing operations for the three months ended March 31, 2009 decreased to $20.4 million from $21.8 million in the three months ended March 31, 2008, primarily due to decreases in revenue from search results delivered through certain of our distribution partners.Other income, net for the three months ended March 31, 2009 was $607,000, as compared to $2.2 million in the three months ended March 31, 2008. The decrease was primarily attributable to a decrease in interest income as a result of a decline in interest rates. Additionally, we recorded an income tax expense from continuing operations of $201,000 in the three months ended March 31, 2009, as compared to expense of $182,000 in the same period in 2008.
The second type of ARS has no maturity date and, in the event of default or liquidation of the collateral or ARS trust by the ARS issuer, we or the ARS trust are entitled to receive non-convertible preferred shares in the ARS issuer; ARS of that type are also known as auction rate preferred securities (ARPS). For the remaining ARPS which have a fair value above zero ($0), for which we paid $7.0 million, there was a single issuer, and we determined their fair values to be an aggregate $850,000 at March 31, 2009 by using discounted cash flow models for the ARPS trust payments, weighted by our estimated probability of trust default. The models relied upon certain unobservable inputs, including our estimate of the holding periods, which was 40 years, the annual discount rate applied to future cash flows, which was primarily based on the historical credit default swap rates for the ARPS issuer, ranging from 21% to 51% in excess of LIBOR, and our estimate of the probabilities of trust default, which was 0%.
In 2008, an issuer of certain of our ARPS terminated the ARPS trusts and issued us non-cumulative perpetual preferred shares in the ARPS issuer. We paid $7.0 million for those ARPS, and the fair value of the preferred shares at March 31, 2009 was $700,000, which was primarily based on a redemption offer from the issuer, and was an increase of $335,000 from a fair value of $365,000 at December 31, 2008. The increase in fair value was recorded to other comprehensive income in the three months ended March 31, 2009. In April 2009, we accepted the redemption offer and received $700,000 in cash for the aforementioned preferred shares.
Depreciation. Depreciation of property and equipment includes depreciation of network servers and data center equipment, computers, software, office equipment and fixtures and leasehold improvements. Depreciation of property and equipment increased to $1.8 million for the three months ended March 31, 2009 compared to $1.5 million for the three months ended March 31, 2008. This increase was primarily due to equipment purchased for the new data centers that we opened in 2008.
As of March 31, 2009, we had cash and marketable investments of $205.4 million, consisting of cash and cash equivalents of $55.4 million, available-for-sale short-term investments of $141.1 million, and available-for-sale long-term investments of $8.9 million. We generally invest our excess cash in high quality marketable investments. These investments include securities issued by U.S. government agencies, certificates of deposit, money market funds, and taxable municipal bonds.
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