Exhibit 99.1
Unaudited Pro Forma Condensed Consolidated Financial Information
On September 17, 2012 (the “Closing Date”), Geeknet, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Dice Holdings, Inc. (“Dice”) and two of Dice’s subsidiaries, Dice Career Solutions, Inc. and eFinancialCareers Limited (collectively, the “Buyers”) pursuant to which the Buyers purchased the Company’s online media business, including the SourceForge, Slashdot and Freecode websites (the “Purchased Business”) and assumed certain related liabilities.
In accordance with the terms of the Purchase Agreement, the Buyers paid to the Company $20,000,000 in cash, of which $3,000,000 was deposited by the Buyers into an escrow account for a period of twelve (12) months after the Closing Date in order to secure the Company’s indemnification obligations to the Buyers for potential breaches of the Company’s representations, warranties, covenants and other obligations made under the Purchase Agreement.
The unaudited Pro Forma Condensed Consolidated Balance Sheet set forth below has been presented as if the sale of the Purchased Business had occurred on June 30, 2012. The unaudited Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 2012 and June 30, 2011 and for the years ended December 31, 2011, 2010 and 2009 set forth below have been presented as if the sale of the Purchased Business had occurred on January 1, 2009.
The unaudited pro forma condensed consolidated financial information are presented for informational purposes and is not necessarily indicative of what the Company’s financial position or results of operations actually would have been had the sale of the Purchased Business occurred as of the dates indicated. In addition, the unaudited pro forma condensed consolidated financial information is not necessarily indicative of future operating results or financial position.
The unaudited pro forma financial information is based upon available information and assumptions that the Company believes are reasonable. Some of the assumptions involve judgments by management, and changes in the assumptions could cause significant changes in the adjustments used to calculate the unaudited pro forma financial information. These unaudited pro forma condensed consolidated financial information and accompanying notes should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and the accompanying notes as of and for the six months ended June 30, 2012 and 2011and the audited consolidated financial statements and the accompanying notes, as of and for the fiscal years ended December 31, 2011, 2010 and 2009.
GEEKNET, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2012
(In thousands, unaudited)
| | As Reported (1) | | Pro Forma Adjustments | | Pro Forma |
ASSETS |
Current assets: | | | | | | |
Cash and cash equivalents | $ 34,609 | | $ 17,000 | (2) | | $ 51,609 |
Restricted cash in escrow | - | | 3,000 | (2) | | 3,000 |
Accounts receivable, net | 5,722 | | (4,987) | (3) | | 735 |
Inventories, net | 11,160 | | - | | | 11,160 |
Prepaid expenses and other current assets | 4,180 | | (308) | (3) | | 3,872 |
Total current assets | 55,671 | | 14,705 | | | 70,376 |
Property and equipment, net | 5,545 | | (1,266) | (3) | | 4,279 |
Other long-term assets | 2,027 | | (1,692) | (4) | | 335 |
Total assets | $ 63,243 | | $ 11,747 | | | $ 74,990 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
Current liabilities: | | | | | | |
Accounts payable | $ 5,264 | | $ (284) | (3) | | $ 4,980 |
Deferred revenue | 3,311 | | (2,068) | (3) | | 1,243 |
Accrued liabilities and other | 1,758 | | 3,798 | (5) | | 5,556 |
Total current liabilities | 10,333 | | 1,446 | | | 11,779 |
Other long-term liabilities | 79 | | - | | | 79 |
Total liabilities | 10,412 | | 1,446 | | | 11,858 |
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Stockholders’ equity: | | | | | | |
Preferred stock | - | | - | | | - |
Common stock | 7 | | - | | | 7 |
Treasury stock | (1,431) | | - | | | (1,431) |
Additional paid-in capital | 810,642 | | - | | | 810,642 |
Accumulated other comprehensive income | (3) | | 15 | (3) | | 12 |
Accumulated deficit | (756,384) | | 10,286 | (6) | | (746,098) |
Total stockholders’ equity | 52,831 | | 10,301 | | | 63,132 |
Total liabilities and stockholders’ equity | $ 63,243 | | $ 11,747 | | | $ 74,990 |
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GEEKNET, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2012
(In thousands, except per share amounts, unaudited)
| As Reported (7) | | Pro Forma Adjustments (8) | | Pro Forma |
Net revenue: | | | | | |
e-Commerce revenue | $ 35,314 | | $ - | | $ 35,314 |
Media revenue | 10,028 | | (10,028) | | - |
Total net revenue | 45,342 | | (10,028) | | 35,314 |
Cost of revenue: | | | | | |
e-Commerce cost of revenue | 30,651 | | - | | 30,651 |
Media cost of revenue | 2,186 | | (2,186) | | - |
Total cost of revenue | 32,837 | | (2,186) | | 30,651 |
Gross margin | 12,505 | | (7,842) | | 4,663 |
Operating expenses: | | | | | |
Sales and marketing | 6,784 | | (3,409) | | 3,375 |
Research and development | 3,770 | | (2,095) | | 1,675 |
General and administrative | 6,398 | | (1,405) | | 4,993 |
Amortization of intangible assets | 43 | | - | | 43 |
Total operating expenses | 16,995 | | (6,909) | | 10,086 |
Loss from operations | (4,490) | | (933) | | (5,423) |
Gain on sale of non-marketable securities | 4,021 | | - | | 4,021 |
Interest and other income (expense), net | (30) | | - | | (30) |
Loss before income taxes | (499) | | (933) | | (1,432) |
Provision for income taxes | 13 | | - | | 13 |
Net Loss | $ (512) | | $ (933) | | $ (1,445) |
Net loss per share: | | | | | |
Basic | $ (0.08) | | | | $ (0.23) |
Diluted | $ (0.08) | | | | $ (0.23) |
Shares used in per share calculations: | | | | | |
Basic | 6,409 | | | | 6,409 |
Diluted | 6,409 | | | | 6,409 |
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GEEKNET, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2011
(In thousands, except per share amounts, unaudited)
| As Reported (9) | | Pro Forma Adjustments (8) | | Pro Forma |
Net revenue: | | | | | |
e-Commerce revenue | $ 29,524 | | $ - | | $ 29,524 |
Media revenue | 10,462 | | (10,462) | | - |
Total net revenue | 39,986 | | (10,462) | | 29,524 |
Cost of revenue: | | | | | |
e-Commerce cost of revenue | 26,843 | | - | | 26,843 |
Media cost of revenue | 2,805 | | (2,805) | | - |
Total cost of revenue | 29,648 | | (2,805) | | 26,843 |
Gross margin | 10,338 | | (7,657) | | 2,681 |
Operating expenses: | | | | | |
Sales and marketing | 6,669 | | (3,527) | | 3,142 |
Research and development | 2,286 | | (1,460) | | 826 |
General and administrative | 5,899 | | (1,420) | | 4,479 |
Amortization of intangible assets | 41 | | (41) | | - |
Total operating expenses | 14,895 | | (6,448) | | 8,447 |
Loss from operations | (4,557) | | (1,209) | | (5,766) |
Interest and other income (expense), net | 7 | | - | | 7 |
Loss before income taxes | (4,550) | | (1,209) | | (5,759) |
Benefit for income taxes | (23) | | - | | (23) |
Net loss | $ (4,527) | | $ (1,209) | | $ (5,736) |
Net loss per share: | | | | | |
Basic | $ (0.72) | | | | $ (0.91) |
Diluted | $ (0.72) | | | | $ (0.91) |
Shares used in per share calculations: | | | | | |
Basic | 6,294 | | | | 6,294 |
Diluted | 6,294 | | | | 6,294 |
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GEEKNET, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2011
(In thousands, except per share amounts, unaudited)
| As Reported (9) | | Pro Forma Adjustments (8) | | Pro Forma |
Net revenue: | | | | | |
E-commerce revenue | $ 99,057 | | $ - | | $ 99,057 |
Media revenue | 20,409 | | (20,409) | | - |
Total net revenue | 119,466 | | (20,409) | | 99,057 |
Cost of revenue: | | | | | |
E-commerce cost of revenue | 83,277 | | - | | 83,277 |
Media cost of revenue | 4,906 | | (4,906) | | - |
Total cost of revenue | 88,183 | | (4,906) | | 83,277 |
Gross margin | 31,283 | | (15,503) | | 15,780 |
Operating expenses: | | | | | |
Sales and marketing | 15,420 | | (6,738) | | 8,682 |
Research and development | 5,542 | | (3,685) | | 1,857 |
General and administrative | 11,565 | | (2,065) | | 9,500 |
Amortization of intangible assets | 83 | | (83) | | - |
Gain loss on sale of assets | (65) | | 65 | | - |
Total operating expenses | 32,545 | | (12,506) | | 20,039 |
Loss from operations | (1,262) | | (2,997) | | (4,259) |
Interest and other income (expense), net | (11) | | - | | (11) |
Loss before income taxes | (1,273) | | (2,997) | | (4,270) |
Benefit for income taxes | (83) | | - | | (83) |
Net Loss | $ (1,190) | | $ (2,997) | | $ (4,187) |
Loss per share: | | | | | |
Basic | $ (0.19) | | | | $ (0.66) |
Diluted | $ (0.19) | | | | $ (0.66) |
Shares used in per share calculations: | | | | | |
Basic | 6,319 | | | | 6,319 |
Diluted | 6,319 | | | | 6,319 |
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GEEKNET, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2010
(In thousands, except per share amounts, unaudited)
` | As Reported (9) | | Pro Forma Adjustments (8) | | Pro Forma |
Net revenue: | | | | | |
E-commerce revenue | $ 76,335 | | $ - | | $ 76,335 |
Media revenue | 18,284 | | (18,284) | | - |
Total net revenue | 94,619 | | (18,284) | | 76,335 |
Cost of revenue: | | | | | |
E-commerce cost of revenue | 62,630 | | - | | 62,630 |
Media cost of revenue | 6,610 | | (6,610) | | - |
Total cost of revenue | 69,240 | | (6,610) | | 62,630 |
Gross margin | 25,379 | | (11,674) | | 13,705 |
Operating expenses: | | | | | |
Sales and marketing | 15,277 | | (8,365) | | 6,912 |
Research and development | 6,148 | | (4,635) | | 1,513 |
General and administrative | 9,551 | | (459) | | 9,092 |
Amortization of intangible assets | 306 | | (306) | | - |
Gain on sale of assets | (1,391) | | 1,391 | | - |
Restructuring costs | (101) | | 101 | | - |
Total operating expenses | 29,790 | | (12,273) | | 17,517 |
Loss from operations | (4,411) | | 599 | | (3,812) |
Interest and other income (expense), net | 44 | | - | | 44 |
Loss from continuing operations before income taxes | (4,367) | | 599 | | (3,768) |
Benefit for income taxes | (167) | | - | | (167) |
Loss from continuing operations | $(4,200) | | $599 | | $(3,601) |
Loss per share from continuing operations: | | | | | |
Basic | $ (0.69) | | | | $ (0.59) |
Diluted | $ (0.69) | | | | $ (0.59) |
Shares used in per share calculations: | | | | | |
Basic | 6,073 | | | | 6,073 |
Diluted | 6,073 | | | | 6,073 |
GEEKNET, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2009
(In thousands, except per share amounts, unaudited)
| As Reported (9) | | Pro Forma Adjustments (8) | | Pro Forma |
Net revenue: | | | | | |
E-commerce revenue | $ 49,091 | | $ - | | $ 49,091 |
Media revenue, including $545 of related party revenue | 16,486 | | (16,486) | | - |
Total net revenue | 65,577 | | (16,486) | | 49,091 |
Cost of revenue: | | | | | |
E-commerce cost of revenue | 38,151 | | - | | 38,151 |
Media cost of revenue | 6,953 | | (6,953) | | - |
Total cost of revenue | 45,104 | | (6,953) | | 38,151 |
Gross margin | 20,473 | | (9,533) | | 10,940 |
Operating expenses: | | | | | |
Sales and marketing | 11,775 | | (7,924) | | 3,851 |
Research and development | 8,103 | | (7,235) | | 868 |
General and administrative | 8,843 | | (710) | | 8,133 |
Amortization of intangible assets | 200 | | (200) | | - |
(Gain) loss on sale of assets | 1,020 | | (1,020) | | - |
Restructuring costs | (62) | | 62 | | - |
Total operating expenses | 29,879 | | (17,027) | | 12,852 |
Loss from operations | (9,406) | | 7,494 | | (1,912) |
Interest and other income (expense), net | 110 | | - | | 110 |
Other than temporary impairment of non-marketable equity securities | (4,585) | | 4,585 | | - |
Loss before income taxes | (13,881) | | 12,079 | | (1,802) |
Provision for income taxes | 140 | | - | | 140 |
Net Loss | $ (14,021) | | $ 12,079 | | $ (1,942) |
Net loss per share: | | | | | |
Basic | $ (2.31) | | | | $ (0.32) |
Diluted | $ (2.31) | | | | $ (0.32) |
Shares used in per share calculations: | | | | | |
Basic | 6,080 | | | | 6,080 |
Diluted | 6,080 | | | | 6,080 |
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GEEKNET, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) | | Balances are as reported on the Company’s unaudited Condensed Consolidated Balance Sheet included in the Company’s Form 10-Q as of June 30, 2012. |
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(2) | | In accordance with the terms of the Purchase Agreement, the Buyers paid the Company $20 million in cash, of which $3 million was deposited into an escrow account for a period of twelve months after the Closing Date in order to secure the Company’s indemnification obligations to the Buyers for potential breaches of the Company’s representations, warranties, covenants and other obligations made under the Purchase Agreement. |
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(3) | | Estimated assets and liabilities acquired by the Buyers and remaining balances related to the Purchased Business to be excluded in Pro Forma ending balances at June 30, 2012. |
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(4) | | Goodwill of $1.7 million related to the Purchased Business on the date of sale. |
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(5) | | Includes the reduction of $0.5 million in accrued liabilities acquired by the Buyers, an accrual of estimated transaction costs of $1.1 million which are directly related to executing the sale of the Purchased Business assuming the transaction had occurred as of June 30, 2012, and an accrual of $3.2 million for retention bonuses and stock compensation to be paid to employees as a result of the sale of the Purchased Business. |
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(6) | | Accumulated deficit includes an estimated $13.4 million gain from the sale of the Purchased Business assets assuming the transaction had occurred as of June 30, 2012, and the impact of retention bonuses and stock compensation to be paid to employees as a result of the sale of the Purchased Business. |
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(7) | | As reported on the Company’s unaudited Condensed Consolidated Statements of Operations included in the Company’s Form 10-Q as of June 30, 2012. |
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(8) | | Adjustments are results of the Purchased Business for the period presented. These amounts may differ from previously reported segment operating results due to items which were allocated to the Purchased Business, which will be retained subsequent to the sale of the Purchased Business. |
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(9) | | As reported on the Company’s audited Consolidated Statements of Operations included in the Company’s Form 10-K as of December 31, 2011. |
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