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SECURITIES AND EXCHANGE COMMISSION
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 04-3483216 | |
(State or Other Jurisdiction of | (I.R.S. Employer | |
Incorporation or Organization) | Identification No.) | |
275 Grove Street | ||
Newton, Massachusetts | 02466 | |
(Address of Principal Executive Offices) | (Zip Code) |
None.
Common Stock, $0.001 Par Value
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Exhibit 32.1 |
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Item 1. | Business |
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• | Targeted Content Channels Lead to Greater Efficiency for Advertisers.The desire of advertisers to reach customers efficiently has led to the development and proliferation of market-specific content channels throughout all forms of media. Targeted content channels increase advertising efficiency by enabling advertisers to market specifically to the audience they are trying to reach. Content providers are finding new ways, such as specialized cable television channels, magazines and events, to offer increasingly targeted content to their audience and advertisers. The Internet has enabled even more market-specific content offerings, and the proliferation of market-specific websites provides advertisers with efficient and targeted media to reach their customers. |
• | The Internet Improves Advertisers’ Ability to Increase and Measure Return on Investment.Advertisers are increasingly focused on measuring and improving their return on investment, or ROI. Before the advent of Internet-based marketing, there were limited tools for accurately measuring the results of marketing campaigns in a timely fashion. The Internet has enabled advertisers to track individual users and their responses to their marketing programs. With the appropriate technology, vendors now have the ability to assess and benchmark the efficacy of their online advertising campaigns cost-effectively and in real-time. As a result, advertisers are now increasingly demanding a measurable ROI across all forms of media. |
• | The Internet Is Increasingly Critical in Researching Large, Complex and Costly Purchases.The Internet has improved the efficiency and effectiveness of researching purchases. The vast quantity of information available on the Internet, together with search engines and directories that facilitate information discovery, enables potential purchasers to draw information from many sources, including independent experts, peers and vendors, in an efficient manner. These benefits are most apparent in the research of complex and costly purchases which require information from a variety of sources. By improving the efficiency of product research, the Internet enables potential purchasers to save significant time and review a wider range of product selections most effectively. |
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• | Large and Growing Community of Registered Members.We have built a registered member database with detailed business information on over 9 million IT professionals as of December 31, 2010. We have collected detailed business and technology profiles with respect to our registered members, a fact which allows us to provide these registered members with more specialized content and our advertisers with highly targeted audiences and sales leads. |
• | Strong Advertiser Relationships.Since our founding in 1999, we have developed a broad customer base that now comprises approximately 1,100 active advertisers and the quarterly renewal rate of our top 100 customers has consistently exceeded 95%. |
• | Substantial Experience in Online Media.We have over eleven years of experience in developing our online media content, with a focus on providing targeted information to IT professionals and a targeted audience to vendors. Our experience enables us to develop new online properties rapidly, and to acquire and efficiently integrate select properties that further serve IT professionals. We have also developed an expertise in implementing integrated, targeted marketing campaigns designed to maximize the measurability of, and improvement in, ROI. |
• | Proprietary Data on the Research Behavior of our Registered Members and Site Visitors. Through our Activity Intelligence™ product platform, we collect information on millions of interactions that our members and visitors have with the content on our websites and in our e-mails. This allows us to increase the relevance of our informational offerings to our members, and improves our advertisers’ ROI by allowing us to deliver more qualified prospects. |
• | Significant Brand Recognition Among Advertisers and IT Professionals.Our brand is well-recognized by advertisers who value our integrated marketing capabilities and high-ROI advertising programs. At the same time, our sector-specific websites command brand recognition among IT professionals, who rely on these websites because of their specificity and depth of content. |
• | Favorable Search Engine Rankings.Due to our long history of using a targeted approach toward online publishing, our network of websites has produced a large repository of archived content that allows us to appear on search result pages when users perform targeted searches on search engines such as Google. We are successful in attracting traffic from search engines, which, in turn, increases our registered membership. |
• | Proprietary Lead Management Technology.Our proprietary lead management technology enables IT vendors to prioritize and manage efficiently the leads we provide, improving the efficacy of their sales teams and optimizing the ROI on their marketing expenditures with us. |
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• | Provides Access to Integrated, Sector-Specific Content.Our websites provide IT professionals with sector-specific content from the three fundamental sources they value in researching IT purchasing decisions: industry experts, peers and vendors. Our independent staff of editors creates content specific to the sectors we serve and the key sub-sectors within them. This content is integrated with other content generated by our network of third-party industry experts, member-generated content and content from IT vendors. The reliability, breadth and depth, and accessibility of our content offering enable IT professionals to make more informed purchases. |
• | Increases Efficiency of Purchasing Decisions.By accessing targeted and specialized information, IT professionals are able to research important purchasing decisions more effectively. Our integrated content offering minimizes the time spent searching for and evaluating content, and maximizes the time available for consuming quality information. Furthermore, we provide this specialized, targeted content through a variety of media that together address critical stages of the purchase decision process. |
• | Targets Active Buyers Efficiently.Our highly targeted content attracts specific, targeted audiences that are actively researching purchasing decisions. Using our registered member database and information we collect about their product interests, we are able to target further those registered members most likely to be of value to IT vendors. Advertising to a targeted audience already engaged in a potential buying decision minimizes advertiser expenditures on irrelevant audiences, increasing advertising efficiency. |
• | Generates Measurable, High ROI.Our targeted online content offerings enable us to generate and collect valuable business information about each user and his or her technology preferences. This information is provided by users prior to accessing specific content and may be further customized to advertisers’ needs to support their advertising programs. As users access sponsored content, we register and process this information, and deliver qualified actionable leads in real-time. As a result, our advertisers are able to measure and improve the ROI on their advertising expenditures with us. |
• | Generates and Prioritizes Qualified Sales Leads.Our IT vendors also use our detailed member database and integrated advertising campaigns to identify and market to the audience members they consider to have the highest potential value. Once the leads have been delivered, our proprietary lead management technology enables customers to categorize, prioritize and market more effectively to these leads. |
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• | Maximizes Awareness and Shortens the Sales Cycle.As a leading distributor of vendor-provided IT white papers, webcasts, videocasts, virtual events and podcasts, we offer IT vendors the opportunity to educate IT professionals during the research process, prior to any direct interaction with vendor salespeople. By distributing proprietary content and reaching their target audiences via our platform, IT vendors can educate audiences, demonstrate much of their product capabilities and proactively brand themselves as specific product leaders. As a result, an IT professional is more knowledgeable about the vendors’ specifications and product by the time he or she engages with the vendor. This reduces sales time and cost that would have been otherwise expended by the vendor’s direct sales force. |
• | Reaches IT Professionals at Critical Stages of the Purchase Decision Process. Because our content platform includes online and event offerings, IT vendors can market to IT professionals at critical stages of the purchase decision process through multiple touch points. In addition to targeting IT professionals as they conduct purchase research on our website, IT vendors can have face-to-face interactions with qualified buyers seeking to finalize purchase decisions at our in-person events. |
• | Continue to Develop Our Content Platform and Service Offerings.We intend to continue to launch additional websites and develop our platform in order to capitalize on the ongoing shift from traditional broad-based media toward more focused online content that increases the efficiency of advertising spending. We intend to capture additional revenues from existing and new customers by continuing to develop our content and to segment it to deliver an increasingly specialized audience to the IT vendors who advertise across our media. We also intend to continue to deliver a highly engaged and growing audience to advertisers and to develop innovative marketing programs. |
• | Expand into Complementary Sectors.We intend to complement our current offerings by continuing to expand our business in order to capitalize on strategic opportunities in existing, adjacent, or new sectors that we believe to be well-suited to our business model and core competencies. Based on our experience, we believe we are able to capitalize rapidly and cost-effectively on new market opportunities. |
• | Expand Our International Presence.We intend to expand our reach into our addressable market by continuing to increase our presence in countries outside the United States. Having launched our own websites in the United Kingdom in 2008, and in India and Spain in 2009, as well as businesses in China and Australia in 2010, we expect to penetrate foreign markets further by directly launching additional sector specific websites in these foreign locales and in additional international markets, as well as by licensing our content in new foreign territories and, if deemed appropriate, making strategic acquisitions and investments in overseas entities. During 2010, approximately 8% of our revenues were derived from international geo-targeted campaigns. We believe many of the current trends contributing to our domestic online revenue opportunity also are occurring in international markets and, therefore, present a future revenue opportunity. |
• | Selectively Acquire or Partner with Complementary Businesses.We have used acquisitions in the past as a means of expanding our content and service offerings, web traffic and registered members. Historically, our acquisitions can be classified into three categories; content-rich blogs or other individually published sites, typically generating less than one million dollars in revenues; early stage revenue sites, typically generating between one and five million dollars in annual revenues; and later stage revenue sites, typically generating greater than five million dollars in annual revenues. We intend to continue to pursue selected acquisition or partnership opportunities in our core markets and in adjacent markets for products with similar characteristics. |
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• | Security.Every aspect of enterprise computing now depends on secure connectivity, data and applications. The security sector is constantly growing to adapt to new forms of threats and to secure new technologies such as mobile devices, wireless networks and virtualized systems (“cloud”). Compliance regulations, cloud computing adoption, and highly publicized identity and intellectual property thefts are driving interest and investment in increasingly sophisticated security solutions that supplement common “perimeter” security solutions such as firewalls and antivirus software. Our online properties in this sector, SearchSecurity.com, SearchFinancialSecurity.com, SearchMidMarketSecurity.com and SearchSecurity.co.uk offer navigable and structured guides on IT vendor and technology solutions in key sub-sectors such as network security, intrusion defense, identity management and authentication, data and application security, security-as-a-service, cloud security and security information management software. Our annual Financial Information Security Decisions conference anchors a calendar of topically-focused regional seminars on issues such as compliance monitoring and data protection. |
• | Networking.Broadly defined, the networking market includes the hardware, software and services involved in the infrastructure and management of both Enterprise and Carrier voice and data networks. As new sub-sectors of networking have emerged and grown in importance, IT networking professionals have increasingly focused their investments in such technologies as VoIP, wireless and mobile computing, and telecommunication technologies. Our online properties in this sector, SearchNetworking.com, SearchEnterpriseWAN.com, SearchUnifiedCommunications.com, SearchMobileComputing.com and SearchTelecom.com aim to address the specialized needs of these IT networking professionals by offering content targeted specifically to these emerging growth areas as well as key initiatives such as network security and access control, application visibility and performance monitoring, WAN acceleration and optimization, voice/data/video convergence, and remote office management and connectivity. |
• | Storage.The storage sector consists of the market for disk storage systems and tape hardware and software that store and manage data. Growth is fueled by trends inherent in the industry, such as the ongoing need to maintain and supplement data stores, and by external factors, such as expanded compliance regulations and increased focus on disaster recovery solutions. These latter trends have driven overall storage growth and led to new specialized solutions such as remote replication software and information life cycle management solutions. At the same time, established storage sub-sectors, such as backup and SANs have been invigorated by new technologies such as disk-based backup, continuous data protection and storage virtualization. Our online properties in this sector, SearchStorage.com, SearchDataBackup.com, SearchSMBStorage.com, SearchDisasterRecovery.com and SearchStorage.co.uk address IT professionals seeking solutions in key sub-sectors such as fibre channel SANs, IP & iSCSI SANs, NAS, backup hardware and software, and storage management software. The audiences at our in-person Storage Decision conferences are comprised almost exclusively of storage decision makers from within IT organizations. These events are supplemented by regional seminars on topics such as backup, storage efficiency, virtual storage and disaster recovery. |
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• | Data Center and Virtualization Technologies.Data centers house the systems and components, such as servers, storage devices, routers and switches, utilized in large-scale, mission-critical computing environments. A variety of trends and new technologies have reinvigorated the data center as a priority among IT professionals. Technologies, such as blade servers and server virtualization, have driven renewed investment in data center-class computing solutions. Server consolidation is now a focus, driven by the decline in large-scale computing prices relative to distributed computing models. These trends have put pressure on existing data center infrastructure and are driving demand for solutions that address this. For example, the deployment of high-density servers has led to increased heat output and energy consumption in data centers. Power and cooling have thus become a significant cost in IT budgets, making data center energy efficiency a priority. Our key online properties in this sector provide targeted information on the IT vendors, technologies and solutions that serve these sub-sectors. Our properties in this sector include SearchDataCenter.com, covering disaster recovery, power and cooling, mainframe and UNIX servers, systems management, and server consolidation; SearchEnterpriseLinux.com, focused on Linux migration and infrastructures; Search400.com, covering mid-range computing and SearchCloudComputing.com which covers private and public cloud infrastructure. SearchServerVirtualization.com covers the decision points and alternatives for implementing server virtualization, while SearchVMware.com and RTFM-ed.co.uk focus on managing and building out virtual environments on the most widely-installed server virtualization platform. |
• | CIO/IT Strategy.Our CIO/IT Strategy media group provides content targeted at Chief Information Officers, or CIOs, and senior IT executives, enabling them to make informed IT purchases throughout the critical stages of the purchase decision process. CIOs’ areas of interest generally align with the major sectors of the IT market; however, CIOs increasingly are focused on the alignment between IT and their businesses’ operations. Because businesses’ IT strategies vary significantly based upon company size, we have segmented the CIO market by providing specific guidance to CIOs of large enterprises, mid-market enterprises and small to mid-sized businesses (“SMB”s). Data center consolidation, compliance, ITIL/ IT service management, disaster recovery/business continuity, risk management and outsourcing (including software-as-a-service and cloud computing) have all drawn the attention of IT executives who need to understand the operational and strategic implications of these issues and technologies on their businesses. Accordingly, our targeted information resources for senior IT executives focus on ROI, implementation strategies, best practices and comparative assessment of vendor solutions related to these initiatives. Our online properties in this sector include SearchCIO.com, which provides CIOs in large enterprises with strategic information focused on critical purchasing decisions; SearchCIO-Midmarket.com, which targets IT managers at small to medium-sized businesses; and SearchCompliance.com, which provides advice on IT-focused regulations and standards to IT and business executives and other senior IT managers. The CIO/IT Strategy Group also includes online resources and events targeted to IT decision makers in prominent vertical industries. SearchHealthIT.com provides strategic IT purchasing information and advice to senior IT and clinical professionals in hospitals, medical centers, university health centers and other care delivery organizations, as well as organizations in the life sciences sector. |
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• | Business Applications and Analytics.Our Business Applications and Analytics media group focuses on mission critical software such as databases and business intelligence, enterprise resource planning, and customer facing applications such as CRM software for mid-sized and large companies. Because these applications are critical to the overall success of the businesses that use them, there is a high demand for specialized information by IT and business professionals involved in their purchase, implementation, and ongoing support. Our properties in this sector include SearchCRM.com, BeyeNETWORK.com, SearchBusinessAnalytics.com, SearchDataManagement.com, SearchOracle.com, SearchSAP.com and SearchManufacturingERP.com. These sites are leading online resources that provide this specialized information to support mission critical business applications such as customer relationship management (“CRM”), business intelligence, data management, content management, sales force automation, databases and ERP software. |
• | Application Architecture and Development.The application architecture and development sector is comprised of a broad landscape of tools and languages that enable developers, architects and project managers to build, customize and integrate software for their businesses. Our application architecture and development online properties focus on development in enterprise environments, the underlying languages such as .NET, Java and XML as well as related application development tools and integrated development environments or IDEs. Several trends have had a profound impact on this sector and are driving growth. The desire for more flexible and interoperable applications architecture continues to propel interest in SOA, BPM and web services technologies. Application integration, application testing and security, as well as AJAX and rich Internet applications are also key areas of continuing focus for vendors and developers. Our online properties in this sector include TheServerSide.com and TheServerSide.NET which host independent communities of developers and architects using Java and .NET respectively. Ajaxian.com serves web developers of rich internet applications and SearchWinDevelopment.com serves Windows developers who use the .Net platform. SearchSoftwareQuality.com offers content focused on application testing and quality assurance while SearchSOA.com and eBizQ.net serve Architects, IT Managers and Line of Business Executives who are interested in building out service oriented architectures, BPM and working with related technologies. Our online properties are supplemented by conferences on enterprise application development technologies. |
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• | Channel.Our Channel properties address the information needs of channel professionals—classified as resellers, value added resellers, solution providers, systems integrators, service providers, managed service providers, and consultants—in the IT market. As IT professionals have become more specialized, IT vendors have actively sought resellers with specific expertise in the vendors’ sub-sectors. Like IT professionals, channel professionals require more focused technical content in order to operate successful businesses in the markets in which they compete. The resulting dynamics in the IT channel are well-suited to our integrated, targeted content strategy. Our online properties in this sector include SearchITChannel.com, SearchStorageChannel.com, SearchSecurityChannel.com, SearchNetworkingChannel.com and SearchSystemsChannel.com. In addition to these websites, TechTarget channel media is able to profile channel professionals accessing information on any website within the TechTarget Network. As channel professionals resell, service and support hardware, software and services from vendors in a particular IT sector, the key areas of focus tend to parallel those for the sub-sectors addressed by our IT-focused properties: for storage, backup, storage virtualization and network storage solutions such as fibre channel SANs, NAS, IP SANs; for security, intrusion defense, compliance and identity management; for networking, wireless, network security and VoIP; for systems, blade servers, consolidation and server virtualization. |
• | TechnologyGuide.com.We operate a portfolio of Internet content sites that provide product reviews, price comparisons and user forums for technology products such as laptops, desktops and smartphones. Sites include NotebookReview.com™, Brighthand.com™ (covering smartphones) and TabletPCReview.com™, PrinterComparison.com, DesktopReview. com and DigitalCameraReview.com. These sites represent an ideal complement to our enterprise-IT-focused TechTarget sites because IT professionals purchase a large volume of laptops, desktops, smartphones and mobile computing devices. Thus, these sites offer additional, complementary, in-depth content for our IT audience, as well as access for our advertisers to the broader audiences that visit these sites for information. |
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• | Online.Our network of websites forms the core of our content platform. Our websites provide IT professionals with comprehensive decision support information tailored to their specific areas of responsibility and purchasing decisions. Through our websites, we offer a variety of online media offerings to connect IT vendors to IT professionals. Our lead generation offerings allow IT vendors to maximize ROI by capturing qualified sales leads from the distribution and promotion of content to our audience of IT professionals. Our branding offerings provide IT vendors exposure to targeted audiences of IT professionals actively researching information related to their product and services. Our branding offerings include banners, e-newsletters, and custom offerings. Banner advertising can be purchased on specific websites within our network. We also offer the ability to advertise in e-newsletters focused on key site sub-topics. Our custom offerings allow customers to have content or entire “micro-sites” created that focus on topics related to their marketing objectives, and include promotion of these vehicles to the TechTarget audience. These offerings give IT vendors the ability to increase their brand awareness to highly specialized IT sectors. |
• | White Papers.White papers are technical documents created by IT vendors to describe business or technical problems which are addressed by the vendors’ products or services. IT vendors pay us to have their white papers distributed to our users and receive targeted promotion on our relevant websites. Prior to viewing white papers, our registered members and visitors supply their corporate contact information and agree to receive further information from the vendor. The corporate contact and other qualification information for these leads are supplied to the vendor in real time through our proprietary lead management software. |
• | Webcasts, Podcasts and Videocasts.IT vendors pay us to sponsor and host webcasts, podcasts, and videocasts that bring informational sessions directly to attendees’ desktops and, in the case of podcasts, directly to their mobile devices. As is the case with white papers, our users supply their corporate contact and qualification information to the webcast, podcast or videocast sponsor when they view or download the content. Sponsorship includes access to the registrant information and visibility before, during and after the event. |
• | Promotional E-mails.IT vendors pay us to further target the promotion of their white papers, webcasts, podcasts or downloadable trial software by including their content in our periodic e-mail updates to registered users of our websites. Users who have voluntarily registered on our websites receive an e-mail update from us when vendor content directly related to their interests is listed on our sites. |
• | List Rentals.We also offer IT vendors the ability to message relevant registered members on topics related to their interests. IT vendors can rent our e-mail and postal lists of registered members using specific criteria such as company size, geography or job title. |
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• | Contextual Advertising.Our contextual advertising programs associate IT vendor white papers, webcasts or other content on a particular topic with our related sector-specific content. IT vendors have the option to purchase exclusive sponsorship of content related to their product or category. |
• | Third Party Revenue Sharing Arrangements.We have arrangements with certain third parties, including for the licensing of our online content, for the renting of our database of opted-in e-mail subscribers and for which advertising from customers of certain third parties is made available to our website visitors. In each of these arrangements we are paid a share of the resulting revenue. |
• | Events.Our in-person events bring together IT professionals to hear from industry experts and to talk to IT vendors about key topics of interest in the sectors we serve. The majority of our events are free to IT professionals and sponsored by IT vendors. Attendees are pre-screened based on event-specific criteria such as sector-specific budget size, company size, or job title. Our sponsors value the ability to meet with an audience of qualified IT decision makers who all have been pre-screened to determine a high level of buying interest and the ability to execute a purchase decision. We offer three types of events: multi-day conferences, seminars and custom events. Multi-day conferences provide independent expert content for our attendees, and allow vendors to purchase exhibit space and other sponsorship offerings that enable interaction with the attendees. We also hold single-day seminars on various topics in major cities. These seminars provide independent content on key sub-topics in the sectors we serve, are free to qualified attendees and offer multiple vendors the ability to interact with specific, targeted audiences actively focused on buying decisions. Our custom events differ from our seminars in that they are exclusively sponsored by a single IT vendor, and the content is driven primarily by the sole sponsor. |
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Item 1A. | Risk Factors |
• | variations in expenditures by advertisers due to budgetary constraints; |
• | the cancellation or delay of projects by advertisers; |
• | the cyclical and discretionary nature of advertising spending; |
• | general macro-economic conditions, as well as economic conditions specific to the Internet and online and offline media industry; and |
• | the occurrence of extraordinary events, such as natural disasters, international or domestic terrorist attacks or armed conflict. |
• | weakness in corporate IT spending resulting in a decline in IT advertising spending; |
• | increased concentration in the IT industry as a result of consolidations or bankruptcies, leading to a decrease in the number of current and prospective customers, as well as an overall reduction in advertising; |
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• | reduced spending by combined entities following such consolidations; |
• | the timing of advertising campaigns around new product introductions and initiatives; and |
• | economic conditions specific to the IT industry. |
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• | the spending priorities and advertising budget cycles of specific advertisers; |
• | the addition or loss of advertisers; |
• | the addition of new sites and services by us or our competitors; and |
• | normal seasonal fluctuations in advertising spending. |
• | anticipate and respond successfully to rapidly changing IT developments and preferences to ensure that our content remains timely and interesting to our users; |
• | attract and retain qualified editors, writers and technical personnel; |
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• | fund new development for our programs and other offerings; |
• | successfully expand our content offerings into new platform and delivery mechanisms; and |
• | promote and strengthen the brands of our websites and our name. |
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• | the need to hire, integrate, motivate and retain additional sales and sales support personnel; |
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• | the need to train new sales personnel, many of whom lack sales experience when they are hired; and |
• | competition from other companies in hiring and retaining qualified sales personnel. |
• | difficulty in assimilating the operations and personnel of acquired businesses; |
• | potential disruption of our ongoing businesses and distraction of our management and the management of acquired companies; |
• | difficulty in incorporating acquired technology and rights into our offerings and services; |
• | unanticipated expenses related to technology and other integration; |
• | potential failure to achieve additional sales and enhance our customer bases through cross marketing of the combined company’s services to new and existing customers; |
• | potential detrimental impact to our pricing based on the historical pricing of any acquired business with common clients and the market generally; |
• | application of complex accounting rules; |
• | potential litigation resulting from our business combinations or acquisition activities; and |
• | potential unknown liabilities associated with the acquired businesses. |
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• | limitations on our activities in foreign countries where we have granted rights to existing business partners; |
• | the adaptation of our websites and advertising programs to meet local needs and to comply with local legal regulatory requirements; |
• | varied, unfamiliar and unclear legal and regulatory restrictions, as well as unforeseen changes in, legal and regulatory requirements; |
• | more restrictive data protection regulation, which may vary by country; |
• | difficulties in staffing and managing multinational operations; |
• | difficulties in finding appropriate foreign licensees or joint venture partners; |
• | distance, language and cultural differences in doing business with foreign entities; |
• | foreign political and economic uncertainty; |
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• | less extensive adoption of the Internet as an information source and increased restriction on the content of websites; |
• | currency exchange-rate fluctuations; and |
• | potential adverse tax requirements. |
• | privacy, data security and use of personally identifiable information; |
• | copyrights, trademarks and domain names; and |
• | marketing practices, such as e-mail or direct marketing. |
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• | decrease the growth rate of the Internet; |
• | reduce our revenues; |
• | increase our operating expenses; or |
• | expose us to significant liabilities. |
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• | occasional scheduled maintenance; |
• | equipment failure; |
• | traffic volume to our websites that exceed our infrastructure’s capacity; and |
• | natural disasters, telecommunications failures, power failures, other system failures, maintenance, viruses, hacking or other events outside of our control. |
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• | our operating performance and the operating performance of similar companies; |
• | the overall performance of the equity markets; |
• | announcements by us or our competitors of acquisitions, business plans or commercial relationships; |
• | threatened or actual litigation; |
• | changes in laws or regulations relating to the provision of Internet content; |
• | any major change in our board of directors or management; |
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• | publication of research reports about us, our competitors or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts; |
• | our sale of common stock or other securities in the future; |
• | large volumes of sales of our shares of common stock by existing stockholders; and |
• | general political and economic conditions. |
• | authorize our board of directors to issue preferred stock with the terms of each series to be fixed by our board of directors, which could be used to institute a “poison pill” that would work to dilute the share ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board; |
• | divide our board of directors into three classes so that only approximately one-third of the total number of directors is elected each year; |
• | permit directors to be removed only for cause; |
• | prohibit action by less than unanimous written consent of our stockholders; and |
• | specify advance notice requirements for stockholder proposals and director nominations. In addition, with some exceptions, the Delaware General Corporation Law restricts or delays mergers and other business combinations between us and any stockholder that acquires 15% or more of our voting stock. |
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Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
Item 3. | Legal Proceedings |
Item 4. | Removed and Reserved. |
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Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
High | Low | |||||||
Fiscal 2010 | ||||||||
Quarter ended March 31, 2010 | $ | 6.48 | $ | 5.01 | ||||
Quarter ended June 30, 2010 | $ | 6.36 | $ | 4.35 | ||||
Quarter ended September 30, 2010 | $ | 6.48 | $ | 4.26 | ||||
Quarter ended December 31, 2010 | $ | 8.10 | $ | 5.03 | ||||
Fiscal 2009 | ||||||||
Quarter ended March 31, 2009 | $ | 4.99 | $ | 2.30 | ||||
Quarter ended June 30, 2009 | $ | 5.38 | $ | 2.13 | ||||
Quarter ended September 30, 2009 | $ | 8.00 | $ | 3.98 | ||||
Quarter ended December 31, 2009 | $ | 6.94 | $ | 5.20 |
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Among TechTarget, Inc.
The Russell 2000 Index and
The S&P 500 Media Industry Index
5/16/07 | 6/30/07 | 9/30/07 | 12/31/07 | 3/31/08 | 6/30/08 | 9/30/08 | 12/31/08 | 3/31/09 | 6/30/09 | 9/30/09 | 12/31/09 | 3/31/10 | 6/30/10 | 9/30/10 | 12/31/10 | |||||||||||||||||||||||||||||||||||||||||||||||||
TechTarget Inc | 100.00 | 98.85 | 130.00 | 113.69 | 109.00 | 81.23 | 53.85 | 33.23 | 18.46 | 30.77 | 43.85 | 43.31 | 40.23 | 41.38 | 40.38 | 61.00 | ||||||||||||||||||||||||||||||||||||||||||||||||
Russell 2000 | 100.00 | 101.82 | 98.67 | 94.15 | 84.83 | 85.33 | 84.38 | 62.34 | 53.02 | 63.99 | 76.32 | 79.28 | 86.30 | 77.73 | 86.51 | 100.57 | ||||||||||||||||||||||||||||||||||||||||||||||||
S&P 500 Media Industry | 100.00 | 98.51 | 91.63 | 84.46 | 75.67 | 72.47 | 64.24 | 48.04 | 40.69 | 53.70 | 65.96 | 73.80 | 80.75 | 73.13 | 80.19 | 90.62 |
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(a) | (b) | (c) | (d) | |||||||||||||
Maximum | ||||||||||||||||
Number (or | ||||||||||||||||
Total | Approximate | |||||||||||||||
Number of | Dollar | |||||||||||||||
Shares (or | Value) of | |||||||||||||||
Units) | Shares (or | |||||||||||||||
Purchased | Units)that | |||||||||||||||
Total | Average | as Part of | May Yet Be | |||||||||||||
Number | Price | Publicly | Purchased | |||||||||||||
of Shares | Paid per | Announced | Under the | |||||||||||||
(or Units) | Share | Plans or | Plans or | |||||||||||||
Purchased | (or | Programs | Programs | |||||||||||||
Period | (1) | Unit) | (2) | (2) | ||||||||||||
October 2010 | — | — | — | — | ||||||||||||
November 2010 | — | — | — | — | ||||||||||||
December 2010 | 5,857,878 | $ | 6.00 | 5,857,878 | — |
(1) | We repurchased an aggregate of 5,857,878 shares of our common stock pursuant to the tender offer that we publicly announced on November 8, 2010 (the “Tender Offer”). | |
(2) | Our board of directors approved the repurchase by us of up to an aggregate of 10,000,000 shares of our common stock having a value of up to $60,000,000 in the aggregate pursuant to the Tender Offer. This Tender Offer expired on December 9, 2010. |
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Item 6. | Selected Consolidated Financial Data |
Years Ended December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||||||
Consolidated Statement of Operations Data: | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Online | $ | 82,330 | $ | 72,345 | $ | 77,373 | $ | 61,353 | $ | 51,372 | ||||||||||
Events | 12,679 | 14,152 | 22,786 | 24,254 | 19,708 | |||||||||||||||
— | — | 4,385 | 6,643 | 8,119 | ||||||||||||||||
Total revenues | 95,009 | 86,497 | 104,544 | 92,250 | 79,199 | |||||||||||||||
Cost of revenues: | ||||||||||||||||||||
Online(1) | 19,033 | 19,378 | 21,404 | 15,575 | 12,988 | |||||||||||||||
Events(1) | 4,066 | 5,600 | 9,531 | 8,611 | 6,493 | |||||||||||||||
Print(1) | — | — | 2,156 | 3,788 | 5,339 | |||||||||||||||
Total cost of revenues | 23,099 | 24,978 | 33,091 | 27,974 | 24,820 | |||||||||||||||
Gross profit | 71,910 | 61,519 | 71,453 | 64,276 | 54,379 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and marketing(1) | 35,667 | 32,685 | 33,481 | 28,048 | 20,305 | |||||||||||||||
Product development(1) | 8,103 | 8,664 | 10,995 | 7,320 | 6,295 | |||||||||||||||
General and administrative(1) | 19,328 | 18,844 | 14,663 | 12,592 | 8,756 | |||||||||||||||
Depreciation | 2,389 | 2,219 | 2,406 | 1,610 | 1,144 | |||||||||||||||
Amortization of intangible assets | 4,523 | 4,714 | 5,306 | 4,740 | 5,029 | |||||||||||||||
Restructuring charge | — | — | 1,494 | — | — | |||||||||||||||
Total operating expenses | 70,010 | 67,126 | 68,345 | 54,310 | 41,529 | |||||||||||||||
Operating (loss) income | 1,900 | (5,607 | ) | 3,108 | 9,966 | 12,850 | ||||||||||||||
Interest and other income, net | 176 | 267 | 1,440 | 1,831 | 321 | |||||||||||||||
(Loss) income before (benefit from) provision for income taxes | 2,076 | (5,340 | ) | 4,548 | 11,797 | 13,171 | ||||||||||||||
Provision for (benefit from) income taxes | 3,258 | (224 | ) | 2,784 | 5,252 | 5,658 | ||||||||||||||
Net (loss) income | $ | (1,182 | ) | $ | (5,116 | ) | $ | 1,764 | $ | 6,545 | $ | 7,513 | ||||||||
Net (loss) income per common share(2): | ||||||||||||||||||||
Basic | $ | (0.03 | ) | $ | (0.12 | ) | $ | 0.04 | $ | 0.09 | $ | (0.42 | ) | |||||||
Diluted | $ | (0.03 | ) | $ | (0.12 | ) | $ | 0.04 | $ | 0.08 | $ | (0.42 | ) | |||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 42,771 | 41,865 | 41,425 | 28,384 | 7,824 | |||||||||||||||
Diluted | 42,771 | 41,865 | 43,440 | 31,347 | 7,824 | |||||||||||||||
Other Data: | ||||||||||||||||||||
Adjusted EBITDA (unaudited)(3) | $ | 19,813 | $ | 13,949 | $ | 20,985 | $ | 22,150 | $ | 20,273 | ||||||||||
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As of December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Consolidated Balance Sheet Data: | ||||||||||||||||||||
Cash, cash equivalents and investments | $ | 50,134 | $ | 82,557 | $ | 69,568 | $ | 62,001 | $ | 30,830 | ||||||||||
Total assets | $ | 193,758 | $ | 214,063 | $ | 210,012 | $ | 202,488 | $ | 94,156 | ||||||||||
Total liabilities | $ | 19,898 | $ | 16,199 | $ | 19,075 | $ | 25,155 | $ | 24,309 | ||||||||||
Treasury stock | $ | (35,343 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||
Total redeemable convertible preferred stock | $ | — | $ | — | $ | — | $ | — | $ | 136,766 | ||||||||||
Total stockholders’ equity (deficit) | $ | 173,860 | $ | 197,864 | $ | 190,937 | $ | 177,334 | $ | (66,919 | ) | |||||||||
(1) Amounts include stock-based compensation expense as follows: | ||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cost of online revenue | $ | 173 | $ | 454 | $ | 407 | $ | 189 | $ | 87 | ||||||||||
Cost of events revenue | 87 | 94 | 91 | 53 | 31 | |||||||||||||||
Cost of print revenue | — | — | 6 | 15 | 12 | |||||||||||||||
Selling and marketing | 6,380 | 6,025 | 4,813 | 2,999 | 606 | |||||||||||||||
Product development | 520 | 535 | 473 | 334 | 90 | |||||||||||||||
General and administrative | 3,841 | 5,515 | 2,881 | 2,244 | 424 | |||||||||||||||
Total | $ | 11,001 | $ | 12,623 | $ | 8,671 | $ | 5,834 | $ | 1,250 | ||||||||||
(2) | Basic and diluted net (loss) income per common share is computed by dividing the net (loss) income applicable to common stockholders by the basic and diluted weighted-average number of common shares outstanding for the fiscal period. See Note 2 of our “Notes to Consolidated Financial Statements.” | |
(3) | The following table reconciles net (loss) income to adjusted EBITDA for the periods presented and is unaudited: |
Years Ended December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Net (loss) income | $ | (1,182 | ) | $ | (5,116 | ) | $ | 1,764 | $ | 6,545 | $ | 7,513 | ||||||||
Interest and other income, net | 176 | 267 | 1,440 | 1,831 | 321 | |||||||||||||||
Provision for (benefit from) income taxes | 3,258 | (224 | ) | 2,784 | 5,252 | 5,658 | ||||||||||||||
Depreciation | 2,389 | 2,219 | 2,406 | 1,610 | 1,144 | |||||||||||||||
Amortization of intangible assets | 4,523 | 4,714 | 5,306 | 4,740 | 5,029 | |||||||||||||||
EBITDA | 8,812 | 1,326 | 10,820 | 16,316 | 19,023 | |||||||||||||||
Stock-based compensation | 11,001 | 12,623 | 8,671 | 5,834 | 1,250 | |||||||||||||||
Restructuring charge | — | — | 1,494 | — | — | |||||||||||||||
Adjusted EBITDA | $ | 19,813 | $ | 13,949 | $ | 20,985 | $ | 22,150 | $ | 20,273 | ||||||||||
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Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Expected volatility | 78%–79 | % | 75%–79 | % | 41%–71 | % | ||||||
Expected term | 6.25 years | 6.25 years | 6.25 years | |||||||||
Risk-free interest rate | 2.3%–2.85 | % | 2.21%–2.89 | % | 1.71%–3.15 | % | ||||||
Expected dividend yield | — | % | — | % | — | % | ||||||
Weighted-average grant date fair value per share | $ | 4.92 | $ | 4.06 | $ | 3.28 |
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Years Ended December 31, | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Online | $ | 82,330 | 87 | % | $ | 72,345 | 84 | % | $ | 77,373 | 74 | % | ||||||||||||
Events | 12,679 | 13 | 14,152 | 16 | 22,786 | 22 | ||||||||||||||||||
— | — | — | — | 4,385 | 4 | |||||||||||||||||||
Total revenues | 95,009 | 100 | 86,497 | 100 | 104,544 | 100 | ||||||||||||||||||
Cost of revenues: | ||||||||||||||||||||||||
Online | 19,033 | 20 | 19,378 | 23 | 21,404 | 21 | ||||||||||||||||||
Events | 4,066 | 4 | 5,600 | 6 | 9,531 | 9 | ||||||||||||||||||
— | — | — | — | 2,156 | 2 | |||||||||||||||||||
Total cost of revenues | 23,099 | 24 | 24,978 | 29 | 33,091 | 32 | ||||||||||||||||||
Gross profit | 71,910 | 76 | 61,519 | 71 | 71,453 | 68 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Selling and marketing | 35,667 | 38 | 32,685 | 38 | 33,481 | 32 | ||||||||||||||||||
Product development | 8,103 | 9 | 8,664 | 10 | 10,995 | 11 | ||||||||||||||||||
General and administrative | 19,328 | 20 | 18,844 | 22 | 14,663 | 14 | ||||||||||||||||||
Depreciation | 2,389 | 3 | 2,219 | 3 | 2,406 | 2 | ||||||||||||||||||
Amortization of intangible assets | 4,523 | 5 | 4,714 | 5 | 5,306 | 5 | ||||||||||||||||||
Restructuring charge | — | — | — | — | 1,494 | 1 | ||||||||||||||||||
Total operating expenses | 70,010 | 74 | 67,126 | 78 | 68,345 | 65 | ||||||||||||||||||
Operating income (loss) | 1,900 | 2 | (5,607 | ) | (7 | ) | 3,108 | 3 | ||||||||||||||||
Interest and other income, net | 176 | — | 267 | — | 1,440 | 1 | ||||||||||||||||||
Income (loss) before provision for (benefit from) income taxes | 2,076 | 2 | (5,340 | ) | (7 | ) | 4,548 | 4 | ||||||||||||||||
Provision for (benefit from) income taxes | 3,258 | 3 | (224 | ) | — | 2,784 | 2 | |||||||||||||||||
Net (loss) income | $ | (1,182 | ) | (1 | )% | $ | (5,116 | ) | (7 | )% | $ | 1,764 | 2 | % | ||||||||||
Years Ended December 31, | ||||||||||||||||
Increase | Percent | |||||||||||||||
2010 | 2009 | (Decrease) | Change | |||||||||||||
($ in thousands) | ||||||||||||||||
Revenues: | ||||||||||||||||
Online | $ | 82,330 | $ | 72,345 | $ | 9,985 | 14 | % | ||||||||
Events | 12,679 | 14,152 | (1,473 | ) | (10 | ) | ||||||||||
Total revenues | $ | 95,009 | $ | 86,497 | $ | 8,512 | 10 | % | ||||||||
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Years Ended December 31, | ||||||||||||||||
Increase | Percent | |||||||||||||||
2010 | 2009 | (Decrease) | Change | |||||||||||||
($ in thousands) | ||||||||||||||||
Cost of revenues: | ||||||||||||||||
Online | $ | 19,033 | $ | 19,378 | $ | (345 | ) | (2 | )% | |||||||
Events | 4,066 | 5,600 | (1,534 | ) | (27 | ) | ||||||||||
Total cost of revenues | $ | 23,099 | $ | 24,978 | $ | (1,879 | ) | (8 | )% | |||||||
Gross profit | $ | 71,910 | $ | 61,519 | $ | 10,391 | 17 | % | ||||||||
Gross profit percentage | 76 | % | 71 | % |
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For the Years Ended December 31, | ||||||||||||||||
Increase | Percent | |||||||||||||||
2010 | 2009 | (Decrease) | Change | |||||||||||||
($ in thousands) | ||||||||||||||||
Operating expenses: | ||||||||||||||||
Selling and marketing | $ | 35,667 | $ | 32,685 | $ | 2,982 | 9 | % | ||||||||
Product development | 8,103 | 8,664 | (561 | ) | (6 | ) | ||||||||||
General and administrative | 19,328 | 18,844 | 484 | 3 | ||||||||||||
Depreciation | 2,389 | 2,219 | 170 | 8 | ||||||||||||
Amortization of intangible assets | 4,523 | 4,714 | (191 | ) | (4 | ) | ||||||||||
Total operating expenses | $ | 70,010 | $ | 67,126 | $ | 2,884 | 4 | % | ||||||||
Interest and other income, net | $ | 176 | $ | 267 | $ | (91 | ) | (34 | )% | |||||||
Provision for (benefit from) income taxes | $ | 3,258 | $ | (224 | ) | $ | 3,482 | * | % | |||||||
* | Percentage is not meaningful |
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Years Ended December 31, | ||||||||||||||||
Increase | Percent | |||||||||||||||
2009 | 2008 | (Decrease) | Change | |||||||||||||
($ in thousands) | ||||||||||||||||
Revenues: | ||||||||||||||||
Online | $ | 72,345 | $ | 77,373 | $ | (5,028 | ) | (6 | )% | |||||||
Events | 14,152 | 22,786 | (8,634 | ) | (38 | ) | ||||||||||
— | 4,385 | (4,385 | ) | (100 | ) | |||||||||||
Total revenues | $ | 86,497 | $ | 104,544 | $ | (18,047 | ) | (17 | )% | |||||||
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Years Ended December 31, | ||||||||||||||||
Increase | Percent | |||||||||||||||
2009 | 2008 | (Decrease) | Change | |||||||||||||
($ in thousands) | ||||||||||||||||
Cost of revenues: | ||||||||||||||||
Online | $ | 19,378 | $ | 21,404 | $ | (2,026 | ) | (9 | )% | |||||||
Events | 5,600 | 9,531 | (3,931 | ) | (41 | ) | ||||||||||
— | 2,156 | (2,156 | ) | (100 | ) | |||||||||||
Total cost of revenues | $ | 24,978 | $ | 33,091 | $ | (8,113 | ) | (25 | )% | |||||||
Gross profit | $ | 61,519 | $ | 71,453 | $ | (9,934 | ) | (14 | )% | |||||||
Gross profit percentage | 71 | % | 68 | % |
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For the Years Ended December 31, | ||||||||||||||||
Increase | Percent | |||||||||||||||
2009 | 2008 | (Decrease) | Change | |||||||||||||
($ in thousands) | ||||||||||||||||
Operating expenses: | ||||||||||||||||
Selling and marketing | $ | 32,685 | $ | 33,481 | $ | (796 | ) | (2 | )% | |||||||
Product development | 8,664 | 10,995 | (2,331 | ) | (21 | ) | ||||||||||
General and administrative | 18,844 | 14,663 | 4,181 | 29 | ||||||||||||
Depreciation | 2,219 | 2,406 | (187 | ) | (8 | ) | ||||||||||
Amortization of intangible assets | 4,714 | 5,306 | (592 | ) | (11 | ) | ||||||||||
Restructuring charge | — | 1,494 | (1,494 | ) | * | |||||||||||
Total operating expenses | $ | 67,126 | $ | 68,345 | $ | (1,219 | ) | (2 | )% | |||||||
Interest income, net | $ | 267 | $ | 1,440 | $ | (1,173 | ) | (81 | )% | |||||||
(Benefit from) provision for income taxes | $ | (224 | ) | $ | 2,784 | $ | (3,008 | ) | (108 | )% | ||||||
* | Percentage is not meaningful |
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For the Three Months Ended | ||||||||||||||||||||||||||||||||
2010 | 2009 | |||||||||||||||||||||||||||||||
Mar. 31 | Jun. 30 | Sep. 30 | Dec. 31 | Mar. 31 | Jun. 30 | Sep. 30 | Dec. 31 | |||||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||
Online | $ | 18,561 | $ | 20,626 | $ | 18,878 | $ | 24,265 | $ | 16,282 | $ | 17,801 | $ | 18,191 | $ | 20,071 | ||||||||||||||||
Events | 2,482 | 4,447 | 3,123 | 2,627 | 2,190 | 3,936 | 4,865 | 3,161 | ||||||||||||||||||||||||
Total revenues | 21,043 | 25,073 | 22,001 | 26,892 | 18,472 | 21,737 | 23,056 | 23,232 | ||||||||||||||||||||||||
Cost of revenues: | ||||||||||||||||||||||||||||||||
Online | 4,536 | 4,792 | 4,574 | 5,131 | 4,880 | 4,776 | 4,789 | 4,933 | ||||||||||||||||||||||||
Events | 864 | 1,302 | 1,084 | 816 | 1,081 | 1,455 | 1,741 | 1,323 | ||||||||||||||||||||||||
Total cost of revenues | 5,400 | 6,094 | 5,658 | 5,947 | 5,961 | 6,231 | 6,530 | 6,256 | ||||||||||||||||||||||||
Gross profit | 15,643 | 18,979 | 16,343 | 20,945 | 12,511 | 15,506 | 16,526 | 16,976 | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Selling and marketing | 8,913 | 8,991 | 8,568 | 9,195 | 7,516 | 8,023 | 9,157 | 7,989 | ||||||||||||||||||||||||
Product development | 2,185 | 2,021 | 1,947 | 1,950 | 2,081 | 2,194 | 2,276 | 2,113 | ||||||||||||||||||||||||
General and administrative | 5,495 | 4,804 | 4,535 | 4,494 | 3,919 | 4,064 | 4,973 | 5,888 | ||||||||||||||||||||||||
Depreciation | 525 | 642 | 592 | 630 | 536 | 498 | 510 | 675 | ||||||||||||||||||||||||
Amortization of intangible assets | 1,135 | 1,140 | 1,126 | 1,122 | 1,215 | 1,181 | 1,166 | 1,152 | ||||||||||||||||||||||||
Total operating expenses | 18,253 | 17,598 | 16,768 | 17,391 | 15,267 | 15,960 | 18,082 | 17,817 | ||||||||||||||||||||||||
Operating (loss) income | (2,610 | ) | 1,381 | (425 | ) | 3,554 | (2,756 | ) | (454 | ) | (1,556 | ) | (841 | ) | ||||||||||||||||||
Interest and other income (loss), net | 107 | 84 | 79 | (94 | ) | (110 | ) | 174 | 130 | 73 | ||||||||||||||||||||||
(Loss) income before (benefit from) provision for income taxes | (2,503 | ) | 1,465 | (346 | ) | 3,460 | (2,866 | ) | (280 | ) | (1,426 | ) | (768 | ) | ||||||||||||||||||
(Benefit from) provision for income taxes | (163 | ) | 1,019 | 266 | 2,136 | (558 | ) | 263 | 12 | 59 | ||||||||||||||||||||||
Net (loss) income | $ | (2,340 | ) | $ | 446 | $ | (612 | ) | $ | 1,324 | $ | (2,308 | ) | $ | (543 | ) | $ | (1,438 | ) | $ | (827 | ) | ||||||||||
Net (loss) income per share basic | $ | (0.06 | ) | $ | 0.01 | $ | (0.01 | ) | $ | 0.03 | $ | (0.06 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.02 | ) | ||||||||||
Net (loss) income per share diluted | $ | (0.06 | ) | $ | 0.01 | $ | (0.01 | ) | $ | 0.03 | $ | (0.06 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.02 | ) | ||||||||||
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As of December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(in thousands) | ||||||||||||
Cash, cash equivalents and investments | $ | 50,134 | $ | 82,557 | $ | 69,568 | ||||||
Accounts receivable, net | $ | 24,678 | $ | 16,623 | $ | 18,778 |
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For the Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(in thousands) | ||||||||||||
Cash provided by operating activities | $ | 12,879 | $ | 19,733 | $ | 10,746 | ||||||
Cash used in investing activities(1) | $ | (9,756 | ) | $ | (2,075 | ) | $ | (3,271 | ) | |||
Cash used in financing activities | $ | (33,991 | ) | $ | (2,997 | ) | $ | 94 |
(1) | Cash used in investing activities shown net of investment activity of $42.6 million, $(17.9) million and $5.8 million for the years ended December 31, 2010, 2009 and 2008, respectively. |
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Payments Due By Period | ||||||||||||||||||||
Less than | More than | |||||||||||||||||||
Contractual Obligations | Total | 1 Year | 1–3 Years | 3–5 Years | 5 Years | |||||||||||||||
Operating leases (1) | $ | 30,471 | $ | 3,718 | $ | 10,145 | $ | 9,747 | $ | 7,401 | ||||||||||
(1) | See Note 10 to the Consolidated Financial Statements for further information with respect to our operating leases. |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk |
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Item 8. | Financial Statements and Supplementary Data |
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The Board of Directors and Stockholders of
TechTarget, Inc.
We have audited the accompanying consolidated balance sheets of TechTarget, Inc. as of December 31, 2010 and 2009, and the related consolidated statements of operations, redeemable convertible preferred stock and stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of TechTarget, Inc. at December 31, 2010 and 2009, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2010, in conformity with U.S. generally accepted accounting principles.
As discussed in Note 2 to the consolidated financial statements, effective January 1, 2009, TechTarget, Inc. adopted guidance originally issued in Statement of Financial Accounting Standards No. 141(revised 2007),Business Combinations (codified primarily in FASB ASC Topic 805, “Business Combinations”).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), TechTarget, Inc.’s internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 16, 2011 expressed an adverse opinion thereon.
/s/ Ernst & Young LLP
Boston, Massachusetts
March 16, 2011
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December 31, | ||||||||
2010 | 2009 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 32,584 | $ | 20,884 | ||||
Short-term investments | 17,550 | 50,496 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $1,026 and $483 as of December 31, 2010 and 2009, respectively | 24,678 | 16,623 | ||||||
Prepaid expenses and other current assets | 1,021 | 1,929 | ||||||
Deferred tax assets | 729 | 2,399 | ||||||
Total current assets | 76,562 | 92,331 | ||||||
Property and equipment, net | 6,235 | 3,760 | ||||||
Long-term investments | — | 11,177 | ||||||
Goodwill | 92,382 | 88,958 | ||||||
Intangible assets, net of accumulated amortization | 10,469 | 12,528 | ||||||
Deferred tax assets | 7,985 | 5,182 | ||||||
Other assets | 125 | 127 | ||||||
Total assets | $ | 193,758 | $ | 214,063 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 3,797 | $ | 3,106 | ||||
Accrued expenses and other current liabilities | 2,181 | 2,910 | ||||||
Accrued compensation expenses | 1,979 | 808 | ||||||
Income taxes payable | 226 | 398 | ||||||
Deferred revenue | 6,603 | 8,402 | ||||||
Total current liabilities | 14,786 | 15,624 | ||||||
Long-term liabilities: | ||||||||
Other liabilities | 5,112 | 575 | ||||||
Total liabilities | 19,898 | 16,199 | ||||||
Commitments (Note 10) | — | — | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, 5,000,000 shares authorized; no shares issued or outstanding | — | — | ||||||
Common stock, $0.001 par value per share, 100,000,000 shares authorized; 42,901,926 shares issued and 37,044,048 shares outstanding at December 31, 2010; 42,109,965 shares issued and outstanding at December 31, 2009 | 43 | 42 | ||||||
Treasury stock | (35,343 | ) | — | |||||
Additional paid-in capital | 246,080 | 233,555 | ||||||
Warrants | — | 2 | ||||||
Accumulated other comprehensive income | 5 | 8 | ||||||
Accumulated deficit | (36,925 | ) | (35,743 | ) | ||||
Total stockholders’ equity | 173,860 | 197,864 | ||||||
Total liabilities and stockholders’ equity | $ | 193,758 | $ | 214,063 | ||||
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For the Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Revenues: | ||||||||||||
Online | $ | 82,330 | $ | 72,345 | $ | 77,373 | ||||||
Events | 12,679 | 14,152 | 22,786 | |||||||||
— | — | 4,385 | ||||||||||
Total revenues | 95,009 | 86,497 | 104,544 | |||||||||
Cost of revenues: | ||||||||||||
Online(1) | 19,033 | 19,378 | 21,404 | |||||||||
Events(1) | 4,066 | 5,600 | 9,531 | |||||||||
Print(1) | — | — | 2,156 | |||||||||
Total cost of revenues | 23,099 | 24,978 | 33,091 | |||||||||
Gross profit | 71,910 | 61,519 | 71,453 | |||||||||
Operating expenses: | ||||||||||||
Selling and marketing(1) | 35,667 | 32,685 | 33,481 | |||||||||
Product development(1) | 8,103 | 8,664 | 10,995 | |||||||||
General and administrative(1) | 19,328 | 18,844 | 14,663 | |||||||||
Depreciation | 2,389 | 2,219 | 2,406 | |||||||||
Amortization of intangible assets | 4,523 | 4,714 | 5,306 | |||||||||
Restructuring charge | — | — | 1,494 | |||||||||
Total operating expenses | 70,010 | 67,126 | 68,345 | |||||||||
Operating income (loss) | 1,900 | (5,607 | ) | 3,108 | ||||||||
Interest and other income, net | 176 | 267 | 1,440 | |||||||||
Income (loss) before provision for (benefit from) income taxes | 2,076 | (5,340 | ) | 4,548 | ||||||||
Provision for (benefit from) income taxes | 3,258 | (224 | ) | 2,784 | ||||||||
Net (loss) income | $ | (1,182 | ) | $ | (5,116 | ) | $ | 1,764 | ||||
Net (loss) income per common share: | ||||||||||||
Basic | $ | (0.03 | ) | $ | (0.12 | ) | $ | 0.04 | ||||
Diluted | $ | (0.03 | ) | $ | (0.12 | ) | $ | 0.04 | ||||
Weighted average common shares outstanding: | ||||||||||||
Basic | 42,771 | 41,865 | 41,425 | |||||||||
Diluted | 42,771 | 41,865 | 43,440 | |||||||||
(1) | Amounts include stock-based compensation expense as follows: |
Cost of online revenue | $ | 173 | $ | 454 | $ | 407 | ||||||
Cost of events revenue | 87 | 94 | 91 | |||||||||
Cost of print revenue | — | — | 6 | |||||||||
Selling and marketing | 6,380 | 6,025 | 4,813 | |||||||||
Product development | 520 | 535 | 473 | |||||||||
General and administrative | 3,841 | 5,515 | 2,881 |
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Redeemable Convertible | Accumulated | |||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Treasury Stock | Additional | Other | Total | |||||||||||||||||||||||||||||||||||||||
Number of | Redemption | Number of | $0.001 | Number of | Paid-In | Comprehensive | Accumulated | Stockholders’ | ||||||||||||||||||||||||||||||||||||
Shares | Value | Shares | Par Value | Shares | Value | Capital | Warrants | Income (Loss) | Deficit | Equity | ||||||||||||||||||||||||||||||||||
Balance, December 31, 2007 | — | $ | — | 41,081,616 | $ | 41 | — | $ | — | $ | 209,773 | $ | 13 | $ | (102 | ) | $ | (32,391 | ) | $ | 177,334 | |||||||||||||||||||||||
Issuance of common stock from warrants, stock options and restricted stock awards | 535,347 | 1 | 2,214 | (11 | ) | 2,204 | ||||||||||||||||||||||||||||||||||||||
Excess tax benefit — stock options | 939 | 939 | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 8,671 | 8,671 | ||||||||||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||
Change in fair value of interest rate swap | 26 | 26 | ||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on investments (net of tax expense of $10) | 10 | 10 | ||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on foreign currency translation | (11 | ) | (11 | ) | ||||||||||||||||||||||||||||||||||||||||
Net income | 1,764 | 1,764 | ||||||||||||||||||||||||||||||||||||||||||
Comprehensive income | 1,789 | |||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2008 | — | $ | — | 41,616,963 | $ | 42 | — | $ | — | $ | 221,597 | $ | 2 | $ | (77 | ) | $ | (30,627 | ) | $ | 190,937 | |||||||||||||||||||||||
Issuance of common stock from stock options and restricted stock awards | 493,002 | — | 133 | 133 | ||||||||||||||||||||||||||||||||||||||||
Excess tax benefit — stock options | (778 | ) | (778 | ) | ||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 12,623 | 12,623 | ||||||||||||||||||||||||||||||||||||||||||
Other | (20 | ) | (20 | ) | ||||||||||||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||||
Change in fair value of interest rate swap | 77 | 77 | ||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on investments (net of tax benefit of $5) | (4 | ) | (4 | ) | ||||||||||||||||||||||||||||||||||||||||
Unrealized gain on foreign currency translation | 12 | 12 | ||||||||||||||||||||||||||||||||||||||||||
Net loss | (5,116 | ) | (5,116 | ) | ||||||||||||||||||||||||||||||||||||||||
Comprehensive loss | (5,031 | ) | ||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2009 | — | $ | — | 42,109,965 | $ | 42 | — | $ | — | $ | 233,555 | $ | 2 | $ | 8 | $ | (35,743 | ) | $ | 197,864 | ||||||||||||||||||||||||
Issuance of common stock from stock options and restricted stock awards | 791,961 | 1 | 1,014 | 1,015 | ||||||||||||||||||||||||||||||||||||||||
Purchase of common stock through tender offer | 5,857,878 | (35,343 | ) | (35,343 | ) | |||||||||||||||||||||||||||||||||||||||
Excess tax benefit — stock options | 508 | 508 | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 11,001 | 11,001 | ||||||||||||||||||||||||||||||||||||||||||
Expiration of warrants | 2 | (2 | ) | — | ||||||||||||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on investments (net of tax benefit of $8) | (11 | ) | (11 | ) | ||||||||||||||||||||||||||||||||||||||||
Unrealized gain on foreign currency translation | 8 | 8 | ||||||||||||||||||||||||||||||||||||||||||
Net loss | (1,182 | ) | (1,182 | ) | ||||||||||||||||||||||||||||||||||||||||
Comprehensive loss | (1,185 | ) | ||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2010 | — | $ | — | 42,901,926 | $ | 43 | 5,857,878 | $ | (35,343 | ) | $ | 246,080 | $ | — | $ | 5 | $ | (36,925 | ) | $ | 173,860 | |||||||||||||||||||||||
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For the Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Operating Activities: | ||||||||||||
Net (loss) income | $ | (1,182 | ) | $ | (5,116 | ) | $ | 1,764 | ||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 6,912 | 6,933 | 7,712 | |||||||||
Provision for bad debt | 348 | 221 | 441 | |||||||||
Amortization of investment premiums | 1,538 | 1,668 | 181 | |||||||||
Stock-based compensation | 11,001 | 12,623 | 8,671 | |||||||||
Non-cash interest expense | — | 13 | 9 | |||||||||
Deferred tax benefit | (1,748 | ) | (1,253 | ) | 1,746 | |||||||
Excess tax benefit—stock options | (337 | ) | 130 | (891 | ) | |||||||
Non-cash portion of restructuring charge | — | — | 49 | |||||||||
Other non-cash items | — | (20 | ) | 85 | ||||||||
Changes in operating assets and liabilities, net of businesses acquired: | ||||||||||||
Accounts receivable | (7,523 | ) | 1,944 | (3,358 | ) | |||||||
Prepaid expenses and other current assets | 931 | 2,388 | (2,525 | ) | ||||||||
Other assets | 2 | (1 | ) | 55 | ||||||||
Accounts payable | 648 | (296 | ) | 476 | ||||||||
Income taxes payable | 1,819 | 398 | (1,330 | ) | ||||||||
Accrued expenses and other current liabilities | (737 | ) | 2 | 305 | ||||||||
Accrued compensation expenses | 1,171 | 106 | (1,898 | ) | ||||||||
Deferred revenue | (2,379 | ) | (347 | ) | (629 | ) | ||||||
Other liabilities | 2,415 | 340 | (117 | ) | ||||||||
Net cash provided by operating activities | 12,879 | 19,733 | 10,746 | |||||||||
Investing activities: | ||||||||||||
Purchases of property and equipment, and other assets | (4,805 | ) | (2,075 | ) | (2,037 | ) | ||||||
Purchases of investments | (43,486 | ) | (59,868 | ) | (77,398 | ) | ||||||
Proceeds from sales and maturities of investments | 86,054 | 41,961 | 83,266 | |||||||||
Acquisition of assets | — | — | (50 | ) | ||||||||
Acquisition of businesses, net of cash acquired | (4,951 | ) | — | (1,184 | ) | |||||||
Net cash provided by (used in) investing activities | 32,812 | (19,982 | ) | 2,597 | ||||||||
Financing activities: | ||||||||||||
Purchase of treasury shares | (35,343 | ) | — | — | ||||||||
Payments on bank term loan payable | — | (3,000 | ) | (3,000 | ) | |||||||
Excess tax benefit—stock options | 337 | (130 | ) | 891 | ||||||||
Proceeds from exercise of warrants and stock options | 1,015 | 133 | 2,203 | |||||||||
Net cash (used in) provided by financing activities | (33,991 | ) | (2,997 | ) | 94 | |||||||
Net increase (decrease) in cash and cash equivalents | 11,700 | (3,246 | ) | 13,437 | ||||||||
Cash and cash equivalents at beginning of period | 20,884 | 24,130 | 10,693 | |||||||||
Cash and cash equivalents at end of period | $ | 32,584 | $ | 20,884 | $ | 24,130 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid for interest | $ | — | $ | 139 | $ | 318 | ||||||
Cash paid (refunded) for income taxes | $ | 3,157 | $ | (1,942 | ) | $ | 4,561 | |||||
Supplemental disclosure of non-cash investing activities: | ||||||||||||
Accrual for contingent consideration and cash to be paid in connection with an acquisition | $ | 1,063 | $ | — | $ | 131 | ||||||
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• | White Papers.White paper revenue is recognized ratably over the period in which the white paper is available on the Company’s websites. |
• | Webcasts, Podcasts and Videocasts.Webcast, podcast and videocast revenue is recognized ratably over the period in which the webcast, podcast or videocast is available on the Company’s websites. |
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• | Custom Media. Custom media revenue is recognized ratably over the period in which the custom media asset is available on the Company’s websites. |
• | Promotional E-mails and E-newsletters.Promotional e-mail revenue is recognized ratably over the period in which the related content asset is available on the Company’s websites because promotional e-mails do not have standalone value from the related content asset. E-newsletter revenue is recognized in the period in which the e-newsletter is sent. |
• | List Rentals.List rental revenue is recognized in the period in which the e-mail is sent to the list of registered members. |
• | Banners.Banner revenue is recognized in the period in which the banner impressions occur. |
• | Third Party Revenue Sharing Arrangements.Revenue from third party revenue sharing arrangements is recognized on a net basis in the period in which the services are performed. |
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Balance at | Acquired in | Write-offs, | Balance at | |||||||||||||||||
Beginning | Business | Net of | End of | |||||||||||||||||
of Period | Provision | Combinations | Recoveries | Period | ||||||||||||||||
Year ended December 31, 2008 | $ | 424 | $ | 441 | $ | — | $ | (223 | ) | $ | 642 | |||||||||
Year ended December 31, 2009 | $ | 642 | $ | 221 | $ | — | $ | (380 | ) | $ | 483 | |||||||||
Year ended December 31, 2010 | $ | 483 | $ | 348 | $ | 238 | $ | (43 | ) | $ | 1,026 |
Estimated Useful Life | ||
Furniture and fixtures | 5 years | |
Computer equipment and software | 2–3 years | |
Internal-use software and website development costs | 3–4 years | |
Leasehold improvements | Shorter of useful life or remaining duration of lease |
As of December 31, | ||||||||
2010 | 2009 | |||||||
Furniture and fixtures | $ | 703 | $ | 1,155 | ||||
Computer equipment and software | 4,033 | 4,868 | ||||||
Leasehold improvements | 1,490 | 1,090 | ||||||
Internal-use software and website development costs | 6,666 | 4,515 | ||||||
12,892 | 11,628 | |||||||
Less: Accumulated depreciation and amortization | (6,657 | ) | (7,868 | ) | ||||
$ | 6,235 | $ | 3,760 | |||||
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For the Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Numerator: | ||||||||||||
Net (loss) income | $ | (1,182 | ) | $ | (5,116 | ) | $ | 1,764 | ||||
For the Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Denominator: | ||||||||||||
Basic: | ||||||||||||
Weighted average shares of common stock and vested restricted stock awards outstanding | 42,770,741 | 41,864,789 | 41,424,920 | |||||||||
Diluted: | ||||||||||||
Weighted average shares of common stock and vested restricted stock awards outstanding | 42,770,741 | 41,864,789 | 41,424,920 | |||||||||
Effect of potentially dilutive shares | — | — | 2,014,699 | |||||||||
Total weighted average shares of common stock and vested restricted stock awards outstanding | 42,770,741 | 41,864,789 | 43,439,619 | |||||||||
Calculation of Net (Loss) Income Per Common Share: | ||||||||||||
Basic: | ||||||||||||
Net (loss) income applicable to common stockholders | $ | (1,182 | ) | $ | (5,116 | ) | $ | 1,764 | ||||
Weighted average shares of stock outstanding | 42,770,741 | 41,864,789 | 41,424,920 | |||||||||
Net (loss) income per common share | $ | (0.03 | ) | $ | (0.12 | ) | $ | 0.04 | ||||
Diluted: | ||||||||||||
Net (loss) income applicable to common stockholders | $ | (1,182 | ) | $ | (5,116 | ) | $ | 1,764 | ||||
Weighted average shares of stock outstanding | 42,770,741 | 41,864,789 | 43,439,619 | |||||||||
Net (loss) income per common share(1) | $ | (0.03 | ) | $ | (0.12 | ) | $ | 0.04 | ||||
(1) | In calculating diluted earnings per share, shares related to outstanding stock options, unvested restricted stock awards and warrants were excluded for the years ended December 31, 2010 and 2009 because the effect of including them would be anti-dilutive. Diluted net (loss) income per common share does not include the weighted-average effect of anti-dilutive common equivalent shares from stock options outstanding of 1,942,258 for 2008. |
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• | Level 1.Quoted prices in active markets for identical assets and liabilities; |
• | Level 2.Observable inputs other than quoted prices in active markets; and |
• | Level 3.Unobservable inputs. |
Fair Value Measurements at | ||||||||||||||||
Reporting Date Using | ||||||||||||||||
Quoted Prices | Significant | |||||||||||||||
in Active | Other | Significant | ||||||||||||||
Markets for | Observable | Unobservable | ||||||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||||
December 31, 2010 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Money market funds(1) | $ | 23,375 | $ | 23,375 | $ | — | $ | — | ||||||||
Short-term investments | 17,550 | — | 17,550 | — | ||||||||||||
Long-term investments | — | — | — | — | ||||||||||||
Total | $ | 40,925 | $ | 23,375 | $ | 17,550 | $ | — | ||||||||
Fair Value Measurements at | ||||||||||||||||
Reporting Date Using | ||||||||||||||||
Quoted Prices | Significant | |||||||||||||||
in Active | Other | Significant | ||||||||||||||
Markets for | Observable | Unobservable | ||||||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||||
December 31, 2009 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Money market funds(1) | $ | 6,271 | $ | 6,271 | $ | — | $ | — | ||||||||
Short-term investments | 50,496 | — | 50,496 | — | ||||||||||||
Long-term investments | 11,177 | — | 11,177 | — | ||||||||||||
Total | $ | 67,944 | $ | 6,271 | $ | 61,673 | $ | — | ||||||||
(1) | Included in cash and cash equivalents on the accompanying Consolidated Balance Sheet. |
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Estimated | ||||||||
Useful Life | Fair Value | |||||||
Customer relationship intangible asset | 72 months | $ | 630 | |||||
Non-compete agreement intangible asset | 36 months | 60 | ||||||
Member database intangible asset | 60 months | 60 | ||||||
Total intangible assets | $ | 750 | ||||||
Estimated Fair | ||||||
Useful Life | Value | |||||
Customer relationship intangible asset | 72 months | $ | 460 | |||
Member database intangible asset | 60 months | 350 | ||||
Non-compete agreement intangible asset | 36 months | 110 | ||||
Trade name intangible asset | 60 months | 100 | ||||
Total intangible assets | $ | 1,020 | ||||
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Estimated Fair | ||||||
Useful Life | Value | |||||
Customer relationship intangible asset | 72 months | $ | 280 | |||
Member database intangible asset | 60 months | 240 | ||||
Non-compete agreement intangible asset | 36 months | 80 | ||||
Trade name intangible asset | 60 months | 60 | ||||
Total intangible assets | $ | 660 | ||||
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Estimated | ||||||
Useful Life | Fair Value | |||||
Customer relationship intangible asset | 48 months | $ | 227 | |||
Non-compete agreement intangible asset | 36 months | 198 | ||||
Trade name intangible asset | 60 months | 135 | ||||
Total intangible assets | $ | 560 | ||||
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Restructuring | ||||
Charge | ||||
Balance as of January 1, 2008 | $ | — | ||
Employee severance pay and related costs | 886 | |||
Non-cancelable lease, contract termination, and other charges | 559 | |||
Write-offs of tenant improvements, furniture, and fixed assets | 49 | |||
Restructuring charges | 1,494 | |||
Cash paid related to employee severance and other costs | (331 | ) | ||
Write-off of tenant improvements, furniture, and fixed assets | (49 | ) | ||
Balance as of December 31, 2008 | $ | 1,114 | ||
Cash paid related to employee severance and other costs | (1,114 | ) | ||
Balance as of December 31, 2009 | $ | — | ||
As of December 31, | ||||||||
2010 | 2009 | |||||||
Cash | $ | 9,209 | $ | 14,613 | ||||
Money market funds | 23,375 | 6,271 | ||||||
Total cash and cash equivalents | $ | 32,584 | $ | 20,884 | ||||
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December 31, 2010 | ||||||||||||||||
Gross | Gross | |||||||||||||||
Unrealized | Unrealized | Estimated | ||||||||||||||
Cost | Gains | Losses | Fair Value | |||||||||||||
Short and long-term investments: | ||||||||||||||||
Government agency bonds | $ | 2,008 | $ | 1 | $ | — | $ | 2,009 | ||||||||
Municipal bonds | 15,550 | 2 | (11 | ) | 15,541 | |||||||||||
Total short and long-term investments | $ | 17,558 | $ | 3 | $ | (11 | ) | $ | 17,550 | |||||||
December 31, 2009 | ||||||||||||||||
Gross | Gross | |||||||||||||||
Unrealized | Unrealized | Estimated | ||||||||||||||
Cost | Gains | Losses | Fair Value | |||||||||||||
Short and long-term investments: | ||||||||||||||||
Government agency bonds | $ | 8,168 | $ | — | $ | (9 | ) | $ | 8,159 | |||||||
Municipal bonds | 53,495 | 42 | (23 | ) | 53,514 | |||||||||||
Total short and long-term investments | $ | 61,663 | $ | 42 | $ | (32 | ) | $ | 61,673 | |||||||
As of December 31, | ||||||||
2010 | 2009 | |||||||
Balance as of beginning of period | $ | 88,958 | $ | 88,958 | ||||
Goodwill acquired during the period | 3,424 | — | ||||||
Balance as of end of period | $ | 92,382 | $ | 88,958 | ||||
As of December 31, 2010 | ||||||||||||||||
Estimated | Gross | |||||||||||||||
Useful Lives | Carrying | Accumulated | ||||||||||||||
(Years) | Amount | Amortization | Net | |||||||||||||
Customer, affiliate and advertiser relationships | 1-9 | $ | 12,879 | $ | (7,654 | ) | $ | 5,225 | ||||||||
Developed websites, technology and patents | 3-6 | 5,400 | (3,300 | ) | 2,100 | |||||||||||
Trademark, trade name and domain name | 1-7 | 2,373 | (1,526 | ) | 847 | |||||||||||
Proprietary user information database and internet traffic | 3-5 | 5,400 | (3,354 | ) | 2,046 | |||||||||||
Non-compete agreements | 1-3 | 1,573 | (1,322 | ) | 251 | |||||||||||
Total intangible assets | $ | 27,625 | $ | (17,156 | ) | $ | 10,469 | |||||||||
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As of December 31, 2009 | ||||||||||||||||
Estimated | Gross | |||||||||||||||
Useful Lives | Carrying | Accumulated | ||||||||||||||
(Years) | Amount | Amortization | Net | |||||||||||||
Customer, affiliate and advertiser relationships | 1-9 | $ | 11,508 | $ | (5,619 | ) | $ | 5,889 | ||||||||
Developed websites, technology and patents | 3-6 | 5,400 | (2,400 | ) | 3,000 | |||||||||||
Trademark, trade name and domain name | 1-7 | 2,179 | (1,261 | ) | 918 | |||||||||||
Proprietary user information database and internet traffic | 3-5 | 4,750 | (2,257 | ) | 2,493 | |||||||||||
Non-compete agreements | 1-3 | 1,323 | (1,095 | ) | 228 | |||||||||||
Total intangible assets | $ | 25,160 | $ | (12,632 | ) | $ | 12,528 | |||||||||
�� |
Amortization | ||||
Years Ending December 31: | Expense | |||
2011 | $ | 3,699 | ||
2012 | 2,935 | |||
2013 | 1,430 | |||
2014 | 1,051 | |||
2015 | 804 | |||
Thereafter | 550 | |||
$ | 10,469 | |||
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Minimum | ||||
Lease | ||||
Years Ending December 31: | Payments | |||
2011 | $ | 3,178 | ||
2012 | 3,812 | |||
2013 | 3,161 | |||
2014 | 3,172 | |||
2015 | 3,191 | |||
Thereafter | 13,957 | |||
$ | 30,471 | |||
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Years Ended December 31, | ||||||||
2010 | 2009 | 2008 | ||||||
Expected volatility | 78%-79 | % | 75%-79 | % | 41%-71 | % | ||
Expected term | 6.25 years | 6.25 years | 6.25 years | |||||
Risk-free interest rate | 2.3%-2.85 | % | 2.21%-2.89 | % | 1.71%-3.15 | % | ||
Expected dividend yield | — | % | — | % | — | % | ||
Weighted-average grant date fair value per share | $4.92 | $4.06 | $ | 3.28 |
Weighted-Average | ||||||||||||||||
Remaining | ||||||||||||||||
Weighted-Average | Contractual | Aggregate | ||||||||||||||
Options | Exercise | Term | Intrinsic | |||||||||||||
Outstanding | Price Per Share | in Years | Value | |||||||||||||
Options outstanding at December 31, 2009 | 7,916,879 | $ | 6.40 | |||||||||||||
Granted | 200,000 | 7.04 | ||||||||||||||
Exercised | (325,547 | ) | 3.12 | |||||||||||||
Forfeited | (184,075 | ) | 6.89 | |||||||||||||
Canceled | (512,167 | ) | 8.45 | |||||||||||||
Options outstanding at December 31, 2010 | 7,095,090 | $ | 6.41 | 5.7 | $ | 14,632 | ||||||||||
Options exercisable at December 31, 2010 | 5,815,924 | $ | 6.38 | 5.0 | $ | 12,091 | ||||||||||
Options vested or expected to vest at December 31, 2010(1) | 7,030,662 | $ | 6.41 | 5.6 | $ | 14,507 | ||||||||||
(1) | In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. Options expected to vest is calculated by applying an estimated forfeiture rate to the unvested options. |
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Weighted-Average | ||||||||||||
Grant Date | Aggregate | |||||||||||
Fair Value | Intrinsic | |||||||||||
Shares | Per Share | Value | ||||||||||
Nonvested outstanding at December 31, 2009 | 2,216,900 | $ | 5.37 | |||||||||
Granted | 1,592,588 | 6.55 | ||||||||||
Vested | (1,093,536 | ) | 4.96 | |||||||||
Forfeited | (22,499 | ) | 14.16 | |||||||||
Nonvested outstanding at December 31, 2010 | 2,693,453 | $ | 5.92 | $ | 21,359 | |||||||
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Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Current: | ||||||||||||
Federal | $ | 2,794 | $ | 465 | $ | 88 | ||||||
State | 2,180 | 1,223 | 950 | |||||||||
Foreign | 32 | — | — | |||||||||
Total current | 5,006 | 1,688 | 1,038 | |||||||||
Deferred: | ||||||||||||
Federal | (984 | ) | (1,314 | ) | 1,782 | |||||||
State | (719 | ) | (598 | ) | (36 | ) | ||||||
Foreign | (45 | ) | — | — | ||||||||
Total deferred | (1,748 | ) | (1,912 | ) | 1,746 | |||||||
$ | 3,258 | $ | (224 | ) | $ | 2,784 | ||||||
Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Provision computed at statutory rate | $ | 726 | $ | (1,869 | ) | $ | 1,592 | |||||
Increase (reduction) resulting from: | ||||||||||||
Tax exempt interest income | (105 | ) | (133 | ) | (440 | ) | ||||||
Stock-based compensation | 1,336 | 1,426 | 1,012 | |||||||||
Other non-deductible expenses | 132 | 136 | 137 | |||||||||
Non-deductible transaction costs | 42 | — | — | |||||||||
State income tax provision | 1,055 | 197 | 581 | |||||||||
Other | 72 | 19 | (98 | ) | ||||||||
Provision for income taxes | $ | 3,258 | $ | (224 | ) | $ | 2,784 | |||||
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As of December 31, | ||||||||
2010 | 2009 | |||||||
Deferred tax assets: | ||||||||
Net operating loss carryforwards | $ | 716 | $ | 2,797 | ||||
Deferred revenue | 279 | 241 | ||||||
Accruals and allowances | 728 | 432 | ||||||
Stock-based compensation | 7,221 | 5,904 | ||||||
Deferred rent expense | 1,244 | 191 | ||||||
Gross deferred tax assets | 10,188 | 9,565 | ||||||
Less valuation allowance | (678 | ) | (1,020 | ) | ||||
Total deferred tax assets | 9,510 | 8,545 | ||||||
Deferred tax liabilities: | ||||||||
Intangible asset amortization | (241 | ) | (873 | ) | ||||
Depreciation | (698 | ) | (91 | ) | ||||
Total deferred tax liabilities | (939 | ) | (964 | ) | ||||
Net deferred tax assets | $ | 8,571 | $ | 7,581 | ||||
As reported: | ||||||||
Current deferred tax assets | $ | 729 | $ | 2,399 | ||||
Non-current deferred tax assets | $ | 7,985 | $ | 5,182 | ||||
Non-current deferred tax liabilities (included in other liabilities) | $ | (142 | ) | $ | — | |||
2010 | |||||||
Balance at beginning of year | $ | — | |||||
Gross increases related to positions taken in prior periods | 397 | ||||||
Balance at end of year | $ | 397 | |||||
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Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
North America | $ | 89,767 | $ | 83,233 | $ | 101,401 | ||||||
International | 5,242 | 3,264 | 3,143 | |||||||||
Total | $ | 95,009 | $ | 86,497 | $ | 104,544 | ||||||
For the Three Months Ended | ||||||||||||||||||||||||||||||||
2010 | 2009 | |||||||||||||||||||||||||||||||
Mar. 31 | Jun. 30 | Sep. 30 | Dec. 31 | Mar. 31 | Jun. 30 | Sep. 30 | Dec. 31 | |||||||||||||||||||||||||
Total revenues | $ | 21,043 | $ | 25,073 | $ | 22,001 | $ | 26,892 | $ | 18,472 | $ | 21,737 | $ | 23,056 | $ | 23,232 | ||||||||||||||||
Total cost of revenues | 5,400 | 6,094 | 5,658 | 5,947 | 5,961 | 6,231 | 6,530 | 6,256 | ||||||||||||||||||||||||
Total gross profit | 15,643 | 18,979 | 16,343 | 20,945 | 12,511 | 15,506 | 16,526 | 16,976 | ||||||||||||||||||||||||
Total operating expenses | 18,253 | 17,598 | 16,768 | 17,391 | 15,267 | 15,960 | 18,082 | 17,817 | ||||||||||||||||||||||||
Operating (loss) income | (2,610 | ) | 1,381 | (425 | ) | 3,554 | (2,756 | ) | (454 | ) | (1,556 | ) | (841 | ) | ||||||||||||||||||
Net (loss) income | $ | (2,340 | ) | $ | 446 | $ | (612 | ) | $ | 1,324 | $ | (2,308 | ) | $ | (543 | ) | $ | (1,438 | ) | $ | (827 | ) | ||||||||||
Net (loss) income per common share: | ||||||||||||||||||||||||||||||||
Basic | $ | (0.06 | ) | $ | 0.01 | $ | (0.01 | ) | $ | 0.03 | $ | (0.06 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.02 | ) | ||||||||||
Diluted | $ | (0.06 | ) | $ | 0.01 | $ | (0.01 | ) | $ | 0.03 | $ | (0.06 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.02 | ) |
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Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
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1. | Inadequate and ineffective controls over the accounting for certain complex transactions. | |
2. | Inadequate and ineffective controls over adequacy of staffing of accounting group. | |
3. | Insufficient and ineffective review and supervision by management of certain accounting policies and procedures. | |
4. | Inadequate and ineffective accounting and reporting system for processing and reporting of certain complex service revenue transactions. | |
5. | Inadequate and ineffective controls over the use of debit memorandums to reclassify aged customer credits from the accounts receivable subsidiary ledger to an unallocated general accrual account. | |
6. | Inadequate education, training, and awareness of the process for reporting concerns with regard to accounting practices to finance management, management and/or the Audit Committee. |
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1. | In order to improve controls over the accounting for certain complex transactions, we have initiated and intend to continue to: |
• | Assess the expertise of our staff responsible for recording complex transactions and address any identified deficiencies in order to enhance and augment the depth of knowledge of our staff and reduce the risk of future accounting errors and financial statement misstatements. | ||
• | Communicate revised accounting policies and procedures to appropriate accounting staff, and train them on their usage and application. | ||
• | Ensure that finance management is routinely involved in oversight and monitoring of the recording and reporting of complex service revenue recognition transactions. | ||
• | Implement additional automation, trending analyses, and management reporting over potential complex transactions. | ||
• | Review the controls over revenue recognition to ensure procedures exist to properly account for any changes in operations. |
2. | In order to improve controls over ensuring the adequacy of staffing of the accounting group, we have initiated and intend to continue to: |
• | Assess the depth and expertise of our staff responsible for complex transactions and revenue recognition and address any identified deficiencies. | ||
• | Work with our Human Resources department in aggressively identifying and recruiting future capable executive leadership and technical accounting staff candidates. In June 2010 we hired a new Chief Financial Officer who has subsequently recruited and hired a new Vice President of Finance, Revenue Operations Manager and Credit and Collection Manager. Additionally, throughout 2010 we have created and filled the following roles in our Finance Department: Assistant Controller, Manager of Financial Reporting, Manager of Internal Audit and Business Systems Analyst. | ||
• | Provide training to address relevant technical accounting matters including updating the appropriate personnel on recent accounting pronouncements and other relevant accounting literature. |
3. | In order to improve controls to ensure sufficient and effective review and supervision by management of certain accounting policies and procedures, we have initiated and intend to continue to: |
• | Ensure that financial management is routinely reviewing and monitoring the application of and any changes to the accounting policies and procedures underlying complex transactions. | ||
• | Ensure the proper evidence of this review is consistently documented. | ||
• | Ensure that financial management is involved in oversight and monitoring of the recording and reporting of complex transactions. | ||
• | Implement a process whereby senior finance personnel are informed of all significant judgments made during the close process. |
4. | In order to ensure the Company’s accounting and reporting systems are adequate to carry out the level and complexities associated with our service revenue transactions, we have: |
• | Purchased and implemented in the first half of 2010 a software application intended to enhance our revenue accounting and reporting systems. This system was purchased with the intention that it would provide the additional controls needed over revenue recognition until we are able to implement a fully integrated platform supporting enterprise resource planning and data analysis. |
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5. | In order to improve controls over the use of debit memorandum to reclassify aged customer credits from the accounts receivable subsidiary ledger to the general accrual account we have initiated and intend to continue to: |
• | Establish clearly defined policies and procedures relating to the disposition of customer credits. | ||
• | Establish a policy whereby we disburse payment to customers or apply credits to customer invoices if an aged customer credit is not used by the customer within a reasonable time after the credit has been issued. If the Company determines that the customer is inactive for some reason, the Company will determine the applicable jurisdiction to which the credit is subject, and, if applicable and no exemption is available, the Company will escheat a payment in the amount of the credit to the appropriate state authority. | ||
• | Establish clearly defined policies and procedures related to the general accrual account to ensure account activity is proper, the liability fairly states incurred but not reported liabilities and the period end reconciliation is prepared on a timely and consistent basis and is adequately reviewed by the appropriate finance management personnel. |
6. | In order to improve education, training, and awareness of the process for reporting concerns with regard to accounting practices to finance management, management and/or the Audit Committee, we have initiated and intend to continue to: |
• | Provide additional training and education to all employees of the reporting processes and protocols for communicating any concerns relating to accounting practices within the Company. The training will emphasize awareness of the process for reporting concerns, the confidential nature of the process, as well as the importance of timely reporting concerns to finance management, management and/or the Audit Committee. In addition separate training and education will be provided to address relevant technical accounting matters including updating the appropriate personnel on recent accounting pronouncements and other relevant accounting literature. |
• | Improve the effectiveness of the software application implemented in 2010 and make the appropriate enhancements to its role in providing control over revenue transactions until we are able to implement a new fully integrated financial accounting and reporting platform containing adequate system level controls to support an appropriate control environment. | ||
• | Enhance other control activities including exception reporting and detailed reconciliations included as manual controls within the month end closing process to further mitigate process risks not addressed by the current accounting and reporting systems. |
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The Board of Directors and Stockholders of
TechTarget, Inc.
We have audited TechTarget, Inc.’s internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). TechTarget, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying management’s report on internal control over financial reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Keji Wangtuo Information Technology Co., Ltd, which is included in the 2010 consolidated financial statements of TechTarget, Inc. and constituted $3.6 million and $3.0 million of total and net assets, respectively, as of December 31, 2010. Our audit of internal controls over financial reporting of TechTarget, Inc. also did not include an evaluation of the internal control over financial reporting of Keji Wangtuo Information Technology Co., Ltd.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management’s assessment.
The Company’s current accounting and financial reporting system and related internal controls are inadequate to carry out the volume and level of complexities associated with its revenue transactions. This material weakness results in a reasonable possibility that a material misstatement of the Company’s revenue, deferred revenue and accounts receivable could occur and not be prevented or detected on a timely basis.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of TechTarget, Inc. as of December 31, 2010 and 2009, and the related consolidated statements of operations, redeemable convertible preferred stock and stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2010. This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2010 financial statements and this report does not affect our report dated March 16, 2011, which expressed an unqualified opinion on those financial statements.
In our opinion, because of the effect of the material weakness described above on the achievement of the objectives of the control criteria, TechTarget, Inc. has not maintained effective internal control over financial reporting as of December 31, 2010, based on the COSO criteria.
/s/ Ernst & Young LLP
Boston, Massachusetts
March 16, 2011
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Item 9B. | Other Information |
Item 10. | Directors, Executive Officers and Corporate Governance. |
Item 11. | Executive Compensation. |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
Item 13. | Certain Relationships and Related Transactions, and Director Independence. |
Item 14. | Principal Accounting Fees and Services. |
Item 15. | Exhibits, Financial Statement Schedules |
(a)(1) Financial Statements are filed as part of this Annual Report on Form 10-K. The following consolidated financial statements are included in Item 8: |
• | Consolidated Balance Sheets as of December 31, 2010 and 2009 |
• | Consolidated Statements of Operations for the Years Ended December 31, 2010, 2009 and 2008 |
• | Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Years Ended December 31, 2010, 2009 and 2008 |
• | Consolidated Statements of Cash Flows for the Years Ended December 31, 2010, 2009 and 2008 |
• | Notes to Consolidated Financial Statements |
(a)(2) Financial statement schedules have been omitted because they are not required or because the required information is given in the Consolidated Financial Statements or Notes thereto. |
(a)(3) Exhibit Index. |
The exhibits listed in the Exhibit Index immediately preceding the exhibits are filed as part of this Annual Report on Form 10-K and are incorporated into this item by reference. |
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TECHTARGET, INC. | ||||||
Date: March 16, 2011 | ||||||
By: | /s/ GREG STRAKOSCH | |||||
Chief Executive Officer and Director |
Signature | Title | Date | ||
/s/ GREG STRAKOSCH | Chief Executive Officer and Director (Principal executive officer) | March 16, 2011 | ||
�� | ||||
/s/ JEFFREY WAKELY | Chief Financial Officer and Treasurer (Principal financial and accounting officer) | March 16, 2011 | ||
/s/ LEONARD FORMAN | Director | March 16, 2011 | ||
/s/ JAY C. HOAG | Director | March 16, 2011 | ||
/s/ BRUCE LEVENSON | Director | March 16, 2011 | ||
/s/ ROGER M. MARINO | Director | March 16, 2011 |
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Incorporated by Reference to | ||||||||||||||
Filing | ||||||||||||||
Exhibit | Form or | Exhibit | Date | SEC File | ||||||||||
Number | Description | Schedule | No. | with SEC | Number | |||||||||
Articles of Incorporation and By-Laws | ||||||||||||||
3.1 | Fourth Amended and Restated Certificate of Incorporation of the Registrant | 10-Q | 3.1 | 11/13/2007 | 001-33472 | |||||||||
3.2 | Amended and Restated Bylaws of the Registrant | S-1/A | 3.3 | 03/20/2007 | 333-140503 | |||||||||
Instruments Defining the Rights of Security Holders | ||||||||||||||
4.1 | Specimen Stock Certificate for shares of the Registrant’s Common Stock | S-1/A | 4.1 | 04/10/2007 | 333-140503 | |||||||||
Material Contracts | ||||||||||||||
10.1 | Second Amended and Restated Investors’ Rights Agreement by and among the Registrant, the Investors named therein and SG Cowen Securities Corporation, dated as of December 17, 2004 | S-1 | 10.1 | 02/07/2007 | 333-140503 | |||||||||
10.2 | Form of Indemnification Agreement between the Registrant and its Directors and Officers | S-1/A | 10.2 | 05/15/2007 | 333-140503 | |||||||||
10.3 | # | 2007 Stock Option and Incentive Plan | S-1/A | 10.3 | 04/20/2007 | 333-140503 | ||||||||
10.4 | # | Form of Incentive Stock Option Agreement under the 2007 Stock Option and Incentive Plan | S-1/A | 10.4 | 04/20/2007 | 333-140503 | ||||||||
10.5 | # | Form of Non-Qualified Stock Option Agreement under the 2007 Stock Option and Incentive Plan | S-1/A | 10.5 | 04/20/2007 | 333-140503 | ||||||||
10.6 | # | Form of Non-Qualified Stock Option Agreement for Non-Employee Directors | S-1/A | 10.5.1 | 04/27/2007 | 333-140503 | ||||||||
10.7 | # | Form of Restricted Stock Agreement under the 2007 Stock Option and Incentive Plan | S-1/A | 10.6 | 04/20/2007 | 333-140503 | ||||||||
10.8 | # | Form of Restricted Stock Unit Agreement under the 2007 Stock Option and Incentive Plan | 10-K | 10.8 | 3/31/2008 | 001-33472 | ||||||||
10.9 | # | Restricted Stock Unit Agreement, dated December 18, 2007, by and between the Registrant and Kevin Beam | 10-K | 10.9 | 3/31/2008 | 001-33472 | ||||||||
10.10 | # | Restricted Stock Unit Agreement, dated December 18, 2007, by and between the Registrant and Don Hawk | 10-K | 10.10 | 3/31/2008 | 001-33472 | ||||||||
10.11 | # | Restricted Stock Unit Agreement, dated December 18, 2007, by and between the Registrant and Rick Olin | 10-K | 10.11 | 3/31/2008 | 001-33472 | ||||||||
10.12 | # | Restricted Stock Unit Agreement, dated December 18, 2007, by and between the Registrant and Greg Strakosch | 10-K | 10.13 | 3/31/2008 | 001-33472 | ||||||||
10.13 | # | Executive Incentive Bonus Plan | S-1/A | 10.7 | 04/20/2007 | 333-140503 | ||||||||
10.14 | # | 1999 Stock Option Plan | S-1 | 10.8 | 02/07/2007 | 333-140503 |
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Incorporated by Reference to | ||||||||||||||
Filing | ||||||||||||||
Exhibit | Form or | Exhibit | Date | SEC File | ||||||||||
Number | Description | Schedule | No. | with SEC | Number | |||||||||
10.15 | # | Form of Incentive Stock Option Grant Agreement under the 1999 Stock Option Plan (for grants prior to September 27, 2006) | S-1 | 10.9 | 02/07/2007 | 333-140503 | ||||||||
10.16 | # | Form of Incentive Stock Option Grant Agreement under the 1999 Stock Option Plan (for grants on or after September 27, 2006) | S-1 | 10.10 | 02/07/2007 | 333-140503 | ||||||||
10.17 | # | Form of Incentive Stock Option Grant Agreement under the 1999 Stock Option Plan (for grants to executives) | S-1/A | 10.10.1 | 05/01/2007 | 333-140503 | ||||||||
10.18 | # | Form of Nonqualified Stock Option Grant Agreement under the 1999 Stock Option Plan | S-1 | 10.11 | 02/07/2007 | 333-140503 | ||||||||
10.19 | # | Credit Facility Agreement between the Registrant and Citizens Bank of Massachusetts, dated August 30, 2006 | S-1 | 10.16 | 02/07/2007 | 333-140503 | ||||||||
10.20 | # | Amended and Restated Employment Agreement, dated January 17, 2008, by and between the Registrant and Greg Strakosch | 10-K | 10.25 | 3/31/2008 | 001-33472 | ||||||||
10.21 | # | Amended and Restated Employment Agreement, dated January 17, 2008, by and between the Registrant and Don Hawk | 10-K | 10.26 | 3/31/2008 | 001-33472 | ||||||||
10.22 | # | Amended and Restated Employment Agreement, dated January 17, 2008, by and between the Registrant and Kevin Beam | 10-K | 10.28 | 3/31/2008 | 001-33472 | ||||||||
10.23 | # | Amended and Restated Employment Agreement, dated January 17, 2008, by and between the Registrant and Rick Olin | 10-K | 10.29 | 3/31/2008 | 001-33472 | ||||||||
10.24 | # | Employment Agreement, by and between the Registrant and Jeffrey Wakely | 8-K | 10.1 | 5/3/2010 | 001-33472 | ||||||||
10.25 | Lease Agreement by and between MA-Riverside Project L.L.C., as landlord and TechTarget, Inc., as tenant | 8-K | 10.1 | 8/7/2009 | 001-33472 | |||||||||
10.26 | First Amendment to Lease Agreement, by and between the Registrant and MA-Riverside Project L.L.C. for the premises located at One Riverside Center, 275 Grove Street, Newton, Massachusetts, dated November 18, 2010 | 8-K | 10.1 | 11/22/10 | 001-33472 | |||||||||
10.27 | First Amendment (dated August 30, 2007) to Credit Facility Agreement dated August 30, 2006 between the Registrant and Citizens Bank of Massachusetts | 10-Q | 10.1 | 2/8/2010 | 001-33472 | |||||||||
10.28 | Second Amendment (dated December 18, 2008) to Credit Facility Agreement between the Registrant and Citizens Bank of Massachusetts, dated August 30, 2006 | 10-Q | 10.2 | 2/8/2010 | 001-33472 | |||||||||
10.29 | Third Amendment (dated December 17, 2009) to Credit Facility Agreement dated August 30, 2006 between the Registrant and Citizens Bank of Massachusetts | 10-Q | 10.3 | 2/8/2010 | 001-33472 |
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Incorporated by Reference to | ||||||||||||||
Filing | ||||||||||||||
Exhibit | Form or | Exhibit | Date | SEC File | ||||||||||
Number | Description | Schedule | No. | with SEC | Number | |||||||||
10.30 | First Amendment (dated December 17, 2009) to Revolving Promissory Note dated August 30, 2006 between the Registrant and Citizens Bank of Massachusetts | 10-Q | 10.4 | 2/8/2010 | 001-33472 | |||||||||
10.31 | Waiver of Specified Covenants (dated December 17, 2009) for Credit Facility Agreement dated August 30, 2006 between the Registrant and Citizens Bank of Massachusetts, now known as RBS Citizens, National Association | 10-Q | 10.5 | 2/8/2010 | 001-33472 | |||||||||
10.32 | Waiver of Specified Covenants (dated January 28, 2010) for Credit Facility Agreement dated August 30, 2006 between the Registrant and Citizens Bank of Massachusetts, now known as RBS Citizens, National Association | 10-Q | 10.6 | 2/8/2010 | 001-33472 | |||||||||
*10.33 | Amended and Restated Restricted Stock Unit Agreement, dated August 10, 2009, by and between the Registrant and Michael Cotoia | |||||||||||||
Additional Exhibits | ||||||||||||||
*21.1 | List of Subsidiaries | |||||||||||||
*23.1 | Consent of Ernst & Young LLP | |||||||||||||
*31.1 | Certification by Chief Executive Officer Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended. | |||||||||||||
*31.2 | Certification by Chief Financial Officer Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended. | |||||||||||||
*32.1 | Certification by Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||||||||
99.1 | Agreement and Plan of Merger by and among the Registrant, Catapult Acquisition Corp. and KnowledgeStorm, Inc. dated November 1, 2007 | 8-K | 99.1 | 11/07/2007 | 001-33472 |
* | Filed herewith. | |
# | Management contract or compensatory plan or arrangement filed as an Exhibit to this report pursuant to 15(a) and 15(c) of Form 10-K. |
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