SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
(RULE 14D-101)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
NEWSEDGE CORPORATION
(Name of Subject Company)
NEWSEDGE CORPORATION
(Name of Persons Filing Statement)
Common Stock, $0.01 Par Value
(Title of Class of Securities)
652 49 Q106
(CUSIP Number of Class of Securities)
Clifford M. Pollan
President
NewsEdge Corporation
80 Blanchard Road
Burlington, MA 01803
(781) 229-3000
(Name, address and telephone number of person authorized to receive notices and
communications on behalf of the persons filing statement)
With copies to:
Lawrence S. Wittenberg, Esq.
Lawrence A. Gold, Esq.
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
(617) 248-7000
[X]Check the box if the filing relates solely to preliminary communications made
before the commencement of a tender offer.
================================================================================
The following is a press release issued by NewsEdge Corporation on August 13,
2001 announcing NewsEdge's operating results for the second quarter of 2001 and
providing information regarding the proposed tender offer and merger.
================================================================================
NewsEdge Reports Q2 2001 Operating Results
$43 MILLION ACQUISITION VIA CASH TENDER OFFER BY THE THOMSON CORPORATION PENDING
BURLINGTON, MA, AUGUST 13, 2001 -- NewsEdge Corporation (Nasdaq:NEWZ), a global
provider of content services for business, today reported 2001 second quarter
revenues of $16.4 million, and net income of $0.1 million, or $0.01 per basic
and diluted share for the three-month period ended June 30, 2001, compared to
revenue of $17.7 million, and a net loss of $1.3 million, or $0.12 per basic and
diluted share ($0.08 loss including discontinued operations) in the year-ago
second quarter.
The Company's operating results for the 2001 second quarter were impacted by
$0.3 million of severance related costs, partially offset by $0.2 million of
favorable reductions in salary expense due to the implementation of a new
vacation carryover policy. NewsEdge's 2001 Q2 results benefited from a $0.8
million one-time gain from the sale of its equity interests in NewsWatch, KK.
The year-ago second quarter included two non-recurring charges: $0.7 million
related to remaining employee retention expenses under the terminated RoweCom
merger agreement and a $0.5 million reversal of merger acquisition-related
expenses no longer deemed necessary by Management. Excluding all one-time
items, NewsEdge's net loss in the second quarter was $0.6 million, compared to a
net loss of $1.8 million in the 2000 second quarter, and a net loss of $0.7
million in the 2001 first quarter.
For the six-month period ended June 30, 2001, NewsEdge generated revenue of
$33.5 million, and a net loss of $1.1 million, or $0.06 per basic and diluted
share, versus revenue of $35.0 million, and a net loss of $4.8 million
(including a $6.3 million net gain on the disposal of Individual.com, Inc.), or
$0.28 per basic and diluted share ($0.52 per share loss from continuing
operations) in the first half of 2000.
On August 7, 2001, The Thomson Corporation (TSE:TOC), a leading e-information
and solutions company in the business and professional marketplace, announced
the signing of a definitive agreement to acquire NewsEdge in a cash tender offer
valued at approximately $43 million, or $2.30 per outstanding NEWZ share. The
closing of the offer is expected to be completed in the second half of 2001, and
is conditioned upon the tender of a majority of NewsEdge's shares and customary
closing conditions. The offer will be followed by a back-end merger of the
Thomson subsidiary with and into NewsEdge on the same terms as those in the
offer. All of NewsEdge's directors, certain of its executive officers, and a
significant NEWZ shareholder have all pledged to tender their shares pursuant to
the Thomson offer and/or vote in favor of the acquisition. Thomson stated that
it plans to align NewsEdge with The Dialog Corporation, as part of The Thomson
Legal & Regulatory market group.
ABOUT NEWSEDGE
NewsEdge Corporation (NASDAQ: NEWZ) is a global provider of content solutions
for business. Its customers include both content creators and the operators of
the world's most active Web sites. NewsEdge offers technology and services for
its customers to create, manage and deploy content for millions of end-users
through enterprise sites, portals, publisher Web sites and distribution
channels. NewsEdge services make organizations smarter, attract specialized
audiences, foster high-frequency usage, promote Web site "stickiness" and
ultimately cultivate commerce. NewsEdge serves thousands of sites and companies
with highly targeted content solutions from the NewsEdge Refinery, including
industry-specific topics, wireless services, turn-key permission marketing and
publishing tools, outsourced editorial capabilities and sub-second live news
feeds and applications. The NewsEdge Refinery combines a patented combination
of sophisticated technology and human editorial review to deliver highly
targeted news on more than 2,000 business topics from more than 2,000 sources.
NewsEdge is headquartered in Burlington, Mass., with offices and distributors
throughout North America, South America, Europe, Japan and the Middle East. For
more information about NewsEdge Corporation, visit www.NewsEdge.com.
(more)
(C)NewsEdge Corporation, 2001, all rights reserved. NewsEdge is a registered
trademark of NewsEdge Corporation. All other product or service marks mentioned
herein are those of NewsEdge or their respective owners.
This press release contains forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995,
including forward-looking statements regarding revenue, profit, and other
performance expectations, the future success of the Company's business,
marketing, and technology strategies, future market opportunities, and the
future market acceptance of and demand for the Company's products. These
statements are neither promises nor guarantees, but involve risks and
uncertainties that could cause actual results to differ materially from those
set forth in the forward-looking statements, including without limitation risks
relating to market acceptance of and demand for the Company's products, risks of
downturns in economic conditions generally, risks associated with competition
and competitive pricing pressures, risks relating to intellectual property
rights and litigation, risks in technology development and commercialization,
the risk of operating losses, risks in product development, risks associated
with international sales, and other risks detailed in the Company's filings with
the S.E.C, including those appearing under the caption "Risk Factors" in the
Company's annual report filed on S.E.C. Form 10-K for the year ended December
31, 2000. The Company cautions readers and listeners not to place undue reliance
on any such forward-looking statements, which speak only as of the date they are
made. The Company disclaims any obligation to publicly update or revise any such
statements to reflect any change in Company expectations or in events,
conditions, or circumstances on which any such statements may be based, or that
may affect the likelihood that actual results will differ from those set forth
in the forward-looking statements.
This news release is for informational purposes only. It does not constitute an
offer to purchase shares of NewsEdge or a solicitation/recommendation statement
under the rules and regulations of the Securities and Exchange Commission. At
the time Thomson commences the offer, Thomson will file with the Securities and
Exchange Commission a tender offer statement on Schedule TO and NewsEdge will
file a solicitation/recommendation statement on Schedule 14D-9. THOSE DOCUMENTS
WILL CONTAIN IMPORTANT INFORMATION AND SECURITY HOLDERS OF NEWSEDGE ARE ADVISED
TO CAREFULLY READ THOSE DOCUMENTS (WHEN THEY BECOME AVAILABLE) BEFORE MAKING ANY
DECISION WITH RESPECT TO THE TENDER OFFER. These documents will be provided to
NewsEdge security holders at no expense to them and, when filed with the
Securities and Exchange Commission, may be obtained free at www.sec.gov.
Contact Investor inquiries Media inquiries
- ------- ------------------ ---------------
Ron Benanto Robert Rinderman David Scott
NewsEdge Jaffoni & Collins NewsEdge
(781) 229-3000 (212) 835-8500 (781) 229-3000
ron.benanto@newsedge.com NEWZ@jcir.com david.scott@newsedge.com
- ------------------------ ------------- ------------------------
(financial tables follow)
NEWSEDGE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
JUNE 30, DECEMBER 31,
2001 2000
---------- ---------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 16,399 $ 18,320
Restricted cash 375 404
Accounts receivable 11,237 16,645
Due from Office.com - 1,000
Prepaid expenses and deposits 3,819 3,748
---------- ---------
Total current assets 31,830 40,117
---------- ---------
Property and equipment, net 9,114 8,782
---------- ---------
Other assets 346 345
---------- ---------
Total assets $ 41,290 $ 49,244
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,907 $ 5,761
Accrued expenses 9,462 12,900
Deferred revenue, current 21,164 25,837
Total current liabilities 37,533 44,498
---------- ---------
Deferred revenue, noncurrent 29 35
---------- ---------
Stockholders' equity:
Common stock 191 190
Additional paid-in capital 131,716 131,682
Cumulative translation adjustment (56) (104)
Accumulated deficit (125,397) (124,331)
Treasury stock, at cost; 432,000 shares (2,726) (2,726)
---------- ---------
Total stockholders' equity 3,728 4,711
---------- ---------
Total liabilities & stockholders' equity $ 41,290 $ 49,244
========== =========
(Statements of Operations follows)
NEWSEDGE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- ----------------------
2001 2000 2001 2000
-------- ------- -------- -------
Total revenues $ 16,422 $ 17,672 $ 33,525 $ 35,001
Costs and expenses:
Cost of revenues 6,704 7,605 13,086 15,171
Customer support expenses 1,126 1,345 2,328 2,843
Development expenses 2,333 2,384 4,645 5,627
Sales and marketing expenses 5,893 7,685 12,662 17,451
General and administrative expenses 1,132 1,420 2,028 4,013
Merger, disposition and other charges - (453) - (453)
-------- -------- -------- --------
Total costs and expenses 17,188 19,986 34,749 44,652
-------- -------- -------- --------
Loss from operations (766) (2,314) (1,224) (9,651)
Gain on sale of NewsWatch KK 774 - 774 -
Interest income and other, net 139 275 372 504
-------- -------- -------- --------
Income (loss) from continuing operations
before provision for income taxes 147 (2,039) (78) (9,147)
taxes
Provision for income taxes 9 15 18 39
-------- -------- -------- --------
Net income (loss) from continuing
operations 138 (2,054) (96) (9,186)
Loss from discontinued operations, net - - - (1,859)
Net gain on disposal of
Individual.com, Inc. - 773 (970) 6,267
-------- -------- -------- --------
Income (loss) from discontinued
operations - 773 (970) 4,408
-------- -------- -------- --------
Net income (loss) $ 138 $ (1,281) $ (1,066) $ (4,778)
======== ======== ======== ========
Basic and diluted net
income (loss) per share
Continuing operations $ 0.01 $ (0.12) $ (0.01) $ (0.52)
Discontinued operations - 0.04 (0.05) 0.24
-------- -------- -------- --------
Total $ 0.01 $ (0.08) $ (0.06) $ (0.28)
======== ======== ======== ========
Weighted average common
shares outstanding - basic 18,620 17,696 18,614 17,690
======== ======== ======== ========
Weighted average common
shares outstanding - diluted 18,627 17,696 18,614 17,690
======== ======== ======== ========
# 2000 second quarter expenses include certain non-recurring charges totaling
$215,000. These include $668,000 in costs related to final retention payments
as part of the termination of the Rowecom, Inc. acquisition of NewsEdge offset
by the reversal of $453,000 acquisition related reserves Management deemed no
longer required. Year-to-date 2000 expenses include charges totaling
$3,649,000. These include $2,036,000 related to retention payments, transaction
costs and expenses incurred as part of the Rowecom, Inc. termination,
$2,066,000 in asset writie-offs and reserves associated with the Company's
transition to its new strategic direction and the ($453,000) reversals of
acquisition related reserves Management deemed no longer required.
# 2001 first quarter expenses include certain non-recurring reserve reductions
totaling ($519,000). These include ($456,000) in royalty reserves and ($63,000)
in strategy change reserves Management deemed no longer required.
# 2001 second quarter expenses include non-recurring vacation policy change
accrual reductions of ($239,000) and also includes fully loaded severance
expenses of $307,000
# # #