WebMediaBrands Inc. (WEBM) Q1 2013 Earnings Conference Call May 2, 2013 5:00 PM ET
Mitch Eisenberg - Corporate Counsel
Alan Meckler - Chairman & CEO
Don O’Neill - CFO
Good day and welcome to the WebMediaBrands Quarterly Update Conference Call. Today’s conference is being recorded. At this time I would like to turn the conference over to Mr. Alan Meckler, please go ahead, sir.
Thank you. And for those on the line, thank you for joining us today. We look forward to chatting with you. Before we get started, Mitch Eisenberg, our Corporate Counsel will read the Safe Harbor.
Thank you, Alan.
Before we begin the formal comments today, I would like to inform everyone that statements in today’s earnings release which are not historical facts are forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For more detailed discussion of such risks and uncertainties please refer to WebMediaBrands reports that are filed with the Securities and Exchange Commission, which can be obtained at the SECs website or on WebMediaBrands Investor Relations website.
I will now turn the call back to Alan.
Thanks Mitch. So format, I have some comments about the quarter and a little bit of look-forward and Don O’Neill, our CFO will give little more depths to the numbers. And then should there be any questions, we would be happy to entertain it.
So in terms of one looking at the headline or the top bullet point of our press release, it’s not necessarily a pretty picture. But actually there is some bright sunshine beyond the decline we have shown.
First of all, its very important to reiterate that nearly $650,000 of the difference between the first quarter of this year and last year is due to the fact that three trade shows and events that were held in the first quarter of 2012 have been moved to later in the year. So that accounts for a lion’s share of the difference. Nonetheless, that clearly wouldn’t that growth but obviously the numbers will look a lot better. One should also highlight that in terms of our basic cost and operating the business we are getting more efficient.
But, so what are the reasons for the $300 or so thousand dollar decline. We don’t know the exact reason other than to say that the job we are as taken a bit of a hit over the last 6 or 8 months as is advertising.
I think of that here looks fine, one doesn’t have to be a rocket scientist to see that there has been a very high unemployment rate in this country and it’s much higher than the official government rate. There are many reporting that its actually closer to 17% or 18%. So, it would be easy to tie together that any job board which should be impacted somewhat by what’s going on in the economy.
As to the advertising, since July of last year, our advertising has weakened significantly. We tied most of that to the fact that based on my belief I can’t concretely prove it that there has been somewhat of a fall off in investments by DCs that means start-ups and terms of Wall Street less of an interest in companies such as Facebook and Zinga and other for the social gaming space for a liver advertising was coming from.
Nonetheless, I do believe that the social gaming business and Facebook are here to stay and that all we have seen really is a swap and what’s very encouraging is, as we have entered second quarter of 2013, the number of requests for proposals and in fact the actual numbers for the month of April are up short links. So while I cannot give any guarantees to what our numbers will be in the second quarter or for the rest of the year, for the first time, we’ve had five or six really solid weeks of significant advertising and in fact some record orders. Again, I can’t promise that will carry through the second quarter and throughout rest of the year. But, we haven’t had five weeks like we just had in about 6 or 7 months or 8 months. So that is very encouraging for stockholders.
And the same thing for the job board, whereas the job board has some had its problems and of course, we still know we have the high unemployment rate over the last three or four weeks. The job boards had its best numbers. And in fact April is the first month where we have a higher level of job hostings in the previous month over the last 9 or 10. again, this is hopefully a trend for the rest of the year. Certainly for the quarter I can’t promise that, but if we look back over the last eight months we have enabled to make statement like I just made.
So, we are seeing some really positive movement and we can hope based on our understanding of the numbers over the last few years that this means that there may very well be a turnaround to the upside which would be of course welcomed by everybody.
Now, the other and the very interesting thing that is taking place is in – at the end of December of 2012 our companies did not have any product in a very exciting and fast growing 3 D printing industry. So anyone following us probably knows that 3 D printing is our newest trade show. And at the last quarterly call I mentioned the new show that was going to take place in April and was optimistic about it. And as optimistic as I was all the numbers were surpassed.
But we had almost 3000 people at the (inaudible) center in New York. We had close to 600 fully (inaudible) we had approximately 2400 other people that paid come for the exhibit hall. The press reports are astounding I have been in business 40 years and I would say that they were the best press reports I have ever had on any show including Internet World, Search Engine Strategies which are two of the greater hits we have over the last few years. That’s not necessarily mean that we will continue to have success like we just had but the show produced over 400,000 of gross revenue which at the end of December its quite amazing we didn’t have such product.
And because of the success of that show we have announced a summer show and a fall show in the United States in Chicago and San Jose respectively. We also have announced a show in Singapore in October, we will shortly announce a show for Brazil in San Paulo before the end of mid-year. And we should shortly be putting under the schedule a German show.
So we think based on the press reports and our success that we now have leading B2B 3D printing trade show in the world and if one spends any time reading solid publication such as The Economist which is predicting that 3D printing and 3D printing industry is the greatest revolution that we had since the birth of the Internet in the early 1990s, it looks like our company and stockholders may be in for very interesting upside based on this product.
You can look for us to shortly announce an investment in what we believe is the industry's leading blog. I'm not at liberty at this point to announce which one that is, but I think anyone who is following us and is interested in 3D printing will be quite fascinated by the move.
I can also say but not guarantee that we've had a substantial interest from the major organizations that manufacture 3D printers and that we are not at liberty to get into specifics. It does that and with no guarantee that in coming few days we'll be able to announce bookings of several hundred thousand dollars of exhibit space going forward.
So, we're very, very excited by not only the development of what’s happened here in a very short time of Inside 3D Printing. But also, what I mentioned earlier, the exciting news that the job board does have an uptick and same with advertising.
What I did indicate at the last conference call was that increasingly the company was moving more and more towards being major tradeshow company and that is what’s happening. We just had a very, very successful show on a social media topic called Social TV called Lost Remote, which held in New York city also last week and was reasonably to very profitable and we are now going to run another Lost Remote version this year in Los Angeles in December.
I just returned from an extremely successful financial and critically acclaimed show in Munich, Germany of our all Facebook Marketing German show in the German language. We have 400 paid many exhibitors and this show has become the largest social media show in Germany takes place twice annually in Munich and again in November, it will take place in Berlin. So, that’s a very positive.
We also have recently announced the websites are not off yet, but will be shortly what we believe is the first virtual currency show dealing with disclaims and other virtual currency in New York City for July and we will also be launching a newsletter in that field shortly.
And finally, in terms of some of the really exciting news in the trade show area additions to many of the other shows that we have. We believe we will be launching the first personnel (grown) robot show. I mean we know we are running the show, but we do believe that there is no other one in the B2B field and that will be taking place in San Jose in September 16th and noted columnists, writer, inventor, entrepreneur Chris Anderson is going to be the keynote speaker, which I think is worthy in itself.
So, moving on to some of the other areas that’s very exciting before I turn it over to Don, is our leading research product known as AppData, we will shortly be putting out a press release to announce that we have added really exciting a new area information to the leading product on apps called AppData mobile. It’s going to have a lot of new data sources it’s going to include for the first time window phone apps revenue estimates for IOS products or apps revenue estimates on the app level, lots of specialized information for the first time for the developer level of IOS apps. You are going to getting the exportable revenue estimates of all kinds of new graphing and global leader boards to show apps comparing cross countries and many other exciting new features.
We also within 5 or 6 weeks, we’ll be adding several more features to AppData to keep that in the lead as the leading app data product in the marketplace. So with all those things, while we did have the tough 6 or 8 months we believe although one can’t guarantee all of these things have so many other events can happen in the world and the economy that we may very well have turned the corner and we are looking very excitedly to the rest of this quarter that we are in and the rest of the year in the future.
So with that I’m going to turn it over to Don.
Thank you, Alan.
For the first quarter of 2013, we reported revenues of $2.5 million, which represents a 31.6% decrease compared to our results for Q1 2012. This decrease is primarily due to the (reduce) some of the trade shows that were held during the quarter along with a decline in our advertising revenues.
As Alan had mentioned, we did not run any trade shows during the first quarter of 2013 by comparison we were three during the same period in 2012 including our inside social app trade show which will be held during the second quarter of 2013.
The decrease in advertising revenues was due in part to the consolidation of certain social media services related companies that had previously advertised with us. It should also be noted that our results maybe impacted by the number and in place with education courses we hold and the number of insider trade shows that we hold at each quarter.
In addition, advertisers generate generally place fewer advertisings during the first and third calendar quarters of each year. On the sequential quarterly basis, our revenue decreased by $800,000 or 24% which was also due primarily to trade shows and advertising.
Our net loss excluding interest (inaudible) purchase and amortization of stock-based compensation expense or EBITDA was $596,000 during the first quarter of 2013. Our non-cash stock-based compensation expense was $81,000 during the first quarter of 2013 compared to a $122,000 for the same period in 2012.
As we look at our balance sheet, we have $1.6 million in cash at March 31, 2013 compared to $2.2 million at the end of 2012.
With that I will turn the call back to Alan.
The other thing I would add, people should note the build up we are starting to get our deferred revenues which is probably mostly due to the trade show successes that we are having and I think that’s a important area for any investor to be looking at.
With that I’m going to ask moderator at this point to welcome any potential questions out there.
Thank you. (Operator Instructions). And it appears there are no questions at this time.
Thank you very much listening in and we look forward to talking to you after the next quarter.
And this does conclude today’s conference. Thank you for your participation.
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