WBSN » Topics » Liquidity and Capital Resources

This excerpt taken from the WBSN 10-Q filed Nov 9, 2006.

Liquidity and Capital Resources

As of September 30, 2006, we had cash and cash equivalents of $46.0 million, investments in marketable securities of $254.3 million and retained earnings of $81.6 million. As of December 31, 2005, we had cash and cash equivalents of $61.6 million, investments in marketable securities of $258.8 million and retained earnings of $56.4 million.

Net cash provided by operating activities was $61.6 million in the first nine months of 2006, compared with $73.5 million in the first nine months of 2005. The $11.9 million decrease in cash provided by operating activities in the first nine months of 2006 was primarily due to decreased growth in deferred revenue (subscription amounts in excess of recognizable revenue are recorded as deferred revenue) compared to the first nine months of 2005. Our operating cash flow is significantly influenced by subscription renewals and accounts receivable collections, and deferred revenue.  A decrease in subscription renewals or accounts receivable collections, or a lower deferred revenue balance, would negatively impact our operating cash flow.

Net cash provided by investing activities was $0.6 million in the first nine months of 2006, compared with net cash used in investing activities of $53.2 million in the first nine months of 2005. The $53.8 million increase of net cash provided by investing activities for the first nine months of 2006 was primarily due to fewer purchases to offset the maturities and sales of marketable securities.

Net cash used by financing activities was $77.7 million in the first nine months of 2006, compared with net cash used by financing activities of $27.5 million in the first nine months of 2005. The $50.2 million increase in net cash used by financing activities in the first nine months of 2006 was primarily due to share repurchases of 4,300,000 shares of our common stock for $91.4 million in the first nine months of 2006, compared with 1,658,060 shares for $41.9 million in the first nine months of 2005, and fewer proceeds from exercises of employee stock options.

We have an operating lease commitment of approximately $0.5 million during the remainder of 2006, $1.9 million in 2007, and $0.3 million in 2008. A majority of our operating lease commitments are related to our corporate headquarters lease, which extends through 2008. Our corporate headquarters lease includes escalating rent payments from 2006 to 2008, although the lease permits us to cancel the 2008 year commitment of the lease prior to December 31, 2006, at our option in exchange for a payment of approximately $0.3 million. The rent expense related to our corporate headquarters lease is recorded monthly on a straight-line basis in accordance with generally accepted accounting principles.

Future minimum annual payments under non-cancelable operating leases at September 30, 2006 are as follows (in thousands):

 

Operating
Leases

 

2006

 

$

479

 

2007

 

1,937

 

2008

 

325

 

 

 

$

2,741

 

 

24




 

As of September 30, 2006 and 2005, we did not have any relationships with unconsolidated entities or financial partners, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

 

On April 3, 2003, we announced that our Board of Directors authorized a stock repurchase program of up to 4 million shares of our common stock.  On August 15, 2005, we announced that our Board of Directors increased the size of the stock repurchase program by an additional 4 million shares, for a total program size of up to 8 million shares. On July 25, 2006, we announced that our Board of Directors increased the size of the stock repurchase program by an additional 4 million shares, for a total program size of up to 12 million shares. Repurchases may be made from time to time on the open market at prevailing market prices or in privately negotiated transactions. Depending on market conditions and other factors, purchases under this program may be commenced or suspended at any time, or from time to time, without prior notice. As of September 30, 2006, we had repurchased 8,170,060 shares of our common stock under this program, for an aggregate of $170.4 million at an average price of $20.86 per share.

As of December 31, 2004, we retired all 2,012,000 shares of our common stock that had been repurchased prior to that date.  In accordance with APB 6, Status of Accounting Research Bulletins, the treasury stock retirement was effected by reducing the following on our Consolidated Balance Sheet:  treasury stock by $30.7 million, common stock by $0.1 million, additional paid-in capital by $6.4 million and retained earnings by $24.2 million. There was no effect to our overall equity position as a result of the retirement.  We do not expect to retire shares of our common stock that we repurchased during 2005 or 2006 in the foreseeable future.

We believe that our cash and cash equivalents balances, investments in marketable securities and our ongoing cash flow from operations will be sufficient to satisfy our cash requirements, including our capital expenditures and stock repurchases, if any, for at least the next 12 months.  Our cash requirements may increase for reasons we do not currently foresee or we may make acquisitions as part of our growth strategy that increase our cash requirements.  We may elect to raise funds for these purposes through capital markets transactions or debt or private equity transactions as appropriate.  We intend to continue to invest our cash in excess of current operating requirements in interest-bearing, investment-grade securities.

This excerpt taken from the WBSN 10-Q filed Aug 8, 2006.

Liquidity and Capital Resources

As of June 30, 2006, we had cash and cash equivalents of $20.6 million, investments in marketable securities of $317.8 million and retained earnings of $73.0 million. As of December 31, 2005, we had cash and cash equivalents of $61.6 million, investments in marketable securities of $258.8 million and retained earnings of $56.4 million.

Net cash provided by operating activities was $42.1 million in the first six months of 2006, compared with $49.0 million in the first six months of 2005. The $6.9 million decrease in cash provided by operating activities in the first six months of 2006 was primarily due to decreased growth in deferred revenue (subscription amounts in excess of recognizable revenue are recorded as deferred revenue) compared to the first six months of 2005. Our operating cash flow is significantly influenced by subscription renewals and accounts receivable collections, and deferred revenue.  A decrease in  subscription renewals or accounts receivable collections or a lower deferred revenue balance, would negatively impact our operating cash flow.

Net cash used in investing activities was $61.1 million in the first six months of 2006, compared with net cash used in investing activities of $49.7 million in the first six months of 2005. The $11.4 million increase of cash used in investing activities for the first six months of 2006 was primarily due to purchases of marketable securities with fewer maturities and sales of marketable securities to offset the purchases.

Net cash used by financing activities was $22.1 million in the first six months of 2006, compared with net cash used by financing activities of $5.0 million in the first six months of 2005. The $17.1 million increase in net cash used by financing activities in the first six months of 2006 was primarily due to share repurchases of 1,300,000 shares of our common stock for $33.1 million in the first six months of 2006, compared with 650,000 shares for $17.3 million in the first six months of 2005, and fewer proceeds from exercises of employee stock options.

We have an operating lease commitment of approximately $1.0 million during the remainder of 2006, $1.9 million in 2007, and $0.3 million in 2008. A majority of our operating lease commitments are related to our corporate headquarters lease, which extends through 2008. Our corporate headquarters lease includes escalating rent payments from 2006 to 2008, although the lease permits us to cancel the 2008 year commitment of the lease prior to December 31, 2006, at our option in exchange for a payment of approximately $0.3 million. The rent expense related to our corporate headquarters lease is recorded monthly on a straight-line basis in accordance with generally accepted accounting principles.

Future minimum annual payments under non-cancelable operating leases at June 30, 2006 are as follows (in thousands):

 

 

Operating
Leases

 

 

 

 

 

2006

 

$

951

 

2007

 

1,937

 

2008

 

325

 

 

 

$

3,213

 

 

As of June 30, 2006 and 2005, we did not have any relationships with unconsolidated entities or financial partners, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other

24




 

contractually narrow or limited purposes. As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

On April 3, 2003, we announced that our Board of Directors authorized a stock repurchase program of up to 4 million shares of our common stock.  On August 15, 2005, we announced that our Board of Directors increased the size of the stock repurchase program by an additional 4 million shares, for a total program size of up to 8 million shares. On July 25, 2006, we announced that our Board of Directors increased the size of the stock repurchase program by an additional 4 million shares, for a total program size of up to 12 million shares. The repurchases will be made from time to time on the open market at prevailing market prices or in privately negotiated transactions. Depending on market conditions and other factors, purchases under this program may be commenced or suspended at any time, or from time to time, without prior notice. As of June 30, 2006, we had repurchased 5,170,060 shares of our common stock under this program, for an aggregate of $112.1 million at an average price of $21.68 per share. We plan on spending at least $50 million on stock repurchases during the third quarter of 2006.

As of December 31, 2004, we retired all 2,012,000 shares of our common stock that had been repurchased prior to that date.  In accordance with APB 6, Status of Accounting Research Bulletins, the treasury stock retirement was effected by reducing the following on our Consolidated Balance Sheet:  treasury stock by $30.7 million, common stock by $0.1 million, additional paid-in capital by $6.4 million and retained earnings by $24.2 million. There was no effect to our overall equity position as a result of the retirement.  We do not expect to retire shares of our common stock that we repurchased during 2005 or 2006 in the foreseeable future.

We believe that our cash and cash equivalents balances and investments in marketable securities will be sufficient to satisfy our cash operating requirements for the foreseeable future. We intend to continue to invest our cash in excess of current operating requirements in interest-bearing, investment-grade securities.

 

25




 

EXCERPTS ON THIS PAGE:

10-Q
Nov 9, 2006
10-Q
Aug 8, 2006
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki