updated 5/6/2011 4:17:03 PM ET 2011-05-06T20:17:03

FAIRFAX, Va., May 6, 2011 (GLOBE NEWSWIRE) -- In a press release issued by Geeknet, Inc. on May 4, 2011 with the same headline, please note that the table titled CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS had a few typographical errors. The full and correct version of the press release follows:

Geeknet, Inc. (Nasdaq:GKNT), the online network for the global geek community, today announced financial results for the quarter ended March 31, 2011.

Total revenue for the first quarter of 2011 was $19.9 million compared to $14.7 million of revenue for the first quarter of 2010. Net loss for the first quarter of 2011 was $2.4 million or $0.38 per diluted share compared to net loss of $2.8 million or $0.47 per share, for the same period a year ago. Adjusted EBITDA for the first quarter of 2011 was a loss of $1.1 million, compared to an adjusted EBITDA loss of $1.6 million for the same period a year ago. A reconciliation of net income as reported to adjusted EBITDA is included in this release.

First Quarter Highlights:

  • ThinkGeek e-commerce revenue increased 46 percent to $15.2 million for the first quarter of 2011, compared to $10.4 million for the first quarter of 2010. Orders shipped increased by 54 percent in the first quarter of 2011 as compared with the same period last year.
  • Media revenue increased 10 percent to $4.7 million for the first quarter of 2011, compared to $4.3 million for the first quarter of 2010.    
  • Total cash and investments at the end of first quarter 2011 was $25.6 million.

"2011 started well for the company with solid growth in both ThinkGeek and our media business", said Ken Langone, Executive Chairman, Geeknet. "Following last year's strong revenue growth, we are focused on maintaining momentum in ThinkGeek and  continuing to grow our media business by concentrating on business to business technology advertisers to fully maximize the revenue opportunity we see in that market. With our headquarters move complete and management team built out, we remain focused on delivering profitable revenue growth in 2011."

Supplemental schedules of the Company's quarterly statements of operations and operational statistics are available on the Company's web site at geek.net/investors.

A conference call and audio webcast will be held at 2:00 p.m. ET on May 4, 2011 and may be accessed by calling (877) 348-9353 or (253) 237-1159 outside the U.S., or by visiting geek.net/investors. An audio replay will be available between 9:30 p.m. ET on May 4, 2011 and 11:59 p.m. ET on May 18, 2011 by calling (800) 642-1687 or (706) 645-9291, with Conference ID 55987336.

Use of Non-GAAP Financial Measures 

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, we also report adjusted EBITDA.  Adjusted EBITDA should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.  We believe that adjusted EBITDA provides useful information to both management and investors and is an additional measurement which may be used to evaluate our operating performance.  Our management and Board of Directors use adjusted EBITDA as part of their reporting and planning process and it is the primary measure we use to evaluate our operating performance.  In addition, we have historically reported adjusted EBITDA to the investment community.  We also believe that the financial analysts who regularly follow and report on us and the business sector in which we compete use adjusted EBITDA to prepare their financial performance estimates to measure our performance against other sector participants and to project our future financial results.

We define adjusted EBITDA as net loss which is adjusted for interest and other income (expense) net and income taxes as well as stock-based compensation, gain on sale of assets, restructuring charges and depreciation and amortization.  The method we use to produce adjusted EBITDA is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a substitute for results prepared in accordance with accounting principles generally accepted in the United States. Adjusted EBITDA, as we compute it, excludes certain expenses that we believe are not indicative of our core operating results, as well as income taxes, stock-based compensation and depreciation and amortization.  We consider our core operating results to include revenue recorded in a particular period and the related expenses that are intended to directly drive operating income during that period.

The EBITDA calculation excludes interest, income taxes and depreciation and amortization by its nature.  In addition, when we compute adjusted EBITDA we exclude stock-based compensation, gain on sale of assets, restructuring charges and other amounts included in the Interest income and other income (expense) net caption, as we believe that these amounts represent income and expenses that are not directly related to our core operations.  Although some of the items may recur on a regular basis, management does not consider activities associated with these items as core to its operations.  With respect to stock-based compensation, we recognize expenses associated with stock-based compensation that require management to make assumptions about our common stock, such as expected future stock price volatility, the anticipated duration of outstanding stock options and awards and the rate at which we recognize the corresponding stock-based compensation expense over the course of future fiscal periods.  While other forms of expenses (such as cash compensation, inventory costs and real estate costs) are reasonably correlated to our underlying business and such costs are incurred principally or wholly in the particular fiscal period being reported, stock-based compensation expense is not reasonably correlated to the particular fiscal period in question, but rather is based on expected future events that have no relationship (and in certain instances, an inverse relationship) with how well we currently operate our business. Gain on sale of assets is excluded from adjusted EBITDA because such activities are not representative of our core operations. Restructuring costs are excluded from adjusted EBITDA because they represent non-cash charges which are not representative of our core operations.

About Geeknet, Inc.

Geeknet is the online network for the global geek community. Our sites include SourceForge, Slashdot, ThinkGeek, and freshmeat. We serve an audience of over 54 million users* each month and provide the tech-obsessed with content, culture, connections, commerce, and all the things that geeks crave. Want to learn more? Check out geek.net.

The Geeknet, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7330

(*March 2011 Unique Visitors 54.3M. Source: Google Analytics and Omniture)

Geeknet is a trademark of Geeknet, Inc. SourceForge, Slashdot, ThinkGeek, and freshmeat are trademarks of Geeknet, Inc. in the United States and other countries. All other trademarks or product names are property of their respective owners.

NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on our current expectations, and involve risks and uncertainties. Forward-looking statements contained herein include statements regarding potential profitability and the growth prospects for our online media and e-commerce businesses.  Actual results may differ materially from those expressed or implied in such forward-looking statements due to various factors, including: success in designing and offering innovative online advertising programs; decreases or delays in online advertising spending, especially in light of current macroeconomic challenges and uncertainty; our effectiveness at planning and managing our e-commerce inventory; our ability to achieve and sustain higher levels of revenue; our ability to protect and defend our intellectual property rights; rapid technological and market change; unforeseen expenses that we may incur in future quarters; and competition with, and pricing pressures from larger and/or more established competitors.  Investors should consult our filings with the Securities and Exchange Commission, sec.gov, including the risk factors section of our Annual Report on Form 10-K for the year ended December 31, 2010, for further information regarding these and other risks of our business. All forward-looking statements included in this press release are based upon information available to us as of the date hereof, and we do not assume any obligations to update such statements or the reasons why actual results could differ materially from those projected in such statements.

Geeknet, Inc.
(In thousands, except per share data)
  Three Months Ended March 31,
  2011 2010
 E-commerce revenue   $ 15,205  $ 10,384
 Media revenue   4,711  4,295
 Net revenue   19,916  14,679
 E-commerce cost of revenue   13,634  8,818
 Media cost of revenue   1,346  1,781
Cost of revenue  14,980  10,599
Gross margin  4,936  4,080
Operating expenses:    
Sales and marketing  3,368  3,162
Research and development  977  1,530
General and administrative  2,972  2,124
Amortization of intangible assets  20  91
Loss on sale of assets  --   18
Total operating expenses  7,337  6,925
Loss from operations  (2,401)  (2,845)
Interest and other income (expense), net  (8)  23
Loss before income taxes  (2,409)  (2,822)
Benefit for income taxes  (23)  (1)
Net loss  $ (2,386)  $ (2,821)
Net loss per share:    
Basic and diluted  $ (0.38)  $ (0.47)
Shares used in computing earnings per share:    
Basic and diluted  6,276  6,013
Reconciliation of net loss as reported to adjusted EBITDA loss:    
Net loss - as reported  $ (2,386)  $ (2,821)
Reconciling items:    
Interest and other income (expense), net  8  (23)
Benefit for income taxes  (23)  (1)
Stock-based compensation expense included in COGS  44  81
Stock-based compensation expense included in Op Ex.  685  598
Loss on sale of assets  --   18
Depreciation and amortization  541  528
Adjusted EBITDA loss  $ (1,131)  $ (1,620)
Geeknet, Inc.
(In thousands)
  March 31, 2011 December 31, 2010
Current assets:    
 Cash and cash equivalents  $ 25,610  $ 35,333
 Short-term investments  8  8
 Accounts receivable, net  5,401  5,078
 Inventories  11,078  13,322
 Prepaid expenses and other current assets  3,027  2,919
 Total current assets  45,124  56,660
Property and equipment, net  4,822  5,114
Other long-term assets  4,939  4,983
Total assets  $ 54,885  $ 66,757
Current liabilities:    
 Accounts payable  $ 4,128  $ 13,381
 Deferred revenue  1,788  1,836
 Accrued liabilities and other  2,234  3,591
 Accrued restructuring liabilities  --   -- 
 Total current liabilities  8,150  18,808
Other long-term liabilities  109  77
Total liabilities  8,259  18,885
Stockholders' equity:    
 Common stock  7  6
 Treasury stock  (732)  (622)
 Additional paid-in capital  804,410  803,160
 Accumulated other comprehensive income  9  10
 Accumulated deficit  (757,068)  (754,682)
 Total stockholders' equity  46,626  47,872
Total liabilities and stockholders' equity  $ 54,885  $ 66,757
(In thousands)
  Three Months Ended March 31,
  2011 2010
Cash flows from operating activities:    
Net loss  $ (2,386)  $ (2,821)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization   541  528
Stock-based compensation expense  729  679
Provision for bad debts   3  --
Provision for excess and obsolete inventory   26  17
Loss on sale of assets   --  18
Changes in assets and liabilities:    
Accounts receivable   (326)  37
Inventories   2,218  (172)
Prepaid expenses and other assets   (84)  502
Accounts payable   (9,253)  (2,097)
Accrued restructuring liabilities   --  (720)
Deferred revenue  (48)  33
Accrued liabilities and other   (1,357)  (1,012)
Other long-term liabilities   32  (4)
Net cash used in operating activities   (9,905)  (5,012)
Cash flows from investing activities:    
Purchase of property and equipment   (229)  (1,048)
Purchase of intangible assets  --  (13)
Maturities or sale of marketable securities   --  100
Net cash used in investing activities   (229)  (961)
Cash flows from financing activities:    
Proceeds from issuance of common stock  522  28
Repurchase of common stock  (110)  --
Net cash provided by financing activities   412  28
Effect of exchange rate changes on cash and cash equivalents  (1)  (2)
Net decrease in cash and cash equivalents   (9,723)  (5,947)
Cash and cash equivalents, beginning of period   35,333  28,943
Cash and cash equivalents, end of period   $ 25,610  $ 22,996
CONTACT: Investor Relations Contact:
         The Blueshirt Group
         Todd Friedman, todd@blueshirtgroup.com
         Stacie Bosinoff, stacie@blueshirtgroup.com
         Phone: (415) 217-7722

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