UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 28, 2007
CMGI, INC.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 000-23262 | 04-2921333 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
1100 Winter Street
Waltham, Massachusetts 02451
(Address of Principal Executive Offices) (Zip Code)
(781) 663-5001
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 Regulation FD Disclosure
CMGI, Inc. (“CMGI”) hereby furnishes to the Securities and Exchange Commission the presentation to be delivered by Joseph C. Lawler, Chairman, President and Chief Executive Officer of CMGI, to the Baird Business Solutions Conference on February 28, 2007, which is attached to this report as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits |
The exhibit listed in the Exhibit Index immediately preceding such exhibit is furnished with this report.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CMGI, Inc. | ||||||
| Date: February 28, 2007 | By: | /s/ Peter L. Gray | ||||
| Peter L. Gray Executive Vice President and General Counsel | ||||||
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Presentation to Baird Business Solutions Conference – February 28, 2007 | |
 Company Confidential 1 Baird Business Solutions Conference February 28, 2007 Exhibit 99.1 |
 Company Confidential 2 SEC SAFE HARBOR STATEMENT This presentation contains forward-looking statements which address a variety of
subjects including, for example, the expected growth of markets in which CMGI
and ModusLink operate, expected industry expansion, expected annual revenue from new engagements, expected reduction in SG&A, expected improvement in gross margins and operating income, the further execution
of ModusLink’s strategic business plan, the development and implementation
of business strategies in our target markets and through our venture capital business, the assessment of the companies within the venture capital portfolio and the expected ability of CMGI to reduce
its cash usage and operating costs, preserve its capital resources, and grow its
businesses. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: CMGI's success, including its
ability to improve its cash position, expand its operations and revenues, reduce
its costs, improve its gross margins and sustain profitability, depends on its ability to execute on its business strategy and the continued and increased demand for and market acceptance of its products and services;
CMGI's management may face strain on managerial and operational resources as
they try to oversee the expanded operations; CMGI may not be able to expand its operations in accordance with its business strategy; CMGI's cash balances may not be sufficient to allow CMGI to meet all of its business and investment goals; CMGI may experience difficulties integrating technologies, operations and personnel in accordance with its business strategy; CMGI sells to its clients on a
purchase order basis and therefore revenue and financial results are subject to demand variability; CMGI derives a significant portion of its revenue from a small number of customers and the loss of any of those customers could
significantly damage CMGI's financial condition and results of operations; the
mergers and acquisitions and IPO markets are inherently unpredictable and liquidity events for companies in the venture capital portfolio may not occur; and increased competition and technological changes in the markets in which CMGI competes. This presentation contains certain non-GAAP financial measures. A reconciliation of the non-GAAP
financial measures to the most directly comparable GAAP measures can be found in
our periodic reports filed with the SEC. This presentation includes estimates which may not be indicative of future results. For a detailed discussion of cautionary statements that may affect CMGI's
future results of operations and financial results, please refer to CMGI's
filings with the Securities and Exchange Commission, including CMGI's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Forward-looking statements represent management's current expectations
and are inherently uncertain. We do not undertake any obligation to update
forward-looking statements made by us. |
 Company Confidential 3 1995 2000 Now Network of Companies & Venture Capital Multiple Operating Businesses (13+) Search/ Portals Infrastructure Interactive Marketing Professional Services eBusiness & Fulfillment Venture Capital Supply Chain Management Services Focused Operating Company Transforming CMGI Venture Capital 2001 |
 Company Confidential 4 CMGI – Company Overview Two core businesses that support technology-driven companies ModusLink – Leading provider of outsourced global supply chain services supporting the Fortune 500 @Ventures – Leveraging 11 years of history investing in early stage companies in the emerging technology markets with current focus on clean energy Executing a successful turnaround with significant progress in fiscal 2006 $1.1 billion in revenue, 9% growth Achieved second consecutive profitable year $16.6 million in cash flow from operations Strong balance sheet with more than $225 million in cash and marketable securities at July 31 |
 Company Confidential 5 Focus On Two Businesses That Support Technology Driven Companies 1. ModusLink 2. @Ventures |
 Company Confidential 6 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 2002 2003 2004 2005 2206 2007 2008 Business Process Outsourcing Business Process Outsourcing Spending 2002 – 2008 ($Billions) Source: IDC BPO Functions • Human Resources • Procurement • Finance and accounting • Customer service • Logistics • Sales and marketing • Product engineering • Training $700 $600 $500 $400 $300 $200 $100 2006 2002 2003 2004 2005 2007 2008 |
 Company Confidential 7 Worldwide Supply Chain Services Market - 91.7% 8.3% In-house and other supply chain service competitors Supply Chain Service Providers 0.3 0.3 0.4 0.4 0.8 1.0 1.5 3.6 Teckwah Mentor ware Global- Sercom Zomax Banta* Modus Link Arvato 76 80 100 106 197 430 1,100 Revenue $ Millions 237 Source: IDC; company estimates $25 Billion Represents only Hardware, Software & Storage Verticals *acquired by R.R. Donnelley |
           Company
Confidential 8 Plan Source Deliver Make Reverse Logistics Supply Chain Services as Part of BPO Market We simplify the complexities of global supply chain management for our clients |
 Company Confidential 9 ModusLink Services that Connect the Supply Chain mgmt - - - mgmt - - PLAN SOURCE Supply Base Management, Inbound Logistics MAKE Content/Materials Management, Optimized Product Configuration, Wireless Activation DELIVER Outbound Logistics, Direct to Retail/Consumer, eBusiness REVERSE Returns Management, Warranty and Recall SUPPORT Call Center, Financial Management Services Optimized Consulting, Global Inventory Planning |
 Company Confidential 10 Design Post-Sales Support Logistics Reverse Distributors ModusLink’s Competitive Positioning Third party logistics companies R&D Procurement Mfg. & Assembly ODMs/Contract manufacturers Configuration Distribution Forward Logistics |
 Company Confidential 11 Waltham, MA HQ Raleigh, NC Hillsboro,OR Nashville, TN Lindon, UT Indianapolis, IN Austin, TX Houston, TX Newark, CA Ontario, CA Miami, FL Monterrey, Mexico Guadalajara, Mexico Dublin, Ireland Kildare, Ireland Apeldoorn, The Netherlands Putten, The Netherlands Orléans, France Angers, France Seoul, Korea Tokyo, Japan Shimane, Japan Fukushima, Japan Kanagawa, Japan Beijing, China Shanghai, China Pudong, China Kunshan, China Songjiang, China Taipei, Taiwan Shenzhen, China Futian, China Hong Kong, China Penang, Malaysia Singapore Americas Asia Paris, France Brno, Czech Republic Budapest, Hungary Global Supply Chain Partner Europe Global Supply Chain Footprint Waltham, MA HQ Raleigh, NC Hillsboro,OR Nashville, TN Lindon, UT Indianapolis, IN Austin, TX Houston, TX Newark, CA Ontario, CA Miami, FL Monterrey, Mexico Guadalajara, Mexico Dublin, Ireland Kildare, Ireland Apeldoorn, The Netherlands Putten, The Netherlands Orléans, France Angers, France Seoul, Korea Tokyo, Japan Shimane, Japan Fukushima, Japan Kanagawa, Japan Beijing, China Shanghai, China Pudong, China Kunshan, China Songjiang, China Taipei, Taiwan Shenzhen, China Futian, China Hong Kong, China Penang, Malaysia Singapore Paris, France Brno, Czech Republic Budapest, Hungary Waltham, MA HQ Raleigh, NC Hillsboro,OR Nashville, TN Lindon, UT Indianapolis, IN Austin, TX Houston, TX Newark, CA Ontario, CA Miami, FL Monterrey, Mexico Guadalajara, Mexico Dublin, Ireland Kildare, Ireland Apeldoorn, The Netherlands Putten, The Netherlands Orléans, France Angers, France Seoul, Korea Tokyo, Japan Shimane, Japan Fukushima, Japan Kanagawa, Japan Beijing, China Shanghai, China Pudong, China Kunshan, China Songjiang, China Taipei, Taiwan Shenzhen, China Futian, China Hong Kong, China Penang, Malaysia Singapore Paris, France Brno, Czech Republic Budapest, Hungary Waltham, MA HQ Raleigh, NC Hillsboro,OR Nashville, TN Lindon, UT Indianapolis, IN Austin, TX Houston, TX Newark, CA Ontario, CA Miami, FL Monterrey, Mexico Guadalajara, Mexico Dublin, Ireland Kildare, Ireland Apeldoorn, The Netherlands Putten, The Netherlands Orléans, France Angers, France Seoul, Korea Tokyo, Japan Shimane, Japan Fukushima, Japan Kanagawa, Japan Beijing, China Shanghai, China Pudong, China Kunshan, China Songjiang, China Taipei, Taiwan Shenzhen, China Futian, China Hong Kong, China Penang, Malaysia Singapore Paris, France Brno, Czech Republic Budapest, Hungary |
    Company
Confidential 12 Market Solutions Approach Established Markets New Markets COMMUNICATIONS STORAGE CONSUMER ELECTRONICS Accessories & Options Consumer Premises Equipment Device Activation Optimized Configuration Digital Content Load Optimized Configuration Factory Supply Intelligent VMI Digital Content Load Reverse Logistics Service Parts Reverse Logistics Optimized Configuration Service Parts Factory Supply Intelligent VMI Digital Content Load Reverse Logistics COMPUTING Software Manufacturing & Fulfillment License Subscription On Demand Direct Fulfillment Reverse Logistics SOFTWARE ModusLink Custom Solution Builder Intelligent VMI Service Parts Microsoft Authorized Replicator Accessories & Options Factory Supply Reverse Logistics |
 Company Confidential 13 Executing Three Core Strategies e-Commerce Logistics Management After Sales Services Established Markets New Markets Focus On Target Markets Expand Client Relationships/ Innovative Services Shared Services Model Worldwide Best Practices Integrated Business Solution Investing to Drive Operational Efficiencies Computing Software Storage Media Communications Consumer Electronics |
 Company Confidential 14 Focus On Two Businesses That Support Technology Driven Companies 1. ModusLink 2. @Ventures |
 Company Confidential 15 @Ventures Established in 1995 70 internet, software and IT company investments Recent events: - WebCT merged with Blackboard, Inc. - Realm and Alibris acquired by private equity firms - Avamar Technologies acquired by EMC Corp. Current Portfolio |
 Company Confidential 16 @Ventures V Fund formed in 2004 Up to $50 million capital Clean technology focus: • Alternative energy • Energy efficiency • Water purification & management Recent investments: • H2Gen Innovations • Advent Solar • H2Oil Recovery Services Leverage deep experience with emerging technology companies to foster development and encourage liquidity events |
 Company Confidential 17 Financial Review |
 Company Confidential 18 CMGI Financial Overview 2002 - 2006 ($ in millions) Revenue Operating Profit Increased Revenue more than 6 fold through acquisitions and organic growth Created necessary scale to become profitable Stopped cash drain on Company $1,053.5 $381.3 $419.1 $147.0 $- $200.0 $400.0 $600.0 $800.0 $1,000.0 $1,200.0 2002 2003 2004 2005 $1,148.9 2006 $7.8 $(25.2) $(93.6) $(78.5) $(100.0) $(80.0) $(60.0) $(40.0) $(20.0) $- $20.0 2002 2003 2004 2005 2006 $0.6 |
 Company Confidential 19 Q2 FY07 Financial Performance ($ in Millions) *Non-GAAP operating income is defined as operating income/(loss) excluding the
effects of charges related to depreciation, amortization of intangible
assets and stock-based compensation, impairment of long-lived assets and restructuring. A reconciliation of non-GAAP operating income to the most directly comparable GAAP
measures can be found on Slide 24 of this presentation, in the Form 8-K
filed on February 26, 2007 and in the investor section of our website at www.cmgi.com. **As of end of period. Q2 FY07 Q2 FY06 Revenue 324.8 $ 318.8 $ Operating Income/(loss) 11.3 $ (1.7) $ Non-GAAP Operating Income* 19.5 $ 8.8 $
Net Income/(loss) 35.9 $ (6.3) $ Cash and Marketable Securities** 275.0 $ 163.0 $ |
 Company Confidential 20 Target Operating Model (stated on 2/26/07) * Includes amortization of intangible assets and restructuring. As percent of Revenue: FY 2006 Target Gross Margin 10.3% 12-14% SG&A* 10.2% 7% Operating Margin 0.05% 5-7% |
 |
 Company Confidential 22 FY06 Gross Margin% Target FY06 Gross Margin by Service Source: company estimates $30 $25 $20 $15 $10 $5 0% 10% 15% 20% 30% |
 Company Confidential 23 Investor Highlights ModusLink is the largest provider of outsourced global supply chain services Pursuing significant market opportunity Strong, growing customer base including many in the Fortune 500 Turnaround plans are underway and showing significant progress Leveraging experience in venture capital and a strong track record Solid financial foundation Seasoned management team |
 Company Confidential 24 Appendix - Reconciliation of Non-GAAP Measure Table Reconciling Non-GAAP Operating Income to GAAP Operating Income (Loss) and
Net Income (Loss) January 31, 2007 January 31, 2006 19,531 $
8,807 $
(3,442) (2,193) (1,206) (1,206) (1,232) (1,779) (2,382) (5,326) 11,269 $
(1,697) $
30,443 (452) 5,727 758 Income (loss) from discontinued operations (112) (3,408) Non-GAAP Operating income Adjustments: Depreciation Amortization of intangible assets Stock-based compensation Restructuring, net GAAP Operating income (loss) Other income (loss), net Income tax expense (benefit) Net income (loss) 35,873 $
(6,315) $
Three Months Ended |