Classmates.com 2007 Annual Report Download - page 47

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In December 2007, we determined that proceeding with the IPO under then-current market conditions was not in the best interests of our
stockholders and we withdrew CMC's Form S-1 registration statement previously filed with the SEC. Approximately $0.5 million of transaction
costs were determined not to have continuing value after the withdrawal of the IPO and were expensed in the quarter ended December 31, 2007.
It remains our strategy to complete an IPO of CMC. As such, certain additional IPO transaction-related costs totaling $3.6 million associated
with the IPO have been deferred and are included in other assets on our consolidated balance sheet at December 31, 2007. If we do not proceed
with this strategy, these deferred costs will be expensed and included in the Classmates Media segment operating results as well as in our
consolidated statements of operations in a future period.
Results of Operations
The following tables set forth for the periods presented, selected historical statements of operations data. The information contained in the
tables below should be read in conjunction with Liquidity and Capital Resources, Contractual Obligations, and Critical Accounting Policies,
Estimates and Assumptions included in this Item 7 as well as the Consolidated Financial Statements and Notes thereto included elsewhere in this
Annual Report on Form 10-K.
Consolidated information was as follows (in thousands):
45
Year Ended December 31,
2007
2006
2005
Billable services
$
379,526
$
423,565
$
465,980
Advertising
133,977
99,089
59,081
Total revenues
513,503
522,654
525,061
Operating expenses:
Cost of revenues
117,203
119,990
110,672
Sales and marketing
163,424
176,980
209,292
Product development
51,044
52,602
40,009
General and administrative
73,312
67,511
56,729
Amortization of intangible assets
12,800
17,640
21,799
Restructuring charges
3,419
627
—
Impairment of goodwill, intangible assets and long
-
lived assets
—
13,285
—
Total operating expenses
421,202
448,635
438,501
Operating income
92,301
74,019
86,560
Interest and other income, net
7,555
6,076
6,885
Interest expense
(1,164
)
(2,571
)
(6,073
)
Income before income taxes
98,692
77,524
87,372
Provision for income taxes
40,915
36,293
40,245
Income before cumulative effect of accounting change
57,777
41,231
47,127
Cumulative effect of accounting change, net of tax
—
1,041
—
Net income
$
57,777
$
42,272
$
47,127