Classmates.com 2009 Annual Report Download - page 61

Table of Contents
Year Ended December 31, 2009 compared to Year Ended December 31, 2008
The following table presents our consolidated results of operations as a percentage of consolidated revenues for the years ended
December 31, 2009 and 2008.
Consolidated Results
Revenues. Consolidated revenues increased by $320.7 million, or 48%, to $990.1 million for the year ended December 31, 2009,
compared to $669.4 million for the year ended December 31, 2008. The increase of $320.7 million was primarily due to a $363.9 million
increase in revenues associated with our FTD segment as a result of including FTD revenues for the entire period for the year ended
December 31, 2009 whereas such revenues were included only from August 26, 2008 (date of acquisition) in the prior-year period. The increase
was also due to an increase in revenues from our Classmates Media segment, partially offset by a decrease in revenues from our
Communications segment. Revenues related to our FTD, Classmates Media and Communications segments constituted 55.0%, 23.8% and
21.3%, respectively, of our consolidated revenues for the year ended December 31, 2009, compared to 27.2%, 34.4% and 38.4%, respectively,
for the year ended December 31, 2008. In January 2010, we terminated our domestic post-transaction sales agreements. In 2009, these
agreements, which have minimal costs of revenues, contributed $5.7 million, or 1%, of our FTD segment revenues and $20.8 million, or 9%, of
our Classmates Media segment revenues. During 2010, we expect to be able to replace only a limited portion of the advertising revenues
previously generated through these agreements. As a result of a number of factors, including those discussed throughout the results of operations
discussion, we anticipate revenues and operating income will decrease in 2010 as compared to 2009.
Cost of Revenues.
Consolidated cost of revenues increased by $202.5 million, or 94%, to $417.4 million for the year ended December 31,
2009, compared to $214.9 million for the year ended December 31, 2008. The increase of $202.5 million was primarily due to a $216.5 million
increase in cost of revenues associated with our FTD segment as a result of including FTD cost of revenues for the entire period for the year
ended December 31, 2009 whereas such costs were included only from
58
Year Ended
December 31,
2009
2008
Revenues
100.0
%
100.0
%
Operating expenses:
Cost of revenues
42.2
32.1
Sales and marketing
20.5
25.9
Technology and development
6.6
8.5
General and administrative
12.3
13.8
Amortization of intangible assets
3.5
2.8
Restructuring charges
0.2
0.1
Impairment of goodwill, intangible assets and
long
-
lived assets
—
26.3
Total operating expenses
85.3
109.4
Operating income
14.7
(9.4
)
Interest income
0.2
0.7
Interest expense
(3.4
)
(2.0
)
Other income, net
0.4
—
Income before income taxes
11.9
(10.7
)
Provision for income taxes
4.9
3.5
Net income (loss)
7.1
%
(14.1
)%