Geeknet, Inc. Q4 2009 Earnings Conference Call Transcript - Thomson StreetEvents

Geeknet, Inc. Q4 2009 Earnings Conference Call Transcript

Geeknet, Inc. Q4 2009 Earnings Conference Call Transcript - Thomson StreetEvents
Geeknet, Inc. Q4 2009 Earnings Conference Call Transcript
Published Feb 11, 2010
Published Feb 11, 2010
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Abstract:

Final Transcript of LNUX earnings conference call or presentation, 11-Feb-10 11:00am ET

  
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Transcript

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LNUX
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11:00am ET
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The following is excerpted from the question-and-answer section of the transcript.

(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)

Question: Robert Coolbrith - ThinkEquity Partners - Analyst: Good morning. Congratulations on the e-commerce results. Just wondering on e-commerce, do you have a knowledge of how much of your expectations was driven by the really great Taun Taun product and some of the earned media you got around that, and whether or not you're continuing to see benefits from some of the news that filter around that product. And secondly in media, I know you've been focusing on building engagement through community features and things like that, have the metrics on repeat usage or pays per unique pays per visit seems to be going down quarter. What are your plans to build engagement through 2010. Thanks a lot.

Answer By: Patty Morris - Geeknet, Inc. - SVP, CFO

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Robert Coolbrith - ThinkEquity Partners - Analyst: Okay. Thank you.


Question: Richard Fetyko - Merriman Curhan Ford - Analyst: Good morning, guys. A couple of questions. You mentioned the custom or I mentioned I think a ThinkGeek product being a big success. What percentage of sales in ThinkGeek came from these custom products. And secondly with respect to cost trends off of the fourth quarter levels, what should we anticipate in terms of hiring and any other investments off of the fourth quarter levels in the SG&A area?

Answer By: Patty Morris - Geeknet, Inc. - SVP, CFO


Question: Richard Fetyko - Merriman Curhan Ford - Analyst: Okay. Let me rephrase that question then. With the headcount that you have today, and maybe you can give us an update how it is. What kind of headcount additions are you looking to make or other areas that you think you need to turn that into?

Answer By: Patty Morris - Geeknet, Inc. - SVP, CFO


Question: Richard Fetyko - Merriman Curhan Ford - Analyst: Okay. Thanks.


Question: Mark Moore - Viewtrade Securities - Analyst: Hi, guys. Just wanted to say great quarter. Had a couple of questions, maybe in four parts. First off, how has Ohloh. net contributed to the overall advertising scheme and what is going on with SlashDot, haven't heard any new updates with that, how accretive to the bottom line is Phosphorous, in which Scott was talking would add some decent value. Another question would be press releases. You said you added a lot of new customers. It would kind of be nice if that would be seen by the general public. I know a lot of press releases in the past have been announced of different Companies that were added on. Haven't seen any of that. And finally the buyback. Have you completed, in terms of the buyback, 100%, or is that still open. ¬2010 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President

Answer By: Patty Morris - Geeknet, Inc. - SVP, CFO


Question: Ralph Well - Well Investment Management - Analyst: Good morning and congratulations on the direction that appears to be taking place. Could you, Scott, please comment on the game plan that you have to get to longer term sustained profitability? Is there any significant ability to reduce the cost structure while you are making all of these investments, and is it more important in your mind at this point to increase the revenues significantly as opposed to profitability?

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Jon Hickman - MDB Capital Group - Analyst: Hi. I was just wondering if in the past, you have given some guidance for the next quarter as far as media, at least media and high-level media and ThinkGeek revenues, and I didn't hear that on the call and I just want to make sure I didn't miss something, or if you're just not doing that this time around?

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Jon Hickman - MDB Capital Group - Analyst: Okay, so thanks. Bye.


Question: Douglas Whitman - Whitman Capital - Analyst: A couple of very brief questions. Kind of housekeeping stuff. But can you go over, Patty, your receivable days were just outstanding and is that a thing about the mix, great jobs that done by the accounting team, or is that not a number we should expect on the days going forward, would be the first question.

Answer By: Patty Morris - Geeknet, Inc. - SVP, CFO


Question: Douglas Whitman - Whitman Capital - Analyst: And you can go over where you are on the -- I think you call it marketable securities. I don't have the press release right in front of me but the $10 million that held it, is a vast majority of that the auction rate securities and where does that stand.

Answer By: Patty Morris - Geeknet, Inc. - SVP, CFO


Question: Douglas Whitman - Whitman Capital - Analyst: And there is almost no -- for a Company that has cash of this amount, you look at quarter and year-over-year, you have almost no interest income. I know interest rates has dropped considerably but it is it ultra conservatism.

Answer By: Patty Morris - Geeknet, Inc. - SVP, CFO


Question: Douglas Whitman - Whitman Capital - Analyst: Okay. When you do get payment on the auction rate securities, is there going to be an interest payment at that time as well that you're not accounting for?

Answer By: Patty Morris - Geeknet, Inc. - SVP, CFO


Question: Douglas Whitman - Whitman Capital - Analyst: And I'm just, so I get an understanding, normally auditing fees are carried on the books with an estimate of what they're going to be and charged on a quarterly basis not just at the end of the year. Is there something unusual because you had a year end change this year?

Answer By: Patty Morris - Geeknet, Inc. - SVP, CFO


Question: Douglas Whitman - Whitman Capital - Analyst: Okay. And you guys have made -- have kept your heads down because you wanted to rebuild the business. Now that things are more back on track, maybe, Patty, the valuation of the Company is very low. You have a major e-commerce business that is doing obviously very well and e-commerce business is probably worth more than the whole market capitalization, not including the rest of the Company and the cash. Could you talk a little bit about what the plans are on -- away from the press thing, to go back to Wall Street and reestablish a presence on Wall Street?

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Douglas Whitman - Whitman Capital - Analyst: Okay. And the last -- I know the guy asks a lot of question, but the last question I have is could you expand a little bit on what the opportunities are for SlashDot and what some of the plans are going forward?

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Douglas Whitman - Whitman Capital - Analyst: Okay. Well I'm going to get my sleeping bag any way.

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President

Answer By: Patty Morris - Geeknet, Inc. - SVP, CFO


Question: Richard Fetyko - Merriman Curhan Ford - Analyst: With respect to your monetization efforts that makes up two-thirds of your traffic, what percentage of ad impressions today are against international traffic. I'm just trying to gauge the level of monetization today. I guess that's the best way I can ask the question for actually asking for actual revenues, I guess.

Answer By: Patty Morris - Geeknet, Inc. - SVP, CFO


Question: Richard Fetyko - Merriman Curhan Ford - Analyst: So the opportunity there is to sell more directly and sell premium product as opposed to the goodwill assets and monetization levels. ¬2010 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by

Answer By: Patty Morris - Geeknet, Inc. - SVP, CFO


Question: Richard Fetyko - Merriman Curhan Ford - Analyst: Some of the other online media companies have pulled back on -- I guess repatriated some of their inventory if you will away from the ad networks. It sounds like you're kind of headed in that direction without necessarily pulling out of ad networks altogether. But is there a conflict when an advertiser can get on your site through an ad network, or AdSense why or he or she consider going directly for a much higher CPM.

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Richard Fetyko - Merriman Curhan Ford - Analyst: With direct you're able to also generate better targeting and better response rates, is that kind of the value add in that process?

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Richard Fetyko - Merriman Curhan Ford - Analyst: When you're repositioning Geeknet on Madison Avenue right now, what is the pitch? What are you pitching them right now?

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Richard Fetyko - Merriman Curhan Ford - Analyst: You also mentioned the intentions to penetrate more of the non-endemic verticals. Review with us a couple of three verticals there and endemic to your site right now and which non-endemic make the most sense.

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Richard Fetyko - Merriman Curhan Ford - Analyst: Now lastly, with the cash balance you have, you maintained relatively well in the last year or so. Any other -- any further appetite for acquisitions and if so, have you identified some attractive targets or characterized what type of acquisitions are you interested in.

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Richard Fetyko - Merriman Curhan Ford - Analyst: Okay. So acquisitions is not a big priority then?

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Richard Fetyko - Merriman Curhan Ford - Analyst: And you would not necessarily indulge us in terms of what type of acquisitions you would be opportunistic about?

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Richard Fetyko - Merriman Curhan Ford - Analyst: Okay. Thanks. ¬2010 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Robert Coolbrith - ThinkEquity Partners - Analyst: Hi. Thank you again. In response to another question you mentioned how you might extend inventory through partnerships. I was wondering if you could expand on that and whether that represents sort of a new ad network strategy for you or what focus might be there.

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Robert Coolbrith - ThinkEquity Partners - Analyst: And secondly, don't know if you've spoken about this in the past, but you can give us the contribution profit from the two separate businesses. I know you're running them in an integrated fashion but that way we can get a sense for what is contributing what.

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Robert Coolbrith - ThinkEquity Partners - Analyst: And do you see the opportunity and not knowing enough about the tech group, is there an opportunity to run some of your high value premium type of ad availabilities in third party inventory or do you have to stick to the standard IEB stuff.

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: Robert Coolbrith - ThinkEquity Partners - Analyst: Great. ¬2010 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by

Answer By: Patty Morris - Geeknet, Inc. - SVP, CFO


Question: Robert Coolbrith - ThinkEquity Partners - Analyst: Okay. Great. Thank you.


Question: James Molitis - Molitis Partners - Analyst: Jim Molitis, Molitis Partners. I apologize, I missed your response to the question about the buyback program.

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President


Question: James Molitis - Molitis Partners - Analyst: Thank you very much.

Answer By: Scott Kauffman - Geeknet, Inc. - CEO, President

Answer By: Patty Morris - Geeknet, Inc. - SVP, CFO

Table Of Contents

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SourceForge, Inc. Q3 2009 Earnings Conference Call Transcript – 2009-11-04 – $54.00 – Final Transcript of LNUX earnings conference call or presentation, 4-Nov-09 2:00pm PT

SourceForge, Inc. Q2 2009 Earnings Conference Call Transcript – 2009-07-30 – $54.00 – Final Transcript of LNUX earnings conference call or presentation, 30-Jul-09 2:00pm PT

SourceForge, Inc. Q1 2009 Earnings Conference Call Transcript – 2009-05-28 – $54.00 – Final Transcript of LNUX earnings conference call or presentation, 28-May-09 2:00pm PT

SourceForge, Inc. Q2 2009 Earnings Conference Call Transcript – 2009-02-26 – $54.00 – Final Transcript of LNUX earnings conference call or presentation, 26-Feb-09 5:00pm ET

SourceForge, Inc. Q1 2009 Earnings Conference Call Transcript – 2008-11-25 – $54.00 – Final Transcript of LNUX earnings conference call or presentation, 25-Nov-08 5:00pm ET

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