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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 19, 2002
HOMESTORE, INC.
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(Exact name of registrant as specified in its charter)
Delaware 000-26659 95-4438337
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
30700 Russell Ranch Road
Westlake Village, California 91362
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code: (805) 557-2300
Not Applicable
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(Former name or former address, if changed since last report)
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This amendment to the Current Report on Form 8-K originally dated March 19,
2002, is being filed in order to include disclosure related to the commencement
of the transaction and provide the unaudited pro forma financial information
listed below.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Pro forma financial information.
The following unaudited pro forma financial information is being filed
herewith:
Unaudited Pro Forma Consolidated Balance Sheet as of March 31, 2002.
Unaudited Pro Forma Consolidated Statements of Operations for the three
months ended March 31, 2002.
Unaudited Pro Forma Consolidated Statements of Operations for the year
ended December 31, 2001.
Notes to the Unaudited Pro Forma Consolidated Financial Information.
Item 7(a). PRO FORMA FINANCIAL INFORMATION
HOMESTORE, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Overview
In March 2002, Homestore, Inc. ("Homestore or the "Company") entered into a
definitive agreement to sell its ConsumerInfo.com division, which provides
online consumer credit reporting and monitoring services, to Experian for $130
million in cash of which $10 million has been placed in escrow pursuant to the
Stock Purchase Agreement dated as of March 16, 2002 by and between Experian
Holdings, Inc. The Company has accounted for this division as a discontinued
operation in accordance with SFAS No. 144. This division was acquired in
August 2001. On April 3, 2002 Homestore completed the sale. The estimated gain,
calculated based upon the net proceeds, on the sale of this division is
approximately $10.0 million.
The unaudited pro forma consolidated balance sheet as of March 31, 2002, gives
effect to sale as if it had occurred on January 1, 2002 and removes the assets
sold and liabilities assumed of its ConsumerInfo.com division.
The unaudited pro forma consolidated statements of operations for the year
ended December 31, 2001, and the three months ended March 31, 2002, give effect
to the sale as if it had occurred at the beginning of each period presented. The
unaudited pro forma consolidated statements of operations were prepared based on
the audited consolidated statement of operations for the year ended December 31,
2001, and the unaudited consolidated statement of operations for the three
months ended March 31, 2002.
The unaudited pro forma consolidated financial information is based on
estimates and assumptions. These estimates and assumptions have been made solely
for purposes of developing this pro forma information. Unaudited pro forma
consolidated financial information is presented for illustrative purposes only
and is not necessarily indicative of the consolidated financial position or
results of operations of future periods or the results that actually would have
been realized had the division been been sold during this period. This unaudited
pro forma consolidated financial information is based upon the respective
historical consolidated financial statements of Homestore.
Homestore, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of March 31, 2002
(in thousands)
ConsumerInfo.com
Homestore Division(4) Adjustments Pro Forma
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Assets
Current assets:
Cash and cash equivalents $ 36,216 $ 2,000 $ 62,000(1) $ 96,216
Marketable equity security 696 - - 696
Accounts receivable, net 32,144 - - 32,144
Current portion of prepaid distribution expense 39,207 - - 39,207
Other current assets 44,373 13,086 - 31,287
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Total current assets 152,636 15,086 62,000 199,550
Prepaid distribution expense 32,123 - - 32,123
Property and equipment, net 41,270 810 - 40,460
Goodwill, net 110,439 96,388 - 14,051
Intangible assets, net 130,258 25,847 - 104,411
Restricted cash 90,342 - 58,000(1) 148,342
Other long-term assets 12,692 - - 12,692
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Total assets $ 569,760 $ 138,131 $ 120,000 $ 551,629
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 9,935 $ 3,963 $ - $ 5,972
Accrued liabilities 92,614 4,476 5,000(2) 93,138
Deferred revenue 70,702 24,304 - 46,398
Deferred revenue from related parties 16,543 - - 16,543
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Total current liabilities 189,794 32,743 5,000 162,051
Distribution obligation 208,364 - - 208,364
Deferred revenue from related parties 7,940 - - 7,940
Other non-current liabilities 237 - - 237
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Total liabilities 406,335 32,743 5,000 378,592
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Stockholders' equity:
Convertible preferred stock - - - -
Common stock 117 - - 117
Additional paid-in capital 1,991,735 - - 1,991,735
Treasury stock (18,062) - - (18,062)
Notes receivable from stockholders (223) - - (223)
Deferred stock-based charges (6,992) - - (6,992)
Accumulated other comprehensive income (966) - - (966)
Accumulated deficit (1,802,184) - 9,612(3) (1,792,572)
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Total stockholders' equity 163,425 - 9,612 173,037
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Total liabilities and stockholders' equity $ 569,760 $ 32,743 $ 14,612 $ 551,629
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See Notes to Unaudited Pro Forma Consolidated Financial Information.
Homestore, Inc.
Unaudited Proforma Consolidated Statements of Operations
(in thousands, except per share amounts)
For the Three Months Ended March 31, 2002
ConsumerInfo.com
Homestore Division(5) Pro Forma
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Revenue $ 82,686 $ 19,519 $ 63,167
Revenue from related parties 10,949 - 10,949
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Total revenue 93,635 19,519 74,116
Cost of revenues 26,290 4,090 22,200
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Gross profit 67,345 15,429 51,916
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Operating expenses:
Sales and marketing 57,191 9,314 47,877
Product and website development 8,164 - 8,164
General and administrative 27,950 2,810 25,140
Amortization of goodwill and intangible assets 10,851 1,488 9,363
Acquisition and restructuring charges 1,826 25 1,801
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Total operating expenses 105,982 13,637 92,345
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(Loss) income from operations (38,637) 1,792 (40,429)
Interest income, net 539 0 539
Other income/(expense), net 3,289 (946) 4,235
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Net (loss) income $(34,809) $ 846 $(35,655)
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Basic and diluted net loss per share $ (0.29) $ (0.30)
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Shares used to calculate basic and diluted net loss per share 117,565 117,565
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See Notes to Unaudited Proforma Consolidated Financial Information
Homestore, Inc.
Unaudited Pro Forma Consolidated Statements of Operations
(in thousands, except per share amounts)
For the Twelve Months Ended December 31, 2001
ConsumerInfo.com
Homestore Division(6) Pro Forma
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Revenue $ 286,759 $ 21,323 $ 265,436
Revenue from related parties 38,346 - 38,346
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Total revenue 325,105 21,323 303,782
Cost of revenues 118,101 4,544 113,557
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Gross profit 207,004 16,779 190,225
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Operating expenses:
Sales and marketing 249,853 7,476 242,377
Product and website development 36,734 950 35,784
General and administrative 175,260 836 174,424
Amortization of intangible assets 201,358 2,069 199,289
Asset impairment charge 925,094 476 924,618
Acquisition and restructuring charges 50,503 243 50,260
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Total operating expenses 1,638,802 12,050 1,626,752
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(Loss) income from operations (1,431,798) 4,729 (1,436,527)
Interest income, net 10,943 0 10,943
Other (expense), net (44,734) - (44,734)
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Net (loss) income $ (1,465,589) $ 4,729 $ (1,470,318)
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Basic and diluted net loss per share $ (13.64) $ (13.69)
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Shares used to calculate basic and diluted net loss
per share 107,433 107,433
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Supplemental Pro Forma Information:(7)
Reported net loss $ (1,465,589) $ 4,729 $ (1,470,318)
add back goodwill amortization (net of tax) 138,029 - 138,029
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Adjusted net loss (1,327,560) 4,729 (1,332,289)
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Reported net loss per share
Basic and diluted $ (13.64) $ (13.69)
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Adjusted net loss per share
Basic and diluted $ (12.36) $ (12.40)
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Weighted average shares 107,433 107,433
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See Notes to Unaudited Pro Forma Consolidated Financial Information.
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL INFORMATION
Pro Forma adjustments reflect the following in the unaudited pro forma
consolidated balance sheet and statements of operations:
1. Amount represents cash received as proceeds from the sale of the
ConsumerInfo division as follows (in millions):
Unrestricted cash $ 62
Restricted cash 58
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Net cash received 120
Amounts held in escrow 10
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Gross purchase price $130
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In April 2002, the Company closed the sale of the ConsumerInfo.com
division for $130 million in cash to Experian Holdings, Inc. The
Company received proceeds of approximately $120 million net of $10
million placed in escrow pursuant to the Stock Purchase Agreement
dated as of March 16, 2002 by and between Experian Holdings, Inc. and
Homestore, Inc. On March 26, 2002, MemberWorks Incorporated,
one of the former owners of iPlace, parent company of our
ConsumerInfo.com division, obtained a court order requiring the
company to set aside $58 million of the purchase price against a
potential claim MemberWorks has against the Company.
2. Amount represents the accrual of transaction fees associated with the
sale of the ConsumerInfo.com Division.
3. Amount represents the estimated gain on the disposal of the
ConsumerInfo.com Division.
4. Represents the removal of the assets accrued acquired and liabilities
assumed of the ConsumerInfo.com Division.
5. Represents the removal of the results of operations of the
ConsumerInfo.com division for the three months ended March 31, 2002.
6. Represents the removal of the results of operations of the
ConsumerInfo.com division for the period of August 24, 2001, (date of
acquisition) through December 31, 2001.
7. The table reconciles the reported net loss for the year ended December
31, 2001 to its adjusted balance which excludes previously reported
goodwill amortization expense, which is no longer recorded under the
provisions of SFAS No. 142 (amounts in thousands).
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.
HOMESTORE, INC
Date: May 24, 2002 By: /s/ Lewis R. Belote, III
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Lewis R. Belote, III
Chief Financial Officer