8-K 1 s72930.txt FORM 8-K 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 ------------ July 29, 2003 ----------------------------------------------------------------------- Date of Report (Date of earliest event reported) Pinnacor Inc. ----------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware 000-30309 13-4042678 ------------------------------------------------------------------------------ (State or Other (Commission File No.) (I.R.S. Employer Jurisdiction of Identification Incorporation) No.) 601 West 26th Street 13th Floor New York, NY 10001 ------------------------------------------------------------------------------ (Address of Principal (Zip Code) Executive Offices) (212) 691-7900 ------------------------------------------------------------------------------ (Registrant's telephone number, including area code) None ------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Item 7. Exhibits (c) Exhibits Exhibit 99.1 Press Release of Pinnacor Inc. dated July 29, 2003 reporting financial results for the second quarter of 2003 Item 12. Disclosure of Results of Operations and Financial Condition On July 29, 2003 the Registrant will announce its financial results for the second quarter of 2003 in a presentation broadly accessible to the public by dial-in conference call and via webcast. The following information, including the exhibit attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. In addition to financial results determined in accordance with generally accepted accounting principles ("GAAP"), Pinnacor utilizes non-GAAP financial measures (within the meaning of Regulation G promulgated by the Securities and Exchange Commission) in its second quarter 2003 press release and conference call. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. These measures should be considered in addition to results prepared in accordance with GAAP, but are not a substitute for or superior to GAAP results. Non-GAAP financial measures are used because management believes this information provides investors useful information in evaluating the results of the continuing operations and believes that this information provides the users of the financial statements a valuable insight into the operating results of Pinnacor. The non-GAAP measure of adjusted EBITDA is presented to supplement the consolidated financial statements in accordance with GAAP. Pinnacor defines adjusted EBITDA as operating loss excluding depreciation and amortization, restructuring and asset abandonment charges and stock-based compensation. Specifically, management believes that adjusted EBITDA is of interest to its investors because Pinnacor excludes these costs when analyzing operations since they are principally non-cash. Adjusted EBITDA does not represent cash flow from operations, as defined by GAAP. Adjusted EBITDA should not be considered a substitute for net income or loss, or as an indicator of operating performance or whether cash flows will be sufficient to fund cash needs. Attached and incorporated herein by reference as Exhibit 99.1 is a copy of a press release of the Registrant, dated July 29, 2003, reporting the Registrant's financial results for the second quarter of 2003. 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. PINNACOR INC. By: /s/ David Obstler David Obstler Chief Financial Officer and EVP of Corporate Development and Strategy Date: July 29, 2003 EXHIBIT INDEX Exhibit No. Description 99.1 Press Release dated July 29, 2003 reporting financial results of the Registrant for the second quarter of 2003. EXHIBIT 99.1 PINNACOR INC. CONTACTS: Investors: Media: Rowan Hajaj Therese Bruno 212.691.7900 212.691.7900 rhajaj@pinnacor.com tbruno@pinnacor.com FOR IMMEDIATE RELEASE Pinnacor Inc. Reports Positive GAAP Net Income Fifth Consecutive Quarter of Growing EBITDA New York, N.Y., July 29, 2003 - Pinnacor Inc. (Nasdaq: PCOR), a provider of business and financial information and analytical applications, today announced financial results for the second quarter ending June 30, 2003. Financial Highlights for the Second Quarter 2003: |X| Revenues of $8.4 million |X| GAAP net income of $142,000 and break-even basic EPS |X| Basic EPS, excluding amortization of identifiable intangible assets and stock-based compensation, of $0.01 |X| Adjusted EBITDA (A) of $704,000 |X| Cash flow provided by operating activities of $440,000 |X| Cash, cash equivalents and marketable securities of $47.9 million or approximately $1.18 per share at quarter end "Pinnacor continues to demonstrate solid financial performance and operating momentum," said Kirk Loevner, chairman and CEO, Pinnacor. "Our customers value the breadth and depth of solutions we provide, resulting in over half of our new business in the second quarter coming from existing customers. We are proving to be a trusted and enduring partner for our customers' Web strategies." Acquisition by MarketWatch.com, Inc. On July 23, 2003, Pinnacor and MarketWatch.com, Inc. announced a definitive agreement under which MarketWatch.com will acquire the fully diluted stock of Pinnacor for approximately $103 million in stock and cash. The transaction is expected to close in the fourth quarter of this year and is subject to the approval of regulators and shareholders. Commenting on the proposed acquisition, Loevner said, "By coming together now, we are creating a market-leading provider of online business news, information and applications to the financial services industry. Our customer solutions are highly complementary, combining MarketWatch's powerful brand, premium news operation and leading online properties with Pinnacor's sophisticated financial tools and our extensive experience in customization and integration. Together, Pinnacor and MarketWatch.com will have greater resources to compete in the growing market for online information and applications." High-quality Customer Wins In the second quarter, Pinnacor signed 61 new contracts for a total new contract value of $3.3 million or $2.2 million on an annualized basis. In addition, the company renewed $3.7 million of annual contract value, resulting in a total $5.9 million of new annual contract value. The company ended the quarter with approximately 525 customers and an average contract value per customer of approximately $110,000. Examples of new customers added in the second quarter of 2003 are Forbes.com., Metropolitan Life Insurance Company and Pioneer Investment Management. Customers that extended their relationships with Pinnacor in the second quarter include Charles Schwab & Co, Cox Communications and Morgan Stanley. Continued Improvement in Operating Performance Revenues were $8.4 million in the second quarter of 2003, up from $8.3 million in the first quarter 2003 and down from $8.9 million in the comparable period of the prior year. Gross profit was $5.5 million or 65% of sales, compared with 68% of sales a year ago. Total operating expenses, excluding cost of sales, depreciation, amortization and stock-based compensation, were $4.8 million, a 20-percent reduction from the $6.0 million in the comparable period of 2002. Adjusted EBITDA(A) was $704,000 in the second quarter, a significant improvement from the $23,000 reported in the same period a year ago. Net income for the second quarter, excluding amortization of identifiable intangible assets, stock-based compensation and restructuring and asset abandonment charges, was $250,000, or $0.01 per share, based on 40.5 million basic weighted average shares outstanding. This compares to a loss of $683,000 or $(0.02) per basic share, in the second quarter of 2002. GAAP net income for the second quarter was $142,000, or $0.00 per basic share, versus a loss of $5.5 million, or $0.13 per basic share, in the second quarter of 2002. Pinnacor generated $440,000 from operating activities during the second quarter. Total cash utilization for the second quarter was $649,000. At the end of the second quarter, Pinnacor had approximately $47.9 million, or $1.18 per share, in cash, cash equivalents and marketable securities. "The Company continues to grow profitability and move towards free cash-flow generation," said David Obstler, CFO and EVP, corporate development and strategy. "Our second quarter results demonstrate the stability of the core subscription business and our ability to continue to drive efficiencies in our operating structure." Guidance for the Remainder of 2003 Following the announcement of the proposed merger with MarketWatch.com, Inc., the Company will not provide detailed forward-looking guidance. Pinnacor noted that for the full year 2003, on a stand-alone basis, adjusted EBITDA(A) is expected to be in the range of $2.0 million to $3.0 million. Basic EPS is expected to be in the range of $0.02 to $0.04, excluding amortization of identifiable intangible assets and stock-based compensation. These projections do not include potential expenses associated with the planned merger with MarketWatch.com, Inc. Earnings Conference Call Information Pinnacor will host a conference call today at 4:30 p.m. EST. To participate, please dial 1-877-261-8990. International participants should dial 1-847-619-6441. To listen to the live Webcast, please connect to www.pinnacor.com. Select "About Pinnacor" at the top of the page, then select "Investor Relations". The Webcast link will be displayed prominently at the top of the Investor Relations page. The call will be accessible using Windows Media Player; participants intending to access the Webcast should have this application installed prior to connecting to the call. A replay of the call will be available for a week, until Tuesday, August 5, 2003. To access the replay, please dial 1-888-843-8996 (Passcode # 7441431). International participants can replay the call by dialing 1-630-652-3044 (Passcode # 7441431). About Pinnacor Pinnacor Inc. (Nasdaq: PCOR) is a provider of information and analytical applications to financial services companies and global corporations. The company delivers customized information, applications and tools that help businesses reduce costs through outsourcing and drive new revenue streams. Pinnacor's solutions encompass market data and investment analysis tools for financial services firms; critical business information for the enterprise; and personalized portal applications and messaging services for wireless carriers and ISPs. The company counts Barclays Global Investors, U.S. Bancorp Piper Jaffray, Tribune Media Services, Virgin Mobile and Verizon Wireless among its clients. Headquartered in New York City, the company also has offices in San Francisco, Calif.; Coralville, Iowa; and Jerusalem, Israel. www.pinnacor.com. Additional Information About the Merger and Where to Find It MarketWatch.com intends to file a registration statement with the Securities and Exchange Commission on Form S-4 in connection with the proposed acquisition (the "Merger") of Pinnacor by MarketWatch.com. MarketWatch.com and Pinnacor also intend to file with the SEC, and mail to their respective stockholders, a joint proxy statement/prospectus and other relevant materials in connection with the Merger. Investors and security holders of MarketWatch.com and Pinnacor are urged to read the joint proxy statement/prospectus and the other relevant materials when they become available before making any voting or investment decisions with respect to the proposed Merger because the materials will contain important information about MarketWatch.com, Pinnacor and the proposed Merger. The joint proxy statement/prospectus and other relevant materials (when they become available), and any other documents filed by MarketWatch.com and Pinnacor with the SEC, may be obtained free of charge at the SEC's web site at www.sec.gov. Both of MarketWatch.com, Larry Kramer, and MarketWatch.com's other directors and executive officers on the one hand, and Pinnacor, Kirk Loevner and Pinnacor's other directors and executive officers on the other hand, may be deemed to be participants in the solicitation of proxies of stockholders of MarketWatch.com and Pinnacor in connection with the proposed Merger. Such individuals may have interests in the proposed Merger, including as a result of holding options or shares of MarketWatch.com common stock or Pinnacor common stock, as applicable. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of such individuals in the solicitation by reading the joint proxy statement/prospectus when it becomes available. # # # Pinnacor and the Pinnacor logo are trademarks of Pinnacor Inc. All other trademarks are property of their respective owners. The release contains information about future expectations and plans of Pinnacor's management and prospects of Pinnacor's business that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These include statements relating to the expected timetable for completing the proposed MarketWatch.com/Pinnacor transaction, the benefits and synergies of that transaction, future opportunities for the combined company and any other statements about future expectations, benefits, goals, plans or prospects. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, the timely development and market acceptance of new and updated products, our ability to expand our infrastructure (including personnel and computer systems), the effect of competition, the ability of Pinnacor and MarketWatch.com to consummate the proposed transaction, the ability of Pinnacor and MarketWatch.com to successfully integrate our operations and employees, the ability to realize anticipated synergies and cost savings, and the other factors described in our Form 10-K for the year ended December 31, 2002, and Form 10-Q for the quarter ended March 31, 2003. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Readers are also directed to consider other risks and uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission. Pinnacor undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

PINNACOR INC 8-K