Filed by Pinnacor Inc.
Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: NMP, Inc., MarketWatch.com, Inc.,
and Pinnacor Inc.
Commission File No.: 333-108282
On October 23, 2003, Pinnacor Inc. issued a press release announcing financial
results for the third quarter of 2003, entitled "Pinnacor Inc. Reports Growing
Net Income Before Merger-related Expenses." The text of the press release
follows.
PINNACOR LOGO OMITTED
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 Growing Net Income Before Merger-related Expenses
New York, N.Y., October 23, 2003 - Pinnacor Inc. (Nasdaq: PCOR), a provider of
business and financial information and analytical applications, today
announced financial results for the third quarter ending September 30, 2003.
Financial Highlights for the Third Quarter 2003:
|X| Revenues of $8.35 million
|X| Adjusted EBITDA (A) of $704,000
|X| Net income, excluding stock-based compensation, the amortization of
identifiable intangible assets, and deal-related expenses of $331,000
or $0.01 per share
|X| Cash flow from operating activities of $342,000
|X| Cash, cash equivalents and marketable securities of $47.7 million
or $1.17 per share
"We are pleased to report another quarter of solid financial performance,"
said Kirk Loevner, chairman and CEO, Pinnacor. "We are working towards
completing the merger with MarketWatch, and are well underway in planning for
the integration of our two companies. In the meantime we are maintaining our
focus on customer satisfaction and on positioning ourselves to take advantage
of the recovery in the financial services market."
Acquisition Update
On July 23, 2003, Pinnacor and MarketWatch.com, Inc. announced a definitive
agreement under which MarketWatch will acquire Pinnacor. The transaction is
expected to close during the fourth quarter 2003, subject to the approval of
regulators and shareholders. The merger will create a combined company that is
a market-leading provider of online business news and financial applications
to organizations in numerous sectors, including banking, brokerage and media.
MarketWatch's strength in news, tools and charting capabilities combined with
Pinnacor's broad set of financial applications and extensive customization
offerings will create opportunities to sell additional products and services
into a significantly larger customer base.
Financial Highlights
Revenues were $8.35 million in the third quarter of 2003, down from $8.44
million in the second quarter 2003 and up from $8.05 million in the comparable
period of the prior year.
Gross profit was $5.5 million or 66% of sales, compared with 65% of sales in
the prior quarter and 66% of sales a year ago. Total operating expenses,
excluding cost of sales, depreciation and amortization, stock-based
compensation, restructuring charges and $1.023 million of merger-related
expenses, were $4.8 million, flat with the prior quarter and down from $5.2
million in the comparable period of 2002. The $1.023 million in merger-related
expenses represents charges for legal, investment banking, accounting and
merger-related travel costs.
Adjusted EBITDA(A) was $704,000 in the third quarter, a significant
improvement from the $86,000 reported in the same period a year ago. Adjusted
EBITDA(A), is defined by the Company as earnings before interest, income
taxes, depreciation, amortization, stock-based compensation, restructuring and
asset abandonment charges and merger-related expenses.
Net income, excluding stock based compensation, restructuring and asset
abandonment charges, the amortization of identifiable intangible assets and
merger-related expenses was $331,000, and $0.01 per share. This compares to
$250,000 and $0.01 per share last quarter and a $(401,000) and ($0.01) per
share loss in Q3 2002. GAAP net loss in the third quarter was $(818,000) or
$(0.02) per share.
Pinnacor generated $342,000 in cash from operating activities during the third
quarter. Total cash utilization for the third quarter was $203,000, down from
$649,000 in the second quarter. At the end of the third quarter, Pinnacor had
approximately $47.7 million, or $1.17 per share, in cash, cash equivalents and
marketable securities.
Earnings Conference Call Information
Pinnacor will host a conference call today at 5:00 p.m. EST. To participate,
please dial 1-800-446-1671. International participants should dial
1-847-413-3362.
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 Thursday, October 30,
2003. To access the replay, please dial 1-888-843-8996 (Passcode # 7875754).
International participants can replay the call by dialing 1-630-652-3044
(Passcode # 7875754).
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
------------------------------------------------------------
For more information about the proposed acquisition (the "Merger") of Pinnacor
by MarketWatch.com see the Registration Statement on Form S-4, as amended,
filed by NMP, Inc. with the SEC, which is available on the SEC's Web site and
the Company's Web site at www.pinnacor.com under the section entitled
"Investor Relations". MarketWatch.com and Pinnacor also intend to mail to
their respective stockholders a joint proxy statement/prospectus and other
relevant materials in connection with the Merger. 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
Merger because the materials will contain important information about
MarketWatch.com, Pinnacor and the 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.
CONSOLIDATED STATEMENTS OF OPERATIONS-UNAUDITED
For the Three and Nine Months Ended September 30, 2003 and 2002
Three Months Ended Nine Months Ended
------------------ -----------------
September September September September
30, 2003 30, 2002 30, 2003 30, 2002
--------- --------- --------- ---------
(in thousands) (in thousands)
REVENUES
Net revenue $ 8,346 $ 8,051 $ 25,128 $ 26,364
-------- -------- -------- --------
OPERATING EXPENSES
Cost of services
2,821 2,719 8,709 8,558
Research and development
1,805 1,760 5,380 5,737
Sales and marketing
1,452 1,973 4,633 7,501
General and administrative (1)
2,587 1,513 5,586 5,399
Depreciation and amortization (2)
703 906 2,389 3,234
Stock-based compensation (3)
7 33 40 (356)
Restructuring and asset abandonment charge (4)
-- (2,183) -- 2,463
-------- -------- -------- --------
Total operating expenses 9,375 6,721 26,737 32,536
-------- -------- -------- --------
OPERATING INCOME (LOSS) (1,029) 1,330 (1,609) (6,172)
-------- -------- -------- --------
OTHER INCOME (EXPENSE):
Interest income
248 399 912 1,572
Interest expense
(37) (59) (139) (242)
-------- -------- -------- --------
Total other income, net 211 340 773 1,330
-------- -------- -------- --------
NET INCOME (LOSS) (818) 1,670 (836) (4,842)
Basic net income (loss) per common share applicable to common stockholders $ (0.02) $ 0.04 $ (0.02) $ (0.11)
Diluted net income (loss) per common share applicable to common
stockholders $ (0.02) $ 0.04 $ (0.02) $ (0.11)
Basic weighted-average number of shares of common stock outstanding 40,584 42,755 40,534 42,529
Effect of dilutive stock options and restricted stock -- 71 -- --
Diluted weighted-average number of shares of common stock outstanding 40,584 42,826 40,534 42,529
Basic net income (loss) per common share applicable to common stockholders $ (818) $ 1,670 $ (836) $ (4,842)
Amortization of identifiable intangible assets included in depreciation
and amortization 119 79 357 79
Stock-based compensation 7 33 40 (356)
Restructuring and asset abandonment charges -- (2,183) -- 2,463
Transaction related costs 1,023 -- 1,023 --
-------- -------- -------- --------
Basic net income (loss) per common share applicable to common
stockholders, as adjusted $ 331 $ (401) $ 584 $ (2,656)
Basic net loss per common share applicable to common stockholders, as
adjusted $ 0.01 $ (0.01) $ 0.01 $ (0.06)
EBITDA, as adjusted (A), calculated as follows:
Operating income (loss) $ (1,029) $ 1,330 $ (1,609) $ (6,172)
Depreciation and amortization 703 906 2,389 3,234
Stock-based compensation 7 33 40 (356)
Restructuring and asset abandonment charge -- (2,183) -- 2,463
Transaction related costs 1,023 -- 1,023 --
-------- -------- -------- --------
EBITDA, as adjusted $ 704 $ 86 $ 1,843 $ (831)
(A) EBITDA, as adjusted, is defined by the Company as earnings before
interest, income taxes, depreciation, amortization, stock-based
compensation, restructuring and asset abandonment charges and
transaction related charges. EBITDA, as adjusted, should be considered
in addition to, not as a substitute for or superior to, income from
operations, net income, net income per share, cash flows, or other
measures of financial performance prepared in accordance with generally
accepted accounting principles. We believe that EBITDA, as ajdusted,
provides useful information regarding the ongoing operations of the
Company, as it excludes the effects of interest, income taxes,
depreciation, amortization, stock-based compensation, restructuring and
asset abandonment charges and transaction related charges which are
costs not directly attributable to the underlying performance of the
business.
Pinnacor Inc.
Consolidated Balance Sheets
(in thousands)
September 30, 2003 December 31, 2002
-------------------------------------------------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 29,041 $ 15,098
Marketable securities 18,691 35,611
Accounts receivable, net 4,262 5,254
Prepaid expenses 1,865 1,143
-------------------------------------------------
Total current assets 53,859 57,106
Property and equipment, net of accumulated
depreciation and amortization 4,531 5,792
Goodwill 34,888 34,875
Other intangible assets, net of
accumulated amortization 1,946 2,302
Other assets 612 793
-------------------------------------------------
Total Assets $ 95,836 $ 100,868
=================================================
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilites:
Accounts payable and accrued expenses $ 5,445 $ 4,611
Current portion of capital lease obligations 1,059 1,576
Accrued restructuring and other expenses 551 765
Deferred revenue 4,869 8,334
-------------------------------------------------
Total current liabilities 11,924 15,286
NONCURRENT LIABILITIES:
Capital lease obligations, less current portion 418 1,181
-------------------------------------------------
Total labilities 12,342 16,467
-------------------------------------------------
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value, 100,000,000 shares
authorized and 45,310,095 and 44,848,386 issued and
40,885,316 and 40,539,207 outstanding at September 30,
2003 and December 31, 2002 453 448
Additional paid-in capital 225,593 225,122
Treasury stock, 4,424,779 and 4,309,179 shares at
September 30, 2003 and December 31, 2002,
respectively, at cost (4,301) (4,147)
Warrants 1,708 1,708
Deferred compensation (316) (118)
Accumulated other comprehensive income 156 351
Accumulated deficit (139,799) (138,963)
-------------------------------------------------
Total stockholders' equity 83,494 84,401
-------------------------------------------------
Total Liabilities and Stockholders' Equity $ 95,836 $ 100,868
=================================================
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