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May 26, 2015 AT 10:10 am

Geeknet To Be Acquired By Hot Topic For $17.50/Shr @hottopic @thinkgeek #makerbusiness

Adafruit 4679

Adafruit 4680

Geeknet To Be Acquired By Hot Topic For $17.50/Shr – Quick Facts – NASDAQ.com.

(RTTNews.com) – Geeknet, Inc. (GKNT), the parent company of online retailers ThinkGeek and ThinkGeek Solutions, Tuesday said it would be acquired by Hot Topic, Inc., a mall and web-based specialty retailer and a portfolio company of private equity firm Sycamore Partners, for $17.50 per share.

The acquisition, which has a total equity value of about $122 million, will be completed by means of a tender offer to be commenced shortly.
Following the agreement, the tender offer will begin no later than June 19, 2015. Consummation of the tender offer is subject to certain customary conditions. Shareholders representing about 21 percent of Geeknet outstanding shares have committed to participate in the tender offer.

Here was the revenue / previous numbers.

Revenue for 2014 grew 2% to $140.7 million. Net loss for 2014 was $8.3 million, or $1.24 per diluted share, compared to net loss of $0.2 million, or $0.04per diluted share, for 2013. Adjusted EBITDA for 2014 was a loss of $5.6 million, compared to adjusted EBITDA of $3.2 million for 2013. A reconciliation of net income or loss as reported to adjusted EBITDA is included in this release.

“We are extremely disappointed with our fourth quarter and 2014 performance. It was a very competitive and promotional environment. In addition, the delivery issues experienced at our third party fulfillment center and related customer service issues negatively impacted revenue and gross margin. Therefore, in 2015, we are committed to sharpening our focus on product leadership, executing on our strategic plan and improving the customer experience,” said Katy McCarthy, Chairman and Chief Executive Officer.

Some highlights from their 10K:

“We are highly
dependent upon a single third-party fulfillment and
warehouse provider and its systems. Any decrease in the
quality of service offered by our fulfillment and
warehouse provider will adversely affect our reputation
and the growth of our business. If we fail to realize
anticipated operating efficiencies at our third-party
fulfillment and warehouse provider, our operating
results will be adversely affected.”

“Our business is
highly seasonal.”

“Our wholesale
business is heavily dependent on sales to several large
retailers.”

“If we are unable to
maintain or acquire licenses to include intellectual
property owned by others in our products, revenues and
operating results could suffer.”

“A material portion
of our revenue is derived from sales of products related
to popular online or video games, films and television
shows. We rely on our ability to acquire rights related
to popular online or video games, films and television
shows and pay royalties to branded content owners for
the use of their content on these products. Competition
for these licenses can be intense, and we may not be
able to acquire or renew desirable licenses at
reasonable rates or at all. In addition, while part of
our business strategy involves predicting future trends,
we may be unsuccessful in predicting which video games,
films, television shows or other pop culture phenomena
will be popular in the future and target our
license-acquisition activities accordingly. Our failure
to maintain our existing licenses or acquire successful
new licenses at reasonable rates could significantly
impact our content sales or interrupt our supply chain
and require use to modify our products or business plans
and could adversely impact our results of operations.”


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