LivePerson Announces Third Quarter 2012 Financial Results -- Reports Revenue of $39.7 Million -- -- Adjusted EPS of $0.08; GAAP EPS of $0.03 -- -- Posts Record Bookings of $8.1 Million; Signs Record Number of Deals -- PR Newswire NEW YORK, Nov. 6, 2012 NEW YORK, Nov. 6, 2012 /PRNewswire/ --LivePerson, Inc. (Nasdaq: LPSN), a provider of real-time intelligent engagement solutions that increase conversions and improve customer experience, today announced financial results for the third quarter ended September 30, 2012. (Logo: http://photos.prnewswire.com/prnh/20110105/NY24753LOGO-a ) Revenue Revenue from business operations (B2B) for the third quarter was $36.1 million, a 17% increase as compared to the third quarter of 2011. Total revenue for the third quarter was $39.7 million, a 16% increase from the third quarter of 2011. Revenue from consumer operations for the third quarter was $3.6 million, flat versus the third quarter of 2011. "During the quarter we saw continued strength in many of our key business and financial metrics, all indicators that point to the overall health of the business. We signed a record number of deals and bookings topped $8 million. We also continued to strengthen our core product offerings, making substantial progress with the integration of our advanced predictive targeting capabilities, rolling out a fortified turnkey mobile solution and advancing with our overall platform strategy," said CEO Robert LoCascio. Customer Expansion LivePerson added 51 new enterprise and midmarket clients during the quarter, including: oTupperware oSmith & Wesson oSeamless oRestaurant.com The Company also expanded business with: oVirgin Atlantic oDeutsche Telekom oForex Capital Markets oPR Newswire Net Income Net income for the third quarter of 2012 was $1.6 million or $0.03 per share as compared to net income of $2.7 million or $0.05 per share in the third quarter of 2011. Net income during the third quarter of 2012 was impacted by deal and litigation related expenses of approximately $0.7 million. Adjusted Net Income and Adjusted EBITDA LivePerson considers adjusted net income and adjusted earnings before other income/(expense), taxes, depreciation, amortization, stock-based compensation and other non-cash charges, if any (adjusted EBITDA) to be important financial indicators of the Company's operational strength and the performance of its business. These results should be considered in addition to results prepared in accordance with generally accepted accounting principles (GAAP), but should not be considered as a substitute for, or superior to, GAAP results. The difference between adjusted EBITDA per share, a non-GAAP measure, and GAAP EPS, is other income/(expense), taxes, depreciation, amortization, stock-based compensation and other non-cash charges, if any. The difference between adjusted net income per share and GAAP EPS is amortization of intangible assets and stock-based compensation. A reconciliation of the differences between adjusted EBITDA and adjusted net income, and the most comparable financial measure calculated and presented in accordance with GAAP, is presented under the heading "Reconciliation of Non-GAAP Financial Information to GAAP" immediately following the Condensed Consolidated Statements of Income included below. Adjusted net income for the third quarter of 2012 was $4.6 million or $0.08 per share, as compared to adjusted net income of $4.8 million or $0.09 per share in the third quarter of 2011. Adjusted Net income during the third quarter of 2012 was impacted by deal and litigation related expenses of approximately $0.7 million. Adjusted EBITDA for the third quarter of 2012 was $7.4 million or $0.13 per share, as compared to adjusted EBITDA of $8.9 million or $0.16 per share in the third quarter of 2011. Adjusted EBITDA during the third quarter of 2012 was impacted by deal and litigation related expenses of approximately $0.7 million. Cash The Company's cash balance was $103.3 million at September 30, 2012 as compared to $100.6 million as of June 30, 2012. The Company generated $3.4 million of cash from operations in the third quarter, and incurred planned capital expenditures related primarily to the purchase of servers and computer networking equipment, resulting in a cash outlay of approximately $3.9 million. Financial Guidance The Company's 2012 guidance reflects previously disclosed deal related expenses including amortization, as well as expenses associated with ongoing litigation and international expansion. The following is the Company's current expectations for financial and operating performance: Fourth Quarter 2012 oRevenue of $41.5 - $42 million oAdjusted EBITDA of $0.12 - $0.14 per share oAdjusted net income per share of $0.07 - $0.09 oGAAP EPS of $0.02 - $0.04 oFully diluted share count of approximately 58.3 million Full Year 2012 oRevenue of $156.5 - $157 million oAdjusted EBITDA of $0.51 - $0.54 per share oAdjusted net income per share of $0.30 - $0.33 oGAAP EPS of $0.10 - $0.13 oFully diluted share count of approximately 57.5 million Other Full Year 2012 Assumptions oAmortization of intangibles of approximately $0.6 million oStock-compensation expense of approximately $10.7 million oDepreciation of approximately $7.8 million oEffective tax rate of approximately 39% oCash tax rate of approximately 37% oCapital expenditures of approximately $10.4 million oCosts associated with acquisitions, litigation and international expansion of approximately $5 million oAcquisition-related operating expenses of $1.5M from the acquisitions of Amadesa and Look.io Stock-Based Compensation Included in the accompanying financial results are expenses related to stock-based compensation, as follows (in thousands): 3 months ended 9 months ended Sept 30, 2012 Sept 30, 2012 Cost of revenue $428 $1,130 Product development 807 2,206 Sales and marketing 822 2,113 General and administrative 795 2,197 Total $2,852 $7,646 Amortization of Intangible Assets Included in the accompanying financial results are expenses related to the amortization of intangible assets, as follows (in thousands): 3 months ended 9 months ended Sept 30, 2012 Sept 30, 2012 Cost of revenue $129 $196 General and administrative 11 98 Total $140 $294 Earnings Teleconference and Video Discussion Information The Company will discuss its third quarter 2012 financial results during a teleconference today, November 6, 2012 at 5:00 p.m. ET. To participate via telephone domestic callers (U.S. and Canada) should dial 877-507-3684, while international callers should dial 706-634-9559, both should reference the conference ID "57153167". The conference call will also be simulcast live on the Internet and can be accessed by logging onto the investor relations section of the Company's web site at: http://www.liveperson.com/about/ir. If you are unable to participate on the live call, the teleconference will be available for replay approximately two hours after the call. To access the replay, please call 855-859-2056 (U.S. and Canada) or 404-537-3406 (international). Please reference the conference ID "57153167". The Company will also post a video discussion of its third quarter results on YouTube. To view, click on the following link: http://www.youtube.com/user/myliveperson. About LivePerson LivePerson, Inc. (Nasdaq: LPSN) offers a cloud-based platform that enables businesses to proactively connect in real-time with their customers via chat, voice, and content delivery at the right time, through the right channel, including websites, social media, and mobile devices. This "intelligent engagement" is driven by real-time behavioral analytics, producing connections based on a true understanding of business objectives and customer needs. More than 8,500 companies rely on LivePerson's platform to increase conversions and improve customer experience, including Hewlett-Packard, IBM, Microsoft, Verizon, Sky, Walt Disney, PNC, QVC and Orbitz. LivePerson received the CODiE award for Best Content Management Solution in 2012 and for Best Ecommerce Solution in 2011, and has been named a Company of the Year by Frost and Sullivan in 2011. LivePerson is headquartered in New York City with offices in San Francisco, Atlanta, Tel Aviv, London and Melbourne. For more information, please visit www.liveperson.com. To view other recent press releases about LivePerson, click on the following link: http://pr.liveperson.com. Non-GAAP Financial Disclosure Investors are cautioned that the following financial measures used in this press release are defined as "non-GAAP financial measures" by the Securities and Exchange Commission, or SEC: adjusted EBITDA, or earnings/(loss) before other income/(expense), taxes, depreciation, amortization, stock-based compensation, other non-cash charges, if any; and adjusted net income, or net income excluding amortization of intangible assets and stock-based compensation. These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation. In addition, although we have provided a reconciliation of these measures to the nearest comparable GAAP measures, they should not be construed as alternatives to any other measures of performance determined in accordance with generally accepted accounting principles, or as indicators of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that they fail to address. We present this financial information because we believe that it is helpful to some investors as a measure of our performance. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our current results with our results from other reporting periods and with the results of other companies. Safe Harbor Provision Statements in this press release regarding LivePerson that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause actual future events or results to differ materially from such statements. Any such forward-looking statements, including but not limited to financial guidance, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. It is routine for our internal projections and expectations to change as the quarter and year progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change. Although these expectations may change, we are under no obligation to inform you if they do. Actual events or results may differ materially from those contained in the projections or forward-looking statements. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: potential fluctuations in our quarterly and annual results; potential fluctuations in litigation, transaction-related and other costs; costs associated with our international expansion; the adverse effect that the global economic downturn may have on our business and results of operations; competition in the online sales, marketing, customer service and online engagement solutions markets; our ability to retain existing clients and attract new clients; risks related to new regulatory or other legal requirements that could materially impact our business; impairments to goodwill that result in significant charges to earnings; volatility of the value of certain currencies in relation to the US dollar, particularly the New Israeli Shekel, U.K. pound and Euro; risks related to our international operations, particularly our operations in Israel, and the civil and political unrest in that region; responding to rapid technological change and changing client preferences; our ability to retain key personnel and attract new personnel; risks related to the ability to successfully integrate past or potential future acquisitions; technology systems beyond our control and technology-related defects that could disrupt the LivePerson services; increased allowances for doubtful accounts as a result of an increasing amount of receivables due from customers with greater credit risk; privacy concerns relating to the Internet that could result in new legislation or negative public perception; risks related to the regulation or possible misappropriation of personal information belonging to our customers' Internet users; legal liability and/or negative publicity for the services provided to consumers via our technology platforms; risks related to protecting our intellectual property rights or potential infringement of the intellectual property rights of third parties; and risks related to our common stock being traded on more than one securities exchange, which may result in additional variations in the trading price of our common stock. This list is intended to identify only certain of the principal factors that could cause actual results to differ from those discussed in the forward-looking statements. Readers are referred to the reports and documents filed from time to time by us with the Securities and Exchange Commission for a discussion of these and other important risk factors that could cause actual results to differ from those discussed in forward-looking statements. LivePerson, Inc. Condensed Consolidated Statements of Income (In Thousands, Except Share and Per Share Data) Unaudited Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Revenue $ $ $ $ 39,670 34,347 114,934 96,581 Operating expenses: Cost of revenue 9,036 8,368 25,450 25,148 Product development 8,005 5,266 21,881 14,658 Sales and marketing 12,713 9,907 36,820 28,146 General and 7,316 5,689 22,784 15,037 administrative Amortization of 11 11 98 32 intangibles Total operating 37,081 29,241 107,033 83,021 expenses Income from operations 2,589 5,106 7,901 13,560 Other income (expense), 41 (762) 155 (370) net Income before provision 2,630 4,344 8,056 13,190 for income taxes Provision for income taxes 1,030 1,609 3,193 5,028 Net income $ $ $ $ 1,600 2,735 4,863 8,162 Basic net income per $ $ $ $ common share 0.03 0.05 0.09 0.16 Diluted net income per $ $ $ $ common share 0.03 0.05 0.09 0.15 Weighted average shares outstanding used in basic net income per common 55,688,824 53,109,824 55,087,109 52,642,700 share calculation Weighted average shares outstanding used in diluted net income per common 57,760,868 55,736,089 56,987,302 55,240,235 share calculation LivePerson, Inc. Reconciliation of Non-GAAP Financial Information to GAAP (In Thousands, Except Share and Per Share Data) Unaudited Unaudited Supplemental Data The following information is not a financial measure under generally accepted accounting principles (GAAP). In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with GAAP, or as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities as there may be significant factors or trends that it fails to address. We present this financial information because we believe that it is helpful to some investors as one measure of our operations. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our results with our results from other reporting periods and with the results of other companies. Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Net income in accordance with generally accepted accounting $ $ $ $ principles 1,600 2,735 4,863 8,162 Add/(less): (a) Amortization of 140 318 294 953 intangibles (b) Stock-based 2,852 1,736 7,646 4,951 compensation (c) Depreciation 1,841 1,704 5,170 4,928 (d) Provision for 1,030 1,609 3,193 5,028 income taxes (e) Other (income) (41) 762 (155) 370 expense, net Adjusted EBITDA (1) $ $ $ $ 7,422 8,864 21,011 24,392 Diluted adjusted EBITDA $ $ $ $ per common share 0.13 0.16 0.37 0.44 Weighted average shares used in diluted adjusted EBITDA per common share 57,760,868 55,736,089 56,987,302 55,240,235 Net income in accordance with generally accepted accounting $ $ $ $ principles 1,600 2,735 4,863 8,162 Add: (a) Amortization of 140 318 294 953 intangibles (b) Stock-based 2,852 1,736 7,646 4,951 compensation Adjusted net income $ $ $ $ 4,592 4,789 12,803 14,066 Diluted adjusted net $ $ $ $ income per common share 0.08 0.09 0.22 0.25 Weighted average shares used in diluted adjusted net income per common share 57,760,868 55,736,089 56,987,302 55,240,235 Adjusted EBITDA $ $ $ $ 7,422 8,864 21,011 24,392 Add/(less): (a) Changes in operating assets and (2,448) (722) 998 (1,719) liabilities (b) Provision for 110 20 230 doubtful accounts (c) Provision for (1,030) (1,609) (3,193) (5,028) income taxes (d) Deferred income (585) (243) (1,325) (58) taxes (e) Other income 41 (762) 155 (370) (expense), net Net cash provided by $ $ $ $ operating activities 3,400 5,638 17,666 17,447 (1) Earnings/(loss) before other income/(expense), taxes, depreciation, amortization, stock-based compensation and other non-cash charges. LivePerson, Inc. Condensed Consolidated Balance Sheets (In Thousands) Unaudited September 30, 2012 December 31, 2011 ASSETS Current assets: Cash and cash equivalents $ $ 103,284 93,278 Accounts receivable, net 22,825 20,999 Prepaid expenses and other current 6,921 5,390 assets Deferred tax assets, net 2,588 2,342 Total current assets 135,618 122,009 Property and equipment, net 16,124 13,879 Intangibles, net 12,367 1,095 Goodwill 26,572 24,090 Deferred tax assets, net 3,621 2,829 Deferred implementation costs, net of 215 247 current Security deposits 551 356 Other assets 1,465 1,546 Total assets $ $ 196,533 166,051 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ $ 9,908 8,258 Accrued expenses 14,056 12,019 Deferred revenue 6,752 5,378 Total current liabilities 30,716 25,655 Deferred revenue, net of current 1,152 1,152 Other liabilities 1,465 1,546 Total liabilities 33,333 28,353 Commitments and contingencies Total stockholders' equity 163,200 137,698 Total liabilities and $ $ stockholders' equity 196,533 166,051 Investor contact: Stacey Yonkus 212-609-4236 firstname.lastname@example.org SOURCE LivePerson, Inc. Website: http://www.liveperson.com
LivePerson Announces Third Quarter 2012 Financial Results
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