LivePerson Announces Third Quarter 2012 Financial Results

          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
syonkus@liveperson.com

SOURCE LivePerson, Inc.

Website: http://www.liveperson.com
 
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