Bazaarvoice, Inc. Announces its Financial Results for the Fourth Fiscal Quarter and Fiscal Year Ended April 30, 2014

Bazaarvoice, Inc. Announces its Financial Results for the Fourth Fiscal Quarter and Fiscal Year Ended April 30, 2014  Fourth fiscal quarter of 2014 and recent strategic highlights include:    *Achieved revenue of $47.1 million which includes revenues from the     PowerReviews business, exceeding guidance   *Signed definitive agreement to divest PowerReviews for $30.0 million in     cash   *Completed the strategic acquisition of FeedMagnet   *Achieved record quarter for client launches and net new client additions   *Launched three new products at our annual client summit   AUSTIN, Texas, June 4, 2014 (GLOBE NEWSWIRE) -- Bazaarvoice, Inc. (Nasdaq:BV), the network connecting brands and retailers to the authentic voices of consumers wherever they shop, reported its financial results for the fourth fiscal quarter and fiscal year ended April 30, 2014.  "The fourth quarter was our best quarter of the year on many fronts. We exceeded our revenue guidance, achieved great performance in net new client additions and customer launches, and delivered a nice year over year improvement in our adjusted EBITDA loss," said Gene Austin, chief executive officer and president. "Given the strength of the fourth quarter, the launch of new offerings, and our overall view of the business heading into fiscal year 2015, we believe we are at or near our revenue growth rate bottom and we are confident our revenue growth rates will begin to accelerate by the third quarter of this fiscal year at the latest."  Fourth Fiscal Quarter of 2014 Financial Details  On April 24, 2014, we entered into a Joint Stipulation with the U.S. Department of Justice ("DOJ") to resolve the DOJ's claims in the antitrust action challenging our 2012 acquisition of PowerReviews, Inc. ("PowerReviews") and, together with the DOJ, we submitted a proposed order to the U.S. District Court for the Northern District of California (the "Court"). Under the terms of the Joint Stipulation and the proposed order, we are required to divest all of the net assets of the PowerReviews business.As a result of this, in accordance with accounting guidance, we have reported the results of operations and financial position of PowerReviews as discontinued operations within the condensed consolidated statements of operations and balance sheets for all periods presented. Accordingly, PowerReviews revenues, related expenses and an estimated loss on disposal, net of tax, are components of "loss from discontinued operations" in the Condensed Consolidated Statement of Operations. On the Condensed Consolidated Balance sheets the assets and liabilities of the discontinued operations of PowerReviews have been presented as 'Assets held for sale' and 'Liabilities held for sale,' respectively. The statement of cash flows is reported on a combined basis without separately presenting cash flows from discontinued operations.  For more information regarding discontinued operations, see the Frequently Asked Questions posted on the "Quarterly Results" section of our Investor Relations website at investors.bazaarvoice.com. Summary data below describes results from continuing operations and excludes results from discontinued operations.  Revenue from continuing operations: Bazaarvoice reported revenue of $43.1 million for the fourth quarter of 2014, up 11% from the fourth quarter of 2013, and consisted of SaaS revenue of $41.9 million and net media revenue of $1.2 million.  Adjusted EBITDA from continuing operations: Adjusted EBITDA for the fourth quarter of 2014 was a loss of $7.6 million, compared to a loss of $9.1 million for the fourth quarter of 2013.  GAAP net loss and net loss per share from continuing operations: GAAP net loss was $12.2 million, compared to a GAAP net loss of $23.0 million for the fourth quarter of 2013. GAAP net loss per share was $0.16 based upon weighted average shares outstanding of 77.2million, compared to $0.32 for the fourth quarter of 2013 based upon weighted average shares outstanding of 73.1 million.  Non-GAAP net loss and net loss per share from continuing operations: Non-GAAP net loss was $8.4 million, compared to a non-GAAP net loss of $10.7 million for the fourth quarter of 2013. Non-GAAP net loss per share was $0.11 based upon weighted average shares outstanding of 77.2million, compared to $0.15 for the fourth quarter of 2013 based upon weighted average shares outstanding of 73.1 million.  Fiscal Year 2014 Financial Details  Revenue from continuing operations: Bazaarvoice reported revenue of $168.1 million for the fiscal year ended April 30, 2014, up 15% from the fiscal year ended April 30, 2013, and consisted of SaaS revenue of $161.3 million and net media revenue of $6.8 million.  Adjusted EBITDA from continuing operations: Adjusted EBITDA for the fiscal year 2014 was a loss of $21.9 million, consistent with a loss of $21.9 million for the fiscal year 2013.  GAAP net loss and net loss per share from continuing operations: GAAP net loss was $52.8 million, compared to a GAAP net loss of $47.5 million for the fiscal year 2013. GAAP net loss per share was $0.70 based upon weighted average shares outstanding of 75.6million, compared to $0.69 for the fiscal year 2013 based upon weighted average shares outstanding of 69.3 million.  Non-GAAP net loss and net loss per share from continuing operations: Non-GAAP net loss was $25.8 million, compared to a non-GAAP net loss of $24.2 million for fiscal year 2013. Non-GAAP net loss per share was $0.34 based upon weighted average shares outstanding of 75.6million, compared to $0.35 for the fiscal year 2013 based upon weighted average shares outstanding of 69.3 million.  Clients: The number of active clients at the end of the fourth fiscal quarter and fiscal year 2014 was 1,133 and the number of network clients at the end of the fourth fiscal quarter and fiscal year 2014 was over 1,500. Annualized SaaS revenue per average active client for the fiscal year 2014 was approximately $156,000.  Number of Active Clients  Beginning as of our fourth quarter of fiscal 2014, we now define an active client as an organization from which we are currently recognizing recurring revenue, and we count organizations that are closely related as one client, even if they have signed separate contractual agreements. We believe that our ability to increase our active client base is a leading indicator of our ability to grow revenue.  Further, due to the presentation of the PowerReviews business as discontinued operations, we have separated our active clients into two categories: 1) active clients from continuing operations and 2) active clients from discontinued operations. As a result of this analysis, each category could include a common client who may have organizations for which we recognized recurring revenue thathave separate signed contractual agreements.  All prior periods discussed in this press release or presented in the accompanying financial tables have been revised to conform to the current period definition of an active client.  Number of Network Clients  We define a network client as an organization that does not have recurring revenue. We count organizations that are closely related as one client, even if they have signed separate contractual agreements. We believe that our network client base in combination with our active client base is an indicator of the reach of our network.  Quarterly Conference Call  Bazaarvoice will host a conference call today at 4:30 p.m. Eastern Time to review the company's financial results for the fourth quarter and fiscal year ended April30, 2014. To access this call, dial (888)481-2877 from the United States or (719)325-2495 internationally with conference ID 9791906. A live webcast of the conference call can be accessed from the investor relations page of Bazaarvoice's company website at investors.bazaarvoice.com. Following the completion of the call, a recorded replay will be available on the company's website, and a telephone replay will be available through June 18, 2014 by dialing (877)870-5176 from the United States or (858)384-5517 internationally with recording access code 9791906.  About Bazaarvoice  Bazaarvoice is a network that connects brands and retailers to the authentic voices of people where they shop. Each month, more than 400 million people view and share authentic opinions, questions, and experiences about tens of millions of products in the Bazaarvoice network. The company's technology platform amplifies these voices into the places that influence purchase decisions.Network analytics help marketers and advertisers provide more engaging experiences that drive brand awareness, consideration, sales, and loyalty.Headquartered in Austin, Texas, Bazaarvoice has offices across North America, Europe, and Asia-Pacific.For more information, visit www.bazaarvoice.com, read the blog at www.bazaarvoice.com/blog, and follow on Twitter atwww.twitter.com/bazaarvoice.  Non-GAAP Financial Measures  Adjusted EBITDA for continuing operations discussed in this press release is defined as our GAAP net loss from continuing operations adjusted for stock-based expense, contingent consideration related to acquisition, adjusted depreciation and amortization (which excludes amortization of capitalized internal-use software development costs), integration and other costs related to acquisitions, other non-business costs and benefits, income tax expense and other (income) expense, net.  Adjusted EBITDA for discontinuing operations presented in the accompanying financial tables is defined as our GAAP net loss from discontinued operations adjusted for stock-based expense, adjusted depreciation and amortization (which excludes amortization of capitalized internal-use software development costs), impairment of acquired intangibles, integration and other costs related to the acquisition and the divestiture of PowerReviews, estimated loss on disposal of discontinued operations, other non-business costs and benefits, income tax expense and other (income) expense, net.  Non-GAAP net loss for continuing operations, which is used to calculate non-GAAP net loss per share for continuing operations, is defined as our GAAP net loss from continuing operations, adjusted to exclude stock-based expense, contingent consideration related to acquisition, amortization of acquired intangible assets, integration and other costs related to acquisitions, and other non-business costs and benefits along with the associated income tax effect of these adjustments.  Non-GAAP net loss for discontinuedoperations, which is used to calculate non-GAAP net loss per share for discontinued operations, is defined as our GAAP net loss from discontinued operations adjusted to exclude stock-based expense, amortization of acquired intangible assets, impairment of acquired intangibles, integration and other costs related to the acquisition and divestiture of PowerReviews, estimated loss on disposal of discontinued operationsand other non-business costs and benefits along with the associated income tax effect of these adjustments.  Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of core operating performance. Further management has presented these non-GAAP financial measures separately for discontinued operations as it may prove useful to securities analyst and investors in evaluating the impact of the anticipated divestiture of PowerReviews on the company's continuing operating performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the company's operating performance against prior periods and the effectiveness of our business strategies, the preparation of operating budgets and to determine appropriate levels of operating and capital investments, as well as in communications with our board of directors concerning our financial performance. Management also believes that the non-GAAP financial measures provide additional insight for securities analysts and investors in evaluating the company's financial and operational performance without regard to items that can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired. However, these non-GAAP financial measures have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP. Furthermore, these non-GAAP financial measures may not be comparable to similarly titled measures of other organizations because other organizations may not calculate these non-GAAP financial measures in the same manner. We intend to provide these non-GAAP financial measures as part of our future financial results discussions and; therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.  Forward-looking Statements  This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, and objectives of management are forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "will," "would" and similar and "target" expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about management's expectation that revenue growth will begin to accelerate by the third quarter of fiscal year 2015, management's estimates regarding future revenue and financial performance, the ability to continue developing network solutions to leverage our consumer audience reach, content and data to create incremental value for clients, and other statements about management's beliefs, intentions or goals. We may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to, our expectations regarding our revenue, expenses, sales and operations; our limited operating history; our ability to operate in a new and unproven market; our ability to effectively manage growth, especially in light of our announced management changes; our ability to manage expansion into international markets and new vertical industries; our ability to successfully identify, manage and integrate potential acquisitions; and other risks and potential factors that could affect Bazaarvoice's business and financial results identified in our Form 10-K for the fiscal year ended April30, 2013, our Form 10-Q for the fiscal quarter ended January 31, 2014, and Form S-1 as filed with the Securities and Exchange Commission on July12, 2012. Additional information will also be set forth in our future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend and undertake no duty to release publicly any updates or revisions to any forward-looking statements contained herein.  Bazaarvoice, Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited)                                                                                                                            April 30,  April 30,                                                         2014       2013 Assets                                                    Current assets:                                                     Cash and cash equivalents                                $31,934  $25,045 Restricted cash                                          604       604 Short-term investments                                   40,700    70,290 Accounts receivable, net                                 39,099    27,582 Prepaid expenses and other current assets                8,212     6,563 Assets held for sale                                     33,745    52,055 Total current assets                                     154,294   182,139 Property, equipment and capitalized internal-use         17,005    14,461 software development costs, net Goodwill                                                 139,155   132,831 Acquired intangible assets, net                          13,388    10,751 Other non-current assets                                 3,428     1,761 Total assets                                             $327,270 $341,943 Liabilities and stockholders' equity                                Current liabilities:                                                Accounts payable                                         $3,346   $6,362 Accrued expenses and other current liabilities           27,071    29,959 Revolving line of credit                                 27,000    -- Deferred revenue                                         54,951    51,039 Liabilities held for sale                                3,621     6,650 Total current liabilities                                115,989   94,010 Deferred revenue less current portion                    1,722     1,920 Deferred tax liability, long-term                        1,730     2,032 Other liabilities, long-term                             1,367     2,632 Total liabilities                                        120,808   100,594 Stockholders' equity:                                               Common stock                                             8         7 Additional paid-in capital                               398,201   370,397 Accumulated other comprehensive income (loss)            328       (146) Accumulated deficit                                      (192,075) (128,909) Total stockholders' equity                               206,462   241,349 Total liabilities and stockholders' equity               $327,270 $341,943   Bazaarvoice, Inc. Condensed Consolidated Statements of Operations (in thousands, except net loss per share data) (unaudited)                                                                                               Three Months            Twelve Months                               Ended April 30,         Ended April 30,                               2014        2013        2014        2013 Revenue                        $43,078   $38,924   $168,145  $146,812 Cost of revenue                14,522     12,319     52,905     47,350 Gross profit                   28,556     26,605     115,240    99,462 Operating expenses:                                              Sales and marketing            23,884     22,095     86,482     73,114 Research and development       9,832      8,691      37,585     32,169 General and administrative     6,521      9,672      26,370     30,990 Acquisition-related and other  366        7,819      16,184     10,487 Amortization of acquired       288        282        1,135      549 intangible assets Total operating expenses       40,891     48,559     167,756    147,309 Operating loss                 (12,335)   (21,954)   (52,516)   (47,847) Other income (expense), net:                                     Interest income                7          107        143        217 Other expense                  (323)      (590)      (973)      (1,045) Total other expense, net       (316)      (483)      (830)      (828) Loss from continuing           (12,651)   (22,437)   (53,346)   (48,675) operations before income taxes Income tax expense (benefit)   (418)      583        (500)      (1,172) Net loss from continuing operations attributable to     (12,233)   (23,020)   (52,846)   (47,503) common stockholders Loss from discontinued         (11,448)   (124)      (10,320)   (16,249) operations, net of tax Net loss applicable to common  $(23,681) $(23,144) $(63,166) $(63,752) stockholders                                                                 Basic and diluted loss per                                       share: Continuing operations          $(0.16)   $(0.32)   $(0.70)   $(0.69) Discontinued operations        (0.15)     --         (0.14)     (0.23) Basic and diluted loss per     $(0.31)   $(0.32)   $(0.84)   $(0.92) share:                                                                 Basic and diluted weighted average number of shares       77,165     73,121     75,564     69,336 outstanding   Bazaarvoice, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)                                                                                            Three Months              Twelve Months                            Ended April 30,           Ended April 30,                            2014         2013         2014         2013 Operating activities:                                            Net loss                    $(23,681)  $(23,144)  $(63,166)  $(63,752) Adjustments to reconcile net loss to net cash                                             provided by (used in) operating activities: Depreciation and            3,901       3,427       15,068      10,900 amortization expense Impairment of acquired      2,500       --          2,500       -- intangible assets Estimated loss on disposal of discontinued operations, 9,192       --          9,192       -- net of tax Stock-based expense         3,472       3,381       14,468      22,453 Revaluation of contingent   --          (1,000)     (3,270)     (1,000) consideration Bad debt expense            469         1,216       1,902       2,859 Excess tax benefit related  (120)       (145)       (216)       (510) to stock-based expense Other non-cash expense      286         5           480         (5) (benefit) ^(1) Changes in operating assets                                      and liabilities: Accounts receivable         3,721       (168)       (12,081)    (10,749) Prepaid expenses and other  (1,176)     (2,023)     (1,551)     (1,766) current assets Other non-current assets    (130)       (1,593)     (1,603)     (432) Accounts payable            (3,570)     453         (3,095)     974 Accrued expenses and other  (409)       6,256       (2,623)     13,283 current liabilities Deferred revenue            3,225       3,986       2,040       8,633 Other liabilities,          (585)       253         (1,512)     (2,699) long-term Net cash used in operating  (2,905)     (9,096)     (43,467)    (21,811) activities Investing activities:                                            Acquisitions, net of cash acquired, and purchase of   (8,946)     --          (9,616)     (60,750) intangible asset Purchases of property, equipment and capitalized   (2,155)     (2,849)     (10,661)    (10,853) internal-use software development costs Purchases of short-term     (25,575)    (16,250)    (60,092)    (90,828) investments Proceeds from maturities of 13,068      22,541      58,478      61,310 short-term investments Proceeds from sales of      --          5,013       31,098      10,037 short-term investments ^(1) Net cash provided by (used  (23,608)    8,455       9,207       (91,084) in) investing activities Financing activities:                                            Proceeds from follow-on stock offering, net of      --          --          --          51,943 costs Proceeds from employee      2,460       1,756       13,499      11,226 stock compensation plans Proceeds from revolving     27,000      --          27,000      -- line of credit Excess tax benefit related  120         145         216         510 to stock-based expense Net cash provided by        29,580      1,901       40,715      63,679 financing activities Effect of exchange rate fluctuations on cash and    175         (60)        434         (106) cash equivalents Net change in cash and cash 3,242       1,200       6,889       (49,322) equivalents Cash and cash equivalents   28,692      23,845      25,045      74,367 at beginning of period Cash and cash equivalents   $31,934    $25,045    $31,934    $25,045 at end of period                                                                 Supplemental disclosure of other cash flow                                                  information: Cash paid for income taxes  $763       $204       $1,493     $440 Cash paid for interest      137         --          137         -- Supplemental disclosure of non-cash investing and                                           financing activities: Purchase of intangible asset recorded in accrued   $--        $205       $--        $705 expenses and other current liabilities Issuance of stock for       --          --          --          125,497 acquisition                                                                 ^(1) Prior period has been reclassified to conform with basis of presentation adopted in current period.                                                                 These Condensed Consolidated Statements of Cash Flows include combined cash flows from continuing operations along with discontinued operations.   Bazaarvoice, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures for Continuing Operations (in thousands, except net loss per share data) (unaudited)                                                                                        Three Months                Twelve Months                         Ended April 30,             Ended April 30,                         2014          2013          2014         2013 Non-GAAP net loss and net loss per share from                                         continuing operations: GAAP net loss from       $(12,233)   $(23,020)   $(52,846)  $(47,503) continuing operations Stock-based expense ^(1) 3,333        3,114        13,825      11,158 Contingent consideration related to acquisition ^ --           (410)        (3,860)     (410) (2) Amortization of acquired 317          282          1,164       549 intangible assets Acquisition-related and  366          7,819        16,184      10,487 other expense Other stock-related      --           1,428        --          1,428 expense ^(4) Income tax adjustment    (191)        39           (239)       64 for non-GAAP items Non-GAAP net loss from   $(8,408)    $(10,748)   $(25,772)  $(24,227) continuing operations GAAP basic and diluted   77,165       73,121       75,564      69,336 shares Non-GAAP basic and diluted net loss per     $(0.11)     $(0.15)     $(0.34)    $(0.35) share from continuing operations                                                                Adjusted EBITDA from                                            continuing operations: GAAP net loss from       $(12,233)   $(23,020)   $(52,846)  $(47,503) continuing operations Stock-based expense ^(1) 3,333        3,114        13,825      11,158 Contingent consideration related to acquisition ^ --           (410)        (3,860)     (410) (2) Adjusted depreciation    1,081        948          4,492       3,322 and amortization ^(3) Acquisition-related and  366          7,819        16,184      10,487 other expense Other stock-related      --           1,428        --          1,428 expense ^(4) Income tax expense       (418)        583          (500)       (1,172) (benefit) Total other (income)     316          483          830         828 expense, net Adjusted EBITDA from     $(7,555)    $(9,055)    $(21,875)  $(21,862) continuing operations:                                                                ^(1) Stock-based expense                                        includes the following: Cost of revenue          $316        $149        $1,155     $677 Sales and marketing      1,072        841          4,496       3,033 Research and development 747          733          2,817       2,840 General and              1,198        1,391        5,357       4,608 administrative Stock-based expense      $3,333      $3,114      $13,825    $11,158                                                                ^(2) Contingent consideration related to                                        acquisition includes the following: (a) Revaluation of                                              contingent consideration General and              $--         $(1,000)    $(3,270)   $(1,000) administrative (b) Contingent consideration included                                          in compensation expense General and              --           295          (295)       295 administrative Sales and marketing      --           295          (295)       295 Contingent consideration $--         $(410)      $(3,860)   $(410) related to acquisition                                                                Revaluation of contingent consideration is the decrease in fair value of the liability-classified contingent consideration related to the acquisition of Longboard Media, Inc. Contingent consideration included in compensation expense relates to certain Longboard Media, Inc. employees whose right to receive such compensation is forfeited if they terminate their employment. The contingent consideration was payable on Longboard Media's achievement of certain performance goals for the period from January 1, 2013 to December 31, 2013. On October 31, 2013, the Company determined that the probability of the attainment of the underlying performance goals was remote and the resultant payout was estimated to be zero. As a result, the fair value of the liability-classified contingent consideration and the liability accrued for contingent consideration included in compensation expense were reduced to zero. On January 31, 2014, the Company concluded that the underlying performance goals were not met and the payout was zero. We exclude these items from our non-GAAP financial measures in order to facilitate the comparison of post-acquisition operating results.                                                                ^(3) Adjusted depreciation and                                                amortization includes the following: Cost of revenue          $244        $231        $937       $891 Sales and marketing      275          120          1,112       601 Research and development 189          173          813         647 General and              85           142          495         634 administrative Amortization of acquired 288          282          1,135       549 intangible assets Adjusted depreciation    $1,081      $948        $4,492     $3,322 and amortization                                                                ^(4) Other stock-related expense includes the                                            following: General and              $--         $1,428      $--        $1,428 administrative Other stock-related      $--         $1,428      $--        $1,428 expense  Other stock-related expense represents a non-recurring estimated liability for taxes and related items in connection with our treatment of certain stock option grants. Since the estimated liability directly relates to stock option grants and as stock-based expenses are consistently excluded from our non-GAAP financial measures, we have excluded this estimated liability.   Bazaarvoice, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures for Discontinued Operations (in thousands, except net loss per share data) (unaudited)                                                                                           Three Months             Twelve Months                            Ended April 30,          Ended April 30,                            2014          2013       2014         2013 Non-GAAP net income (loss) and net earnings per share from discontinued                             operations: GAAP net loss from          $(11,448)   $(124)   $(10,320)  $(16,249) discontinued operations Stock-based expense ^(1)    139          267       643         11,295 Amortization of acquired    1,472        1,549     5,888       4,965 intangible assets Impairment of acquired      2,500        --        2,500       -- intangible assets^(4) Acquisition-related, divestiture-related and     819          (378)     819         1,725 other expenses Other stock-related expense --           772       --          772 ^(3) Estimated loss on disposal of discontinued operations, 9,192        --        9,192       -- net of tax^(5) Non-GAAP net income from    $2,674      $2,086   $8,722     $2,508 discontinued operations GAAP basic weighted average 77,165       73,121    75,564      69,336 shares outstanding: GAAP diluted weighted       78,492       75,808    78,006      75,121 average shares outstanding; Non-GAAP basic earnings per share from discontinued     $0.03       $0.03    $0.12      $0.04 operations Non-GAAP diluted earnings per share from discontinued $0.03       $0.03    $0.11      $0.03 operations                                                                Adjusted EBITDA from                                            discontinued operations: GAAP net loss from          $(11,448)   $(124)   $(10,320)  $(16,249) discontinued operations Stock-based expense ^(1)    139          267       643         11,295 Adjusted depreciation and   1,482        1,589     5,983       5,114 amortization ^(2) Impairment of acquired      2,500        --        2,500       -- intangible assets^(4) Acquisition-related, divestiture-related and     819          (378)     819         1,725 other expenses Other stock-related expense --           772       --          772 ^(3) Income tax expense          (660)        1         22          25 (benefit) Total other (income)        --           (10)      (4)         (14) expense, net Estimated loss on disposal of discontinued operations, 9,192        --        9,192       -- net of tax^(5) Adjusted EBITDA from        $2,024      $2,117   $8,835     $2,668 discontinued operations:                                                                ^(1) Stock-based expense                                        includes the following: Cost of revenue             $127        $236     $567       $1,057 Sales and marketing         --           5         7           1,239 Research and development    6            24        55          307 General and administrative  6            2         14          8,692 Stock-based expense         $139        $267     $643       $11,295                                                                ^(2) Adjusted depreciation and amortization includes                                       the following: Cost of revenue             $450        $450     $1,800     $1,590 Sales and marketing         --           --        --          -- Research and development    --           --        --          -- General and administrative  10           40        95          149 Amortization of acquired    1,022        1,099     4,088       3,375 intangible assets Adjusted depreciation and   $1,482      $1,589   $5,983     $5,114 amortization                                                                ^(3) Other stock-related expense includes the                                            following: General and administrative  $--         $772     $--        $772 Other stock-related expense $--         $772     $--        $772  Other stock-related expense represents a non-recurring estimated liability for taxes and related items in connection with our treatment of certain stock option grants. Since the estimated liability directly relates to stock option grants and as stock-based expenses are consistently excluded from our non-GAAP financial measures, we have excluded this estimated liability. ^(4) Prior to the classification as "assets held for sale", the Company determined that the carrying value of the asset group exceeded the undiscounted cash flows expected to be generated. As a result, the Company recorded an impairment change of $2.5 million for the three months ended April 30, 2014. ^(5) Estimated loss on disposal of discontinued operations has been determined by estimating proceeds from selling the PowerReviews business, net of any associated transaction costs, less the net carrying value of the assets and liabilities held for sale as of April 30, 2014. Any material change between the estimated proceeds used for determining the loss on disposal and the actual proceeds due to the timing of executing a definitive agreementwith aprospective buyer on or around the date of this 8-K filingmay result in a revision of this estimated loss. Any such revisions will be reflectedin the financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2014 and, if required, an amended Current Report on Form 8-K/A.  Bazaarvoice, Inc. Selected Quarterly Financial and Operational Metrics for Continuing and Discontinued Operations (in thousands, except active enterprise clients and full-time employees data) (unaudited)                                                                                                                 Three Months Ended                     Jul 31,     Oct 31,    Jan 31,    Apr 30,    Jul 31,    Oct 31,    Jan 31,    Apr 30,                     2012        2012       2013       2013       2013       2013       2014       2014 Continuing                                                                                   Operations: Revenue ^(1)         $33,820   $35,148  $38,920  $38,924  $40,319  $41,148  $43,600  $43,078 Cost of revenue ^(2) 11,229     11,672    12,130    12,319    12,117    12,508    13,758    14,522 Gross profit         22,591     23,476    26,790    26,605    28,202    28,640    29,842    28,556 Operating expenses:                                                                          Sales and marketing  13,751     17,165    20,103    22,095    20,996    20,837    20,765    23,884 ^ (2), (4) Research and         7,160      7,496     8,822     8,691     8,924     9,793     9,036     9,832 development ^(2) General and administrative ^(2), 6,660      6,533     8,125     9,672     8,536     3,639     7,674     6,521 (4) Acquisition-related  --        1,085     1,583     7,819     7,504     8,283     31        366 and other expense Amortization of acquired intangible  --        --       267       282       282       283       282       288 assets Total operating      27,571     32,279    38,900    48,559    46,242    42,835    37,788    40,891 expenses Operating loss       (4,980)    (8,803)   (12,110)  (21,954)  (18,040)  (14,195)  (7,946)   (12,335) Total other income   (407)      54        8         (483)     3         (249)     (268)     (316) (expense), net Net loss before      (5,387)    (8,749)   (12,102)  (22,437)  (18,037)  (14,444)  (8,214)   (12,651) income taxes Income tax expense   269        271       (2,295)   583       (391)     130       179       (418) (benefit) Net loss from continuing           (5,656)    (9,020)   (9,807)   (23,020)  (17,646)  (14,574)  (8,393)   (12,233) operations Stock-based expense  2,243      3,040     2,761     3,114     3,807     3,467     3,218     3,333 ^(3) Contingent consideration        --        --       --       (410)     370       (4,230)   --       -- related to acquisition ^(4) Adjusted depreciation and     595        708       1,071     948       1,053     1,202     1,156     1,081 amortization ^(5) Acquisition-related  --        1,085     1,583     7,819     7,504     8,283     31        366 and other expense Other stock-related  --        --       --       1,428     --       --       --       -- expense ^(6) Income tax expense   269        271       (2,295)   583       (391)     130       179       (418) (benefit) Total other (income) 407        (54)      (8)       483       (3)       249       268       316 expense, net Adjusted EBITDA from continuing           $(2,142)  $(3,970) $(6,695) $(9,055) $(5,306) $(5,473) $(3,541) $(7,555) operations                                                                                             Net income (loss) from discontinued    $(12,883) $(2,222) $(1,020) $(124)   $278     $420     $430     $(11,448) operations Stock-based expense  10,095      555        378        267        201        181        122        139 ^(3) Adjusted depreciation and     743         1,391      1,391      1,589      1,506      1,503      1,492      1,482 amortization ^(5) Impairment of acquired intangible  --        --       --       --       --       --       --       2,500 assets ^(8) Acquisition-related, divestiture-related  1,384       281        438        (378)     --       --       --       819 and other expenses Other stock-related  --        --       --       772       --       --       --       -- expense ^(6) Income tax expense   19          3          2          1          168        253        261        (660) (benefit) Total other (income) (3)        3         (4)       (10)      (4)       --       --       -- expense, net Estimated loss on disposal of discontinued         --        --       --       --       --       --       --       9,192 operations, net of tax^(9) Adjusted EBITDA from discontinued         $(645)    $11      $1,185   $2,117   $2,149   $2,357   $2,305   $2,024 operations                                                                                             Number of active clients from continuing           843        866       943       885       922       980       1,011     1,133 operations (at period end) ^(7) Number of active clients from discontinued         340        356       413       404       398       389       368       341 operations (at period end) ^(7) Full-time employees including employees attributable to      771        777       796       783       776       798       794       799 discontinued operations (at period end) Full-time employees attributable to discontinued         68         48        35        29        28        27        25        24 operations (at period end)                                                                                             ^(1) Revenue from continuing                                                                                   operations includes the following: SaaS                 $33,820   $35,148  $37,071  $38,057  $38,863  $39,896  $40,645  $41,924 Media                --        --       1,849     867       1,456     1,252     2,955     1,154 Revenue              $33,820   $35,148  $38,920  $38,924  $40,319  $41,148  $43,600  $43,078                                                                                             Revenue from discontinued                                                                                 operations includes the following: SaaS                 $1,803    $3,402   $3,639   $4,316   $4,179   $4,335   $4,338   $3,947 Media                39         76        119       90        73        55        59        25 Revenue              $1,842    $3,478   $3,758   $4,406   $4,252   $4,390   $4,397   $3,972                                                                                             Total revenue:                                                                               SaaS                 $35,623   $38,550  $40,710  $42,373  $43,042  $44,231  $44,983  $45,871 Media                39         76        1,968     957       1,529     1,307     3,014     1,179 Revenue              $35,662   $38,626  $42,678  $43,330  $44,571  $45,538  $47,997  $47,050  ^(2) To conform with the basis of presentation adopted in the three months ended July 31, 2013, the presentation of certain expense line items for prior periods has been adjusted to reflect the reclassification of bad debt expense from sales and marketing to general and administrative, and to allocate certain information technology costs from general and administrative to cost of revenue, sales and marketing, and research and development.                                                                                             Bazaarvoice, Inc. Selected Quarterly Financial and Operational Metrics for Continuing and Discontinued Operations (continued) (in thousands, except active enterprise clients and full-time employees data) (unaudited)                                                                                                                 Three Months Ended                     Jul 31,     Oct 31,    Jan 31,    Apr 30,    Jul 31,    Oct 31,    Jan 31,    Apr 30,                     2012        2012       2013       2013       2013       2013       2014       2014 ^(3) Stock-based expense from continuing                                                                                   operations includes the following: Cost of revenue      $100      $261     $167     $149     $318     $236     $285     $316 Sales and marketing  651        835       706       841       1,227     1,324     873       1,072 Research and         560        919       628       733       805       662       603       747 development General and          932        1,025     1,260     1,391     1,457     1,245     1,457     1,198 administrative Stock-based expense from continuing      $2,243    $3,040   $2,761   $3,114   $3,807   $3,467   $3,218   $3,333 operations                                                                                             Stock-based expense from discontinued                                                                            operations includes the following: Cost of revenue      $201      $333     $287     $236     $174     $160     $106     $127 Sales and marketing  1,179      43        12        5         4         2         1         -- Research and         87         143       53        24        19        17        13        6 development General and          8,628      36        26        2         4         2         2         6 administrative Stock-based expense from discontinued    $10,095   $555     $378     $267     $201     $181     $122     $139 operations                                                                                             ^(4) Contingent consideration related to                                                                                   acquisition includes the following: (a) Revaluation of contingent                                                                                   consideration General and          $--       $--      $--      $(1,000) $--      $(3,270) $--      $-- administrative (b) Contingent consideration                                                                                included in compensation expense General and          --         --        --        295       185       (480)     --        -- administrative Sales and marketing  --         --        --        295       185       (480)     --        -- Contingent consideration        $--       $--      $--      $(410)   $370     $(4,230) $--      $-- related to acquisition                                                                                             Revaluation of contingent consideration is the decrease in fair value of the liability-classified contingent consideration related to the acquisition of Longboard Media, Inc. Contingent consideration included in compensation expense relates to certain Longboard Media, Inc. employees whose right to receive such compensation is forfeited if they terminate their employment. The contingent consideration was payable to Longboard Media's achievement of certain performance goals for the period from January 1, 2013 to December 31, 2013. On October 31, 2013, the Company determined that the probability of the attainment of the underlying performance goals was remote and the resultant payout was estimated to be zero. As a result, the fair value of the liability-classified contingent consideration and the liability accrued for contingent consideration included in compensation expense were reduced to zero. On January 31, 2014, the Company concluded that the underlying performance goals were not met and the payout was zero. We exclude these items from our non-GAAP financial measures in order to facilitate the comparison of post-acquisition operating results.                      Three Months Ended                     Jul 31,     Oct 31,    Jan 31,    Apr 30,    Jul 31,    Oct 31,    Jan 31,    Apr 30,                     2012        2012       2013       2013       2013       2013       2014       2014 ^(5) Adjusted depreciation and amortization from                                                                            continuing operations includes the following: Cost of revenue      $197      $231     $232     $231     $226     $238     $229     $244 Sales and marketing  133        175       173       120       221       318       298       275 Research and         144        161       169       173       189       226       209       189 development General and          121        141       230       142       135       137       138       85 administrative Amortization of acquired intangible  --         --        267       282       282       283       282       288 assets Adjusted depreciation and amortization from    $595      $708     $1,071   $948     $1,053   $1,202   $1,156   $1,081 continuing operations                                                                                             Adjusted depreciation and amortization from                                                                            discontinued operations includes the following: Cost of revenue      $240      $450     $450     $450     $450     $450     $450     $450 General and          23         43        43        40        34        31        20        10 administrative Amortization of acquired intangible  480        898       898       1,099     1,022     1,022     1,022     1,022 assets Adjusted depreciation and amortization from    $743      $1,391   $1,391   $1,589   $1,506   $1,503   $1,492   $1,482 discontinued operations                                                                                             ^(6) Other stock-related expense from                                                                                 continuing operations includes the following: General and          $--       $--      $--      $1,428   $--      $--      $--      $-- administrative Other stock-related  $--       $--      $--      $1,428   $--      $--      $--      $-- expense                                                                                             Other stock-related expense from discontinued                                                                                 operations includes the following: General and          $--       $--      $--      $772     $--      $--      $--      $-- administrative Other stock-related  $--       $--      $--      $772     $--      $--      $--      $-- expense Other stock-related expense represents an estimated liability for taxes and related items in connection with our treatment of certain stock option grants. Since the estimated liability directly relates to stock option grants and as stock-based expenses are consistently excluded from our non-GAAP financial measures, we have excluded this estimated liability. ^(7) Beginning as of our fourth quarter of fiscal 2014, we now define an active client as an organization from which we are currently recognizing recurring revenue, and we count organizations that are closely related as one client, even if they have signed separate contractual agreements. We believe that our ability to increase our active client base is a leading indicator of our ability to grow revenue. Further, due to the presentation of the PowerReviews business as discontinued operations, we have separated our active clients into two categories: 1) active clients from continuing operations and 2) active clients from discontinued operations. As a result of this analysis, each category could include a common client who may have organizations for which we recognized recurring revenue thathave separate signed contractual agreements. All prior periods discussed in this press release or presented in the accompanying financial tables have been revised to conform to the current period definition of an active client. ^(8) The Company compared the carrying value of the asset group included in "assets held for sale" to the undiscounted cash flows to be generated by the asset group. The carrying value of the asset group exceeded the undiscounted cash flows and as a result, the Company recorded an impairment charge of $2.5 million for the three months ended April 30, 2014.  ^(9) Estimated loss on disposal of discontinued operations has been determined by estimating proceeds from selling the PowerReviews business, net of any associated transaction costs, less the net carrying value of the assets and liabilities held for sale as of April 30, 2014. Any material change between the estimated proceeds used for determining the loss on disposal and the actual proceeds due to the timing of executing a definitive agreementwith aprospective buyer on or around the date of this 8-K filingmay result in a revision of this estimated loss. Any such revisions will be reflectedin the financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2014 and, if required, an amended Current Report on Form 8-K/A.  CONTACT: Investor Relations Contact:                   Linda Wells          Bazaarvoice, Inc.          415-489-6045          linda.wells@bazaarvoice.com                   Media Contact:          Matt Krebsbach          Bazaarvoice, Inc.          512-551-6612          matt.krebsbach@bazaarvoice.com  Bazaarvoice Logo  
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