LivePerson Reports Second Quarter 2009 Financial Results

- Quarterly revenue increases 11% from prior year

- EBITDA per share of $0.09 for second quarter

- EPS of $0.02 for second quarter

NEW YORK

NEW YORK, Aug. 4 /PRNewswire-FirstCall/ -- LivePerson, Inc. (NASDAQ: LPSN), a leading provider of online engagement solutions that facilitate real-time assistance and expert advice, today announced financial results for the second quarter ended June 30, 2009.

Revenue

Revenue for the second quarter was $20.5 million, an 11% increase from the second quarter of 2008, and a 3% sequential increase as compared to the first quarter of 2009. Revenue from business operations for the second quarter was $17.7 million, a 2% increase as compared to the first quarter of 2009 and a 12% increase from the second quarter of 2008. Revenue from consumer operations increased 14% sequentially from the first quarter of 2009, and 3% from the prior year quarter.

"We were pleased to see increased expansion of existing enterprise clients in the second quarter," CEO Robert LoCascio said. "We continue to see signs of improvement in both bookings and deal sizes across our enterprise pipeline, which positions us well for the rest of 2009. Coupled with double-digit sequential growth within our consumer operations, we are pleased with our results this quarter and the outlook for the remainder of the year."

Customer Expansion

LivePerson added several new clients in the quarter, including:

  • Symantec
  • Omni Hotels
  • iStockphoto
  • A leading online financial services provider
  • A global leader in electrical engineering and electronics
  • A leading online electronic retailer and

The company also expanded business with existing clients, including:

  • Verizon
  • National City
  • The world's largest home improvement retailer
  • A leading provider of software, services and solutions for businesses and consumers
  • A leading global telecommunications company, and
  • A leading online travel portal

Net Income/Loss

Net income for the second quarter of 2009 was $1.1 million or $0.02 per share as compared to a net loss of $0.2 million or $0.00 per share in the second quarter of 2008.

Adjusted Net Income and EBITDA

LivePerson considers adjusted net income and earnings/(loss) before other income/(expense), taxes, depreciation, amortization and stock-based compensation (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.

A reconciliation of the differences between 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 Operations included below.

The difference between EBITDA per share, a non-GAAP measure, and GAAP EPS, is interest, 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.

Adjusted net income for the second quarter of 2009 was $2.8 million or $0.06 per share, as compared to $1.7 million or $0.04 per share in the comparable period in 2008, and $3.0 million or $0.06 per share in the first quarter of 2009.

EBITDA for the second quarter of 2009 was $4.4 million or $0.09 per share, as compared to $1.9 million or $0.04 per share in the second quarter of 2008, and $5.2 million or $0.11 per share in the first quarter of 2009.

Cash

The company's cash balance was $31.3 million at June 30, 2009 as compared to $28.0 million as of March 31, 2009. The company generated $5.7 million from operations in the second quarter. Also during the second quarter, the company incurred planned capital expenditures related primarily to the purchase of servers and computer networking equipment, resulting in a cash outlay of approximately $2.8 million.

Financial Expectations

Third Quarter 2009

  • Revenue of $21.3 - $21.8 million
  • EBITDA of $0.08 - $0.09 per share
  • Adjusted net income per share of $0.05 - $0.06
  • GAAP EPS of $0.01 - $0.02
  • Fully diluted share count of approximately 49 million

Full Year 2009

  • Revenue of $84 - $86 million
  • EBITDA of $0.36 - $0.38 per share
  • Adjusted net income per share of $0.22 - $0.24
  • GAAP EPS of $0.07 - $0.09
  • Fully diluted share count of approximately 49 million

Other Full Year 2009 Assumptions

  • Amortization of intangibles of approximately $2.0 million
  • Stock-compensation expense of approximately $4.6 million
  • Depreciation of approximately $4.0 million
  • Effective tax rate of approximately 45%
  • Cash tax rate of approximately 40%
  • Capital expenditures of approximately $7.0 - $9.0 million

Stock-Based Compensation

Included in the accompanying financial results are expenses related to stock-based compensation, as follows (in thousands):

                                       Q2 2009
                                       -------
    Cost of revenue                       $207
    Product development                    372
    Sales and marketing                    292
    General and administrative             247
                                       -------
       Total                            $1,118

Amortization of Intangible Assets

Included in the accompanying financial results are expenses related to the amortization of intangible assets, as follows (in thousands):

                                      Q2 2009
                                      -------
    Cost of revenue                      $307
    General and administrative            272
                                      -------
       Total                             $579

                               LivePerson, Inc.
                Condensed Consolidated Statements of Operations
                (In Thousands, Except Share and Per Share Data)
                                   Unaudited

                               Three Months Ended      Six Months Ended
                                     June 30,               June 30,
                                     --------               --------
                                  2009       2008        2009        2008
                                  ----       ----        ----        ----
    Revenue                    $20,541    $18,588     $40,460     $35,673
                               -------    -------     -------     -------

    Operating expenses:
      Cost of revenue            5,228      5,234       9,513      10,120
      Product development        3,138      3,503       5,839       6,577
      Sales and marketing        6,908      6,443      13,412      12,241
      General and
       administrative            3,157      3,455       6,679       6,635
      Amortization of
       intangibles                 272        391         544         782
                                   ---        ---         ---         ---
          Total operating
           expenses             18,703     19,026      35,987      36,355
                                ------     ------      ------      ------

    Income (loss) from
     operations                  1,838       (438)      4,473        (682)

    Other income
     (expense), net                 44        108         (40)        189
                                    --        ---         ---         ---

    Income (loss) before
     provision for (benefit
     from) income taxes          1,882       (330)      4,433        (493)

    Provision for (benefit
     from) income taxes            748       (139)      2,028         (90)
                                   ---       ----       -----         ---

    Net income (loss)           $1,134      $(191)     $2,405       $(403)
                                ======      =====      ======       =====

    Basic net income
     (loss) per common
     share                       $0.02     $(0.00)      $0.05      $(0.01)
                                 =====     ======       =====      ======

    Diluted net income
     (loss) per common
     share                       $0.02     $(0.00)      $0.05      $(0.01)
                                 =====     ======       =====      ======

    Weighted average shares
     outstanding used in basic
     net income (loss) per
     common share
     calculation            47,611,657 47,182,068  47,540,614  47,537,385
                            ========== ==========  ==========  ==========

    Weighted average shares
     outstanding used in
     diluted net income
     (loss) per common
     share calculation      48,650,478 47,182,068  48,301,914  47,537,385
                            ========== ==========  ==========  ==========



                                   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       Six Months Ended
                                        June 30,                June 30,
                                        --------                --------
                                   2009        2008        2009        2008
                                   ----        ----        ----        ----
    Net income (loss) in
     accordance with generally
     accepted accounting
     principles                  $1,134       $(191)     $2,405       $(403)
      Add/(less):
      (a) Amortization of
           intangibles              579         698       1,158       1,396
      (b) Stock-based
           compensation           1,118       1,204       2,279       2,164
      (c) Depreciation              825         475       1,627         798
      (d) Provision for
           (benefit from)
           income taxes             748        (139)      2,028         (90)
      (e) Other (income)
           expense, net             (44)       (108)         40        (189)
                                    ---        ----          --        ----
    EBITDA (1)                   $4,360      $1,939      $9,537      $3,676
                                 ======      ======      ======      ======
    Diluted EBITDA per common
     share                        $0.09       $0.04       $0.20       $0.07
                                  =====       =====       =====       =====
     Weighted average shares
      used in diluted EBITDA
      per common share        48,650,478  48,732,780  48,301,914  49,260,216
                              ==========  ==========  ==========  ==========


    Net income (loss) in
     accordance with generally
     accepted accounting
     principles                  $1,134       $(191)     $2,405       $(403)
      Add:
      (a) Amortization of
           intangibles              579         698       1,158       1,396
      (b) Stock-based
           compensation           1,118       1,204       2,279       2,164
                                  -----       -----       -----       -----
    Adjusted net income          $2,831      $1,711      $5,842      $3,157
                                 ======      ======      ======      ======
    Diluted adjusted net
     income per common share      $0.06       $0.04       $0.12       $0.06
                                  =====       =====       =====       =====

    Weighted average shares
     used in diluted adjusted
     net income per common
     share                   48,650,478  48,732,780  48,301,914  49,260,216
                             ==========  ==========  ==========  ==========


    EBITDA                       $4,360      $1,939      $9,537      $3,676
      Add/(less):
      (a) Changes in
           operating
           assets and
           liabilities            2,115       1,983         813        (168)
      (b)  Provision for
            doubtful
            accounts                  -           -           -          68
      (c) (Provision for)
            benefit
            from income
            taxes                  (748)        139      (2,028)         90
      (d)  Deferred
            income taxes            (27)       (238)        297        (251)
      (e)  Other income
            (expense), net           44         108         (40)        189
                                     --         ---         ---         ---
    Net cash provided by
     operating activities        $5,744      $3,931      $8,579      $3,604
                                 ======      ======      ======      ======
    -----------------------------
    (1)  Earnings/(loss) before other income/(expense), taxes, depreciation,
         amortization and stock-based compensation.



                             LivePerson, Inc.
                  Condensed Consolidated Balance Sheets
                              (In Thousands)
                                Unaudited



                                      June 30, 2009  December 31, 2008
                                      -------------  -----------------
    ASSETS

    Current assets:
      Cash and cash equivalents             $31,267           $25,500
      Accounts receivable, net                7,824             7,574
      Prepaid expenses and
       other current assets                   1,719             1,706
      Deferred tax assets, net                1,261             1,772
                                              -----             -----
        Total current assets                 42,071            36,552

      Property and
       equipment, net                         8,894             7,473
      Intangibles, net                        3,161             4,319
      Goodwill                               23,903            24,388
      Deferred tax assets, net                7,544             7,330
      Deferred implementation
       costs                                    147               147
      Security deposits                         323               349
      Other assets                            1,489             1,390
                                              -----             -----
        Total assets                        $87,532           $81,948
                                            =======           =======

    LIABILITIES AND
     STOCKHOLDERS' EQUITY

    Current liabilities:
      Accounts payable                       $3,625            $3,555
      Accrued expenses                        9,073             9,088
      Deferred revenue                        4,143             3,985
                                              -----             -----
        Total current liabilities            16,841            16,628

    Deferred revenue,
     net of current                             409               347
    Other liabilities                         1,489             1,390
                                              -----             -----
        Total liabilities                    18,739            18,365

    Commitments and
     contingencies

    Total stockholders' equity               68,793            63,583
                                             ------            ------
            Total liabilities and
             stockholders' equity           $87,532           $81,948
                                            =======           =======


About LivePerson

LivePerson is a provider of online engagement solutions that facilitate real-time assistance and expert advice. Connecting businesses and experts with consumers seeking help on the Web, LivePerson's hosted software platform creates more relevant, compelling and personalized online experiences. Every month, LivePerson's intelligent platform helps millions of people succeed online; more than 8,000 companies, including EarthLink, Hewlett-Packard, Microsoft, Qwest, and Verizon, rely on LivePerson to maximize the impact of the online channel. LivePerson is headquartered in New York City.

Non-GAAP Financial Disclosure

Investors are cautioned that the EBITDA, or earnings/(loss) before other income/(expense), taxes, depreciation, amortization and stock-based compensation, and adjusted net income, or net income excluding amortization of intangible assets and stock-based compensation, information contained in this press release are not financial measures under generally accepted accounting principles. In addition, 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 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: risks related to the operational integration of acquisitions; risks related to our increased operations in the direct-to-consumer market; risks related to our international operations, particularly our operations in Israel, and the civil and political unrest in that region; volatility of the value of certain currencies in relation to the US dollar, particularly the New Israeli Shekel, U.K. pound and Euro; our history of losses; potential fluctuations in our quarterly and annual results; impairments to goodwill that result in significant charges to earnings; responding to rapid technological change and changing client preferences; competition in the real-time sales, marketing, customer service and online engagement solutions market; continued use by our clients of the LivePerson services and their purchase of additional services; technology systems beyond our control and technology-related defects that could disrupt the LivePerson services; risks related to adverse business conditions experienced by our clients; our dependence on key employees; competition for qualified personnel; the impact of new accounting rules, including the requirement to expense stock options; the possible unavailability of financing as and if needed; risks related to protecting our intellectual property rights or potential infringement of the intellectual property rights of third parties; our dependence on the continued use of the Internet as a medium for commerce and the viability of the infrastructure of the Internet; and risks related to the regulation or possible misappropriation of personal information. 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.

SOURCE LivePerson, Inc.

SOURCE: LivePerson, Inc.

Web site: http://www.liveperson.com/