LivePerson Reports First Quarter 2011 Financial Results

- First quarter revenue increased 20% from prior year

- Record EBITDA per share of $0.16

- Adjusted net income per share of $0.09

- GAAP EPS of $0.06

- Daniel Murphy named Chief Financial Officer

NEW YORK, May 2, 2011 /PRNewswire/ -- LivePerson, Inc. (Nasdaq: LPSN), a leading provider of online, real-time intelligent engagement solutions, today announced financial results for the first quarter ended March 31, 2011.  

(Logo:  http://photos.prnewswire.com/prnh/20110105/NY24753LOGO-a )

Revenue

Revenue for the first quarter was $30.4 million, a 20% increase from the first quarter of 2010, and a 1% sequential increase as compared to the fourth quarter of 2010. Revenue from business operations for the first quarter was $26.7 million, a 22% increase as compared to the first quarter of 2010 and a 2% increase as compared to the fourth quarter of 2010.  Revenue from consumer operations for the first quarter was $3.7 million, a 6% increase as compared to the first quarter of 2010, and down 1% as compared to the fourth quarter of 2010.    

"The first quarter kicked off what we expect to be an exciting year for LivePerson," said CEO Robert LoCascio. "We have moved quickly to expand our developer community, with dozens of third-parties now leveraging our unique technology to create value-added offerings for our customers, and we also look forward to launching our own new product offerings during the coming quarters."

In addition, Daniel Murphy joined the company as its Chief Financial Officer today. Mr. Murphy succeeds President and CFO Tim Bixby, who announced his intention to leave the company late last year. Mr. Bixby will continue with the company through May 13, 2011 to support the transition.

Customer Expansion

LivePerson added 12 new enterprise and midmarket clients in the quarter, including:

  • 2 of the 25 largest US banks
  • a leading SaaS email services provider
  • the world's leading provider of commercial information about businesses
  • one of the UK's largest independent investment managers
  • a leading web-based direct marketing and retail brand company

The company also expanded business with

  • T-Mobile Netherlands
  • A leading worldwide provider of IT services and solutions
  • Verizon
  • a leading US-based telecommunications services provider
  • One of Europe's largest banks

Net Income

Net income for the first quarter of 2011 was $3.2 million or $0.06 per share as compared to $2.1 million or $0.04 per share in the first quarter of 2010, and net income of $2.7 million or $0.05 per share in the fourth quarter of 2010.  

Adjusted Net Income and EBITDA

LivePerson considers adjusted net income and earnings 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 first quarter of 2011 was $5.1 million or $0.09 per share, as compared to $3.6 million or $0.07 per share in the first quarter of 2010, and $4.6 million or $0.09 per share in the fourth quarter of 2010.  

EBITDA for the first quarter of 2011 was $8.6 million or $0.16 per share, as compared to $6.0 million or $0.12 per share in the first quarter of 2010, and $7.9 million or $0.15 per share in the fourth quarter of 2010.  

Cash

The company's cash balance was $67.1 million at March 31, 2011 as compared to $61.3 million as of December 31, 2010.  The company generated $4.5 million of cash from operations in the first quarter.  Also during the first quarter, the company incurred planned capital expenditures related primarily to the purchase of servers and computer networking equipment, and leasehold improvements, resulting in a cash outlay of approximately $2.3 million.  

Financial Expectations

Following is the company's current expectation for financial and operating performance:

Second Quarter 2011

  • Revenue of $31.3 - $31.8 million
  • EBITDA of $0.13 - $0.15 per share
  • Adjusted net income per share of $0.06 - $0.08
  • GAAP EPS of $0.04 - $0.05
  • Fully diluted share count of approximately 55.5 million

Full Year 2011

  • Revenue of $133 - $136 million
  • EBITDA of $0.60 - $0.63 per share
  • Adjusted net income per share of $0.33 - $0.36
  • GAAP EPS of $0.20 - $0.22
  • Fully diluted share count of approximately 56.0 million

Other Full Year 2011 Assumptions

  • Amortization of intangibles of approximately $1.0 million
  • Stock-compensation expense of approximately $6.0 million
  • Depreciation of approximately $8.0 million
  • Effective tax rate of approximately 36%
  • Cash tax rate of approximately 36%
  • Capital expenditures of approximately $8.0 million

Stock-Based Compensation  

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



Q1 2011

Q1 2010

Cost of revenue


$298

$214

Product development  


440

335

Sales and marketing  


336

280

General and administrative


461

258

  Total


$1,535

$1,087



Amortization of Intangible Assets  

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



Q1 2011

Q1 2010

Cost of revenue


$307

$306

General and administrative


11

83

  Total


$318

$389



Earnings Teleconference and Video Discussion Information

The company will discuss its first quarter 2011 financial results during a teleconference today, May 2, 2011, at 5:00 p.m. ET.  To participate, please call 877-507-3684 before 5:00 p.m. ET. International callers, please dial 706-634-9559. Please reference the conference ID "61585391".

If you are unable to participate, the teleconference will be available for replay at 6:00 p.m. ET on May 2, 2011 until August 2, 2011. To access the replay, please call 800-642-1687 (U.S. and Canada) or 706-645-9291 (international). Please reference the conference ID "61585391".

The company will also post a video discussion of its first quarter 2011 results on YouTube. To view, click on the following link: http://www.youtube.com/user/myliveperson.

LivePerson, Inc.

Condensed Consolidated Statements of Income

(In Thousands, Except Share and Per Share Data)

Unaudited
















Three Months Ended







March 31,







2011


2010










Revenue




$          30,382


$        25,308










Operating expenses:






Cost of revenue


8,095


6,632


Product development


4,377


3,606


Sales and marketing


8,860


7,690


General and administrative


3,960


3,792


Amortization of intangibles


11


83




Total operating expenses


25,303


21,803










Income from operations


5,079


3,505










Other expense, net


170


(26)










Income before provision for income taxes


5,249


3,479










Provision for income taxes


2,018


1,343










Net income



$            3,231


$          2,136










Basic net income per common share


$              0.06


$            0.04










Diluted net income per common share


$              0.06


$            0.04










Weighted average shares outstanding used in basic net






income per common share calculation


52,080,363


49,838,491










Weighted average shares outstanding used in diluted net






income per common share calculation


54,805,222


52,193,862



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







March 31,







2011


2010

Net income in accordance with generally






accepted accounting principles


$          3,231


$          2,136


Add/(less):






(a)

Amortization of intangibles


318


389


(b)

Stock-based compensation


1,535


1,087


(c)

Depreciation


1,634


1,053


(d)

Provision for income taxes


2,018


1,343


(e)

Other expense, net


(170)


26

EBITDA (1)



$          8,566


$          6,034

Diluted EBITDA per common share


$            0.16


$            0.12










Weighted average shares used in diluted EBITDA






per common share


54,805,222


52,193,862



















Net income in accordance with generally






accepted accounting principles


$          3,231


$          2,136


Add:








(a)

Amortization of intangibles


318


389


(b)

Stock-based compensation


1,535


1,087

Adjusted net income


$          5,084


$          3,612

Diluted adjusted net income per common share


$            0.09


$            0.07










Weighted average shares used in diluted adjusted net income






per common share


54,805,222


52,193,862



















EBITDA





$          8,566


$          6,034


Add/(less):






(a)

Changes in operating assets and liabilities


(2,479)


(5,064)


(b)

Provision for income taxes


(2,018)


(1,343)


(c)

Deferred income taxes


220


(6)


(d)

Provision for doubtful accounts




60


-


(e)

Other expense, net


170


(26)

Net cash provided by (used in) operating activities


$          4,519


$           (405)










(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














March 31, 2011


December 31, 2010









ASSETS













Current assets:





Cash and cash equivalents

$                     67,119


$                     61,336


Accounts receivable, net

19,606


16,491


Prepaid expenses and other current assets

5,046


6,341


Deferred tax assets, net

1,540


1,529



Total current assets

93,311


85,697










Property and equipment, net

12,491


12,762


Intangibles, net

1,806


2,124


Goodwill

24,090


24,015


Deferred tax assets, net

3,645


3,876


Deferred implementation costs

172


164


Security deposits

500


499


Other assets

1,980


2,006



Total assets

$                   137,995


$                   131,143









LIABILITIES AND STOCKHOLDERS' EQUITY












Current liabilities:





Accounts payable

$                       6,736


$                       6,416


Accrued expenses

9,099


12,111


Deferred revenue

6,720


5,570



Total current liabilities

22,555


24,097









Deferred revenue, net of current

421


513

Other liabilities

1,980


1,890



Total liabilities

24,956


26,500









Commitments and contingencies












Total stockholders' equity

113,039


104,643





Total liabilities and stockholders' equity

$                   137,995


$                   131,143



About LivePerson

LivePerson, Inc. (Nasdaq and TASE:  LPSN) is a leading provider of real-time intelligent engagement solutions that optimize online conversions, customer service and support for companies of all sizes. Our web-based solutions use a scalable application and system architecture, allowing for quick deployment. LivePerson offers a secure and reliable platform for delivery of relevant, compelling and personalized online experiences. More than 8,500 companies including Cisco, Hewlett-Packard, IBM, Microsoft, Verizon and Orbitz rely on LivePerson to maximize the impact of the online channel. LivePerson has been named one of America's 25 Fastest-Growing Tech Companies in 2010 by Forbes, and Company of the Year by Frost and Sullivan. LivePerson is headquartered in New York City with offices in Tel Aviv, Atlanta, London and San Francisco. For more information please visit http://www.liveperson.com.

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: potential fluctuations in our quarterly and annual results; the adverse effect that the global recession may have on our business; competition in the real-time sales, marketing, customer service and online engagement solutions market; 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 operational integration of acquisitions; technology systems beyond our control and technology-related defects that could disrupt the LivePerson services; 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; 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 market, 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.

SOURCE LivePerson, Inc.