NEW YORK, NY - November 1, 2005 - LivePerson, Inc. (NASDAQ: LPSN), a provider of communication solutions for online sales, marketing and customer service, today announced financial results for the third quarter ended September 30, 2005.
Revenue for the third quarter was $5.7 million, a 31% increase from the third quarter of 2004, and an 8% sequential increase versus the second quarter of 2005. Revenue growth was due primarily to new deployments of Timpani™ Sales & Marketing, and continuing strong sales of LivePerson Pro to small business customers. Timpani Sales & Marketing enables LivePerson clients to analyze website traffic in real time, and then to proactively engage high-value buyers based on their shopping behavior, thereby increasing online customer conversion rates.
"We are very pleased with the results for the quarter," CEO Robert LoCascio said. "Our sequential growth trends are continuing, and we have a strong roster of both recently signed contracts and pipeline deals, as well as recent expansion within several larger clients."
LivePerson signed several new top-tier clients during the quarter, adding leaders in industries as diverse as mortgage lending, asset management, diet and nutrition services, computer equipment distribution and online bill payment processing. LivePerson also recently expanded business with major US financial institution clients, as well as Bell Canada, Overstock.com and Verizon.
Net income for the third quarter of 2005 was $0.7 million or $0.02 per share as compared to net income of $0.4 million or $0.01 per share in the third quarter of 2004, and net income of $0.4 million or $0.01 per share in the second quarter of 2005.
Earnings before interest, taxes, depreciation, amortization and non-cash compensation (EBITDA) for the third quarter of 2005 was $1.2 million as compared to $0.7 million in the third quarter of 2004 and $0.8 million in the second quarter of 2005.
A reconciliation of the differences between EBITDA and the most comparable financial measure calculated and presented in accordance with generally accepted accounting principles (GAAP) is located under the heading "Reconciliation of Non-GAAP Financial Information to GAAP" immediately following the Condensed Consolidated Statements of Income included in this press release.
LivePerson considers EBITDA and cash from operations to be important financial indicators of the company's operational strength and the performance of its business. EBITDA should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure in the table below.
Financial Expectations
The company currently expects the following financial results:
-- Revenue of $6.1 - $6.2 million for the fourth quarter of 2005
-- EBITDA of $0.03 per share and GAAP EPS of $0.02 for the fourth
quarter of 2005
-- Revenue of $22.0 - $22.2 million for the full year 2005
-- EBITDA of $0.10-$0.11 per share and GAAP EPS of $0.05 for the full
year 2005
The difference between EBITDA per share, a non-GAAP measure, and GAAP EPS, is interest, taxes, depreciation, amortization and non-cash compensation. The company expects an effective tax rate of approximately 35% for 2005.
LivePerson, Inc.
Condensed Consolidated Statements of Income
(In Thousands, Except Share and Per Share Data)
Unaudited
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Total revenue $5,724 $4,381 $15,960 $12,796
Operating expenses:
Cost of revenue 1,114 730 2,997 2,116
Product development 663 515 2,027 1,470
Sales and marketing 1,715 1,327 4,889 3,721
General and
administrative 1,034 1,222 3,400 3,131
Amortization of other
intangibles 232 204 699 563
Total operating
expenses 4,758 3,998 14,012 11,001
Income from operations 966 383 1,948 1,795
Other income, net 81 18 184 41
Income before provision
for income taxes 1,047 401 2,132 1,836
Provision for income taxes 358 25 738 58
Net income $689 $376 $1,394 $1,778
Basic net income per
common share $0.02 $0.01 $0.04 $0.05
Diluted net income per
common share $0.02 $0.01 $0.04 $0.04
Weighted average shares
outstanding used in basic
net income per common
share calculation 37,555,696 37,336,792 37,492,285 37,222,428
Weighted average shares
outstanding used in
diluted net income per
common share
calculation 39,839,001 39,294,832 39,528,089 39,535,593
LivePerson, Inc.
Reconciliation of Non-GAAP Financial Information to GAAP
(In Thousands, Except Share and Per Share Data)
Unaudited
Unaudited Supplemental Data
The following information is not a financial measure under generally accepted accounting principles (GAAP). In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with GAAP, or as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities as there may be significant factors or trends that it fails to address. We present this financial information because we believe that it is helpful to some investors as one measure of our operations. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our results with our results from other reporting periods and with the results of other companies.
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Net income in accordance
with generally accepted
accounting principles $689 $376 $1,394 $1,778
Add/(less):
(a) Amortization of other
intangibles 232 204 699 563
(b) Non-cash compensation - 58 - 187
(c) Depreciation 23 56 115 172
(d) Provision for income
taxes 358 25 738 58
(e) Interest income, net (81) (18) (184) (41)
EBITDA (1) $1,221 $701 $2,762 $2,717
Diluted EBITDA per common
share $0.03 $0.02 $0.07 $0.07
Weighted average shares
used in diluted EBITDA
per common share 39,839,001 39,294,832 39,528,089 39,535,593
EBITDA $1,221 $701 $2,762 $2,717
Add/(less):
Changes in operating
assets and liabilities 736 577 9 (923)
Provision for doubtful
accounts - - 30 15
Provision for income
taxes (358) (25) (738) (58)
Deferred income taxes 345 - 697 -
Interest income, net 81 18 184 41
Net cash provided by
operating activities $2,025 $1,271 $2,944 $1,792
(1) Earnings before interest, taxes, depreciation and amortization.
LivePerson, Inc.
Condensed Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Data)
Unaudited
September 30, 2005 December 31, 2004
ASSETS
Current assets:
Cash and cash equivalents $15,242 $12,425
Accounts receivable, net 1,482 1,641
Prepaid expenses and other current
assets 567 475
Total current assets 17,291 14,541
Property and equipment, net 509 384
Intangibles, net 1,022 1,721
Security deposits 170 166
Other assets 404 338
Total assets $19,396 $17,150
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $158 $262
Accrued expenses 1,375 1,666
Deferred revenue 1,701 1,330
Total current liabilities 3,234 3,258
Other liabilities 404 338
Commitments and contingencies
Total stockholders' equity 15,758 13,554
Total liabilities and
stockholders' equity $19,396 $17,150
About LivePerson
LivePerson is a provider of communication solutions for online sales, marketing and customer service. LivePerson's Timpani™ platform enables online businesses to identify and engage the right customer with the right communication channel at the right time, thereby enhancing the online experience. Chat, marketing and selling tools, a self-service knowledgebase and email management are combined with channel matching technology, rules-based intelligence, routing and reporting, to offer clients the opportunity to increase sales, lower customer service costs and enhance the customer experience. Many among the company's roster of more than 3,000 customers, including EarthLink, Microsoft, Hewlett-Packard, Qwest, Verizon and AT&T, have reported significant savings, increased sales and high customer satisfaction using LivePerson's technologies. LivePerson is headquartered in New York City.
EBITDA Financial Disclosure
Investors are cautioned that the EBITDA, or earnings before interest, taxes, depreciation, amortization and non-cash compensation, information contained in this press release is not a financial measure under generally accepted accounting principles. In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with generally accepted accounting principles, 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 performance. We caution investors that non-GAAP financial information such as EBITDA, 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.
Forward-Looking Statements
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 progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change prior to the end of the quarter. Although these expectations may change, we are under no obligation to inform you if they do. Our company policy is generally to provide our expectations only once per quarter, and not to update that information until the next quarter. Actual events or results may differ materially from those contained in the projections or forward-looking statements. The following factors, among others, could cause our actual results to differ materially from those described in a forward-looking statement: our history of losses; potential fluctuations in our quarterly and annual results; responding to rapid technological change and changing client preferences; competition in the real-time sales, marketing and customer service 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 the operational integration of acquisitions; risks related to our international operations, particularly our operations in Israel, and the current civil and political unrest in that region; 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.
CONTACT: Younjee Kim, +1-212-609-4222, ykim@liveperson.com
Web site: http://www.liveperson.com/
Mike Tague
mtague@liveperson.com