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NEW YORK, Nov. 5 /PRNewswire-FirstCall/ -- LivePerson, Inc. (NASDAQ: LPSN), a leading provider of online communication platforms that facilitate real-time assistance and expert advice, today announced financial results for the third quarter ended September 30, 2008.
Revenue
Revenue for the third quarter was $19.4 million, a 51% increase from the third quarter of 2007, and a 4% sequential increase as compared to the second quarter of 2008. Revenue from business solutions for the third quarter was $16.7 million, a 30% increase from the third quarter of 2007, and a 6% sequential increase as compared to the preceding quarter.
Sequential revenue growth was due primarily to expansion of existing enterprise customers, as well as sales to new small business customers.
"LivePerson delivered another strong quarter with revenue, earnings and cash flow all in line with guidance," CEO Robert LoCascio said. "In today's uncertain economic climate, consumers are turning to the Web now more than ever for advice, information and answers. LivePerson's platform enables individuals to connect with businesses and independent experts alike, giving people the personalized information they need, when they need it."
Client and Partner Expansion
LivePerson added several new clients, including:
-- One of the largest cable providers in the nation
-- A world leader in the mobile phone industry
-- A global management consulting, technology services and outsourcing
company
-- Quest Software EMEA
The company expanded business with several existing customers, including:
-- Verizon
-- AT&T
-- National City Corporation
-- An industry leader in personal computers and digital media
-- A prominent resort and theme park operator
Net Income
Net income for the third quarter of 2008 was $0.4 million or $0.01 per share as compared to net income of $1.6 million or $0.03 per share in the third quarter of 2007, and 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 before interest, taxes, depreciation and amortization (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 Income included below.
The difference between EBITDA per share, a non-GAAP measure, and GAAP EPS, is interest, taxes, depreciation, amortization and stock-based compensation. 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 third quarter of 2008 was $2.1 million or $0.04 per share, as compared to $2.8 million or $0.06 per share in the comparable period in 2007, and $1.7 million or $0.04 per share in the second quarter of 2008.
EBITDA for the third quarter of 2008 was $2.7 million or $0.05 per share, as compared to $2.7 million or $0.06 per share in the third quarter of 2007, and $1.9 million or $0.04 per share in the second quarter of 2008.
Cash
The company's cash balance is $23.8 million at September 30, 2008 as compared to $23.5 million as of June 30, 2008. The company generated approximately $2.7 million from operations. Also during the third quarter, the company incurred capital expenditures related primarily to the purchase of servers and computer networking equipment, resulting in a cash outlay of approximately $2.4 million.
Financial Expectations Fourth Quarter 2008 -- Revenue of $20.0 - $20.5 million -- EBITDA of $0.04 - $0.05 per share -- Adjusted net income of $0.02 - $0.04 per share -- Fully diluted share count of approximately 49 million Full Year 2008 -- Revenue of $75.0 - $75.5 million -- EBITDA of $0.16 - $0.18 per share -- Adjusted net income of $0.13 - $0.14 per share -- Fully diluted share count of approximately 49 million Stock-Based Compensation
Included in the accompanying financial results are expenses related to stock-based compensation, as follows (in thousands):
Q3 2008
Cost of revenue $145
Product development 302
Sales and marketing 292
General and administrative 275
Total $1,014
Amortization of Intangible Assets
Included in the accompanying financial results are expenses related to the amortization of intangible assets, as follows (in thousands):
Q3 2008
Cost of revenue $307
General and administrative 352
Total $659
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,
2008 2007 2008 2007
Total revenue $19,375 $12,823 $55,048 $35,453
Operating expenses:
Cost of revenue 5,226 3,305 15,346 9,199
Product development 3,299 2,169 9,876 6,033
Sales and marketing 6,624 3,556 18,864 10,470
General and administrative 3,399 2,274 10,034 6,353
Amortization of other
intangibles 352 242 1,134 725
Total operating expenses 18,900 11,546 55,254 32,780
Income (loss) income from
operations 475 1,277 (206) 2,673
Other (expense) income, net (44) 309 145 744
Income (loss) before
benefit from income taxes 431 1,586 (61) 3,417
Provision for (benefit
from) income taxes 21 - (68) -
Net income $410 $1,586 $7 $3,417
Basic net income per
common share $0.01 $0.04 $0.00 $0.08
Diluted net income per
common share $0.01 $0.03 $0.00 $0.07
Weighted average shares
outstanding used in basic
net income per common
share calculation 47,229,252 43,080,475 47,433,924 42,469,631
Weighted average shares
outstanding used in
diluted net income per
common share calculation 48,678,016 46,328,876 49,064,151 45,942,436
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,
2008 2007 2008 2007
Net income in accordance
with generally accepted
accounting principles $410 $1,586 $7 $3,417
Add/(less):
(a)Amortization of
intangibles 659 329 2,055 978
(b)Stock-based
compensation 1,014 930 3,178 2,642
(c)Depreciation 526 146 1,324 585
(d)Provision for (benefit
from) income taxes 21 - (68) -
(e)Other expense
(income), net 44 (309) (145) (744)
EBITDA (1) $2,674 $2,682 $6,351 $6,878
Diluted EBITDA per common
share $0.05 $0.06 $0.13 $0.15
Weighted average shares
used in diluted EBITDA
per common share 48,678,016 46,328,876 49,064,151 45,942,436
Net (loss) income in
accordance with generally
accepted accounting
principles $410 $1,586 $7 $3,417
Add:
(a)Amortization of
intangibles 659 329 2,055 978
(b)Stock-based
compensation 1,014 930 3,178 2,642
Adjusted net income $2,083 $2,845 $5,240 $7,037
Diluted adjusted net
income per common share $0.04 $0.06 $0.11 $0.15
Weighted average shares
used in diluted adjusted
net income per common
share 48,678,016 46,328,876 49,064,151 45,942,436
EBITDA $2,674 $2,682 $6,351 $6,878
Add/(less):
(a)Changes in operating
assets and liabilities (170) 795 (338) 406
(b)Provision for doubtful
accounts - 54 68 74
(c)(Provision for) benefit
from income taxes (21) - 68 -
(d)Deferred income taxes 211 (1,437) (39) (3,521)
(e)(Other expense)
income, net (44) 309 145 744
Net cash provided by
operating activities $2,650 $2,403 $6,255 $4,581
(1) Earnings before interest, taxes, depreciation, amortization and
stock-based compensation.
LivePerson, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
Unaudited
September 30, 2008 December 31, 2007
ASSETS
Current assets:
Cash and cash equivalents $23,773 $26,222
Accounts receivable, net 6,910 6,026
Prepaid expenses and other current
assets 2,270 1,802
Deferred tax assets, net 1,569 42
Total current assets 34,522 34,092
Property and equipment, net 7,462 3,733
Intangibles, net 4,898 6,953
Goodwill 47,971 51,684
Deferred tax assets, net 6,336 4,202
Security deposits 385 499
Other assets 1,677 1,325
Total assets $103,251 $102,488
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,022 $3,067
Accrued expenses 8,366 9,191
Deferred revenue 4,408 4,000
Deferred tax liabilities, net - 193
Total current liabilities 16,796 16,451
Other liabilities 1,677 1,325
Commitments and contingencies
Total stockholders' equity 84,778 84,712
Total liabilities and stockholders'
equity $103,251 $102,488
About LivePerson
LivePerson, founded in 1995 and headquartered in New York City, is a leading provider of online communication platforms that facilitate real-time assistance and expert advice. Intelligently connecting businesses and individual experts with consumers seeking help on the Web, LivePerson's platforms create more relevant, compelling and personalized online experiences. Every month, millions of people turn to LivePerson to get the information and advice they need to succeed online. More than 7,000 companies, including EarthLink, Hewlett-Packard, Microsoft, Qwest, and Verizon, and 30,000 individual experts rely on LivePerson to maximize the impact of the online channel.
Non-GAAP Financial Disclosure
Investors are cautioned that the EBITDA, or earnings before interest, 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.
CONTACT: Tim Bixby of LivePerson, Inc., +1-212-609-4200,
bixby@liveperson.com; or Budd Zuckerman of Genesis Select Corp.,
+1-303-415-0200, budd@genesisselect.com, for LivePerson, Inc.
Web site: http://www.liveperson.com/
Mike Tague
mtague@liveperson.com