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- Quarterly revenue increases 17% from prior year
- Full year revenue increases 43% from prior year
- Business operations revenue grows 30% from prior year, and 3% from prior quarter
- EBITDA per share is $0.07 for fourth quarter, $0.20 for full year
NEW YORK, Feb. 11 /PRNewswire-FirstCall/ -- LivePerson, Inc. , a leading provider of online communication platforms that facilitate real-time assistance and expert advice, today announced financial results for the fourth quarter and full year ended December 31, 2008.
Revenue
Revenue for the fourth quarter was $19.6 million, a 17% increase from the fourth quarter of 2007, and a 1% sequential increase as compared to the third quarter of 2008. Revenue from business operations for the fourth quarter was $17.2 million, a 23% increase from the fourth quarter of 2007, and a 3% sequential increase as compared to the third quarter of 2008.
Revenue for the full year was $74.7 million, a 43% increase from 2007. Revenue from business operations for the year was $64.1 million, a 30% increase from 2007.
As a result of the significant deterioration of the company's market capitalization in the fourth quarter of 2008, the company reevaluated goodwill related to its consumer operations. Due to weaker than expected financial performance of these operations in the latter portion of 2008, the company recorded a non-cash goodwill impairment charge of $23.5 million or $0.50 per share. The charge is a non-cash item, and therefore had no impact on the company's cash flows.
"While a tough external economic environment has made our growth targets more difficult to reach, our performance against cost control targets in the fourth quarter was strong and has created a firm foundation to build upon in 2009," CEO Robert LoCascio said. "With gross margin improvement for the third consecutive quarter and record quarterly EBITDA, we continue to see impressive operating improvements."
Client and Partner Expansion
LivePerson added several new clients, including:
The company expanded business with customers, including:
Net Income/Loss
Net loss for the fourth quarter of 2008 was $23.8 million or $0.50 per share as compared to net income of $2.4 million or $0.05 per share in the fourth quarter of 2007, and net income of $0.4 million or $0.01 per share in the third quarter of 2008. Net loss for the full year was $23.8 million or $0.50 per share as compared to net income of $5.8 million or $0.12 per share in 2007. Net loss in both the fourth quarter and the full year of 2008 included the impact of the goodwill impairment of $23.5 million or $0.50 per share, and a tax provision of $1.2 million, or $0.03 per share.
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 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, excluding the impact of the goodwill impairment, for the fourth quarter of 2008 was $1.3 million or $0.03 per share, as compared to $4.4 million or $0.09 per share in the comparable period in 2007, and $2.1 million or $0.04 per share in the third quarter of 2008. Adjusted net income, excluding the impact of the goodwill impairment, for the full year was $6.6 million or $0.14 per share, as compared to $11.5 million or $0.25 per share in 2007.
EBITDA for the fourth quarter of 2008 was $3.5 million or $0.07 per share, as compared to $2.8 million or $0.06 per share in the fourth quarter of 2007, and $2.7 million or $0.05 per share in the third quarter of 2008. EBITDA for the full year was $9.9 million or $0.20 per share, as compared to $9.7 million or $0.21 per share in 2007.
Cash
The company's cash balance was $25.5 million at December 31, 2008 as compared to $23.8 million as of September 30, 2008. The company generated $1.7 million from operations in the fourth quarter. Also during the fourth 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 $1.4 million. For the full year, capital expenditures were $6.8 million.
Financial Expectations
First Quarter 2009
Full Year 2009
Other Full Year 2009 Assumptions
Stock-Based Compensation
Included in the accompanying financial results are expenses related to stock-based compensation, as follows (in thousands):
Q4 2008
Cost of revenue $137
Product development 271
Sales and marketing 369
General and administrative 311
Total $1,088
Amortization of Intangible Assets
Included in the accompanying financial results are expenses related to the amortization of intangible assets, as follows (in thousands):
Q4 2008
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 Twelve Months Ended
December 31, December 31,
------------ ------------
2008 2007 2008 2007
---- ---- ---- ----
Revenue $19,607 $16,775 $74,655 $52,228
------- ------- ------- -------
Operating expenses:
Cost of revenue 4,960 4,335 20,307 13,534
Product development 3,023 2,999 12,899 9,032
Sales and marketing 7,260 5,654 26,124 16,124
General and
administrative 3,009 2,857 13,042 9,208
Amortization of
intangibles 272 390 1,407 1,116
Goodwill impairment 23,501 - 23,501 -
------ - ------ -
Total operating
expenses 42,025 16,235 97,280 49,014
------ ------ ------ ------
(Loss) income from
operations (22,418) 540 (22,625) 3,214
Other (expense) income,
net (192) 153 (47) 896
---- --- --- ---
(Loss) income before
provision for (benefit
from) income taxes (22,610) 693 (22,672) 4,110
Provision for (benefit
from) income taxes 1,234 (1,711) 1,165 (1,711)
----- ------ ----- ------
Net (loss) income $(23,844) $2,404 $(23,837) $5,821
======== ====== ======== ======
Basic net (loss)
income per common share $(0.50) $0.05 $(0.50) $0.13
====== ===== ====== =====
Diluted net (loss)
income per common share $(0.50) $0.05 $(0.50) $0.12
====== ===== ====== =====
Weighted average shares
outstanding used in basic
net (loss) income per
common share
calculation 47,411,354 47,336,618 47,428,251 43,696,378
========== ========== ========== ==========
Weighted average shares
outstanding used in diluted
net (loss) income per
common share
calculation 47,411,354 50,384,112 47,428,251 46,814,080
========== ========== ========== ==========
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 Twelve Months Ended
December 31, December 31,
------------ ------------
2008 2007 2008 2007
---- ---- ---- ----
Net (loss) income in
accordance with generally
accepted accounting
principles $(23,844) $2,404 $(23,837) $5,821
Add/(less):
(a) Goodwill impairment 23,501 - 23,501 -
(b) Amortization of
intangibles 579 793 2,634 1,772
(c) Stock-based
compensation 1,088 1,240 4,266 3,881
(d) Depreciation 768 217 2,093 802
(e) Provision for
(benefit from)
income taxes 1,234 (1,711) 1,165 (1,711)
(f) Other expense
(income), net 192 (153) 47 (896)
--- ---- -- ----
EBITDA (1), excluding
goodwill impairment $3,518 $2,790 $9,869 $9,669
====== ====== ====== ======
Diluted EBITDA per
common share $0.07 $0.06 $0.20 $0.21
===== ===== ===== =====
Weighted average shares
used in diluted EBITDA
per common share 48,116,364 50,384,112 48,573,455 46,814,080
========== ========== ========== ==========
Net (loss) income in
accordance with generally
accepted accounting
principles $(23,844) $2,404 $(23,837) $5,821
Add:
(a) Goodwill impairment 23,501 - 23,501 -
(b) Amortization of
intangibles 579 793 2,634 1,772
(c) Stock-based
compensation 1,088 1,240 4,266 3,881
----- ----- ----- -----
Adjusted net income,
excluding goodwill
impairment $1,324 $4,437 $6,564 $11,474
====== ====== ====== =======
Diluted adjusted net
income per common share $0.03 $0.09 $0.14 $0.25
===== ===== ===== =====
Weighted average shares
used in diluted adjusted
net income per common
share 48,116,364 50,384,112 48,573,455 46,814,080
========== ========== ========== ==========
EBITDA, excluding impairment $3,518 $2,790 $9,869 $9,669
Add/(less):
(a) Changes in operating
assets and liabilities 703 1,184 364 1,594
(b) Provision for
doubtful accounts 80 30 148 103
(c) (Provision for)
benefit from income taxes (1,234) 1,711 (1,165) 1,711
(d) Deferred income taxes (1,145) (1,459) (1,184) (4,980)
(e) (Other expense)
income, net (192) 153 (47) 896
---- --- --- ---
Net cash provided by
operating activities $1,730 $4,409 $7,985 $8,993
====== ====== ====== ======
(1) Earnings before interest, taxes, depreciation, amortization and
stock-based compensation.
LivePerson, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
Unaudited
December 31, 2008 December 31, 2007
----------------- -----------------
ASSETS
Current assets:
Cash and cash equivalents $25,500 $26,222
Accounts receivable, net 7,574 6,026
Prepaid expenses and other
current assets 1,853 1,802
Deferred tax assets, net 1,772 42
----- --
Total current assets 36,699 34,092
Property and equipment, net 7,473 3,733
Intangibles, net 4,319 6,953
Goodwill 24,388 51,684
Deferred tax assets, net 7,330 4,202
Security deposits 349 499
Other assets 1,390 1,325
----- -----
Total assets $81,948 $102,488
======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,555 $3,067
Accrued expenses 9,088 9,191
Deferred revenue 4,332 4,000
Deferred tax liabilities, net - 193
--- ---
Total current liabilities 16,975 16,451
Other liabilities 1,390 1,325
Commitments and contingencies
Total stockholders' equity 63,583 84,712
------ ------
Total liabilities and
stockholders' equity $81,948 $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.
Mike Tague
mtague@liveperson.com