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NEW YORK, NY - February 3, 2005 - LivePerson, Inc. (NASDAQ: LPSN), a leading provider of software solutions for online communications including sales, marketing and customer service, today announced financial results for the fourth quarter and fiscal year ended December 31, 2004.
Revenue for the fourth quarter was $4.6 million, a 32% increase from the fourth quarter of 2003, and a 6% sequential increase versus the third quarter of 2004. Revenue for the full year 2004 was $17.4 million, a 45% increase from $12.0 million in the prior year. Revenue growth was due primarily to existing client growth, the addition of new clients and to a lesser extent, the Island Data acquisition effective January 1, 2004.
"We are pleased with the improved revenue growth we experienced in the fourth quarter," CEO Robert LoCascio stated. "A strong finish to the year enabled us to deliver annual revenue growth of more than 45% for the second consecutive year."
Net income for the fourth quarter of 2004 was $0.4 million or $0.01 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 $0.3 million, or $0.01 per share in the fourth quarter of 2003. Net income for the year was $2.2 million or $0.06 per share, as compared to a net loss of $(0.8) million, or $(0.02) per share, in the prior year. The prior full year results include the impact of a $1.0 million restructuring expense.
Earnings before interest, taxes, depreciation, amortization and non-cash compensation (EBITDA) for the fourth quarter of 2004 was $0.7 million as compared to $0.7 million in the third quarter of 2004 and $0.7 million in the fourth quarter of 2003. EBITDA for the year was $3.4 million as compared to $0.8 million in the prior year. The prior full year results include the impact of the $1.0 million restructuring expense.
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 Operations 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: * Sequential quarterly revenue growth of 6%, to $4.9 million for Q1 2005 * Revenue of $22.0 million for the full year 2005 * EBITDA of $0.01 per share and GAAP EPS of $0.00 in Q1 2005 * EBITDA of $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 40% for 2005.
Ongoing Audit of Financial Results and Internal Controls
The Company is undergoing an audit of its financial results for the year 2004, and an audit of its internal controls over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002. These audit procedures are not yet complete as of the date of this press release. There can be no assurance that our financial results as disclosed in this press release will not change following the completion of the audits or that our internal controls will be found to be effective.
LivePerson, Inc.
Condensed Consolidated Statements of Operations
(In Thousands, Except Share and Per Share Data)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2004 2003 2004 2003
Total revenue $4,637 $3,526 $17,433 $12,023
Operating expenses:
Cost of revenue 783 520 2,899 2,028
Product development 530 471 2,000 1,641
Sales and marketing 1,433 1,062 5,154 3,555
General and administrative 1,333 954 4,464 3,610
Amortization of other
intangibles 204 254 767 1,014
Restructuring charge - - - 1,024
Total operating expenses 4,283 3,261 15,284 12,872
Income (loss) from operations 354 265 2,149 (849)
Other income, net 36 13 77 33
Income (loss) before
provision for income taxes 390 278 2,226 (816)
Provision for income taxes - - 58 -
Net income (loss) $390 $278 $2,168 $(816)
Basic net income (loss)
per share $0.01 $0.01 $0.06 $(0.02)
Diluted net income (loss)
per share $0.01 $0.01 $0.06 $(0.02)
Weighted average shares
outstanding used in basic
net income (loss) per
share calculation 37,370,093 36,133,570 37,263,378 34,854,802
Weighted average shares
outstanding used in
diluted net income
(loss) per share
calculation 37,370,093 37,628,148 37,317,179 34,854,802
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 Year Ended
December 31, December 31,
2004 2003 2004 2003
Net income (loss) in
accordance with generally
accepted accounting principles $390 $278 $2,168 $(816)
Add/(less):
(a)Amortization of other
intangibles 204 254 767 1,014
(b)Non-cash compensation 59 151 246 343
(c)Depreciation 57 42 229 321
(d)Provision for income taxes - - 58 -
(e)Interest income, net (36) (13) (77) (41)
EBITDA (1) $674 $712 $3,391 $821
Fully diluted EBITDA per share $0.02 $0.02 $0.09 $0.02
Weighted average shares
used in EBITDA per share
calculation
Fully diluted (2) 37,370,093 37,628,148 37,317,179 35,399,314
EBITDA $674 $712 $3,391 $821
Add/(less):
Changes in operating
assets and liabilities (414) (533) (1,337) 237
Provision for doubtful
accounts 15 - 30 15
Provision for income taxes - - (58) -
Interest income, net 36 13 77 41
Net cash provided by
operating activities $311 $192 $2,103 $1,114
(1) Earnings before interest, taxes, depreciation and amortization.
(2) The weighted average shares assumed to be outstanding under the
EBITDA per share calculation is greater for certain periods as
compared to the weighted average shares assumed to be outstanding in
accordance with GAAP. This occurs when both a GAAP net loss and
positive EBITDA per share exist in a given period.
LivePerson, Inc.
Condensed Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Data)
(Unaudited)
December 31, 2004 December 31, 2003
ASSETS
Current assets:
Cash and cash equivalents $12,425 $10,898
Accounts receivable, net 1,609 1,239
Prepaid expenses and other current assets 485 318
Total current assets 14,519 12,455
Property and equipment, net 407 341
Other intangibles, net 1,746 361
Security deposits 166 129
Other assets 338 251
Total assets $17,176 $13,537
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $280 $116
Accrued expenses 1,679 2,577
Deferred revenue 1,257 1,276
Total current liabilities 3,216 3,969
Other liabilities 338 232
Commitments and contingencies
Total stockholders' equity 13,622 9,336
Total liabilities and
stockholders' equity $17,176 $13,537
About LivePerson
LivePerson is a leading provider of software solutions for online communications including 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 industry-leading 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 operations. 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 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