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NEW YORK, NY - May 1, 2007 - LivePerson, Inc. (NASDAQ: LPSN), a provider of online conversion solutions, today announced financial results for the first quarter ended March 31, 2007.
Revenue for the first quarter was $11.0 million, a 60% increase from the first quarter of 2006, and a 6% sequential increase versus the fourth quarter of 2006. Revenue growth was due primarily to strong growth from existing enterprise users of Timpani Sales & Marketing, as well as continued strong performance from the small business product line.
"The first quarter showed solid growth following a very strong finish to 2006," CEO Robert LoCascio said. "We achieved our first quarter revenue expectations, and we now see a solid pipeline of existing and potential business that we expect will drive strong second half results, as we saw in 2006. Given this visibility, we are reaffirming our full year revenue expectation of approximately $49 million."
LivePerson signed several new blue-chip clients during the quarter including
* DaimlerChrysler's Dodge brand * auto parts supplier JC Whitney, and * the world's largest information technology company. We expanded business with several existing customers including * Bell Canada * the largest US publisher of financial management software * a leading global financial services firm, and * Lennar, a national home-building and financial services company.
LivePerson also saw further expansion in the company's small and medium business category during the first quarter, adding more than 200 customers to an existing base of 5,000.
Net income for the first quarter of 2007 was $0.9 million or $0.02 per share as compared to net income of $0.3 million or $0.01 per share in the first quarter of 2006, and net income of $1.2 million or $0.03 per share in the fourth quarter of 2006. Net income in the fourth quarter of 2006 included a tax benefit of $0.4 million.
The Company's effective tax rate in the first quarter was zero resulting from a partial release of the company's valuation allowance against deferred tax assets based on current estimates of future taxable income.
Earnings before interest, taxes, depreciation, amortization and stock- based compensation (EBITDA) for the first quarter of 2007 was $2.0 million as compared to $1.0 million in the first quarter of 2006 and $1.9 million in the fourth quarter of 2006.
The difference between EBITDA per share, a non-GAAP measure, and GAAP EPS, is interest, taxes, depreciation, amortization and stock-based compensation. 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.
The company's cash balance increased by $2.2 million or 10% to $23.9 million at March 31, 2007 as compared to December 31, 2006.
Financial Expectations
The company currently expects the following financial results:
* Revenue of $11.6 -- $11.7 million for the second quarter of 2007
* EBITDA of $0.05 per share and GAAP EPS of $0.02 for the second quarter
of 2007
* Revenue of $48.5 -- $49.5 million for the full year 2007
* EBITDA of $0.24 per share and GAAP EPS of $0.10 - $0.12 for the full
year 2007
* An effective tax rate of 0% for the full year 2007
These GAAP EPS expectations already include the estimated impact of a change in accounting policy related to adopting SFAS 123® as of January 1, 2006. The impact is expected to decrease net income per share by $0.02 and $0.08, for the second quarter and the full year 2007, respectively. This impact may change based upon additional stock option grants, if any, methodology refinement or other factors.
LivePerson, Inc.
Condensed Consolidated Statements of Income
(In Thousands, Except Share and Per Share Data)
Unaudited
Three Months Ended
March 31,
2007 2006
Total revenue $10,969 $6,877
Operating expenses:
Cost of revenue 2,789 1,462
Product development 1,820 880
Sales and marketing 3,402 2,646
General and administrative 2,020 1,501
Amortization of intangibles 242 232
Total operating expenses 10,273 6,721
Income from operations 696 156
Other income, net 222 143
Income before provision for income
taxes 918 299
Provision for income taxes - -
Net income $918 $299
Basic net income per common share $0.02 $0.01
Diluted net income per common share $0.02 $0.01
Weighted average shares outstanding
used in basic net
income per common share calculation 41,297,515 38,253,681
Weighted average shares outstanding
used in diluted net
income per common share calculation 44,761,279 40,504,248
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,
2007 2006
Net income in accordance with
generally
accepted accounting principles $918 $299
Add/(less):
(a)Amortization of intangibles 325 232
(b)Stock-based compensation 815 583
(c)Depreciation 208 62
(d)Provision for income taxes - -
(e)Interest income, net (222) (143)
EBITDA (1) $2,044 $1,033
Diluted EBITDA per common share $0.05 $0.03
Weighted average shares used in
diluted EBITDA
per common share 44,761,279 40,504,248
EBITDA $2,044 $1,033
Add/(less):
Changes in operating assets and
liabilities (679) 207
Provision for doubtful accounts 20 -
Tax benefit from employee stock
option exercises - 214
Deferred income taxes (1,029) (221)
Interest income, net 222 143
Net cash provided by operating
activities $578 $1,376
(1) Earnings before interest, taxes, depreciation, amortization and
stock-based compensation.
LivePerson, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
Unaudited
March 31, 2007 December 31, 2006
ASSETS
Current assets:
Cash and cash equivalents $23,888 $21,729
Accounts receivable, net 4,857 4,269
Prepaid expenses and other current
assets 1,185 1,317
Total current assets 29,930 27,315
Property and equipment, net 1,343 1,124
Intangibles, net 2,315 2,640
Goodwill 18,509 9,673
Deferred tax assets, net 2,518 1,580
Security deposits 284 299
Other assets 704 684
Total assets $55,603 $43,315
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $766 $813
Accrued expenses 2,899 3,754
Deferred revenue 3,939 3,256
Deferred tax liabilities, net 168 259
Total current liabilities 7,772 8,082
Other liabilities 704 684
Commitments and contingencies
Total stockholders' equity 47,127 34,549
Total liabilities and
stockholders' equity $55,603 $43,315
About LivePerson
LivePerson (NASDAQ: LPSN) is a provider of online conversion solutions. Our hosted software enables companies to identify and proactively engage online visitors -- increasing sales, satisfaction and loyalty while reducing service costs. Combining web-interaction technology (chat, email, voice and a self-service knowledgebase) with a deep understanding of consumer behavior and industry best practices, LivePerson's Timpani™ platform engages the right customer, at the right time, with the right communications channel. This Engagement Marketing platform creates more relevant, compelling and personalized experiences -- converting traffic into revenues, and facilitating real-time sales and customer service. More than 5,000 companies, including EarthLink, Hewlett-Packard, Microsoft, Qwest and Verizon, rely on LivePerson to help maximize the return on their marketing and e-commerce investments. LivePerson is headquartered in New York City.
EBITDA Financial Disclosure
Investors are cautioned that the EBITDA, or earnings before interest, taxes, depreciation, amortization and stock-based 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.
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 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. 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 international operations, particularly our operations in Israel, and the civil and political unrest in that region; 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 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 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