NEW YORK, NY - November 1, 2001 - LivePerson, Inc. (NASDAQ: LPSN), a leading Application Service Provider (ASP) of technology facilitating real-time sales and customer service for companies doing business on the Internet, today announced financial results for the quarter ended September 30, 2001.
Revenue for the three months ended September 30, 2001 was $1.7 million, a slight decrease from $1.8 million in the corresponding period of 2000 and from $1.9 million for the three months ended June 30, 2001.
Pro forma net loss for the three months ended September 30, 2001, excluding non-cash compensation, amortization of goodwill and restructuring charges, was $3.2 million, as compared to $7.3 million in the corresponding quarter of 2000 and $3.7 million for the three months ended June 30, 2001.
Pro forma basic and diluted net loss per share for the three months ended September 30, 2001, excluding non-cash compensation, amortization of goodwill and restructuring charges, was $(0.09) per share, as compared to $(0.25) per share for the corresponding period in 2000 and representing an 18% improvement vs. $(0.11) per share for the quarter ended June 30, 2001.
Commenting on the results for the third quarter, Chief Executive Officer Robert LoCascio stated, "We are very pleased with the Company's operating results. During the quarter, we upgraded 100% of our client base to LivePerson Version 4.5, a less expensive platform for the Company to install and support, with greater reliability and stability for our clients. We continue to be on track to achieve monthly pro forma operating cash profitability by December. This is a major turning point for the Company; these results will show that the business model is working."
Historical basic and diluted net loss per common share for the three months ended September 30, 2001 was $(0.40) per share, as compared to $(0.32) per share for the corresponding quarter in 2000 and $(0.13) per share for the three months ended June 30, 2001.
President and Chief Financial Officer Tim Bixby stated, "In a difficult software environment, we've reduced our pro forma net loss per share by more than 18% vs. the prior three months for the third consecutive quarter. As the new fiscal year begins on January 1st, we see LivePerson generating positive pro forma cash flow, with ample cash reserves and no restricted cash on the balance sheet."
Additionally in the third quarter, the Company incurred a restructuring charge of $9.2 million related primarily to write-offs of obsolete hardware, software and leasehold improvements. "Our transition to a single network infrastructure and the elimination of a significant real estate lease obligation drove the restructuring charges," Bixby added. "We will see dramatic operating cost reductions in the fourth quarter as a result, positioning us to achieve our goal of monthly pro forma operating cash profitability."
LivePerson also announced that a 1 for 15 reverse split of its common stock, approved by stockholder vote on September 11, 2001, will not be effected, as a result of a determination by the Company's Board of Directors. The Nasdaq National Market has terminated the Company's delisting hearing process, and temporarily suspended certain listing requirements, including its $1.00 minimum bid price listing requirement through at least early 2002. As a result, the Company has determined that any potential delisting would not occur until at least the second quarter of 2002.
LivePerson, Inc. Condensed Consolidated Statements of Operations (in Thousands, Except Share and Per Share Data) Three Months Ended Nine Months Ended September 30, September 30, (Unaudited) (Unaudited) 2001 2000 2001 2000 Total revenues $1,734 $1,849 $6,017 $3,949 Operating expenses: Cost of revenues 1,586 2,216 6,412 5,445 Product development 865 2,212 3,000 6,130 Sales and marketing 1,133 3,223 4,427 10,440 General and administrative 1,464 2,034 5,032 5,324 Amortization of goodwill and other intangibles 745 -- 2,230 -- Non-cash compensation, net of reversals 526 2,031 569 12,989 Non-cash compensation credit related to restructuring, net -- -- (1,720) -- Restructuring charges 9,232 -- 12,740 -- Total operating expenses 15,551 11,716 32,690 40,328 Loss from operations (13,817) (9,867) (26,673) (36,379) Other income, net 161 538 579 1,412 Net loss (13,656) (9,329) (26,094) (34,967) Non-cash preferred stock dividend -- -- -- 18,000 Net loss attributable to common stockholders $(13,656) $(9,329) $(26,094) $(52,967) Basic and diluted net loss per common share $(0.40) $(0.32) $(0.77) $(2.44) Weighted average shares outstanding used in basic and diluted net loss per common share calculation 34,003,501 29,476,985 33,982,599 21,722,748 Unaudited Supplemental Data Pro forma net loss (a) $(3,153) $(7,298) $(12,275) $(21,978) Pro forma basic and diluted net loss per share (a,b) $(0.09) $(0.25) $(0.36) $(0.80) Pro forma weighted average shares used in basic and diluted net loss per share (b) 34,003,501 29,476,985 33,982,599 27,572,771 (a) Pro forma net loss excludes non-cash compensation, amortization of goodwill and charges for restructuring of $10,503 and $2,031 for the three months ended September 30, 2001 and 2000, respectively, and noncash compensation, amortization of goodwill and charges for restructuring of $13,819 and $12,989 for the nine months ended September 30, 2001 and 2000, respectively, and a non-cash preferred stock dividend of $18,000 in the first nine months of 2000. (b) Pro forma weighted average shares for 2000 assumes the conversion of convertible preferred stock into an equivalent number of shares of common stock at the time of their original issuance. LivePerson, Inc. Condensed Consolidated Balance Sheets (In Thousands, Except Share and Per Share Data) September 30, December 31, 2001 2000 (Unaudited) ASSETS Current assets: Cash, cash equivalents and marketable securities $12,263 $21,449 Accounts receivable, net 469 1,271 Prepaid expenses and other current assets 396 747 Total current assets 13,128 23,467 Property and equipment, net 1,046 12,883 Goodwill and other intangibles, net 6,083 8,291 Restricted cash related to leases -- 2,000 Security deposits 7 68 Deferred costs, net -- 291 Total assets $20,264 $47,000 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $1,381 $1,126 Accrued expenses 3,121 1,446 Deferred revenue 432 615 Total current liabilities 4,934 3,187 Long-term deferred revenue -- 277 Deferred rent -- 304 Deferred gain on sale-leaseback -- 457 Commitments and contingencies Total stockholders' equity 15,330 42,775 Total liabilities and stockholders' equity $20,264 $47,000 About LivePerson
LivePerson (http://www.liveperson.com/) is a leading Application Service Provider (ASP) of technology facilitating real-time sales and customer service for companies doing business on the Internet. The LivePerson service enables online businesses to communicate with Internet users in real time, thereby enhancing the online experience. With LivePerson Exchange, consisting of Chat, FAQ, Email and Document Management, LivePerson offers clients the opportunity to increase sales, reduce customer service costs and increase responsiveness to customer needs. LivePerson is headquartered in New York City, with R&D facilities in Tel Aviv, Israel.
Statements in this press release regarding LivePerson, Inc. that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results. 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 the Company bases its 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 LivePerson's actual results to differ materially from those described in a forward-looking statement: our possible delisting from Nasdaq; the limited history of providing the LivePerson services; our limited historical annual revenue and history of losses; the possible unavailability of financing as and if needed; an unproven business model; our dependence on the success of the LivePerson chat service; continued use by our clients of the LivePerson services; potential fluctuations in our quarterly and annual results; risks related to adverse business conditions experienced by our clients; risks related to managing our expanding operations and staff attrition; integration of acquisitions, including the acquisition of HumanClick Ltd. and other potential acquisitions; our dependence on key employees; risks related to our international operations; competition both for qualified personnel and in the market for real-time sales and customer service technology; building awareness of the LivePerson brand name; technology systems beyond LivePerson's control and technology-related defects that could disrupt the LivePerson services; our dependence on the growth of the Internet as a medium for commerce and the viability of the infrastructure of the Internet; and responding to rapid technological change. 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 LivePerson 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.
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