NEW YORK, NY - July 23, 2003 - LivePerson, Inc. (NASDAQ: LPSN), a provider of technology facilitating real-time online customer interaction, today announced financial results for the second quarter ended June 30, 2003.
Revenue for the quarter was $2.8 million, a 51% increase from the prior year, and a 12% sequential increase versus the first quarter of 2003. Revenue growth from the prior year was driven by a combination of new clients, existing client growth and the impact of the NewChannel asset acquisition that occurred in July 2002. Revenue growth from the prior quarter was driven by expansion in all product lines, including Sales Edition, Service Edition, and LivePerson Pro for small businesses.
"Sales momentum with large corporate clients enabled LivePerson to more than double our growth expectations to 12% sequential growth for the quarter," CEO Robert LoCascio stated. "We are beginning to see the impact of investments we've made over the past two years in product development, sales staff and direct marketing efforts. As a result, we're increasing our revenue expectation for 2003 from $11.0 million to $11.5 million, representing a 40% increase in revenue from 2002."
As in the first quarter, a combination of new customer wins, increased revenue from existing clients and a greater proportion of new clients purchasing the higher-priced Sales Edition drove LivePerson's sequential growth. New clients added during the quarter include GeoLearning, Hewlett-Packard and Toyota, while growth continued within existing clients including eBay, Forex and Kaplan Education.
Net income for the quarter was $4,000 or $0.00 per share, as compared to a net loss of $(83,000) or $(0.00) per share in the prior quarter, and a net loss of $(51,000), or $(0.00) per share in the second quarter of 2002. A non-cash stock compensation charge and the costs of the Company's first Customer Summit reduced net income in the quarter by approximately $0.1 million.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter was $409,000 versus $122,000 in the second quarter of 2002. 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. These measures 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.
The Company's cash balance increased by $0.4 million in the quarter to $8.8 million, in line with EBITDA and cash flow from operations for the quarter.
Financial Expectations The Company currently expects the following financial results: * Sequential quarterly revenue growth of 8%, to $3.1 million for Q3 2003 * Annual revenue growth of 40%, to $11.5 million for the full year 2003 * EBITDA of $0.01 per share and breakeven EPS in Q3 2003 * EBITDA of $0.05 per share and EPS of $0.01 for the full year 2003
The difference between EBITDA per share, a non-GAAP measure, and EPS, is interest, taxes, depreciation and amortization. This difference is expected to equal $0.01 per share in Q3 and $0.04 per share for the full year 2003.
LivePerson, Inc.
Condensed Consolidated Statements of Operations
(In Thousands, Except Share and Per Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
(Unaudited) (Unaudited)
2003 2002 2003 2002
Total revenue $ 2,826 $ 1,873 $ 5,355 $ 3,699
Operating expenses:
Cost of revenue 514 318 1,006 656
Product development 419 281 751 577
Sales and marketing 856 493 1,583 1,057
General and administrative 744 750 1,550 1,421
Amortization of other
intangibles 253 -- 507 --
Non-cash compensation,
net of reversals 42 116 48 218
Total operating expenses 2,828 1,958 5,445 3,929
Loss from operations (2) (85) (90) (230)
Other income, net 6 34 11 71
Income (loss) before
cumulative effect of
accounting change 4 (51) (79) (159)
Cumulative effect of
accounting change -- -- -- 5,338
Net income (loss) $ 4 $ (51) $ (79) $ (5,497)
Basic net income (loss)
per share:
Income (loss) before
cumulative effect of
accounting change $ 0.00 $ (0.00) $ (0.00) $ (0.00)
Cumulative effect of
accounting change -- -- -- (0.16)
Net income (loss) $ 0.00 $ (0.00) $ (0.00) $ (0.16)
Diluted net income (loss)
per share:
Income (loss) before
cumulative effect of
accounting change $ 0.00 $ (0.00) $ (0.00) $ (0.00)
Cumulative effect of
accounting change -- -- -- (0.16)
Net income (loss) $ 0.00 $ (0.00) $ (0.00) $ (0.16)
Weighted average shares
outstanding used in basic
net income (loss) per
share calculation 34,229,236 34,029,588 34,192,755 34,016,671
Weighted average shares
outstanding used in
diluted net income (loss)
per share calculation 35,605,738 34,029,588 34,192,755 34,016,671
LivePerson, Inc.
Reconciliation of Non-GAAP Financial Information to GAAP
(In Thousands, Except Share and Per Share Data)
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 Six Months Ended
June 30, June 30,
(Unaudited) (Unaudited)
2003 2002 2003 2002
Net income (loss) in
accordance with generally
accepted accounting
principles $ 4 $ (51) $ (79) $(5,497)
Add/(less):
(a) Amortization of other
intangibles 253 -- 507 --
(b) Non-cash compensation,
net of reversals 42 116 48 218
(c) Depreciation 116 91 208 181
(d) Cumulative effect of
accounting change -- -- -- 5,338
(e) Interest income, net (6) (34) (18) (71)
EBITDA (1) $ 409 $ 122 $ 666 $ 169
Fully diluted EBITDA per share $ 0.01 $ 0.00 $ 0.02 $ 0.00
Weighted average shares
used in EBITDA per share
calculation
Fully diluted 35,605,738 34,323,837 35,369,170 34,239,704
EBITDA $ 409 $ 122 $ 666 $ 169
Add/(less):
Changes in operating
assets and liabilities (64) (163) (1) 68
Provision for doubtful
accounts -- -- 15 --
Interest income, net 6 34 18 71
Net cash provided by/(used
in) operating activities $ 351 $ (7) $ 698 $ 308
(1) Earnings before interest, taxes, depreciation and amortization.
LivePerson, Inc.
Condensed Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Data)
June 30, 2003 December 31, 2002
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 8,782 $ 8,004
Accounts receivable, net 585 607
Prepaid expenses and other current assets 445 299
Total current assets 9,812 8,910
Property and equipment, net 402 595
Other intangibles, net 507 1,014
Security deposits 130 124
Other assets 252 194
Total assets $ 11,103 $ 10,837
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 197 $ 136
Accrued expenses 1,457 1,837
Deferred revenue 1,264 800
Total current liabilities 2,918 2,773
Other liabilities 233 176
Commitments and contingencies
Total stockholders' equity 7,952 7,888
Total liabilities and stockholders' equity $ 11,103 $ 10,837
About LivePerson
LivePerson is a leading provider of technology facilitating real-time online customer interaction. LivePerson services enable online businesses to communicate securely with Internet users in real time, thereby enhancing the online experience. With real-time solutions consisting of chat, marketing and selling tools, a self-service FAQ product and email management, LivePerson offers clients the opportunity to increase sales, lower customer service costs and increase responsiveness to customer needs. LivePerson is headquartered in New York City.
EBITDA Financial Disclosure
Investors are cautioned that the EBITDA, or earnings before interest, taxes, depreciation and amortization, 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 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, Inc. 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 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: 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; our dependence on key employees; risks related to our international operation, particularly our operations in Tel Aviv, Israel, and the current civil and political unrest in that region; competition for qualified personnel; competition in the real-time sales and customer service technology market; 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.
Media Contacts: Jennifer Regnault Budd Zuckerman LivePerson, Inc. Genesis Select Corp. (212) 609-4213 (303) 415-0200 jregnault@liveperson.com budd@genesisselect.com
SOURCE: LivePerson, Inc.
CONTACT: Younjee Kim, +1-212-609-4222, ykim@liveperson.com
Web site: http://www.liveperson.com/
Mike Tague
mtague@liveperson.com