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LivePerson Reports Fourth Quarter and Full Year 2009 Financial Results
Feb 10, 2010
- Fourth quarter revenue increased 26% from prior year and 11% sequentially
- Record EBITDA per share of $0.14 in fourth quarter
- Record EPS of $0.06 in fourth quarter
- Currently hosting over 1 billion visitor sessions per month across customer websites

NEW YORK, Feb. 10 /PRNewswire-FirstCall/ -- LivePerson, Inc. (Nasdaq: LPSN), a leading provider of online engagement solutions that facilitate real-time assistance and expert advice, today announced financial results for the fourth quarter and full year ended December 31, 2009.

Revenue

Revenue for the fourth quarter was $24.8 million, a 26% increase from the fourth quarter of 2008, and an 11% sequential increase as compared to the third quarter of 2009. Revenue from business operations for the fourth quarter was $21.4 million, a 24% increase as compared to the fourth quarter of 2008 and a 12% increase as compared to the third quarter of 2009.  Revenue from consumer operations for the fourth quarter was $3.4 million, a 41% increase as compared to the fourth quarter of 2008, and a 9% increase as compared to the third quarter of 2009.    

Revenue for the full year was $87.5 million, a 17% increase from $74.7 million in 2008. Revenue from business operations for the full year was $75.5 million, an 18% increase from $64.1 million in 2008.  Revenue from consumer operations for the full year was $11.9 million, a 13% increase from $10.6 million in 2008.

"We had a great quarter, with all facets of the business contributing to top line growth," said LivePerson CEO Robert LoCascio. "Revenue and earnings for both the quarter and year have surpassed our expectations, driven by a balanced mix of geographic expansion, new account acquisition and existing account penetration.  Our sound sales strategy coupled with strong cost management across the organization place us in a solid position to continue driving growth in 2010 and beyond."

Customer Expansion

LivePerson added 14 new large enterprise clients in the quarter, including:

  • A major American sporting goods company
  • Crate & Barrel
  • One of the world's leading long-haul airlines
  • A leading worldwide provider of IT services and solutions
  • One of the leading US-based health and benefits providers

The Company also expanded business with

  • Three new geographies for a leading global wireless provider
  • A leading multinational entertainment and media enterprise
  • AT&T Mobility
  • Verizon
  • The world leader in digital and analog technology
  • Several US-based banks including PNC Bank, Chase and Charles Schwab

Net Income/(Loss)

Net income for the fourth quarter of 2009 was $3.1 million or $0.06 per share as compared to a net loss of $23.8 million or $0.50 per share in the fourth quarter of 2008, and net income of $2.3 million or $0.05 per share in the third quarter of 2009.   Net income for the full year was $7.8 million or $0.16 per share, as compared to a net loss of $23.8 million or $0.50 per share in the prior year.  

Financial results in the fourth quarter of 2008 and the full year 2008 included a goodwill impairment charge of $23.5 million or $0.50 per share related to the company's consumer operations.  This charge was a non-cash item, and therefore had no impact on the company's cash flows.

Adjusted Net Income and EBITDA

LivePerson considers adjusted net income and earnings before other income/(expense), taxes, depreciation, amortization and stock-based compensation (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 for the fourth quarter of 2009 was $4.7 million or $0.09 per share, as compared to $1.3 million or $0.03 per share in the fourth quarter of 2008, and $3.9 million or $0.08 per share in the third quarter of 2009.  Adjusted net income for the full year was $14.5 million or $0.30 per share, as compared to $6.6 million or $0.14 per share in the prior year.

EBITDA for the fourth quarter of 2009 was $7.1 million or $0.14 per share, as compared to $3.5 million or $0.07 per share in the fourth quarter of 2008, and $6.2 million or $0.12 per share in the third quarter of 2009.   EBITDA for the full year 2009 was $22.8 million or $0.47 per share, as compared to $9.9 million or $0.20 per share in the prior year.

Cash

The company's cash balance was $45.6 million at December 31, 2009 as compared to $36.5 million as of September 30, 2009, and $25.5 million at December 31, 2008.  The company generated $8.2 million of cash 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, the company generated $21.0 million of cash from operations, and incurred planned capital expenditures related primarily to the purchase of servers and computer networking equipment, resulting in a cash outlay of approximately $5.4 million.      

Financial Expectations

Following is the Company's current expectation for financial and operating performance:

First Quarter 2010

  • Revenue of $25.0 - $25.2 million
  • EBITDA of $0.11 - $0.12 per share
  • Adjusted net income per share of $0.06 - $0.07
  • GAAP EPS of $0.02 - $0.03
  • Fully diluted share count of approximately 51 million

Full Year 2010

  • Revenue of $105 - $107 million
  • EBITDA of $0.50 - $0.52 per share
  • Adjusted net income per share of $0.30 - $0.32
  • GAAP EPS of $0.16 - $0.18
  • Fully diluted share count of approximately 51.5 million

Other Full Year 2010 Assumptions

  • Amortization of intangibles of approximately $1.5 million
  • Stock-compensation expense of approximately $6 million
  • Depreciation of approximately $6 million
  • Effective tax rate of approximately 40%
  • Cash tax rate of approximately 40%
  • Capital expenditures of approximately $6.0 - $7.0 million

Stock-Based Compensation  

Included in the accompanying financial results are expenses related to stock-based compensation, as follows (in thousands):

    
    
                                       Q4 2009       FY 2009 
                                       -------       ------- 
    Cost of revenue                      $211          $790
    Product development                   372         1,402 
    Sales and marketing                   376         1,337 
    General and administrative            276         1,197 
                                          ---         ----- 
       Total                           $1,235        $4,726 

Amortization of Intangible Assets  

Included in the accompanying financial results are expenses related to the amortization of intangible assets, as follows (in thousands):

    
    
                                     Q4 2009        FY 2009
                                     -------        -------
    Cost of revenue                   $307          $1,228 
    General and administrative          83             745
                                        --             ---
       Total                          $390          $1,973

Earnings Teleconference and Video Discussion Information

The company will discuss its fourth quarter and full year 2009 financial results during a teleconference today, February 10, 2010, at 5:00 p.m. ET.  To participate, please call 877-507-3684 before 5:00 p.m. ET. International callers, please dial 706-634-9559. Please reference the conference ID "53817749."

If you are unable to participate, the teleconference will be available for replay at 6:00 p.m. ET on February 10, 2010 until May 10, 2010. To access the replay, please call 800-642-1687 (U.S. and Canada) or 706-645-9291 (international). Please reference the conference ID "53817749."

The company will post a video discussion of its fourth quarter 2009 results on YouTube. To view, click on the following link: http://www.youtube.com/user/myliveperson.

    
    
                               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,     
                                    ------------           ------------     
                                  2009        2008        2009       2008 
                                  ----        ----        ----       ---- 
    Revenue                    $24,768     $19,607     $87,490    $74,655 
                               -------     -------     -------    ------- 
                                                                          
    Operating expenses:                                                   
      Cost of revenue            6,068       4,961      21,076     20,307 
      Product development        3,163       3,023      12,111     12,899 
      Sales and marketing        7,408       7,259      27,355     26,124 
      General and                                                         
       administrative            3,427       3,008      13,417     13,042 
      Amortization of                                                     
       intangibles                  83         273         745      1,407 
      Goodwill impairment            -      23,501           -     23,501 
                                   ---      ------         ---     ------ 
          Total operating                                                 
           expenses             20,149      42,025      74,704     97,280 
                                ------      ------      ------     ------ 
                                                                          
    Income (loss) from                                                    
     operations                  4,619     (22,418)     12,786    (22,625)
                                                                          
    Other (expense)                                                       
     income, net                   (35)       (192)         14        (47)
                                   ---        ----          --        --- 
                                                                          
    Income (loss) before                                                  
     provision for income                                                 
     taxes                       4,584     (22,610)     12,800    (22,672)
                                                                          
    Provision for income                                                  
     taxes                       1,493       1,234       5,037      1,165 
                                 -----       -----       -----      ----- 
                                                                          
    Net income (loss)           $3,091    $(23,844)     $7,763   $(23,837)
                                ======    ========      ======   ======== 
                                                                          
    Basic net income                                                      
     (loss) per common                                                    
     share                       $0.06      $(0.50)      $0.16     $(0.50)
                                 =====      ======       =====     ====== 
                                                                          
    Diluted net income                                                    
     (loss) per common                                                    
     share                       $0.06      $(0.50)      $0.16     $(0.50)
                                 =====      ======       =====     ====== 
                                                                          
    Weighted average shares 
     outstanding used in 
     basic net income (loss)
     per common share                                                     
     calculation            48,786,986  47,411,354  47,962,688 47,428,251 
                            ==========  ==========  ========== ========== 
                                                                          
    Weighted average shares 
     outstanding used in 
     diluted net income 
     (loss) per common 
      share calculation     51,065,181  47,411,354  49,008,440 47,428,251 
                            ==========  ==========  ========== ========== 
    
    
    
                               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,    
                                     ------------            ------------    
                                   2009        2008        2009        2008 
                                   ----        ----        ----        ---- 
    Net income (loss) in 
     accordance with generally                        
     accepted accounting                                                 
     principles                  $3,091    $(23,844)     $7,763    $(23,837)
      Add/(less):                                                         
        (a) Goodwill 
             impairment               -      23,501           -      23,501 
        (b) Amortization                                                  
             of intangibles         390         579       1,973       2,634 
        (c) Stock-based                                                   
             compensation         1,235       1,088       4,726       4,266 
        (d) Depreciation            899         768       3,347       2,093 
        (e) Provision for                                                 
             (benefit from)                                                   
             income taxes         1,493       1,234       5,037       1,165 
        (f) Other (income) 
             expense, net            35         192         (14)         47 
                                     --         ---         ---          -- 
    EBITDA (1)                   $7,143      $3,518     $22,832      $9,869 
                                 ======      ======     =======      ====== 
    Diluted EBITDA per                                                    
     common share                 $0.14       $0.07       $0.47       $0.20 
                                  =====       =====       =====       ===== 
                                                                          
    Weighted average shares 
     used in diluted EBITDA                        
     per common share        51,065,181  48,116,364  49,008,440  48,573,455 
                             ==========  ==========  ==========  ========== 
                                                                          
                                                                          
    Net income (loss) in 
     accordance with generally                        
     accepted accounting                                                 
     principles                  $3,091    $(23,844)     $7,763    $(23,837)
      Add:                                                                
        (a) Goodwill                                                      
             impairment               -      23,501           -      23,501 
        (b) Amortization                                                  
             of intangibles         390         579       1,973       2,634 
        (c) Stock-based                                                   
             compensation         1,235       1,088       4,726       4,266 
                                  -----       -----       -----       ----- 
    Adjusted net income          $4,716      $1,324     $14,462      $6,564 
                                 ======      ======     =======      ====== 
    Diluted adjusted net                                                  
     income per common                                                    
     share                        $0.09       $0.03       $0.30       $0.14 
                                  =====       =====       =====       ===== 
                                                                          
    Weighted average shares 
     used in diluted adjusted
     net income per 
     common share            51,065,181  48,116,364  49,008,440  48,573,455 
                             ==========  ==========  ==========  ========== 
                                                                          
                                                                          
    EBITDA                       $7,143      $3,518     $22,832      $9,869 
      Add/(less):                                                         
        (a) Changes in                                                    
             operating assets                                                 
             and liabilities        308         609         293         271 
        (b) Provision for                                                 
             doubtful accounts       25          80          55         148 
        (c) (Provision                                                    
             for) benefit from                                                
             income taxes        (1,493)     (1,234)     (5,037)     (1,165)
        (d) Deferred                                                      
             income taxes         2,229      (1,051)      2,865      (1,091)
        (e) Other income                                                  
             (expense), net         (35)       (192)         14         (47)
                                    ---        ----          --         --- 
    Net cash provided by                                                  
     operating activities        $8,177      $1,730     $21,022      $7,985 
                                 ======      ======     =======      ====== 
    
    (1) Earnings/(loss) before other income/(expense), taxes, depreciation,
        amortization, stock-based compensation and other non-cash charges. 
    
    
    
                               LivePerson, Inc.                          
                    Condensed Consolidated Balance Sheets                
                                (In Thousands)                           
                                  Unaudited                              
                                                                         
                                      December 31, 2009 December 31, 2008
                                      ----------------- -----------------
                                                                         
    ASSETS                                                               
                                                                         
    Current assets:                                                      
      Cash and cash equivalents                 $45,572           $25,500
      Accounts receivable, net                   10,265             7,574
      Prepaid expenses and other                                         
       current assets                             3,661             1,706
      Deferred tax assets, net                    1,460             1,772
                                                  -----             -----
        Total current assets                     60,958            36,552
                                                                         
      Property and equipment, net                 9,551             7,473
      Intangibles, net                            2,821             4,319
      Goodwill                                   23,920            24,388
      Deferred tax assets, net                    4,777             7,330
      Deferred implementation costs                 136               147
      Security deposits                             326               349
      Other assets                                1,792             1,390
                                                  -----             -----
        Total assets                           $104,281           $81,948
                                               ========           =======
                                                                         
    LIABILITIES AND STOCKHOLDERS' EQUITY                     
                                                                         
    Current liabilities:                                                 
      Accounts payable                           $5,375            $3,555
      Accrued expenses                           10,895             9,088
      Deferred revenue                            4,692             3,985
                                                  -----             -----
        Total current liabilities                20,962            16,628
                                                                         
    Deferred revenue, net of current                506               347
    Other liabilities                             1,676             1,390
                                                  -----             -----
        Total liabilities                        23,144            18,365
                                                 ------            ------
                                                                         
    Commitments and contingencies                          
                                                                         
    Total stockholders' equity                   81,137            63,583
                                                 ------            ------
            Total liabilities and                                        
             stockholders' equity              $104,281           $81,948
                                               ========           =======

About LivePerson

LivePerson is a leading provider of online engagement solutions that facilitate real-time assistance and expert advice. Connecting businesses and experts with consumers seeking help on the Web, LivePerson's hosted software platform creates more relevant, compelling and personalized online experiences. Every month, LivePerson's intelligent platform helps millions of people succeed online; more than 8,000 companies, including EarthLink, Hewlett-Packard, Microsoft, Qwest, and Verizon, rely on LivePerson to maximize the impact of the online channel. LivePerson is headquartered in New York City.

Non-GAAP Financial Disclosure

Investors are cautioned that the EBITDA, or earnings/(loss) before other income/(expense), 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.

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