- Revenue of $33.2 million, a 10% increase from first quarter 2008
TEMPE, Ariz., May 6 /PRNewswire-FirstCall/ -- Limelight Networks,
Inc. (NASDAQ:LLNW) today reported first quarter 2009 financial
results. "Limelight Networks achieved solid year-over-year revenue
growth during the first quarter. We continued to see strong demand
for our core content delivery and storage services, and were
pleased with the market reception for LimelightSITE and a favorable
ruling in our patent litigation with Akamai. We believe that
continued Internet adoption presents us with attractive growth
opportunities and that our eight years of innovation, our global
scale and our network-based architecture are the optimal solution
for publishers, enterprises, and governments advancing their online
presence," commented Jeff Lunsford, chairman and chief executive
officer, Limelight Networks, Inc. Financial Highlights For the
first quarter of 2009, the company reported revenue of $33.2
million, up 10% percent from $30.2 million in the same period last
year, and EBITDA, adjusted for share-based compensation, litigation
and the reversal of a previously recorded damage accrual, of $4.7
million. Non-GAAP net loss, before stock based compensation,
litigation costs, and reversal of a previously recorded damage
accrual, was $2.1 million or 2 cents per basic share. GAAP net
earnings were $55.1 million, or 66 cents per basic share and 64
cents on a fully-diluted basis. These earnings include the reversal
of a previously recorded damage accrual of $66 million as a result
of the Massachusetts Federal District Court order finding that we
do not infringe the Akamai 703 patent. Capital purchases incurred
were $4.6 million. The Company ended the quarter with no bank debt
and approximately $162 million in cash and short-term marketable
securities. A reconciliation of GAAP to non-GAAP net income is
included in the attached tables. Second-Quarter Outlook Limelight
Networks anticipates second quarter revenue to be in the range of
$32.2 million to $33.2 million. Financial Tables LIMELIGHT
NETWORKS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands,
except per share data) March 31, December 31, 2009 2008 ---- ----
(Unaudited) ASSETS Current Assets: Cash and cash equivalents
$146,791 $138,180 Marketable securities 15,197 36,463 Accounts
receivable, net of reserves of $8,585 and $7,565 at March 31, 2009
and December 31, 2008, respectively 34,238 33,482 Income taxes
receivable 164 7 Prepaid expenses and other current assets 8,427
7,834 ----- ----- Total current assets 204,817 215,966 Property and
equipment, net 37,721 40,185 Marketable securities, less current
portion 8 13 Other assets 4,939 628 ----- --- Total assets $247,485
$256,792 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities: Accounts payable $11,770 $8,920 Deferred
revenue, current portion 10,328 9,865 Provision for litigation -
65,645 Other current liabilities 9,785 14,928 ----- ------ Total
current liabilities 31,883 99,358 Deferred revenue, less current
portion 6,018 7,303 ----- ----- Total liabilities 37,901 106,661
Commitments and contingencies - - Stockholders' equity: Convertible
preferred stock, $0.001 par value; 7,500 shares authorized; 0
shares issued and outstanding - - Common stock, $0.001 par value;
150,000 shares authorized; 83,792 and 83,405 shares issued and
outstanding at March 31, 2009 and December 31, 2008, respectively
84 83 Additional paid-in capital 295,155 290,593 Accumulated other
comprehensive income 15 260 Accumulated deficit (85,670) (140,805)
------- -------- Total stockholders' equity 209,584 150,131 -------
------- Total liabilities and stockholders' equity $247,485
$256,792 ======== ======== LIMELIGHT NETWORKS, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per
share data) (Unaudited) Three Months Ended ------------------ March
December March December 31, 31, 31, 31, 2009 2008 2008 2007 ----
---- ---- ---- Revenue $33,175 $35,898 $30,202 $29,132 Costs and
operating expenses Cost of revenue * + 21,471 21,881 20,672 18,435
General and administrative * + 12,444 15,550 13,329 7,961 Sales and
marketing * 8,139 9,231 8,142 8,619 Research & development *
1,910 2,072 1,590 1,385 Provision for litigation (65,645) 1,295
7,134 48,130 ------- ----- ----- ------ Total costs and operating
expenses (21,681) 50,029 50,867 84,530 Operating income (loss)
54,856 (14,131) (20,665) (55,398) Interest expense (11) (11) (21)
(6) Interest income 383 669 1,891 2,035 Other income (expense) 227
(375) 170 (177) --- ---- --- ---- Income (loss) before taxes 55,455
(13,848) (18,625) (53,546) Income tax expense (benefit) 320 94
(183) 1,799 --- --- ---- ----- Net income (loss) $55,135 $(13,942)
$(18,442) $(55,345) ======= ======== ======== ======== Net income
(loss) per share: Basic $0.66 $(0.17) $(0.22) $(0.67) Diluted $0.64
$(0.17) $(0.22) $(0.67) Shares used in per share calculations:
Basic 83,515 83,192 82,623 82,140 Diluted 85,968 83,192 82,623
82,140 * Includes share-based compensation (see supplemental table
for figures) + Includes depreciation (see supplemental table for
figures) LIMELIGHT NETWORKS, INC. SUPPLEMENTAL FINANCIAL DATA (In
thousands) (Unaudited) Three Months Ended ------------------ March
December March December 31, 31, 31, 31, 2009 2008 2008 2007 ----
---- ---- ---- Supplemental financial data (in thousands):
Share-based compensation: Cost of revenues $551 $585 $507 $479
General and administrative 2,131 3,028 1,665 1,454 Sales and
marketing 1,189 1,262 1,306 1,272 Research and development 616 633
482 420 --- --- --- --- Total share-based compensation $4,487
$5,508 $3,960 $3,625 ====== ====== ====== ====== Depreciation and
amortization: Network-related depreciation $6,548 $6,862 $6,013
$5,429 Other depreciation 540 455 247 278 --- --- --- --- Total
depreciation and amortization $7,088 $7,317 $6,260 $5,707 ======
====== ====== ====== Capital expenditures: Capital expenditures
(cash and accrual) $4,572 $5,151 $3,095 $5,136 ====== ====== ======
====== Net (decrease) increase in cash, cash equivalents and
marketable securities $(12,660) $(2,015) $(2,475) $3,032 ========
======= ======= ====== End of period statistics: Approximate number
of active customers 1,365 1,336 1,232 1,157 Number of employees 296
294 244 237 LIMELIGHT NETWORKS, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months
Ended ------------------ March December March December 31, 31, 31,
31, 2009 2008 2008 2007 ---- ---- ---- ---- Cash flows from
operating activities: Net income (loss) $55,135 $(13,942) $(18,442)
$(55,345) Adjustments to reconcile net loss to net cash (used in)
provided by operating activities: Depreciation and amortization
7,088 7,317 6,260 5,707 Share-based compensation 4,487 5,508 3,960
3,625 Deferred income tax (benefit) expense - (9) (234) 33 Excess
tax benefit related to stock option exercises - 177 - (1,596)
Provision for litigation (65,645) 1,295 7,134 48,130 (Income) loss
on foreign currency exchange (31) (149) - 42 Accounts receivable
charges 3,288 3,961 1,562 2,268 Accretion of debt discount - - - -
Accretion of marketable securities - (6) (453) (530) Loss on
marketable securities - - 55 387 Changes in operating assets and
liabilities: Accounts receivable (3,840) (6,169) (2,271) (5,243)
Prepaid expenses and other current assets (593) 1,695 87 1,037
Income taxes receivable (157) 1,480 594 2,742 Other assets (4,311)
32 564 11 Accounts payable (1,223) (531) (4,634) 3,613 Accounts
payable, related parties - - (80) 230 Deferred revenue (822) 416
301 135 Other current liabilities (5,144) 718 5,035 (4,449) Other
long term liabilities - (770) 1 740 --- ---- --- --- Net cash (used
in) provided by operating activities (11,768) 1,023 (561) 1,537
------- ----- ---- ----- Cash flows from investing activities:
Purchases of property and equipment (754) (3,537) (2,435) (2,081)
Purchase of marketable securities - - (34,725) 20,300 Sale of
marketable securities 21,300 17,125 44,200 (37,569) Net cash
provided by (used in) investing activities 20,546 13,588 7,040
(19,350) ------ ------ ----- ------- Cash flows from financing
activities: Escrow funds returned from share repurchase - - - 1,190
Tax benefits from share- based compensation - (177) - - Excess tax
benefit related to stock option exercises - - - 1,573 Proceeds from
exercise of stock options and warrants 76 34 107 175 Proceeds from
initial public offering, net of issuance costs - - - (47) --- ---
--- --- Net cash provided by (used in) financing activities 76
(143) 107 2,891 --- ---- --- ----- Effect of exchange rate changes
on cash and cash equivalents (243) 566 (156) (4) ---- --- ---- ---
Net increase (decrease) in cash and cash equivalents 8,611 15,034
6,430 (14,926) Cash and cash equivalents, beginning of period
138,180 123,146 113,824 128,750 ------- ------- ------- -------
Cash and cash equivalents, end of period $146,791 $138,180 $120,254
$113,824 ======== ======== ======== ======== Use of Non-GAAP
Financial Measures To evaluate our business, we consider and use
Non-GAAP net income and EBITDA adjusted for share-based
compensation and litigation and damage costs as a supplemental
measure of operating performance. We consider Non-GAAP net income
to be an important indicator of overall business performance
because it allows us to illustrate the impact of the effects of
share-based compensation, litigation expenses and provision for
litigation. We define EBITDA as GAAP net income before interest
income, interest expense, other income and expense, provision for
income taxes, depreciation and amortization. We define EBITDA
adjusted for share-based compensation and litigation and damage
costs as EBITDA plus expenses that we do not consider reflective of
our ongoing operations. We use EBITDA adjusted for share-based
compensation and litigation and damage costs as a supplemental
measure to review and assess operating performance. We also believe
use of EBITDA adjusted for share-based compensation and litigation
and damage costs facilitates investors' use of operating
performance comparisons from period to period. The terms Non-GAAP
net income, EBITDA and EBITDA adjusted for share-based compensation
and litigation and damage costs are not defined under U.S.
generally accepted accounting principles, or U.S. GAAP, and are not
measures of operating income, operating performance or liquidity
presented in accordance with U.S. GAAP. Our Non-GAAP net income,
EBITDA and EBITDA adjusted for share-based compensation and
litigation and damage costs have limitations as analytical tools,
and when assessing our operating performance, Non-GAAP net income,
EBITDA and EBITDA adjusted for share-based compensation and
litigation and damage costs should not be considered in isolation,
or as a substitute for net income (loss) or other consolidated
income statement data prepared in accordance with U.S. GAAP. Some
of these limitations include, but are not limited to: -- EBITDA and
EBITDA adjusted for share-based compensation and litigation and
damage costs do not reflect our cash expenditures or future
requirements for capital expenditures or contractual commitments;
-- they do not reflect changes in, or cash requirements for, our
working capital needs; -- they do not reflect the cash requirements
necessary for litigation costs; -- they do not reflect the interest
expense, or the cash requirements necessary to service interest or
principal payments, on our debt; -- they do not reflect income
taxes or the cash requirements for any tax payments; -- although
depreciation and amortization are non-cash charges, the assets
being depreciated and amortized will be replaced sometime in the
future, and EBITDA and EBITDA adjusted for share-based compensation
and litigation and damage costs do not reflect any cash
requirements for such replacements; -- while share-based
compensation is a component of operating expense, the impact on our
financial statements compared to other companies can vary
significantly due to such factors as the assumed life of the
options and the assumed volatility of our common stock; and --
other companies may calculate EBITDA and EBITDA adjusted for
share-based compensation and litigation and damage costs
differently than we do, limiting their usefulness as comparative
measures. We compensate for these limitations by relying primarily
on our GAAP results and using Non-GAAP Net Income and EBITDA
adjusted for share-based compensation and litigation and damage
costs only as supplemental support for management's analysis of
business performance. Non-GAAP Net Income, EBITDA and EBITDA
adjusted for share-based compensation and litigation and damage
costs are calculated as follows for the periods presented in
thousands: Reconciliation of Non-GAAP Financial Measures In
accordance with the requirements of Regulation G issued by the
Securities and Exchange Commission, the Company is presenting the
most directly comparable GAAP financial measures and reconciling
the non-GAAP financial metrics to the comparable GAAP measures
LIMELIGHT NETWORKS, INC. Reconciliation of GAAP Net Income (Loss)
to Non-GAAP Net Income (Loss) (In thousands) (Unaudited) Three
Months Ended ------------------ March December March December 31,
31, 31, 31, 2009 2008 2008 2007 ---- ---- ---- ---- GAAP net income
(loss) $55,135 $(13,942) $(18,442) $(55,345) Deferred revenue - - -
729 Deferred cost of traffic and services - - - 21 Provision for
litigation (65,645) 1,295 7,134 48,130 Share-based compensation
4,487 5,508 3,960 3,625 Litigation defense expenses 3,945 4,576
5,366 2,772 ----- ----- ----- ----- Non-GAAP net loss $(2,078)
$(2,563) $(1,982) $(68) ======= ======= ======= ==== LIMELIGHT
NETWORKS, INC. Reconciliation of GAAP Net Income (Loss) to EBITDA
to EBITDA Adjusted for Share-Based Compensation and Litigation and
Damage Costs (In thousands) (Unaudited) Three Months Ended
------------------ March December March December 31, 31, 31, 31,
2009 2008 2008 2007 ---- ---- ---- ---- GAAP net income (loss)
$55,135 $(13,942) $(18,442) $(55,345) Add: depreciation and
amortization 7,088 7,317 6,260 5,707 Add: interest expense 11 11 21
6 Less: interest and other income (610) (294) (2,062) (1,858) Plus
income tax (benefit) expense 320 94 (183) 1,799 --- --- ---- -----
EBITDA 61,944 (6,814) (14,406) (49,691) Add: provision for
litigation (65,645) 1,295 7,134 48,130 Add: share-based
compensation 4,487 5,508 3,960 3,625 Add: litigation defense
expenses 3,945 4,576 5,366 2,772 ----- ----- ----- ----- EBITDA
adjusted for share-based compensation, litigation and damage costs
$4,731 $4,565 $2,054 $4,836 ====== ====== ====== ====== Conference
Call Management will host a quarterly conference call for investors
today beginning at 4:30 p.m. EDT (1:30 p.m. PDT). This call can be
accessed toll-free at 1-866-362-4832 within the United States or
1-617.597.5364 outside of the U.S. using Participant Passcode
68176220. The conference call will also be audiocast live from
http://www.llnw.com/ and a replay will be available following the
call from the Company's website. Safe-Harbor Statement This press
release contains forward-looking statements concerning, among other
things, the outlook for the Company's revenues, net loss and
stock-based compensation expense for the first quarter of 2009,
customer growth, market growth, pricing pressures, expansion into
additional market segments, product and services improvements and
litigation and related expenses. Forward-looking statements are not
guarantees and are subject to a number of risks and uncertainties
that could cause actual results to differ materially including, but
not limited to, risks and uncertainties discussed in the Company's
Annual Report on Form 10K and other filings with the Securities and
Exchange Commission and the final review of the results and
amendments and preparation of quarterly financial statements,
including consultation with our outside auditors. Accordingly,
readers are cautioned not to place undue reliance on any
forward-looking statements. The Company assumes no duty or
obligation to update or revise any forward-looking statements for
any reason. About Limelight Networks, Inc. Limelight Networks, Inc.
(NASDAQ:LLNW) is trusted by the world's most innovative enterprise,
entertainment, technology, and software brands to improve the
performance and profitability of web sites and end-user
experiences. Our scalable, on-demand managed infrastructure
solutions provide global reach and consistently high availability,
by routing traffic over a private fiber-optic backbone rather than
through the often-congested, unpredictable public Internet. For
more information, visit our web site
(http://www.limelightnetworks.com/), read our blog
(http://blog.llnw.com/), or follow @llnw on Twitter. Copyright (C)
2009 Limelight Networks, Inc. All rights reserved. All product or
service names are the property of their respective owners
DATASOURCE: Limelight Networks, Inc. CONTACT: Paul Alfieri of
Limelight Networks, Inc., +1-917-297-4241, Web Site:
http://www.limelightnetworks.com/
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