Limelight Networks, Inc. (Nasdaq:LLNW) ("Limelight") today reported
first quarter 2012 financial results.
"Limelight Networks' suite of high-value solutions allow our
customers to manage their entire digital presence across web,
mobile, social, and large screen channels on one platform," said
Jeff Lunsford, chairman and chief executive officer. "These
cloud-based solutions are being well-received by customers and
prospects, and contributed to 66% year-over-year growth in our
value added services. Our high-performance global compute and
delivery platform allows us to offer advanced features across
mobile, video and content management, website acceleration, content
delivery, transcoding, live streaming, social enablement and cloud
storage. The integration of these differentiates Limelight from
point solution providers and allows our customers to streamline
their workflow, deliver exceptional multi-screen experiences to
their customers, and enhance their bottom lines."
Specific highlights for the first quarter included:
- Revenue of $44.3 million, representing 7% year-over-year growth
from continuing operations
- Value added services revenue growth of 66% year-over-year
- Value added services comprised 31% of revenue:
-- Limelight video platform and mobile revenue grew in excess of
80% year-over-year
-- Enterprise cloud storage revenue grew in excess of 50%
year-over-year
-- Site and application acceleration services revenue grew in
excess of 45% year-over-year
Financial Highlights
For the first quarter of 2012, the Company reported revenue of
$44.3 million from continuing operations, adjusted EBITDA of $2.2
million and non-GAAP net loss, before share-based compensation,
litigation expenses, amortization of intangible assets,
acquisition-related expenses, and discontinued operations of $5.5
million or 5 cents per basic share. GAAP net loss from continuing
operations was $9.7 million, or 9 cents per basic share.
Capital investments were $5.7 million in the quarter. The
Company ended the quarter with no bank debt and approximately $137
million in cash and cash equivalents and short-term marketable
securities.
Stock Buyback Program
During the first quarter, the Company repurchased approximately
$1.2 million of common stock under the repurchase plan. The Company
has completed its initial repurchase program, having repurchased
approximately 9.7 million shares of common stock for approximately
$25.2 million (including commissions) at an average price of $2.59
per share since commencement. In addition, on May 2, 2012, our
Board of Directors authorized a new $15 million share repurchase
program.
Q2 2012 Outlook
The Company anticipates second quarter revenue to be in the
range of $45-46 million.
Financial Tables
LIMELIGHT NETWORKS,
INC. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(In thousands, except
per share data) |
|
|
|
|
March 31,
2012 |
December 31,
2011 |
|
(Unaudited) |
|
ASSETS |
|
|
Current Assets: |
|
|
Cash and cash equivalents |
$ 108,733 |
$ 120,349 |
Marketable securities |
27,914 |
19,850 |
Accounts receivable, net of
reserves of $4,417 and $4,391 at March 31, 2012 and December 31,
2011 |
27,339 |
28,045 |
Deferred income tax |
53 |
62 |
Income taxes receivable |
80 |
31 |
Prepaid expenses and other current
assets |
15,179 |
20,646 |
Total current assets |
179,298 |
188,983 |
Property and equipment, net |
52,903 |
56,368 |
Marketable securities, less current
portion |
40 |
51 |
Deferred income tax, less current
portion |
1,273 |
1,177 |
Goodwill |
80,304 |
80,105 |
Other intangible assets, net |
8,598 |
9,207 |
Other assets |
12,239 |
10,454 |
Total assets |
$ 334,655 |
$ 346,345 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current Liabilities: |
|
|
Accounts payable |
$ 3,519 |
$ 6,797 |
Deferred revenue |
7,903 |
7,287 |
Capital lease obligation |
1,741 |
1,750 |
Income taxes payable |
287 |
774 |
Other current liabilities |
12,393 |
13,195 |
Total current liabilities |
25,843 |
29,803 |
Capital lease obligation, less current
portion |
1,697 |
2,124 |
Deferred income tax |
566 |
580 |
Deferred revenue, less current portion |
696 |
539 |
Other long term liabilities |
3,687 |
4,194 |
Total liabilities |
32,489 |
37,240 |
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;
300,000 shares authorized at March 31, 2012 and December 31,
2011; |
|
|
104,245 and 104,349 shares issued and
outstanding at March 31, 2012 and December 31, 2011,
respectively |
104 |
104 |
Additional paid-in capital |
463,579 |
460,845 |
Contingent consideration |
110 |
219 |
Accumulated other comprehensive
loss |
(67) |
(509) |
Accumulated deficit |
(161,560) |
(151,554) |
Total stockholders' equity |
302,166 |
309,105 |
Total liabilities and stockholders'
equity |
$ 334,655 |
$ 346,345 |
|
|
LIMELIGHT NETWORKS,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(In thousands, except
per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
|
|
|
March 31, 2012 |
December 31,
2011 |
March 31, 2011 |
December 31,
2010 |
|
|
|
|
|
Revenues |
$ 44,316 |
$ 45,979 |
$ 41,403 |
$ 43,024 |
Costs and operating expenses |
|
|
|
|
Cost of revenues * † |
27,330 |
27,666 |
26,265 |
26,672 |
General and
administrative * † |
9,718 |
10,173 |
7,162 |
7,913 |
Sales and marketing * |
11,632 |
10,178 |
10,798 |
9,724 |
Research &
development * |
5,166 |
4,592 |
3,691 |
3,351 |
Total costs and operating expenses |
53,846 |
52,609 |
47,916 |
47,660 |
|
|
|
|
|
Operating loss |
(9,530) |
(6,630) |
(6,513) |
(4,636) |
|
|
|
|
|
Interest expense |
(50) |
(74) |
(36) |
(59) |
Interest income |
106 |
128 |
184 |
143 |
Other income (expense) |
(86) |
(328) |
3 |
(89) |
|
|
|
|
|
Loss from continuing operations before income
taxes |
(9,560) |
(6,904) |
(6,362) |
(4,641) |
Income tax provision (benefit) |
137 |
(909) |
138 |
(383) |
|
|
|
|
|
Loss from continuing operations |
(9,697) |
(5,995) |
(6,500) |
(4,258) |
|
|
|
|
|
Discontinued operations: |
|
|
|
|
Loss from discontinued operations,
net of income taxes |
(309) |
(558) |
(3,318) |
(2,090) |
|
|
|
|
|
Net loss |
$ (10,006) |
$ (6,553) |
$ (9,818) |
$ (6,348) |
|
|
|
|
|
Net loss per share: |
|
|
|
|
Basic |
|
|
|
|
Continuing operations |
$ (0.09) |
$ (0.06) |
$ (0.06) |
$ (0.04) |
Discontinued operations |
$ (0.01) |
$ -- |
$ (0.03) |
$ (0.02) |
Total |
$ (0.10) |
$ (0.06) |
$ (0.09) |
$ (0.06) |
|
|
|
|
|
Diluted |
|
|
|
|
Continuing operations |
$ (0.09) |
$ (0.06) |
$ (0.06) |
$ (0.04) |
Discontinued operations |
$ (0.01) |
$ -- |
$ (0.03) |
$ (0.02) |
Total |
$ (0.10) |
$ (0.06) |
$ (0.09) |
$ (0.06) |
|
|
|
|
|
Shares used in per share calculations: |
|
|
|
|
Basic |
104,226 |
106,253 |
103,917 |
99,557 |
Diluted |
104,226 |
106,253 |
103,917 |
99,557 |
|
|
|
|
|
|
|
|
|
|
* Includes share-based
compensation (see supplemental table for figures) |
|
|
|
|
|
† Includes depreciation and
amortization (see supplemental table for figures) |
|
|
LIMELIGHT NETWORKS,
INC. |
SUPPLEMENTAL FINANCIAL
DATA |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
|
|
|
March 31, 2012 |
December 31,
2011 |
March 31, 2011 |
December 31,
2010 |
|
|
|
|
Supplemental financial
data (in thousands): |
|
|
|
|
|
|
|
|
Share-based
compensation: |
|
|
|
|
|
|
|
|
|
Cost of revenues |
$ 506 |
$ 614 |
$ 576 |
$ 580 |
General and administrative |
1,777 |
2,000 |
1,270 |
1,410 |
Sales and marketing |
837 |
844 |
1,138 |
1,137 |
Research and development |
831 |
730 |
849 |
780 |
|
|
|
|
|
Total share-based compensation |
$ 3,951 |
$ 4,188 |
$ 3,833 |
$ 3,907 |
|
|
|
|
|
Depreciation and
amortization: |
|
|
|
|
|
|
|
|
Network-related depreciation |
$ 6,829 |
$ 7,022 |
$ 6,657 |
$ 6,330 |
Other depreciation and amortization |
703 |
714 |
400 |
379 |
Amortization of intangible assets |
695 |
819 |
151 |
140 |
|
|
|
|
|
Total depreciation and amortization |
$ 8,227 |
$ 8,555 |
$ 7,208 |
$ 6,849 |
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash, cash
equivalents and marketable securities: |
$ (3,563) |
$ (17,545) |
$ 65,638 |
$ (3,045) |
|
|
|
|
|
|
|
|
|
|
End of period
statistics: |
|
|
|
|
|
|
|
|
|
Approximate number of active customers |
1,562 |
1,565 |
1,552 |
1,567 |
|
|
|
|
|
Number of employees |
504 |
482 |
424 |
405 |
|
|
LIMELIGHT NETWORKS,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended |
|
|
|
|
|
|
March 31, 2012 |
December 31,
2011 |
March 31, 2011 |
December 31,
2010 |
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities: |
|
|
|
|
Net loss |
$ (10,006) |
$ (6,553) |
$ (9,818) |
$ (6,348) |
Loss from discontinued operations |
(309) |
(558) |
(3,318) |
(2,090) |
Net loss from continuing operations |
(9,697) |
(5,995) |
(6,500) |
(4,258) |
|
|
|
|
|
Adjustments to reconcile net loss to net
cash provided by operating activities: |
|
|
|
|
Depreciation and amortization |
8,227 |
8,555 |
7,208 |
6,849 |
Share-based compensation |
3,951 |
4,188 |
3,833 |
3,907 |
Deferred income taxes |
(112) |
(183) |
(79) |
(728) |
(Gain) loss on foreign currency
transactions |
-- |
(18) |
-- |
-- |
(Gain) loss on sale of property and
equipment |
-- |
-- |
-- |
(104) |
Accounts receivable charges |
426 |
262 |
233 |
121 |
Accretion of marketable securities |
99 |
27 |
49 |
85 |
Non cash tax benefit associated with sale
of discontinued operations |
-- |
(407) |
-- |
-- |
Non cash increase in cost basis
investment |
(374) |
(359) |
(73) |
-- |
Changes in operating assets and
liabilities: |
|
|
|
|
Accounts receivable |
280 |
(379) |
1,160 |
(768) |
Prepaid expenses and other current
assets |
5,478 |
1,102 |
(909) |
156 |
Income taxes receivable |
(35) |
452 |
(125) |
41 |
Other assets |
(2,130) |
(296) |
(3,941) |
594 |
Accounts payable |
(625) |
(4,815) |
(833) |
1,286 |
Deferred revenue |
774 |
1,540 |
(775) |
(2,796) |
Other current liabilities |
(1,246) |
754 |
(1,923) |
(1,537) |
Income taxes payable |
(500) |
(1,045) |
(51) |
(314) |
Other long term liabilities |
(508) |
341 |
84 |
-- |
Net cash provided by (used in) operating
activities |
4,008 |
3,724 |
(2,642) |
2,534 |
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
Purchase of marketable securities |
(15,469) |
(7,396) |
(1,410) |
(1,039) |
Maturities of marketable securities |
7,303 |
1,412 |
6,970 |
7,339 |
Purchases of property and equipment |
(5,680) |
(3,491) |
(7,973) |
(8,321) |
Net cash used in investing
activities |
(13,846) |
(9,475) |
(2,413) |
(2,021) |
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
Payments on capital lease
obligations |
(436) |
(402) |
(227) |
(192) |
Proceeds from exercise of stock
options |
118 |
109 |
415 |
1,486 |
Proceeds from secondary public offering,
net |
-- |
-- |
77,169 |
-- |
Cash paid for repurchase of common
stock |
(1,161) |
(15,164) |
-- |
-- |
Payment of employee tax withholdings
related to restricted stock |
(259) |
(133) |
(234) |
(950) |
Net cash (used in) provided by financing
activities |
(1,738) |
(15,590) |
77,123 |
344 |
Effect of exchange rate changes on
cash |
(40) |
447 |
234 |
21 |
|
|
|
|
|
Cash flows from discontinued
operations: |
|
|
|
|
Cash (used in) provided by operating
activities of discontinued operations |
-- |
(2,597) |
(1,111) |
3,040 |
Cash used in investing activities of
discontinued operations |
-- |
-- |
(77) |
(591) |
Net cash (used in) provided by
discontinued operations |
-- |
(2,597) |
(1,188) |
2,449 |
Net (decrease) increase in cash and
cash equivalents |
(11,616) |
(23,491) |
71,114 |
3,327 |
Cash and cash equivalents, beginning
of period |
120,349 |
143,840 |
54,861 |
51,534 |
Cash and cash equivalents, end of
period |
$ 108,733 |
$ 120,349 |
$ 125,975 |
$ 54,861 |
Use of Non-GAAP Financial Measures
To evaluate our business, we consider and use Non-GAAP net
income (loss) and Adjusted EBITDA as a supplemental measure of
operating performance. These measures include the same adjustments
that management takes into account when it reviews and assesses
operating performance on a period-to-period basis. We consider
Non-GAAP net income (loss) 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,
amortization of intangibles, acquisition related expenses and
discontinued operations. We define EBITDA as GAAP net income (loss)
before interest income, interest expense, other income and expense,
provision for income taxes, depreciation and amortization, and
discontinued operations. We believe that EBITDA provides a useful
metric to investors to compare us with other companies within our
industry and across industries. We define Adjusted EBITDA as EBITDA
adjusted for operational expenses that we do not consider
reflective of our ongoing operations. We use Adjusted EBITDA as a
supplemental measure to review and assess operating performance. We
also believe use of Adjusted EBITDA facilitates investors' use of
operating performance comparisons from period to period. In
addition, it should be noted that our performance-based executive
officer bonus structure is tied closely to our performance as
measured in part by certain non-GAAP financial measures.
The terms Non-GAAP net income (loss), EBITDA and Adjusted EBITDA
are not defined under United States generally accepted accounting
principles, or United States GAAP, and are not measures of
operating income, operating performance or liquidity presented in
accordance with United States GAAP. Our Non-GAAP net income (loss),
EBITDA and Adjusted EBITDA have limitations as analytical tools,
and when assessing our operating performance, Non-GAAP net income
(loss), EBITDA and Adjusted EBITDA should not be considered in
isolation, or as a substitute for net income (loss) or other
consolidated income statement data prepared in accordance with
United States GAAP. Some of these limitations include, but are not
limited to:
- EBITDA and Adjusted EBITDA 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 that we may incur;
- 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 Adjusted EBITDA 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 Adjusted EBITDA
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 (loss) and Adjusted
EBITDA only as supplemental support for management's analysis of
business performance. Non-GAAP net income (loss), EBITDA and
Adjusted EBITDA 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 31, 2012 |
December 31,
2011 |
March 31, 2011 |
December 31,
2010 |
|
|
|
|
|
GAAP net loss |
$ (10,006) |
$ (6,553) |
$ (9,818) |
$ (6,348) |
|
|
|
|
|
Share-based compensation |
3,951 |
4,188 |
3,833 |
3,907 |
Litigation defense expenses |
49 |
301 |
344 |
22 |
Acquisition related expenses |
(488) |
117 |
141 |
169 |
Amortization of intangible assets |
695 |
819 |
151 |
140 |
Loss from discontinued operations |
309 |
558 |
3,318 |
2,090 |
|
|
|
|
|
Non-GAAP net loss |
$ (5,490) |
$ (570) |
$ (2,031) |
$ (20) |
|
|
LIMELIGHT NETWORKS,
INC. |
Reconciliation of GAAP
Net Income (Loss) to EBITDA to Adjusted EBITDA |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
|
|
|
March 31, 2012 |
December 31,
2011 |
March 31, 2011 |
December 31,
2010 |
|
|
|
|
|
GAAP net loss |
$ (10,006) |
$ (6,553) |
$ (9,818) |
$ (6,348) |
|
|
|
|
|
Depreciation and amortization |
8,227 |
8,555 |
7,208 |
6,849 |
Interest expense |
50 |
74 |
36 |
59 |
Interest and other (income) expense |
(20) |
200 |
(187) |
(54) |
Income tax expense (benefit) |
137 |
(909) |
138 |
(383) |
Loss from discontinued operations |
309 |
558 |
3,318 |
2,090 |
|
|
|
|
|
EBITDA |
(1,303) |
1,925 |
695 |
2,213 |
|
|
|
|
|
Share-based compensation |
3,951 |
4,188 |
3,833 |
3,907 |
Litigation defense expenses |
49 |
301 |
344 |
22 |
Acquisition related expenses |
(488) |
117 |
141 |
169 |
|
|
|
|
|
Adjusted EBITDA |
$ 2,209 |
$ 6,531 |
$ 5,013 |
$ 6,311 |
Conference Call
At approximately 4:30 p.m. EDT (1:30 p.m. PDT) today, management
will host a quarterly conference call for investors. Investors can
access this call toll-free at 877-388-8480 within the United States
or +1 678-809-1592 outside of the U.S. The conference call
will also be audiocast live from http://www.limelight.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 expenses, customer
growth, market growth, pricing pressures, expansion into additional
market segments, product and services improvements, the integration
of acquired businesses and litigation and acquisition related
expenses. Forward-looking statements represent the current judgment
and expectations of Limelight Networks and 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 a trusted provider of
integrated cloud-based applications that leverage Limelight's
scalable, high-performance, global computing platform. We give
organizations whose Internet, mobile, and social initiatives are
critical to their success a complete solution to upload, manage,
publish, monetize, accelerate, and analyze their online and mobile
content. The Limelight team of experts and end-to-end offering
allow customers to streamline all of the processes throughout the
content lifecycle and optimize the performance of content across
all channels — empowering them to quickly and cost-effectively
orchestrate a successful digital presence that improves brand
awareness, drives revenue, and enhances customer
relationships. For more information, please
visit www.limelight.com or follow us on Twitter
at www.twitter.com/llnw.
Copyright (C) 2012 Limelight Networks, Inc. All rights reserved.
All product or service names are the property of their respective
owners.
CONTACT: Heather Miller
215-867-8600 ext. 239
media@llnw.com
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Grafico Azioni Limelight Networks (NASDAQ:LLNW)
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