Limelight Networks(R) Reports First Quarter 2013 Financial Results
09 Maggio 2013 - 10:05PM
Limelight Networks, Inc. (Nasdaq:LLNW) ("Limelight"), a global
leader in Digital Presence Management, today announced first
quarter 2013 financial results.
"Today Limelight reported revenue for the first quarter of 2013
of $45.8 million and adjusted EBITDA of $2.8 million. In my first
full quarter at Limelight, I placed a strong emphasis on driving
focus and a high level of execution across our business in order to
deliver superior service to our customers and build shareholder
value," said Bob Lento, Chief Executive Officer. "We began to
implement changes to improve our sales organization's productivity
and increase the effectiveness of our sales and marketing
investments, and we put in place processes within R&D to
accelerate product time to market and increase the quality of each
solution. I am encouraged by our progress during the quarter."
Recent Business Highlights
Limelight continues to enhance its position as a leader in the
Digital Presence Management marketplace.
- First quarter 2013 value added services were 35% of total
revenue, up from 32% in the fourth quarter of 2012.
- Limelight was named a Strong Performer by Forrester in the
Forrester Wave: Online Video Platform report.
- We launched our thought leadership book, Digital Presence for
Dummies, which was published by Wiley and is the industry's first
guide to digital presence. Demand for the book is strong, and
within just a few weeks of hitting the digital airwaves, the book
was named a 2013 Killer Content Award winner by the DemandGen
Report.
- During the first quarter of 2013, Limelight announced George
Vonderhaar as Chief Sales Officer and Jonathan Smith as Managing
Director and Vice President of Europe, Middle East and Africa.
Financial highlights for Limelight's 2013 first quarter
included:
- Revenue from continuing operations of $45.8 million.
- Adjusted EBITDA of $2.8 million.
- Cash flows from operations of $2.7 million.
- Non-GAAP net loss, before share-based compensation, litigation
expenses, amortization of intangible assets, acquisition-related
expenses, and discontinued operations of $4.0 million, or $0.04
cents per basic share.
- GAAP loss from continuing operations of $8.1 million, or $0.08
cents per basic share.
- Capital expenditures of $2.6 million.
- The Company ended the quarter with no bank debt and
approximately $120 million in cash and cash equivalents and
short-term marketable securities.
Stock Buyback Program
During the first quarter, the Company repurchased approximately
$5.5 million of common stock under the $10 million repurchase plan
that the Board of Directors authorized on October 29, 2012. The
Board of Directors previously authorized the repurchase of a total
of $50 million in common stock under three separate repurchase
plans, the first of which was authorized in September 2011. With
the first quarter repurchases, the third stock repurchase program
is now complete.
Financial Tables
LIMELIGHT NETWORKS,
INC. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(In thousands, except
per share data) |
|
|
|
|
March 31, |
December 31, |
|
2013 |
2012 |
|
(Unaudited) |
|
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 86,163 |
$ 108,915 |
Marketable securities |
34,041 |
19,040 |
Accounts receivable, net |
27,537 |
26,602 |
Income taxes receivable |
318 |
471 |
Deferred income tax |
71 |
38 |
Prepaid expenses and other
current assets |
11,108 |
12,308 |
Total current assets |
159,238 |
167,374 |
Property and equipment, net |
35,339 |
41,251 |
Marketable securities, less current
portion |
11 |
18 |
Deferred income tax, less current
portion |
2,849 |
2,838 |
Goodwill |
80,458 |
80,278 |
Other intangible assets, net |
5,713 |
6,387 |
Other assets |
6,600 |
6,735 |
Total assets |
$ 290,208 |
$ 304,881 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 6,108 |
$ 6,730 |
Deferred revenue |
7,107 |
6,892 |
Capital lease obligation |
1,032 |
1,301 |
Income taxes payable |
798 |
519 |
Other current liabilities |
10,722 |
14,866 |
Total current liabilities |
25,767 |
30,308 |
Capital lease obligation, less current
portion |
664 |
824 |
Deferred income tax |
423 |
461 |
Deferred revenue, less current portion |
2,281 |
797 |
Other long-term liabilities |
5,144 |
5,261 |
Total liabilities |
34,279 |
37,651 |
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, 2013 and December 31, 2012; |
|
|
96,105 and 98,038 shares issued and
outstanding at March 31, 2013 and December 31, 2012,
respectively |
96 |
98 |
Additional paid-in capital |
450,625 |
452,258 |
Contingent consideration |
33 |
33 |
Accumulated other comprehensive
loss |
(2,239) |
(709) |
Accumulated deficit |
(192,586) |
(184,450) |
Total stockholders' equity |
255,929 |
267,230 |
Total liabilities and stockholders'
equity |
$ 290,208 |
$ 304,881 |
|
LIMELIGHT NETWORKS,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(In thousands, except
per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
|
|
March 31, |
December 31, |
March 31, |
|
2013 |
2012 |
2012 |
Revenues |
$ 45,813 |
$ 46,471 |
$ 44,316 |
Cost of revenue: |
|
|
|
Cost of services |
22,052 |
21,529 |
20,501 |
Depreciation - network |
6,680 |
7,009 |
6,829 |
Total cost of revenue |
28,732 |
28,538 |
27,330 |
Gross profit |
17,081 |
17,933 |
16,986 |
Operating expenses: |
|
|
|
General and
administrative * |
8,073 |
10,873 |
8,320 |
Sales and marketing * |
10,484 |
10,613 |
11,632 |
Research &
development * |
5,741 |
5,075 |
5,166 |
Depreciation and
amortization |
1,450 |
1,514 |
1,398 |
Total operating expenses |
25,748 |
28,075 |
26,516 |
|
|
|
|
Operating loss |
(8,667) |
(10,142) |
(9,530) |
|
|
|
|
Other income (expense): |
|
|
|
Interest expense |
(27) |
(41) |
(50) |
Interest income |
70 |
79 |
106 |
Other, net |
568 |
(20) |
(86) |
Total other income (expense) |
611 |
18 |
(30) |
Loss from continuing operations before income
taxes |
(8,056) |
(10,124) |
(9,560) |
Income tax expense (benefit) |
80 |
167 |
137 |
|
|
|
|
Loss from continuing operations |
(8,136) |
(10,291) |
(9,697) |
Discontinued operations: |
|
|
|
Loss from discontinued
operations, net of income taxes |
-- |
(1,943) |
(309) |
Net loss |
$ (8,136) |
$ (12,234) |
$ (10,006) |
|
|
|
|
Net loss per share: |
|
|
|
Basic |
|
|
|
Continuing operations |
$ (0.08) |
$ (0.10) |
$ (0.09) |
Discontinued operations |
$ -- |
$ (0.02) |
$ (0.01) |
Total |
$ (0.08) |
$ (0.12) |
$ (0.10) |
|
|
|
|
Diluted |
|
|
|
Continuing operations |
$ (0.08) |
$ (0.10) |
$ (0.09) |
Discontinued operations |
$ -- |
$ (0.02) |
$ (0.01) |
Total |
$ (0.08) |
$ (0.12) |
$ (0.10) |
|
|
|
|
Shares used in per share calculations: |
|
|
|
Basic |
96,818 |
98,765 |
104,226 |
Diluted |
96,818 |
98,765 |
104,226 |
|
|
|
|
* Includes share-based
compensation (see supplemental table for figures) |
|
LIMELIGHT NETWORKS,
INC. |
SUPPLEMENTAL FINANCIAL
DATA |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
|
|
March 31, |
December 31, |
March 31, |
|
2013 |
2012 |
2012 |
Supplemental financial data (in
thousands): |
|
|
|
Share-based
compensation: |
|
|
|
Cost of revenues |
$ 505 |
$ 522 |
$ 506 |
General and administrative |
1,621 |
1,873 |
1,777 |
Sales and marketing |
663 |
601 |
837 |
Research and development |
561 |
644 |
831 |
Total share-based compensation |
$ 3,350 |
$ 3,640 |
$ 3,951 |
|
|
|
|
Depreciation and
amortization: |
|
|
|
Network-related depreciation |
$ 6,680 |
$ 7,009 |
$ 6,829 |
Other depreciation and amortization |
718 |
787 |
703 |
Amortization of intangible assets |
732 |
727 |
695 |
Total depreciation and amortization |
$ 8,130 |
$ 8,523 |
$ 8,227 |
|
|
|
|
Net decrease in cash, cash equivalents and
marketable securities: |
$ (7,758) |
$ (2,012) |
$ (3,563) |
|
|
|
|
End of period
statistics: |
|
|
|
Approximate number of active customers |
1,406 |
1,451 |
1,562 |
Number of employees |
499 |
511 |
504 |
|
LIMELIGHT NETWORKS,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
|
|
March 31, |
December 31, |
March 31, |
|
2013 |
2012 |
2012 |
|
|
|
|
|
|
|
|
Cash flows from operating
activities: |
|
|
|
Net loss |
$ (8,136) |
$ (12,234) |
$ (10,006) |
Loss from discontinued
operations |
-- |
(1,943) |
(309) |
Net loss from continuing
operations |
(8,136) |
(10,291) |
(9,697) |
|
|
|
|
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: |
|
|
Depreciation and
amortization |
8,130 |
8,523 |
8,227 |
Share-based compensation |
3,350 |
3,640 |
3,951 |
Deferred income taxes |
(171) |
261 |
(112) |
Foreign currency remeasurement
gain |
(861) |
(276) |
(97) |
Loss on sale of property and
equipment |
-- |
70 |
-- |
Accounts receivable
charges |
326 |
905 |
426 |
Accretion of marketable
securities |
96 |
107 |
99 |
Non cash tax benefit associated
with sale of discontinued operations |
-- |
-- |
-- |
Non cash increase in cost basis
investment |
-- |
-- |
(374) |
Changes in operating assets and
liabilities: |
|
|
|
Accounts receivable |
(1,260) |
901 |
280 |
Prepaid expenses and other
current assets |
1,085 |
(76) |
(361) |
Income taxes receivable |
141 |
(47) |
(35) |
Other assets |
106 |
(72) |
(2,130) |
Accounts payable |
(96) |
265 |
(625) |
Deferred revenue |
1,698 |
(544) |
774 |
Other current liabilities |
(1,947) |
1,040 |
(1,246) |
Income taxes payable |
307 |
(55) |
(500) |
Other long term
liabilities |
(116) |
(119) |
(508) |
Net cash provided by (used in)
operating activities |
2,652 |
4,232 |
(1,928) |
|
|
|
|
Cash flows from investing
activities: |
|
|
|
Purchase of marketable
securities |
(38,039) |
-- |
(15,469) |
Maturities of marketable
securities |
22,895 |
8,340 |
7,303 |
Purchases of property and
equipment |
(2,603) |
(916) |
(5,680) |
Proceeds from sale of
discontinued operations |
-- |
224 |
5,839 |
Net cash (used in) provided by
investing activities |
(17,747) |
7,648 |
(8,007) |
|
|
|
|
Cash flows from financing
activities: |
|
|
|
Payments on capital lease
obligations |
(429) |
(427) |
(436) |
Proceeds from exercise of stock
options |
-- |
34 |
118 |
Cash paid for purchase of
common stock |
(5,512) |
(4,578) |
(1,161) |
Payment of employee tax
withholdings related to restricted stock |
(1,358) |
(81) |
(259) |
Net cash used in financing
activities |
(7,299) |
(5,052) |
(1,738) |
Effect of exchange rate changes
on cash and cash equivalents |
(358) |
(232) |
57 |
|
|
|
|
Cash flows from discontinued
operations: |
|
|
|
Cash used in operating
activities of discontinued operations |
-- |
(149) |
-- |
Net cash used in discontinued
operations |
-- |
(149) |
-- |
Net (decrease) increase in cash and
cash equivalents |
(22,752) |
6,447 |
(11,616) |
Cash and cash equivalents, beginning
of period |
108,915 |
102,468 |
120,349 |
Cash and cash equivalents, end of
period |
$ 86,163 |
$ 108,915 |
$ 108,733 |
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 Loss to Non-GAAP Net Loss |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
Three Months
Ended |
|
|
|
|
|
March 31, |
December 31, |
March 31, |
|
2013 |
2012 |
2012 |
|
|
|
|
GAAP net loss |
$ (8,136) |
$ (12,234) |
$ (10,006) |
|
|
|
|
Share-based compensation |
3,350 |
3,640 |
3,951 |
Litigation defense expenses |
42 |
361 |
49 |
Acquisition related expenses |
(24) |
(17) |
(488) |
Amortization of intangible assets |
732 |
727 |
695 |
Loss from discontinued operations |
-- |
1,943 |
309 |
|
|
|
|
Non-GAAP net loss |
$ (4,036) |
$ (5,580) |
$ (5,490) |
|
LIMELIGHT NETWORKS,
INC. |
Reconciliation of GAAP
Net Loss to EBITDA to Adjusted EBITDA |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
Three Months
Ended |
|
|
|
|
|
March 31, |
December 31, |
March 31, |
|
2013 |
2012 |
2012 |
|
|
|
|
GAAP net loss |
$ (8,136) |
$ (12,234) |
$ (10,006) |
|
|
|
|
Depreciation and
amortization |
8,130 |
8,523 |
8,227 |
Interest expense |
27 |
41 |
50 |
Interest and other (income)
expense |
(638) |
(59) |
(20) |
Income tax expense
(benefit) |
80 |
167 |
137 |
Loss from discontinued
operations |
-- |
1,943 |
309 |
|
|
|
|
EBITDA |
(537) |
(1,619) |
(1,303) |
|
|
|
|
Share-based compensation |
3,350 |
3,640 |
3,951 |
Litigation defense
expenses |
42 |
361 |
49 |
Acquisition related
expenses |
(24) |
(17) |
(488) |
|
|
|
|
Adjusted EBITDA |
$ 2,831 |
$ 2,365 |
$ 2,209 |
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 or annual 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 global leader in
Digital Presence Management. Limelight's Orchestrate Digital
Presence Platform is an integrated suite of cloud-based Software as
a Service (SaaS) applications, which allows organizations to
optimize all aspects of their online digital presence across web,
mobile, social, and large screen channels. Orchestrate leverages
Limelight's scalable, high-performance global network to offer
advanced features for: web content management; website
personalization; content targeting; online video publishing; mobile
enablement and monetization; content delivery; transcoding; and
cloud storage – combined with social media integration and powerful
analytics. Limelight's team of digital presence experts helps
organizations streamline processes and optimize business results
across all customer interaction channels to deliver exceptional
multi-screen experiences, improve brand awareness, drive revenue,
and enhance their customer relationships – all while reducing
costs. For more information, please visit www.limelight.com, and be
sure to follow us on Twitter at www.twitter.com/llnw.
Copyright (C) 2013 Limelight Networks, Inc. All rights reserved.
All product or service names are the property of their respective
owners.
CONTACT: Gillian Reckler
602-753-6965
ir@llnw.com
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