Limelight Networks(R) Reports Second Quarter 2013 Financial Results
07 Agosto 2013 - 10:00PM
Limelight Networks, Inc. (Nasdaq:LLNW) ("Limelight"), a global
leader in Digital Presence Management, today announced second
quarter 2013 financial results.
"Today Limelight reported revenue for the second quarter of 2013
of $42.8 million and an adjusted EBITDA loss of approximately
$500,000. This quarter's results while disappointing, reflect the
impact of changes we are making to implement our long term mission
of helping customers better engage digital audiences," said Bob
Lento, Chief Executive Officer. "We have launched several
initiatives bringing renewed discipline and speed to product
development and network operations. Customer support and
satisfaction is a top priority, as is ensuring that Limelight is an
employer of choice in our markets. We have also established a
clear process for identifying customers who value quality,
performance, availability, and service, while moving away from
contracts that do not provide long-term economic value. These
changes, while necessary, may affect short-term results. With
these initiatives underway, we are accelerating time to market for
product releases, increasing network capacity, and driving sales
efficiencies."
Recent Business Highlights
Limelight continues to enhance its position as a leader in the
Digital Presence Management marketplace.
- Second quarter 2013 value added services were 36% of total
revenue, up from 35% in the first quarter of 2013.
- Limelight Launched Orchestrate V2.0 and outlined our roadmap of
innovation that we believe will lead us to our vision of a fully
integrated and operationalized Digital Presence platform.
- Increased available network capacity for new and existing
customers by 2 Terabits per second.
Financial Results for Limelight's 2013 second quarter
included:
- Revenue from continuing operations of $42.8 million.
- An adjusted EBITDA loss of approximately $500,000.
- Cash flows from operations of $4.7 million.
- Non-GAAP net loss of $7.2 million, or $0.07 cents per basic
share.
- GAAP loss from continuing operations of $11.2 million, or $0.12
cents per basic share.
- Capital expenditures of $4.5 million.
- The Company ended the quarter with no bank debt and
approximately $119 million in cash and cash equivalents and
short-term marketable securities.
Financial Tables
LIMELIGHT NETWORKS,
INC. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(In thousands, except
per share data) |
|
|
|
|
June 30, |
December 31, |
|
2013 |
2012 |
|
(Unaudited) |
|
ASSETS |
|
|
Current assets: |
|
|
Cash and cash
equivalents |
$ 82,111 |
$ 108,915 |
Marketable
securities |
36,755 |
19,040 |
Accounts receivable,
net |
24,494 |
26,602 |
Income taxes
receivable |
310 |
471 |
Deferred income
tax |
67 |
38 |
Prepaid expenses and
other current assets |
10,107 |
12,308 |
Total current assets |
153,844 |
167,374 |
Property and equipment, net |
33,990 |
41,251 |
Marketable securities, less current
portion |
8 |
18 |
Deferred income tax, less current
portion |
2,908 |
2,838 |
Goodwill |
80,493 |
80,278 |
Other intangible assets, net |
5,007 |
6,387 |
Other assets |
6,129 |
6,735 |
Total assets |
$ 282,379 |
$ 304,881 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 8,229 |
$ 6,730 |
Deferred revenue |
6,542 |
6,892 |
Capital lease
obligation |
777 |
1,301 |
Income taxes payable |
841 |
519 |
Other current
liabilities |
11,455 |
14,866 |
Total current liabilities |
27,844 |
30,308 |
Capital lease obligation, less current
portion |
501 |
824 |
Deferred income tax |
376 |
461 |
Deferred revenue, less current portion |
2,230 |
797 |
Other long-term liabilities |
4,980 |
5,261 |
Total liabilities |
35,931 |
37,651 |
Commitments and contingencies |
-- |
-- |
Stockholders' equity: |
|
|
Convertible preferred stock,
$0.001 par value; 7,500 shares authorized; no shares issued and
outstanding |
-- |
-- |
Common stock, $0.001 par value;
300,000 shares authorized at June 30, 2013 and December 31,
2012; |
|
|
96,836 and 98,038 shares issued and
outstanding at June 30, 2013 and December 31, 2012,
respectively |
97 |
98 |
Additional paid-in capital |
453,083 |
452,258 |
Contingent consideration |
33 |
33 |
Accumulated other comprehensive
loss |
(2,945) |
(709) |
Accumulated deficit |
(203,820) |
(184,450) |
Total stockholders' equity |
246,448 |
267,230 |
Total liabilities and stockholders'
equity |
$ 282,379 |
$ 304,881 |
|
LIMELIGHT NETWORKS,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(In thousands, except
per share data) |
(Unaudited) |
|
|
|
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
|
|
|
|
|
|
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
|
2013 |
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
|
Revenues |
$ 42,763 |
$ 45,813 |
$ 44,447 |
$ 88,576 |
$ 88,763 |
Cost of revenue: |
|
|
|
|
|
Cost of
services * |
21,870 |
22,052 |
20,379 |
43,923 |
40,880 |
Depreciation -
network |
6,120 |
6,680 |
7,184 |
12,800 |
14,013 |
Total cost of revenue |
27,990 |
28,732 |
27,563 |
56,723 |
54,893 |
Gross profit |
14,773 |
17,081 |
16,884 |
31,853 |
33,870 |
Operating expenses: |
|
|
|
|
|
General and
administrative * |
8,365 |
8,073 |
8,053 |
16,438 |
16,373 |
Sales and
marketing * |
10,699 |
10,484 |
11,762 |
21,183 |
23,394 |
Research &
development * |
5,650 |
5,741 |
4,986 |
11,391 |
10,152 |
Depreciation and
amortization |
1,442 |
1,450 |
1,450 |
2,892 |
2,848 |
Total operating expenses |
26,156 |
25,748 |
26,251 |
51,904 |
52,767 |
|
|
|
|
|
|
Operating loss |
(11,383) |
(8,667) |
(9,367) |
(20,051) |
(18,897) |
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
Interest expense |
(21) |
(27) |
(46) |
(48) |
(96) |
Interest income |
79 |
70 |
83 |
149 |
189 |
Other, net |
143 |
568 |
56 |
711 |
(30) |
Total other income |
201 |
611 |
93 |
812 |
63 |
|
|
|
|
|
|
Loss from continuing operations before income
taxes |
(11,182) |
(8,056) |
(9,274) |
(19,239) |
(18,834) |
Income tax expense |
51 |
80 |
163 |
131 |
300 |
|
|
|
|
|
|
Loss from continuing operations |
(11,233) |
(8,136) |
(9,437) |
(19,370) |
(19,134) |
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
Loss from discontinued
operations, net of income taxes |
-- |
-- |
(391) |
-- |
(700) |
|
|
|
|
|
|
Net loss |
$ (11,233) |
$ (8,136) |
$ (9,828) |
$ (19,370) |
$ (19,834) |
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
Basic |
|
|
|
|
|
Continuing
operations |
$ (0.12) |
$ (0.08) |
$ (0.10) |
$ (0.20) |
$ (0.18) |
Discontinued
operations |
$ -- |
$ -- |
$ -- |
$ -- |
$ (0.01) |
Total |
$ (0.12) |
$ (0.08) |
$ (0.10) |
$ (0.20) |
$ (0.19) |
|
|
|
|
|
|
Diluted |
|
|
|
|
|
Continuing
operations |
$ (0.12) |
$ (0.08) |
$ (0.10) |
$ (0.20) |
$ (0.18) |
Discontinued
operations |
$ -- |
$ -- |
$ -- |
$ -- |
$ (0.01) |
Total |
$ (0.12) |
$ (0.08) |
$ (0.10) |
$ (0.20) |
$ (0.19) |
|
|
|
|
|
|
Shares used in per share calculations: |
|
|
|
|
|
Basic |
96,257 |
96,818 |
102,783 |
96,538 |
103,505 |
Diluted |
96,257 |
96,818 |
102,783 |
96,538 |
103,505 |
|
|
|
|
|
|
* Includes share-based
compensation (see supplemental table for figures) |
|
LIMELIGHT NETWORKS,
INC. |
SUPPLEMENTAL FINANCIAL
DATA |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
|
|
|
|
|
|
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
|
2013 |
2013 |
2012 |
2013 |
2012 |
Supplemental financial data (in
thousands): |
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation: |
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
$ 513 |
$ 505 |
$ 485 |
$ 1,018 |
$ 991 |
General and administrative |
1,605 |
1,621 |
1,290 |
3,226 |
3,067 |
Sales and marketing |
595 |
663 |
829 |
1,258 |
1,666 |
Research and development |
514 |
561 |
617 |
1,075 |
1,448 |
|
|
|
|
|
|
Total share-based compensation |
$ 3,227 |
$ 3,350 |
$ 3,221 |
$ 6,577 |
$ 7,172 |
|
|
|
|
|
|
Depreciation and
amortization: |
|
|
|
|
|
|
|
|
|
|
|
Network-related depreciation |
$ 6,120 |
$ 6,680 |
$ 7,184 |
$ 12,800 |
$ 14,013 |
Other depreciation and amortization |
724 |
718 |
721 |
1,442 |
1,424 |
Amortization of intangible assets |
718 |
732 |
729 |
1,450 |
1,424 |
|
|
|
|
|
|
Total depreciation and amortization |
$ 7,562 |
$ 8,130 |
$ 8,634 |
$ 15,692 |
$ 16,861 |
|
|
|
|
|
|
Net (decrease) increase in cash, cash
equivalents and marketable securities: |
$ (1,341) |
$ (7,758) |
$ (12,042) |
$ (9,099) |
$ (15,605) |
|
|
|
|
|
|
End of period
statistics: |
|
|
|
|
|
|
|
|
|
|
|
Approximate number of active customers |
1,358 |
1,406 |
1,494 |
1,358 |
1,494 |
|
|
|
|
|
|
Number of employees |
495 |
499 |
528 |
495 |
528 |
|
LIMELIGHT NETWORKS,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
|
|
|
|
|
|
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
|
2013 |
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
|
Cash flows from operating
activities: |
|
|
|
|
|
Net loss |
$ (11,233) |
$ (8,136) |
$ (9,828) |
$ (19,370) |
$ (19,834) |
Loss from discontinued
operations |
-- |
-- |
(391) |
-- |
(700) |
Net loss from continuing
operations |
(11,233) |
(8,136) |
(9,437) |
(19,370) |
(19,134) |
|
|
|
|
|
|
Adjustments to reconcile net
loss to net cash provided by operating activities: |
|
|
|
|
|
Depreciation and
amortization |
7,562 |
8,130 |
8,634 |
15,692 |
16,861 |
Share-based compensation |
3,227 |
3,350 |
3,221 |
6,577 |
7,172 |
Deferred income taxes |
(118) |
(171) |
(62) |
(289) |
(174) |
Foreign currency remeasurement
gain |
(284) |
(861) |
(247) |
(1,145) |
(344) |
Loss on sale of property and
equipment |
22 |
-- |
13 |
22 |
13 |
Accounts receivable
charges |
207 |
326 |
458 |
533 |
884 |
Amortization of premium on
marketable securities |
184 |
96 |
143 |
280 |
242 |
Non cash tax benefit associated
with sale of discontinued operations |
-- |
-- |
-- |
-- |
-- |
Non cash increase in cost basis
investment |
-- |
-- |
(154) |
-- |
(528) |
Changes in operating assets and
liabilities: |
|
|
|
|
|
Accounts receivable |
2,835 |
(1,260) |
(1,302) |
1,575 |
(1,022) |
Prepaid expenses and
other current assets |
878 |
1,085 |
1,813 |
1,963 |
1,452 |
Income taxes
receivable |
7 |
141 |
(223) |
148 |
(258) |
Other assets |
461 |
106 |
(4) |
567 |
(2,134) |
Accounts payable |
946 |
(96) |
603 |
850 |
(22) |
Deferred revenue |
(615) |
1,698 |
(509) |
1,083 |
265 |
Other current
liabilities |
708 |
(1,947) |
955 |
(1,239) |
(291) |
Income taxes payable |
53 |
307 |
322 |
360 |
(178) |
Other long term
liabilities |
(167) |
(116) |
50 |
(282) |
(458) |
Net cash provided by operating
activities |
4,673 |
2,652 |
4,274 |
7,325 |
2,346 |
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
Purchase of marketable
securities |
(7,931) |
(38,039) |
(8,713) |
(45,970) |
(24,182) |
Maturities of marketable
securities |
5,000 |
22,895 |
6,879 |
27,895 |
14,182 |
Purchases of property and
equipment |
(4,519) |
(2,603) |
(4,432) |
(7,122) |
(10,112) |
Proceeds from sale of
discontinued operations |
119 |
-- |
1,011 |
119 |
6,850 |
Net cash used in investing
activities |
(7,331) |
(17,747) |
(5,255) |
(25,078) |
(13,262) |
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
Payments on capital lease
obligations |
(417) |
(429) |
(445) |
(846) |
(881) |
Proceeds from exercise of stock
options |
2 |
-- |
7 |
2 |
125 |
Cash paid for purchase of
common stock |
-- |
(5,512) |
(11,941) |
(5,512) |
(13,102) |
Payment of employee tax
withholdings related to restricted stock |
(771) |
(1,358) |
(259) |
(2,129) |
(518) |
Net cash used in financing
activities |
(1,186) |
(7,299) |
(12,638) |
(8,485) |
(14,376) |
Effect of exchange rate changes
on cash and cash equivalents |
(208) |
(358) |
(85) |
(566) |
(28) |
Net decrease in cash and cash
equivalents |
(4,052) |
(22,752) |
(13,704) |
(26,804) |
(25,320) |
Cash and cash equivalents, beginning
of period |
86,163 |
108,915 |
108,733 |
108,915 |
120,349 |
Cash and cash equivalents, end of
period |
$ 82,111 |
$ 86,163 |
$ 95,029 |
$ 82,111 |
$ 95,029 |
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 U.S.
GAAP Net Loss to Non-GAAP Net Loss |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
|
|
|
|
|
|
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
|
2013 |
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
|
U.S. GAAP net loss |
$ (11,233) |
$ (8,136) |
$ (9,828) |
$ (19,370) |
$ (19,834) |
|
|
|
|
|
|
Share-based compensation |
3,227 |
3,350 |
3,221 |
6,577 |
7,172 |
Litigation defense expenses |
109 |
42 |
(31) |
151 |
18 |
Acquisition related expenses |
(9) |
(24) |
68 |
(33) |
(419) |
Amortization of intangible assets |
718 |
732 |
729 |
1,450 |
1,424 |
Loss from discontinued operations |
-- |
-- |
391 |
-- |
700 |
|
|
|
|
|
|
Non-GAAP net loss |
$ (7,188) |
$ (4,036) |
$ (5,450) |
$ (11,225) |
$ (10,939) |
|
LIMELIGHT NETWORKS,
INC. |
Reconciliation of U.S.
GAAP Net Loss to EBITDA to Adjusted EBITDA |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
|
|
|
|
|
|
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
|
2013 |
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
|
U.S. GAAP net loss |
$ (11,233) |
$ (8,136) |
$ (9,828) |
$ (19,370) |
$ (19,834) |
|
|
|
|
|
|
Depreciation and
amortization |
7,562 |
8,130 |
8,634 |
15,692 |
16,861 |
Interest expense |
21 |
27 |
46 |
48 |
96 |
Interest and other (income)
expense |
(222) |
(638) |
(139) |
(860) |
(159) |
Income tax expense |
51 |
80 |
163 |
131 |
300 |
Loss from discontinued
operations |
-- |
-- |
391 |
-- |
700 |
|
|
|
|
|
|
EBITDA |
(3,821) |
(537) |
(733) |
(4,359) |
(2,036) |
|
|
|
|
|
|
Share-based compensation |
3,227 |
3,350 |
3,221 |
6,577 |
7,172 |
Litigation defense
expenses |
109 |
42 |
(31) |
151 |
18 |
Acquisition related
expenses |
(9) |
(24) |
68 |
(33) |
(419) |
|
|
|
|
|
|
Adjusted (loss) EBITDA |
$ (494) |
$ 2,831 |
$ 2,525 |
$ 2,336 |
$ 4,735 |
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. The Limelight Orchestrate Digital
Presence Management Platform ("the Orchestrate Platform") is an
integrated suite of cloud-based Software as a Service (SaaS) and
Infrastructure as a Service (IaaS) applications and services that
allow organizations to optimize all aspects of their online digital
presence across web, mobile, social, and large screen channels. The
Orchestrate Platform leverages Limelight's scalable,
high-performance global network to offer advanced features for:
content delivery; website personalization; content targeting;
online video publishing; mobile enablement and monetization; web
content management; transcoding; and cloud storage – combined with
social media integration and powerful analytics. Limelight's team
of digital presence experts help 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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