Limelight Networks(R) Reports Third Quarter 2013 Financial Results
05 Novembre 2013 - 10:00PM
- GAAP Revenue of $42.7 million, gross margin of 37%, loss from
continuing operations of $10.9 million, or $0.11 per
basic share
- Non-GAAP net loss of $6.7 million, or $0.07 per basic share,
break-even adjusted EBITDA
- $112 million, or $1.15 per share, of cash and cash equivalents
and marketable securities
- Launched Orchestrate V2.5 to support faster content
delivery
Limelight Networks, Inc. (Nasdaq:LLNW) ("Limelight"), a global
leader in Digital Presence Management, today reported revenue of
$42.7 million for the quarter ended September 30, 2013, compared to
$42.8 million for the quarter ended June 30, 2013, and compared to
$45.0 million for the third quarter of 2012.
For the third quarter, on a GAAP basis, gross margin was 37%,
and loss from continuing operations was $10.9 million or $0.11 per
basic share. Gross margin was flat compared to the same period
in 2012 when the company reported a loss from continuing operations
of $0.6 million, or $0.01 per share. The third quarter of 2012
included a $9.4 million gain on the sale of the Company's cost
basis investment in Gaikai Inc.
On a non-GAAP basis net loss was $6.7 million, or $0.07 per
basic share compared to a non-GAAP net loss of $5.5 million or
$0.05 per basic share in the third quarter of 2012.
"This quarter we took another step forward in our turnaround and
simplification plan," said Bob Lento, Chief Executive Officer.
"With our focus on account management, and initiatives to grow
profitable revenue, we held quarter over quarter revenue flat,
despite a significant decline in revenue from one of our largest
customers. Our commitment to our customers through product and
operational excellence is unwavering and we continued to invest in
capacity and capabilities which we believe will help us create
long-term customer relationships and grow revenue and
profitability."
Financial Tables
|
|
|
LIMELIGHT NETWORKS,
INC. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(In thousands, except
per share data) |
|
|
|
|
September 30, |
December 31, |
|
2013 |
2012 |
|
(Unaudited) |
|
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 79,222 |
$ 108,915 |
Marketable securities |
33,043 |
19,040 |
Accounts receivable, net |
25,667 |
26,602 |
Income taxes receivable |
339 |
471 |
Deferred income tax |
83 |
38 |
Prepaid expenses and other current
assets |
10,232 |
12,308 |
Total current assets |
148,586 |
167,374 |
Property and equipment, net |
33,291 |
41,251 |
Marketable securities, less current
portion |
6 |
18 |
Deferred income tax, less current
portion |
2,862 |
2,838 |
Goodwill |
80,658 |
80,278 |
Other intangible assets, net |
4,343 |
6,387 |
Other assets |
5,796 |
6,735 |
Total assets |
$ 275,542 |
$ 304,881 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 8,008 |
$ 6,730 |
Deferred revenue |
6,015 |
6,892 |
Capital lease obligation |
589 |
1,301 |
Income taxes payable |
969 |
519 |
Other current liabilities |
12,450 |
14,866 |
Total current liabilities |
28,031 |
30,308 |
Capital lease obligation, less current
portion |
412 |
824 |
Deferred income tax |
357 |
461 |
Deferred revenue, less current portion |
1,931 |
797 |
Other long-term liabilities |
4,832 |
5,261 |
Total liabilities |
35,563 |
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 September 30, 2013 and December 31, 2012;
97,239 and 98,038 shares issued and outstanding at September 30,
2013 and December 31, 2012, respectively |
97 |
98 |
Additional paid-in capital |
456,153 |
452,258 |
Contingent consideration |
33 |
33 |
Accumulated other comprehensive loss |
(1,566) |
(709) |
Accumulated deficit |
(214,738) |
(184,450) |
Total stockholders' equity |
239,979 |
267,230 |
Total liabilities and stockholders'
equity |
$ 275,542 |
$ 304,881 |
|
|
|
|
|
|
|
|
|
LIMELIGHT NETWORKS,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(In thousands, except
per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
|
|
|
|
|
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|
2013 |
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
|
Revenues |
$ 42,656 |
$ 42,763 |
$ 45,001 |
$ 131,232 |
$ 133,765 |
Cost of revenue: |
|
|
|
|
|
Cost of services * |
21,773 |
21,870 |
21,313 |
65,696 |
62,193 |
Depreciation - network |
5,278 |
6,120 |
6,970 |
18,078 |
20,984 |
Total cost of revenue |
27,051 |
27,990 |
28,283 |
83,774 |
83,177 |
Gross profit |
15,605 |
14,773 |
16,718 |
47,458 |
50,588 |
Operating expenses: |
|
|
|
|
|
General and administrative * |
8,609 |
8,365 |
8,757 |
25,047 |
25,130 |
Sales and marketing * |
10,363 |
10,699 |
11,037 |
31,545 |
34,431 |
Research and development * |
5,423 |
5,650 |
4,956 |
16,814 |
15,108 |
Depreciation and amortization |
1,433 |
1,442 |
1,481 |
4,325 |
4,329 |
Total operating expenses |
25,828 |
26,156 |
26,231 |
77,731 |
78,998 |
|
|
|
|
|
|
Operating loss |
(10,223) |
(11,383) |
(9,513) |
(30,273) |
(28,410) |
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
Interest expense |
(15) |
(21) |
(40) |
(64) |
(136) |
Interest income |
89 |
79 |
88 |
238 |
277 |
Gain on sale of cost basis
investment |
-- |
-- |
9,420 |
-- |
9,420 |
Other, net |
(557) |
143 |
(551) |
154 |
(582) |
Total other (expense) income |
(483) |
201 |
8,917 |
328 |
8,979 |
|
|
|
|
|
|
Loss from continuing operations before income
taxes |
(10,706) |
(11,182) |
(596) |
(29,945) |
(19,431) |
Income tax expense |
197 |
51 |
14 |
328 |
313 |
|
|
|
|
|
|
Loss from continuing operations |
(10,903) |
(11,233) |
(610) |
(30,273) |
(19,744) |
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
Loss from discontinued operations, net of
income taxes |
(15) |
-- |
(218) |
(15) |
(918) |
|
|
|
|
|
|
Net loss |
$ (10,918) |
$ (11,233) |
$ (828) |
$ (30,288) |
$ (20,662) |
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
Basic |
|
|
|
|
|
Continuing operations |
$ (0.11) |
$ (0.12) |
$ (0.01) |
$ (0.31) |
$ (0.19) |
Discontinued
operations |
$ (0.00) |
$ -- |
$ -- |
$ (0.00) |
$ (0.01) |
Total |
$ (0.11) |
$ (0.12) |
$ (0.01) |
$ (0.31) |
$ (0.20) |
|
|
|
|
|
|
Diluted |
|
|
|
|
|
Continuing operations |
$ (0.11) |
$ (0.12) |
$ (0.01) |
$ (0.31) |
$ (0.19) |
Discontinued operations |
$ (0.00) |
$ -- |
$ -- |
$ (0.00) |
$ (0.01) |
Total |
$ (0.11) |
$ (0.12) |
$ (0.01) |
$ (0.31) |
$ (0.20) |
|
|
|
|
|
|
Shares used in per share calculations: |
|
|
|
|
|
Basic |
96,949 |
96,257 |
99,359 |
96,675 |
102,123 |
Diluted |
96,949 |
96,257 |
99,359 |
96,675 |
102,123 |
|
|
|
|
|
|
* Includes share-based
compensation (see supplemental table for figures) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIMELIGHT NETWORKS,
INC. |
SUPPLEMENTAL FINANCIAL
DATA |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
|
|
|
|
|
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|
2013 |
2013 |
2012 |
2013 |
2012 |
Supplemental financial data (in
thousands): |
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation: |
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
$ 499 |
$ 513 |
$ 604 |
$ 1,518 |
$ 1,594 |
General and administrative |
1,591 |
1,605 |
1,571 |
4,817 |
4,638 |
Sales and marketing |
638 |
595 |
836 |
1,896 |
2,503 |
Research and development |
495 |
514 |
652 |
1,569 |
2,100 |
|
|
|
|
|
|
Total share-based compensation |
$ 3,223 |
$ 3,227 |
$ 3,663 |
$ 9,800 |
$ 10,835 |
|
|
|
|
|
|
Depreciation and
amortization: |
|
|
|
|
|
|
|
|
|
|
|
Network-related depreciation |
$ 5,278 |
$ 6,120 |
$ 6,970 |
$ 18,078 |
$ 20,984 |
Other depreciation and amortization |
722 |
724 |
760 |
2,164 |
2,185 |
Amortization of intangible assets |
711 |
718 |
721 |
2,161 |
2,144 |
|
|
|
|
|
|
Total depreciation and amortization |
$ 6,711 |
$ 7,562 |
$ 8,451 |
$ 22,403 |
$ 25,313 |
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash, cash
equivalents and marketable securities: |
$ (6,603) |
$ (1,341) |
$ 5,340 |
$ (15,702) |
$ (10,265) |
|
|
|
|
|
|
|
|
|
|
|
|
End of period
statistics: |
|
|
|
|
|
|
|
|
|
|
|
Approximate number of active customers |
1,341 |
1,358 |
1,493 |
1,341 |
1,493 |
|
|
|
|
|
|
Number of employees |
508 |
495 |
517 |
508 |
517 |
|
|
|
|
|
|
|
|
|
|
|
|
LIMELIGHT NETWORKS,
INC. |
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
|
(In
thousands) |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
|
|
|
|
|
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|
2013 |
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
Net loss |
$ (10,918) |
$(11,233) |
$ (828) |
$ (30,288) |
$ (20,662) |
Loss from discontinued operations |
(15) |
-- |
(218) |
(15) |
(918) |
Net loss from continuing operations |
(10,903) |
(11,233) |
(610) |
(30,273) |
(19,744) |
|
|
|
|
|
|
Adjustments to reconcile net loss
to net cash provided by operating activities: |
|
|
|
|
Depreciation and
amortization |
6,711 |
7,562 |
8,451 |
22,403 |
25,313 |
Share-based
compensation |
3,223 |
3,227 |
3,663 |
9,800 |
10,835 |
Deferred income taxes |
80 |
(118) |
(125) |
(209) |
(299) |
Foreign currency
remeasurement (gain) loss |
641 |
(284) |
517 |
(504) |
173 |
Loss on sale of property
and equipment |
3 |
22 |
6 |
25 |
19 |
Accounts receivable
charges |
225 |
207 |
221 |
758 |
1,105 |
Amortization of premium on
marketable securities |
182 |
184 |
123 |
462 |
365 |
Gain on sale of cost basis
investment |
-- |
-- |
(9,420) |
-- |
(9,420) |
Non cash increase in cost
basis investment |
-- |
-- |
-- |
-- |
(528) |
Changes in operating assets
and liabilities: |
|
|
|
|
|
Accounts receivable |
(1,398) |
2,835 |
(446) |
177 |
(1,468) |
Prepaid
expenses and other current assets |
(33) |
878 |
1,534 |
1,930 |
2,986 |
Income
taxes receivable |
(17) |
7 |
(135) |
131 |
(393) |
Other
assets |
341 |
461 |
580 |
908 |
(1,554) |
Accounts payable |
252 |
946 |
2,176 |
1,102 |
2,154 |
Deferred revenue |
(827) |
(615) |
142 |
256 |
407 |
Other
current liabilities |
803 |
708 |
(732) |
(436) |
(1,023) |
Income
taxes payable |
96 |
53 |
(22) |
456 |
(200) |
Other
long term liabilities |
(166) |
(167) |
(72) |
(448) |
(531) |
Net cash (used in) provided by operating
activities |
(787) |
4,673 |
5,851 |
6,538 |
8,197 |
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Purchase of marketable
securities |
(3,841) |
(7,931) |
(3,098) |
(49,811) |
(27,280) |
Maturities of marketable
securities |
7,426 |
5,000 |
5,103 |
35,321 |
19,285 |
Purchases of property and
equipment |
(5,563) |
(4,519) |
(7,362) |
(12,685) |
(17,474) |
Proceeds from sale of cost
basis investment |
-- |
-- |
10,154 |
-- |
10,154 |
Proceeds from sale of
discontinued operations |
5 |
119 |
367 |
124 |
7,217 |
Net cash (used in) provided by investing
activities |
(1,973) |
(7,331) |
5,164 |
(27,051) |
(8,098) |
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Payments on capital lease
obligations |
(278) |
(417) |
(441) |
(1,124) |
(1,322) |
Proceeds from exercise of
stock options |
27 |
2 |
30 |
29 |
155 |
Cash paid for purchase of
common stock |
-- |
-- |
(3,171) |
(5,512) |
(16,273) |
Payment of employee tax
withholdings related to restricted stock |
(180) |
(771) |
(83) |
(2,309) |
(601) |
Net cash used in financing
activities |
(431) |
(1,186) |
(3,665) |
(8,916) |
(18,041) |
Effect of exchange rate changes on cash
and cash equivalents |
310 |
(208) |
89 |
(256) |
61 |
|
|
|
|
|
|
Discontinued operations |
|
|
|
|
|
Cash used in operating activities of
discontinued operations |
(8) |
-- |
-- |
(8) |
-- |
Net (decrease) increase in cash and
cash equivalents |
(2,889) |
(4,052) |
7,439 |
(29,693) |
(17,881) |
Cash and cash equivalents, beginning
of period |
82,111 |
86,163 |
95,029 |
108,915 |
120,349 |
Cash and cash equivalents, end of
period |
$ 79,222 |
$ 82,111 |
$ 102,468 |
$ 79,222 |
$ 102,468 |
|
|
|
|
|
|
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, gain on
sale of cost basis investment and discontinued operations. We
define EBITDA as GAAP net income (loss) before interest income,
interest expense, gain on sale of cost basis investment, 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 |
Nine Months
Ended |
|
|
|
|
|
|
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|
2013 |
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
|
U.S. GAAP net loss |
$ (10,918) |
$ (11,233) |
$ (828) |
$ (30,288) |
$ (20,662) |
|
|
|
|
|
|
Share-based compensation |
3,223 |
3,227 |
3,663 |
9,800 |
10,835 |
Litigation defense expenses |
149 |
109 |
148 |
299 |
166 |
Acquisition related expenses |
146 |
(9) |
48 |
113 |
(372) |
Amortization of intangible assets |
711 |
718 |
721 |
2,161 |
2,144 |
Gain on sale of cost basis investment |
-- |
-- |
(9,420) |
-- |
(9,420) |
Loss from discontinued operations |
15 |
-- |
218 |
15 |
918 |
|
|
|
|
|
|
Non-GAAP net loss |
$ (6,674) |
$ (7,188) |
$ (5,450) |
$ (17,900) |
$ (16,391) |
|
|
|
|
|
|
|
|
|
|
|
|
LIMELIGHT NETWORKS,
INC. |
Reconciliation of U.S.
GAAP Net Loss to EBITDA to Adjusted EBITDA |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
|
|
|
|
|
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|
2013 |
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
|
U.S. GAAP net loss |
$ (10,918) |
$ (11,233) |
$ (828) |
$ (30,288) |
$ (20,662) |
|
|
|
|
|
|
Depreciation and amortization |
6,711 |
7,562 |
8,451 |
22,403 |
25,313 |
Interest expense |
15 |
21 |
40 |
64 |
136 |
Gain on sale of cost basis
investment |
-- |
-- |
(9,420) |
-- |
(9,420) |
Interest and other (income) expense |
468 |
(222) |
463 |
(392) |
304 |
Income tax expense |
197 |
51 |
14 |
328 |
313 |
Loss from discontinued operations |
15 |
-- |
218 |
15 |
918 |
|
|
|
|
|
|
EBITDA |
(3,512) |
(3,821) |
(1,062) |
(7,870) |
(3,098) |
|
|
|
|
|
|
Share-based compensation |
3,223 |
3,227 |
3,663 |
9,800 |
10,835 |
Litigation defense expenses |
149 |
109 |
148 |
299 |
166 |
Acquisition related expenses |
146 |
(9) |
48 |
113 |
(372) |
|
|
|
|
|
|
Adjusted EBITDA (loss) |
$ 6 |
$ (494) |
$ 2,797 |
$ 2,342 |
$ 7,531 |
|
|
|
|
|
|
Conference Call
At approximately 4:30 p.m. EST (1:30 p.m. PST) 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. 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
ir@llnw.com
(602) 850-5000
famaPR on behalf of Limelight Networks
(617) 986-5020
limelight@famapr.com
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