LLNW Limelight Networks Inc

• Q4 Revenue of $42.2 million, and net loss of $5.1 million, or $0.05 per basic share
• $118.5 million, or $1.22 per basic share, of cash and cash equivalents and marketable securities
• Sold Web Content Management (WCM) business
• The Board of Directors authorized a $15 million share repurchase program

Limelight Networks, Inc. (Nasdaq:LLNW), a global leader in digital content delivery, today reported revenue of $42.2 million for the quarter ended December 31, 2013, compared to $46.5 million for the fourth quarter of 2012.

On a GAAP basis, the company reported a net loss of $5.1 million or $0.05 per basic share for the fourth quarter of 2013, compared to a loss of $12.2 million, or $0.12 per basic share in the same period of 2012. The fourth quarter of 2013 included a $3.8 million gain, or $0.04 per basic share, on the sale of the company’s WCM business.

On a non-GAAP basis, net loss was $5.1 million, or $0.05 per basic share for the quarter ended December 31, 2013, compared to a non-GAAP net loss of $5.6 million or $0.06 per basic share in the fourth quarter of 2012.

The company reported revenue of $173.4 million for the year ended December 31, 2013, compared to $180.2 million for 2012.

On a GAAP basis, the company reported a net loss of $35.4 million, or $0.37 per basic share for the year ended December 31, 2013, compared to a loss of $32.9 million, or $0.32 per basic share in the same period of 2012.

On a non-GAAP basis, net loss was $23.0 million, or $0.24 per basic share for the year ended December 31, 2013, compared to a non-GAAP net loss of $22.0 million or $0.22 per basic share in the same period of 2012. Limelight ended the year with 482 employees.

“We are one year into our turnaround efforts to strengthen operations and improve our financial performance. The sale of WCM helps us focus our resources on our core capabilities,” said Bob Lento, Chief Executive Officer. “Looking ahead, with a clearer value proposition for our customers, we aim to reduce customer churn, improve customer satisfaction, and steadily improve our financial performance. While I’m encouraged by the progress we made in 2013, we have more work ahead of us in 2014.”

Financial Tables

LIMELIGHT NETWORKS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data)     December 31, December 31,   2013     2012   (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 85,956 $ 108,915 Marketable securities 32,506 19,040 Accounts receivable, net 21,430 26,602 Income taxes receivable 371 471 Deferred income tax 93 38 Prepaid expenses and other current assets   8,192     12,308   Total current assets 148,548 167,374 Property and equipment, net 32,905 41,251 Marketable securities, less current portion 46 18 Deferred income tax, less current portion 1,307 2,838 Goodwill 77,035 80,278 Other intangible assets, net 2,354 6,387 Other assets   6,103     6,735   Total assets $ 268,298   $ 304,881     LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 5,473 $ 6,730 Deferred revenue 3,523 6,892 Capital lease obligation 466 1,301 Income taxes payable 799 519 Other current liabilities   15,022     14,866   Total current liabilities 25,283 30,308 Capital lease obligation, less current portion 358 824 Deferred income tax 321 461 Deferred revenue, less current portion 1,500 797 Other long-term liabilities   3,505     5,261   Total liabilities 30,967 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 December 31, 2013 and December 31, 2012; 97,677 and 98,038 shares issued and outstanding at December 31, 2013 and December 31, 2012, respectively

98 98

Additional paid-in capital

458,748 452,258 Contingent consideration - 33 Accumulated other comprehensive loss (1,663 ) (709 ) Accumulated deficit   (219,852 )   (184,450 ) Total stockholders' equity   237,331     267,230   Total liabilities and stockholders' equity $ 268,298   $ 304,881     LIMELIGHT NETWORKS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)           Three Months Ended Twelve Months Ended   December 31, September 30, December 31, December 31, December 31,   2013     2013     2012     2013     2012     Revenues $ 42,200   $ 42,656   $ 46,471   $ 173,433   $ 180,236   Cost of revenue: Cost of services * + 22,061 22,138 21,866 88,783 85,226 Depreciation - network   4,864     5,278     7,009     22,942     27,992   Total cost of revenue +   26,925     27,416     28,875     111,725     113,218   Gross profit 15,275 15,240 17,596 61,708 67,018 Operating expenses: General and administrative * + 7,882 8,244 10,536 31,904 34,500 Sales and marketing * 9,929 10,363 10,613 41,474 45,044 Research and development * 5,189 5,423 5,075 22,003 20,182 Depreciation and amortization   1,479     1,433     1,514     5,804     5,843   Total operating expenses +   24,479     25,463     27,738     101,185     105,569     Operating loss (9,204 ) (10,223 ) (10,142 ) (39,477 ) (38,551 )   Other income (expense): Interest expense (12 ) (15 ) (41 ) (76 ) (177 ) Interest income 82 89 79 321 356 Gain on sale of cost basis investment - - - - 9,420 Other, net   4,489     (557 )   (20 )   4,643     (602 ) Total other income (expense)   4,559     (483 )   18     4,888     8,997     Loss from continuing operations before income taxes (4,645 ) (10,706 ) (10,124 ) (34,589 ) (29,554 ) Income tax expense   59     197     167     387     481     Loss from continuing operations (4,704 ) (10,903 ) (10,291 ) (34,976 ) (30,035 )   Discontinued operations: Loss from discontinued operations, net of income taxes   (411 )   (15 )   (1,943 )   (426 )   (2,861 )   Net loss $ (5,115 ) $ (10,918 ) $ (12,234 ) $ (35,402 ) $ (32,896 )   Net loss per share: Basic Continuing operations $ (0.05 ) $ (0.11 ) $ (0.10 ) $ (0.36 ) $ (0.30 ) Discontinued operations $ (0.00 ) $ (0.00 ) $ (0.02 ) $ (0.01 ) $ (0.02 ) Total $ (0.05 ) $ (0.11 ) $ (0.12 ) $ (0.37 ) $ (0.32 )   Diluted Continuing operations $ (0.05 ) $ (0.11 ) $ (0.10 ) $ (0.36 ) $ (0.30 ) Discontinued operations $ (0.00 ) $ (0.00 ) $ (0.02 ) $ (0.01 ) $ (0.02 ) Total $ (0.05 ) $ (0.11 ) $ (0.12 ) $ (0.37 ) $ (0.32 )   Shares used in per share calculations: Basic 97,380 96,949 98,765 96,851 101,283 Diluted 97,380 96,949 98,765 96,851 101,283   * Includes share-based compensation (see supplemental table for figures)   + Includes reclassifications to match current year presentation

(See summary of reclassifications for detail)

  LIMELIGHT NETWORKS, INC. SUPPLEMENTAL FINANCIAL DATA (In thousands) (Unaudited)           Three Months Ended Twelve Months Ended   December 31, September 30, December 31, December 31, December 31,   2013   2013     2012     2013     2012   Supplemental financial data (in thousands):   Share-based compensation:   Cost of revenues $ 356 $ 499 $ 522 $ 1,873 $ 2,117 General and administrative 1,154 1,591 1,873 5,971 6,511 Sales and marketing 348 638 601 2,245 3,104 Research and development   687   495     644     2,256     2,743     Total share-based compensation $ 2,545 $ 3,223   $ 3,640   $ 12,345   $ 14,475       Depreciation and amortization:   Network-related depreciation $ 4,864 $ 5,278 $ 7,009 $ 22,942 $ 27,992 Other depreciation and amortization 797 722 787 2,961 2,972 Amortization of intangible assets   682   711     727     2,843     2,871     Total depreciation and amortization $ 6,343 $ 6,711   $ 8,523   $ 28,746   $ 33,835       Net increase (decrease) in cash, cash equivalents and marketable securities: $ 6,237 $ (6,603 ) $ (2,012 ) $ (9,465 ) $ (12,277 )     End of period statistics:   Approximate number of active customers 1,295 1,341 1,451 1,295 1,451   Number of employees 482 508 511 482 511   LIMELIGHT NETWORKS, INC. SUMMARY OF RECLASSIFICATIONS (In thousands) (Unaudited)           Three Months Ended Twelve Months Ended   December 31, September 30, December 31, December 31, December 31, 2013 2013   2012   2013 2012   Summary of reclassifications (in thousands):   Cost of services As previously reported 22,061 21,773 21,529 88,783 83,723 Reclassification - 365   337   - 1,503   After Reclassification 22,061 22,138   21,866   88,783 85,226     Total cost of revenue As previously reported 26,925 27,051 28,538 111,725 111,715 Reclassification - 365   337   - 1,503   After reclassifications 26,925 27,416   28,875   111,725 113,218     Gross profit As previously reported 15,275 15,605 17,933 61,708 68,521 Reclassifications - (365 ) (337 ) - (1,503 ) After reclassifications 15,275 15,240   17,596   61,708 67,018     General and administrative As previously reported 7,882 8,609 10,873 31,904 36,003 Reclassifications - (365 ) (337 ) - (1,503 ) After reclassifications 7,882 8,244   10,536   31,904 34,500     Total operating expenses As previously reported 24,479 25,828 28,075 101,185 107,072 Reclassifications - (365 ) (337 ) - (1,503 ) After reclassifications 24,479 25,463   27,738   101,185 105,569     LIMELIGHT NETWORKS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)               Three Months Ended Twelve Months Ended   December 31, September 30, December 31, December 31, December 31,   2013     2013     2012     2013     2012     Operating activities Net loss $ (5,115 ) $ (10,918 ) $ (12,234 ) $ (35,402 ) $ (32,896 ) Loss from discontinued operations   (411 )   (15 )   (1,943 )   (426 )   (2,861 ) Net loss from continuing operations (4,704 ) (10,903 ) (10,291 ) (34,976 ) (30,035 )   Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 6,343 6,711 8,523 28,746 33,835 Share-based compensation 2,545 3,223 3,640 12,345 14,475 Deferred income taxes (119 ) 80 261 (328 ) (38 ) Foreign currency remeasurement (gain) loss (27 ) 641 (276 ) (531 ) (103 ) Loss on sale of property and equipment 417 3 70 442 89 Accounts receivable charges 206 225 905 965 2,010 Amortization of premium on marketable securities 176 182 107 639 472 Gain on sale of cost basis investment - - - - (9,420 ) Gain on sale of the Web Content Management business (3,836 ) - - (3,836 ) - Non cash increase in cost basis investment - - - - (528 ) Changes in operating assets and liabilities: Accounts receivable 2,404 (1,398 ) 901 2,581 (567 ) Prepaid expenses and other current assets (707 ) (33 ) (76 ) 1,222 2,910 Income taxes receivable (27 ) (17 ) (47 ) 105 (440 ) Other assets (390 ) 341 (72 ) 519 (1,626 ) Accounts payable (3,293 ) 252 265 (2,192 ) 2,419 Deferred revenue (252 ) (827 ) (544 ) 4 (137 ) Other current liabilities 822 803 1,040 384 17 Income taxes payable (149 ) 96 (55 ) 305 (255 ) Other long term liabilities   (350 )   (166 )   (119 )   (798 )   (649 ) Net cash (used in) provided by operating activities   (941 )   (787 )   4,232     5,596     12,429     Investing activities Purchase of marketable securities (9,236 ) (3,841 ) - (59,047 ) (27,280 ) Maturities of marketable securities 9,580 7,426 8,340 44,901 27,625 Purchases of property and equipment (5,890 ) (5,563 ) (916 ) (18,575 ) (18,390 ) Proceeds from sale of cost basis investment 1,237 - - 1,237 10,154 Proceeds from sale of the Web Content Management business 12,341 - - 12,341 - Proceeds from sale of discontinued operations   -     5     224     124     7,441   Net cash (used in) provided by investing activities   8,032     (1,973 )   7,648     (19,019 )   (450 )   Financing activities Payments on capital lease obligations (177 ) (278 ) (427 ) (1,301 ) (1,749 ) Proceeds from exercise of stock options 9 27 34 38 189 Proceeds from employee stock purchase plan 225 - - 225 - Cash paid for purchase of common stock - - (4,578 ) (5,512 ) (20,851 ) Payment of employee tax withholdings related to restricted stock   (64 )   (180 )   (81 )   (2,372 )   (682 ) Net cash used in financing activities   (7 )   (431 )   (5,052 )   (8,922 )   (23,093 ) Effect of exchange rate changes on cash and cash equivalents   (350 )   310     (232 )   (606 )   (171 )   Discontinued operations           Cash used in operating activities of discontinued operations   -     (8 )   (149 )   (8 )   (149 ) Net (decrease) increase in cash and cash equivalents 6,734 (2,889 ) 6,447 (22,959 ) (11,434 ) Cash and cash equivalents, beginning of period   79,222     82,111     102,468     108,915     120,349   Cash and cash equivalents, end of period $ 85,956   $ 79,222   $ 108,915   $ 85,956   $ 108,915    

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 WCM business and discontinued operations. We define EBITDA as GAAP net income (loss) before interest income, interest expense, gain on sale of cost basis investment and WCM business, 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 share-based compensation, litigation expenses and acquisition related expenses. 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 as well as across companies. 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 Twelve Months Ended   December 31, September 30, December 31, December 31, December 31,   2013     2013     2012     2013     2012     U.S. GAAP net loss $ (5,115 ) $ (10,918 ) $ (12,234 ) $ (35,402 ) $ (32,896 )   Share-based compensation 2,545 3,223 3,640 12,345 14,475 Litigation defense expenses 151 149 361 450 527 Acquisition related expenses 63 146 (17 ) 176 (388 ) Amortization of intangible assets 682 711 727 2,843 2,871 Gain on sale of cost basis investment - - - - (9,420 ) Gain on sale of the Web Content Management business (3,836 ) - - (3,836 ) - Loss from discontinued operations   411     15     1,943     426     2,861     Non-GAAP net loss $ (5,099 ) $ (6,674 ) $ (5,580 ) $ (22,998 ) $ (21,970 )   LIMELIGHT NETWORKS, INC. Reconciliation of U.S. GAAP Net Loss to EBITDA to Adjusted EBITDA (In thousands) (Unaudited)             Three Months Ended Twelve Months Ended   December 31, September 30, December 31, December 31, December 31,   2013     2013     2012     2013     2012     U.S. GAAP net loss $ (5,115 ) $ (10,918 ) $ (12,234 ) $ (35,402 ) $ (32,896 )   Depreciation and amortization 6,343 6,711 8,523 28,746 33,835 Interest expense 12 15 41 76 177 Gain on sale of cost basis investment - - - - (9,420 ) Gain on sale of the Web Content Management business (3,836 ) - - (3,836 ) - Interest and other (income) expense (735 ) 468 (59 ) (1,128 ) 246 Income tax expense 59 197 167 387 481 Loss from discontinued operations   411     15     1,943     426     2,861     EBITDA (2,861 ) (3,512 ) (1,619 ) (10,731 ) (4,716 )   Share-based compensation 2,545 3,223 3,640 12,345 14,475 Litigation defense expenses 151 149 361 450 527 Acquisition related expenses   63     146     (17 )   176     (388 )   Adjusted EBITDA (loss) $ (102 ) $ 6   $ 2,365   $ 2,240   $ 9,898    

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 10-K 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

Limelight Networks (NASDAQ: LLNW), a global leader in digital content delivery, empowers customers to better engage digital audiences by enabling them to manage and deliver digital content on any device, anywhere in the world. The Company's award winning Limelight Orchestrate™ platform includes an integrated suite of content delivery technology and services that helps organizations deliver exceptional multi-screen experiences, improve brand awareness, drive revenue, and enhance customer relationships — all while reducing costs. For more information, please visit www.limelight.com, read our blog, and be sure to follow us on Twitter at www.twitter.com/llnw.

Copyright (C) 2014 Limelight Networks, Inc. All rights reserved. All product or service names are the property of their respective owners.

Limelight Networks, Inc.Pete Perrone, 602-850-5000ir@llnw.comorfamaPR on behalf of Limelight NetworksAmy Peterson, 617-986-5020limelight@famapr.com