The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from GlobeNewswire (a Nasdaq OMX company)

Limelight Networks(R) Reports Second Quarter 2012 Results

Thursday, August 02, 2012

Limelight Networks(R) Reports Second Quarter 2012 Results05:03 EDT Thursday, August 02, 2012TEMPE, Ariz., Aug. 2, 2012 (GLOBE NEWSWIRE) -- Limelight Networks, Inc. (Nasdaq:LLNW) ("Limelight"), a global leader in Digital Presence Management, announced today second quarter 2012 financial results. "Limelight works closely with our customers to provide the high-value, cloud-based services to seamlessly manage their digital presence across web, mobile, social and large-screen channels on one platform," said Jeff Lunsford, chairman and chief executive officer. "Our product suite enables Limelight customers to streamline their digital presence management workflow, deliver exceptional multi-screen experiences to their own customers, and enhance their bottom line." Highlights for Limelight's second quarter included: Revenue of $44.4 million, a 7% year-over-year growth for continuing operations Value added services revenue growth of 28% year-over-year Value added services grew to 32% of revenue: Limelight video platform and mobile revenue grew in excess of 45% year-over-year Enterprise cloud storage revenue grew approximately 17% year-over-year Site and application acceleration services revenue grew in excess of 45% year-over-yearFinancial Highlights For the second quarter of 2012, the Company reported revenue of $44.4 million from continuing operations, adjusted EBITDA of $2.5 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 $9.4 million, or 10 cents per basic share. Capital investments were $4.4 million in the quarter. The Company ended the quarter with no bank debt and approximately $125 million in cash and cash equivalents and short-term marketable securities.Stock Buyback Program During the second quarter, the Company repurchased approximately $11.9 million of common stock under the $15 million share repurchase plan that the Board authorized on May 2nd, 2012. The Company purchased approximately 4.5 million shares at an average price of $2.63 per share including commission.Q3 2012 Outlook The Company anticipates third quarter revenue to be in the range of $44.0-45.5 million.Financial Tables      LIMELIGHT NETWORKS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except per share data)        June 30, December 31,   20122011  (Unaudited)  ASSETS     Current Assets:      Cash and cash equivalents  $ 95,029  $ 120,349  Marketable securities  29,604  19,850  Accounts receivable, net of reserves of $3,920 and $4,391 at June 30, 2012 and December 31, 2011  28,183  28,045  Income taxes receivable  289  31  Deferred income tax   50  62  Prepaid expenses and other current assets  12,787  20,646 Total current assets  165,942  188,983 Property and equipment, net  49,617  56,368 Marketable securities, less current portion  12  51 Deferred income tax, less current portion  1,287  1,177 Goodwill  79,862  80,105 Other intangible assets, net  7,688  9,207 Other assets  11,558  10,454 Total assets  $ 315,966  $ 346,345      LIABILITIES AND STOCKHOLDERS' EQUITY     Current Liabilities:      Accounts payable  $ 5,734  $ 6,797  Deferred revenue  7,462  7,287  Capital lease obligation  1,714  1,750  Income taxes payable  596  774  Other current liabilities  12,660  13,195 Total current liabilities  28,166  29,803 Capital lease obligation, less current portion  1,279  2,124 Deferred income tax  504  580 Deferred revenue, less current portion  630  539 Other long term liabilities  3,737  4,194 Total liabilities  34,316  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 June 30, 2012 and December 31, 2011; 100,093 and 104,349 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively  100  104 Additional paid-in capital  454,387  460,845 Contingent consideration  110  219 Accumulated other comprehensive loss  (1,559)  (509) Accumulated deficit  (171,388)  (151,554) Total stockholders' equity  281,650  309,105 Total liabilities and stockholders' equity  $ 315,966  $ 346,345              LIMELIGHT NETWORKS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data)(Unaudited)                              Three Months EndedSix Months Ended                June 30,March 31,June 30,March 31,June 30,June 30,  201220122011201120122011               Revenues  $ 44,447  $ 44,316  $ 41,558  $ 41,403  $ 88,763  $ 82,961 Costs and operating expenses              Cost of revenues * +  27,563  27,330  28,377  26,265  54,893  54,642  General and administrative * +  9,503  9,718  9,675  7,162  19,221  16,837  Sales and marketing *  11,762  11,632  9,929  10,798  23,394  20,727  Research & development *  4,986  5,166  4,503  3,691  10,152  8,194 Total costs and operating expenses  53,814  53,846  52,484  47,916  107,660  100,400               Operating loss   (9,367)  (9,530)  (10,926)  (6,513)  (18,897)  (17,439)               Interest expense  (46)  (50)  (100)  (36)  (96)  (136) Interest income  83  106  254  184  189  438 Other income (expense)  56  (86)  32  3  (30)  35               Loss from continuing operations before taxes  (9,274)  (9,560)  (10,740)  (6,362)  (18,834)  (17,102) Income tax expense  163  137  429  138  300  567               Loss from continuing operations  (9,437)  (9,697)  (11,169)  (6,500)  (19,134)  (17,669)               Discontinued operations:              Loss from discontinued operations, net of tax  (391)  (309)  (2,766)  (3,318)  (700)  (6,084)               Net loss  $ (9,828)  $ (10,006)  $ (13,935)  $ (9,818)  $ (19,834)  $ (23,753)               Net loss per share:              Basic              Continuing operations  $ (0.10)  $ (0.09)  $ (0.10)  $ (0.06)  $ (0.18)  $ (0.16)  Discontinued operations  $ (0.00)  $ (0.01)  $ (0.02)  $ (0.03)  $ (0.01)  $ (0.06)  Total  $ (0.10)  $ (0.10)  $ (0.12)  $ (0.09)  $ (0.19)  $ (0.22)                Diluted              Continuing operations  $ (0.10)  $ (0.09)  $ (0.10)  $ (0.06)  $ (0.18)  $ (0.16)  Discontinued operations  $ (0.00)  $ (0.01)  $ (0.02)  $ (0.03)  $ (0.01)  $ (0.06)  Total  $ (0.10)  $ (0.10)  $ (0.12)  $ (0.09)  $ (0.19)  $ (0.22)               Shares used in per share calculations:              Basic  102,783  104,226  113,113  103,917  103,505  108,515  Diluted  102,783  104,226  113,113  103,917  103,505  108,515                             * 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 EndedSix Months Ended                June 30,March 31,June 30,March 31,June 30,June 30,  201220122011201120122011Supplemental financial data (in thousands):                          Share-based compensation:                           Cost of revenues  $ 485  $ 506  $ 716  $ 576  $ 991  $ 1,292 General and administrative  1,290  1,777  1,769  1,270  3,067  3,039 Sales and marketing  829  837  1,099  1,138  1,666  2,237 Research and development  617  831  1,288  849  1,448  2,137               Total share-based compensation  $ 3,221  $ 3,951  $ 4,872  $ 3,833  $ 7,172  $ 8,705              Depreciation and amortization:                           Network-related depreciation  $ 7,184  $ 6,829  $ 7,316  $ 6,657  $ 14,013  $ 13,973 Other depreciation and amortization  721  703  599  400  1,424  999 Amortization of intangible assets  729  695  605  151  1,424  756               Total depreciation and amortization  $ 8,634  $ 8,227  $ 8,520  $ 7,208  $ 16,861  $ 15,728                             Net (decrease) increase in cash, cash equivalents and marketable securities:  $ (12,042)  $ (3,563)  $ (19,064)  $ 65,638  $ (15,605)  $ 46,574                            End of period statistics:             Approximate number of active customers  1,494  1,562  1,630  1,552  1,494  1,630 Number of employees  528  504  486  424  528  486              LIMELIGHT NETWORKS, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited)                              Three Months EndedSix Months Ended                June 30,March 31,June 30,March 31,June 30,June 30,  201220122011201120122011                            Cash flows from operating activities:             Net loss  $ (9,828)  $ (10,006)  $ (13,935)  $ (9,818)  $ (19,834)  $ (23,753) Loss from discontinued operations  (391)  (309)  (2,766)  (3,318)  (700)  (6,084) Net loss from continuing operations  (9,437)  (9,697)  (11,169)  (6,500)  (19,134)  (17,669)               Adjustments to reconcile net loss to net cash provided by (used in) operating activities:         Depreciation and amortization  8,634  8,227  8,520  7,208  16,861  15,728 Share-based compensation  3,221  3,951  4,872  3,833  7,172  8,705 Deferred income taxes  (62)  (112)  5  (79)  (174)  (74) Loss on sale of property and equipment  13  --  --  --  13  -- Accounts receivable charges  458  426  388  233  884  621 Accretion of marketable securities  143  99  (58)  49  242  (9) Non cash increase in cost basis investment  (154)  (374)  (209)  (73)  (528)  (282) Changes in operating assets and liabilities:              Accounts receivable  (1,302)  280  847  1,160  (1,022)  2,007  Prepaid expenses and other current assets  2,824  5,478  253  (909)  8,302  (656)  Income taxes receivable  (223)  (35)  (37)  (125)  (258)  (162)  Other assets  (4)  (2,130)  8  (3,941)  (2,134)  (3,933)  Accounts payable  603  (625)  491  (833)  (22)  (342)  Deferred revenue  (509)  774  (1,831)  (775)  265  (2,606)  Other current liabilities  955  (1,246)  (601)  (1,923)  (291)  (2,524)  Income taxes payable  322  (500)  312  (51)  (178)  261  Other long term liabilities  50  (508)  370  84  (458)  454 Net cash provided by (used in) operating activities  5,532  4,008  2,161  (2,642)  9,540  (481)              Cash flows from investing activities:             Purchase of marketable securities  (8,713)  (15,469)  (4,218)  (1,410)  (24,182)  (5,628) Maturities of marketable securities  6,879  7,303  4,200  6,970  14,182  11,170 Purchases of property and equipment  (4,432)  (5,680)  (11,370)  (7,973)  (10,112)  (19,343) Acquisition of businesses, net of cash acquired  --  --  (7,493)  --  --  (7,493) Net cash used in investing activities  (6,266)  (13,846)  (18,881)  (2,413)  (20,112)  (21,294)              Cash flows from financing activities:             Payments on capital lease obligations  (445)  (436)  (403)  (227)  (881)  (630) Proceeds from exercise of stock options  7  118  71  415  125  486 Proceeds from secondary public offering, net  --  --  (72)  77,169  --  77,097 Cash paid for purchase of common stock  (11,941)  (1,161)  --  --  (13,102)  -- Payment of employee tax withholdings related to restricted stock  (259)  (259)  (713)  (234)  (518)  (947) Net cash (used in) provided by financing activities  (12,638)  (1,738)  (1,117)  77,123  (14,376)  76,006 Effect of exchange rate changes on cash  (332)  (40)  90  234  (372)  324              Cash flows from discontinued operations:             Cash used in operating activities of discontinued operations  --  --  (793)  (1,111)  --  (1,904) Cash used in investing activities of discontinued operations  --  --  (464)  (77)  --  (541) Net cash used in discontinued operations  --  --  (1,257)  (1,188)  --  (2,445)Net (decrease) increase in cash and cash equivalents  (13,704)  (11,616)  (19,004)  71,114  (25,320)  52,110Cash and cash equivalents, beginning of period   108,733  120,349  125,975  54,861  120,349  54,861Cash and cash equivalents, end of period  $ 95,029  $ 108,733  $ 106,971  $ 125,975  $ 95,029  $ 106,971Use 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 EndedSix Months Ended                June 30,March 31,June 30,March 31,June 30,June 30,  201220122011201120122011               GAAP net loss  $ (9,828)  $ (10,006)  $ (13,935)  $ (9,818)  $ (19,834)  $ (23,753)               Share-based compensation  3,221  3,951  4,872  3,833  7,172  8,705 Litigation defense expenses  (31)  49  269  344  18  612 Acquisition related expenses  68  (488)  559  141  (419)  700 Amortization of intangible assets  729  695  605  151  1,424  756 Loss from discontinued operations  391  309  2,766  3,318  700  6,084               Non-GAAP net loss  $ (5,450)  $ (5,490)  $ (4,864)  $ (2,031)  $ (10,939)  $ (6,896)              LIMELIGHT NETWORKS, INC.Reconciliation of GAAP Net Loss to EBITDA to Adjusted EBITDA(In thousands)(Unaudited)                              Three Months EndedSix Months Ended                June 30,March 31,June 30,March 31,June 30,June 30,  201220122011201120122011               GAAP net loss  $ (9,828)  $ (10,006)  $ (13,935)  $ (9,818)  $ (19,834)  $ (23,753)               Depreciation and amortization  8,634  8,227  8,520  7,208  16,861  15,728 Interest expense  46  50  100  36  96  136 Interest and other (income) expense  (139)  (20)  (286)  (187)  (159)  (473) Income tax expense   163  137  429  138  300  567 Loss from discontinued operations  391  309  2,766  3,318  700  6,084               EBITDA  (733)  (1,303)  (2,406)  695  (2,036)  (1,711)               Share-based compensation  3,221  3,951  4,872  3,833  7,172  8,705 Litigation defense expenses  (31)  49  269  344  18  612 Acquisition related expenses  68  (488)  559  141  (419)  700               Adjusted EBITDA   $ 2,525  $ 2,209  $ 3,294  $ 5,013  $ 4,735  $ 8,306Conference Call At approximately 8:30 a.m. EDT (5:30 a.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 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) 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 Gillian Reckler 602-753-6965 ir@llnw.com