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Press release from PR Newswire

OpenTable, Inc. Announces Second Quarter Financial Results

Thursday, August 02, 2012

OpenTable, Inc. Announces Second Quarter Financial Results16:31 EDT Thursday, August 02, 2012-- Increases Revenue by 15% to $39.6 Million -- -- Grows Seated Diners by 27% over Q2 2011 -- -- Achieves EPS of $0.25 and Non-GAAP EPS of $0.42 --SAN FRANCISCO, Aug. 2, 2012 /PRNewswire/ -- OpenTable, Inc. (NASDAQ: OPEN), a leading provider of free, real-time online restaurant reservations for diners and reservation and guest management solutions for restaurants, today reported its financial results for the second quarter ended June 30, 2012.(Logo:  http://photos.prnewswire.com/prnh/20110606/MM07085LOGO )OpenTable reported consolidated net revenues for Q2 2012 of $39.6 million, a 15% increase over Q2 2011.  Consolidated net income for Q2 2012 was $5.7 million, or $0.25 per diluted share.  Non-GAAP consolidated net income for Q2 2012, which excludes tax-affected stock-based compensation expense, tax-affected acquisition-related expenses and tax-affected amortization of acquired intangibles, was $9.7 million, or $0.42 per diluted share.  OpenTable provides operating results by geography as the Company is at different stages of development in its North America and International operations.  North America ResultsInstalled restaurant base as of June 30, 2012, totaled 18,373, an 18% increase over June 30, 2011. Seated diners totaled 28.0 million, a 26% increase over Q2 2011. Revenues totaled $34.5 million, an 18% increase over Q2 2011.  Non-GAAP adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation and acquisition-related expenses) totaled $18.1 million, or 52% of North America revenues, a 22% increase over Q2 2011. International ResultsInstalled restaurant base as of June 30, 2012, totaled 6,664.  Prior to the relaunch of the toptable site, we targeted and successfully migrated the toptable restaurants that accounted for more than 90% of toptable seated diners in Q1 2012.  At the time of the toptable relaunch in May 2012, we proactively removed 1,578 toptable restaurants from our International installed restaurant base as they had not migrated to OpenTable technology.  This removal of restaurants from our installed base was an anticipated one-time event and reflects a group of restaurants that accounted for less than 10% of toptable seated diners in Q1 2012.  Seated diners totaled 2.2 million, a 39% increase over Q2 2011.  Revenues totaled $5.1 million, a 1% increase over Q2 2011.  Non-GAAP adjusted EBITDA totaled a loss of $0.8 million compared to a loss of $0.5 million in Q2 2011.  "We're pleased with the progress we're making across a variety of areas that support future growth in both our North America and International businesses," said Matt Roberts, President and CEO of OpenTable. "The relaunch of the toptable site marks a significant milestone as it lays the foundation for growth in the UK, which is at the core of our International business.  We're excited that London now represents our largest concentration of local restaurant customers in the world."Q2 2012 Consolidated Financial and Operating SummaryInstalled restaurant base as of June 30, 2012, totaled 25,037, an 11% increase over June 30, 2011. Seated diners totaled 30.3 million, a 27% increase over Q2 2011. Total revenues were $39.6 million in Q2 2012, up 15% over Q2 2011 revenues of $34.3 million.  Reservation revenues were $22.3 million in Q2 2012, up 22% over Q2 2011 revenues of $18.3 million.  Reservation revenues primarily increased as a result of the increase in seated diners.  Subscription revenues were $13.9 million in Q2 2012, up 11% over Q2 2011 revenues of $12.6 million.  Subscription revenues primarily increased as a result of the increase in installed restaurants using our Electronic Reservation Book solution.  Other revenues were $3.3 million in Q2 2012, down 3% over Q2 2011 revenues of $3.4 million.  The decrease is primarily the result of a decrease in revenue from third-party restaurant coupon sales, partially offset by an increase in advertising revenues and featured private dining sales.  Total operating expenses were $30.7 million in Q2 2012, up 24% over Q2 2011 operating expenses of $24.8 million.  The increase was primarily driven by an increase in stock-based compensation, performance-based compensation and a 7% increase in headcount. Total operating income was $8.9 million in Q2 2012 compared to $9.5 million in Q2 2011.  Non-GAAP consolidated operating income, excluding stock-based compensation expense, acquisition-related expenses and amortization of acquired intangibles was $15.2 million in Q2 2012 compared to $12.4 million in Q2 2011.  The Q2 2012 GAAP income tax expense was $3.1 million, or a 35% tax rate.  Consolidated net income was $5.7 million, or $0.25 per diluted share, in Q2 2012 compared to $6.3 million, or $0.26 per diluted share, in Q2 2011.  Non-GAAP consolidated net income, which excludes tax-affected stock-based compensation expense, tax-affected acquisition-related expenses, and tax-affected amortization of acquired intangibles was $9.7 million, or $0.42 per diluted share, in Q2 2012 compared to $8.1 million, or $0.33 per diluted share, in Q2 2011.   As of June 30, 2012, OpenTable had cash and cash equivalents and short-term investments of $71.9 million.  "During the second quarter the business continued to deliver solid operating metrics, adjusted EBITDA margins and cash flows even as we invest for the future," said Duncan Robertson, CFO of OpenTable.Business OutlookAs of today, OpenTable is providing guidance for Q3 2012 and the full year 2012 on revenue, non-GAAP adjusted EBITDA and other consolidated metrics.  Q3 2012 Guidance:In the North America segment the Company estimates revenue to be in the range of $33.9 million to $34.6 million and non-GAAP adjusted EBITDA to be in the range of $16.0 million to $17.0 million.  In the International segment the Company estimates revenue to be in the range of $5.2 million to $5.6 million and non-GAAP adjusted EBITDA loss to be in the range of $0.6 million to $1.0 million. On a consolidated basis the Company estimates revenue to be in the range of $39.1 million to $40.2 million, non-GAAP adjusted EBITDA to be in the range of $15.0 million to $16.4 million and non-GAAP EPS to be in the range of $0.34 to $0.38. Full Year 2012 Guidance:In the North America segment the Company estimates revenue to be in the range of $138.0 million to $141.0 million and non-GAAP adjusted EBITDA to be in the range of $69.0 million to $72.5 million.  In the International segment the Company estimates revenue to be in the range of $22.0 million to $23.0 million and non-GAAP adjusted EBITDA loss to be in the range of $2.0 million to $3.0 million. On a consolidated basis the Company estimates revenue to be in the range of $160.0 million to $164.0 million, non-GAAP adjusted EBITDA to be in the range of $66.0 million to $70.5 million and non-GAAP EPS to be in the range of $1.54 to $1.66. Treatful Acquisition:On July 27, 2012, the Company agreed to acquire Treat Technologies, Inc., a provider of the Treatful-branded online gift card solutions for restaurants, for approximately $4 million in cash pursuant to an agreement and plan of merger. The completion of the acquisition is subject to customary closing conditions.Quarterly Conference CallA conference call will be webcast live today at 2 p.m. PT/5 p.m. ET and will be available through August 30, 2012, at http://investors.opentable.com/events.cfm.  This call may contain forward-looking statements and other material information regarding the Company's financial and operating results. About Non-GAAP Financial Information This press release contains certain non-GAAP financial measures.  Tables are provided in the press release that reconcile the non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP).  The reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures in the tables below include all information reasonably available to the Company at the date of this press release and adjustments that the Company can reasonably predict.  Events that could cause the reconciliation to change include, but are not limited to, acquisitions and divestitures of businesses, goodwill and other asset impairments, and sales of available-for-sale debt securities and other investments.  The non-GAAP financial measures in this press release include non-GAAP consolidated net income and the related per diluted share amounts, non-GAAP consolidated operating income and non-GAAP adjusted EBITDA.  Non-GAAP financial measure adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, and acquisition-related expenses.   Within the Company's reconciliation to non-GAAP diluted net income per share, the impact of undistributed earnings allocated to participating securities has been excluded. To supplement the Company's consolidated financial statements presented on a GAAP basis, management believes that these non-GAAP measures provide useful information about the Company's core operating results and thus are appropriate to enhance the overall understanding of the Company's past financial performance and its prospects for the future. Management believes it is useful to exclude stock-based compensation, acquisition-related expenses and amortization of acquired intangibles because they do not reflect the underlying performance of the Company's business operations. These adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results and trends and performance.  Management uses these non-GAAP measures to evaluate the Company's financial results.  The presentation of non-GAAP measures is not meant to be considered in isolation or as a substitute for or superior to financial results determined in accordance with GAAP.Background Information The Company reports consolidated operations in U.S. dollars and operates in two geographic segments: North America and International. The North America segment is comprised of all operations in the United States, Canada and Mexico, and the International segment is comprised of all non-North America operations, which includes operations in Europe and Asia. The Company generates substantially all of its revenues from its restaurant customers. The Company's revenues primarily include monthly subscription fees, a fee for each restaurant guest seated through online reservations, and other revenue, including installation fees for the Electronic Reservation Book (including training).  Forward-Looking StatementsThis press release and its attachments contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties.  These forward-looking statements include guidance for Q3 2012 and the full year 2012 and the quotations from management in this press release, as well as any statements regarding the Company's strategic and operational plans.  The Company's actual results may differ materially from those anticipated in these forward-looking statements.  Factors that may contribute to such differences include, among others, the impact of the current economic climate on the Company's business; the Company's ability to maintain an adequate rate of growth; the Company's ability to effectively manage its growth; the Company's ability to attract new restaurant customers; the Company's ability to increase the number of visitors to its website and convert those visitors into diners; the Company's ability to retain existing restaurant customers and diners or encourage repeat reservations; the Company's ability to successfully enter new markets and manage its international expansion; the Company's ability to successfully manage any acquisitions of businesses, solutions or technologies; interruptions in service and any related impact on the Company's reputation; and costs associated with defending intellectual property infringement and other claims.  More information about potential factors that could affect the Company's business and financial results is contained in the Company's annual report on Form 10-K for the year ended December 31, 2011 and the Company's other filings with the SEC.  The Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.About OpenTable, Inc.OpenTable is a leading provider of free, real-time online restaurant reservations for diners and reservation and guest management solutions for restaurants.  The OpenTable network delivers the convenience of online restaurant reservations to diners and the operational benefits of a computerized reservation book to restaurants.  OpenTable has more than 25,000 restaurant customers, and, since its inception in 1998, has seated more than 350 million diners around the world.  The Company is headquartered in San Francisco, California, and the OpenTable service is available throughout the United States, as well as in Canada, Germany, Japan, Mexico and the UK.  OpenTable also owns and operates toptable, a leading restaurant reservation site in the UK.       OpenTable, OpenTable.com, OpenTable logos, toptable and other service names are the trademarks of OpenTable, Inc. and/or its affiliates. OPENTABLE, INC.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETSJune 30,December 31,20122011ASSETSCURRENT ASSETS:  Cash and cash equivalents$       57,543,000$       36,519,000  Short-term investments14,344,00013,411,000  Accounts receivable, net 18,760,00018,795,000  Prepaid expenses and other current assets3,299,0002,708,000  Deferred tax asset11,089,00011,238,000           Total current assets105,035,00082,671,000Property, equipment and software, net17,968,00016,150,000Goodwill42,705,00042,312,000Intangibles, net14,637,00016,403,000Deferred tax asset9,063,0005,466,000Other assets1,038,000813,000TOTAL ASSETS$     190,446,000$     163,815,000LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIES:  Accounts payable and accrued expenses$         6,207,000$         7,004,000  Accrued compensation5,063,0004,518,000  Deferred revenue1,620,0001,752,000  Dining rewards payable24,379,00020,827,000           Total current liabilities37,269,00034,101,000  Deferred revenue ? non-current2,252,0002,249,000  Deferred tax liability3,515,0003,915,000  Income tax liability13,635,00013,215,000  Other long-term liabilities63,000108,000           Total liabilities56,734,00053,588,000STOCKHOLDERS' EQUITY:  Common stock2,0002,000  Additional paid-in capital192,641,000171,465,000  Treasury stock(50,673,000)(41,963,000)  Accumulated other comprehensive loss(1,176,000)(1,634,000)  Accumulated deficit(7,082,000)(17,643,000)           Total stockholders' equity133,712,000110,227,000TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$     190,446,000$     163,815,000 OPENTABLE, INC.UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTSThree Months EndedSix Months EndedJune 30,June 30,2012201120122011(In thousands, except per share amounts)REVENUES$         39,558$         34,290$       78,927$       67,997COSTS AND EXPENSES:  Operations and support (1)10,3389,68620,85819,158  Sales and marketing (1)8,4836,40317,34314,215  Technology (1)3,6103,5316,8587,578  General and administrative (1)8,2505,14817,60111,010           Total costs and expenses30,68124,76862,66051,961Income from operations8,8779,52216,26716,036Other income, net13243045Income before taxes8,8909,54616,29716,081Income tax expense 3,1453,2215,7365,571NET INCOME$           5,745$           6,325$       10,561$       10,510Net income per share:  Basic$           0.25$           0.27$        0.47$        0.45  Diluted$           0.25$           0.26$        0.46$        0.43Weighted average shares outstanding:  Basic22,57823,55822,55723,446  Diluted23,16924,61523,16424,573(1) Stock-based compensation included in above line items:  Operations and support$                    333$                    446$                 634$                 858  Sales and marketing1,3754932,7561,003  Technology6424371,164888  General and administrative2,9034606,6232,091$                 5,253$                 1,836$            11,177$              4,840Other Operational Data:  Installed restaurants (at period end):    North America18,37315,56018,37315,560    International6,6647,0676,6647,067    Total25,03722,62725,03722,627  Seated diners (in thousands):    North America28,03822,19655,75443,066    International2,2441,6184,4983,171    Total30,28223,81460,25246,237  Headcount (at period end):    North America418378418378    International161162161162    Total579540579540Additional Financial Data:  Revenues:    North AmericaReservation$         19,721$         15,560$       38,935$       30,536Subscription12,26511,09024,16521,711Other2,4862,5925,0955,769Total North America Revenues$         34,472$         29,242$       68,195$       58,016    InternationalReservation$           2,590$           2,736$        5,703$        5,367Subscription1,6621,4723,3022,869Other8348401,7271,745Total International Revenues5,0865,04810,7329,981    Total Revenues$         39,558$         34,290$       78,927$       67,997  Income (loss) from operations:    North America$         11,374$         12,240$       21,354$       22,325    International(2,497)(2,718)(5,087)(6,289)    Total$           8,877$           9,522$       16,267$       16,036  Depreciation and amortization:    North America$           1,859$           1,741$        3,548$        3,436    International1,2701,2092,7582,345    Total$           3,129$           2,950$        6,306$        5,781  Stock-based compensation:    North America$           4,791$              862$       10,226$        2,881    International4629749511,959    Total$           5,253$           1,836$       11,177$        4,840 OPENTABLE, INC.RECONCILIATION OF GAAP TO NON-GAAP OPERATING RESULTSThree Months EndedSix Months EndedJune 30,June 30,2012201120122011(In thousands, except per share amounts)Non-GAAP consolidated net income per share:GAAP net income "as reported"$         5,745$         6,325$        10,561$        10,510Add back: stock-based compensation expense5,2531,83611,1774,840Income tax effect of stock-based compensation(2,022)(778)(4,302)(1,918)Add back: acquisition-related expenses51-51-Income tax effect of acquisition-related expenses(19)-(19)-Add back: amortization of acquired intangibles9781,0051,9491,993Income tax effect of amortization of intangibles(259)(272)(515)(558)NON-GAAP CONSOLIDATED NET INCOME $         9,727$         8,116$        18,902$        14,867Non-GAAP diluted net income per share$           0.42$           0.33$           0.82$           0.61Weighted average diluted shares outstanding23,16924,61523,16424,573Non-GAAP consolidated operating income:GAAP income from operations "as reported"$         8,877$         9,522$        16,267$        16,036Add back: stock-based compensation expense5,2531,83611,1774,840Add back: acquisition-related expenses51-51-Add back: amortization of acquired intangibles9781,0051,9491,993NON-GAAP OPERATING INCOME$        15,159$        12,363$        29,444$        22,869North America Adjusted EBITDA:GAAP operating income "as reported"$        11,374$        12,240$        21,354$        22,325Adjustments:  Stock-based compensation expense4,79186210,2262,881  Acquisition-related expense51-51-  Amortization of acquired intangibles8888176176  Depreciation and other amortization expense1,7711,6533,3723,260           North America Adjusted EBITDA$        18,075$        14,843$        35,179$        28,642International Adjusted EBITDA:GAAP operating loss "as reported"$        (2,497)$        (2,718)$        (5,087)$        (6,289)Adjustments:  Stock-based compensation expense4629749511,959  Amortization of acquired intangibles8909171,7731,817  Depreciation and other amortization expense380292985528           International Adjusted EBITDA$          (765)$          (535)$        (1,378)$        (1,985) OPENTABLE, INC.RECONCILIATION OF GAAP TO NON-GAAP FORWARD-LOOKING GUIDANCEForward-Looking GuidanceThree Months EndingTwelve Months EndingSeptember 30, 2012December 31, 2012Range of EstimateRange of EstimateFromToFromTo(In thousands, except per share amounts)Non-GAAP consolidated net income per share:GAAP net income$         3,866$         4,719$        19,975$        22,765Add back: stock-based compensation expense5,5455,54521,63121,631Income tax effect of stock-based compensation(2,107)(2,107)(8,253)(8,253)Add back: acquisition-related expenses--5151Income tax effect of acquisition-related expenses--(19)(19)Add back: amortization of acquired intangibles9629623,3263,326Income tax effect of amortization of intangibles(260)(260)(882)(882)NON-GAAP CONSOLIDATED NET INCOME $         8,006$         8,859$        35,829$        38,619Non-GAAP diluted net income per share$           0.34$           0.38$           1.54$           1.66Weighted average diluted shares outstanding23,50023,50023,30023,300North America Adjusted EBITDA:GAAP operating income$         9,003$        10,003$        41,502$        45,002Adjustments:  Stock-based compensation expense5,0535,05319,87219,872  Acquisition-related expense--5151  Amortization of acquired intangibles8888320320  Depreciation and other amortization expense1,8561,8567,2557,255           North America Adjusted EBITDA$        16,000$        17,000$        69,000$        72,500International Adjusted EBITDA:GAAP operating loss$        (2,686)$        (2,286)$        (9,395)$        (8,395)Adjustments:  Stock-based compensation expense4924921,7591,759  Amortization of acquired intangibles8748743,0063,006  Depreciation and other amortization expense3203201,6301,630           International Adjusted EBITDA$        (1,000)$          (600)$        (3,000)$        (2,000)Consolidated Adjusted EBITDA:GAAP operating income $         6,317$         7,717$        32,107$        36,607Adjustments:  Stock-based compensation expense5,5455,54521,63121,631  Acquisition-related expense--5151  Amortization of acquired intangibles9629623,3263,326  Depreciation and other amortization expense2,1762,1768,8858,885           Consolidated Adjusted EBITDA$        15,000$        16,400$        66,000$        70,500 SOURCE OpenTable, Inc.For further information: Investor Relations, +1-415-344-6520, investors@opentable.com, or Media Relations Contact, +1-415-344-4275 pr@opentable.com