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Press release from PR Newswire

OpenTable, Inc. Announces Fourth Quarter and Full Year 2012 Financial Results

Thursday, February 07, 2013

OpenTable, Inc. Announces Fourth Quarter and Full Year 2012 Financial Results16:31 EST Thursday, February 07, 2013-- Increases Revenue by 16% over Q4'11 to $43.0 Million -- -- Grows Seated Diners by 22% over Q4 2011 -- -- Achieves EPS of $0.32 and Non-GAAP EPS of $0.46 --SAN FRANCISCO, Feb. 7, 2013 /PRNewswire/ -- OpenTable, Inc. (NASDAQ: OPEN), the world's leading provider of online restaurant reservations, today reported its financial results for the fourth quarter and fiscal year ended December 31, 2012.(Logo: http://photos.prnewswire.com/prnh/20110606/MM07085LOGO) OpenTable reported consolidated net revenues for Q4 2012 of $43.0 million, a 16% increase over Q4 2011.  Consolidated net income for Q4 2012 was $7.5 million, or $0.32 per diluted share.  Non-GAAP consolidated net income for Q4 2012, which excludes tax-affected stock-based compensation expense, tax-affected acquisition-related expenses and tax-affected amortization of acquired intangibles, was $10.7 million, or $0.46 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 December 31, 2012, totaled 19,801, a 15% increase over December 31, 2011. Seated diners totaled 29.9 million, a 21% increase over Q4 2011. Revenues totaled $36.7 million, a 16% increase over Q4 2011.  Non-GAAP adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation and acquisition-related expenses) totaled $19.0 million, or 52% of North America revenues, a 16% increase over Q4 2011. International ResultsInstalled restaurant base as of December 31, 2012, totaled 7,716.  As previously reported, with the relaunch of the toptable site in Q2 2012, in an anticipated one-time event, we removed restaurants that did not migrate to OpenTable technology from our installed restaurant base.  After adjusting for this one-time event, our installed restaurant base as of December 31, 2012, represented a 62% increase over our installed base of OpenTable technology-enabled restaurants as of December 31, 2011.    Seated diners totaled 3.0 million, a 35% increase over Q4 2011.  Revenues totaled $6.3 million, a 13% increase over Q4 2011. Non-GAAP adjusted EBITDA totaled a loss of $0.1 million compared to a loss of $0.5 million in Q4 2011.  "Our business continued to demonstrate strong momentum in 2012," said Matt Roberts, President and CEO of OpenTable.  "The shift to mobile coupled with richer customer experiences represent long-term opportunities for the business, and we're pleased with the recent progress in our international segment."Q4 2012 Consolidated Financial and Operating SummaryInstalled restaurant base as of December 31, 2012, totaled 27,517. Seated diners totaled 32.8 million, a 22% increase over Q4 2011. Total revenues were $43.0 million in Q4 2012, up 16% over Q4 2011 revenues of $37.2 million.  Reservation revenues were $24.5 million in Q4 2012, up 21% over Q4 2011 revenues of $20.3 million.  Reservation revenues primarily increased as a result of the increase in seated diners.  Subscription revenues were $14.5 million in Q4 2012, up 10% over Q4 2011 revenues of $13.3 million.  Subscription revenues primarily increased as a result of the increase in installed restaurants using our Electronic Reservation Book solution.  Other revenues were $4.0 million in Q4 2012, up 9% over Q4 2011 revenues of $3.6 million.  The increase is primarily the result of an increase in revenue from gift card sales.  Total costs and expenses were $31.9 million in Q4 2012, up 21% over Q4 2011 costs and expenses of $26.4 million.  The increase was primarily driven by an increase in stock-based compensation expense and a 4% increase in headcount. Total operating income was $11.1 million in Q4 2012 compared to $10.8 million in Q4 2011.  Non-GAAP consolidated operating income, excluding stock-based compensation expense, acquisition-related expenses and amortization of acquired intangibles was $16.4 million in Q4 2012 compared to $13.7 million in Q4 2011. The Q4 2012 GAAP income tax expense was $3.7 million, or a 33% tax rate.  Consolidated net income was $7.5 million, or $0.32 per diluted share, in Q4 2012 compared to $7.0 million, or $0.29 per diluted share, in Q4 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 $10.7 million, or $0.46 per diluted share, in Q4 2012 compared to $8.9 million, or $0.37 per diluted share, in Q4 2011.   As of December 31, 2012, OpenTable had cash and cash equivalents and short-term investments of $103.5 million.  2012 Consolidated Financial and Operating SummaryTotal revenues were $161.6 million in 2012, up 16% over 2011 revenues of $139.5 million. Operating income totaled $36.5 million in 2012, or 23% of consolidated revenues, a 12% increase over 2011.  Non-GAAP consolidated operating income, excluding stock-based compensation expense, acquisition-related expenses and amortization of acquired intangibles, was $61.0 million in 2012, or 38% of consolidated revenues, a 29% increase over 2011. Non-GAAP adjusted EBITDA totaled $70.1 million in 2012, or 43% of consolidated revenues, a 27% increase over 2011."During the fourth 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 Q1 2013 and the full year 2013 on revenue, non-GAAP adjusted EBITDA and other consolidated metrics.  Q1 2013 Guidance:In the North America segment the Company estimates revenue to be in the range of $38.6 million to $39.6 million and non-GAAP adjusted EBITDA to be in the range of $19.3 million to $20.4 million.    In the International segment the Company estimates revenue to be in the range of $6.1 million to $6.5 million and non-GAAP adjusted EBITDA loss to be in the range of $1.8 million to $2.4 million. On a consolidated basis the Company estimates revenue to be in the range of $44.7 million to $46.1 million, non-GAAP adjusted EBITDA to be in the range of $16.9 million to $18.6 million, GAAP EPS to be in the range of $0.25 to $0.29 and non-GAAP EPS to be in the range of $0.39 to $0.44. Full Year 2013 Guidance:In the North America segment the Company estimates revenue to be in the range of $158.8 million to $164.2 million and non-GAAP adjusted EBITDA to be in the range of $82.6 million to $87.2 million.  In the International segment the Company estimates revenue to be in the range of $27.3 million to $28.9 million and non-GAAP adjusted EBITDA loss to be in the range of $0.7 million to $2.9 million. On a consolidated basis the Company estimates revenue to be in the range of $186.1 million to $193.1 million, non-GAAP adjusted EBITDA to be in the range of $79.7 million to $86.5 million, GAAP EPS to be in the range of $1.27 and $1.45 and non-GAAP EPS to be in the range of $1.79 to $1.96. Quarterly Conference CallA conference call will be webcast live today at 2 p.m. PT/5 p.m. ET and will be available through February 28, 2013, 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 Q1 2013 and the full year 2013 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 websites and mobile applications 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; costs associated with defending intellectual property infringement and other claims; and the impact of natural catastrophic events.  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, 2012 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 the world's leading provider of online restaurant reservations, seating approximately 10 million diners per month via online bookings across more than 27,000 restaurants. The OpenTable network connects restaurants and diners, helping diners discover and book the perfect table and helping restaurants deliver personalized hospitality to keep guests coming back. The OpenTable service enables diners to see which restaurants have available tables, select a restaurant based on verified diner reviews, menus and other helpful information, and easily book a reservation. In addition to the Company's website and mobile apps, OpenTable powers online reservations for nearly 600 partners, including many of the Internet's most popular global and local brands. For restaurants, the OpenTable hospitality solutions enable them to manage their reservation book, streamline their operations and enhance their service levels. Since its inception in 1998, OpenTable has seated more than 400 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, the leading consumer destination site for restaurant reservations 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 SHEETSDecember 31,December 31,20122011(In thousands)ASSETSCURRENT ASSETS:  Cash and cash equivalents$            102,772$              36,519  Short-term investments73313,411  Accounts receivable, net 22,01518,795  Prepaid expenses and other current assets2,9242,708  Deferred tax asset14,35311,238           Total current assets142,79782,671Property, equipment and software, net21,27116,150Goodwill46,30442,312Intangibles, net15,22616,403Deferred tax asset10,6285,466Other assets1,021813TOTAL ASSETS$            237,247$            163,815LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIES:  Accounts payable and accrued expenses$              13,847$                7,004  Accrued compensation5,1674,518  Deferred revenue1,5631,752  Deferred tax liability107-  Dining rewards payable27,61120,827           Total current liabilities48,29534,101  Deferred revenue ? non-current2,0542,249  Deferred tax liability3,2683,915  Income tax liability15,63913,215  Other long-term liabilities76108           Total liabilities69,33253,588STOCKHOLDERS' EQUITY:  Common stock22  Additional paid-in capital211,408171,465  Treasury stock(50,685)(41,963)  Accumulated other comprehensive income (loss)861(1,634)  Retained earnings (accumulated deficit)6,329(17,643)           Total stockholders' equity167,915110,227TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$            237,247$            163,815 OPENTABLE, INC.UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTSThree Months EndedTwelve Months EndedDecember 31,December 31,2012201120122011(In thousands, except per share amounts)REVENUES$         42,967$         37,165$      161,632$     139,518COSTS AND EXPENSES:  Operations and support (1)10,50610,27641,90839,350  Sales and marketing (1)8,9727,00534,53128,697  Technology (1)3,9653,36514,56414,691  General and administrative (1)8,4075,74034,08024,157           Total costs and expenses31,85026,386125,083106,895Income from operations11,11710,77936,54932,623Other income, net33309998Income before taxes11,15010,80936,64832,721Income tax expense 3,6873,82112,67611,167NET INCOME$           7,463$           6,988$        23,972$       21,554Net income per share:  Basic$           0.33$           0.30$         1.06$        0.92  Diluted$           0.32$           0.29$         1.03$        0.88Weighted average shares outstanding:  Basic22,80223,50922,63923,525  Diluted23,45924,09423,24924,436(1) Stock-based compensation included in above line items:  Operations and support$                    331$                    376$               1,297$              1,665  Sales and marketing1,1284805,1742,054  Technology1,1013843,2851,703  General and administrative1,99968010,8905,307$                 4,559$                 1,920$             20,646$            10,729Other Operational Data:  Installed restaurants (at period end):    North America19,80117,15019,80117,150    International7,7167,9697,7167,969    Total27,51725,11927,51725,119  Seated diners (in thousands):    North America29,86124,649113,05389,533    International2,9712,2029,7717,141    Total32,83226,851122,82496,674  Headcount (at period end):    North America423398423398    International157160157160    Total580558580558Additional Financial Data:  Revenues:    North AmericaReservation$         20,801$         17,061$        78,929$       62,751Subscription12,69611,66749,37144,784Other3,1542,82911,03811,119Total North America Revenues$         36,651$         31,557$      139,338$     118,654    InternationalReservation$           3,678$           3,236$        12,099$       11,464Subscription1,8341,5836,8905,983Other8047893,3053,417Total International Revenues6,3165,60822,29420,864    Total Revenues$         42,967$         37,165$      161,632$     139,518  Income (loss) from operations:    North America$         12,739$         13,150$        45,674$       44,007    International(1,622)(2,371)(9,125)(11,384)    Total$         11,117$         10,779$        36,549$       32,623  Depreciation and amortization:    North America$           2,072$           1,690$         7,532$        6,852    International1,0031,4875,2165,153    Total$           3,075$           3,177$        12,748$       12,005  Stock-based compensation:    North America$           4,046$           1,537$        18,493$        7,713    International5133832,1533,016    Total$           4,559$           1,920$        20,646$       10,729 OPENTABLE, INC.RECONCILIATION OF GAAP TO NON-GAAP OPERATING RESULTSThree Months EndedTwelve Months EndedDecember 31,December 31,2012201120122011(In thousands, except per share amounts)Non-GAAP consolidated net income per share:GAAP net income "as reported"$         7,463$         6,988$        23,972$        21,554Add back: stock-based compensation expense4,5591,92020,64610,729Income tax effect of stock-based compensation(1,729)(675)(8,027)(3,996)Add back: acquisition-related expenses95-199-Income tax effect of acquisition-related expenses(35)-(75)-Add back: amortization of acquired intangibles6009723,6383,958Income tax effect of amortization of intangibles(273)(268)(1,099)(1,089)NON-GAAP CONSOLIDATED NET INCOME $        10,680$         8,937$        39,254$        31,156Non-GAAP diluted net income per share$           0.46$           0.37$           1.69$           1.28Weighted average diluted shares outstanding23,45924,09423,24924,436Non-GAAP consolidated operating income:GAAP income from operations "as reported"$        11,117$        10,779$        36,549$        32,623Add back: stock-based compensation expense4,5591,92020,64610,729Add back: acquisition-related expenses95-199-Add back: amortization of acquired intangibles6009723,6383,958NON-GAAP OPERATING INCOME$        16,371$        13,671$        61,032$        47,310North America Adjusted EBITDA:GAAP operating income "as reported"$        12,739$        13,150$        45,674$        44,007Adjustments:  Stock-based compensation expense4,0461,53718,4937,713  Acquisition-related expense95-199-  Amortization of acquired intangibles22888605351  Depreciation and other amortization expense1,8441,6026,9276,501           North America Adjusted EBITDA$        18,952$        16,377$        71,898$        58,572International Adjusted EBITDA:GAAP operating loss "as reported"$        (1,622)$        (2,371)$        (9,125)$      (11,384)Adjustments:  Stock-based compensation expense5133832,1533,016  Amortization of acquired intangibles3728843,0333,607  Depreciation and other amortization expense6316032,1831,546           International Adjusted EBITDA$          (106)$          (501)$        (1,756)$        (3,215) OPENTABLE, INC.RECONCILIATION OF GAAP TO NON-GAAP FORWARD-LOOKING GUIDANCEForward-Looking GuidanceThree Months EndingTwelve Months EndingMarch 31, 2013December 31, 2013Range of EstimateRange of EstimateFromToFromTo(In thousands, except per share amounts)Consolidated net income per share:GAAP CONSOLIDATED NET INCOME $         5,832$         6,937$        30,417$        34,701Add back: stock-based compensation expense4,7434,74317,41417,414Income tax effect of stock-based compensation(1,660)(1,660)(6,443)(6,443)Add back: amortization of acquired intangibles6006002,0272,027Income tax effect of amortization of intangibles(210)(210)(750)(750)NON-GAAP CONSOLIDATED NET INCOME $         9,305$        10,410$        42,665$        46,949GAAP diluted net income per share$           0.25$           0.29$           1.27$           1.45Non-GAAP diluted net income per share$           0.39$           0.44$           1.79$           1.96Weighted average diluted shares outstanding23,70023,70023,90023,900North America Adjusted EBITDA:GAAP operating income$        12,532$        13,632$        55,225$        59,825Adjustments:  Stock-based compensation expense4,2754,27515,81415,814  Amortization of acquired intangibles227227909909  Depreciation and other amortization expense2,2662,26610,65210,652           North America Adjusted EBITDA$        19,300$        20,400$        82,600$        87,200International Adjusted EBITDA:GAAP operating loss$        (3,592)$        (2,992)$        (7,071)$        (4,871)Adjustments:  Stock-based compensation expense4684681,6001,600  Amortization of acquired intangibles3733731,1181,118  Depreciation and other amortization expense3513511,4531,453           International Adjusted EBITDA$        (2,400)$        (1,800)$        (2,900)$          (700)Consolidated Adjusted EBITDA:GAAP operating income $         8,940$        10,640$        48,154$        54,954Adjustments:  Stock-based compensation expense4,7434,74317,41417,414  Amortization of acquired intangibles6006002,0272,027  Depreciation and other amortization expense2,6172,61712,10512,105           Consolidated Adjusted EBITDA$        16,900$        18,600$        79,700$        86,500 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