TEMPE, AZ -- (MARKET WIRE) -- 08/06/09 --
Limelight Networks, Inc. (NASDAQ: LLNW)
-- Revenue of $32.3 million, a 7% increase from the second quarter of
2008
-- Generation of $7.5 million in cash from operations and expansion of
earnings margins
-- Acquisition of mobility and monetization innovator Kiptronic Inc.
Limelight Networks, Inc. (NASDAQ: LLNW) today reported second quarter 2009
financial results.
"The proliferation of Internet-connected devices and ongoing shift in
consumer behavior are driving continued growth in Internet traffic and
creating an environment of complexity where innovative technology companies
will have great opportunities to build value-added solutions. We are
pleased with the early reception of mobile and monetization services we
acquired from Kiptronic as well as of value-added services that we are
developing internally and piloting with customers," commented Jeff
Lunsford, chairman and chief executive officer, Limelight Networks, Inc.
Financial Highlights
For the second quarter of 2009, the company reported revenue of $32.3
million, up 7% percent from $30.3 million in the same period last year, and
EBITDA, adjusted for share-based compensation and litigation costs, of $6.0
million.
"Through disciplined operations we were able to expand our pro forma
earnings margins and generate over $7 million in cash from operations,
before capital investments, even though the challenging business
environment led to revenue at the low end of our expectations," said Doug
Lindroth, chief financial officer. Non-GAAP net loss, before stock-based
compensation and litigation costs, was $0.7 million or 1 cent per basic
share. GAAP net loss was $5.3 million, or 6 cents per basic share.
Capital investments were $4.1 million. The Company ended the quarter with
no bank debt and approximately $164 million in cash and short-term
marketable securities. A reconciliation of GAAP to non-GAAP net income is
included in the attached tables.
Third-Quarter Outlook
Limelight Networks anticipates third quarter revenue to be in the range of
$32 million to $33 million.
Financial Tables
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
June 30, December 31,
2009 2008
------------ ------------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 145,162 $ 138,180
Marketable securities 19,141 36,463
Accounts receivable, net of reserves of
$8,987 and $7,565 at June 30, 2009 and
December 31, 2008, respectively 26,391 33,482
Income taxes receivable 24 7
Prepaid expenses and other current assets 7,731 7,834
------------ ------------
Total current assets 198,449 215,966
Property and equipment, net 35,169 40,185
Marketable securities, less current portion 24 13
Goodwill 1,080 -
Other assets 4,899 628
------------ ------------
Total assets $ 239,621 $ 256,792
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 6,453 $ 8,920
Deferred revenue, current portion 10,734 9,865
Provision for litigation - 65,645
Other current liabilities 8,555 14,928
------------ ------------
Total current liabilities 25,742 99,358
Deferred revenue, less current portion 4,640 7,303
------------ ------------
Total liabilities 30,382 106,661
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; 150,000
shares authorized; 84,445 and 83,405 shares
issued and outstanding at June 30, 2009
and December 31, 2008, respectively 84 83
Additional paid-in capital 300,036 290,593
Accumulated other comprehensive income 88 260
Accumulated deficit (90,969) (140,805)
------------ ------------
Total stockholders' equity 209,239 150,131
------------ ------------
Total liabilities and stockholders' equity $ 239,621 $ 256,792
============ ============
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
-------------------------------------- ------------------
June 30, March 31, June 30, March 31, June 30, June 30,
2009 2009 2008 2008 2009 2008
-------- -------- -------- -------- -------- --------
Revenue $ 32,333 $ 33,175 $ 30,314 $ 30,202 $ 65,508 $ 60,516
Costs and
operating
expenses
Cost of
revenue * † 21,078 21,471 19,751 20,672 42,549 40,423
General and
administra-
tive * † 6,937 12,444 9,463 13,329 19,381 22,791
Sales and
marketing * 7,716 8,139 8,965 8,142 15,855 17,107
Research &
development * 1,944 1,910 1,694 1,590 3,854 3,284
Provision for
litigation - (65,645) 6,743 7,134 (65,645) 13,878
-------- -------- -------- -------- -------- --------
Total costs and
operating
expenses 37,675 (21,681) 46,616 50,867 15,994 97,483
Operating
income (loss) (5,342) 54,856 (16,302) (20,665) 49,514 (36,967)
Interest
expense (11) (11) (11) (21) (22) (33)
Interest income 337 383 1,334 1,891 720 3,226
Other income
(expense) (111) 227 (377) 170 116 (207)
-------- -------- -------- -------- -------- --------
Income (loss)
before taxes (5,127) 55,455 (15,356) (18,625) 50,328 (33,981)
Income tax
expense
(benefit) 171 320 (25) (183) 492 (208)
-------- -------- -------- -------- -------- --------
Net income
(loss) $ (5,298) $ 55,135 $(15,331) $(18,442) $ 49,836 $(33,773)
======== ======== ======== ======== ======== ========
Net income
(loss) per
share:
Basic $ (0.06) $ 0.66 $ (0.18) $ (0.22) $ 0.60 $ (0.41)
Diluted $ (0.06) $ 0.64 $ (0.18) $ (0.22) $ 0.57 $ (0.41)
Shares used in
per share
calculations:
Basic 84,033 83,515 82,889 82,623 83,774 82,756
Diluted 84,033 85,968 82,889 82,623 87,249 82,756
* Includes share-based compensation (see supplemental table for figures)
† Includes depreciation (see supplemental table for figures)
LIMELIGHT NETWORKS, INC.
SUPPLEMENTAL FINANCIAL DATA
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
-------------------------------------- ------------------
June 30, March 31, June 30, March 31, June 30, June 30,
2009 2009 2008 2008 2009 2008
-------- -------- -------- -------- -------- --------
Supplemental
financial data
(in thousands):
Share-based
compensation:
Cost of revenues $ 582 $ 551 $ 558 $ 507 $ 1,134 $ 1,064
General and
administrative 1,820 2,131 1,698 1,665 3,950 3,363
Sales and
marketing 1,253 1,189 1,431 1,306 2,442 2,738
Research and
development 626 616 598 482 1,242 1,080
-------- -------- -------- -------- -------- --------
Total
share-based
compensation $ 4,281 $ 4,487 $ 4,285 $ 3,960 $ 8,768 $ 8,245
======== ======== ======== ======== ======== ========
Depreciation and
amortization:
Network-related
depreciation $ 6,133 $ 6,548 $ 6,192 $ 6,013 $ 12,681 $ 12,205
Other
depreciation 532 540 311 247 1,072 557
-------- -------- -------- -------- -------- --------
Total
depreciation
and
amortization $ 6,665 $ 7,088 $ 6,503 $ 6,260 $ 13,753 $ 12,762
======== ======== ======== ======== ======== ========
Capital
expenditures:
Capital
expenditures
(cash and
accrual) $ 4,113 $ 4,572 $ 5,013 $ 3,095 $ 8,685 $ 8,108
======== ======== ======== ======== ======== ========
Net (decrease)
increase in
cash, cash
equivalents
and marketable
securities $ 2,331 $(12,660) $(10,194) $ (2,475) $(10,329) $(12,669)
======== ======== ======== ======== ======== ========
End of period
statistics:
Approximate
number of
active
customers
(excluding
Kiptronic
customers) 1,370 1,365 1,291 1,232 1,370 1,291
Number of
employees 301 296 250 244 301 250
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
-------------------------------------- ------------------
June 30, March 31, June 30, March 31, June 30, June 30,
2009 2009 2008 2008 2009 2008
-------- -------- -------- -------- -------- --------
Cash flows from
operating
activities:
Net income
(loss) $ (5,298) $ 55,135 $(15,331) $(18,442) $ 49,836 $(33,773)
Adjustments
to
reconcile
net loss to
net cash
(used in)
provided
by
operating
activities:
Depreciation
and
amortization 6,665 7,088 6,503 6,260 13,753 12,762
Share-based
compensation 4,281 4,487 4,285 3,960 8,768 8,245
Deferred
income
tax
(benefit)
expense - - 23 (234) - (211)
Excess
tax
benefit
related
to stock
option
exercises - - - - - -
Provision
for
litigation - (65,645) 6,743 7,134 (65,645) 13,878
(Income)
loss on
foreign
currency
exchange 205 (31) 12 - 174 12
Accounts
receivable
charges 622 3,288 1,925 1,562 3,910 3,487
Accretion
of debt
discount - - - - - -
Accretion
of
marketable
securities (157) - 21 (453) (157) (432)
Loss on
marketable
securities - - 16 55 - 71
Changes in
operating
assets and
liabilities:
Accounts
receivable 7,281 (3,840) (1,880) (2,271) 3,441 (4,151)
Prepaid
expenses
and
other
current
assets 721 (593) (4,452) 87 128 (4,365)
Income
taxes
receivable 140 (157) (129) 594 (17) 465
Other
assets 149 (4,311) 67 564 (4,162) 631
Accounts
payable (4,219) (1,223) (73) (4,634) (5,442) (4,707)
Accounts
payable,
related
parties - - (150) (80) - (230)
Deferred
revenue (972) (822) (774) 301 (1,794) (473)
Other
current
liabili-
ties (1,918) (5,144) (3,859) 5,035 (7,061) 1,176
Other
long
term
liabili-
ties - - 64 1 - 65
-------- -------- -------- -------- -------- --------
Net cash
provided by
(used in)
operating
activities 7,500 (11,768) (6,989) (561) (4,268) (7,550)
-------- -------- -------- -------- -------- --------
Cash flows from
investing
activities:
Purchases
of
property
and
equipment (5,308) (754) (4,231) (2,435) (6,062) (6,666)
Purchase
of
marketable
securi-
ties (12,830) - (30,400) (34,725) (12,830) (65,125)
Sale of
marketable
securi-
ties 9,100 21,300 34,825 44,200 30,400 79,025
Cash
aquired
in
business
acquisi-
tion 22 - - - 22 -
-------- -------- -------- -------- -------- --------
Net cash
provided by
(used in)
investing
activities (9,016) 20,546 194 7,040 11,530 7,234
-------- -------- -------- -------- -------- --------
Cash flows from
financing
activities:
Escrow
funds
returned
from
share
repurchase - - 1,070 - - 1,070
Proceeds
from
exercise
of stock
options
and
warrants 92 76 53 107 168 160
-------- -------- -------- -------- -------- --------
Net cash
provided by
(used in)
financing
activities 92 76 1,123 107 168 1,230
-------- -------- -------- -------- -------- --------
Effect of
exchange
rate
changes on
cash and
cash
equivalents (205) (243) 259 (156) (448) 103
-------- -------- -------- -------- -------- --------
Net increase
(decrease) in
cash and cash
equivalents (1,629) 8,611 (5,413) 6,430 6,982 1,017
Cash and cash
equivalents,
beginning of
period 146,791 138,180 120,254 113,824 138,180 113,824
-------- -------- -------- -------- -------- --------
Cash and cash
equivalents,
end of period $145,162 $146,791 $114,841 $120,254 $145,162 $114,841
======== ======== ======== ======== ======== ========
Use of Non-GAAP Financial Measures
To evaluate our business, we consider and use Non-GAAP net income and
EBITDA adjusted for share-based compensation and litigation and damage
costs as a supplemental measure of operating performance. We consider
Non-GAAP net income 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 and provision for litigation.
We define EBITDA as GAAP net income before interest income, interest
expense, other income and expense, provision for income taxes, depreciation
and amortization. We define EBITDA adjusted for share-based compensation
and litigation and damage costs as EBITDA plus expenses that we do not
consider reflective of our ongoing operations. We use EBITDA adjusted for
share-based compensation and litigation and damage costs as a supplemental
measure to review and assess operating performance. We also believe use of
EBITDA adjusted for share-based compensation and litigation and damage
costs facilitates investors' use of operating performance comparisons from
period to period.
The terms Non-GAAP net income, EBITDA and EBITDA adjusted for share-based
compensation and litigation and damage costs are not defined under U.S.
generally accepted accounting principles, or U.S. GAAP, and are not
measures of operating income, operating performance or liquidity presented
in accordance with U.S. GAAP. Our Non-GAAP net income, EBITDA and EBITDA
adjusted for share-based compensation and litigation and damage costs have
limitations as analytical tools, and when assessing our operating
performance, Non-GAAP net income, EBITDA and EBITDA adjusted for
share-based compensation and litigation and damage costs should not be
considered in isolation, or as a substitute for net income (loss) or other
consolidated income statement data prepared in accordance with U.S. GAAP.
Some of these limitations include, but are not limited to:
-- EBITDA and EBITDA adjusted for share-based compensation and litigation
and damage costs 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 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 EBITDA adjusted for share-based compensation and
litigation and damage costs 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 EBITDA adjusted for share-
based compensation and litigation and damage costs 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 and EBITDA adjusted for share-based
compensation and litigation and damage costs only as supplemental support
for management's analysis of business performance. Non-GAAP Net Income,
EBITDA and EBITDA adjusted for share-based compensation and litigation and
damage costs 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 Income (Loss) to Non-GAAP Net Income (Loss)
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
-------------------------------------- ------------------
June 30, March 31, June 30, March 31, June 30, June 30,
2009 2009 2008 2008 2009 2008
-------- -------- -------- -------- -------- --------
GAAP net income
(loss) $ (5,298) $ 55,135 $(15,331) $(18,442) $ 49,836 $(33,773)
Provision for
litigation - (65,645) 6,743 7,134 (65,645) 13,878
Share-based
compensation 4,281 4,487 4,285 3,960 8,768 8,245
Litigation
defense
expenses 367 3,945 2,667 5,366 4,312 8,033
-------- -------- -------- -------- -------- --------
Non-GAAP net
loss $ (650) $ (2,078) $ (1,636) $ (1,982) $ (2,729) $ (3,617)
======== ======== ======== ======== ======== ========
LIMELIGHT NETWORKS, INC.
Reconciliation of GAAP Net Income (Loss) to EBITDA to EBITDA
Adjusted for Share-Based Compensation and Litigation and Damage Costs
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
-------------------------------------- ------------------
June 30, March 31, June 30, March 31, June 30, June 30,
2009 2009 2008 2008 2009 2008
-------- -------- -------- -------- -------- --------
GAAP net income
(loss) $ (5,298) $ 55,135 $(15,331) $(18,442) $ 49,836 $(33,773)
Add:
depreciation
and
amortization 6,665 7,088 6,503 6,260 13,753 12,762
Add:
interest
expense 11 11 11 21 22 33
Less:
interest
and other
income (226) (610) (957) (2,062) (836) (3,019)
Plus income
tax
(benefit)
expense 171 320 (25) (183) 492 (208)
-------- -------- -------- -------- -------- --------
EBITDA 1,323 61,944 (9,799) (14,406) 63,267 (24,205)
Add:
provision
for
litigation - (65,645) 6,743 7,134 (65,645) 13,878
Add:
share-based
compensation 4,281 4,487 4,285 3,960 8,768 8,245
Add:
litigation
defense
expenses 367 3,945 2,667 5,366 4,312 8,033
-------- -------- -------- -------- -------- --------
EBITDA adjusted
for
share-based
compensation,
litigation and
damage costs $ 5,971 $ 4,731 $ 3,896 $ 2,054 $ 10,702 $ 5,951
======== ======== ======== ======== ======== ========
Conference Call
At approximately 4:30 p.m. EDT (1:30 p.m. PDT) today, management will host
a quarterly conference call for investors. Access to the call will be
provided by both telephone dial-in and via live Internet broadcast.
To access this conference call by telephone dial 1-866-713-8564 within the
United States or 1-617-597-5312 outside of the U.S. using passcode
69016158. To access the live Internet broadcast, visit
http://www.llnw.com. A replay of the call will also be available from
http://www.llnw.com for one week following the conclusion of the event.
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 and litigation and related expenses. Forward-looking
statements 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 trusted by the world's most
innovative enterprise, entertainment, technology, and software brands to
improve the performance and profitability of web sites and end-user
experiences. Our scalable, on-demand managed infrastructure solutions
provide global reach and consistently high availability, by routing traffic
over a private fiber-optic backbone rather than through the
often-congested, unpredictable public Internet. For more information, visit
our web site (http://www.limelightnetworks.com), read our blog
(http://blog.llnw.com), or follow @llnw
(http://www.twitter.com/llnw) on Twitter.
Copyright © 2009 Limelight Networks, Inc. All rights reserved. All
product or service names are the property of their respective owners
Add to DiggBookmark with del.icio.usAdd to Newsvine
CONTACT:
Paul Alfieri
Limelight Networks, Inc.
+1-917-297-4241
Email Contact