TEMPE, AZ -- (MARKET WIRE) -- 11/04/09 --
Limelight Networks, Inc. (NASDAQ: LLNW) today
reported third quarter 2009 financial results.
-- Revenue of $32.5 million
-- Launch of next-generation XD Platform, with Adaptive Intelligence, to
provide advanced levels of performance and increased insight into real-time
Internet and delivery conditions
-- Launch of LimelightREACH and LimelightADS, two new services that
provide turnkey capabilities for customizing and monetizing media delivery
on mobile and other connected devices
"The Internet continues to transform and advance the way people live, work
and play around the world. Tomorrow's Internet will involve more real-time
data flow and content consumption across a growing mix of computers,
laptops, netbooks, game consoles, televisions, set-top boxes, and mobile
devices, the combination of which will allow consumers to enjoy content,
access information and conduct transactions anytime, anywhere. With our
recently announced XD Platform and the mobility and monetization solutions
we released during the quarter, we are positioning Limelight Networks to be
a core provider of cloud-based services within this transformed world,
helping forward-thinking media, entertainment, enterprise and government
organizations leverage the next-generation Internet's capabilities to
differentiate from their competitors and better serve their constituents,"
said Jeff Lunsford, CEO of Limelight Networks.
Financial Highlights
For the third quarter of 2009, the company reported revenue of $32.5
million, up 1 percent from $32.3 million in the second quarter of 2009, and
EBITDA, adjusted for share-based compensation and litigation costs, of $5.8
million.
Non-GAAP net loss, before stock based compensation and litigation costs,
was $.6 million or 1 cent per basic share. GAAP net loss was $5.2 million,
or 6 cents per basic share.
Capital investments were $10.6 million. The Company ended the quarter with
no bank debt and approximately $153 million in cash and short-term
marketable securities. A reconciliation of GAAP to non-GAAP net income is
included in the attached tables.
Fourth-Quarter Outlook
Limelight Networks anticipates fourth quarter revenue to be in the range of
$32.5 million to $34 million.
Financial Tables
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
September 30, December 31,
2009 2008
------------- -------------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 102,447 $ 138,180
Marketable securities 50,367 36,463
Accounts receivable, net of reserves of
$9,149 and $7,565 at September 30, 2009
and December 31, 2008, respectively 27,692 33,482
Income taxes receivable 184 7
Prepaid expenses and other current assets 9,206 7,834
------------- -------------
Total current assets 189,896 215,966
Property and equipment, net 39,653 40,185
Marketable securities, less current portion 16 13
Goodwill 619 -
Other intangible assets, net 404 -
Other assets 9,048 628
------------- -------------
Total assets $ 239,636 $ 256,792
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 7,180 $ 8,920
Deferred revenue, current portion 12,077 9,865
Provision for litigation - 65,645
Other current liabilities 8,905 14,928
------------- -------------
Total current liabilities 28,162 99,358
Deferred revenue, less current portion 3,006 7,303
------------- -------------
Total liabilities 31,168 106,661
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; 84,667 and 83,405
shares issued and outstanding at
September 30, 2009 and
December 31, 2008, respectively 85 83
Additional paid-in capital 304,466 290,593
Accumulated other comprehensive income 105 260
Accumulated deficit (96,188) (140,805)
------------- -------------
Total stockholders' equity 208,468 150,131
------------- -------------
Total liabilities and stockholders' equity $ 239,636 $ 256,792
============= =============
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
-------------------------------------- ------------------
September September September September
30, June 30, 30, June 30, 30, 30,
2009 2009 2008 2008 2009 2008
-------- -------- -------- -------- -------- --------
Revenue $ 32,530 $ 32,333 $ 33,116 $ 30,314 $ 98,038 $ 93,632
Costs and
operating
expenses
Cost of
revenue * † 20,907 21,078 21,557 19,751 63,456 61,980
General and
administrative
* † 7,032 6,937 15,455 9,463 26,413 38,247
Sales and
marketing * 8,060 7,716 8,577 8,965 23,915 25,684
Research &
development * 2,024 1,944 2,008 1,694 5,878 5,293
Provision for
litigation - - 2,343 6,743 (65,645) 16,220
-------- -------- -------- -------- -------- --------
Total costs and
operating
expenses 38,023 37,675 49,940 46,616 54,017 147,424
Operating
income (loss) (5,493) (5,342) (16,824) (16,302) 44,021 (53,792)
Interest
expense (11) (11) (11) (11) (33) (43)
Interest income 330 337 1,203 1,334 1,050 4,428
Other income
(expense) 15 (111) 410 (377) 131 203
-------- -------- -------- -------- -------- --------
Income (loss)
before taxes (5,159) (5,127) (15,222) (15,356) 45,169 (49,204)
Income tax
expense
(benefit) 61 171 130 (25) 552 (78)
-------- -------- -------- -------- -------- --------
Net income
(loss) $ (5,220) $ (5,298) $(15,352) $(15,331) $ 44,617 $(49,126)
======== ======== ======== ======== ======== ========
Net income
(loss) per
share:
Basic $ (0.06) $ (0.06) $ (0.18) $ (0.18) $ 0.53 $ (0.59)
Diluted $ (0.06) $ (0.06) $ (0.18) $ (0.18) $ 0.51 $ (0.59)
Shares used in
per share
calculations:
Basic 84,489 84,033 83,022 82,889 84,012 82,845
Diluted 84,489 84,033 83,022 82,889 87,708 82,845
* 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 Nine Months Ended
-------------------------------------- ------------------
September September September September
30, June 30, 30, June 30, 30, 30,
2009 2009 2008 2008 2009 2008
-------- --------- -------- -------- -------- --------
Supplemental
financial data
(in
thousands):
Share-based
compensation:
Cost of
revenues $ 638 $ 582 $ 594 $ 558 $ 1,772 $ 1,658
General and
administrative 1,805 1,820 1,669 1,698 5,755 5,031
Sales and
marketing 1,293 1,253 1,400 1,431 3,734 4,137
Research and
development 633 626 642 598 1,876 1,723
-------- --------- -------- -------- -------- --------
Total
share-based
compensation $ 4,369 $ 4,281 $ 4,305 $ 4,285 $ 13,137 $ 12,549
======== ========= ======== ======== ======== ========
Depreciation
and amortization:
Network-related
depreciation $ 6,018 $ 6,133 $ 6,607 $ 6,192 $ 18,699 $ 18,812
Other
depreciation 627 532 343 311 1,699 901
-------- --------- -------- -------- -------- --------
Total
depreciation
and
amortization $ 6,645 $ 6,665 $ 6,950 $ 6,503 $ 20,398 $ 19,713
======== ========= ======== ======== ======== ========
Capital
expenditures:
Capital
expenditures
(cash and
accrual) $ 11,070 $ 4,113 $ 6,803 $ 5,013 $ 19,755 $ 14,911
======== ========= ======== ======== ======== ========
Net (decrease)
increase in
cash, cash
equivalents
and marketable
securities $(11,497) $ 2,331 $ (7,844) $(10,194) $(21,826) $(20,513)
======== ========= ======== ======== ======== ========
End of period
statistics:
Approximate
number of
active
customers 1,370 1,370 1,304 1,291 1,370 1,304
Number of
employees 321 301 285 250 321 285
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
-------------------------------------- ------------------
September September September September
30, June 30, 30, June 30, 30, 30,
2009 2009 2008 2008 2009 2008
-------- -------- -------- -------- -------- --------
Cash flows from
operating
activities:
Net income
(loss) $ (5,220) $ (5,298) $(15,353) $(15,331) $ 44,617 $(49,126)
Adjustments
to reconcile
net income
(loss) to
net cash
(used in)
provided
by operating
activities:
Depreciation
and
amortization 6,645 6,665 6,950 6,503 20,398 19,713
Share-based
compensation 4,369 4,281 4,305 4,285 13,137 12,549
Deferred
income
tax (benefit)
expense - - 129 23 - (82)
Provision
for
litigation - - 2,343 6,743 (65,645) 16,220
(Income)
loss on
foreign
currency
exchange 7 205 (30) 12 181 (18)
Accounts
receivable
charges 329 622 1,802 1,925 4,239 5,289
Accretion
of marketable
securities (298) (157) 11 21 (455) (421)
Loss on
marketable
securities - - - 16 - 71
Changes in
operating
assets and
liabilities:
Accounts
receivable(1,648) 7,281 (11,006) (1,880) 1,793 (15,157)
Prepaid
expenses
and other
current
assets (1,475) 721 417 (4,452) (1,347) (3,948)
Income
taxes
receivable (159) 140 8 (129) (176) 473
Other
assets (4,152) 149 153 67 (8,314) 784
Accounts
payable 244 (4,219) 2,348 (73) (5,198) (2,359)
Accounts
payable,
related
parties - - - (150) - (230)
Deferred
revenue (291) (972) 4,799 (774) (2,085) 4,326
Other
current
liabilities 358 (1,918) 3,555 (3,859) (6,704) 4,733
Other
long term
liabilities - - (64) 64 - -
-------- -------- -------- -------- -------- --------
Net cash
provided by
(used in)
operating
activities (1,291) 7,500 367 (6,989) (5,559) (7,183)
-------- -------- -------- -------- -------- --------
Cash flows from
investing
activities:
Purchases
of
property
and
equipment (10,586) (5,308) (7,870) (4,231) (16,648) (14,536)
Purchase of
marketable
securities (32,905) (12,830) - (30,400) (45,735) (65,125)
Sale of
marketable
securities 2,000 9,100 16,000 34,825 32,400 95,025
Cash
acquired in
business
acquisition - 22 - - 22 -
-------- -------- -------- -------- -------- --------
Net cash
provided by
(used in)
investing
activities (41,491) (9,016) 8,130 194 (29,961) 15,364
-------- -------- -------- -------- -------- --------
Cash flows from
financing
activities:
Escrow
funds
returned
from
share
repurchase - - - 1,070 - 1,070
Proceeds
from
exercise
of stock
options
and
warrants 72 92 31 53 240 191
-------- -------- -------- -------- -------- --------
Net cash
provided by
financing
activities 72 92 31 1,123 240 1,261
-------- -------- -------- -------- -------- --------
Effect of
exchange
rate
changes on
cash and
cash
equivalents (5) (205) (223) 259 (453) (120)
-------- -------- -------- -------- -------- --------
Net increase
(decrease) in
cash and cash
equivalents (42,715) (1,629) 8,305 (5,413) (35,733) 9,322
Cash and cash
equivalents,
beginning of
period 145,162 146,791 114,841 120,254 138,180 113,824
-------- -------- -------- -------- -------- --------
Cash and cash
equivalents,
end of period $102,447 $145,162 $123,146 $114,841 $102,447 $123,146
======== ======== ======== ======== ======== ========
Use of Non-GAAP Financial Measures
To evaluate our business, we consider and use Non-GAAP net income (loss)
and EBITDA adjusted for share-based compensation and litigation and damage
costs 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 and provision for
litigation. We define EBITDA as GAAP net income (loss) before interest
income, interest expense, other income and expense, provision for income
taxes, depreciation and amortization. We believe that EBITDA provides a
useful metric to investors to compare us with other companies within our
industry and across industries. 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. 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 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 (loss),
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 (loss), 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 (loss) 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 (loss), 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 Nine Months Ended
-------------------------------------- ------------------
September September September September
30, June 30, 30, June 30, 30, 30,
2009 2009 2008 2008 2009 2008
-------- -------- -------- -------- -------- --------
GAAP net income
(loss) $ (5,220) $ (5,298) $(15,352) $(15,331) $ 44,617 $(49,126)
Provision for
litigation - - 2,343 6,743 (65,645) 16,220
Share-based
compensation 4,369 4,281 4,305 4,285 13,137 12,549
Litigation
defense
expenses 273 367 8,189 2,667 4,585 16,222
-------- -------- -------- -------- -------- --------
Non-GAAP net
loss $ (578) $ (650) $ (515) $ (1,636) $ (3,306) $ (4,135)
======== ======== ======== ======== ======== ========
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 Nine Months Ended
-------------------------------------- ------------------
September September September September
30, June 30, 30, June 30, 30, 30,
2009 2009 2008 2008 2009 2008
-------- -------- -------- -------- -------- --------
GAAP net income
(loss) $ (5,220) $ (5,298) $(15,352) $(15,331) $ 44,617 $(49,126)
Add:
depreciation
and
amortization 6,645 6,665 6,950 6,503 20,398 19,713
Add:
interest
expense 11 11 11 11 33 43
Less:
interest
and other
income (346) (226) (1,613) (957) (1,181) (4,631)
Plus income
tax (benefit)
expense 61 171 130 (25) 552 (78)
-------- -------- -------- -------- -------- --------
EBITDA 1,151 1,323 (9,874) (9,799) 64,419 (34,079)
Add:
provision
for
litigation - - 2,343 6,743 (65,645) 16,220
Add:
share-based
compensation 4,369 4,281 4,305 4,285 13,137 12,549
Add:
litigation
defense
expenses 273 367 8,189 2,667 4,585 16,222
-------- -------- -------- -------- -------- --------
EBITDA adjusted
for share-based
compensation,
litigation and
damage costs $ 5,793 $ 5,971 $ 4,963 $ 3,896 $ 16,496 $ 10,912
======== ======== ======== ======== ======== ========
Conference Call
At approximately 4:30 p.m. EST (1:30 p.m. PST) 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 1-866-831-6234 within the
United States or 1-617-213-8854 outside of the U.S. using passcode
80947579. 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
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CONTACT:
Paul Alfieri
Limelight Networks, Inc.
+1-917-297-4241
Email Contact