TEMPE, Ariz., Nov. 6 /PRNewswire-FirstCall/ -- Limelight Networks, Inc.
(Nasdaq: LLNW) today reported third-quarter 2008 revenue of $33.1 million and
a net loss of $15.4 million, or 18 cents per basic share. Non-GAAP net loss,
adjusted for certain charges, was $0.5 million or 1 cent per basic share.
EBITDA, adjusted for share-based compensation, litigation and potential damage
cost accruals, was $5 million. The non-GAAP loss of 1 cent per basic share
excludes a charge of 13 cents per basic share related to litigation and
potential damage cost accruals, and 5 cents per basic share of share-based
compensation.
A reconciliation of GAAP to non-GAAP net income is included in the
attached tables.
"Disciplined execution enabled us to achieve strong sequential growth in
the third quarter," commented Jeff Lunsford, chairman and chief executive
officer, Limelight Networks, Inc. "We experienced new traffic records across
our network and, even in this tough economic environment, are continuing to
see attractive growth opportunities within the media, software, game and
enterprise customer segments."
Financial Highlights
Third-quarter revenue was $33.1 million, up 18 percent from $28.0 million
of non-GAAP revenue in the year-ago third quarter and above the high end of
the range of guidance previously provided by the Company. Capital purchases
incurred were $6.8 million. The Company ended the quarter with no bank debt
and approximately $177 million in cash and short-term marketable securities.
Fourth-Quarter Outlook
Limelight Networks anticipates fourth-quarter revenue to be in the range
of $33 million to $34 million. The Company also expects substantially reduced
potential damage accruals of under $750 thousand plus accrued interest related
to ongoing litigation.
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
September 30, December 31,
2008 2007
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $123,146 $113,824
Marketable securities 53,509 83,273
Accounts receivable, net of
reserves of $5,401 at September
30, 2008 and $4,022 at December
31, 2007, respectively 31,274 21,407
Income taxes receivable 1,419 1,960
Prepaid expenses and other current
assets 9,262 4,469
Total current assets 218,610 224,933
Property and equipment, net 42,355 46,968
Marketable securities, less current portion 16 87
Other assets 656 1,440
Total assets $261,637 $273,428
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $7,560 $8,523
Accounts payable, related parties - 230
Deferred revenue, current portion 7,987 4,237
Provision for litigation 64,350 48,130
Other current liabilities 14,043 9,312
Total current liabilities 93,940 70,432
Deferred revenue, less current portion 8,765 8,189
Other long-term liabilities 797 770
Total liabilities 103,502 79,391
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; 83,082
and 82,541 shares issued and
outstanding at September 30, 2008
and December 31, 2007,
respectively 83 83
Additional paid-in capital 285,219 271,586
Accumulated other comprehensive income (304) 106
Accumulated deficit (126,863) (77,738)
Total stockholders' equity 158,135 194,037
Total liabilities and stockholders' equity $261,637 $273,428
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September June September June September September
30, 30, 30, 30, 30, 30,
2008 2008 2007 2007 2008 2007
Revenue $33,116 $30,314 $29,190 $21,436 $93,632 $73,979
Costs and
operating
expenses
Cost of
revenue* ** 21,557 19,751 17,773 14,835 61,980 47,106
General
and
adminis-
trative* ** 15,455 9,463 8,117 8,831 38,247 24,723
Sales and
marketing* 8,577 8,965 7,421 6,404 25,684 16,843
Research &
development* 2,008 1,694 1,294 1,541 5,293 4,119
Provision for
litigation 2,343 6,743 - - 16,220 -
Total costs
and operating
expenses 49,940 46,616 34,605 31,611 147,424 92,791
Operating loss (16,824) (16,302) (5,415) (10,175) (53,792) (18,812)
Interest expense (11) (11) (18) (821) (43) (1,412)
Interest income 1,203 1,334 2,456 573 4,428 3,118
Other income
(expense) 410 (377) 33 - 203 33
Loss before
taxes (15,222) (15,356) (2,944) (10,423) (49,204) (17,073)
Income tax
expense
(benefit) 130 (25) 181 221 (78) 602
Net income
(loss) $(15,352) $(15,331) $(3,125) $(10,644) $(49,126) $(17,675)
Net loss
per share:
Basic $(0.18) $(0.18) $(0.04) $(0.23) $(0.59) $(0.35)
Diluted $(0.18) $(0.18) $(0.04) $(0.23) $(0.59) $(0.35)
Shares used
in per share
calculations:
Basic 83,022 82,889 82,045 45,791 82,845 49,929
Diluted 83,022 82,889 82,045 45,791 82,845 49,929
* 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 June September June September September
30, 30, 30, 30, 30, 30,
2008 2008 2007 2007 2008 2007
Supplemental
financial
data
(in thousands):
Share-based
compensation:
Cost of
revenues $594 $558 $422 $346 $1,658 $1,010
General
and
administrative 1,669 1,698 1,702 3,754 5,031 9,199
Sales
and
marketing 1,400 1,431 1,289 1,152 4,137 2,676
Research
and
development 642 598 542 1,007 1,723 2,400
Total
share-based
compensation $4,305 $4,285 $3,955 $6,259 $12,549 $15,285
Depreciation
and
amortization:
Network-
related
depreciation $6,607 $6,192 $5,602 $5,020 $18,812 $15,310
Other
depreciation 343 311 268 174 901 579
Total
depreciation
and
amortization $6,950 $6,503 $5,870 $5,194 $19,713 $15,889
Capital
expenditures:
Capital
expenditures
(cash and
accrual) $6,803 $5,013 $7,291 $8,769 $14,911 $21,635
Net
increase
(decrease)
in cash,
cash
equivalents
and
marketable
securities $(7,844) $(10,194) $6,370 $174,891 $(20,513) $186,256
End of
period
statistics:
Number of
customers
under
recurring
contract 1,304 1,291 988 876 1,304 988
Number of
employees 285 252 218 213 285 218
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September June September June September September
30, 30, 30, 30, 30, 30,
2008 2008 2007 2007 2008 2007
Cash
flows
from
operating
activities:
Net loss $(15,353) $(15,331) $(3,125) $(10,644) $(49,126) $(17,675)
Adjustments
to reconcile
net loss to
net cash
provided by
(used in)
operating
activities:
Depreciation
and
amortization 6,951 6,502 5,870 5,194 19,713 15,889
Share-based
compensation 4,304 4,285 3,955 6,259 12,549 15,285
Deferred
income tax
(benefit)
expense 129 23 (294) 1,048 (82) 286
Provision
for
litigation 2,343 6,743 - - 16,220 -
Loss
(income)
on foreign
currency
exchange (30) 12 - - (18) -
Accounts
receivable
charges 1,802 1,925 1,689 1,170 5,289 3,536
Accretion
of debt
discount - - - 383 - 424
Accretion
of
marketable
securities 11 21 (277) - (421) (277)
Loss on
marketable
securities - 16 - - 71
Changes in
operating
assets and
liabilities:
Accounts
receivable (11,006) (1,880) 1,202 (7,641) (15,157) (4,441)
Prepaid
expenses
and other
current
assets 417 (4,452) (143) (545) (3,948) (2,495)
Income
taxes
receivable 8 (129) 412 (848) 473 (126)
Other assets 153 67 (153) (426) 784 (698)
Accounts
payable 2,348 (73) (1,883) (2,980) (2,359) (5,595)
Accounts
payable,
related
parties - (150) (19) (763) (230) (781)
Deferred
revenue 4,799 (774) 8,462 3,612 4,326 12,094
Other
current
liabilities 3,555 (3,859) 2,009 5,405 4,733 8,044
Other
long
term
liabilities (64) 64 - - - -
Net cash
provided
by (used in)
operating
activities 367 (6,990) 17,705 (776) (7,183) 23,470
Cash flows
from
investing
activities:
Purchases
of
property
and
equipment (7,870) (4,231) (12,094) (5,461) (14,536) (20,650)
Purchase
of
marketable
securities - (30,400) (43,411) (28,589) (65,125) (72,001)
Sale of
marketable
securities 16,000 34,825 7,000 - 95,025 7,000
Net cash
provided by
(used in)
investing
activities 8,130 194 (48,505) (34,050) 15,364 (85,651)
Cash flows
from
financing
activities:
Payments
on
credit
facilities - - - (23,818) - (23,818)
Borrowings
on line
of credit - - - - - 1,500
Payments
on line
of credit - - - (1,500) - (1,500)
Payments on
capital
lease
obligations - - - (91) - (250)
Escrow funds
returned
from share
repurchase - 1,070 1,029 2,091 1,070 3,418
Excess tax
benefit
related to
stock option
exercises - - - - - 23
Proceeds from
exercise of
stock options
and warrants 31 53 4 - 191 35
Proceeds from
initial
public
offering,
net of issuance
costs - - (586) 204,498 - 203,912
Net cash
provided
by financing
activities 31 1,123 447 181,180 1,261 183,320
Effect of
exchange
rate changes
on cash and
cash
equivalents (223) 260 (120)
Net
increase
(decrease)
in cash
and cash
equivalents 8,305 (5,413) (30,353) 146,354 9,322 121,139
Cash and
cash
equivalents,
beginning
of period 114,841 120,254 159,103 12,749 113,824 7,611
Cash and
cash
equivalents,
end of
period $123,146 $114,841 $128,750 $159,103 $123,146 $128,750
LIMELIGHT NETWORKS, INC.
Reconciliation of GAAP Revenue to Non-GAAP Revenue
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September June September June September September
30, 30, 30, 30, 30, 30,
2008 2008 2007 2007 2008 2007
GAAP revenue NA NA $29,190 $21,436 NA $73,979
Deferred
traffic
revenue (2,645) 2,645 -
Deferred
custom
CDN
services 1,504 820 2,324
Non-GAAP
revenue NA NA $28,049 $24,901 NA $76,303
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 June September June September September
30, 30, 30, 30, 30, 30,
2008 2008 2007 2007 2008 2007
GAAP net loss $(15,352) $(15,331)$(3,125) $(10,644) $(49,126) $(17,675)
Deferred
revenue - - (1,141) 3,465 - 2,324
Deferred
cost of
traffic
and
services - - 649 (935) - (286)
Provision
for
litigation 2,343 6,743 - - 16,220 -
Share-based
compensation 4,305 4,285 3,955 6,259 12,549 15,285
Litigation
related
expenses 8,189 2,667 2,002 1,636 16,222 4,523
Non-GAAP net
(loss) income $(515) $(1,636) $2,340 $(219) $(4,135) $4,171
LIMELIGHT NETWORKS, INC.
Reconciliation of GAAP Net Income (Loss) to EBITDA to Adjusted EBITDA
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September June September June September September
30, 30, 30, 30, 30, 30,
2008 2008 2007 2007 2008 2007
GAAP net loss $(15,352) $(15,331) $(3,125) $(10,644) $(49,126) $(17,675)
Add:
depreciation
and
amortization 6,950 6,503 5,870 5,194 19,713 15,889
Add: interest
expense 11 11 18 821 43 1,412
Less: interest
and other
income (1,613) (957) (2,490) (573) (4,631) (3,151)
Plus income
tax (benefit)
expense 130 (25) 181 221 (78) 602
EBITDA (9,874) (9,799) 454 (4,981) (34,079) (2,923)
Add:
deferred
revenue - - (1,141) 3,465 - 2,324
Add:
provision
for
litigation 2,343 6,743 - - 16,220 -
Add:
share-based
compensation 4,305 4,285 3,955 6,259 12,549 15,285
Add:
litigation
related
expenses 8,189 2,667 2,002 1,636 16,222 4,523
Less:
deferred
traffic
and service
costs - - 649 (935) - (286)
Adjusted EBITDA $4,963 $3,896 $5,919 $5,444 $10,912 $18,923
Conference Call
Management will host a quarterly conference call for investors beginning
at 3:00 p.m. MT (5 p.m. ET). This call will be audiocast live at
http://www.llnw.com. It can also be accessed toll-free at 1-866-761-0748
within the United States or 1-617-614-2706 outside of the U.S using Conference
ID 89097839. A replay will be available from the company's website following
the call.
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 expense for the third quarter of 2008, 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 a content delivery partner
enabling the next wave of Internet business and entertainment. More than 1300
Internet, entertainment, software, and technology brands trust our robust,
scalable platform to monetize their digital assets by delivering a brilliant
online experience to their global audience. Our architecture bypasses the busy
public Internet using a dedicated optical network that interconnects thousands
of servers and delivers massive files at the speed of light -- directly to the
access networks that consumers use every day. Our proven network and passion
for service provides our customers confidence that every object in their
library will be delivered to every user, every time. Read our blog at
http://blog.llnw.com or visit http://www.limelightnetworks.com for more
information.
Copyright (C) 2008 Limelight Networks, Inc. All rights reserved. All
product or service names are the property of their respective owners
SOURCE Limelight Networks, Inc.
Contact: Paul Alfieri of Limelight Networks, Inc., +1-917-297-4241, palfieri@llnw.com