TEMPE, Ariz., Feb. 26 /PRNewswire-FirstCall/ -- Limelight Networks, Inc.
(Nasdaq: LLNW) today reported fourth-quarter and full-year 2008 financial
results.
"Limelight Networks achieved strong sequential and year-over-year revenue
growth in the fourth quarter. Consumers and businesses continue to migrate
online to source information, enjoy entertainment media, and conduct commerce.
With our robust network-based architecture and disciplined operations, we
believe we are well-positioned to capitalize on this long-term trend and grow
our business in 2009 even amidst challenging times," commented Jeff Lunsford,
chairman and chief executive officer, Limelight Networks, Inc.
Financial Highlights
For the fourth quarter of 2008, the company reported revenue of $36
million, up 23 percent from $29 million in the same period last year, and a
net loss of $14 million, or 17 cents per basic share.
Non-GAAP net loss, adjusted for certain charges, was $2.6 million or 3
cents per basic share. The non-GAAP loss of 3 cents per basic share excludes
a charge of 6 cents per basic share related to litigation and potential damage
cost accruals, and 7 cents per basic share of share-based compensation.
EBITDA, adjusted for share-based compensation, litigation and potential damage
cost accruals, was $4.6 million. Capital purchases incurred were $5.2 million.
The Company ended the quarter with no bank debt and approximately $175 million
in cash and short-term marketable securities.
For the full year 2008, the company reported revenue of $130 million with
a net loss of 76 cents per basic share. Non-GAAP net loss, adjusted for
certain charges, was $6.7 million, or 8 cents per basic share.
A reconciliation of GAAP to non-GAAP net income is included in the
attached tables.
First-Quarter Outlook
Limelight Networks anticipates first-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)
December 31, December 31,
2008 2007
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $138,180 $113,824
Marketable securities 36,463 83,273
Accounts receivable, net of reserves of
$7,565 and $4,022 at December 31, 2008
and 2007, respectively 33,482 21,407
Income taxes receivable 7 1,960
Prepaid expenses and other current assets 7,834 4,469
Total current assets 215,966 224,933
Property and equipment, net 40,185 46,968
Marketable securities, less current portion 13 87
Other assets 628 1,440
Total assets $256,792 $273,428
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $8,920 $8,523
Accounts payable, related parties - 230
Deferred revenue, current portion 9,865 4,237
Provision for litigation 65,645 48,130
Other current liabilities 14,928 9,312
Total current liabilities 99,358 70,432
Deferred revenue, less current portion 7,303 8,189
Other long-term liabilities - 770
Total liabilities 106,661 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; 83,406
and 82,541 shares issued and
outstanding at December 31, 2008
and December 31, 2007, respectively 83 83
Additional paid-in capital 290,593 271,586
Accumulated other comprehensive income 260 106
Accumulated deficit (140,805) (77,738)
Total stockholders' equity 150,131 194,037
Total liabilities and stockholders' equity $256,792 $273,428
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
December September December September
31, 2008 30, 2008 31, 2007 30, 2007
Revenue $35,898 $33,116 $29,132 $29,190
Costs and operating expenses
Cost of revenue * o 21,881 21,557 18,435 17,773
General and administrative * o 15,550 15,455 7,961 8,117
Sales and marketing * 9,231 8,577 8,619 7,421
Research & development * 2,072 2,008 1,385 1,294
Provision for litigation 1,295 2,343 48,130 -
Total costs and operating expenses 50,029 49,940 84,530 34,605
Operating loss (14,131) (16,824) (55,398) (5,415)
Interest expense (11) (11) (6) (18)
Interest income 669 1,203 2,035 2,456
Other income (expense) (375) 410 (177) 33
Loss before taxes (13,848) (15,222) (53,546) (2,944)
Income tax expense 94 130 1,799 181
Net income loss $(13,942) $(15,352) $(55,345) $(3,125)
Net loss per share:
Basic $(0.17) $(0.18) $(0.67) $(0.04)
Diluted $(0.17) $(0.18) $(0.67) $(0.04)
Shares used in per share calculations:
Basic 83,192 83,022 82,140 82,045
Diluted 83,192 83,022 82,140 82,045
Twelve Months Ended
December 31, December 31,
2008 2007
Revenue $129,530 $103,111
Costs and operating expenses
Cost of revenue * o 83,861 65,541
General and administrative * o 53,796 32,684
Sales and marketing * 34,916 25,462
Research & development * 7,365 5,504
Provision for litigation 17,515 48,130
Total costs and operating expenses 197,453 177,321
Operating loss (67,923) (74,210)
Interest expense (55) (1,418)
Interest income 5,098 5,153
Other income (expense) (171) (144)
Loss before taxes (63,051) (70,619)
Income tax expense 16 2,401
Net income loss $(63,067) $(73,020)
Net loss per share:
Basic $(0.76) $(1.26)
Diluted $(0.76) $(1.26)
Shares used in per share calculations:
Basic 82,932 57,982
Diluted 82,932 57,982
* Includes share-based compensation (see supplemental table for figures)
o Includes depreciation (see supplemental table for figures)
LIMELIGHT NETWORKS, INC.
SUPPLEMENTAL FINANCIAL DATA
(In thousands)
(Unaudited)
Three Months Ended
December September December September
31, 2008 30, 2008 31, 2007 30, 2007
Supplemental financial
data (in thousands):
Share-based compensation:
Cost of revenues $585 $594 $479 $422
General and administrative 3,028 1,669 1,454 1,702
Sales and marketing 1,262 1,400 1,272 1,289
Research and development 633 642 420 542
Total share-based compensation $5,508 $4,305 $3,625 $3,955
Depreciation and amortization:
Network-related depreciation $6,862 $6,607 $5,429 $5,602
Other depreciation 455 343 278 268
Total depreciation and
amortization $7,317 $6,950 $5,707 $5,870
Capital expenditures:
Capital expenditures (cash and
accrual) $5,151 $6,803 $5,136 $7,291
Net increase (decrease) in cash,
cash equivalents and marketable
securities $(2,015) $(7,844) $3,032 $6,370
End of period statistics:
Number of customers under recurring
contract 1,336 1,304 1,157 988
Number of employees 294 285 237 218
Twelve Months Ended
December 31, December 31,
2008 2007
Supplemental financial data (in thousands):
Share-based compensation:
Cost of revenues $2,243 $1,489
General and administrative 8,060 10,653
Sales and marketing 5,400 3,948
Research and development 2,355 2,820
Total share-based compensation $18,058 $18,910
Depreciation and amortization:
Network-related depreciation $25,675 $20,739
Other depreciation 1,356 857
Total depreciation and amortization $27,031 $21,596
Capital expenditures:
Capital expenditures (cash and accrual) $20,062 $26,771
Net increase (decrease) in cash, cash
equivalents and marketable securities $(22,528) $189,288
End of period statistics:
Number of customers under recurring contract 1,336 1,157
Number of employees 294 237
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
December September December September
31, 2008 30, 2008 31, 2007 30, 2007
Cash flows from operating
activities:
Net loss $(13,942) $(15,353) $(55,345) $(3,125)
Adjustments to reconcile net
loss to net cash provided by
(used in) operating activities:
Depreciation and amortization 7,317 6,950 5,707 5,870
Share-based compensation 5,508 4,305 3,625 3,955
Deferred income tax (benefit)
expense (779) 129 33 (294)
Excess tax benefit related to
stock option exercises - - (1,596) -
Provision for litigation 1,295 2,343 48,130 -
Loss (income) on foreign
currency exchange (149) (30) 42 -
Accounts receivable charges 2,563 1,802 2,268 1,689
Accretion of debt discount - - - -
Accretion of marketable
securities (6) 11 (530) (277)
Loss on marketable securities - - 387 -
Changes in operating assets
and liabilities:
Accounts receivable (4,771) (11,006) (5,243) 1,202
Prepaid expenses and other
current assets 1,695 417 1,037 (143)
Income taxes receivable 1,480 8 2,742 412
Other assets 32 153 11 (153)
Accounts payable (531) 2,348 3,613 (1,883)
Accounts payable, related
parties - 230 (19)
Deferred revenue 416 4,799 135 8,462
Other current liabilities 718 3,555 (4,449) 2,009
Other long term liabilities - (64) 740 -
Net cash provided by (used in)
operating activities 846 367 1,537 17,705
Cash flows from investing activities:
Purchases of property and
equipment (3,537) (7,870) (2,081) (12,094)
Purchase of marketable
securities - 20,300 (43,411)
Sale of marketable securities 17,125 16,000 (37,569) 7,000
Net cash provided by (used in)
investing activities 13,588 8,130 (19,350) (48,505)
Cash flows from financing activities:
Payments on credit facilities - - - -
Borrowings on line of credit - - - -
Payments on line of credit - - - -
Payments on capital lease
obligations - - - -
Escrow funds returned from
share repurchase - - 1,190 1,029
Excess tax benefit related to
stock option exercises - - 1,573 -
Proceeds from exercise of
stock options and warrants 34 31 175 4
Proceeds from initial public
offering, net of issuance costs - - (47) (586)
Net cash provided by financing
activities 34 31 2,891 447
Effect of exchange rate changes
on cash and cash equivalents 566 (223) (4) -
Net increase (decrease) in cash
and cash equivalents 15,034 8,305 (14,926) (30,353)
Cash and cash equivalents,
beginning of period 123,146 114,841 128,750 159,103
Cash and cash equivalents, end of
period $138,180 $123,146 $113,824 $128,750
Twelve Months Ended
December 31, December 31,
2008 2007
Cash flows from operating activities:
Net loss $(63,067) $(73,020)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Depreciation and amortization 27,031 21,596
Share-based compensation 18,058 18,910
Deferred income tax (benefit) expense (861) 318
Excess tax benefit related to stock
option exercises - (1,596)
Provision for litigation 17,515 48,130
Loss (income) on foreign currency
exchange (167) 42
Accounts receivable charges 7,852 5,805
Accretion of debt discount - 424
Accretion of marketable securities (427) (805)
Loss on marketable securities 71 387
Changes in operating assets and
liabilities:
Accounts receivable (19,928) (9,686)
Prepaid expenses and other
current assets (2,253) (1,458)
Income taxes receivable 1,953 2,616
Other assets 816 (687)
Accounts payable (2,890) (1,982)
Accounts payable, related parties (230) (551)
Deferred revenue 4,742 12,229
Other current liabilities 5,448 3,595
Other long term liabilities - 740
Net cash provided by (used in)
operating activities (6,337) 25,007
Cash flows from investing activities:
Purchases of property and equipment (18,073) (22,731)
Purchase of marketable securities (65,125) (109,570)
Sale of marketable securities 112,150 27,300
Net cash provided by (used in)
investing activities 28,952 (105,001)
Cash flows from financing activities:
Payments on credit facilities - (23,818)
Borrowings on line of credit - 1,500
Payments on line of credit - (1,500)
Payments on capital lease obligations - (250)
Escrow funds returned from share
repurchase 1,070 4,607
Excess tax benefit related to stock
option exercises - 1,596
Proceeds from exercise of stock options
and warrants 225 211
Proceeds from initial public offering,
net of issuance costs - 203,865
Net cash provided by financing activities 1,295 186,211
Effect of exchange rate changes on cash and
cash equivalents 446 (4)
Net increase (decrease) in cash and cash
equivalents 24,356 106,213
Cash and cash equivalents, beginning of
period 113,824 7,611
Cash and cash equivalents, end of period $138,180 $113,824
LIMELIGHT NETWORKS, INC.
Reconciliation of GAAP Revenue to Non-GAAP Revenue
(In thousands)
(Unaudited)
Three Months Ended
December September December September
31, 2008 30, 2008 31, 2007 30, 2007
GAAP revenue $35,898 $33,116 $29,132 $29,190
Deferred traffic revenue - - - (2,645)
Deferred custom CDN services - - 729 1,504
Non-GAAP revenue $35,898 $33,116 $29,861 $28,049
Twelve Months Ended
December 31, December 31,
2008 2007
GAAP revenue $129,530 $103,111
Deferred traffic revenue - -
Deferred custom CDN services - 3,053
Non-GAAP revenue $129,530 $106,164
LIMELIGHT NETWORKS, INC.
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss)
(In thousands)
(Unaudited)
Three Months Ended
December September December September
31, 2008 30, 2008 31, 2007 30, 2007
GAAP net loss $(13,942) $(15,352) $(55,345) $(3,125)
Deferred revenue - - 729 (1,141)
Deferred cost of traffic and services - - 21 649
Provision for litigation 1,295 2,343 48,130 -
Share-based compensation 5,508 4,305 3,625 3,955
Litigation defense expenses 4,576 8,189 2,772 2,002
Non-GAAP net (loss) income $(2,563) $(515) $(68) $2,340
Twelve Months Ended
December 31, December 31,
2008 2007
GAAP net loss $(63,067) $(73,020)
Deferred revenue - 3,053
Deferred cost of traffic and services - (265)
Provision for litigation 17,515 48,130
Share-based compensation 18,058 18,910
Litigation defense expenses 20,799 7,295
Non-GAAP net (loss) income $(6,695) $4,103
LIMELIGHT NETWORKS, INC.
Reconciliation of GAAP Net Income (Loss) to EBITDA to Adjusted EBITDA
(In thousands)
(Unaudited)
Three Months Ended
December September December September
31, 2008 30, 2008 31, 2007 30, 2007
GAAP net loss $(13,942) $(15,352) $(55,345) $(3,125)
Add: depreciation and
amortization 7,317 6,950 5,707 5,870
Add: interest expense 11 11 6 18
Less: interest and other income (294) (1,613) (1,858) (2,490)
Plus income tax (benefit) expense 94 130 1,799 181
EBITDA (6,814) (9,874) (49,691) 454
Add: deferred revenue - - 729 (1,141)
Add: provision for litigation 1,295 2,343 48,130 -
Add: share-based compensation 5,508 4,305 3,625 3,955
Add: litigation defense
expenses 4,576 8,189 2,772 2,002
Less: deferred traffic and
service costs - - (21) (649)
Adjusted EBITDA $4,565 $4,963 $5,586 $5,919
Twelve Months Ended
December 31, December 31,
2008 2007
GAAP net loss $(63,067) $(73,020)
Add: depreciation and amortization 27,031 21,596
Add: interest expense 55 1,418
Less: interest and other income (4,927) (5,009)
Plus income tax (benefit) expense 16 2,401
EBITDA (40,892) (52,614)
Add: deferred revenue - 3,053
Add: provision for litigation 17,515 48,130
Add: share-based compensation 18,058 18,910
Add: litigation defense expenses 20,799 7,295
Less: deferred traffic and service costs - 265
Adjusted EBITDA $15,480 $24,509
Conference Call
Management will host a quarterly conference call for investors beginning
at 8:00 a.m. ET (5 a.m. PT) on February 26, 2009. This call can be accessed
toll-free at 1-866-272-9941 within the United States or 1-617-213-8895 outside
of the U.S. using Conference ID 76676134.
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 first quarter of 2009, 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.
* Source: Frost & Sullivan, Worldwide Content Delivery Markets, January
2009
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) 2009 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