TEMPE, AZ -- (MARKET WIRE) -- 02/23/10 --
Limelight Networks, Inc. (NASDAQ: LLNW) today
reported fourth quarter and full year 2009 financial results. Fourth
quarter highlights included:
-- Revenue of $33.6 million
-- Generation of $5.1 million in cash from operations
-- Definitive agreement to acquire EyeWonder, Inc.,
a leading rich media ad serving vendor
"Business and consumer activity continues to rapidly migrate online,
creating a world of hyper-connected users who expect all of their screens
and devices to have broadcast quality access to content, information,
games, social networks, and purchases, at any time and from any location.
Limelight Networks' global computing platform helps publishers,
advertisers, and enterprises be successful in this constantly connected,
multi-screen environment," said Jeff Lunsford, chairman and chief executive
officer.
Financial Highlights
For the fourth quarter of 2009, the company reported revenue of $33.6
million, up 3 percent from third quarter 2009 revenue. The company also
reported EBITDA, adjusted for share-based compensation, litigation expenses
and acquisition related expenses, of $3.3 million. The company generated
$5.1 million in cash from operations during the quarter.
Non-GAAP net loss, before stock based compensation, litigation expenses,
and acquisition related expenses, was $3.1 million or 4 cents per basic
share. GAAP net loss was $9.7 million, or 11 cents per basic share.
Capital investments were $3.8 million. The company ended the quarter with
no bank debt and approximately $154 million in cash and short-term
marketable securities.
For the full year 2009, the company reported revenue of $131.7 million,
compared to $129.5 million for full year 2008. GAAP net income for 2009 was
$34.9 million or 41 cents per basic share. Non-GAAP net loss, before stock
based compensation, litigation expenses, provision for litigation, and
acquisition related expenses, was $6.4 million or 8 cents per basic share.
The company also reported EBITDA, adjusted for share-based compensation,
litigation expenses, provision for litigation, and acquisition related
expenses, of $19.8 million.
A reconciliation of GAAP to non-GAAP net income is included in the attached
tables.
First Quarter 2010 Outlook
Limelight Networks anticipates first quarter revenue to be in the range of
$33 million to $34.5 million.
Financial Tables
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
December December
31, 31,
2009 2008
---------- ----------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 89,509 $ 138,180
Marketable securities 64,870 36,463
Accounts receivable, net of reserves of $9,226
and $7,565 at December 31, 2009 and December 31,
2008, respectively 26,363 33,482
Income taxes receivable 617 7
Prepaid expenses and other current assets 9,654 7,834
---------- ----------
Total current assets 191,013 215,966
Property and equipment, net 35,524 40,185
Marketable securities, less current portion 12 13
Goodwill 619 -
Other intangible assets, net 370 -
Other assets 8,132 628
---------- ----------
Total assets $ 235,670 $ 256,792
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 5,144 $ 8,920
Deferred revenue, current portion 12,199 9,865
Provision for litigation - 65,645
Other current liabilities 14,140 14,928
---------- ----------
Total current liabilities 31,483 99,358
Deferred revenue, less current portion 1,377 7,303
Deferred income tax, less current portion 10 -
---------- ----------
Total liabilities 32,870 106,661
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; 85,011 and 83,405 shares issued and
outstanding at December 31, 2009 and December 31,
2008, respectively 85 83
Additional paid-in capital 308,536 290,593
Accumulated other comprehensive income 93 260
Accumulated deficit (105,914) (140,805)
---------- ----------
Total stockholders' equity 202,800 150,131
---------- ----------
Total liabilities and stockholders' equity $ 235,670 $ 256,792
========== ==========
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
------------------------------------------
December September December September
31, 30, 31, 30,
2009 2009 2008 2008
--------- --------- --------- ---------
Revenue $ 33,625 $ 32,530 $ 35,898 $ 33,116
Costs and operating expenses
Cost of revenue * 22,167 20,907 21,881 21,557
General and administrative * 10,066 7,032 15,550 15,455
Sales and marketing * 8,672 8,060 9,231 8,577
Research & development * 2,059 2,024 2,072 2,008
Provision for litigation - - 1,295 2,343
--------- --------- --------- ---------
Total costs and operating
expenses 42,964 38,023 50,029 49,940
Operating (loss) income (9,339) (5,493) (14,131) (16,824)
Interest expense (5) (11) (11) (11)
Interest income 295 330 669 1,203
Other income (expense) (146) 15 (375) 410
--------- --------- --------- ---------
(Loss) income before taxes (9,195) (5,159) (13,848) (15,222)
Income tax expense 531 61 94 130
--------- --------- --------- ---------
Net (loss) income $ (9,726) $ (5,220) $ (13,942) $ (15,352)
========= ========= ========= =========
Net (loss) income per share:
Basic $ (0.11) $ (0.06) $ (0.17) $ (0.18)
Diluted $ (0.11) $ (0.06) $ (0.17) $ (0.18)
Shares used in per share
calculations:
Basic 84,770 84,489 83,192 83,022
Diluted 84,770 84,489 83,192 83,022
Twelve Months Ended
--------------------
December December
31, 31,
2009 2008
--------- ---------
Revenue $ 131,663 $ 129,530
Costs and operating expenses
Cost of revenue * 85,623 83,861
General and administrative * 36,479 53,796
Sales and marketing * 32,587 34,916
Research & development * 7,937 7,365
Provision for litigation (65,645) 17,515
--------- ---------
Total costs and operating
expenses 96,981 197,453
Operating (loss) income 34,682 (67,923)
Interest expense (39) (55)
Interest income 1,345 5,098
Other income (expense) (14) (171)
--------- ---------
(Loss) income before taxes 35,974 (63,051)
Income tax expense 1,084 16
--------- ---------
Net (loss) income $ 34,890 $ (63,067)
========= =========
Net (loss) income per share:
Basic $ 0.41 $ (0.76)
Diluted $ 0.40 $ (0.76)
Shares used in per share
calculations:
Basic 84,202 82,932
Diluted 87,972 82,932
* 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
-------------------------------------------
December September December September
31, 30, 31, 30,
2009 2009 2008 2008
---------- --------- --------- ---------
Supplemental financial data (in
thousands):
Share-based compensation:
Cost of revenues $ 642 $ 638 $ 585 $ 594
General and administrative 1,801 1,805 3,028 1,669
Sales and marketing 1,236 1,293 1,262 1,400
Research and development 648 633 633 642
---------- --------- --------- ---------
Total share-based compensation $ 4,327 $ 4,369 $ 5,508 $ 4,305
========== ========= ========= =========
Depreciation and amortization:
Network-related depreciation $ 5,352 $ 6,018 $ 6,862 $ 6,607
Other depreciation 652 627 455 343
---------- --------- --------- ---------
Total depreciation and
amortization $ 6,004 $ 6,645 $ 7,317 $ 6,950
========== ========= ========= =========
Capital expenditures:
Capital expenditures (cash and
accrual) $ 1,905 $ 11,070 $ 5,151 $ 6,803
========== ========= ========= =========
Net increase (decrease) in
cash, cash equivalents
and marketable securities $ 1,561 $ (11,497) $ (2,015) $ (7,844)
========== ========= ========= =========
End of period statistics:
Approximate number of active
customers 1,370 1,370 1,336 1,304
Number of employees 328 321 294 285
Twelve Months Ended
--------------------
December December
31, 31,
2009 2008
--------- ---------
Supplemental financial data (in
thousands):
Share-based compensation:
Cost of revenues $ 2,414 $ 2,243
General and administrative 7,556 8,060
Sales and marketing 4,970 5,400
Research and development 2,523 2,355
--------- ---------
Total share-based compensation $ 17,463 $ 18,058
========= =========
Depreciation and amortization:
Network-related depreciation $ 24,051 $ 25,675
Other depreciation 2,351 1,356
--------- ---------
Total depreciation and
amortization $ 26,402 $ 27,031
========= =========
Capital expenditures:
Capital expenditures (cash and
accrual) $ 21,660 $ 20,062
========= =========
Net increase (decrease) in
cash, cash equivalents
and marketable securities $ (20,265) $ (22,528)
========= =========
End of period statistics:
Approximate number of active
customers 1,370 1,336
Number of employees 328 294
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
------------------------------------------
December September December September
31, 30, 31, 30,
2009 2009 2008 2008
--------- --------- --------- ---------
Cash flows from operating
activities:
Net (loss) income $ (9,726) $ (5,220) $ (13,942) $ (15,352)
Adjustments to reconcile net
(loss) income to net cash
provided by (used in)
operating activities:
Depreciation and
amortization 6,004 6,645 7,317 6,950
Share-based compensation 4,327 4,369 5,508 4,305
Deferred income tax
(benefit) expense 10 - (9) 129
Provision for litigation - - 1,295 2,343
Loss (income) on foreign
currency exchange 20 7 (149) (30)
Excess tax shortfalls
related to stock option
exercises - - 177 -
Accounts receivable
charges 1,556 329 3,961 1,802
Accretion of marketable
securities 89 (298) (6) 11
Loss on marketable
securities - - - -
Changes in operating
assets and liabilities:
Accounts receivable (227) (1,648) (6,169) (11,006)
Prepaid expenses and
other current assets (516) (1,475) 1,695 417
Income taxes receivable (434) (159) 1,480 8
Other assets 917 (4,152) 32 153
Accounts payable (6) 244 (531) 2,348
Accounts payable,
related parties - - - -
Deferred revenue (1,506) (291) 416 4,799
Other current
liabilities 4,616 358 718 3,554
Other long term
liabilities - - (770) (64)
--------- --------- --------- ---------
Net cash provided by (used
in) operating activities 5,124 (1,291) 1,023 367
--------- --------- --------- ---------
Cash flows from investing
activities:
Purchases of property and
equipment (3,784) (10,586) (3,537) (7,870)
Purchase of marketable
securities (25,500) (32,905) - -
Sale of marketable
securities 10,900 2,000 17,125 16,000
Cash acquired in business
acquisition - - - -
--------- --------- --------- ---------
Net cash (used in) provided
by investing activities (18,384) (41,491) 13,588 8,130
--------- --------- --------- ---------
Cash flows from financing
activities:
Escrow funds returned
from share repurchase - - - -
Excess tax benefits
related to stock option
exercises - - (177) -
Proceeds from exercise of
stock options and
warrants 32 72 34 31
--------- --------- --------- ---------
Net cash provided by (used
in) financing activities 32 72 (143) 31
--------- --------- --------- ---------
Effect of exchange rate
changes on cash and cash
equivalents 290 (5) 566 (223)
--------- --------- --------- ---------
Net (decrease) increase in cash
and cash equivalents (12,938) (42,715) 15,034 8,305
Cash and cash equivalents,
beginning of period 102,447 145,162 123,146 114,841
--------- --------- --------- ---------
Cash and cash equivalents, end
of period $ 89,509 $ 102,447 $ 138,180 $ 123,146
========= ========= ========= =========
Twelve Months Ended
--------------------
December December
31, 31,
2009 2008
--------- ---------
Cash flows from operating
activities:
Net (loss) income $ 34,890 $ (63,067)
Adjustments to reconcile net
(loss) income to net cash
provided by (used in)
operating activities:
Depreciation and
amortization 26,402 27,031
Share-based compensation 17,463 18,058
Deferred income tax
(benefit) expense 10 (91)
Provision for litigation (65,645) 17,515
Loss (income) on foreign
currency exchange 201 (167)
Excess tax shortfalls
related to stock option
exercises - 177
Accounts receivable
charges 5,795 9,250
Accretion of marketable
securities (366) (427)
Loss on marketable
securities - 71
Changes in operating
assets and liabilities:
Accounts receivable 1,566 (21,326)
Prepaid expenses and
other current assets (1,863) (2,253)
Income taxes receivable (610) 1,953
Other assets (7,397) 816
Accounts payable (5,204) (2,890)
Accounts payable,
related parties - (230)
Deferred revenue (3,591) 4,742
Other current
liabilities (2,086) 5,448
Other long term
liabilities - (770)
--------- ---------
Net cash provided by (used
in) operating activities (435) (6,160)
--------- ---------
Cash flows from investing
activities:
Purchases of property and
equipment (20,432) (18,073)
Purchase of marketable
securities (71,235) (65,125)
Sale of marketable
securities 43,300 112,150
Cash acquired in business
acquisition 22 -
--------- ---------
Net cash (used in) provided
by investing activities (48,345) 28,952
--------- ---------
Cash flows from financing
activities:
Escrow funds returned
from share repurchase - 1,070
Excess tax benefits
related to stock option
exercises - (177)
Proceeds from exercise of
stock options and
warrants 272 225
--------- ---------
Net cash provided by (used
in) financing activities 272 1,118
--------- ---------
Effect of exchange rate
changes on cash and cash
equivalents (163) 446
--------- ---------
Net (decrease) increase in cash
and cash equivalents (48,671) 24,356
Cash and cash equivalents,
beginning of period 138,180 113,824
--------- ---------
Cash and cash equivalents, end
of period $ 89,509 $ 138,180
========= =========
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, litigation expenses,
provision for litigation, and acquisition related expenses 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, provision for litigation,
and acquisition related expenses. 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, litigation expenses, provision for
litigation and acquisition related expenses as EBITDA plus expenses that we
do not consider reflective of our ongoing operations. We use EBITDA
adjusted for share-based compensation, litigation expenses, provision for
litigation and acquisition related expenses as a supplemental measure to
review and assess operating performance. We also believe use of EBITDA
adjusted for share-based compensation, litigation expenses, provision for
litigation and acquisition related expenses 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, litigation expenses, provision for litigation and
acquisition related expenses 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, litigation expenses, provision for litigation and
acquisition related expenses have limitations as analytical tools, and when
assessing our operating performance, Non-GAAP net income (loss), EBITDA and
EBITDA adjusted for share-based compensation, litigation expenses,
provision for litigation and acquisition related expenses 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, litigation
expenses, provision for litigation and acquisition related expenses
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, litigation expenses, provision for litigation and
acquisition related expenses 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, litigation expenses, provision for
litigation and acquisition related expenses 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, litigation expenses, provision for litigation and
acquisition related expenses only as supplemental support for management's
analysis of business performance. Non-GAAP Net Income (loss), EBITDA and
EBITDA adjusted for share-based compensation, litigation expenses,
provision for litigation and acquisition related expenses 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
------------------------------------------
December September December September
31, 30, 31, 30,
2009 2009 2008 2008
--------- --------- --------- ---------
GAAP net (loss) income $ (9,726) $ (5,220) $ (13,942) $ (15,352)
Provision for litigation - - 1,295 2,343
Share-based compensation 4,327 4,369 5,508 4,305
Litigation defense expenses 827 273 4,576 8,189
Acquisition related expenses 1,481 - - -
--------- --------- --------- ---------
Non-GAAP net loss $ (3,091) $ (578) $ (2,563) $ (515)
========= ========= ========= =========
Twelve Months Ended
--------------------
December December
31, 31,
2009 2008
--------- ---------
GAAP net (loss) income $ 34,890 $ (63,067)
Provision for litigation (65,645) 17,515
Share-based compensation 17,463 18,058
Litigation defense expenses 5,412 20,799
Acquisition related expenses 1,481 -
--------- ---------
Non-GAAP net loss $ (6,399) $ (6,695)
========= =========
LIMELIGHT NETWORKS, INC.
Reconciliation of GAAP Net Income (Loss) to EBITDA to EBITDA
Adjusted for Share-Based Compensation, Litigation Expenses, Provision for
Litigation and Acquisition Expenses
(In thousands)
(Unaudited)
Three Months Ended
------------------------------------------
December September December September
31, 30, 31, 30,
2009 2009 2008 2008
--------- --------- --------- ---------
GAAP net (loss) income $ (9,726) $ (5,220) $ (13,942) $ (15,352)
Add: depreciation and
amortization 6,004 6,645 7,317 6,950
Add: interest expense 5 11 11 11
Less: interest and other
income (149) (346) (294) (1,613)
Plus income tax (benefit)
expense 531 61 94 130
--------- --------- --------- ---------
EBITDA (3,335) 1,151 (6,814) (9,874)
Add: provision for
litigation - - 1,295 2,343
Add: share-based
compensation 4,327 4,369 5,508 4,305
Add: litigation defense
expenses 827 273 4,576 8,189
Add: acquisition related
expenses 1,481 - - -
--------- --------- --------- ---------
EBITDA adjusted for share-based
compensation, litigation
expenses, provision for
litigation and acquisition
expenses $ 3,300 $ 5,793 $ 4,565 $ 4,963
========= ========= ========= =========
Twelve Months Ended
--------------------
December December
31, 31,
2009 2008
--------- ---------
GAAP net (loss) income $ 34,890 $ (63,067)
Add: depreciation and
amortization 26,402 27,031
Add: interest expense 39 55
Less: interest and other
income (1,331) (4,927)
Plus income tax (benefit)
expense 1,084 16
--------- ---------
EBITDA 61,084 (40,892)
Add: provision for
litigation (65,645) 17,515
Add: share-based
compensation 17,463 18,058
Add: litigation defense
expenses 5,412 20,799
Add: acquisition related
expenses 1,481 -
--------- ---------
EBITDA adjusted for share-based
compensation, litigation
expenses, provision for
litigation and acquisition
expenses $ 19,795 $ 15,480
========= =========
Conference Call
At approximately 4:30 p.m. EST (1:30 p.m. PST), 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.
This call can be accessed toll-free at 1-866-831-6291 within the United
States or 1-617-213-8860 outside of the U.S. using Participant Passcode
82723009. The conference call will also be audiocast live from
http://www.llnw.com and a replay will be available 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 acquisition 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 that the Company's
acquisition of EyeWonder is delayed or ultimately not consummated, 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 and
annual 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.
Additional Information Regarding the Acquisition of EyeWonder and Where to
Find It
Limelight Networks filed a Registration Statement on Form S-4 and a Proxy
Statement/Prospectus with the SEC in connection with the transaction and
plans to mail to its stockholders a Proxy Statement/Prospectus in
connection with the transaction. The Registration Statement and the Proxy
Statement/Prospectus contain important information about Limelight
Networks, EyeWonder, the transaction and related matters. Investors and
security holders are urged to read the Registration Statement and the Proxy
Statement/Prospectus carefully. Investors and security holders may obtain
free copies of the Registration Statement and the Proxy
Statement/Prospectus and other documents filed with the SEC by Limelight
through the web site maintained by the SEC at www.sec.gov and by contacting
Limelight Networks Investor Relations at 917-297-4241. In addition,
investors and security holders may obtain free copies of the documents
filed with the SEC on Limelight Networks' website at
www.limelightnetworks.com.
Participants in the Acquisition of EyeWonder
Limelight Networks, EyeWonder and their respective directors, executive
officers and certain other members of management and employees may be
deemed to be participants in the solicitation of proxies in respect of the
proposed transaction. Information regarding these persons who may, under
the rules of the SEC, be considered participants in the solicitation of
Limelight Networks stockholders in connection with the proposed transaction
is set forth in the Proxy Statement/Prospectus described above. Additional
information regarding Limelight Networks' executive officers and directors
is included in Limelight Networks' definitive proxy statement, which was
filed with the SEC on April 27, 2009. You can obtain free copies of these
documents from Limelight Networks using the contact information above.
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 © 2010 Limelight Networks, Inc. All rights reserved. All
product or service names are the property of their respective owners
CONTACT:
Paul Alfieri
Limelight Networks, Inc.
+1-646-875-8835
Email Contact