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LivePerson Announces Fourth Quarter 2013 Financial Results

-- Reports Fourth Quarter Revenue of $46.9 Million --

NEW YORK, Feb. 12, 2014 /PRNewswire/ -- LivePerson, Inc. (NASDAQ: LPSN), a leading provider of digital engagement solutions, today announced financial results for the fourth quarter ended December 31, 2013.

(Logo:  http://photos.prnewswire.com/prnh/20110105/NY24753LOGO-a )

Revenue

Revenue from business operations (B2B) for the fourth quarter was $43.0 million.  Total revenue, which includes our consumer operations, was $46.9 million for the fourth quarter.  Revenue from consumer operations for the fourth quarter was $3.9 million.

For the full year 2013, B2B revenue, excluding the small business segment, has grown 18% over last year.

Bookings for the fourth quarter of 2013 were $10.0 million, which compares to $10.2 million last quarter and $8.7 million in the fourth quarter of 2012.  Bookings are measured as incremental new contractual commitments from new or existing customers, excluding nonrecurring and usage-based fees.

"During the quarter we continued to see a growing appetite for the type of engagements we're offering," said CEO Robert LoCascio.  "Our LiveEngage value proposition is allowing us to become more tightly aligned with our customers who are realizing the greater business value of having a multi-channel digital engagement strategy." 

Customer Expansion

LivePerson signed a total of 187 deals in the quarter, consisting of both new and existing customers, adding 31 new customers during the quarter, including:

  • One of the largest banks in Italy
  • A global leader in virtualization, networking and cloud infrastructure solutions
  • One of the top-selling car manufacturers in the U.K.

The Company also expanded business with:

  • One of the largest retail home improvement and appliance chains in North America
  • A leading telecommunications provider in the U.K.
  • One of the largest Internet marketing and media companies in the world

Net (Loss) Income

Net loss for the fourth quarter of 2013 was $0.7 million or $0.01 per share, as compared to net income of $1.5 million or $0.03 per share in the fourth quarter of 2012.    

Adjusted Net Income and Adjusted EBITDA

LivePerson considers adjusted net income and adjusted earnings before other income/(expense), taxes, depreciation, amortization, stock-based compensation and other non-cash charges, if any (adjusted EBITDA) to be important financial indicators of the Company's operational strength and the performance of its business. These results should be considered in addition to results prepared in accordance with generally accepted accounting principles in the United States (GAAP), but should not be considered as a substitute for, or superior to, GAAP results.

The difference between adjusted EBITDA per share, a non-GAAP measure, and GAAP EPS, is other income/(expense), taxes, depreciation, amortization, stock-based compensation and other non-cash charges, if any.  The difference between adjusted net income per share and GAAP EPS is amortization of purchased intangible assets and stock-based compensation.

A reconciliation of the differences between adjusted EBITDA and adjusted net income, and the most comparable financial measure calculated and presented in accordance with GAAP, is presented under the heading "Reconciliation of Non-GAAP Financial Information to GAAP" immediately following the Condensed Consolidated Statements of Operations included below.

Adjusted net income for the fourth quarter of 2013 was $3.1 million or $0.06 per share, as compared to $4.8 million or $0.08 per share in the fourth quarter of 2012.

Adjusted EBITDA for the fourth quarter of 2013 was $5.3 million or $0.10 per share, as compared to $8.0 million or $0.14 per share in the fourth quarter of 2012.

Cash

The Company's cash balance was $91.9 million at December 31, 2013 as compared to $77.4 million as of September 30, 2013.  The Company generated approximately $13.3 million of cash from operations in the fourth quarter, and incurred planned capital expenditures primarily related to the purchase of servers and computer networking equipment and expansion of its corporate offices, resulting in a cash outlay of approximately $1.4 million

Financial Expectations

Following is the Company's current expectation for financial and operating performance.   

First Quarter 2014

  • Revenue of $46.5 - $47.5 million
  • Diluted adjusted EBITDA of $0.07 - $0.09 per share
  • Diluted adjusted net income of $0.04 - $0.06 per share
  • GAAP EPS of $(0.04) - $(0.02)
  • Fully diluted share count of approximately 55.6 million

Full Year 2014

  • Revenue of $199.0 - $204.0 million
  • Diluted adjusted EBITDA of $0.37 - $0.41 per share
  • Diluted adjusted net income of $0.21 - $0.25 per share
  • GAAP EPS of $(0.11) - $(0.07)
  • Fully diluted share count of approximately 56.2 million

Other Full Year 2014 Assumptions

  • Amortization of purchased intangibles of approximately $4 million
  • Stock-compensation expense of approximately $14 million
  • Effective tax rate of approximately 23%, producing a potential tax benefit 
  • Depreciation of approximately $10 million
  • Capital expenditures of approximately $11 million

Stock-Based Compensation

Included in the accompanying financial results are expenses related to stock-based compensation, as follows (in thousands):


Three Months Ended

Twelve Months Ended



December 31, 2013

December 31, 2013


Cost of revenue

$398

$1,954


Sales and marketing

692

2,851


Product development

632

3,555


General and administrative

1,037

4,148


  Total

$2,759

$12,508






Amortization of Purchased Intangible Assets  

Included in the accompanying financial results are expenses related to the amortization of purchased intangible assets, as follows (in thousands):


Three Months Ended

Twelve Months Ended



December 31, 2013

December 31, 2013


Cost of revenue

$869

$1,772


General and administrative

199

871


  Total

$1,068

$2,643






 

Earnings Teleconference and Video Discussion Information

The Company will discuss its fourth quarter 2013 financial results during a teleconference today, February 12, 2014.  To participate via telephone, callers should dial in five to ten minutes prior to the 5:00pm Eastern start time; domestic callers (U.S. and Canada) should dial 877-507-3684, while international callers should dial 706-634-9559, both should reference the conference ID "51011147".  The conference call will also be simulcast live on the Internet and can be accessed by logging onto the investor relations section of the Company's web site at http://www.liveperson.com/about/ir

If you are unable to participate in the live call, the teleconference will be available for replay approximately two hours after the call.  To access the replay, please call 855-859-2056 (U.S. and Canada) or 404-537-3406 (international).  Please reference the conference ID "51011147".  A replay will also be available on the investor relations section of the Company's web site at http://www.liveperson.com/about/ir.  

The Company will also post a video discussion of its fourth quarter results on YouTube.  To view, click on the following link: http://www.youtube.com/user/myliveperson.

About LivePerson

LivePerson, Inc. (Nasdaq: LPSN) offers a cloud-based platform that enables businesses to proactively connect in real-time with their customers via chat, voice, and content delivery at the right time, through the right channel, including websites, social media, and mobile devices.  This "intelligent engagement" is driven by real-time behavioral analytics, producing connections based on a true understanding of business objectives and customer needs.

For more information, please visit www.liveperson.com.  To view other global press releases about LivePerson, please visit pr.liveperson.com.

Non-GAAP Financial Disclosure

Investors are cautioned that the following financial measures used in this press release are defined as "non-GAAP financial measures" by the Securities and Exchange Commission, or SEC: adjusted EBITDA, or earnings/(loss) before other income/(expense), taxes, depreciation, amortization, stock-based compensation, other non-cash charges, if any; and adjusted net income, or net income excluding amortization of intangible assets and stock-based compensation.  These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation.  In addition, although we have provided a reconciliation of these measures to the nearest comparable GAAP measures, they should not be construed as alternatives to any other measures of performance determined in accordance with generally accepted accounting principles, or as indicators of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that they fail to address.  We present this financial information because we believe that it is helpful to some investors as a measure of our performance.  We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our current results with our results from other reporting periods and with the results of other companies.

Safe Harbor Provision

Statements in this press release regarding LivePerson that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause actual future events or results to differ materially from such statements.  Any such forward-looking statements, including but not limited to financial guidance, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  It is routine for our internal projections and expectations to change as the quarter and year progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change.  Although these expectations may change, we are under no obligation to inform you if they do.  Actual events or results may differ materially from those contained in the projections or forward-looking statements.  Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: potential fluctuations in our quarterly revenue and operating results; the adverse effect that the global economic downturn may have on our business and results of operations; competition in the markets for online sales, marketing and customer service solutions, and online consumer services; our ability to retain existing clients and attract new clients; risks related to new regulatory or other legal requirements that could materially impact our business; impairments to goodwill that result in significant charges to earnings; volatility of the value of certain currencies in relation to the U.S. dollar, particularly the currency of regions where we have operations; additional regulatory requirements, tax liabilities, currency exchange rate fluctuations and other risks as we expand internationally; responding to rapid technological change and changing client preferences; our ability to retain key personnel and attract new personnel; our ability to expand our operations internationally; risks related to the ability to successfully integrate past or potential future acquisitions; risks related to the regulation or possible misappropriation of personal information belonging to our customers' Internet users; technology systems beyond our control and technology-related defects that could disrupt the LivePerson services; privacy concerns relating to the Internet that could result in new legislation or negative public perception; legal liability and/or negative publicity for the services provided to consumers via our technology platforms; risks related to protecting our intellectual property rights or potential infringement of the intellectual property rights of third parties; increased allowances for doubtful accounts as a result of an increasing amount of receivables due from customers with greater credit risk; delays in our implementation cycles; risks associated with our current or future stock repurchase programs, including whether such programs will enhance long-term stockholder value, and whether such stock repurchases could increase the volatility of the price of our common stock and diminish our cash reserves; risks related to our operations in Israel, and the civil and political unrest in that region; and risks related to our common stock being traded on more than one securities exchange, which may result in additional variations in the trading price of our common stock.  This list is intended to identify only certain of the principal factors that could cause actual results to differ from those discussed in the forward-looking statements.  Readers are referred to the reports and documents filed from time to time by us with the Securities and Exchange Commission for a discussion of these and other important risk factors that could cause actual results to differ from those discussed in forward-looking statements.

 

LivePerson, Inc.

Condensed Consolidated Statements of Operations

(In Thousands, Except Share and Per Share Data)

Unaudited




















Three Months Ended


Twelve Months Ended







December 31,


December 31,







2013


2012


2013


2012

Revenue




$      46,888


$      42,475


$    177,805


$    157,409














Costs and expenses:










Cost of revenue


11,213


10,128


42,555


35,579


Sales and marketing


16,369


12,795


62,488


49,614


General and administrative


10,388


8,823


39,968


31,606


Product development


9,306


8,170


36,397


30,051


Amortization of purchased intangibles


199


119


871


218




Total cost and expenses


47,475


40,035


182,279


147,068














(Loss) income from operations


(587)


2,440


(4,474)


10,341














Other income


73


221


337


376














(Loss) income before provision for (benefit from) income taxes


(514)


2,661


(4,137)


10,717














Provision for (benefit from) income taxes


194


1,169


(638)


4,362














Net (loss) income


$          (708)


$        1,492


$       (3,499)


$        6,355



























Net (loss) income per share of common stock:























Basic 



$         (0.01)


$           0.03


$         (0.06)


$           0.11















Diluted 



$         (0.01)


$           0.03


$         (0.06)


$           0.11














Weighted-average shares used to compute net (loss) income per share:


































Basic 



54,209,685


55,892,061


54,725,236


55,292,597















Diluted 



54,209,685


57,589,248


54,725,236


57,131,041

 

 

LivePerson, Inc.

Reconciliation of Non-GAAP Financial Information to GAAP

(In Thousands, Except Share and Per Share Data)

Unaudited



























Unaudited Supplemental Data










The following information is not a financial measure under generally accepted accounting principles (GAAP). In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with GAAP, or as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities as there may be significant factors or trends that it fails to address. We present this financial information because we believe that it is helpful to some investors as one measure of our operations. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our results with our results from other reporting periods and with the results of other companies.




















Three Months Ended


Twelve Months Ended







December 31, 


December 31, 







2013


2012


2013


2012

Net (loss) income in accordance with generally










accepted accounting principles


$          (708)


$        1,492


$       (3,499)


$        6,355


Add/(less):










(a)

Amortization of purchased intangibles


1,068


285


2,643


580


(b)

Stock-based compensation


2,759


3,069


12,508


10,715


(c)

Depreciation


2,041


2,160


8,090


7,329


(d)

Provision for (benefit from) income taxes


194


1,169


(638)


4,362


(e)

Other (income) 


(73)


(221)


(337)


(376)

Adjusted EBITDA (1)


$        5,281


$        7,954


$      18,767


$      28,965

Diluted adjusted EBITDA per common share


$           0.10


$           0.14


$           0.34


$           0.51














Weighted average shares used in diluted adjusted EBITDA 










per common share


55,396,496


57,589,248


55,930,735


57,131,041



























Net (loss) income in accordance with generally










accepted accounting principles


$          (708)


$        1,492


$       (3,499)


$        6,355


Add:












(a)

Amortization of purchased intangibles


1,068


285


2,643


580


(b)

Stock-based compensation


2,759


3,069


12,508


10,715

Adjusted net income


$        3,119


$        4,846


$      11,652


$      17,650

Diluted adjusted net income per common share


$           0.06


$           0.08


$           0.21


$           0.31














Weighted average shares used in diluted adjusted net income










per common share


55,396,496


57,589,248


55,930,735


57,131,041



























Adjusted EBITDA


$        5,281


$        7,954


$      18,767


$      28,965


Add/(less):










(a)

Changes in operating assets and liabilities


10,765


6,545


1,530


7,544


(b)

Provision for doubtful accounts


457


-


457


20


(c)

(Provision for) benefit from income taxes


(194)


(1,169)


638


(4,362)


(d)

Deferred income taxes


(3,072)


(1,547)


(4,771)


(2,872)


(e)

Other income


73


221


337


376

Net cash provided by operating activities


$      13,310


$      12,004


$      16,958


$      29,671














(1)  Earnings/(loss) before other income/(expense), taxes, depreciation, amortization, stock-based compensation and other non-cash charges.














 

LivePerson, Inc.

Condensed Consolidated Balance Sheets

(In Thousands)

Unaudited






























December 31, 2013


December 31, 2012









ASSETS













CURRENT ASSETS:





Cash and cash equivalents

$                   91,906


$                103,339


Accounts receivable, net

29,489


23,830


Prepaid expenses and other current assets

6,361


6,369


Deferred tax assets, net

5,426


2,616



Total current assets

133,182


136,154










Property and equipment, net

17,618


17,495


Intangibles, net

13,088


15,681


Goodwill

32,724


32,645


Deferred tax assets, net

6,243


4,183


Other assets

2,235


2,418



Total assets

$                205,090


$                208,576









LIABILITIES AND STOCKHOLDERS' EQUITY 












CURRENT LIABILITIES:





Accounts payable

$                   10,139


$                   11,125


Accrued expenses

25,419


17,911


Deferred revenue

8,747


6,525



Total current liabilities

44,305


35,561









Deferred revenue, net of current

468


1,263

Other liabilities

1,264


1,509



Total liabilities

46,037


38,333









Commitments and contingencies












Total stockholders' equity 

159,053


170,243



Total liabilities and stockholders' equity 

$                205,090


$                208,576

 

Investor contact:
Stacey Yonkus
212-609-4236
[email protected]


SOURCE LivePerson, Inc.

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