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Limelight Networks(R) Reports Financial Results for the First Quarter of 2016Limelight Networks, Inc. (Nasdaq:LLNW) (Limelight), a global leader in digital content delivery, today reported revenue of $41.4 million for the first quarter which ended March 31, 2016, down 2 percent, compared to $42.3 million in the first quarter of 2015, and down 1 percent when adjusting for the impact of foreign currency fluctuations. GAAP gross margin was 40.2% in the first quarter of 2016, an increase of 120 basis points from 39.0% in the first quarter of 2015. On a GAAP basis, Limelight reported a net loss of $5.9 million, or $0.06 per basic share, for the first quarter of 2016, compared to a net loss of $5.7 million, or $0.06 per basic share in the first quarter of 2015. Non-GAAP net loss was $1.3 million or $0.01 per basic share for the first quarter of 2016, compared to a non-GAAP net loss of $2.4 million, or $0.02 per basic share in the first quarter of 2015. Non-GAAP net loss for the first quarter of 2016 excludes $3.5 million of share-based compensation and $1.2 million of litigation related expense. EBITDA was negative $0.7 million for the first quarter of 2016, compared to negative $2.7 million for the first quarter of 2015. Adjusted EBITDA was $4.0 million for the first quarter of 2016 compared to $0.4 million for the first quarter of 2015. During the quarter, Limelight drew $12.8 million of debt from an existing bank line and ended the quarter with $87 million of cash and cash equivalents compared to $73 million at the end of the fourth quarter of 2015. Limelight ended the first quarter with 501 employees and employee equivalents, down from 509 at the end of the fourth quarter of 2015, and down from 533 at the end of the first quarter of 2015. For the full year 2016, Limelight expects revenues to be between $180 and $188 million. Gross margin is expected to improve by over 200 basis points compared to the full year 2015. Non-GAAP net loss/income is expected to be between $(0.05) and $0.05 per share. Capital expenditures for the full year 2016 should be under $20 million. Commenting on the first quarter results, Chief Executive Officer, Robert Lento said, "I am pleased with the quarter's performance. While revenue was slightly short of our expectations, gross margin and Adjusted EBITDA showed solid improvement. With limited capital expenditures and utilizing software enhancements, we added material capacity to our infrastructure while also improving performance." "Recent developments in the longstanding litigation with Akamai in the '703 patent case have capped the upper end of our potential range of loss at $63 million dollars. We continue to pursue all reasonable channels to reduce or completely eliminate this exposure. We are driving hard to move from a cash consuming, unprofitable entity to a cash generating, profitable enterprise. The management team is strongly invested in achieving this goal, as evidenced by several of our senior leaders taking half of their salary in equity each month throughout 2016. We believe this quarter's operating and financial results reinforce that the company is on the right track, and our growing confidence is reflected in our revised guidance." Financial Tables
Use of Non-GAAP Financial Measures To evaluate our business, we consider and use non-generally accepted accounting principles (Non-GAAP) net loss, EBITDA and Adjusted EBITDA as supplemental measures 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 loss to be an important indicator of overall business performance. We define Non-GAAP net loss to be U.S. GAAP net loss, adjusted to exclude share-based compensation, litigation expenses, and amortization of intangible assets. 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 as U.S. GAAP net loss adjusted to exclude interest and other (income) expense, interest expense, income tax expense, and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted to exclude share-based compensation and litigation expenses. We use Adjusted EBITDA as a supplemental measure to review and assess operating performance. We also believe use of Adjusted EBITDA facilitates investors' use of operating performance comparisons from period-to-period, as well as across companies. The terms Non-GAAP net loss, EBITDA and Adjusted EBITDA are not defined under 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 loss, EBITDA and Adjusted EBITDA have limitations as analytical tools, and when assessing our operating performance, Non-GAAP net loss, EBITDA and Adjusted EBITDA should not be considered in isolation, or as a substitute for net loss or other consolidated income statement data prepared in accordance with U.S. GAAP. Some of these limitations include, but are not limited to:
We compensate for these limitations by relying primarily on our U.S. GAAP results and using Non-GAAP net income (loss), EBITDA, and Adjusted EBITDA only as supplemental support for management's analysis of business performance. Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are calculated as follows for the periods presented in thousands: Reconciliation of Non-GAAP Financial Measures Limelight is presenting the most directly comparable U.S. GAAP financial measures and reconciling the non-GAAP financial metrics to the comparable U.S. GAAP measures. Per share amounts may not foot due to rounding.
For future periods, we are unable to provide a reconciliation of EBITDA and Adjusted EBITDA to net loss as a result of the uncertainty regarding, and the potential variability of, the amounts of depreciation and amortization, interest expense, interest and other (income) expense and income tax expense, that may be incurred in the future. Conference Call At approximately 4:30 p.m. EDT (1:30 p.m. PDT) today, management will host a quarterly conference call for investors. Investors can access this call toll-free at 877-388-8480 within the United States or +1 678-809-1592 outside of the U.S. The conference call will also be audio cast live from http://www.limelight.com and a replay will be available following the call from the Limelight website. Forward-Looking Statements This press release contains forward-looking statements that involve risks and uncertainties. These statements include, among others, statements regarding our strategic focus; our expectations regarding revenues for the full year 2016; gross margin, non-GAAP net income (loss) and capital expenditures for the full year 2016; our ability to generate cash for the full year 2016; our expectations regarding the Akamai litigation and related potential damages; our future prospects; and our position in our industry. Our expectations and beliefs regarding these matters may not materialize. The potential risks and uncertainties that could cause actual results or outcomes to differ materially from the results or outcomes predicted include, among other things, reduction of demand for our services from new or existing customers, unforeseen changes in our hiring patterns, adverse outcomes in litigation, and experiencing expenses that exceed our expectations. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Forms 10-K and 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online on our investor relations website at investors.limelightnetworks.com and on the SEC website at www.SEC.gov. All information provided in this release and in the attachments is as of April 27, 2016, and we undertake no duty to update this information in light of new information or future events, unless required by law. About Limelight Limelight Networks (NASDAQ: LLNW), a global leader in digital content delivery, empowers customers to better engage online audiences by enabling them to securely manage and globally deliver digital content, on any device. The company's award winning Limelight Orchestrate™ platform includes an integrated suite of content delivery technology and services that helps organizations secure digital content, deliver exceptional multi-screen experiences, improve brand awareness, drive revenue, and enhance customer relationships - all while reducing costs. For more information, please visit www.limelight.com, read our blog, follow us on Twitter, Facebook and LinkedIn and be sure to visit Limelight Connect. Copyright (C) 2016 Limelight Networks, Inc. All rights reserved. All product or service names are the property of their respective owners. View source version on businesswire.com: http://www.businesswire.com/news/home/20160427006647/en/ |