EXHIBIT 99.1
Limelight Networks(R) Reports Fourth Quarter and Full Year 2010 Results
TEMPE, Ariz., Feb. 14, 2011 (GLOBE NEWSWIRE) -- Limelight Networks, Inc. (Nasdaq:LLNW) today reported fourth quarter and full-year 2010 financial results. Highlights included:
- Record Q4 revenue of $55.2 million and full-year 2010 revenue of $183.3 million
- Q4 Core content delivery business revenue growth of 21% year-over-year
- Continued expansion of cloud-based and consulting services, which comprised 36% of Q4 revenue:
- Q4 Mobile revenue growth exceeded 200% year-over-year
- Q4 Site and application acceleration services growth exceeded 150% year over year
- Q4 Enterprise cloud storage growth exceeded 40% year-over-year
- Q4 Online video platform growth exceeded 110% year-over-year
- Achievement of $0.01 of non-GAAP net income per share in Q4, excluding acquisition-related income tax expense
"Limelight Networks' content delivery and cloud-based services have become embedded into the fabric of the Internet, which has, through computers, tablets, smartphones and Internet-connected televisions, become embedded into the fabric of our lives. We believe that our globally distributed, high-performance computing platform, and the solutions that run on it, are unique within the technology industry, positioning us well for continued growth and market share gains in 2011. We are focused on delivering value to our customers and helping them improve the efficacy of their online businesses in a world where content and ad dollars continue to shift online, the mobile web continues its rapid growth, and enterprise IT applications continue to migrate into the cloud," said Jeff Lunsford, chairman and chief executive officer.
Financial Highlights
For the fourth quarter of 2010, the Company reported revenue of $55.2 million, up 64 percent from the fourth quarter 2009 and up 11 percent sequentially from Q3 2010. The Company also reported Adjusted EBITDA of $8.1 million and non-GAAP net earnings, before share-based compensation, litigation expenses, amortization of intangible assets, and acquisition-related expenses, of $1.5 million, excluding acquisition-related income tax expense, or 1 cent per share on a fully diluted basis. GAAP net loss was $6.3 million, or 6 cents per basic share.
For the full year of 2010, the Company reported revenue of $183.3 million, compared to $131.7 million in 2009. The Company also reported Adjusted EBITDA of $25.8 million and non-GAAP net income, before share-based compensation, litigation expenses, amortization of intangible assets, and acquisition-related expenses, of $4.6 million or 5 cents per share on a fully diluted basis. GAAP net loss was $20.4 million, or 22 cents per basic share. A reconciliation of GAAP to non-GAAP net income is included in the tables that are attached to this earnings release.
Capital investments were $8.9 million for the fourth quarter and $34.3 million for the year. The Company ended the year with no bank debt and approximately $69 million in cash and short-term marketable securities.
2011 Outlook
The Company anticipates first quarter revenue to be in the range of $48.0-$49.5 million and full year revenue to increase 15 to 20% over 2010 reported revenue.
Financial Tables
| LIMELIGHT NETWORKS, INC. | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (In thousands, except per share data) | ||
| December 31, | December 31, | |
| 2010 | 2009 | |
| (Unaudited) | ||
| ASSETS | ||
| Current Assets: | ||
| Cash and cash equivalents | $ 56,741 | $ 89,509 |
| Marketable securities | 12,009 | 64,870 |
| Accounts receivable, net of reserves of $7,243 and $9,226 at December 31, 2010 and December 31, 2009 | 41,940 | 26,363 |
| Income taxes receivable | 721 | 617 |
| Prepaid expenses and other current assets | 9,628 | 9,654 |
| Total current assets | 121,039 | 191,013 |
| Property and equipment, net | 54,407 | 35,524 |
| Marketable securities, less current portion | 1,755 | 12 |
| Deferred tax asset, non-current | 718 | -- |
| Goodwill | 94,364 | 619 |
| Other intangible assets, net | 19,406 | 370 |
| Other assets | 6,951 | 8,132 |
| Total assets | $ 298,640 | $ 235,670 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current Liabilities: | ||
| Accounts payable | $ 12,236 | $ 5,144 |
| Deferred revenue, current portion | 6,877 | 12,199 |
| Capital lease obligation, current portion | 1,049 | -- |
| Other current liabilities | 21,608 | 14,140 |
| Total current liabilities | 41,770 | 31,483 |
| Deferred revenue, less current portion | -- | 1,377 |
| Capital lease obligation, less current portion | 1,750 | -- |
| Deferred income tax, less current portion | 598 | 10 |
| Other long term liabilities | 21 | -- |
| Total liabilities | 44,139 | 32,870 |
| 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; 100,068 and 85,011 shares issued and | ||
| outstanding at December 31, 2010 and December 31, 2009, respectively | 100 | 85 |
| Additional paid-in capital | 380,338 | 308,537 |
| Accumulated other comprehensive income | 329 | 93 |
| Accumulated deficit | (126,266) | (105,915) |
| Total stockholders' equity | 254,501 | 202,800 |
| Total liabilities and stockholders' equity | $ 298,640 | $ 235,670 |
| LIMELIGHT NETWORKS, INC. | ||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||
| (In thousands, except per share data) | ||||||
| (Unaudited) | ||||||
| Three Months Ended | Twelve Months Ended | |||||
| December 31, | September 30, | December 31, | September 30, | December 31, | December 31, | |
| 2010 | 2010 | 2009 | 2009 | 2010 | 2009 | |
| Revenues | $ 55,243 | $ 49,803 | $ 33,625 | $ 32,530 | $ 183,327 | $ 131,663 |
| Costs and operating expenses | ||||||
| Cost of revenues * † | 29,966 | 27,946 | 22,167 | 20,907 | 102,719 | 85,623 |
| General and administrative * † | 11,621 | 10,393 | 10,066 | 7,032 | 42,119 | 36,479 |
| Sales and marketing * | 13,323 | 12,724 | 8,672 | 8,060 | 46,752 | 32,587 |
| Research & development * | 5,141 | 4,491 | 2,059 | 2,024 | 15,755 | 7,937 |
| Provision for litigation | -- | -- | -- | -- | -- | (65,645) |
| Total costs and operating expenses | 60,051 | 55,554 | 42,964 | 38,023 | 207,345 | 96,981 |
| Operating (loss) income | (4,808) | (5,751) | (9,339) | (5,493) | (24,018) | 34,682 |
| Interest expense | (64) | (6) | (5) | (11) | (77) | (39) |
| Interest income | 147 | 210 | 295 | 330 | 914 | 1,345 |
| Other (expense) income | (105) | (120) | (146) | 15 | (222) | (14) |
| (Loss) income before taxes | (4,830) | (5,667) | (9,195) | (5,159) | (23,403) | 35,974 |
| Income tax expense (benefit) | 1,518 | 287 | 531 | 61 | (3,052) | 1,084 |
| Net (loss) income | $ (6,348) | $ (5,954) | $ (9,726) | $ (5,220) | $ (20,351) | $ 34,890 |
| Net (loss) income per share: | ||||||
| Basic | $ (0.06) | $ (0.06) | $ (0.11) | $ (0.06) | $ (0.22) | $ 0.41 |
| Diluted | $ (0.06) | $ (0.06) | $ (0.11) | $ (0.06) | $ (0.22) | $ 0.40 |
| Shares used in per share calculations: | ||||||
| Basic | 99,557 | 98,634 | 84,770 | 84,489 | 94,300 | 84,202 |
| Diluted | 99,557 | 98,634 | 84,770 | 84,489 | 94,300 | 87,972 |
| * Includes share-based compensation (see supplemental table for figures) | ||||||
| † Includes depreciation and amortization (see supplemental table for figures) | ||||||
| LIMELIGHT NETWORKS, INC. | ||||||
| SUPPLEMENTAL FINANCIAL DATA | ||||||
| (In thousands) | ||||||
| (Unaudited) | ||||||
| Three Months Ended | Twelve Months Ended | |||||
| December 31, | September 30, | December 31, | September 30, | December 31, | December 31, | |
| 2010 | 2010 | 2009 | 2009 | 2010 | 2009 | |
| Supplemental financial data (in thousands): | ||||||
| Share-based compensation: | ||||||
| Cost of revenues | $ 614 | $ 645 | $ 642 | $ 638 | $ 2,441 | $ 2,414 |
| General and administrative | 1,691 | 1,779 | 1,801 | 1,805 | 6,881 | 7,556 |
| Sales and marketing | 1,234 | 1,311 | 1,236 | 1,293 | 5,023 | 4,970 |
| Research and development | 804 | 819 | 648 | 633 | 3,056 | 2,523 |
| Total share-based compensation | $ 4,343 | $ 4,554 | $ 4,327 | $ 4,369 | $ 17,401 | $ 17,463 |
| Depreciation and amortization: | ||||||
| Network-related depreciation | $ 6,387 | $ 5,878 | $ 5,352 | $ 6,018 | $ 22,367 | $ 24,051 |
| Other depreciation and amortization | 497 | 680 | 619 | 568 | 2,460 | 2,259 |
| Amortization of intangible assets | 1,458 | 1,354 | 33 | 59 | 3,899 | 92 |
| Total depreciation and amortization | $ 8,342 | $ 7,912 | $ 6,004 | $ 6,645 | $ 28,726 | $ 26,402 |
| Net (decrease) increase in cash, cash equivalents | ||||||
| and marketable securities | $ (2,169) | $ (11,166) | $ 1,561 | $ (11,497) | $ (83,886) | $ (20,265) |
| End of period statistics: | ||||||
| Approximate number of active customers | 1,824 | 1,780 | 1,370 | 1,370 | 1,824 | 1,370 |
| Number of employees | 689 | 660 | 328 | 321 | 689 | 328 |
| LIMELIGHT NETWORKS, INC. | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (In thousands) | |||||||
| (Unaudited) | |||||||
| Three Months Ended | Twelve Months Ended | ||||||
| December 31, | September 30, | December 31, | September 30, | December 31, | December 31, | ||
| 2010 | 2010 | 2009 | 2009 | 2010 | 2009 | ||
| Cash flows from operating activities: | |||||||
| Net (loss) income | $ (6,348) | $ (5,954) | $ (9,726) | $ (5,220) | $ (20,351) | $ 34,890 | |
| Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | |||||||
| Depreciation and amortization | 8,342 | 7,912 | 6,004 | 6,645 | 28,726 | 26,402 | |
| Share-based compensation | 4,343 | 4,554 | 4,327 | 4,369 | 17,401 | 17,463 | |
| Deferred income taxes | (807) | (71) | -- | -- | (997) | -- | |
| Income tax expense (benefit) related to business acquisition | 1,899 | -- | -- | -- | (3,869) | -- | |
| Provision for litigation | -- | -- | -- | -- | -- | (65,645) | |
| Loss (gain) on foreign currency transactions | 22 | 159 | 20 | 7 | 17 | 201 | |
| Loss on sale of property and equipment | 27 | 58 | -- | -- | 179 | -- | |
| Accounts receivable (recovery) charges | (16) | 585 | 774 | 329 | 2,326 | 5,013 | |
| Accretion of marketable securities | 85 | (50) | 89 | (298) | 359 | (366) | |
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (2,857) | (5,089) | 555 | (1,648) | (8,363) | 2,348 | |
| Prepaid expenses and other current assets | (306) | 539 | (516) | (1,475) | 832 | (1,863) | |
| Income taxes receivable | 141 | (69) | (424) | (159) | 299 | (600) | |
| Other assets | 611 | 62 | 917 | (4,152) | 1,617 | (7,396) | |
| Accounts payable | 1,875 | (74) | (6) | 244 | 842 | (5,204) | |
| Deferred revenue | (2,588) | (1,913) | (1,506) | (291) | (6,878) | (3,591) | |
| Other current liabilities | 2,454 | 755 | 4,875 | 358 | 2,951 | (1,361) | |
| Other long term liabilities | (20) | 41 | -- | -- | -- | -- | |
| Net cash provided by (used in) operating activities | 6,857 | 1,445 | 5,383 | (1,291) | 15,091 | 291 | |
| Cash flows from investing activities: | |||||||
| Purchases of property and equipment | (8,903) | (11,675) | (3,759) | (10,586) | (34,308) | (20,407) | |
| Purchase of marketable securities | (1,039) | (8,715) | (25,500) | (32,905) | (28,509) | (71,235) | |
| Sale of marketable securities | 7,516 | 12,405 | 10,900 | 2,000 | 81,101 | 43,300 | |
| Acquisition of businesses, net of cash acquired | -- | (2,622) | -- | -- | (66,529) | 22 | |
| Net cash (used in) provided by investing activities | (2,426) | (10,607) | (18,359) | (41,491) | (48,245) | (48,320) | |
| Cash flows from financing activities: | |||||||
| Payment on capital lease obligations | (409) | -- | -- | -- | (409) | -- | |
| Payment of employee tax withholdings related to restricted stock | (948) | -- | (286) | -- | (1,579) | (753) | |
| Proceeds from exercise of stock options | 1,486 | 335 | 34 | 72 | 1,948 | 274 | |
| Net cash provided by (used in) financing activities | 129 | 335 | (252) | 72 | (40) | (479) | |
| Effect of exchange rate changes on cash | (48) | 285 | 290 | (5) | 426 | (163) | |
| Net increase (decrease) in cash and cash equivalents | 4,512 | (8,542) | (12,938) | (42,715) | (32,768) | (48,671) | |
| Cash and cash equivalents, beginning of period | 52,229 | 60,771 | 102,447 | 145,162 | 89,509 | 138,180 | |
| Cash and cash equivalents, end of period | $ 56,741 | $ 52,229 | $ 89,509 | $ 102,447 | $ 56,741 | $ 89,509 | |
Use of Non-GAAP Financial Measures
To evaluate our business, we consider and use Non-GAAP net income (loss) and Adjusted EBITDA 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, amortization of intangibles 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 and, 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 Adjusted EBITDA as EBITDA adjusted for operational expenses that we do not consider reflective o f our ongoing operations. 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. 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 Adjusted EBITDA are not defined under United States generally accepted accounting principles, or United States GAAP, and are not measures of operating income, operating performance or liquidity presented in accordance with United States GAAP. Our Non-GAAP net income (loss), EBITDA and Adjusted EBITDA have limitations as analytical tools, and when assessing our operating performance, Non-GAAP net income (loss), EBITDA and Adjusted EBITDA should not be considered in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with United States GAAP. Some of these limitations include, but are not limited to:
- EBITDA and Adjusted EBITDA 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 the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt that we may incur;
- 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 Adjusted EBITDA 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 Adjusted EBITDA 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 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
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 | Twelve Months Ended | |||||
| December 31, | September 30, | December 31, | September 30, | December 31, | December 31, | |
| 2010 | 2010 | 2009 | 2009 | 2010 | 2009 | |
| GAAP net (loss) income | $ (6,348) | $ (5,954) | $ (9,726) | $ (5,220) | $ (20,351) | $ 34,890 |
| Provision for litigation | -- | -- | -- | -- | -- | (65,645) |
| Share-based compensation | 4,343 | 4,554 | 4,327 | 4,369 | 17,401 | 17,463 |
| Litigation defense expenses | 22 | 9 | 827 | 273 | 2,149 | 5,412 |
| Acquisition related expenses | 169 | 345 | 1,481 | -- | 1,527 | 1,481 |
| Amortization of intangible assets | 1,458 | 1,354 | 33 | 59 | 3,899 | 92 |
| Non-GAAP net (loss) income | $ (356) | $ 308 | $ (3,058) | $ (519) | $ 4,625 | $ (6,307) |
| LIMELIGHT NETWORKS, INC. | ||||||
| Reconciliation of GAAP Net Income (Loss) to EBITDA to Adjusted EBITDA | ||||||
| (In thousands) | ||||||
| (Unaudited) | ||||||
| Three Months Ended | Twelve Months Ended | |||||
| December 31, | September 30, | December 31, | September 30, | December 31, | December 31, | |
| 2010 | 2010 | 2009 | 2009 | 2010 | 2009 | |
| GAAP net (loss) income | $ (6,348) | $ (5,954) | $ (9,726) | $ (5,220) | $ (20,351) | $ 34,890 |
| Depreciation and amortization | 8,342 | 7,912 | 6,004 | 6,645 | 28,726 | 26,402 |
| Interest expense | 64 | 6 | 5 | 11 | 77 | 39 |
| Interest and other income (expense) | (42) | (90) | (149) | (346) | (692) | (1,331) |
| Income tax (benefit) expense | 1,518 | 287 | 531 | 61 | (3,052) | 1,084 |
| EBITDA | 3,534 | 2,161 | (3,335) | 1,151 | 4,708 | 61,084 |
| Provision for litigation | -- | -- | -- | -- | -- | (65,645) |
| Share-based compensation | 4,343 | 4,554 | 4,327 | 4,369 | 17,401 | 17,463 |
| Litigation defense expenses | 22 | 9 | 827 | 273 | 2,149 | 5,412 |
| Acquisition related expenses | 169 | 345 | 1,481 | -- | 1,527 | 1,481 |
| Adjusted EBITDA | $ 8,068 | $ 7,069 | $ 3,300 | $ 5,793 | $ 25,785 | $ 19,795 |
Conference Call
At approximately 4:05 p.m. EST (1:05 p.m. PST), management will host a quarterly conference call for investors. Investors can access this call toll-free at 1-877-388-8480 within the United States or +1 678-809-1592 outside of the U.S. The conference call will also be audiocast live from http://www.llnw.com and a replay will be available following the call from the Company's website.
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, the integration of acquired businesses and litigation and acquisition related expenses. Forward-looking statements represent the current judgment and expectations of Limelight Networks and 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-lo oking 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) provides solutions that enable business and technology decision makers to profit from the shift of content and advertising to the online world, the explosive growth of mobile and connected devices, and the migration of IT applications and services into the cloud. Over 1800 customers worldwide use Limelight's massively scalable software services to engage audiences, enhance brand presence, analyze viewer preferences, optimize advertising, manage and monetize digital assets, and ultimately build stronger customer relationships. For more information, please visit http://www.limelightnetworks.com or follow us on Twitter at www.twitter.com/llnw.
Copyright (C) 2011 Limelight Networks, Inc. All rights reserved. EyeWonder is a trademark of Limelight Networks, Inc. All product or service names are the property of their respective owners.
CONTACT: Paul Alfieri of Limelight Networks, Inc.
+1-646-875-8835, palfieri@llnw.com