EX-99 2 newsrelease.htm PRESS RELEASE Limelight Networks(R) Reports Fourth Quarter and Full-Year 2011 Results

EXHIBIT 99.1

Limelight Networks(R) Reports Fourth Quarter and Full-Year 2011 Results

TEMPE, Ariz., Feb. 13, 2012 (GLOBE NEWSWIRE) -- Limelight Networks, Inc. (Nasdaq:LLNW) ("Limelight") today reported fourth quarter and full year 2011 financial results.

"After two years of transformational work, Limelight Networks now offers high-value integrated solutions which allow our customers to manage their entire digital presence across web, mobile, social, and large screen channels," said Jeff Lunsford, chairman and chief executive officer. "These cloud-based solutions are being well-received by customers and prospects, and helped us to exceed our revenue forecasts for the fourth quarter. Our high-performance global computing platform allows us to offer advanced features across mobile, On-line Video Platform, content management, front-end acceleration, content delivery, transcoding, live streaming, social enablement and cloud storage. The integration of these differentiates us from point solution providers and allows us to solve complex business problems for our customers. Our content delivery business also helped us exceed revenue forecasts, growing 9% sequentially during a third quarter in a row of favorable CDN pricing trends. This CDN business is unique and valuable, having funded and fueled the construction of a globally distributed platform that solves what we believe is one of the hardest problems in cloud computing – that of delivering broadcast quality video to hyper-connected viewers across 800+ device types across the globe. The hardware, software and operational platform required to pull this off provides an exceptional foundation for building high-value cloud applications at the workflow layer in the future."

Specific highlights for the fourth quarter included:

  • Revenue of $46 million and full-year 2011 revenue of $171.3 million from continuing operations
  • Value added services revenue growth of 70% year-over-year
  • Value added services comprised 29% of revenue:
  • Limelight video platform revenue grew in excess of 160% year-over-year
  • Mobile internet and tablet computing revenue grew in excess of 70% year-over-year
  • Enterprise cloud storage revenue grew in excess of 55% year-over-year
  • Site and application acceleration services revenue grew in excess of 25% year-over-year

Financial Highlights

For the fourth quarter of 2011, the Company reported revenue of $46 million from continuing operations, adjusted EBITDA of $6.5 million and non-GAAP net loss, before share-based compensation, litigation expenses, amortization of intangible assets, acquisition-related expenses, and discontinued operations of $0.6 million or 1 cent per basic share. GAAP net loss from continuing operations was $6 million, or 6 cents per basic share.

For the full year of 2011, the Company reported revenue of $171.3 million from continuing operations. The Company also reported Adjusted EBITDA of $18.4 million and non-GAAP net loss from continuing operations, before share-based compensation, litigation expenses, amortization of intangible assets, acquisition-related expenses, and discontinued operations of $9.7 million or $0.09 per basic share.

Capital investments were $3.5 million in the quarter and $30.4 million for the year. The Company ended the year with no bank debt and approximately $140 million in cash and short-term marketable securities.

Stock Buyback Program

During the fourth quarter the Company repurchased approximately 5.6 million shares of common stock for $15.2 million at an average price of $2.78 per share, including commissions. The Company is nearing the completion of its $25 million stock buyback program, having repurchased approximately 9.7 million shares of common stock at an average price of $2.57 per share since commencement.

2012 Outlook

The Company anticipates first quarter revenue to be in the range of $43-$45 million.

Financial Tables

LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
     
  December 31,  December 31, 
  2011 2010
  (Unaudited)  
ASSETS    
Current Assets:    
Cash and cash equivalents  $ 120,349  $ 54,861
Marketable securities  19,850  12,009
Accounts receivable, net of reserves of $4,391 and $6,732 at December 31, 2011 and December 31, 2010  28,045  28,022
Deferred income tax   62  --
Income taxes receivable  31  215
Prepaid expenses and other current assets  20,646  8,277
Assets of discontinued operations  --  64,739
Total current assets  188,983  168,123
Property and equipment, net  56,368  52,891
Marketable securities, less current portion  51  103
Deferred income tax, less current portion  1,177  718
Goodwill  80,105  68,390
Other intangible assets, net  9,207  2,061
Other assets  10,454  6,354
Total assets  $ 346,345  $ 298,640
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current Liabilities:    
Accounts payable  $ 6,797  $ 10,300
Deferred revenue, current portion  7,287  6,554
Capital lease obligation, current portion  1,750  934
Income taxes payable  774  1,427
Other current liabilities  13,195  15,327
Liabilities of discontinued operations  --  6,301
Total current liabilities  29,803  40,843
Capital lease obligation, less current portion  2,124  1,641
Deferred income tax, less current portion  580  26
Deferred revenue, less current portion  539  --
Other long term liabilities  4,194  21
Total liabilities  37,240  42,531
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; 300,000 shares authorized at December 31, 2011 and 150,000 shares authorized  at December 31, 2010; 104,349 and 100,068 shares issued and outstanding at December 31, 2011 and December 31, 2010, respectively  104  100
Additional paid-in capital  460,845  380,338
Contingent consideration  219  1,608
Accumulated other comprehensive (loss) income   (509)  329
Accumulated deficit  (151,554)  (126,266)
Total stockholders' equity  309,105  256,109
Total liabilities and stockholders' equity  $ 346,345  $ 298,640
     
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,
  2011 2011 2010 2010 2011 2010
Revenues  $ 45,979  $ 42,352  $ 43,024  $ 39,952  $ 171,292  $ 154,223
Costs and operating expenses            
Cost of revenues * +  27,666  27,278  26,672  24,976  109,586  94,582
General and administrative * +  10,173  9,915  7,913  7,027  36,925  32,287
Sales and marketing *  10,178  9,176  9,724  10,021  40,081  38,614
Research & development *  4,592  4,360  3,351  2,909  17,146  10,841
Total costs and operating expenses  52,609  50,729  47,660  44,933  203,738  176,324
             
Operating loss   (6,630)  (8,377)  (4,636)  (4,981)  (32,446)  (22,101)
             
Interest expense  (74)  (89)  (59)  --  (299)  (62)
Interest income  128  186  143  210  752  910
Other income (expense)  (328)  (18)  (89)  (145)  (311)  (250)
Loss from continuing operations before taxes  (6,904)  (8,298)  (4,641)  (4,916)  (32,304)  (21,503)
Income tax (benefit) expense  (909)  (1,896)  (383)  406  (2,238)  727
Loss from continuing operations  (5,995)  (6,402)  (4,258)  (5,322)  (30,066)  (22,230)
Discontinued operations:            
(Loss) gain from discontinued operations, net of tax  (558)  11,420  (2,090)  (632)  4,778  1,879
Net (loss) income   $ (6,553)  $ 5,018  $ (6,348)  $ (5,954)  $ (25,288)  $ (20,351)
             
Net (loss) income per share:            
Basic            
Continuing operations  $ (0.06)  $ (0.06)  $ (0.04)  $ (0.05)  $ (0.28)  $ (0.24)
Discontinued operations  $ --   $ 0.10  $ (0.02)  $ (0.01)  $ 0.05  $ 0.02
Total  $ (0.06)  $ 0.04  $ (0.06)  $ (0.06)  $ (0.23)  $ (0.22)
             
Diluted            
Continuing operations  $ (0.06)  $ (0.06)  $ (0.04)  $ (0.05)  $ (0.28)  $ (0.24)
Discontinued operations  $ --   $ 0.10  $ (0.02)  $ (0.01)  $ 0.05  $ 0.02
Total  $ (0.06)  $ 0.04  $ (0.06)  $ (0.06)  $ (0.23)  $ (0.22)
             
Shares used in per share calculations:            
Basic  106,253  113,662  99,557  98,634  109,236  94,300
Diluted  106,253  113,662  99,557  98,634  109,236  94,300
             
             
* 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,
  2011 2011 2010 2010 2011 2010
Supplemental financial data (in thousands):            
Share-based compensation:            
Cost of revenues  $ 614  $ 514  $ 580  $ 609  $ 2,419  $ 2,359
General and administrative  2,000  1,093  1,410  1,418  6,132  5,984
Sales and marketing  844  695  1,137  1,246  3,776  4,840
Research and development  730  687  780  795  3,554  2,999
Total share-based compensation  $ 4,188  $ 2,989  $ 3,907  $ 4,068  $ 15,881  $ 16,182
             
Depreciation and amortization:            
Network-related depreciation  $ 7,022  $ 7,035  $ 6,330  $ 5,828  $ 28,030  $ 22,224
Other depreciation and amortization  714  725  379  578  2,437  2,140
Amortization of intangible assets  819  774  140  121  2,350  319
Total depreciation and amortization  $ 8,555  $ 8,534  $ 6,849  $ 6,527  $ 32,817  $ 24,683
             
Net (decrease) increase in cash, cash equivalents and marketable securities:  $ (17,545)  $ 44,248  $ (3,045)  $ (11,963)  $ 73,277  $ (87,418)
             
End of period statistics:            
Approximate number of active customers  1,565  1,602  1,567  1,565  1,565  1,567
Number of employees  482  473  405  384  482  405
             
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,
  2011 2011 2010 2010 2011 2010
             
             
Cash flows from operating activities:            
Net (loss) income   $ (6,553)  $ 5,018  $ (6,348)  $ (5,954)  $ (25,288)  $ (20,351)
(Loss) income from discontinued operations  (558)  11,420  (2,090)  (632)  4,778  1,879
Net loss from continuing operations  (5,995)  (6,402)  (4,258)  (5,322)  (30,066)  (22,230)
             
Adjustments to reconcile net loss to net cash            
 provided by operating activities:            
Depreciation and amortization  8,555  8,533  6,849  6,521  32,817  24,683
Share-based compensation  4,188  2,989  3,907  4,068  15,881  16,182
Deferred income taxes  (183)  43  (728)  10  (214)  (718)
Loss (gain) on foreign currency transactions  (18)  --  --  --  (18)  --
Loss (gain) on sale of property and equipment  --  --  (104)  60  --  48
Accounts receivable charges  262  298  121  (565)  1,181  1,333
Accretion of marketable securities  27  (81)  85  (50)  (63)  359
Non cash tax benefit associated with sale of discontinued operations  (407)  (2,165)  --  --  (2,572)  --
Non cash cost basis investment  (359)  (397)  --  --  (1,038)  --
Changes in operating assets and liabilities:            
Accounts receivable  (379)  (1,623)  (768)  (2,447)  5  (2,953)
Prepaid expenses and other current assets  1,102  (1,028)  156  671  (582)  1,221
Income taxes receivable  452  (106)  41  94  184  418
Other assets  (296)  370  594  216  (3,859)  1,828
Accounts payable  (4,815)  2,666  1,286  (300)  (2,491)  288
Deferred revenue  1,540  45  (2,796)  (1,881)  (1,021)  (7,023)
Other current liabilities  754  (2,039)  (1,537)  1,497  (3,236)  2,024
Income taxes payable  (1,045)  --  (314)  (427)  (1,357)  (478)
Other long term liabilities  341  549  --  21  1,344  21
Net cash provided by operating activities  3,724  1,652  2,534  2,166  4,895  15,003
             
Cash flows from investing activities:            
Purchase of marketable securities  (7,396)  (9,688)  (1,039)  (8,715)  (22,712)  (28,509)
Sale of marketable securities  1,412  2,350  7,339  12,405  14,932  80,924
Purchases of property and equipment  (3,491)  (7,529)  (8,321)  (11,509)  (30,363)  (33,501)
Acquisition of discontinued operations  --  --  --  --  --  (63,907)
Acquisition of businesses, net of cash acquired  --  133  --  (2,622)  (7,360)  (2,622)
Proceeds from sale of discontinued operations  --  61,000  --  --  61,000  --
Net cash (used in) provided by investing activities  (9,475)  46,266  (2,021)  (10,441)  15,497  (47,615)
             
Cash flows from financing activities:            
Payments on capital lease obligations  (402)  (352)  (192)  --  (1,384)  (192)
Proceeds from exercise of stock options  109  136  1,486  335  731  1,948
Proceeds from secondary public offering, net  --  (48)  --  --  77,049  --
Cash paid for repurchase of common stock  (15,164)  (9,210)  --  --  (24,374)  --
Payment of employee tax withholdings related to restricted stock  (133)  (113)  (950)  (245)  (1,193)  (1,582)
Net cash (used in) provided by financing activities  (15,590)  (9,587)  344  90  50,829  174
Effect of exchange rate changes on cash  447  (420)  21  --  351  210
             
Cash flows from discontinued operations:            
Cash (used in) provided by operating activities of discontinued operations  (2,597)  (899)  3,040  4  (5,400)  (1,603)
Cash used in investing activities of discontinued operations  --  (143)  (591)  (169)  (684)  (817)
Net cash (used in) provided by discontinued operations  (2,597)  (1,042)  2,449  (165)  (6,084)  (2,420)
Net (decrease) increase in cash and cash equivalents  (23,491)  36,869  3,327  (8,350)  65,488  (34,648)
Cash and cash equivalents, beginning of period   143,840  106,971  51,534  59,884  54,861  89,509
Cash and cash equivalents, end of period  $ 120,349  $ 143,840  $ 54,861  $ 51,534  $ 120,349  $ 54,861
             

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, amortization of intangibles, acquisition related expenses and discontinued operations. We define EBITDA as GAAP net income (loss) before interest income, interest expense, other income and expense, provision for income taxes, depreciation and amortization, and discontinued operations. 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 of 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,
  2011 2011 2010 2010 2011 2010
             
GAAP net (loss) income   $ (6,553)  $ 5,018  $ (6,348)  $ (5,954)  $ (25,288)  $ (20,351)
             
Share-based compensation  4,188  2,989  3,907  4,068  15,881  16,182
Litigation defense expenses  301  463  22  9  1,376  2,149
Acquisition related expenses  117  (41)  169  345  776  1,527
Amortization of intangible assets  819  774  140  121  2,350  319
(Income) loss from discontinued operations  558  (11,420)  2,090  632  (4,778)  (1,879)
             
Non-GAAP net loss  $ (570)  $ (2,217)  $ (20)  $ (779)  $ (9,683)  $ (2,053)
             
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,
  2011 2011 2010 2010 2011 2010
             
GAAP net (loss) income  $ (6,553)  $ 5,018  $ (6,348)  $ (5,954)  $ (25,288)  $ (20,351)
             
Depreciation and amortization  8,555  8,534  6,849  6,527  32,817  24,684
Interest expense  74  89  59  --  299  62
Interest and other (income) expense  200  (168)  (54)  (65)  (441)  (660)
Income tax (benefit) expense   (909)  (1,896)  (383)  406  (2,238)  727
Loss (income) from discontinued operations  558  (11,420)  2,090  632  (4,778)  (1,879)
             
EBITDA  1,925  157  2,213  1,546  371  2,583
             
Share-based compensation  4,188  2,989  3,907  4,068  15,881  16,182
Litigation defense expenses  301  463  22  9  1,376  2,149
Acquisition related expenses  117  (41)  169  345  776  1,527
             
Adjusted EBITDA   $ 6,531  $ 3,568  $ 6,311  $ 5,968  $ 18,404  $ 22,441
             

Conference Call

At approximately 4:30 p.m. EST (1:30 p.m. PST) 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 audiocast live from http://www.limelight.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-looking 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. Our worldwide customers 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.limelight.com or follow us on Twitter at www.twitter.com/llnw.

Copyright (C) 2012 Limelight Networks, Inc. All rights reserved. All product or service names are the property of their respective owners.

CONTACT: Heather Miller
         215-867-8600 ext. 239
         media@llnw.com