EX-99.1 2 d577835dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

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ACTIVE Network Reports Second Quarter 2013 Financial Results

 

   

Record Second Quarter Revenue of $132.4 Million

 

   

Strong Second Quarter Adjusted EBITDA of $22.2 Million

 

   

Company Issues Improved Full Year 2013 Adjusted EBITDA Guidance

SAN DIEGO, CALIF. – August 1, 2013ACTIVE Network (NYSE: ACTV), the leader in cloud-based activity and participant management™ solutions, today announced its financial results for the second quarter ended June 30, 2013. The Company also announced today that it has formed a Strategic Transactions Committee to consider and evaluate strategic alternatives.

Q2 2013 Financial Highlights:

(All comparisons are made to the second quarter of 2012)

 

   

Total net revenue up 9% to $132.4 million.

 

   

Technology revenue increased 10% and constituted 90%, or $119.5 million, of total net revenue.

 

   

Net registration revenue increased 10% to $92.3 million; registrations grew 6% and revenue per registration up 4%.

 

   

Marketing services revenue constituted 10%, or $12.9 million, of total net revenue.

 

   

Net loss was $4.5 million, compared to net loss of $2.3 million.

 

   

Adjusted EBITDA, a non-GAAP financial measure, was $22.2 million. Excluding charges related to management changes, Adjusted EBITDA was $23.7 million up 18%.

“I am pleased with our strong second quarter results – with revenues at the top end of our outlook range and Adjusted EBITDA exceeding the high end of our guidance,” said Jon Belmonte, Interim CEO of ACTIVE Network. “During the quarter, we commenced on a number of prioritization efforts designed to strengthen our financial performance and extend our market leadership position.”

“We believe our focus on operational efficiency will result in significant progress towards our future Adjusted EBITDA margin target of 23-27%,” said Scott Mendel, CFO of ACTIVE Network. “Our prioritization efforts drove strong margin accretion in the second quarter which we believe will continue, while helping position us for sustainable long-term growth.”

Q2 2013 Key Business Highlights

 

   

Marquee customer highlights included wins from Symantec™, SAS™ Institute, City of Mesa, AZ, YMCA™ of East Bay, CA, District of Cook County, IL, YMCA™ of Greater Kansas City, City of Carlsbad, CA Parks & Recreation, World Wrestling Camps™, Ann Arbor, MI Art Center and Rock–N-Glow™ 5Ks.

 

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ACTIVE’s Conference™ solution powered a record number of large, complex technology events during the quarter including Cisco Live 2013, Adobe Max 2013, and Symantec Vision 2013, among others.

 

   

ACTIVE Network powered 200,000 games over 81-days during the United States Bowling Congress (USBC) 2013 Women’s Championships held April 12 through June 30 in Reno, Nevada.

 

   

ACTIVE Network announced a strategic partnership with RaceHQ™ to support software solutions that help race directors build and deliver great events.

Financial Outlook

Third Quarter 2013 – For the third quarter of 2013, ACTIVE Network expects total revenue to be in the range of $113 million to $116 million. Registrations are expected to grow approximately 2% to 4% and revenue per registration is expected to grow approximately 1% to 4% compared to the same period in the prior year. The Company expects Adjusted EBITDA in the range of $15 million to $17 million, and a net loss of $9 million to $4 million.

Full Year 2013 – Total revenue is expected to be in the range of $451 million to $456 million and Adjusted EBITDA is expected to be in the range of $51 million to $54 million. Excluding charges in the second quarter of 2013 related to management changes, Adjusted EBITDA is expected to be in the range of $52.5 million to $55.5 million, an improvement from the Company’s previously issued Adjusted EBITDA outlook. The Company expects a net loss of $41 million to $35 million.

Formation of a Strategic Transactions Committee

Separately, the Company noted it has received expressions of interest from outside parties ranging from an investment in ACTIVE Network to an acquisition of the Company. As a result, ACTIVE Network announced today its Board of Directors has a committee in place to evaluate strategic alternatives.

“The Strategic Transactions Committee and the entire Board of Directors intend to evaluate all options carefully in order to maximize shareholder value, including the continued execution of its stand-alone plan,” said Jon Belmonte, Interim CEO of ACTIVE Network. “The management team remains focused on execution of its operating plan.”

The Company noted there can be no assurances as to whether any strategic alternative involving a third party will be recommended by the Board or undertaken or, if so, upon what terms and conditions. The

 

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Company does not intend to disclose developments with respect to the progress of its evaluation of strategic alternatives until such time as the Board has determined a course of action or otherwise deems disclosure appropriate. The Board has retained Citi as financial advisor to assist in this process.

Conference Call Information

The conference call dial-in number is (877) 703-6106 for domestic participants and (857) 244-7305 for international participants. A live webcast of the conference call will also be available and can be accessed within the investor relations section of the ACTIVE Network corporate website at: http://investors.activenetwork.com/.

A replay of the call will be available starting at 6:30 p.m. Eastern Time (3:30 p.m. Pacific Time) on August 1, 2013 through 11:59 p.m. Eastern Time (8:59 p.m. Pacific Time) on August 8, 2013. To listen to the replay, dial (888) 286-8010 or (617) 801-6888 outside of the United States and use the passcode 72332144. The replay will also be available via webcast at: http://investors.activenetwork.com/.

About ACTIVE Network

ACTIVE Network (NYSE: ACTV) is on a mission to make the world a more active place. With deep expertise in activity and participant management™, our ACTIVE Works® cloud technology helps organizations transform and grow their businesses. We do this through technology solutions that power the world’s activities, as well as online destinations such as ACTIVE.com® that connect people with the things they love to do. Serving ~55,000 global business customers and driving ~90 million transactions annually, we help organizations get participants, manage their events and build communities. ACTIVE Network is headquartered in San Diego, California and has over 30 offices worldwide. Learn more at ACTIVEnetwork.com or ACTIVE.com and engage with us on Twitter @ACTIVEnetwork, @ACTIVE and on Facebook.

Note With Respect to Non-GAAP Financial Measures

In addition to using GAAP financial results, the Company’s management measures and reports non-GAAP financial measures including Adjusted EBITDA, Non-GAAP net income (loss) and Non-GAAP net income (loss) per share. The most directly comparable GAAP financial results for these non-GAAP financial measures are Net income (loss), Net income (loss) and Net income (loss) per share, respectively. Management uses these non-GAAP financial measures to evaluate the Company’s performance and operations. Management also uses these non-GAAP financial measures for business planning, to evaluate acquisition opportunities and as a measurement to create incentives and to compensate the Company’s management team. In addition, management believes the exclusion or inclusion of certain amounts in calculating these non-GAAP financial measures can provide a useful measure to investors for period-to-period comparisons. These non-GAAP financial measures, however,

 

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should be used in addition to, and in conjunction with, the Company’s financial results presented in accordance with GAAP. The Company strongly encourages investors to review its financial statements in their entirety and to not rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare the Company’s results with other companies’ non-GAAP financial measures having the same or similar names. Please see Reconciliation of GAAP to Non-GAAP Results below for a reconciliation of our GAAP to non-GAAP financial measures.

Forward-Looking Statements

The Active Network, Inc. cautions you that the statements included in this press release that are not a description of historical facts are forward-looking statements within the meaning of the federal securities laws. Any such statements are subject to substantial risks and uncertainties, including the Company’s ability to generate revenue and control expenses in order to achieve and maintain profitability, the Company’s ability to maintain an adequate rate of growth and improve its operations, including growing its registrations and revenue from registrations, and the Company’s ability to successfully manage its acquisitions and investments in businesses, applications and technologies, the effects of the Company’s recent management change, and the Company’s ability to successfully consider and evaluate its strategic alternatives, as well as the other risks detailed from time to time in the reports it files with the Securities and Exchange Commission. As a result of these risks and uncertainties, the Company’s actual results may differ materially from those expressed in any forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement and the Company undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof.

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© 2013 The Active Network, Inc. All rights reserved. ACTIVE.com, ACTIVE Works and StarCite are registered trademarks of The Active Network, Inc. ACTIVE Network is a trademark of The Active Network, Inc. All other trademarks are the property of their respective owners.

 

Media Contact:    Investor Contact:
Kristin Carroll, ACTIVE Network    Brinlea Johnson, The Blueshirt Group
PR@ACTIVEnetwork.com    Brinlea@blueshirtrgroup.com
1-858- 964-3834    1-212-331-8424
   Allise Furlani, The Blueshirt Group
   allise@blueshirtgroup.com
   212-331-8433

 

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THE ACTIVE NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

                                                                           
     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2013     2012     2013     2012  

Net Revenue:

        

Technology revenue

   $ 119,473      $ 108,155      $ 214,463      $ 192,275   

Marketing services revenue

     12,887        13,409        23,908        23,727   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenue

     132,360        121,564        238,371        216,002   

Cost of net revenue:

        

Cost of technology revenue

     56,413        50,812        105,459        96,467   

Cost of marketing services revenue

     1,024        2,115        2,215        3,431   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of net revenue

     57,437        52,927        107,674        99,898   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     74,923        68,637        130,697        116,104   

Operating expenses:

        

Sales and marketing

     27,148        24,284        53,974        49,308   

Research and development

     21,496        21,121        42,672        42,330   

General and administrative

     25,031        16,903        41,539        33,447   

Amortization of intangibles

     3,986        5,596        8,440        11,288   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     77,661        67,904        146,625        136,373   
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations

     (2,738     733        (15,928     (20,269

Interest income

     16        25        31        50   

Interest expense

     (153     (90     (335     (241

Other income (expense), net

     (470     (524     (1,023     877   
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before provision for income taxes

     (3,345     144        (17,255     (19,583

Provision for income taxes

     1,127        2,469        2,445        3,080   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (4,472   $ (2,325   $ (19,700   $ (22,663
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share:

        

Basic and diluted

   $ (0.07   $ (0.04   $ (0.32   $ (0.39
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares:

        

Basic and diluted

     61,611        58,322        61,190        57,655   
  

 

 

   

 

 

   

 

 

   

 

 

 


THE ACTIVE NETWORK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

                                     
     June 30,     December 31,  
     2013     2012  
     (Unaudited)        

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 108,135      $ 58,493   

Restricted cash

     624        1,145   

Registration receivable

     31,281        16,260   

Accounts receivable, net

     52,980        51,363   

Inventories

     4,588        4,809   

Prepaid expenses and other current assets

     11,151        8,922   
  

 

 

   

 

 

 

Total current assets

     208,759        140,992   

Property and equipment, net

     44,527        41,236   

Software development costs, net

     49,869        51,151   

Goodwill

     242,369        243,716   

Intangible assets, net

     51,607        62,806   

Other long-term assets

     2,536        2,569   
  

 

 

   

 

 

 

Total assets

   $ 599,667      $ 542,470   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 6,383      $ 8,174   

Registration fees payable

     117,242        61,272   

Accrued expenses

     42,826        38,865   

Deferred revenue

     73,207        66,846   

Capital lease obligations, current portion

     2,319        2,774   

Other current liabilities

     3,719        4,373   
  

 

 

   

 

 

 

Total current liabilities

     245,696        182,304   

Capital lease obligations, net of current portion

     1,793        2,462   

Other long-term liabilities

     6,039        6,192   

Deferred tax liability

     20,707        19,065   
  

 

 

   

 

 

 

Total liabilities

     274,235        210,023   

Stockholders’ equity:

    

Common stock

     62        62   

Treasury stock

     (11,959     (11,959

Additional paid-in capital

     667,936        653,694   

Accumulated other comprehensive income

     7,377        8,934   

Accumulated deficit

     (337,984     (318,284
  

 

 

   

 

 

 

Total stockholders’ equity

     325,432        332,447   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 599,667      $ 542,470   
  

 

 

   

 

 

 


THE ACTIVE NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

                                     
     Six Months Ended  
     June 30,  
     2013     2012  

Operating activities

    

Net loss

   $ (19,700   $ (22,663

Adjustments to reconcile net loss to net cash provided by operating activities:

    

Depreciation and amortization of property and equipment

     20,026        15,863   

Amortization of intangible assets

     10,833        14,231   

Stock-based compensation expense

     13,452        7,331   

Deferred tax liability

     1,689        1,799   

Other non-cash items

     (652     (1,713

Change in operating assets and liabilities, net of effect of acquisitions:

    

Restricted cash

     521        627   

Registration receivable

     (15,030     (7,809

Accounts receivable

     (1,747     (6,699

Inventories

     220        (2,311

Prepaid expenses and other assets

     (2,221     (1,318

Accounts payable and accrued expenses

     4,669        (1,809

Registration fees payable

     55,978        39,944   

Deferred revenue

     6,675        13,105   

Other liabilities

     (95     (359
  

 

 

   

 

 

 

Net cash provided by operating activities

     74,618        48,219   

Investing activities

    

Purchases of property and equipment

     (13,909     (9,343

Capitalized software development

     (11,123     (10,996

Cash paid for acquisitions, net of cash acquired

     —          (38,037
  

 

 

   

 

 

 

Net cash used in investing activities

     (25,032     (58,376

Financing activities

    

Proceeds from issuance of common stock

     1,663        6,850   

Payments on capital lease obligations

     (1,124     (2,737

Payments of employee tax withholdings from equity transactions

     (1,059     —     

Proceeds (repayment) of long-term debt

     —          5,000   
  

 

 

   

 

 

 

Net cash provided by financing activities

     (520     9,113   

Effect of exchange rates on cash

     576        151   
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     49,642        (893

Cash and cash equivalents at beginning of period

     58,493        108,699   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 108,135      $ 107,806   
  

 

 

   

 

 

 


THE ACTIVE NETWORK, INC.

SUPPLEMENTARY DATA

(In thousands, except revenue per registration)

(Unaudited)

Operational Data:

 

                                                                             
      Three Months Ended           Six Months Ended        
     June 30,     %     June 30,     %  
     2013     2012     change     2013     2012     change  

Net registration revenue

     92,266        83,854        10     162,811        147,373        10

Registrations

     29,738        28,036        6     47,876        46,259        3

Net registration revenue per registration

   $ 3.10      $ 2.99        4   $ 3.40      $ 3.19        7

 

GAAP and Non-GAAP Gross Profit Margin:

            
     Three Months Ended     % or     Six Months Ended     % or  
     June 30,     bps     June 30,     bps  
     2013     2012     change     2013     2012     change  

Total net revenue

   $ 132,360      $ 121,564        9   $ 238,371      $ 216,002        10

GAAP gross profit

   $ 74,923      $ 68,637        9   $ 130,697      $ 116,104        13

Add back: stock-based compensation

     118        192          283        252     

Add back: depreciation & amortization

     10,130        7,950          19,600        15,668     
  

 

 

   

 

 

     

 

 

   

 

 

   

Non-GAAP gross profit

   $ 85,171      $ 76,779        11   $ 150,580      $ 132,024        14

Gross profit margin:

            

GAAP gross profit margin

     56.6     56.5     10  bps      54.8     53.8     100  bps 

Non-GAAP gross profit margin

     64.3     63.2     110  bps      63.2     61.1     210  bps 

Stock-Based Compensation Expense:

 

                                                                           
     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2013      2012      2013      2012  

Cost of net revenue

   $ 118       $ 192       $ 283       $ 252   

Sales and marketing

     841         1,006         1,591         1,702   

Research and development

     410         668         1,009         1,120   

General and administrative

     8,157         2,436         10,569         4,257   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock-based compensation (1)

   $ 9,526       $ 4,302       $ 13,452       $ 7,331   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Management change costs included $5.7 million in stock-based compensation and $1.5 million in other costs in the three months ended June 30, 2013 associated with the May 2013 separation agreements for the Company’s former Executive Chairman and Chairman of the Board, and Chief Executive Officer.


THE ACTIVE NETWORK, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands, except per share data)

(Unaudited)

Non-GAAP Earnings:

 

                                                               
      Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2013     2012     2013     2012  

Non-GAAP net income (loss):

        

GAAP net loss

   $ (4,472   $ (2,325   $ (19,700   $ (22,663

Add back: stock-based compensation (1)

     9,526        4,302        13,452        7,331   

Add back: amortization of intangibles

     5,178        7,074        10,833        14,231   

Income tax effect

     (5,147     (3,982     (8,500     (7,547
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

   $ 5,085      $ 5,069      $ (3,915   $ (8,648
  

 

 

   

 

 

   

 

 

   

 

 

 

Add back: management change costs (1)

     1,500        —          1,500        —     

Income tax effect

     (525     —          (525     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss) excluding management change costs

   $ 6,060      $ 5,069      $ (2,940   $ (8,648
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares:

        

Basic

     61,611        58,322        61,190        57,655   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     64,848        64,962        61,190        57,655   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss) per share:

        

Basic

   $ 0.08      $ 0.09      $ (0.06   $ (0.15
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.08      $ 0.08      $ (0.06   $ (0.15
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss) per share excluding management change costs:

        

Basic

   $ 0.10      $ 0.09      $ (0.05   $ (0.15
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.09      $ 0.08      $ (0.05   $ (0.15
  

 

 

   

 

 

   

 

 

   

 

 

 

 

Adjusted EBITDA:

        
      Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2013     2012     2013     2012  

Net loss

   $ (4,472   $ (2,325   $ (19,700   $ (22,663

Add back: interest expense, net

     137        65        304        191   

Add back: provision for income taxes

     1,127        2,469        2,445        3,080   

Add back: depreciation and amortization

     15,460        15,118        30,859        30,094   

Add back: stock-based compensation (1)

     9,526        4,302        13,452        7,331   

Add back: other (income) expense, net

     470        524        1,023        (877
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 22,248      $ 20,153      $ 28,383      $ 17,156   
  

 

 

   

 

 

   

 

 

   

 

 

 

Add back: management change costs (1)

     1,500        —          1,500        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA excluding management change costs

   $ 23,748      $ 20,153      $ 29,883      $ 17,156   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Management change costs included $5.7 million in stock-based compensation and $1.5 million in other costs in the three months ended June 30, 2013 associated with the May 2013 separation agreements for the Company’s former Executive Chairman and Chairman of the Board, and Chief Executive Officer.


THE ACTIVE NETWORK, INC.

FUTURE PERFORMANCE—3RD QUARTER AND FULL YEAR 2013 OUTLOOK

(In thousands, except per share data)

 

                                                                           
     Estimated     Estimated  
     3rd Quarter 2013     Full Year 2013  
     Low End     High End     Low End     High End  

Reconciliation of GAAP to Non-GAAP Results:

        

Net loss

   $ (9,000   $ (4,000   $ (41,000   $ (35,000

Add back: interest, taxes and other

     2,000        1,000        6,000        5,000   

Add back: depreciation and amortization

     16,000        15,000        62,000        61,000   

Add back: stock-based compensation (1)

     6,000        5,000        24,000        23,000   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 15,000      $ 17,000      $ 51,000      $ 54,000   
  

 

 

   

 

 

   

 

 

   

 

 

 

Add back: management change costs (1)

         1,500        1,500   
      

 

 

   

 

 

 

Adjusted EBITDA excluding management change costs

       $ 52,500      $ 55,500   
      

 

 

   

 

 

 

Net loss per share:

        

Net loss

   $ (9,000   $ (4,000   $ (41,000   $ (35,000
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares—basic and diluted

     62,000        63,000        62,000        63,000   

Net loss per share—basic and diluted

   $ (0.15   $ (0.06   $ (0.66   $ (0.56
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss):

        

GAAP net loss

   $ (9,000   $ (4,000   $ (41,000   $ (35,000

Add back: stock-based compensation (1)

     6,000        5,000        24,000        23,000   

Add back: amortization of intangibles

     5,500        5,000        21,000        20,000   

Income tax effect

     (4,000     (3,500     (15,800     (15,100
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

   $ (1,500   $ 2,500      $ (11,800   $ (7,100
  

 

 

   

 

 

   

 

 

   

 

 

 

Add back: management change costs (1)

         1,500        1,500   

Income tax effect

         (500     (500
      

 

 

   

 

 

 

Non-GAAP net loss excluding management change costs

       $ (10,800   $ (6,100
      

 

 

   

 

 

 

Weighted average shares—basic

     62,000        63,000        62,000        63,000   

Weighted average shares—diluted

     N/A        66,000        N/A        N/A   

Non-GAAP net income (loss) per share:

        

Basic

   $ (0.02   $ 0.04      $ (0.19   $ (0.11
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.02   $ 0.04      $ (0.19   $ (0.11
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss per share excluding management change costs, basic and diluted

       $ (0.17   $ (0.10
      

 

 

   

 

 

 

 

(1) Management change costs included $5.7 million in stock-based compensation and $1.5 million in other costs in the three months ended June 30, 2013 associated with the May 2013 separation agreements for the Company’s former Executive Chairman and Chairman of the Board, and Chief Executive Officer.