- Third Quarter Revenue of $117.5
Million
- Third Quarter Adjusted EBITDA of $16.4
Million
ACTIVE Network (NYSE:ACTV), the leader in cloud-based activity
and participant management™ solutions, today announced its
financial results for the third quarter ended September 30,
2013.
Q3 2013 Financial Highlights:
(All comparisons are made to the third quarter of 2012)
- Total net revenue up 8% to $117.5
million.
- Technology revenue increased 9% and
constituted 89%, or $104.4 million, of total net revenue.
- Net registration revenue increased 9%
to $79.0 million; registrations grew 6% and revenue per
registration was up 2%.
- Marketing services revenue constituted
11%, or $13.1 million, of total net revenue.
- Net loss was $5.3 million, compared to
net loss of $6.0 million.
- Adjusted EBITDA, a non-GAAP financial
measure, was $16.4 million.
- Excluding charges related to
transaction costs associated with ACTIVE Network entering into a
definitive agreement to be acquired by Vista Equity Partners and
management changes, Adjusted EBITDA was $19.5 million, up 27%.
“I am very pleased with our third quarter results,” said Jon
Belmonte, Interim CEO of ACTIVE Network. “During the quarter, we
entered into a definitive agreement to be acquired by Vista Equity
Partners, which we believe will be a very positive event for
stockholders and will help position us to further capitalize on the
market opportunity.”
Q3 2013 Key Business Highlights
- Marquee customer highlights included
wins from Run or Dye, Kentucky Derby Festival Marathon, Monterey
County Parks (CA), Arkansas State Parks, and Informatica World 2014
and 2015.
- ACTIVE Network launched a new version
of ACTIVE RegOnline™, the Company's entry-level online
event-management solution. The new ACTIVE RegOnline makes it easier
for event planners from Small and Mid-sized Businesses (SMBs) and
associations, to plan, promote, and manage events of all
sizes.
- ACTIVE Network saw a 5% increase in
summer camping across U.S. Federal parks, 30+ states, and regional
and private partners. Through ReserveAmerica.com, ACTIVE Network
provides consumers with the ability to search and reserve from more
than 210,000 campsites.
Merger Agreement with Vista Equity Partners
On September 28, 2013, ACTIVE Network entered into a definitive
agreement to be acquired by affiliates of Vista Equity Partners
(“Vista”), a leading private equity firm focused on investments in
software, data and technology-enabled businesses, in a transaction
valued at approximately $1.05 billion. Pursuant to the agreement,
Vista has commenced a tender offer to acquire all of the
outstanding shares of ACTIVE Network’s common stock for $14.50 per
share, in cash, payable without interest and less any applicable
withholding taxes. Any shares not tendered in the offer will be
acquired in a second-step merger at the same cash price as paid in
the tender offer. The transaction is expected to close before the
end of the fourth quarter of 2013. Upon the completion of the
transaction, ACTIVE Network will become a privately held
company.
Conference Call Information
Due to the previously announced merger agreement with Vista,
ACTIVE Network will not host a conference call in conjunction with
today's release of its third quarter 2013 results and will not be
updating prior financial guidance or providing financial guidance
for future periods.
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, 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. This press release
also contains forward-looking statements with respect to the tender
offer and related transactions, including the benefits expected
from the acquisition and the expected timing of the completion of
the transaction. Such statements are based on a number of
assumptions that could ultimately prove inaccurate, and are subject
to a number of risks, including uncertainties regarding the timing
of the closing of the transaction, uncertainties as to the number
of the Company’s stockholders who may tender their stock in the
tender offer, the possibility that various closing conditions for
the transaction may not be satisfied or waived, and general
economic and business conditions. Factors that could cause actual
results of the tender offer to differ materially include the
following: the risk of failing to satisfy conditions to the
transaction, the risk that Vista is unable to obtain adequate
financing, the risk that the transaction will not close or that
closing will be delayed, the risk that the Company’s business will
suffer due to uncertainty related to the transaction, the
competitive environment in the Company’s industry and competitive
responses to the transaction. 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.
© 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.
Notice to Investors
This press release is not a recommendation, an offer to purchase
or a solicitation of an offer to sell shares of ACTIVE Network’s
common stock. The solicitation and the offer to purchase shares of
ACTIVE Network’s common stock described in this press release will
be made only pursuant to the offer to purchase and related
materials that Vista has filed on Schedule TO with the SEC. In
addition, ACTIVE Network has filed its recommendation of the tender
offer on Schedule 14D-9 with the SEC. Additionally, ACTIVE Network
and Vista will file other relevant materials in connection with the
proposed acquisition of ACTIVE Network by Vista pursuant to the
terms of the merger agreement. INVESTORS AND STOCKHOLDERS OF ACTIVE
NETWORK ARE ADVISED TO READ THE SCHEDULE TO (INCLUDING AN OFFER TO
PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER
DOCUMENTS) AND THE SCHEDULE 14D-9, AS EACH MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, AND ANY OTHER RELEVANT DOCUMENTS
FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, BEFORE MAKING ANY
DECISION WITH RESPECT TO THE TENDER OFFER, BECAUSE THESE DOCUMENTS
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION
AND THE PARTIES THERETO.
Investors and stockholders may obtain free copies of the
Schedule TO and Schedule 14D-9, as each may be amended or
supplemented from time to time, and other documents filed by the
parties (when available), at the SEC’s web site at www.sec.gov or
by contacting the investor relations department of ACTIVE Network
at 10182 Telesis Court, San Diego, California 92121, by telephone
at (858) 964-3834 or by email at PR@activenetwork.com.
THE ACTIVE NETWORK, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands, except per share
data) (Unaudited)
Three Months Ended Nine Months
Ended September 30, September 30, 2013
2012 2013
2012 Net Revenue: Technology revenue $ 104,407 $ 96,170 $
318,870 $ 288,445 Marketing services revenue 13,128
13,049 37,036 36,776
Total net revenue 117,535 109,219 355,906 325,221 Cost of
net revenue: Cost of technology revenue 50,896 45,571 156,355
142,038 Cost of marketing services revenue 916
1,826 3,131 5,257 Total cost of
net revenue 51,812 47,397
159,486 147,295 Gross profit 65,723
61,822 196,420 177,926 Operating expenses: Sales and
marketing 25,307 24,154 79,281 73,462 Research and development
20,703 20,624 63,375 62,954 General and administrative 20,441
15,862 61,980 49,309 Amortization of intangibles 3,956
5,492 12,396 16,780
Total operating expenses 70,407 66,132
217,032 202,505 Loss from
operations (4,684 ) (4,310 ) (20,612 ) (24,579 ) Interest
income 13 23 44 73 Interest expense (151 ) (239 ) (486 ) (480 )
Other income (expense), net 431 486
(592 ) 1,363 Loss before provision for income
taxes (4,391 ) (4,040 ) (21,646 ) (23,623 ) Provision for income
taxes 904 1,982 3,349
5,062 Net loss $ (5,295 ) $ (6,022 ) $ (24,995
) $ (28,685 ) Net loss per share: Basic and diluted $ (0.08
) $ (0.10 ) $ (0.40 ) $ (0.49 ) Weighted-average shares:
Basic and diluted 62,757 59,444
61,718 58,259
THE ACTIVE
NETWORK, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31, 2013
2012 (Unaudited) Assets Current assets: Cash
and cash equivalents $ 103,330 $ 58,493 Restricted cash 308 1,145
Registration receivable 22,580 16,260 Accounts receivable, net
51,774 51,363 Inventories 3,918 4,809 Prepaid expenses and other
current assets 10,548 8,922 Total
current assets 192,458 140,992 Property and equipment, net
42,500 41,236 Software development costs, net 49,073 51,151
Goodwill 242,869 243,716 Intangible assets, net 46,564 62,806 Other
long-term assets 2,600 2,569 Total
assets $ 576,064 $ 542,470
Liabilities and
stockholders’ equity Current liabilities: Accounts payable $
3,107 $ 8,174 Registration fees payable 88,125 61,272 Accrued
expenses 51,669 38,865 Deferred revenue 69,715 66,846 Capital lease
obligations, current portion 2,278 2,774 Other current liabilities
3,495 4,373 Total current liabilities
218,389 182,304 Capital lease obligations, net of current
portion 1,088 2,462 Other long-term liabilities 5,690 6,192
Deferred tax liability 21,427 19,065
Total liabilities 246,594 210,023 Stockholders’ equity:
Common stock 64 62 Treasury stock (11,959 ) (11,959 ) Additional
paid-in capital 676,592 653,694 Accumulated other comprehensive
income 8,052 8,934 Accumulated deficit (343,279 )
(318,284 ) Total stockholders’ equity 329,470
332,447 Total liabilities and stockholders’ equity $ 576,064
$ 542,470
THE ACTIVE NETWORK,
INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
Nine Months Ended September 30,
2013 2012 Operating
activities Net loss $ (24,995 ) $ (28,685 ) Adjustments to
reconcile net loss to net cash provided by operating activities:
Depreciation and amortization of property and equipment 30,311
23,995 Amortization of intangible assets 15,970 21,132 Stock-based
compensation expense 19,086 11,992 Deferred tax liability 2,391
3,046 Other non-cash items (935 ) (2,431 ) Change in operating
assets and liabilities, net of effect of acquisitions: Restricted
cash 837 627 Registration receivable (6,321 ) (4,274 ) Accounts
receivable (453 ) (2,483 ) Inventories 891 (1,831 ) Prepaid
expenses and other assets (1,680 ) (2,692 ) Accounts payable and
accrued expenses 10,884 3,416 Registration fees payable 26,854 252
Deferred revenue 3,105 13,914 Other liabilities (329 )
1,170 Net cash provided by operating activities
75,616 37,148
Investing activities Purchases of property and
equipment (16,690 ) (12,665 ) Capitalized software development
(16,266 ) (17,194 ) Cash paid for acquisitions, net of cash
acquired - (38,037 ) Net cash used in
investing activities (32,956 ) (67,896 )
Financing
activities Proceeds from issuance of common stock 5,444 9,247
Payments on capital lease obligations (1,869 ) (3,552 ) Payments of
employee tax witholdings from equity transactions (1,896 ) -
Proceeds (repayment) of long-term debt -
(5,000 ) Net cash provided by financing activities 1,679 695 Effect
of exchange rates on cash 498 (147 ) Net
increase (decrease) in cash and cash equivalents 44,837 (30,200 )
Cash and cash equivalents at beginning of period 58,493
108,699 Cash and cash equivalents at end of
period $ 103,330 $ 78,499
THE ACTIVE
NETWORK, INC. SUPPLEMENTARY DATA (In thousands,
except revenue per registration) (Unaudited)
Operational Data:
Three Months Ended
Nine Months Ended September 30,
% September 30, % 2013
2012 change 2013
2012 change Net registration revenue $ 78,957 $
72,703 9 % $ 241,768 $ 220,076 10 % Registrations 26,840 25,207 6 %
74,716 71,466 5 % Net registration revenue per registration $ 2.94
$ 2.88 2 % $ 3.24 $ 3.08 5 %
GAAP and Non-GAAP
Gross Profit Margin: Three Months Ended % or
Nine Months Ended % or September 30,
bps September 30, bps 2013 2012
change 2013 2012 change Total net
revenue $ 117,535 $ 109,219 8 % $ 355,906 $ 325,221 9 % GAAP
gross profit $ 65,723 $ 61,822 6 % $ 196,420 $ 177,926 10 % Add
back: stock-based compensation 174 222 457 474 Add back:
depreciation & amortization 10,166 8,060
29,766 23,728 Non-GAAP gross
profit $ 76,063 $ 70,104 9 % $ 226,643 $ 202,128 12 % Gross
profit margin: GAAP gross profit margin 55.9 % 56.6 % (70) bps 55.2
% 54.7 % 50 bps Non-GAAP gross profit margin 64.7 % 64.2 % 50 bps
63.7 % 62.2 % 150 bps
Stock-Based Compensation
Expense: Three Months Ended Nine Months Ended
September 30, September 30, 2013 2012
2013 2012 Cost of net revenue $ 174 $ 222 $ 457 $ 474
Sales and marketing 1,242 1,007 2,833 2,709 Research and
development 674 662 1,683 1,782 General and administrative
3,544 2,770 14,113 7,027
Total stock-based compensation (1) $ 5,634 $ 4,661
$ 19,086 $ 11,992
(1) Management change costs included $0.6 million in
stock-based compensation in the three months ended September 30,
2013, and $6.3 million in stock-based compensation in the nine
months ended September 30, 2013 associated with the May and July
3013 separation agreements for the company's former Executive
Chairman and Chairman of the Board, Chief Executive Officer, and
Chief Legal 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 Nine Months Ended
September 30, September 30, 2013
2012 2013 2012
Non-GAAP net income (loss): GAAP net loss $ (5,295 ) $
(6,022 ) $ (24,995 ) $ (28,685 ) Add back: stock-based compensation
(1) 5,634 4,661 19,086 11,992 Add back: amortization of intangibles
5,137 6,900 15,970 21,132 Income tax effect (3,770 )
(4,046 ) (12,270 ) (11,593 ) Non-GAAP net income
(loss) $ 1,706 $ 1,493 $ (2,209 ) $ (7,154 ) Add
back: management change and deal costs (1) 3,100 - 4,800 - Income
tax effect (1,085 ) - (1,680 ) -
Non-GAAP net income (loss) excluding management change and
deal costs $ 3,721 $ 1,493 $ 911 $ (7,154 )
Weighted-average shares: Basic 62,757
59,444 61,718 58,259
Diluted 67,941 64,708 65,666
58,259
Non-GAAP net income (loss)
per share: Basic $ 0.03 $ 0.03 $ (0.04 ) $ (0.12
) Diluted $ 0.03 $ 0.02 $ (0.04 ) $ (0.12 )
Non-GAAP net income (loss) per share excluding management
change and deal costs: Basic $ 0.06 $ 0.03 $ 0.01
$ (0.12 ) Diluted $ 0.05 $ 0.02 $ 0.01
$ (0.12 )
Adjusted EBITDA: Three
Months Ended Nine Months Ended September 30,
September 30, 2013 2012 2013
2012 Net loss $ (5,295 ) $ (6,022 ) $ (24,995 ) $ (28,685 )
Add back: interest expense, net 138 216 442 407 Add back: provision
for income taxes 904 1,982 3,349 5,062 Add back: depreciation and
amortization 15,422 15,033 46,281 45,127 Add back: stock-based
compensation (1) 5,634 4,661 19,086 11,992 Add back: other (income)
expense, net (431 ) (486 ) 592
(1,363 ) Adjusted EBITDA $ 16,372 $ 15,384 $ 44,755
$ 32,540 Add back: management change and deal costs
(1) 3,100 - 4,800
- Adjusted EBITDA excluding management change and deal costs
$ 19,472 $ 15,384 $ 49,555 $ 32,540
(1) Management change costs included $0.6 million in
stock-based compensation and $0.4 million in other costs in the
three months ended September 30, 2013, and $6.3 million in
stock-based compensation and $1.9 million in other costs in the
nine months ended September 30, 2013 associated with the May and
July 2013 separation agreements for the company's former Executive
Chairman and Chairman of the Board, Chief Executive Officer, and
Chief Legal Officer. Deal costs included $2.7 million for banking,
accounting and legal costs in the three months ended September 30,
2013 and $2.9 million in the nine months ended September 30, 2013.
Media:ACTIVE NetworkKristin Carroll,
1-858-964-3834PR@ACTIVEnetwork.comorInvestors:The Blueshirt
GroupBrinlea Johnson,
1-212-331-8424Brinlea@blueshirtrgroup.comorThe Blueshirt
GroupAllise Furlani, 212-331-8433allise@blueshirtgroup.com
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