UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
_____________________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of
Report (Date of earliest event reported): August
3, 2006
LivePerson,
Inc.
(Exact
Name of Registrant as Specified in its Charter)
|
Delaware
|
0-30141
|
13-3861628
|
|
(State
or other Jurisdiction
of
Incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer
Identification
No.)
|
|
462
Seventh Avenue, New York, New York
|
10018
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
|
Registrant's
telephone number, including area code:
(212) 609-4200
|
|
_____________________
(Former
name or former address, if changed since last
report)
|
_____________________
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
Item
2.02. Results
of Operations and Financial Condition.
A
copy of
the press release issued by LivePerson, Inc. on August 3, 2006, announcing
its
results of operations and financial condition for the quarter ended June 30,
2006, is included herewith as Exhibit 99.1 and is incorporated herein by
reference. The information included in this Current Report on Form 8-K
(including Exhibit 99.1 hereto) that is furnished pursuant to this Item 2.02
shall not be deemed to be “filed” for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that Section or Sections 11 and 12(a) (2) of the Securities
Act
of 1933, as amended. The information contained herein and in the accompanying
exhibit shall not be incorporated by reference into any filing of the
Registrant, whether made before or after the date hereof, regardless of any
general incorporation language in such filing, unless expressly incorporated
by
specific reference into such filing.
Item
9.01. Financial
Statements and Exhibits.
(d)
Exhibits. The following documents are included as exhibits to this
report:
| 99.1 |
Press
release issued August 3, 2006.
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
LIVEPERSON,
INC.
(Registrant)
|
|
Date:
August 3, 2006
|
By:
|
/s/
TIMOTHY E. BIXBY
|
|
Timothy
E. Bixby
|
||
|
President,
Chief Financial Officer and
Secretary
|
EXHIBIT
INDEX
|
99.1
|
Press
release issued August 3, 2006.
|
For
Immediate Release
Media
Contacts:
|
Tim
Bixby
LivePerson,
Inc.
(212)
609-4200
bixby@liveperson.com
|
Budd
Zuckerman
Genesis
Select Corp.
(303)
415-0200
budd@genesisselect.com
|
LivePerson
Reports Second Quarter Revenue Increase of 40% to $7.4
million
Quarterly
Revenue Increases 8% from Prior Quarter; Company Begins
Integration
of Proficient Systems Acquisition
NEW
YORK,
NY - August 3, 2006 - LivePerson, Inc. (Nasdaq: LPSN), a provider of online
conversion solutions, today announced financial results for the second quarter
ended June 30, 2006.
Revenue
for the second quarter was $7.4 million, a 40% increase from the second quarter
of 2005, and an 8% sequential increase as compared to the first quarter of
2006.
Revenue growth was due primarily to continuing strong sales of
TimpaniTM
Sales
& Marketing to new and existing customers, as well as solid growth in sales
of LivePerson Pro and Contact Center to small and mid-size businesses. Timpani
Sales & Marketing analyzes website traffic in real time, enabling LivePerson
clients to proactively engage high-value buyers based on their shopping
behavior, thereby increasing online customer conversion rates.
“We
are
very pleased with the results for the quarter,” CEO Robert LoCascio said. “We
are continuing to see positive results from our increase in sales and marketing
investment over the past nine months, especially in signed enterprise contracts
that will impact future quarters. As a result, we expect 10-11% sequential
organic revenue growth in the third quarter. We also recently announced the
closing of the acquisition of Proficient Systems. We have begun to integrate
our
two companies and are very optimistic about our ability to deliver solutions
to
new and existing customers.”
The
company’s updated full year revenue guidance represents 45% annual revenue
growth; of which 40% is organic growth. The company’s prior revenue guidance
indicated an expected annual revenue growth rate of approximately
35%.
LivePerson
signed several new blue-chip clients during the quarter, including Netquote,
IDT, and New Line Cinema, and expanded business with several existing customers,
including Charles Schwab and Qwest.
Net
income for the second quarter of 2006 was $0.4 million or $0.01 per share,
unchanged as compared to the second quarter of 2005. Included in these figures
for the three months ended June 30, 2006 is the impact of amortization of
stock-based compensation expense of $0.4 million related to the adoption of
SFAS
No. 123(R). There was no stock-based compensation expense in the three months
ended June 30, 2005 as the company was not required to adopt SFAS No. 123(R)
until January 1, 2006.
Earnings
before interest, taxes, depreciation, amortization and stock-based compensation
(EBITDA) for the second quarter of 2006 was $1.0 million as compared to $0.8
million in the second quarter of 2005 and $1.0 million in the first quarter
of
2006.
The
company’s cash balance was unchanged at $19.1 million at June 30, 2006 as
compared to the prior quarter. An increase in cash from operations of $0.4
million in the quarter was offset by the cash impact of capital expenditures
and
one-time capital costs related to expansion within the UK.
The
company reduced its valuation allowance against deferred tax assets resulting
in
an effective tax rate of zero for the six months ended June 30,
2006.
The
difference between EBITDA per share, a non-GAAP measure, and GAAP EPS, is
interest, taxes, depreciation, amortization and stock-based compensation.
A
reconciliation of the differences between EBITDA and the most comparable
financial measure calculated and presented in accordance with generally accepted
accounting principles (GAAP) is located under the heading “Reconciliation of
Non-GAAP Financial Information to GAAP” immediately following the Condensed
Consolidated Statements of Income included in this press release.
LivePerson
considers EBITDA and cash from operations to be important financial indicators
of the company's operational strength and the performance of its business.
EBITDA should be considered in addition to results prepared in accordance with
GAAP, but should not be considered a substitute for, or superior to, GAAP
results. The non-GAAP measures included in this press release have been
reconciled to the nearest GAAP measure in the table below.
Financial
Expectations
The
company currently expects the following financial results:
| · |
Revenue
of $8.15-$8.25 million for the third quarter of 2006 (10-11% sequential
quarterly revenue growth), excluding
the revenue impact of the Proficient
acquisition
|
| · |
Revenue
from the Proficient acquisition of $0.5 million for the third quarter
of
2006, effective as of the transaction closing date of July 18,
2006
|
| · |
Total
revenue of $8.6-$8.7 million for the third quarter of
2006
|
| · |
EBITDA
of $0.03 per share and GAAP EPS of $0.01 for the third quarter of
2006
|
| · |
Revenue
of $32.2-$32.8 million for the full year
2006
|
| · |
EBITDA
of $0.13 per share and GAAP EPS of $0.04 for the full year
2006
|
| · |
GAAP
EPS expectations include additional expense of $0.01 per share per
quarter
for amortization of intangible assets related to the Proficient
acquisition
|
| · |
Share
count will increase by approximately 2 million shares due to the
Proficient acquisition during the third quarter, and may increase
by up to
2.05 million additional shares during the second quarter of 2007
based
upon the revenue earn out provisions related to the acquisition of
Proficient Systems
|
GAAP
EPS
expectations include the estimated impact of a change in accounting policy
related to adopting SFAS No. 123(R) as of January 1, 2006. The additional
expense related to this change is expected to be $0.05 per share and $0.01
per
share, for the full year 2006 and the third quarter of 2006, respectively,
based
upon the unamortized balance of stock-based compensation expense as of June
30,
2006 and the expected impact on stock-based compensation of the Proficient
acquisition. This impact may change based upon additional stock option grants,
if any, methodology refinement or other factors.
|
LivePerson,
Inc.
|
|||||||||||||
|
Condensed
Consolidated Statements of Income
|
|||||||||||||
|
(In
Thousands, Except Share and Per Share Data)
|
|||||||||||||
|
Unaudited
|
|||||||||||||
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
|
June
30,
|
June
30,
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
Total
revenue
|
$
|
7,416
|
$
|
5,283
|
$
|
14,293
|
$
|
10,237
|
|||||
|
Operating
expenses:
|
|||||||||||||
|
Cost
of revenue
|
1,642
|
1,019
|
3,103
|
1,882
|
|||||||||
|
Product
development
|
1,018
|
688
|
1,898
|
1,363
|
|||||||||
|
Sales
and marketing
|
2,856
|
1,690
|
5,502
|
3,175
|
|||||||||
|
General
and administrative
|
1,437
|
1,096
|
2,939
|
2,367
|
|||||||||
|
Amortization
of other intangibles
|
232
|
232
|
464
|
467
|
|||||||||
|
Total
operating expenses
|
7,185
|
4,725
|
13,906
|
9,254
|
|||||||||
|
Income
from operations
|
231
|
558
|
387
|
983
|
|||||||||
|
Other
income, net
|
170
|
59
|
313
|
102
|
|||||||||
|
Income
before provision for income taxes
|
401
|
617
|
700
|
1,085
|
|||||||||
|
Provision
for income taxes
|
-
|
216
|
-
|
380
|
|||||||||
|
Net
income
|
$
|
401
|
$
|
401
|
$
|
700
|
$
|
705
|
|||||
|
Basic
net income per common share
|
$
|
0.01
|
$
|
0.01
|
$
|
0.02
|
$
|
0.02
|
|||||
|
Diluted
net income per common share
|
$
|
0.01
|
$
|
0.01
|
$
|
0.02
|
$
|
0.02
|
|||||
|
Weighted
average shares outstanding used in basic net
|
|||||||||||||
|
income
per common share calculation
|
38,900,328
|
37,487,015
|
38,578,791
|
37,460,574
|
|||||||||
|
Weighted
average shares outstanding used in diluted net
|
|||||||||||||
|
income
per common share calculation
|
42,818,687
|
39,400,983
|
42,471,432
|
39,408,879
|
|||||||||
|
LivePerson,
Inc.
|
||||||||||||
|
Reconciliation
of Non-GAAP Financial Information to GAAP
|
||||||||||||
|
(In
Thousands, Except Share and Per Share Data)
|
||||||||||||
|
Unaudited
|
||||||||||||
|
Unaudited
Supplemental Data
|
||||||||||||
|
The
following information is not a financial measure under generally
accepted
accounting principles (GAAP). In addition, it should not be construed
as
an alternative to any other measures of performance determined
in
accordance with GAAP, or as an indicator of our operating performance,
liquidity or cash flows generated by operating, investing and financing
activities as there may be significant factors or trends that it
fails to
address. We present this financial information because we believe
that it
is helpful to some investors as one measure of our operations.
We caution
investors that non-GAAP financial information, by its nature, departs
from
traditional accounting conventions; accordingly, its use can make
it
difficult to compare our results with our results from other reporting
periods and with the results of other
companies.
|
||||||||||||
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
|
June
30, 2006
|
June
30, 2006
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
Net
income in accordance with generally
|
|||||||||||||
|
accepted
accounting principles
|
$
|
401
|
$
|
401
|
$
|
700
|
$
|
705
|
|||||
|
Add/(less):
|
|||||||||||||
|
(a)
Amortization
of intangibles
|
232
|
232
|
464
|
467
|
|||||||||
|
(b)
Stock-based
compensation
|
439
|
-
|
1,022
|
-
|
|||||||||
|
(c)
Depreciation/Loss
on disposal of fixed assets
|
130
|
44
|
192
|
92
|
|||||||||
|
(d)
Provision
for income taxes
|
-
|
216
|
-
|
380
|
|||||||||
|
(e)
Interest
income, net
|
(170
|
)
|
(59
|
)
|
(313
|
)
|
(102
|
)
|
|||||
|
EBITDA
(1)
|
$
|
1,032
|
$
|
834
|
$
|
2,065
|
$
|
1,542
|
|||||
|
Diluted
EBITDA per common share
|
$
|
0.02
|
$
|
0.02
|
$
|
0.05
|
$
|
0.04
|
|||||
|
Weighted
average shares used in diluted EBITDA
|
|||||||||||||
|
per
common share
|
42,818,687
|
39,400,983
|
42,471,432
|
39,408,879
|
|||||||||
|
EBITDA
|
$
|
1,032
|
$
|
834
|
$
|
2,065
|
$
|
1,542
|
|||||
|
Add/(less):
|
|||||||||||||
|
Changes
in operating assets and liabilities
|
(766
|
)
|
(223
|
)
|
(559
|
)
|
(728
|
)
|
|||||
|
Provision
for doubtful accounts
|
-
|
-
|
-
|
30
|
|||||||||
|
Provision
for income taxes
|
-
|
(216
|
)
|
-
|
(380
|
)
|
|||||||
|
Tax
benefit from employee stock option exercises
|
-
|
201
|
-
|
353
|
|||||||||
|
Interest
income, net
|
170
|
59
|
313
|
102
|
|||||||||
|
Net
cash provided by operating activities
|
$
|
436
|
$
|
655
|
$
|
1,819
|
$
|
919
|
|||||
|
(1)
Earnings before interest, taxes, depreciation, amortization and
stock-based compensation.
|
|||||||||||||
|
LivePerson,
Inc.
|
|||||||
|
Condensed
Consolidated Balance Sheets
|
|||||||
|
(In
Thousands)
|
|||||||
|
Unaudited
|
|||||||
|
June
30, 2006
|
December
31, 2005
|
||||||
|
ASSETS
|
|||||||
|
Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
19,104
|
$
|
17,117
|
|||
|
Accounts
receivable, net
|
2,424
|
1,727
|
|||||
|
Prepaid
expenses and other current assets
|
939
|
591
|
|||||
|
Deferred
tax assets
|
518
|
-
|
|||||
|
Total
current assets
|
22,985
|
19,435
|
|||||
|
Property
and equipment, net
|
689
|
575
|
|||||
|
Intangibles,
net
|
559
|
790
|
|||||
|
Security
deposits
|
204
|
180
|
|||||
|
Other
assets
|
534
|
446
|
|||||
|
Total
assets
|
$
|
24,971
|
$
|
21,426
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable
|
$
|
389
|
$
|
346
|
|||
|
Accrued
expenses
|
2,072
|
1,803
|
|||||
|
Deferred
revenue
|
1,831
|
1,618
|
|||||
|
Total
current liabilities
|
4,292
|
3,767
|
|||||
|
Other
liabilities
|
534
|
446
|
|||||
|
Commitments
and contingencies
|
|||||||
|
Total
stockholders' equity
|
20,145
|
17,213
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
24,971
|
$
|
21,426
|
|||
About
LivePerson
LivePerson
is a provider of online conversion solutions. Our hosted software enables
companies to identify and proactively engage online visitors—increasing sales,
satisfaction and loyalty while reducing service costs. Combining web-interaction
technology (chat, email and a self-service knowledgebase) with a deep
understanding of consumer behavior and industry best practices, LivePerson’s
TimpaniTM
platform
engages the right customer, at the right time, with the right communications
channel. This Engagement Marketing platform creates more relevant, compelling
and personalized experiences—converting traffic into revenues, and facilitating
real-time sales and customer service. More than 4,000 companies including
EarthLink, Hewlett-Packard, Microsoft, Qwest and Verizon, rely on LivePerson
to
help maximize the return on their marketing and e-commerce investments.
LivePerson is headquartered in New York City.
EBITDA
Financial Disclosure
Investors
are cautioned that the EBITDA, or earnings before interest, taxes, depreciation,
amortization and non-cash compensation, information contained in this press
release is not a financial measure under generally accepted accounting
principles. In addition, it should not be construed as an alternative to any
other measures of performance determined in accordance with generally accepted
accounting principles, or as an indicator of our operating performance,
liquidity or cash flows generated by operating, investing and financing
activities, as there may be significant factors or trends that it fails to
address. We present this financial information because we believe that it is
helpful to some investors as one measure of our performance. We caution
investors that non-GAAP financial information such as EBITDA, by its nature,
departs from traditional accounting conventions; accordingly, its use can make
it difficult to compare our current results with our results from other
reporting periods and with the results of other companies.
Safe
Harbor Provision
Statements
in this press release regarding LivePerson that are not historical facts are
forward-looking statements and are subject to risks and uncertainties that
could
cause actual future events or results to differ materially from such statements.
Any such forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. It is
routine for our internal projections and expectations to change as the quarter
progresses, and therefore it should be clearly understood that the internal
projections and beliefs upon which we base our expectations may change prior
to
the end of the quarter. Although these expectations may change, we are under
no
obligation to inform you if they do. Our company policy is generally to provide
our expectations only once per quarter, and not to update that information
until
the next quarter. Actual events or results may differ materially from those
contained in the projections or forward-looking statements. Some of the factors
that could cause actual results to differ materially from the forward-looking
statements contained herein include, without limitation: risks related to the
operational integration of acquisitions; risks related to our international
operations, particularly our operations in Israel, and the current civil and
political unrest in that region; our history of losses; potential fluctuations
in our quarterly and annual results; responding to rapid technological change
and changing client preferences; competition in the real-time sales, marketing
and customer service solutions market; continued use by our clients of the
LivePerson services and their purchase of additional services; technology
systems beyond our control and technology-related defects that could disrupt
the
LivePerson services; risks related to adverse business conditions experienced
by
our clients; our dependence on key employees; competition for qualified
personnel; the impact of new accounting rules, including the requirement to
expense stock options; the possible unavailability of financing as and if
needed; risks related to protecting our intellectual property rights or
potential infringement of the intellectual property rights of third parties;
our
dependence on the continued use of the Internet as a medium for commerce and
the
viability of the infrastructure of the Internet; and risks related to the
regulation or possible misappropriation of personal information. This list
is
intended to identify only certain of the principal factors that could cause
actual results to differ from those discussed in the forward-looking statements.
Readers are referred to the reports and documents filed from time to time by
us
with the Securities and Exchange Commission for a discussion of these and other
important risk factors that could cause actual results to differ from those
discussed in forward-looking statements.