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Press Release

Limelight Networks(TM) Reports Second Quarter 2009 Results

Company Release - 8/6/2009 4:01 PM ET

TEMPE, AZ -- (MARKET WIRE) -- 08/06/09 -- Limelight Networks, Inc. (NASDAQ: LLNW)

--  Revenue of $32.3 million, a 7% increase from the second quarter of
    2008
--  Generation of $7.5 million in cash from operations and expansion of
    earnings margins
--  Acquisition of mobility and monetization innovator Kiptronic Inc.
    

Limelight Networks, Inc. (NASDAQ: LLNW) today reported second quarter 2009 financial results.

"The proliferation of Internet-connected devices and ongoing shift in consumer behavior are driving continued growth in Internet traffic and creating an environment of complexity where innovative technology companies will have great opportunities to build value-added solutions. We are pleased with the early reception of mobile and monetization services we acquired from Kiptronic as well as of value-added services that we are developing internally and piloting with customers," commented Jeff Lunsford, chairman and chief executive officer, Limelight Networks, Inc.

Financial Highlights

For the second quarter of 2009, the company reported revenue of $32.3 million, up 7% percent from $30.3 million in the same period last year, and EBITDA, adjusted for share-based compensation and litigation costs, of $6.0 million.

"Through disciplined operations we were able to expand our pro forma earnings margins and generate over $7 million in cash from operations, before capital investments, even though the challenging business environment led to revenue at the low end of our expectations," said Doug Lindroth, chief financial officer. Non-GAAP net loss, before stock-based compensation and litigation costs, was $0.7 million or 1 cent per basic share. GAAP net loss was $5.3 million, or 6 cents per basic share.

Capital investments were $4.1 million. The Company ended the quarter with no bank debt and approximately $164 million in cash and short-term marketable securities. A reconciliation of GAAP to non-GAAP net income is included in the attached tables.

Third-Quarter Outlook

Limelight Networks anticipates third quarter revenue to be in the range of $32 million to $33 million.

Financial Tables

                         LIMELIGHT NETWORKS, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                  (In thousands, except per share data)


                                                  June 30,    December 31,
                                                    2009          2008
                                                ------------  ------------
                                                (Unaudited)
                        ASSETS
Current Assets:
  Cash and cash equivalents                     $    145,162  $    138,180
  Marketable securities                               19,141        36,463
  Accounts receivable, net of reserves of
   $8,987 and $7,565 at June 30, 2009 and
   December 31, 2008, respectively                    26,391        33,482
  Income taxes receivable                                 24             7
  Prepaid expenses and other current assets            7,731         7,834
                                                ------------  ------------
Total current assets                                 198,449       215,966
Property and equipment, net                           35,169        40,185
Marketable securities, less current portion               24            13
Goodwill                                               1,080             -
Other assets                                           4,899           628
                                                ------------  ------------
Total assets                                    $    239,621  $    256,792
                                                ============  ============

       LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable                              $      6,453  $      8,920
  Deferred revenue, current portion                   10,734         9,865
  Provision for litigation                                 -        65,645
  Other current liabilities                            8,555        14,928
                                                ------------  ------------
Total current liabilities                             25,742        99,358
Deferred revenue, less current portion                 4,640         7,303
                                                ------------  ------------
Total liabilities                                     30,382       106,661
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; 84,445 and 83,405 shares
   issued and outstanding at June 30, 2009
   and December 31, 2008, respectively                    84            83
  Additional paid-in capital                         300,036       290,593
  Accumulated other comprehensive income                  88           260
  Accumulated deficit                                (90,969)     (140,805)
                                                ------------  ------------
Total stockholders' equity                           209,239       150,131
                                                ------------  ------------
Total liabilities and stockholders' equity      $    239,621  $    256,792
                                                ============  ============




                         LIMELIGHT NETWORKS, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In thousands, except per share data)
                                (Unaudited)


                          Three Months Ended             Six Months Ended
                --------------------------------------  ------------------
                 June 30, March 31,  June 30, March 31,  June 30,  June 30,
                  2009      2009      2008      2008      2009      2008
                --------  --------  --------  --------  --------  --------
Revenue         $ 32,333  $ 33,175  $ 30,314  $ 30,202  $ 65,508  $ 60,516
Costs and
 operating
 expenses
  Cost of
   revenue * †    21,078    21,471    19,751    20,672    42,549    40,423
  General and
   administra-
   tive * †        6,937    12,444     9,463    13,329    19,381    22,791
  Sales and
   marketing *     7,716     8,139     8,965     8,142    15,855    17,107
  Research &
   development *   1,944     1,910     1,694     1,590     3,854     3,284
  Provision for
   litigation          -   (65,645)    6,743     7,134   (65,645)   13,878
                --------  --------  --------  --------  --------  --------
Total costs and
 operating
 expenses         37,675   (21,681)   46,616    50,867    15,994    97,483
Operating
 income (loss)    (5,342)   54,856   (16,302)  (20,665)   49,514   (36,967)
Interest
 expense             (11)      (11)      (11)      (21)      (22)      (33)
Interest income      337       383     1,334     1,891       720     3,226
Other income
 (expense)          (111)      227      (377)      170       116      (207)
                --------  --------  --------  --------  --------  --------
Income (loss)
 before taxes     (5,127)   55,455   (15,356)  (18,625)   50,328   (33,981)
Income tax
 expense
 (benefit)           171       320       (25)     (183)      492      (208)
                --------  --------  --------  --------  --------  --------
Net income
 (loss)         $ (5,298) $ 55,135  $(15,331) $(18,442) $ 49,836  $(33,773)
                ========  ========  ========  ========  ========  ========

Net income
 (loss) per
 share:
  Basic         $  (0.06) $   0.66  $  (0.18) $  (0.22) $   0.60  $  (0.41)
  Diluted       $  (0.06) $   0.64  $  (0.18) $  (0.22) $   0.57  $  (0.41)

Shares used in
 per share
 calculations:
  Basic           84,033    83,515    82,889    82,623    83,774    82,756
  Diluted         84,033    85,968    82,889    82,623    87,249    82,756


* Includes share-based compensation (see supplemental table for figures)

† Includes depreciation (see supplemental table for figures)






                         LIMELIGHT NETWORKS, INC.
                        SUPPLEMENTAL FINANCIAL DATA
                              (In thousands)
                                (Unaudited)



                           Three Months Ended            Six Months Ended
                 -------------------------------------- ------------------
                 June 30, March 31,  June 30, March 31,  June 30,  June 30,
                   2009     2009      2008      2008      2009      2008
                 -------- --------  --------  --------  --------  --------
Supplemental
 financial data
 (in thousands):
Share-based
 compensation:
Cost of revenues $    582 $    551  $    558  $    507  $  1,134  $  1,064
General and
 administrative     1,820    2,131     1,698     1,665     3,950     3,363
Sales and
 marketing          1,253    1,189     1,431     1,306     2,442     2,738
Research and
 development          626      616       598       482     1,242     1,080
                 -------- --------  --------  --------  --------  --------
Total
 share-based
 compensation    $  4,281 $  4,487  $  4,285  $  3,960  $  8,768  $  8,245
                 ======== ========  ========  ========  ========  ========

Depreciation and
 amortization:
Network-related
 depreciation    $  6,133 $  6,548  $  6,192  $  6,013  $ 12,681  $ 12,205
Other
 depreciation         532      540       311       247     1,072       557
                 -------- --------  --------  --------  --------  --------
Total
 depreciation
 and
 amortization    $  6,665 $  7,088  $  6,503  $  6,260  $ 13,753  $ 12,762
                 ======== ========  ========  ========  ========  ========

Capital
 expenditures:
Capital
 expenditures
 (cash and
 accrual)        $  4,113 $  4,572  $  5,013  $  3,095  $  8,685  $  8,108
                 ======== ========  ========  ========  ========  ========

Net (decrease)
 increase in
 cash, cash
 equivalents
 and marketable
 securities      $  2,331 $(12,660) $(10,194) $ (2,475) $(10,329) $(12,669)
                 ======== ========  ========  ========  ========  ========

End of period
 statistics:
Approximate
 number of
 active
 customers
 (excluding
 Kiptronic
 customers)         1,370    1,365     1,291     1,232     1,370     1,291
Number of
 employees            301      296       250       244       301       250





                         LIMELIGHT NETWORKS, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (In thousands)
                                (Unaudited)



                          Three Months Ended             Six Months Ended
                --------------------------------------  ------------------
                June 30,  March 31, June 30,  March 31, June 30,  June 30,
                  2009      2009      2008      2008      2009      2008
                --------  --------  --------  --------  --------  --------


Cash flows from
 operating
 activities:
  Net income
   (loss)       $ (5,298) $ 55,135  $(15,331) $(18,442) $ 49,836  $(33,773)
  Adjustments
   to
   reconcile
   net loss to
   net cash
   (used in)
   provided
   by
   operating
   activities:
    Depreciation
     and
     amortization  6,665     7,088     6,503     6,260    13,753    12,762
    Share-based
     compensation  4,281     4,487     4,285     3,960     8,768     8,245
    Deferred
     income
     tax
     (benefit)
     expense           -         -        23      (234)        -      (211)
    Excess
     tax
     benefit
     related
     to stock
     option
     exercises         -         -         -         -         -         -
    Provision
     for
     litigation        -   (65,645)    6,743     7,134   (65,645)   13,878
    (Income)
     loss on
     foreign
     currency
     exchange        205       (31)       12         -       174        12
    Accounts
     receivable
     charges         622     3,288     1,925     1,562     3,910     3,487
    Accretion
     of debt
     discount          -         -         -         -         -         -
    Accretion
     of
     marketable
     securities     (157)        -        21      (453)     (157)     (432)
    Loss on
     marketable
     securities        -         -        16        55         -        71
    Changes in
     operating
     assets and
     liabilities:
      Accounts
       receivable  7,281    (3,840)   (1,880)   (2,271)    3,441    (4,151)
      Prepaid
       expenses
       and
       other
       current
       assets        721      (593)   (4,452)       87       128    (4,365)
      Income
       taxes
       receivable    140      (157)     (129)      594       (17)      465
        Other
         assets      149    (4,311)       67       564    (4,162)      631
        Accounts
         payable  (4,219)   (1,223)      (73)   (4,634)   (5,442)   (4,707)
        Accounts
         payable,
         related
         parties       -         -      (150)      (80)        -      (230)
        Deferred
         revenue   (972)     (822)     (774)      301    (1,794)     (473)
        Other
         current
         liabili-
         ties     (1,918)   (5,144)   (3,859)    5,035    (7,061)    1,176
        Other
         long
         term
         liabili-
         ties          -         -        64         1         -        65
                --------  --------  --------  --------  --------  --------
  Net cash
   provided by
   (used in)
   operating
   activities      7,500   (11,768)   (6,989)     (561)   (4,268)   (7,550)
                --------  --------  --------  --------  --------  --------

Cash flows from
 investing
 activities:
    Purchases
     of
     property
     and
     equipment    (5,308)     (754)   (4,231)   (2,435)   (6,062)   (6,666)
      Purchase
       of
       marketable
       securi-
       ties      (12,830)        -   (30,400)  (34,725)  (12,830)  (65,125)
      Sale of
       marketable
       securi-
       ties        9,100    21,300    34,825    44,200    30,400    79,025
      Cash
       aquired
       in
       business
       acquisi-
       tion           22         -         -         -        22         -
                --------  --------  --------  --------  --------  --------
  Net cash
   provided by
   (used in)
   investing
   activities     (9,016)   20,546       194     7,040    11,530     7,234
                --------  --------  --------  --------  --------  --------

Cash flows from
 financing
 activities:
    Escrow
     funds
     returned
     from
     share
     repurchase        -         -     1,070         -         -     1,070
    Proceeds
     from
     exercise
     of stock
     options
     and
     warrants         92        76        53       107       168       160
                --------  --------  --------  --------  --------  --------
  Net cash
   provided by
   (used in)
   financing
   activities         92        76     1,123       107       168     1,230
                --------  --------  --------  --------  --------  --------
  Effect of
   exchange
   rate
   changes on
   cash and
   cash
   equivalents      (205)     (243)      259      (156)     (448)      103
                --------  --------  --------  --------  --------  --------
Net increase
 (decrease) in
 cash and cash
 equivalents      (1,629)    8,611    (5,413)    6,430     6,982     1,017
Cash and cash
 equivalents,
 beginning of
 period          146,791   138,180   120,254   113,824   138,180   113,824
                --------  --------  --------  --------  --------  --------
Cash and cash
 equivalents,
 end of period  $145,162  $146,791  $114,841  $120,254  $145,162  $114,841
                ========  ========  ========  ========  ========  ========


Use of Non-GAAP Financial Measures

To evaluate our business, we consider and use Non-GAAP net income and EBITDA adjusted for share-based compensation and litigation and damage costs as a supplemental measure of operating performance. We consider Non-GAAP net income 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 and provision for litigation. We define EBITDA as GAAP net income before interest income, interest expense, other income and expense, provision for income taxes, depreciation and amortization. We define EBITDA adjusted for share-based compensation and litigation and damage costs as EBITDA plus expenses that we do not consider reflective of our ongoing operations. We use EBITDA adjusted for share-based compensation and litigation and damage costs as a supplemental measure to review and assess operating performance. We also believe use of EBITDA adjusted for share-based compensation and litigation and damage costs facilitates investors' use of operating performance comparisons from period to period.

The terms Non-GAAP net income, EBITDA and EBITDA adjusted for share-based compensation and litigation and damage costs are not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and are not measures of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. Our Non-GAAP net income, EBITDA and EBITDA adjusted for share-based compensation and litigation and damage costs have limitations as analytical tools, and when assessing our operating performance, Non-GAAP net income, EBITDA and EBITDA adjusted for share-based compensation and litigation and damage costs should not be considered in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Some of these limitations include, but are not limited to:

--  EBITDA and EBITDA adjusted for share-based compensation and litigation
    and damage costs 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 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 EBITDA adjusted for share-based compensation and
    litigation and damage costs 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 EBITDA adjusted for share-
    based compensation and litigation and damage costs 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 and EBITDA adjusted for share-based compensation and litigation and damage costs only as supplemental support for management's analysis of business performance. Non-GAAP Net Income, EBITDA and EBITDA adjusted for share-based compensation and litigation and damage costs 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             Six Months Ended
                --------------------------------------  ------------------
                June 30,  March 31, June 30,  March 31, June 30,  June 30,
                  2009      2009      2008      2008      2009      2008
                --------  --------  --------  --------  --------  --------

GAAP net income
 (loss)         $ (5,298) $ 55,135  $(15,331) $(18,442) $ 49,836  $(33,773)

Provision for
 litigation            -   (65,645)    6,743     7,134   (65,645)   13,878
Share-based
 compensation      4,281     4,487     4,285     3,960     8,768     8,245
Litigation
 defense
 expenses            367     3,945     2,667     5,366     4,312     8,033
                --------  --------  --------  --------  --------  --------

Non-GAAP net
 loss           $   (650) $ (2,078) $ (1,636) $ (1,982) $ (2,729) $ (3,617)
                ========  ========  ========  ========  ========  ========



                         LIMELIGHT NETWORKS, INC.
       Reconciliation of GAAP Net Income (Loss) to EBITDA to EBITDA
  Adjusted for Share-Based Compensation and Litigation and Damage Costs
                              (In thousands)
                                (Unaudited)



                          Three Months Ended             Six Months Ended
                --------------------------------------  ------------------

                June 30,  March 31, June 30,  March 31, June 30,  June 30,
                  2009      2009      2008      2008      2009      2008
                --------  --------  --------  --------  --------  --------

GAAP net income
 (loss)         $ (5,298) $ 55,135  $(15,331) $(18,442) $ 49,836  $(33,773)

   Add:
    depreciation
    and
    amortization   6,665     7,088     6,503     6,260    13,753    12,762
   Add:
    interest
    expense           11        11        11        21        22        33
   Less:
    interest
    and other
    income          (226)     (610)     (957)   (2,062)     (836)   (3,019)
   Plus income
    tax
    (benefit)
    expense          171       320       (25)     (183)      492      (208)
                --------  --------  --------  --------  --------  --------
EBITDA             1,323    61,944    (9,799)  (14,406)   63,267   (24,205)

   Add:
    provision
    for
    litigation         -   (65,645)    6,743     7,134   (65,645)   13,878
   Add:
    share-based
    compensation   4,281     4,487     4,285     3,960     8,768     8,245
   Add:
    litigation
    defense
    expenses         367     3,945     2,667     5,366     4,312     8,033
                --------  --------  --------  --------  --------  --------

EBITDA adjusted
 for
 share-based
 compensation,
 litigation and
 damage costs   $  5,971  $  4,731  $  3,896  $  2,054  $ 10,702  $  5,951
                ========  ========  ========  ========  ========  ========

Conference Call

At approximately 4:30 p.m. EDT (1:30 p.m. PDT) today, management will host a quarterly conference call for investors. Access to the call will be provided by both telephone dial-in and via live Internet broadcast.

To access this conference call by telephone dial 1-866-713-8564 within the United States or 1-617-597-5312 outside of the U.S. using passcode 69016158. To access the live Internet broadcast, visit http://www.llnw.com. A replay of the call will also be available from http://www.llnw.com for one week following the conclusion of the event.

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 and litigation and related expenses. Forward-looking statements 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) is trusted by the world's most innovative enterprise, entertainment, technology, and software brands to improve the performance and profitability of web sites and end-user experiences. Our scalable, on-demand managed infrastructure solutions provide global reach and consistently high availability, by routing traffic over a private fiber-optic backbone rather than through the often-congested, unpredictable public Internet. For more information, visit our web site (http://www.limelightnetworks.com), read our blog (http://blog.llnw.com), or follow @llnw (http://www.twitter.com/llnw) on Twitter.

Copyright © 2009 Limelight Networks, Inc. All rights reserved. All product or service names are the property of their respective owners

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CONTACT:
Paul Alfieri
Limelight Networks, Inc.
+1-917-297-4241
Email Contact

Media Contacts

Steve Milmore
smilmore@llnw.com
or
Deborah Hohler
dhohler@llnw.com

Investor Contact

ir@llnw.com

Limelight Networks, Inc.

222 S. Mill Ave.
Tempe AZ 85281
602-850-5000
limelight.com

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