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):
January 30, 2019
LIMELIGHT NETWORKS, INC.
(Exact name of Registrant as specified in its charter)
Delaware | 001-33508 | 20-1677033 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||
1465 North Scottsdale Road, Suite 400
Scottsdale, AZ 85257
(Address, including zip code, of principal executive offices)
(602) 850-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock | LLNW | NASDAQ |
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 (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |||||
Emerging growth company | ¨ | ||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨ | ||||
Item 2.02 | Results of Operations and Financial Condition. |
On January 29, 2020, the Company issued a press release regarding its financial results for the fourth quarter and full year ended December 31, 2019, and certain other information. The full text of this press release is furnished herewith as Exhibit 99.1.
The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
Exhibit Number | Description | |
99.1 | ||
SIGNATURES
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.
LIMELIGHT NETWORKS, INC. | ||||||
Dated: January 29, 2020 | By: | /s/ Michael DiSanto | ||||
Michael DiSanto Chief Administrative and Legal Officer & Secretary | ||||||
EXHIBIT INDEX
Exhibit Number | Description | |
99.1 | ||
Exhibit 99.1
January 29, 2020
Limelight Networks(R) Reports Strong Financial Results for the Fourth Quarter and Full Year 2019
• | Record revenue of $60.1 million, up 37 percent year over year, up 17% sequentially |
• | GAAP basic EPS of $0.02 and Non-GAAP EPS of $0.05 |
• | EBITDA of $8.1 million and Adjusted EBITDA of $11.4 million |
• | Delivered record traffic, exceeding previous record by over 25% |
Limelight Networks, Inc. (Nasdaq:LLNW) (Limelight), a leading provider of edge cloud services, today reported record revenue of $60.1 million for the fourth quarter of 2019, up 37% compared to $44.0 million in the fourth quarter of 2018.
Limelight reported GAAP net income of $2.5 million, or $0.02 per basic share for the fourth quarter of 2019, compared to a net loss of $5.2 million, or $0.05 per basic share, in the fourth quarter of 2018.
Non-GAAP net income was $5.8 million, or $0.05 per basic share, for the fourth quarter of 2019, compared to non-GAAP net income of $0.3 million, or break even per basic share, in the fourth quarter of 2018.
EBITDA was $8.1 million for the fourth quarter of 2019, compared to a loss of $0.9 million for the fourth quarter of 2018. Adjusted EBITDA was $11.4 million for the fourth quarter of 2019, compared to $4.6 million for the fourth quarter of 2018.
For the full year ended December 31, 2019, Limelight reported revenue of $200.6 million, an increase of 3% compared to $195.7 million for the year ended December 31, 2018.
Limelight reported GAAP net loss of $16.0 million, or $0.14 per basic share, for the year ended December 31, 2019, compared to net income of $9.8 million, or $0.09 per basic share, in 2018. Net income for the full year of 2018 includes $14.9 million, or $0.12 per basic share, of non-operating income related to the settlement and patent license agreement.
Non-GAAP net loss was $2.3 million, or $0.02 per basic share, for the year ended December 31, 2019, compared to non-GAAP net income of $13.7 million, or $0.12 per basic share, in 2018.
EBITDA was $4.3 million for the year ended December 31, 2019, compared to $28.7 million for the year ended December 31, 2018. Adjusted EBITDA was $18.1 million for the year ended December 31, 2019, compared to $32.5 million for the year ended December 31, 2018.
Limelight ended the fourth quarter with 610 employees and employee equivalents, up from 609 at the end of the third quarter of 2019, and up from 563 in the year ago period.
Exhibit 99.1
“The fourth quarter was our best ever performance across multiple financial and non-financial measures as we continued to execute our strategy of focusing on edge services and high-quality video delivery. The business momentum accelerated during the fourth quarter, primarily due to our significant participation in multiple live and on-demand OTT launches by some of the largest media companies in the world. Those companies looked to us as a trusted partner in these launches based on the superior performance of our network, global scale, and strong value proposition, said Bob Lento, Chief Executive Officer at Limelight.
“We are excited about the current and projected industry trends. We believe that we are poised to deliver a record year of volume, revenue and growth on a number of metrics, as our 2020 guidance reflects. OTT launches and demand for low latency-based edge services are predicted to expand globally in 2020 and beyond. We believe that we have unique assets to meet the computational and connectivity challenges of emerging business, both securely and globally. We are grateful for our customers, partners and employees who have helped build this business and position it for continued success,” Mr. Lento added.
Based on current conditions, and compared to 2019, our 2020 guidance implies double digit revenue growth, higher GAAP and Non-GAAP earnings, higher adjusted EBITDA, and lower capital expenditures.
Limelight Networks, Inc. | ||||||
2020 Guidance | ||||||
Actual | ||||||
January 2020 | December 2019 | 2019 | ||||
Revenue | $223 to $235 million | $220 to $235 million | $200.6 million | |||
GAAP Basic EPS | $(0.10) to break-even | $(0.10) to break-even | $(0.14) | |||
Non-GAAP EPS | Break-even to $0.10 | Break-even to $0.10 | $(0.02) | |||
Adjusted EBITDA | $25 to $35 million | $25 to $35 million | $18.1 million | |||
Capital expenditures | $25 to 30 million | $25 to 30 million | $34.7 million | |||
Exhibit 99.1
Financial Tables
Limelight Networks, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
December 31, 2019 | September 30, 2019 | December 31, 2018 | ||||||||
(Unaudited) | (Unaudited) | |||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 18,335 | 14,832 | $ | 25,383 | |||||
Marketable securities | — | 3,218 | 25,083 | |||||||
Accounts receivable, net | 34,476 | 35,818 | 26,041 | |||||||
Income taxes receivable | 82 | 77 | 122 | |||||||
Prepaid expenses and other current assets | 9,920 | 9,522 | 14,789 | |||||||
Total current assets | 62,813 | 63,467 | 91,418 | |||||||
Property and equipment, net | 46,136 | 46,304 | 27,378 | |||||||
Operating lease right of use assets | 12,842 | 12,667 | — | |||||||
Marketable securities, less current portion | 40 | 40 | 40 | |||||||
Deferred income taxes | 1,319 | 1,474 | 1,462 | |||||||
Goodwill | 77,102 | 77,051 | 76,407 | |||||||
Other assets | 9,117 | 7,394 | 2,220 | |||||||
Total assets | $ | 209,369 | 208,397 | $ | 198,925 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 12,020 | 20,641 | $ | 9,216 | |||||
Deferred revenue | 976 | 1,205 | 1,883 | |||||||
Operating lease liability obligations | 2,056 | 1,870 | — | |||||||
Income taxes payable | 178 | 325 | 124 | |||||||
Provision for litigation | — | — | 9,000 | |||||||
Other current liabilities | 13,398 | 12,516 | 12,922 | |||||||
Total current liabilities | 28,628 | 36,557 | 33,145 | |||||||
Operating lease liability obligations, less current portion | 13,488 | 13,331 | — | |||||||
Deferred income taxes | 239 | 123 | 152 | |||||||
Deferred revenue, less current portion | 161 | 162 | 42 | |||||||
Other long-term liabilities | 316 | 300 | 435 | |||||||
Total liabilities | 42,832 | 50,473 | 33,774 | |||||||
Commitments and contingencies | ||||||||||
Stockholders’ equity: | ||||||||||
Convertible preferred stock, $0.001 par value; 7,500 shares authorized; no shares issued and outstanding | — | — | — | |||||||
Common stock, $0.001 par value; 300,000 shares authorized; 118,368, 116,513 and 114,246 shares issued and outstanding at December 31, 2019, September 30, 2019 and December 31, 2018, respectively | 118 | 117 | 114 | |||||||
Additional paid-in capital | 530,285 | 524,758 | 513,682 | |||||||
Accumulated other comprehensive loss | (9,210 | ) | (9,837 | ) | (10,033 | ) | ||||
Accumulated deficit | (354,656 | ) | (357,114 | ) | (338,612 | ) | ||||
Total stockholders’ equity | 166,537 | 157,924 | 165,151 | |||||||
Total liabilities and stockholders’ equity | $ | 209,369 | 208,397 | $ | 198,925 | |||||
Exhibit 99.1
Limelight Networks, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | Percent | Dec. 31, | Percent | Dec. 31, | Dec. 31, | Percent | |||||||||||||||||||||
2019 | 2019 | Change | 2018 | Change | 2019 | 2018 | Change | |||||||||||||||||||||
Revenue | $ | 60,129 | $ | 51,321 | 17 | % | $ | 43,992 | 37 | % | $ | 200,634 | $ | 195,670 | 3 | % | ||||||||||||
Cost of revenue: | ||||||||||||||||||||||||||||
Cost of services (1) | 28,586 | 25,602 | 12 | % | 22,141 | 29 | % | 99,897 | 85,920 | 16 | % | |||||||||||||||||
Depreciation — network | 5,288 | 4,961 | 7 | % | 3,941 | 34 | % | 19,193 | 16,277 | 18 | % | |||||||||||||||||
Total cost of revenue | 33,874 | 30,563 | 11 | % | 26,082 | 30 | % | 119,090 | 102,197 | 17 | % | |||||||||||||||||
Gross profit | 26,255 | 20,758 | 26 | % | 17,910 | 47 | % | 81,544 | 93,473 | (13 | )% | |||||||||||||||||
Gross profit percentage | 43.7 | % | 40.4 | % | 40.7 | % | 40.6 | % | 47.8 | % | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
General and administrative (1) | 7,554 | 7,356 | 3 | % | 7,482 | 1 | % | 30,785 | 32,372 | (5 | )% | |||||||||||||||||
Sales and marketing (1) | 10,399 | 10,713 | (3 | )% | 9,484 | 10 | % | 43,078 | 39,553 | 9 | % | |||||||||||||||||
Research and development (1) | 5,459 | 5,160 | 6 | % | 5,781 | (6 | )% | 22,534 | 24,075 | (6 | )% | |||||||||||||||||
Depreciation and amortization | 328 | 172 | 91 | % | 476 | (31 | )% | 872 | 2,313 | (62 | )% | |||||||||||||||||
Total operating expenses | 23,740 | 23,401 | 1 | % | 23,223 | 2 | % | 97,269 | 98,313 | (1 | )% | |||||||||||||||||
Operating income (loss) | 2,515 | (2,643 | ) | NM | (5,313 | ) | NM | (15,725 | ) | (4,840) | NM | |||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||
Interest expense | (45 | ) | (10 | ) | NM | (10 | ) | NM | (76 | ) | (86) | NM | ||||||||||||||||
Interest income | 25 | 81 | NM | 230 | NM | 427 | 670 | NM | ||||||||||||||||||||
Settlement and patent license income | — | — | NM | — | NM | — | 14,900 | NM | ||||||||||||||||||||
Other, net | 169 | (13 | ) | NM | 90 | NM | 80 | (264) | NM | |||||||||||||||||||
Total other income (expense) | 149 | 58 | NM | 310 | NM | 431 | 15,220 | NM | ||||||||||||||||||||
Income (loss) before income taxes | 2,664 | (2,585 | ) | NM | (5,003 | ) | NM | (15,294 | ) | 10,380 | NM | |||||||||||||||||
Income tax expense | 206 | 166 | NM | 190 | NM | 750 | 538 | NM | ||||||||||||||||||||
Net income (loss) | $ | 2,458 | $ | (2,751 | ) | NM | $ | (5,193 | ) | NM | $ | (16,044 | ) | $ | 9,842 | NM | ||||||||||||
Net income (loss) per share: | ||||||||||||||||||||||||||||
Basic | $ | 0.02 | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.14 | ) | $ | 0.09 | |||||||||||||||
Diluted | $ | 0.02 | $ | (0.02 | ) | $ | (0.05 | ) | (0.14 | ) | 0.08 | |||||||||||||||||
Weighted average shares used in per share calculation: | ||||||||||||||||||||||||||||
Basic | 117,603 | 116,270 | 113,578 | 115,890 | 112,114 | |||||||||||||||||||||||
Diluted | 123,801 | 116,270 | 113,578 | 115,890 | 120,010 | |||||||||||||||||||||||
(1) Includes share-based compensation (see supplemental table for figures) | ||||||||||||||||||||||||||||
Exhibit 99.1
Limelight Networks, Inc.
Supplemental Financial Data
(In thousands)
(Unaudited)
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
Dec. 31, | Sept. 30, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Share-based compensation: | |||||||||||||||||||
Cost of services | $ | 376 | $ | 331 | $ | 756 | $ | 1,495 | $ | 1,815 | |||||||||
General and administrative | 1,858 | 2,006 | 2,792 | 8,098 | 8,458 | ||||||||||||||
Sales and marketing | 597 | 584 | 963 | 2,263 | 2,837 | ||||||||||||||
Research and development | 484 | 437 | 974 | 1,922 | 2,720 | ||||||||||||||
Total share-based compensation | $ | 3,315 | $ | 3,358 | $ | 5,485 | $ | 13,778 | $ | 15,830 | |||||||||
Depreciation and amortization: | |||||||||||||||||||
Network-related depreciation | $ | 5,288 | $ | 4,961 | $ | 3,941 | $ | 19,193 | $ | 16,277 | |||||||||
Other depreciation and amortization | 328 | 172 | 476 | 872 | 2,313 | ||||||||||||||
Total depreciation and amortization | $ | 5,616 | $ | 5,133 | $ | 4,417 | $ | 20,065 | $ | 18,590 | |||||||||
Net increase (decrease) in cash, cash equivalents and marketable securities: | $ | 285 | $ | (10,872 | ) | $ | (2,169 | ) | $ | (32,131 | ) | $ | 1,150 | ||||||
End of period statistics: | |||||||||||||||||||
Approximate number of active customers | 599 | 609 | 649 | 599 | 649 | ||||||||||||||
Number of employees and employee equivalents | 610 | 609 | 563 | 610 | 563 | ||||||||||||||
Exhibit 99.1
Limelight Networks, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
Dec. 31, | Sept. 30, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Operating activities | |||||||||||||||||||
Net income (loss) | $ | 2,458 | $ | (2,751 | ) | $ | (5,193 | ) | $ | (16,044 | ) | $ | 9,842 | ||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||||||||||
Depreciation and amortization | 5,616 | 5,133 | 4,417 | 20,065 | 18,590 | ||||||||||||||
Share-based compensation | 3,315 | 3,358 | 5,485 | 13,778 | 15,830 | ||||||||||||||
Settlement and patent license income | — | — | — | — | (14,900 | ) | |||||||||||||
Foreign currency remeasurement (gain) loss | 79 | 21 | (65 | ) | (25 | ) | (162 | ) | |||||||||||
Deferred income taxes | 300 | (61 | ) | 103 | 270 | 17 | |||||||||||||
Gain on sale of property and equipment | — | (5 | ) | (6 | ) | (56 | ) | (137 | ) | ||||||||||
Accounts receivable charges | 519 | 580 | 449 | 1,793 | 902 | ||||||||||||||
Amortization of premium on marketable securities | 1 | 9 | 33 | 30 | 115 | ||||||||||||||
Realized loss on marketable securities | 9 | — | — | 9 | — | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||
Accounts receivable | 823 | (5,300 | ) | (343 | ) | (10,228 | ) | 5,438 | |||||||||||
Prepaid expenses and other current assets | (324 | ) | (885 | ) | 64 | (1,101 | ) | (2,466 | ) | ||||||||||
Income taxes receivable | (3 | ) | 45 | 25 | 40 | (31 | ) | ||||||||||||
Other assets | (1,547 | ) | 781 | 201 | (4,188 | ) | (558 | ) | |||||||||||
Accounts payable and other current liabilities | (2,383 | ) | (2,798 | ) | (1,807 | ) | 1,292 | (4,333 | ) | ||||||||||
Deferred revenue | (232 | ) | (112 | ) | 1,004 | (789 | ) | 1,089 | |||||||||||
Income taxes payable | (143 | ) | 61 | 17 | 61 | (333 | ) | ||||||||||||
Payments related to litigation, net | — | — | (1,520 | ) | (3,040 | ) | (9,060 | ) | |||||||||||
Other long term liabilities | 15 | 16 | 51 | (121 | ) | (121 | ) | ||||||||||||
Net cash provided by (used in) operating activities | 8,503 | (1,908 | ) | 2,915 | 1,746 | 19,722 | |||||||||||||
Investing activities | |||||||||||||||||||
Purchases of marketable securities | — | — | (4,669 | ) | (10,279 | ) | (20,631 | ) | |||||||||||
Sale and maturities of marketable securities | 3,211 | 1,000 | 3,500 | 35,364 | 23,865 | ||||||||||||||
Purchases of property and equipment | (10,480 | ) | (7,750 | ) | (5,618 | ) | (34,704 | ) | (16,113 | ) | |||||||||
Proceeds from sale of property and equipment | — | 5 | 4 | 51 | 135 | ||||||||||||||
Net cash used in investing activities | (7,269 | ) | (6,745 | ) | (6,783 | ) | (9,568 | ) | (12,744 | ) | |||||||||
Financing activities | |||||||||||||||||||
Payment of employee tax withholdings related to restricted stock vesting | (1,079 | ) | (1,015 | ) | (985 | ) | (3,607 | ) | (4,793 | ) | |||||||||
Cash paid for the purchase of common stock | — | — | — | — | (3,800 | ) | |||||||||||||
Proceeds from employee stock plans | 3,290 | 13 | 1,374 | 4,406 | 6,173 | ||||||||||||||
Net cash provided by (used in) financing activities | 2,211 | (1,002 | ) | 389 | 799 | (2,420 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 58 | (211 | ) | 184 | (25 | ) | (87 | ) | |||||||||||
Net increase (decrease) in cash and cash equivalents | 3,503 | (9,866 | ) | (3,295 | ) | (7,048 | ) | 4,471 | |||||||||||
Cash and cash equivalents, beginning of period | 14,832 | 24,698 | 28,678 | 25,383 | 20,912 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 18,335 | $ | 14,832 | $ | 25,383 | $ | 18,335 | $ | 25,383 | |||||||||
Use of Non-GAAP Financial Measures
To evaluate our business, we consider and use non-generally accepted accounting principles (Non-GAAP) net income (loss), EBITDA and Adjusted EBITDA as supplemental measures of operating performance. These measures include the same adjustments that management takes into account when it reviews and assesses operating performance on a period-to-period basis. We consider Non-GAAP net income (loss) to be an important indicator of overall business performance. We define Non-GAAP net income (loss) to be U.S. GAAP net loss, adjusted to exclude the settlement and patent license income, share-based compensation, and litigation expenses. We believe that EBITDA provides a useful metric to investors to compare us with other companies within our industry and across industries. We define EBITDA as U.S. GAAP net income (loss) adjusted to exclude depreciation and amortization, interest expense, interest and other (income) expense, and income tax expense. We define Adjusted EBITDA as EBITDA adjusted to exclude the settlement and patent license income, share-based compensation and litigation expenses. We use Adjusted EBITDA as a supplemental measure to review and assess operating performance. Our management uses these Non-GAAP financial measures because, collectively, they provide valuable information on the performance of our on-going operations, excluding
Exhibit 99.1
non-cash charges, taxes and non-core activities (including interest payments related to financing activities). These measures also enable our management to compare the results of our on-going operations from period to period, and allow management to review the performance of our on-going operations against our peer companies and against other companies in our industry and adjacent industries. We believe these measures also provide similar insights to investors, and enable investors to review our results of operations “through the eyes of management.”
Furthermore, our management uses these Non-GAAP financial measures to assist them in making decisions regarding our strategic priorities and areas for future investment and focus.
The terms Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are not defined under 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 (loss), EBITDA and Adjusted EBITDA have limitations as analytical tools, and when assessing our operating performance, Non-GAAP net income (loss), EBITDA and Adjusted EBITDA should not be considered in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Some of these limitations include, but are not limited to:
• | EBITDA and Adjusted EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; |
• | These measures do not reflect changes in, or cash requirements for, our working capital needs; |
• | Non- GAAP net income (loss) and Adjusted EBITDA do not reflect the cash requirements necessary for litigation costs, including provision for litigation and litigation expenses; |
• | These measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt that we may incur; |
• | These measures do not reflect income taxes or the cash requirements for any tax payments; |
• | Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will be replaced sometime in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; |
• | While share-based compensation is a component of operating expense, the impact on our financial statements compared to other companies can vary significantly due to such factors as the assumed life of the options and the assumed volatility of our common stock; and |
• | Other companies may calculate Non-GAAP net income (loss), EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures. |
We compensate for these limitations by relying primarily on our U.S. GAAP results and using Non-GAAP net income (loss), EBITDA and Adjusted EBITDA only as supplemental support for management’s analysis of business performance. Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are calculated as follows for the periods presented in thousands:
Reconciliation of Non-GAAP Financial Measures
In accordance with the requirements of Item 10(e) of Regulation S-K, we are presenting the most directly comparable U.S. GAAP financial measures and reconciling the unaudited Non-GAAP financial metrics to the comparable U.S. GAAP measures. Per share amounts may not foot due to rounding.
Exhibit 99.1
Limelight Networks, Inc.
Reconciliation of U.S. GAAP Net Income (Loss) to Non-GAAP Net Income (Loss)
(In thousands)
(Unaudited)
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||||||
Amount | Per Share | Amount | Per Share | Amount | Per Share | Amount | Per Share | Amount | Per Share | ||||||||||||||||||||||||||||||
U.S. GAAP net income (loss) | $ | 2,458 | $ | 0.02 | $ | (2,751 | ) | $ | (0.02 | ) | $ | (5,193 | ) | $ | (0.05 | ) | $ | (16,044 | ) | $ | (0.14 | ) | $ | 9,842 | $ | 0.09 | |||||||||||||
Settlement and patent license income | — | — | — | — | — | — | — | — | (14,900 | ) | (0.13 | ) | |||||||||||||||||||||||||||
Share-based compensation | 3,315 | 0.03 | 3,358 | 0.03 | 5,485 | 0.05 | 13,778 | 0.12 | 15,830 | 0.14 | |||||||||||||||||||||||||||||
Litigation expenses | — | — | — | — | 3 | — | — | — | 2,907 | 0.03 | |||||||||||||||||||||||||||||
Non-GAAP net income (loss) | $ | 5,773 | $ | 0.05 | $ | 607 | $ | 0.01 | $ | 295 | $ | — | $ | (2,266 | ) | $ | (0.02 | ) | $ | 13,679 | $ | 0.12 | |||||||||||||||||
Weighted average shares used in per share calculation: | 117,603 | 116,270 | 113,578 | 115,890 | 112,114 | ||||||||||||||||||||||||||||||||||
Limelight Networks, Inc.
Reconciliation of U.S. GAAP Net Income (Loss) to EBITDA to Adjusted EBITDA
(In thousands)
(Unaudited)
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
U.S. GAAP net income (loss) | $ | 2,458 | $ | (2,751 | ) | $ | (5,193 | ) | $ | (16,044 | ) | $ | 9,842 | ||||||
Depreciation and amortization | 5,616 | 5,133 | 4,417 | 20,065 | 18,590 | ||||||||||||||
Interest expense | 45 | 10 | 10 | 76 | 86 | ||||||||||||||
Interest and other (income) expense | (194 | ) | (68 | ) | (320 | ) | (507 | ) | (406 | ) | |||||||||
Income tax expense | 206 | 166 | 190 | 750 | 538 | ||||||||||||||
EBITDA | $ | 8,131 | $ | 2,490 | $ | (896 | ) | $ | 4,340 | $ | 28,650 | ||||||||
Settlement and patent license income | — | — | — | — | (14,900 | ) | |||||||||||||
Share-based compensation | 3,315 | 3,358 | 5,485 | 13,778 | 15,830 | ||||||||||||||
Litigation expenses | — | — | 3 | — | 2,907 | ||||||||||||||
Adjusted EBITDA | $ | 11,446 | $ | 5,848 | $ | 4,592 | $ | 18,118 | $ | 32,487 | |||||||||
For future periods, we are unable to provide a reconciliation of EBITDA and Adjusted EBITDA to net loss as a result of the uncertainty regarding, and the potential variability of, the amounts of depreciation and amortization, interest expense, interest and other (income) expense and income tax expense, that may be incurred in the future.
Conference Call
At approximately 4:30 p.m. EST (1:30 p.m. PST) today, management will host a quarterly conference call for investors. Investors can access this call toll-free at 877-296-5190 within the United States or +1 412-317-5233 outside of the U.S. The conference call will also be audio cast live from http://www.limelight.com and a replay will be available following the call from the Limelight website.
Exhibit 99.1
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. These statements include, among others, statements regarding our expectations regarding revenue, gross margin, non-GAAP net income, capital expenditures, litigation, and our future prospects. Our expectations and beliefs regarding these matters may not materialize. The potential risks and uncertainties that could cause actual results or outcomes to differ materially from the results or outcomes predicted include, among other things, reduction of demand for our services from new or existing customers, unforeseen changes in our hiring patterns, adverse outcomes in litigation, and experiencing expenses that exceed our expectations. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Forms 10-K and 10-Q, particularly under the heading “Risk Factors.” Copies of these filings are available online on our investor relations website at investors.limelightnetworks.com and on the SEC website at www.SEC.gov. All information provided in this release and in the attachments is as of January 29, 2020, and we undertake no duty to update this information in light of new information or future events, unless required by law.
About Limelight
Limelight Networks, Inc. (NASDAQ: LLNW), a leading provider of digital content delivery, video, cloud security, and edge computing services, empowers customers to provide exceptional digital experiences. Limelight’s edge services platform includes a unique combination of global private infrastructure, intelligent software, and expert support services that enable current and future workflows. For more information, please visit www.limelight.com, and read follow us on Twitter, Facebook and LinkedIn.
Copyright (C) 2019 Limelight Networks, Inc. All rights reserved. All product or service names are the property of their respective owners.
Source: Limelight Networks
CONTACT:
Limelight Networks, Inc.
Sajid Malhotra, 602-850-5778
ir@llnw.com
Ticker Slug:
Ticker: LLNW
Exchange: NASDAQ