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): November
2, 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 November 2, 2006, announcing
its
results of operations and financial condition for the quarter ended September
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 November 2, 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: November 2, 2006 | By: | /s/ TIMOTHY E. BIXBY |
|
Timothy
E. Bixby
|
||
|
President,
Chief Financial Officer and
Secretary
|
||
EXHIBIT
INDEX
| 99.1 |
|
Press
release issued November 2, 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 Third Quarter Revenue Increase of 55% to $8.9
million
| · |
Quarterly
Revenue Increases 20% from Prior Quarter Including Impact of Proficient
Acquisition
|
| · |
Organic
Revenue Growth is 12% for the
Quarter
|
| · |
Company
Raises Annual Revenue Guidance for 2nd
Time in 2006
|
NEW
YORK,
NY - November 2, 2006 - LivePerson, Inc. (Nasdaq: LPSN), a provider of online
conversion solutions, today announced financial results for the third quarter
ended September 30, 2006.
Revenue
for the third quarter was $8.9 million, a 55% increase from the third quarter
of
2005, and a 20% sequential increase as compared to the second quarter of 2006.
Revenue growth was due primarily to sales of TimpaniTM
Sales
& Marketing to new and existing customers, sales of LivePerson Pro and
Contact Center to small and mid-size businesses, and the impact of the
acquisition of Proficient Systems effective July 18. Approximately 40% of the
sequential revenue growth impact in the quarter was a result of the acquisition.
Excluding the impact of the acquisition, sequential revenue growth was 12%
and
annual revenue growth for the third quarter was 45%.
“We
are
very pleased with our results this quarter,” said Robert LoCascio, CEO of
LivePerson. “Our investments in sales and marketing continued to payoff in the
quarter, as we added several new enterprise customers and realized a significant
revenue contribution from both our small business and enterprise solutions.
We
believe strong momentum built in the third quarter will lead to similar solid
revenue growth for the fourth quarter and are therefore revising our full year
revenue guidance upward.”
The
company updated full year revenue guidance for the second time this year, and
currently expects full year revenue growth to exceed 49%. The company’s prior
revenue guidance indicated an expected annual revenue growth rate of
approximately 45%.
LivePerson
signed several new blue-chip clients during the quarter and expanded business
with several others. Within the travel and hospitality sector, LivePerson added
Orbitz to its client roster. LivePerson furthered its presence in the
communications sector by broadening ties with two of the largest wireless
providers in North America while expanding business with existing customers
Bell
Canada and EarthLink. LivePerson is now deployed in seven of the ten largest
telecommunications companies in North America.
LivePerson
announced the formal launch of Timpani Voice in the quarter with initial
deployments at The NASDAQ Stock Market, PR Newswire and Bell Canada. Timpani
Voice, LivePerson’s click-to-talk solution, enables LivePerson customers to
connect via telephone with high-value website visitors. LivePerson has also
expanded its market footprint in the United Kingdom, adding online insurers
eSure and Liverpool Victoria.
Net
income for the third quarter of 2006 was $0.3 million or $0.01 per share, as
compared to $0.7 million and $0.02 per share in the third quarter of 2005.
Included in these figures for the three months ended September 30, 2006 is
the
impact of amortization of stock-based compensation expense of $0.6 million
related to the adoption of SFAS No. 123(R). There was no stock-based
compensation expense in the three months ended September 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 third quarter of 2006 was $1.3 million as compared to $1.2
million in the third quarter of 2005 and $1.0 million in the second quarter
of
2006.
The
company’s cash balance was $19.8 million at September 30, 2006, up slightly as
compared to the prior quarter.
The
company reduced its valuation allowance against deferred tax assets resulting
in
an effective tax rate of zero for the nine months ended September 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 $10.0-$10.1 million for the fourth quarter of 2006, or approximately
13% sequential revenue growth
|
| · |
EBITDA
of $0.04-$0.05 per share and GAAP EPS of $0.02 for the fourth quarter
of
2006
|
| · |
Revenue
of $33.1-$33.2 million for the full year
2006
|
| · |
EBITDA
of $0.12-$0.13 per share and GAAP EPS of $0.04 for the full year
2006
|
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 $0.02
per
share, for the full year 2006 and the fourth quarter of 2006, respectively,
based upon the unamortized balance of stock-based compensation expense as of
September 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
|
Nine
Months Ended
|
||||||||||||
|
September
30,
|
September
30,
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
Total
revenue
|
$
|
8,881
|
$
|
5,724
|
$
|
23,174
|
$
|
15,960
|
|||||
|
Operating
expenses:
|
|||||||||||||
|
Cost
of revenue
|
2,142
|
1,114
|
5,246
|
2,997
|
|||||||||
|
Product
development
|
1,381
|
663
|
3,280
|
2,027
|
|||||||||
|
Sales
and marketing
|
3,104
|
1,715
|
8,605
|
4,889
|
|||||||||
|
General
and administrative
|
1,750
|
1,034
|
4,689
|
3,400
|
|||||||||
|
Amortization
of other intangibles
|
447
|
232
|
911
|
699
|
|||||||||
|
Total
operating expenses
|
8,824
|
4,758
|
22,731
|
14,012
|
|||||||||
|
Income
from operations
|
57
|
966
|
443
|
1,948
|
|||||||||
|
Other
income, net
|
200
|
81
|
514
|
184
|
|||||||||
|
Income
before provision for income taxes
|
257
|
1,047
|
957
|
2,132
|
|||||||||
|
Provision
for income taxes
|
-
|
358
|
-
|
738
|
|||||||||
|
Net
income
|
$
|
257
|
$
|
689
|
$
|
957
|
$
|
1,394
|
|||||
|
Basic
net income per common share
|
$
|
0.01
|
$
|
0.02
|
$
|
0.02
|
$
|
0.04
|
|||||
|
Diluted
net income per common share
|
$
|
0.01
|
$
|
0.02
|
$
|
0.02
|
$
|
0.04
|
|||||
|
Weighted
average shares outstanding used in basic net
|
|||||||||||||
|
income
per common share calculation
|
40,547,309
|
37,555,696
|
39,242,174
|
37,492,285
|
|||||||||
|
Weighted
average shares outstanding used in diluted net
|
|||||||||||||
|
income
per common share calculation
|
43,854,202
|
39,839,001
|
42,981,377
|
39,528,089
|
|||||||||
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
|
Nine
Months Ended
|
||||||||||||
|
September
30,
|
September
30,
|
||||||||||||
|
2006
|
|
2005
|
|
2006
|
|
2005
|
|||||||
|
Net
income in accordance with generally
|
|||||||||||||
|
accepted
accounting principles
|
$
|
257
|
$
|
689
|
$
|
957
|
$
|
1,394
|
|||||
|
Add/(less):
|
|||||||||||||
|
(a)
Amortization of intangibles
|
447
|
232
|
911
|
699
|
|||||||||
|
(b)
Stock-based compensation
|
557
|
-
|
1,580
|
-
|
|||||||||
|
(c)
Depreciation/Loss on disposal of fixed assets
|
259
|
23
|
450
|
115
|
|||||||||
|
(d)
Provision for income taxes
|
-
|
358
|
-
|
738
|
|||||||||
|
(e)
Interest income, net
|
(200
|
)
|
(81
|
)
|
(514
|
)
|
(184
|
)
|
|||||
|
EBITDA
(1)
|
$
|
1,320
|
$
|
1,221
|
$
|
3,384
|
$
|
2,762
|
|||||
|
Diluted
EBITDA per common share
|
$
|
0.03
|
$
|
0.03
|
$
|
0.08
|
$
|
0.07
|
|||||
|
Weighted
average shares used in diluted EBITDA
|
|||||||||||||
|
per
common share
|
43,854,202
|
39,839,001
|
42,981,377
|
39,528,089
|
|||||||||
|
EBITDA
|
$
|
1,320
|
$
|
1,221
|
$
|
3,384
|
$
|
2,762
|
|||||
|
Add/(less):
|
|||||||||||||
|
Changes
in operating assets and liabilities
|
(1,151
|
)
|
736
|
(1,679
|
)
|
9
|
|||||||
|
Provision
for doubtful accounts
|
30
|
-
|
30
|
30
|
|||||||||
|
Provision
for income taxes
|
-
|
(358
|
)
|
-
|
(738
|
)
|
|||||||
|
Tax
benefit from employee stock option exercises
|
-
|
345
|
-
|
697
|
|||||||||
|
Interest
income, net
|
200
|
81
|
514
|
184
|
|||||||||
|
Net
cash provided by operating activities
|
$
|
399
|
$
|
2,025
|
$
|
2,249
|
$
|
2,944
|
|||||
_____________
|
(1)
Earnings before interest, taxes, depreciation, amortization and
stock-based compensation.
|
LivePerson,
Inc.
Condensed
Consolidated Balance Sheets
(In
Thousands)
Unaudited
|
|
|||||||
|
|
|||||||
|
September
30, 2006
|
December
31, 2005
|
||||||
|
ASSETS
|
|||||||
|
Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
19,786
|
$
|
17,117
|
|||
|
Accounts
receivable, net
|
3,593
|
1,727
|
|||||
|
Prepaid
expenses and other current assets
|
1,037
|
591
|
|||||
|
Deferred
tax assets
|
1,100
|
-
|
|||||
|
Total
current assets
|
25,516
|
19,435
|
|||||
|
Property
and equipment, net
|
1,121
|
575
|
|||||
|
Intangibles,
net
|
3,113
|
790
|
|||||
|
Goodwill
|
6,875
|
-
|
|||||
|
Security
deposits
|
283
|
180
|
|||||
|
Other
assets
|
612
|
446
|
|||||
|
Total
assets
|
$
|
37,520
|
$
|
21,426
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable
|
$
|
544
|
$
|
346
|
|||
|
Accrued
expenses
|
3,468
|
1,803
|
|||||
|
Deferred
revenue
|
3,026
|
1,618
|
|||||
|
Total
current liabilities
|
7,038
|
3,767
|
|||||
|
Other
liabilities
|
612
|
446
|
|||||
|
Commitments
and contingencies
|
|||||||
|
Total
stockholders' equity
|
29,870
|
17,213
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
37,520
|
$
|
21,426
|
|||
About
LivePerson
LivePerson
(Nasdaq: LPSN) 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, voice 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.