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): July
31, 2007
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. (the “Registrant”) on August 2,
2007, announcing its results of operations and financial condition for the
quarter ended June 30, 2007, 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
8.01. Other
Events.
On
July
31, 2007, the Company was served with a complaint filed in the United States
District Court for the Southern District of New York by the Shareholders’
Representative of Proficient Systems, Inc. (“Proficient”). In connection with
the July 2006 acquisition of Proficient, the Company was contingently required
to issue up to 2,050,000 shares of common stock based on the terms of an
earn-out provision in the merger agreement. In accordance with the terms of
the
earn-out provision, the Company issued 1,129,571 shares in the second quarter
of
2007 to the shareholders of Proficient. The complaint filed by the Shareholders’
Representative seeks certain documentation relating to calculation of the
earn-out consideration, and seeks payment of substantially all of the remaining
contingently issuable earn-out shares. The Company believes the claims are
without merit, intends to vigorously defend against this lawsuit, and does
not
currently expect that the total shares issued will differ significantly from
the
amount issued to date.
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 2, 2007.
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 2, 2007
|
By:
|
/s/
TIMOTHY E. BIXBY
|
|
Timothy
E. Bixby
|
||
|
President,
Chief Financial Officer and
Secretary
|
EXHIBIT
INDEX
|
99.1
|
Press
release issued August 2, 2007.
|
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 57% to $11.7
million
NEW
YORK,
NY - August 2, 2007 - LivePerson, Inc. (Nasdaq: LPSN), a provider of online
conversion solutions, today announced financial results for the second quarter
ended June 30, 2007.
Revenue
for the second quarter was $11.7 million, a 57% increase from the second quarter
of 2006, and a 6% sequential increase versus the first quarter of 2007.
Sequential revenue growth was due primarily to strong growth from existing
enterprise users of Timpani Sales & Marketing, as well as continued strong
performance from the small business product line.
“The
second quarter came in right in line with our expectations on a number of key
measures,” CEO Robert LoCascio said. “We signed a solid number of new clients,
saw decreased enterprise attrition rates, and experienced strong bookings that
will support our second half growth expectations.”
LivePerson
signed several new blue-chip clients during the quarter including Adobe and
National City, as well as:
|
·
|
A
leading global Internet destination
brand,
|
|
·
|
A
leading US credit card issuer
|
|
·
|
One
of Canada’s leading telecommunication service
providers,
|
|
·
|
A
leading UK-based credit card issuer,
and
|
|
·
|
A
leading UK online fashion brand.
|
We
expanded business with several existing customers including:
|
·
|
Panasonic,
|
| · |
JCWhitney,
|
|
·
|
Verizon
Wireless, and
|
|
·
|
a
leading regional telecommunication service
provider.
|
Net
income for the second quarter of 2007 was $0.9 million or $0.02 per share as
compared to net income of $0.4 million or $0.01 per share in the second quarter
of 2006, and net income of $0.9 million or $0.02 per share in the first quarter
of 2007.
The
Company’s effective tax rate in the second quarter was zero resulting from a
partial release of the company’s valuation allowance against deferred tax assets
based on current estimates of future taxable income.
Earnings
before interest, taxes, depreciation, amortization and stock-based compensation
(EBITDA) for the second quarter of 2007 was $2.2 million as compared to $1.0
million in the second quarter of 2006 and $2.0 million in the first quarter
of
2007.
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.
The
company’s cash balance increased by $2.6 million or 11% to $26.5 million at June
30, 2007 as compared to March 31, 2007.
Financial
Expectations
The
company currently expects the following financial results, excluding
any
impact from the expected acquisition of Kasamba, which is anticipated to close
on or around October 1:
|
·
|
Revenue
of $12.7 - $12.8 million for the third quarter of 2007, or approximately
9%-10% quarterly sequential revenue
growth
|
|
·
|
EBITDA
of $0.05-$0.06 per share and GAAP EPS of $0.03 for the third quarter
of
2007
|
|
·
|
Revenue
of $48.5 - $49.5 million for the full year
2007
|
|
·
|
EBITDA
of $0.22 - $0.24 per share and GAAP EPS of $0.11 - $0.12 for the
full year
2007
|
|
·
|
An
effective tax rate of 0% for the full year
2007
|
These
GAAP EPS expectations already include the estimated impact of a change in
accounting policy related to adopting SFAS 123(R) as of January 1, 2006. The
impact is expected to decrease net income per share by $0.02 and $0.08, for
the
third quarter and the full year 2007, respectively. This impact may change
based
upon additional stock option grants, if any, methodology refinement or other
factors.
The
company expects the following impact from the Kasamba acquisition, assuming
the
transaction closes on or around October 1:
|
·
|
An
increase in monthly revenue of approximately $1 million upon
closing.
|
|
·
|
A
decrease in EBITDA (earnings before interest, taxes, depreciation
and
amortization) of $0.01 per share in the fourth quarter of 2007, due
primarily to the impact of additional share issuances related to
the
anticipated transaction.
|
|
·
|
A
decrease in EPS in the fourth quarter of 2007, due primarily to
deal-related amortization and additional stock compensation expense
of
$0.01-$0.02.
|
The
Kasamba related expectations are unchanged from the company’s announcement on
June 25.
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,
|
|
||||||||
|
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|||||
|
Total
revenue
|
$
|
11,661
|
$
|
7,416
|
$
|
22,630
|
$
|
14,293
|
|||||
|
Operating
expenses:
|
|||||||||||||
|
Cost
of revenue
|
3,105
|
1,642
|
5,894
|
3,103
|
|||||||||
|
Product
development
|
2,044
|
1,018
|
3,864
|
1,898
|
|||||||||
|
Sales
and marketing
|
3,512
|
2,856
|
6,914
|
5,502
|
|||||||||
|
General
and administrative
|
2,057
|
1,437
|
4,079
|
2,939
|
|||||||||
|
Amortization
of other intangibles
|
242
|
232
|
483
|
464
|
|||||||||
|
Total
operating expenses
|
10,960
|
7,185
|
21,234
|
13,906
|
|||||||||
|
Income
from operations
|
701
|
231
|
1,396
|
387
|
|||||||||
|
Other
income, net
|
212
|
170
|
435
|
313
|
|||||||||
|
Net
income
|
$
|
913
|
$
|
401
|
$
|
1,831
|
$
|
700
|
|||||
|
Basic
net income per common share
|
$
|
0.02
|
$
|
0.01
|
$
|
0.04
|
$
|
0.02
|
|||||
|
Diluted
net income per common share
|
$
|
0.02
|
$
|
0.01
|
$
|
0.04
|
$
|
0.02
|
|||||
|
Weighted
average shares outstanding used in basic net
|
|||||||||||||
|
income
per common share calculation
|
43,011,309
|
38,900,328
|
42,159,146
|
38,578,791
|
|||||||||
|
Weighted
average shares outstanding used in diluted net
|
|||||||||||||
|
income
per common share calculation
|
46,726,357
|
42,818,687
|
45,757,843
|
42,471,432
|
|||||||||
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,
|
|
June
30,
|
|
||||||||
|
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|||||
|
Net
income in accordance with generally
|
|||||||||||||
|
accepted
accounting principles
|
$
|
913
|
$
|
401
|
$
|
1,831
|
$
|
700
|
|||||
|
Add/(less):
|
|||||||||||||
|
(a)
Amortization
of intangibles
|
325
|
232
|
650
|
464
|
|||||||||
|
(b)
Stock-based
compensation
|
898
|
439
|
1,712
|
1,022
|
|||||||||
|
(c)
Depreciation/Loss
on disposal of fixed assets
|
229
|
130
|
438
|
192
|
|||||||||
|
(e)
Interest
income, net
|
(212
|
)
|
(170
|
)
|
(435
|
)
|
(313
|
)
|
|||||
|
EBITDA
(1)
|
$
|
2,153
|
$
|
1,032
|
$
|
4,196
|
$
|
2,065
|
|||||
|
Diluted
EBITDA per common share
|
$
|
0.05
|
$
|
0.02
|
$
|
0.09
|
$
|
0.05
|
|||||
|
Weighted
average shares used in diluted EBITDA
|
|||||||||||||
|
per
common share
|
46,726,357
|
42,818,687
|
45,757,843
|
42,471,432
|
|||||||||
|
EBITDA
|
$
|
2,153
|
$
|
1,032
|
$
|
4,196
|
$
|
2,065
|
|||||
|
Add/(less):
|
|||||||||||||
|
Changes
in operating assets and liabilities
|
191
|
(766
|
)
|
(386
|
)
|
(559
|
)
|
||||||
|
Provision
for doubtful accounts
|
-
|
-
|
20
|
-
|
|||||||||
|
Deferred
income taxes
|
(1,054
|
)
|
-
|
(2,084
|
)
|
-
|
|||||||
|
Interest
income, net
|
212
|
170
|
435
|
313
|
|||||||||
|
Net
cash provided by operating activities
|
$
|
1,502
|
$
|
436
|
$
|
2,181
|
$
|
1,819
|
|||||
(1)
Earnings before interest, taxes, depreciation, amortization and stock-based
compensation.
LivePerson,
Inc.
Condensed
Consolidated Balance Sheets
(In
Thousands)
Unaudited
|
June
30, 2007
|
|
December
31, 2006
|
|||||
|
ASSETS
|
|||||||
|
Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
26,534
|
$
|
21,729
|
|||
|
Accounts
receivable, net
|
5,037
|
4,269
|
|||||
|
Prepaid
expenses and other current assets
|
1,302
|
1,317
|
|||||
|
Total
current assets
|
32,873
|
27,315
|
|||||
|
Property
and equipment, net
|
1,216
|
1,124
|
|||||
|
Prepaid
expenses
|
508
|
-
|
|||||
|
Intangibles,
net
|
1,990
|
2,640
|
|||||
|
Goodwill
|
18,405
|
9,673
|
|||||
|
Deferred
tax assets, net
|
3,479
|
1,580
|
|||||
|
Security
deposits
|
272
|
299
|
|||||
|
Other
assets
|
790
|
684
|
|||||
|
Total
assets
|
$
|
59,533
|
$
|
43,315
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable
|
$
|
419
|
$
|
813
|
|||
|
Accrued
expenses
|
4,212
|
3,754
|
|||||
|
Deferred
revenue
|
3,804
|
3,256
|
|||||
|
Deferred
tax liabilities, net
|
74
|
259
|
|||||
|
Total
current liabilities
|
8,509
|
8,082
|
|||||
|
Other
liabilities
|
790
|
684
|
|||||
|
Commitments
and contingencies
|
|||||||
|
Total
stockholders' equity
|
50,234
|
34,549
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
59,533
|
$
|
43,315
|
|||
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 5,000 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 stock-based 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 civil and political
unrest in that region; our history of losses; potential fluctuations in our
quarterly and annual results; impairments to goodwill that result in significant
charges to earnings; 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.