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Active Network Reports Third Quarter 2011 Results

Event date: Thursday, November 10, 2011, at 3:16 PM

Active Network Reports Third Quarter 2011 Results

  • Quarterly Revenues Increase 23% Year-Over-Year to $89.6 Million
  • Quarterly Adjusted EBITDA of $12.7 Million, Up 36% Over the Prior Year Period
  • YTD Total Net Revenue Up 20% Over the Prior Year Period and YTD Adjusted EBITDA Up 60% Over the Prior Year Period

SAN DIEGO, Nov 10, 2011 (BUSINESS WIRE) --

The Active Network, Inc. (NYSE: ACTV), the leading provider of organization-based cloud computing applications, today announced its financial results for the third quarter of 2011.

Q3 2011 Financial Highlights:

(All comparisons are made to the third quarter of 2010)

  • Total net revenue was $89.6 million, up 23% from $73.1 million.
  • Technology revenue constituted 85%, or $76.3 million of total net revenue, up 22% from $62.4 million.
  • Marketing Services revenue constituted 15%, or $13.3 million of total net revenue, up 24% from $10.7 million.
  • Loss from operations narrowed to $412,000 compared to a loss of $2.3 million.
  • Net loss narrowed to $1.4 million compared to a net loss of $3.8 million.
  • Adjusted EBITDA, a non-GAAP financial measure, grew 36% to $12.7 million, from $9.3 million.
  • Cash flow from operations was $61.6 million, up 52%, as compared to $40.5 million.
  • The Company closed the quarter with cash and cash equivalents of $139.0 million.
  • For the nine months ended September 30, 2011, total net revenue was up 20% to $261.3 million and Adjusted EBITDA was up 60% to $35.7 million.

"We had a strong third quarter, delivering year-over-year revenue growth of 23%, exceeding expectations and increasing year-to-date revenues 20% over the prior year period," said Dave Alberga, CEO of Active Network. "Solid growth in our technology segment was driven by the increased adoption of our technology solutions. We continue to demonstrate our leadership position in the industry as we leverage our organizational-based solutions platform to further penetrate key customer groups, like our faith-based, outdoors verticals and winter sports. Since the beginning of 2011, we have managed greater than $1.7B gross registration fees through our proprietary cloud-based platform. Our business has consistently outperformed, despite a more challenging economic environment, as we benefit from our diversified customer base and long-term contracts that result in predictable, recurring revenue."

"Our results demonstrate our ability to achieve strong top line results while continuing to invest for future growth in key areas such as sales and technology," explained Scott Mendel, CFO of Active Network. "One of the main drivers of our technology revenues is the number of registrations transacted through our cloud applications, and this quarter, we grew net registration revenue 17% over the same period last year. We believe our continued expansion in core markets and success in scaling our business will accelerate us towards our target long-term operating model."

Q3 2011 Key Business Highlights:

  • Active Network announced the appointment of twenty-year global technology veteran, Darko Dejanovic, in the newly-created role of chief technology, product and innovation officer. Dejanovic is leading the Company's global technology and product strategy and operations. The Company believes his expertise in growing global B2B and B2C technology and online media companies should be instrumental in advancing Active Network to further technology innovation and growth.
  • This quarter, the Company implemented and started recognizing revenue on the State of Ohio contract for hunting and fishing registrations.
  • During the quarter, the Company continued to grow and solidify its leading position in the faith-based market, now serving over 3,500 churches.
  • Active.com(R), a media property of Active Network, announced the Active.com Couch-to-5K(R) training plan, a new iPhone application that encourages people to get off the couch and onto the roads.

Today, Active Network also announced the acquisition of Resort Technology Partners (RTP), a leading provider of enterprise software serving the ski resort and recreation markets. The addition of RTP as part of the Active Network portfolio of companies marks the Company's entry into a strategic, sports market within the broader activities space, and is aligned with the Company's strategy to use acquisitions to accelerate penetration into existing markets.

Business Outlook

For the fourth quarter of 2011, Active Network is targeting total net revenue to be in the range of $72 million to $76 million, with registration growth of approximately 12% to 14%, and revenue per registration growth of approximately 1% to 3% compared to the same period in the prior year. The Company expects a net loss in the range of $15 million to $13 million and is targeting for Adjusted EBITDA in the range of $1 to $3 million.

Inclusive of the fourth quarter of 2011, the Company expects total net revenue in 2011 to be in the range of $333 million to $337 million, a net loss in the range of $22 million to $20 million and Adjusted EBITDA in the range of $36.7 to $38.7 million.

Conference Call Information

Active Network will host a conference call to discuss third quarter 2011 results today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). The conference call dial-in number is 800-688-0836 for domestic participants and 617-614-4072 for international participants. A live webcast of the conference call will also be available and can be accessed within the investor relations section of Active Network's corporate website at: http://www.activenetwork.com/investors.

A replay of the call will be available starting at 8:00 p.m. Eastern Time (5:00 p.m. Pacific Time) on November 10, 2011 through 11:59 p.m. Eastern Time (8:59 p.m. Pacific Time) on November 12, 2011. To listen to the replay, dial 888-286-8010 (or 617-801-6888 outside of the United States) and use the passcode 6015-8109. The webcast will also be available via webcast within the investor relations section of the Company's website at: http://www.investors.activenetwork.com.

About The Active Network, Inc.

The Active Network, Inc. is the leading provider of organization-based cloud computing applications--serving the business events, community activities, outdoors, and sports markets-- with over 47,000 global business customers and 70 million annual transactions reported last year. Our technology platform, ActiveWorks(R), transforms the way organizers manage their activities and events by automating online registrations and streamlining other critical management functions, while also driving consumer participation to their events. Our flagship media property, Active.com(R), is the leading online community for people who want to discover, participate in, and share activities about which they are passionate. Headquartered in San Diego, California since 1999, the company has over 25 offices worldwide. To learn more, visit www.ActiveNetwork.com or www.Active.com. Follow Active Network on Twitter @ActiveNetwork, @Active and on Facebook.

Note With Respect to Non-GAAP Financial Measures

In addition to using GAAP financial results, the Company's management measures and reports non-GAAP financial measures, including Adjusted EBITDA, Non-GAAP net income (loss) and Non-GAAP net income (loss) per share. The most directly comparable GAAP financial results for these non-GAAP financial measures are Net income (loss), Net income (loss) and Net income (loss) per share, respectively. Management uses these non-GAAP financial measures to evaluate the Company's performance and operations. Management also uses these non-GAAP financial measures for business planning, to evaluate acquisition opportunities and as a measurement to create incentives and to compensate the Company's management team. In addition, management believes the exclusion or inclusion of certain amounts in calculating these non-GAAP financial measures can provide a useful measure to investors for period-to-period comparisons. These non-GAAP financial measures, however, should be used in addition to, and in conjunction with, the Company's financial results presented in accordance with GAAP. The Company strongly encourages investors to review its financial statements in their entirety and to not rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare the Company's results with other companies' non-GAAP financial measures having the same or similar names. Please see Reconciliation of GAAP to Non-GAAP Results below for a reconciliation of our GAAP to non-GAAP financial measures.

Forward-Looking Statements

The Active Network, Inc. cautions you that the statements included in this press release that are not a description of historical facts are forward-looking statements within the meaning of the federal securities laws. Any such statements are subject to substantial risks and uncertainties, including the Company's ability to generate revenue and control expenses in order to achieve and maintain profitability, the Company's ability to maintain an adequate rate of growth, including growing its registrations and revenue from registrations, and the Company's ability to successfully manage its acquisitions and investments in businesses, applications and technologies, as well as the other risks detailed from time to time in the reports it files with the Securities and Exchange Commission. As a result of these risks and uncertainties, the Company's actual results may differ materially from those expressed in any forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement and the Company undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof.

THE ACTIVE NETWORK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2011 2010 2011 2010
Net Revenue:
Technology revenue $ 76,341 $ 62,400 $ 225,002 $ 188,504
Marketing services revenue 13,287 10,693 36,343 29,473
Total net revenue 89,628 73,093 261,345 217,977
Cost of net revenue:
Cost of technology revenue 38,291 29,308 109,986 88,682
Cost of marketing services revenue 1,599 1,816 4,241 4,562
Total cost of net revenue 39,890 31,124 114,227 93,244
Gross profit 49,738 41,969 147,118 124,733
Operating expenses:
Sales and marketing 17,116 15,041 52,970 44,799
Research and development 17,628 15,048 50,181 46,400
General and administrative 11,737 10,101 34,633 32,958
Amortization of intangibles 3,669 4,029 11,090 12,149
Total operating expenses 50,150 44,219 148,874 136,306
Loss from operations (412 ) (2,250 ) (1,756 ) (11,573 )
Interest income 32 43 91 113
Interest expense (109 ) (1,325 ) (2,799 ) (4,089 )
Other income (expense), net (33 ) 762 109 141
Loss before provision for income taxes (522 ) (2,770 ) (4,355 ) (15,408 )
Provision for income taxes 910 1,064 2,490 2,772
Net loss (1,432 ) (3,834 ) (6,845 ) (18,180 )
Accretion of redeemable convertible preferred stock - (7,055 ) (11,810 ) (20,828 )
Net loss attributable to common stockholders $ (1,432 ) $ (10,889 ) $ (18,655 ) $ (39,008 )
Net loss per share attributable to common stockholders:
Basic and diluted $ (0.03 ) $ (1.51 ) $ (0.62 ) $ (5.53 )
Weighted-average shares used to compute net loss
per share attributable to common stockholders:
Basic and diluted 53,701 7,228 29,993 7,050
THE ACTIVE NETWORK, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2011 2010
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 139,023 $ 31,441
Restricted cash 5,000 5,000
Accounts receivable, net 61,192 34,096
Inventories 1,102 -
Prepaid expenses and other current assets 4,914 4,181
Total current assets 211,231 74,718
Property and equipment, net 28,936 28,181
Software development costs, net 43,620 37,013
Goodwill 213,357 207,113
Intangible assets, net 32,429 41,208
Deposits and other assets 2,040 2,315
Total assets $ 531,613 $ 390,548
Liabilities, preferred stock and stockholders' equity (deficit)
Current liabilities:
Accounts payable $ 4,503 $ 5,372
Registration fees payable 76,172 40,667
Accrued expenses 36,103 32,172
Deferred revenue 52,672 34,013
Current portion of debt - 16,866
Capital lease obligations, current portion 2,906 1,983
Other current liabilities 2,576 1,630
Total current liabilities 174,932 132,703
Debt, net of current portion - 27,537
Capital lease obligations, net of current portion 649 1,663
Other long-term liabilities 5,644 4,353
Deferred tax liability 19,556 17,960
Total liabilities 200,781 184,216
Convertible preferred stock - 21,187
Redeemable convertible preferred stock - 371,126
Total preferred stock - 392,313
Stockholders' equity (deficit):
Common stock 55 9
Treasury stock (11,959 ) (11,959 )
Additional paid-in capital 602,194 65,224
Accumulated other comprehensive income 7,318 8,866
Accumulated deficit (266,776 ) (248,121 )
Total stockholders' equity (deficit) 330,832 (185,981 )
Total liabilities, preferred stock and stockholders' equity (deficit) $ 531,613 $ 390,548
THE ACTIVE NETWORK, INC.
SUPPLEMENTARY DATA
(In thousands, except revenue per registration)
(Unaudited)
Operational Data:
Three Months Ended Nine Months Ended
September 30, % September 30, %
2011 2010 change 2011 2010 change
Net registration revenue $ 60,893 $ 52,074 17% $ 182,067 $ 158,315 15%
Registrations 23,513 20,474 15% 62,969 54,859 15%
Net registration revenue per registration $ 2.59 $ 2.54 2% $ 2.89 $ 2.89 0%
Gross Profit Margin:
Three Months Ended % or Nine Months Ended % or
September 30, bps September 30, bps
2011 2010 change 2011 2010 change
Total net revenue $ 89,628 $ 73,093 23% $ 261,345 $ 217,977 20%
GAAP gross profit 49,738 41,969 147,118 124,733
Add back: stock-based compensation 52 25 107 79
Add back: depreciation & amortization 5,897 4,146 16,796 10,318
Non-GAAP gross profit 55,687 46,140 21% 164,021 135,130 21%
Gross profit margin:
GAAP gross profit margin 55.5% 57.4% (190) bps 56.3% 57.2% (90) bps
Non-GAAP gross profit margin 62.1% 63.1% (100) bps 62.8% 62.0% 80 bps
Stock-based compensation: Three Months Ended Nine Months Ended
September 30, September 30,
2011 2010 2011 2010
Cost of net revenue $ 52 $ 25 $ 107 $ 79
Sales and marketing 277 134 1,040 390
Research and development 315 8 636 287
General and administrative 1,326 1,182 2,999 3,786
Total $ 1,970 $ 1,349 $ 4,782 $ 4,542
THE ACTIVE NETWORK, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2011 2010 2011 2010
Non-GAAP net income (loss):
GAAP net loss $ (1,432 ) $ (3,834 ) $ (6,845 ) $ (18,180 )
Add back: stock-based compensation 1,970 1,349 4,782 4,542
Add back: amortization of intangibles 5,063 5,232 15,310 15,830
Income tax effect (2,461 ) (2,303 ) (7,032 ) (7,130 )
Non-GAAP net income (loss) $ 3,140 $ 444 $ 6,215 $ (4,938 )
Non-GAAP net income (loss) per share:
Non-GAAP net income (loss) $ 3,140 $ 444 $ 6,215 $ (4,938 )
GAAP basic shares 53,701 7,228 29,993 7,050
Add: preferred stock conversion - 34,632 18,267 34,632
Non-GAAP basic shares 53,701 41,860 48,260 41,682
GAAP diluted shares 53,701 7,228 29,993 7,050
Add: preferred stock conversion and dilutive securities 9,124 39,022 27,433 34,632
Non-GAAP diluted shares 62,825 46,250 57,426 41,682
Non-GAAP net income (loss) per share:
Basic $ 0.06 $ 0.01 $ 0.13 $ (0.12 )
Diluted $ 0.05 $ 0.01 $ 0.11 $ (0.12 )
Three Months Ended Nine Months Ended
September 30, % September 30, %
2011 2010 change 2011 2010 change
Adjusted EBITDA:
Net loss $ (1,432 ) $ (3,834 ) $ (6,845 ) $ (18,180 )
Interest expense, net 77 1,282 2,708 3,976
Income tax provision 910 1,064 2,490 2,772
Depreciation & amortization 11,146 10,230 32,654 29,287
Stock-based compensation 1,970 1,349 4,782 4,542
Other expense (income), net 33 (762 ) (109 ) (141 )
Adjusted EBITDA $ 12,704 $ 9,329 36 % $ 35,680 $ 22,256 60 %
THE ACTIVE NETWORK, INC.
FUTURE PERFORMANCE - 4TH QUARTER AND FULL YEAR 2011 OUTLOOK
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands)
Estimated Estimated
4th Quarter 2011 Full Year 2011
Low End High End Low End High End
Net loss $ (15,000 ) $ (13,000 ) $ (21,800 ) $ (19,800 )
Interest, taxes & other 1,200 1,200 6,200 6,200
Depreciation & amortization 11,600 11,600 44,300 44,300
Stock-based compensation 3,200 3,200 8,000 8,000
Adjusted EBITDA $ 1,000 $ 3,000 $ 36,700 $ 38,700

© 2011 The Active Network, Inc. All rights reserved. Active.com and ActiveWorks are registered trademarks of The Active Network, Inc. Active Network is a trademark of The Active Network, Inc. All other trademarks are the property of their respective owners.

SOURCE: The Active Network, Inc. 

Media:
Active Network
Mona Klausing, 1-858-964-3813
Mona.Klausing@ActiveNetwork.com
or
Investors:
The Blueshirt Group
Brinlea Johnson, 1-212-331-8424
Brinlea@BlueshirtGroup.com