ACTIVE Network Reports First Quarter 2013 Financial Results

ACTIVE Network Reports First Quarter 2013 Financial Results

  • First Quarter Revenue Increases 12% to $106.0 Million

  • Record First Quarter Adjusted EBITDA of $6.1 Million

  • Operating Cash Flow of $60.2 Million for the Quarter

SAN DIEGO--(BUSINESS WIRE)-- ACTIVE Network (NYSE: ACTV) , the leader in cloud-based activity and participant management™ solutions, today announced its financial results for the first quarter ended March 31, 2013.

Q1 2013 Financial Highlights:


(All comparisons are made to the first quarter of 2012)

  • Total net revenue up 12% to $106.0 million.

  • Technology revenue increased 13% and constituted 90%, or $95.0 million, of total net revenue.

  • Net registration revenue increased 11% to $70.5 million - number of registrations flat; revenue per registration up 11%.

  • Marketing services revenue constituted 10%, or $11.0 million, of total net revenue.

  • Gross margins increased 230 basis points as a % of revenue to 52.6%.

  • Net loss was $15.2 million compared to net loss of $20.3 million.

  • Adjusted EBITDA, a non-GAAP financial measure, was $6.1 million.

"Our strong first quarter 2013 revenues and bottom line results demonstrate the Company's ability to scale our infrastructure and deliver gross margin accretion," said Scott Mendel, CFO of ACTIVE Network. "Cash flow for the quarter was very strong, reflecting our top line growth and following typical seasonal patterns. We remain focused on driving operational efficiency to capitalize on our large market opportunity and generate long-term growth."

Q1 2013 Key Business Highlights

  • Marquee customer highlights included wins from YMCA Los Angeles, New Jersey Department of Environmental Protection, Two Cities Marathon, and Woodlands Marathon.

  • ACTIVE Network renewed exclusive multi-year contracts with well-known clients including Gartner, World Triathlon Corporation (Ironman), Georgia State Parks and Recreation.Gov, which services the National Park Service, the National Forest Service, Bureau of Land Management, and the Army Corps of Engineers.

  • ACTIVE Network announced that the YMCA of Greater San Antonio, has extended their relationship and is migrating from Class® software to ACTIVE Net™, a cloud-based solution that can help improve operational efficiency, engage members and drive participation by offering better online access to activities.

  • ACTIVE Network launched ACTIVE On-Site, a mobile app and branded credit card reader to help race directors simplify and speed up the on-site check-in, registration and payment process.

Financial Outlook

Second Quarter 2013 - For the second quarter of 2013, ACTIVE Network expects total revenue to be in the range of $128 million to $133 million. Registrations are expected to grow approximately 3% to 8% and revenue per registration is expected to grow approximately 3% to 5% compared to the same period in the prior year. The Company expects a net loss of $10 million to $3 million and Adjusted EBITDA in the range of $18 million to $21 million. Second quarter guidance includes the estimated impact of one-time charges associated with the recent management changes.

Full Year 2013 - Due to the recent management changes, ACTIVE Network is prioritizing and accelerating its strategic and financial goals for the remainder of the year. Accordingly, the Company will not be providing full year 2013 guidance at this time, but expects to do so once it has had an opportunity to align its financial projections with its go-forward strategy.

Conference Call Information

ACTIVE Network will host a conference call to discuss first quarter 2013 results today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call dial-in number is (877) 546-5019 for domestic participants and (857) 244-7551 for international participants. A live webcast of the conference call will also be available and can be accessed within the investor relations section of the ACTIVE Network corporate website at: http://investors.ACTIVEnetwork.com.

A replay of the call will be available starting at 6:30 p.m. Eastern Time (3:30 p.m. Pacific Time) on May 2, 2013 through 11:59 p.m. Eastern Time (8:59 p.m. Pacific Time) on May 9, 2013. To listen to the replay, dial (888) 286-8010 or (617) 801-6888 outside of the United States and use the passcode 41574038. The replay will also be available via webcast at:

http://investors.activenetwork.com/.

About ACTIVE Network

ACTIVE Network (NYSE: ACTV) is on a mission to make the world a more active place. With deep expertise in activity and participant management™, our ACTIVE Works® cloud technology helps organizations transform and grow their businesses. We do this through technology solutions that power the world's activities, as well as online destinations such as ACTIVE.com® that connect people with the things they love to do. Serving over 50,000 global business customers and driving over 80 million transactions annually, we help organizations get participants, manage their events and build communities. ACTIVE Network is headquartered in San Diego, California and has over 30 offices worldwide. Learn more at ACTIVEnetwork.com or ACTIVE.comand engage with us on Twitter @ACTIVEnetwork, @ACTIVEand 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 and improve its operations, including growing its registrations and revenue from registrations, the Company's ability to successfully manage its acquisitions and investments in businesses, applications and technologies, the effects of the Company's recent management change and the final terms of the separation agreements, if any, with the Company's former officers and the associated impact on our financial results, as well as the other risks described more fully in Item 1A in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012, which are expressly incorporated herein by reference, and other factors as may periodically be described 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.

© 2013 The Active Network, Inc. All rights reserved. ACTIVE.com, ACTIVE Works and StarCite 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.

THE ACTIVE NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

Three Months Ended

March 31,

2013

2012

Net Revenue:

Technology revenue

$

94,990

$

84,120

Marketing services revenue

11,021

10,318

Total net revenue

106,011

94,438

Cost of net revenue:

Cost of technology revenue

49,046

45,655

Cost of marketing services revenue

1,191

1,316

Total cost of net revenue

50,237

46,971

Gross profit

55,774

47,467

Operating expenses:

Sales and marketing

26,826

25,024

Research and development

21,176

21,209

General and administrative

16,508

16,544

Amortization of intangibles

4,454

5,692

Total operating expenses

68,964

68,469

Loss from operations

(13,190

)

(21,002

)

Interest income

15

25

Interest expense

(182

)

(151

)

Other income (expense), net

(553

)

1,401

Loss before provision for income taxes

(13,910

)

(19,727

)

Provision for income taxes

1,318

611

Net loss

(15,228

)

(20,338

)

Net loss per share:

Basic and diluted

$

(0.25

)

$

(0.36

)

Weighted-average shares used to compute net loss per share:

Basic and diluted

60,764

56,982

THE ACTIVE NETWORK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

March 31,

December 31,

2013

2012

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$

107,039

$

58,493

Restricted cash

422

1,145

Registration receivable

44,750

16,260

Accounts receivable, net

42,863

51,363

Inventories

4,298

4,809

Prepaid expenses and other current assets

11,084

8,922

Total current assets

210,456

140,992

Property and equipment, net

40,082

41,236

Software development costs, net

50,636

51,151

Goodwill

243,189

243,716

Intangible assets, net

56,974

62,806

Other long-term assets

2,508

2,569

Total assets

$

603,845

$

542,470

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$

5,997

$

8,174

Registration fees payable

124,254

61,272

Accrued expenses

43,581

38,865

Deferred revenue

74,815

66,846

Capital lease obligations, current portion

2,670

2,774

Other current liabilities

3,961

4,373

Total current liabilities

255,278

182,304

Capital lease obligations, net of current portion

1,805

2,462

Other long-term liabilities

5,864

6,192

Deferred tax liability

19,945

19,065

Total liabilities

282,892

210,023

Stockholders' equity:

Common stock

62

62

Treasury stock

(11,959

)

(11,959

)

Additional paid-in capital

657,981

653,694

Accumulated other comprehensive income

8,381

8,934

Accumulated deficit

(333,512

)

(318,284

)

Total stockholders' equity

320,953

332,447

Total liabilities and stockholders' equity

$

603,845

$

542,470

THE ACTIVE NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Three Months Ended

March 31,

2013

2012

Operating activities

Net loss

$

(15,228

)

$

(20,338

)

Adjustments to reconcile net loss to net cash provided

by operating activities:

Depreciation and amortization of property and equipment

9,744

7,819

Amortization of intangible assets

5,655

7,157

Stock-based compensation expense

3,926

3,029

Deferred income taxes

898

640

Other non-cash items

(436

)

(1,442

)

Change in operating assets and liabilities, net of effect of acquisitions:

Restricted cash

723

-

Registration receivable

(28,490

)

(23,609

)

Accounts receivable

8,525

5,090

Inventories

511

(1,418

)

Prepaid expenses and other assets

(2,118

)

(995

)

Accounts payable and accrued expenses

5,801

2,652

Registration fees payable

62,982

37,769

Deferred revenue

8,114

11,319

Other liabilities

(390

)

802

Net cash provided by operating activities

60,217

28,475

Investing activities

Purchases of property and equipment

(6,130

)

(5,849

)

Capitalized software development

(5,388

)

(5,285

)