ACTIVE NETWORK INC - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - FORM 8-K - ACTIVE NETWORK INC	d390580d8k.htm

Exhibit 99.1

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ACTIVE Network Reports Second Quarter 2012 Results

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Record Second Quarter Revenue Increases 23% Year-Over-Year to $121.6 Million

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Year-to-Date Revenue Up 26% Over the Prior Year Period to $216.0 Million

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Number of Registrations Increases 14% Year-Over-Year to 28.0 Million

SAN DIEGO, CALIF. – August 2, 2012 – ACTIVE Network (NYSE: ACTV), the leader in cloud-based activity and participant management™ solutions, today announced its financial results for the second quarter of 2012.

Q2 2012 Financial Highlights:

(All comparisons are made to the second quarter of 2011)

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Total net revenue was $121.6 million, up 23% from $99.0 million.

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Technology revenue constituted 89%, or $108.2 million of total net revenue, up 26% from $85.6 million.

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Net registration revenue was $83.9, up 20% - including registration growth of 14% and revenue per registration growth of 5%.

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Marketing services revenue constituted 11%, or $13.4 million of total net revenue.

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Net loss was $2.3 million compared to a net income of $5.5 million.

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Adjusted EBITDA, a non-GAAP financial measure, was $20.2 million. Excluding the impact of business combination accounting rules related to deferred revenue, Adjusted EBITDA was $23.8 million.

“We delivered a strong second quarter with record revenue of $121.6 million, up 23% over the prior year period,” said Dave Alberga, CEO of ACTIVE Network. “During the quarter, we achieved an important technology milestone by launching the first Hunting and Fishing permitting application built on the ACTIVE Works^® platform. Our customer base continues to expand, adding key customers such as Aetna, MacWorld, and Edinburgh University Sports Union. We remain focused on strengthening our position as the leading cloud-based provider of activity and participant management solutions and continue to increase penetration in the underdeveloped activities market.”

“We are excited to see positive trends in our key metrics this quarter as registrations, one of our main drivers, accelerated 14% and revenue per registration grew 5% from the prior year period,” explained Scott Mendel, CFO of ACTIVE Network. “We experienced growth across all verticals and continued to benefit from a high degree of predictability in our model and strong renewal rates of over 95%.”

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Q2 2012 Key Business Highlights

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The Company launched an impressive suite of Business Solutions mobile applications for professional meetings and events planners, attendees and suppliers.

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Aetna and ACTIVE Network partnered to help members become more physically active through Aetna Everactive^SM, a new social community that brings together virtual health and fitness resources with opportunities to participate in real-life local events.

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In June, ACTIVE Network launched MeetMobile, an innovative swim app, at the national qualifying swim trials in Omaha. MeetMobile transforms the swim meet experience by giving swimmers, coaches and fans real-time, paperless access to heat sheets and event results at their fingertips. Adoption of the app has been strong with over 110,000 downloads to date and over 3.0 million user sessions.

Business Outlook

For the third quarter of 2012, ACTIVE Network is targeting total revenue to be in the range of $108 million to $111 million, up 22% at the midpoint compared to the same period in the prior year. Registrations are expected to grow approximately 13% to 15% and revenue per registration growth of approximately 2% to 4% compared to the same period in the prior year. The Company expects Adjusted EBITDA in the range of $14 million to $16 million. Excluding the impact of business combination accounting rules, Adjusted EBITDA is expected to be in the range of $16 million to $18 million. The Company expects a net loss of $8 million to $4 million.

For the full year of 2012, ACTIVE Network is tightening its initial guidance range. Total revenue is expected to be in the range of $425 million to $430 million, up 27% at the midpoint compared to the prior year. Adjusted EBITDA is expected to be in the range of $46 million to $48 million. Excluding the impact of business combination accounting rules, Adjusted EBITDA is expected to be in the range of $58.5 million to $60.5 million. The Company expects net loss in the range of $38 million to $31 million.

Conference Call Information

ACTIVE Network will host a conference call to discuss second quarter 2012 results today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call dial-in number is (866) 202-0886 for domestic participants and (617) 213-8841 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.

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A replay of the call will be available starting at 7:30 p.m. Eastern Time (4:30 p.m. Pacific Time) on August 2, 2012 through 11:59 p.m. Eastern Time (8:59 p.m. Pacific Time) on August 7, 2012. To listen to the replay, dial (888) 286-8010 or (617) 801-6888 outside of the United States and use the passcode 58040522. 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.com and engage with us 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.

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THE ACTIVE NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net Revenue:
Technology revenue	$	108,155		$	85,553		$	192,275		$	148,661
Marketing services revenue		13,409			13,452			23,727			23,056

Total net revenue		121,564			99,005			216,002			171,717

Cost of net revenue:
Cost of technology revenue		50,812			38,707			96,467			71,695
Cost of marketing services revenue		2,115			1,480			3,431			2,642

Total cost of net revenue		52,927			40,187			99,898			74,337

Gross profit		68,637			58,818			116,104			97,380

Operating expenses:
Sales and marketing		24,284			18,914			49,308			35,854
Research and development		21,121			16,377			42,330			32,553
General and administrative		16,903			12,308			33,447			22,896
Amortization of intangibles		5,596			3,718			11,288			7,421

Total operating expenses		67,904			51,317			136,373			98,724

(Loss) income from operations		733			7,501			(20,269	)		(1,344	)
Interest income		25			29			50			59
Interest expense		(90	)		(1,406	)		(241	)		(2,690	)
Other income (expense), net		(524	)		193			877			142

(Loss) income before provision for income taxes		144			6,317			(19,583	)		(3,833	)
Provision for income taxes		2,469			788			3,080			1,580

Net (loss) income		(2,325	)		5,529			(22,663	)		(5,413	)
Accretion of redeemable convertible preferred stock		—			(4,400	)		—			(11,810	)

Net (loss) income attributable to common stockholders	$	(2,325	)	$	1,129		$	(22,663	)	$	(17,223	)

Net (loss) income per share attributable to common stockholders:
Basic	$	(0.04	)	$	0.04		$	(0.39	)	$	(0.96	)

Diluted	$	(0.04	)	$	0.03		$	(0.39	)	$	(0.96	)

Weighted-average shares used to compute net (loss) income per share attributable to common stockholders:
Basic		58,322			27,269			57,655			17,943

Diluted		58,322			36,877			57,655			17,943

THE ACTIVE NETWORK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)


	June 30, 2012			December 31, 2011
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	107,806		$	108,699
Restricted cash		875			1,502
Accounts receivable, net		80,926			66,469
Inventories		3,973			1,662
Prepaid expenses and other current assets		7,249			6,179

Total current assets		200,829			184,511
Property and equipment, net		33,690			33,830
Software development costs, net		48,105			45,093
Goodwill		243,089			243,320
Intangible assets, net		76,026			90,340
Other long-term assets		2,322			2,133

Total assets	$	604,061		$	599,227

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	6,903		$	8,516
Registration fees payable		112,349			72,405
Accrued expenses		39,078			41,106
Deferred revenue		67,886			54,919
Current portion of long-term debt		10,000			5,000
Capital lease obligations, current portion		1,431			3,317
Other current liabilities		2,976			42,613

Total current liabilities		240,623			227,876
Capital lease obligations, net of current portion		801			1,652
Other long-term liabilities		5,915			6,147
Deferred tax liability		18,700			16,913

Total liabilities		266,039			252,588
Stockholders’ equity:
Common stock		61			58
Treasury stock		(11,959	)		(11,959	)
Additional paid-in capital		639,955			625,875
Accumulated other comprehensive income		7,886			7,923
Accumulated deficit		(297,921	)		(275,258	)

Total stockholders’ equity		338,022			346,639

Total liabilities and stockholders’ equity	$	604,061		$	599,227

THE ACTIVE NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Six Months Ended June 30,
	2012			2011
Operating activities
Net loss	$	(22,663	)	$	(5,413	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		30,094			21,508
Stock-based compensation expense		7,331			2,812
Deferred tax liability		1,799			1,570
Other non-cash items		(931	)		1,217
Change in operating assets and liabilities, net of effect of acquisitions:
Restricted cash		627			—
Accounts receivable		(14,690	)		(21,797	)
Inventories		(2,311	)		(1,810	)
Prepaid expenses and other assets		(1,318	)		(3,498	)
Accounts payable and accrued expenses		(3,201	)		782
Registration fees payable		39,944			58,899
Income taxes payable		249			—
Deferred revenue		13,105			11,461
Deferred rent		184			661

Net cash provided by operating activities		48,219			66,392
Investing activities
Purchases of property and equipment		(9,343	)		(5,326	)
Capitalized software development		(10,996	)		(9,481	)
Cash (paid) received for acquisitions, net of cash acquired		(38,037	)		520
Payment of contingent consideration		—			(625	)

Net cash used in investing activities		(58,376	)		(14,912	)
Financing activities
Proceeds from issuance of common stock and repurchase of unvested common stock		6,850			2,747
Payments on capital lease obligations		(2,737	)		(1,233	)
Proceeds from (repayments of) long-term debt		5,000			(41,628	)
Net proceeds from initial public offering		—			114,700

Net cash provided by financing activities		9,113			74,586
Effect of exchange rates on cash		151			—

Net (decrease) increase in cash and cash equivalents		(893	)		126,066
Cash and cash equivalents at beginning of period		108,699			31,441

Cash and cash equivalents at end of period	$	107,806		$	157,507

THE ACTIVE NETWORK, INC.

SUPPLEMENTARY DATA

(In thousands, except revenue per registration)

(Unaudited)


Operational Data:	Three Months Ended June 30,						% change			Six Months Ended June 30,						% change
	2012			2011			% change			2012			2011			% change
Net registration revenue	$	83,854		$	69,741			20	%	$	147,373		$	121,174			22	%
Registrations		28,036			24,597			14	%		46,259			39,456			17	%
Net registration revenue per registration	$	2.99		$	2.84			5	%	$	3.19		$	3.07			4	%

Gross Profit Margin:	Three Months Ended June 30,						% or bps change			Six Months Ended June 30,						% or bps change
	Three Months Ended June 30,									Six Months Ended June 30,
	2012			2011						2012			2011
Total net revenue	$	121,564		$	99,005			23	%	$	216,002		$	171,717			26	%
Add: impact of business combination accounting rules		3,652			252						8,268			585

Non-GAAP total net revenue	$	125,216		$	99,257			26	%	$	224,270		$	172,302			30	%

GAAP gross profit	$	68,637		$	58,818			17	%	$	116,104		$	97,380			19	%
Add back: stock-based compensation		192			39						252			55
Add back: depreciation & amortization		7,950			5,544						15,668			10,899
Add: impact of business combination accounting rules		3,652			252						8,268			585

Non-GAAP gross profit	$	80,431		$	64,653			24	%	$	140,292		$	108,919			29	%

Gross profit margin:
GAAP gross profit margin		56.5	%		59.4	%		(290	) bps		53.8	%		56.7	%		(290	) bps
Non-GAAP gross profit margin		64.2	%		65.1	%		(90	) bps		62.6	%		63.2	%		(60	) bps


Stock-Based Compensation Expense:	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Cost of net revenue	$	192	$	39	$	252	$	55
Sales and marketing		1,006		576		1,702		763
Research and development		668		203		1,120		321
General and administrative		2,436		1,250		4,257		1,673

Total stock-based compensation	$	4,302	$	2,068	$	7,331	$	2,812

THE ACTIVE NETWORK, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands, except per share data)

(Unaudited)


Non-GAAP Earnings:	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Non-GAAP net (loss) income:
GAAP net (loss) income	$	(2,325	)	$	5,529		$	(22,663	)	$	(5,413	)
Add back: stock-based compensation		4,302			2,068			7,331			2,812
Add back: amortization of intangibles		7,074			5,151			14,231			10,247
Add: impact of business combination accounting rules		3,652			252			8,268			585
Income tax effect		(5,260	)		(2,615	)		(10,441	)		(4,775	)

Non-GAAP net (loss) income	$	7,443		$	10,385		$	(3,274	)	$	3,456

Non-GAAP shares:
GAAP shares - basic		58,322			27,269			57,655			17,943
Add: preferred stock conversion		—			20,551			—			27,552

Non-GAAP shares - basic		58,322			47,820			57,655			45,495

GAAP shares - diluted		58,322			36,877			57,655			17,943
Add: preferred stock and other securities conversion		6,640			20,551			—			36,754

Non-GAAP shares - diluted		64,962			57,428			57,655			54,697

Non-GAAP net (loss) income per share:
Basic	$	0.13		$	0.22		$	(0.06	)	$	0.08

Diluted	$	0.11		$	0.18		$	(0.06	)	$	0.06


Adjusted EBITDA:	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net (loss) income	$	(2,325	)	$	5,529		$	(22,663	)	$	(5,413	)
Add back: interest expense, net		65			1,377			191			2,631
Add back: provision for income taxes		2,469			788			3,080			1,580
Add back: depreciation and amortization		15,118			10,837			30,094			21,508
Add back: stock-based compensation		4,302			2,068			7,331			2,812
Add back: other (income) expense, net		524			(193	)		(877	)		(142	)

Adjusted EBITDA	$	20,153		$	20,406		$	17,156		$	22,976

Add: impact of business combination accounting rules		3,652			252			8,268			585

Adjusted EBITDA excluding the impact of business combination accounting rules	$	23,805		$	20,658		$	25,424		$	23,561

THE ACTIVE NETWORK, INC.

FUTURE PERFORMANCE - 3RD QUARTER AND FULL YEAR 2012 OUTLOOK

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands)


	Estimated 3rd Quarter 2012						Estimated Full Year 2012
	Low End			High End			Low End			High End
Net loss	$	(8,000	)	$	(4,000	)	$	(38,000	)	$	(31,000	)
Interest, taxes and other		1,000			1,000			4,000			3,000
Depreciation and amortization		16,000			15,000			62,000			60,000
Stock-based compensation		5,000			4,000			18,000			16,000

Adjusted EBITDA	$	14,000		$	16,000		$	46,000		$	48,000

Add: impact of business combination accounting rules		2,000			2,000			12,500			12,500

Adjusted EBITDA excluding the impact of business combination accounting rules	$	16,000		$	18,000		$	58,500		$	60,500

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^© 2012 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.


Media Contact:		Investor Contact:

Mona Klausing, ACTIVE Network		Brinlea Johnson, The Blueshirt Group
Mona.Klausing@ACTIVENetwork.com		Brinlea@BlueshirtGroup.com
1-858-964-3813		1-212-331-8424

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ACTIVE NETWORK INC - FORM 8-K - EX-99.1 - PRESS RELEASE - August 2, 2012

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