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

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8-K - FORM 8-K - ACTIVE NETWORK INC	d432113d8k.htm

Exhibit 99.1

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ACTIVE Network Reports Third Quarter 2012 Financial Results

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Third Quarter Revenue Increases 22% to $109.2 Million

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Year-to-Date Revenue Up 24% to $325.2 Million

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Third Quarter Adjusted EBITDA $15.4 Million

SAN DIEGO, CALIF. – November 1, 2012 – ACTIVE Network (NYSE: ACTV), the leader in cloud-based Activity and Participant Management™ (APM) solutions, today announced its financial results for the third quarter ended September 30, 2012.

Q3 2012 Financial Highlights:

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

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Total net revenue up 22% to $109.2 million.

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Technology revenue increased 26% and constituted 88%, or $96.2 million, of total net revenue.

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Net registration revenue increased 19% to $72.7 million with the number of registrations up 7% and the revenue per registration up 11%.

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Marketing services revenue constituted 12%, or $13.0 million, of total net revenue.

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Net loss was $6.0 million compared to a net loss of $1.4 million.

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Adjusted EBITDA, a non-GAAP financial measure, was $15.4 million. Excluding the impact of business combination accounting rules related to deferred revenue, Adjusted EBITDA was $18.0 million, up 40%.

“We delivered strong third quarter results and continued to make progress expanding our customer base, driving innovation in our horizontal ActiveWorks^® platform and penetrating new markets,” said Matt Landa, CEO of ACTIVE Network. “We added a number of new high profile customers, including NYSE Euronext, the Philadelphia Zoo, and The PGA of America. Additionally, we expanded our presence in the Outdoors market with the addition of Saskatchewan and Puerto Rico, who have agreed to implement our ActiveWorks^® platform to automate their respective hunting and fishing permitting operations.”

ACTIVE Network Executive Chairman, Dave Alberga, stated, “Looking ahead, we believe the organizational changes we recently implemented will help leverage the exceptional talent we have at ACTIVE, expand our capabilities and drive long-term growth. Our team will be laser focused on product innovation and sales execution.”

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Q3 2012 Key Business Highlights

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The NYSE EURONEXT selected ACTIVE to manage its corporate events with its leading event management solution.

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ACTIVE entered into a partnership with The PGA of America to create a new online registration system for the PGA’s nationwide “Get Golf Ready” campaign, which will allow PGA Professionals to promote their golf camps, tournaments and clinics via PGA.com and ACTIVE.com.

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The Company announced that the Philadelphia Zoo has chosen its resorts and attractions technology solution to power its Zoo operations—from ticketing and point of sale to food and beverage sales.

Financial Outlook

Fourth Quarter 2012—For the fourth quarter of 2012, ACTIVE Network expects total revenue to be in the range of $93 million to $97 million. Registrations are expected to grow approximately 5% to 10% and revenue per registration is expected to grow approximately 8% to 10% compared to the same period in the prior year. The Company expects Adjusted EBITDA in the range of $5 million to $7 million. Excluding the impact of business combination accounting rules, Adjusted EBITDA is expected to be in the range of $6.6 million to $8.6 million. The Company expects a net loss of $18 million to $13 million.

Full Year 2012—For full year 2012, ACTIVE Network expects total revenue to be in the range of $418 million to $422 million. Registrations are expected to grow approximately 11% to 13% and revenue per registration is expected to grow approximately 6% to 8% compared to last year. The Company expects Adjusted EBITDA in the range of $37.5 million to $39.5 million. Excluding the impact of business combination accounting rules, Adjusted EBITDA is expected to be in the range of $50 million to $52 million. The Company expects a net loss of $47 million to $42 million.

Full Year 2013—ACTIVE Network also introduced initial financial guidance for full year 2013. Total revenue is expected to be in the range of $470 million to $480 million and Adjusted EBITDA is expected to be in the range of $50 million to $54 million. The Company expects a net loss of $38 million to $31 million.

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“We delivered strong third quarter revenue growth of 22%, gross margins expanded 110 basis points to 56.6% and Adjusted EBITDA came in at $15.4 million,” said Scott Mendel, CFO of ACTIVE Network. “Based on our year-to-date financial results and assumptions for the balance of the year, we believe it is appropriate to provide our 2013 forecast for revenue and Adjusted EBITDA at this time. Our outlook assumes overall growth rates of 12% to 14%, which is comparable to our expectations for 2012.”

Conference Call Information

ACTIVE Network will host a conference call to discuss third 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) 788-0546 for domestic participants and (857) 350-1684 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 7:00 p.m. Eastern Time (4:00 p.m. Pacific Time) on November 1, 2012 through 11:59 p.m. Eastern Time (8:59 p.m. Pacific Time) on November 8, 2012. To listen to the replay, dial (888) 286-8010 or (617) 801-6888 outside of the United States and use the passcode 83008684. 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™ (APM), 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

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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 September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net Revenue:
Technology revenue	$	96,170		$	76,341		$	288,445		$	225,002
Marketing services revenue		13,049			13,287			36,776			36,343

Total net revenue		109,219			89,628			325,221			261,345
Cost of net revenue:
Cost of technology revenue		45,571			38,291			142,038			109,986
Cost of marketing services revenue		1,826			1,599			5,257			4,241

Total cost of net revenue		47,397			39,890			147,295			114,227

Gross profit		61,822			49,738			177,926			147,118
Operating expenses:
Sales and marketing		24,154			17,116			73,462			52,970
Research and development		20,624			17,628			62,954			50,181
General and administrative		15,862			11,737			49,309			34,633
Amortization of intangibles		5,492			3,669			16,780			11,090

Total operating expenses		66,132			50,150			202,505			148,874

Loss from operations		(4,310	)		(412	)		(24,579	)		(1,756	)
Interest income		23			32			73			91
Interest expense		(239	)		(109	)		(480	)		(2,799	)
Other income (expense), net		486			(33	)		1,363			109

Loss before provision for income taxes		(4,040	)		(522	)		(23,623	)		(4,355	)
Provision for income taxes		1,982			910			5,062			2,490

Net loss		(6,022	)		(1,432	)		(28,685	)		(6,845	)
Accretion of redeemable convertible preferred stock		—			—			—			(11,810	)

Net loss attributable to common stockholders	$	(6,022	)	$	(1,432	)	$	(28,685	)	$	(18,655	)

Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.10	)	$	(0.03	)	$	(0.49	)	$	(0.62	)

Weighted-average shares used to compute net loss per share attributable to common stockholders:
Basic and diluted		59,444			53,701			58,259			29,993

THE ACTIVE NETWORK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)


	September 30, 2012			December 31, 2011
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	78,499		$	108,699
Restricted cash		875			1,502
Accounts receivable, net		73,806			66,469
Inventories		3,493			1,662
Prepaid expenses and other current assets		8,653			6,179

Total current assets		165,326			184,511
Property and equipment, net		35,042			33,830
Software development costs, net		50,464			45,093
Goodwill		244,108			243,320
Intangible assets, net		69,648			90,340
Other long-term assets		2,310			2,133

Total assets	$	566,898		$	599,227

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	8,063		$	8,516
Registration fees payable		72,657			72,405
Accrued expenses		43,766			41,106
Deferred revenue		68,965			54,919
Current portion of long-term debt		—			5,000
Capital lease obligations, current portion		1,723			3,317
Other current liabilities		4,017			42,613

Total current liabilities		199,191			227,876
Capital lease obligations, net of current portion		1,028			1,652
Other long-term liabilities		6,149			6,147
Deferred tax liability		20,047			16,913

Total liabilities		226,415			252,588
Stockholders’ equity:
Common stock		62			58
Treasury stock		(11,959	)		(11,959	)
Additional paid-in capital		646,954			625,875
Accumulated other comprehensive income		9,369			7,923
Accumulated deficit		(303,943	)		(275,258	)

Total stockholders’ equity		340,483			346,639

Total liabilities and stockholders’ equity	$	566,898		$	599,227

THE ACTIVE NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2012			2011
Operating activities
Net loss	$	(28,685	)	$	(6,845	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization of property and equipment		23,995			17,344
Amortization of intangible assets		21,132			15,310
Stock-based compensation expense		11,992			4,782
Deferred tax liability		3,046			1,824
Other non-cash items		(2,431	)		380
Change in operating assets and liabilities, net of effect of acquisitions:
Restricted cash		627			—
Accounts receivable		(6,757	)		(27,223	)
Inventories		(1,831	)		(1,102	)
Prepaid expenses and other assets		(2,692	)		(396	)
Accounts payable and accrued expenses		3,416			2,925
Registration fees payable		252			35,505
Deferred revenue		13,914			18,089
Other liabilities		1,170			3,146

Net cash provided by operating activities		37,148			63,739
Investing activities
Purchases of property and equipment		(12,665	)		(8,991	)
Capitalized software development		(17,194	)		(13,898	)
Cash paid for acquisitions, net of cash acquired		(38,037	)		(4,082	)
Payment of contingent consideration		—			(625	)

Net cash used in investing activities		(67,896	)		(27,596	)
Financing activities
Proceeds from issuance of common stock and repurchase of unvested common stock		9,247			3,059
Payments on capital lease obligations		(3,552	)		(2,207	)
Proceeds from long-term debt		5,000			—
Repayment of long-term debt		(10,000	)		(41,628	)
Net proceeds from initial public offering		—			112,566

Net cash provided by financing activities		695			71,790
Effect of exchange rates on cash		(147	)		(351	)

Net (decrease) increase in cash and cash equivalents		(30,200	)		107,582
Cash and cash equivalents at beginning of period		108,699			31,441

Cash and cash equivalents at end of period	$	78,499		$	139,023

THE ACTIVE NETWORK, INC.

SUPPLEMENTARY DATA

(In thousands, except revenue per registration)

(Unaudited)


	Three Months Ended September 30,						%	Nine Months Ended September 30,						%
	2012			2011			change	2012			2011			change
Operational Data:
Net registration revenue	$	72,703		$	60,893		19%	$	220,076		$	182,067		21%
Registrations		25,207			23,513		7%		71,466			62,969		13%
Net registration revenue per registration	$	2.88		$	2.59		11%	$	3.08		$	2.89		7%

	Three Months Ended September 30,						% or bps	Nine Months Ended September 30,						% or bps
	2012			2011			change	2012			2011			change
GAAP and Non-GAAP Gross Profit Margin:
Total net revenue	$	109,219		$	89,628		22%	$	325,221		$	261,345		24%
Add: impact of business combination accounting rules		2,593			183				10,861			768

Non-GAAP total net revenue	$	111,812		$	89,811		24%	$	336,082		$	262,113		28%

GAAP gross profit	$	61,822		$	49,738		24%	$	177,926		$	147,118		21%
Add back: stock-based compensation		222			52				474			107
Add back: depreciation & amortization		8,060			5,897				23,728			16,796
Add: impact of business combination accounting rules		2,593			183				10,861			768

Non-GAAP gross profit	$	72,697		$	55,870		30%	$	212,989		$	164,789		29%

Gross profit margin:
GAAP gross profit margin		56.6	%		55.5	%	110 bps		54.7	%		56.3	%	(160) bps
Non-GAAP gross profit margin		65.0	%		62.2	%	280 bps		63.4	%		62.9	%	50 bps

	Three Months Ended September 30,							Nine Months Ended September 30,
	2012			2011				2012			2011
Stock-Based Compensation Expense:
Cost of net revenue	$	222		$	52			$	474		$	107
Sales and marketing		1,007			277				2,709			1,040
Research and development		662			315				1,782			636
General and administrative		2,770			1,326				7,027			2,999

Total stock-based compensation	$	4,661		$	1,970			$	11,992		$	4,782

THE ACTIVE NETWORK, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands, except per share data)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Non-GAAP Earnings:
Non-GAAP net (loss) income:
GAAP net loss	$	(6,022	)	$	(1,432	)	$	(28,685	)	$	(6,845	)
Add back: stock-based compensation		4,661			1,970			11,992			4,782
Add back: amortization of intangibles		6,900			5,063			21,132			15,310
Add: impact of business combination accounting rules		2,593			183			10,861			768
Income tax effect		(4,954	)		(2,526	)		(15,395	)		(7,301	)

Non-GAAP net (loss) income	$	3,178		$	3,258		$	(95	)	$	6,714

Non-GAAP shares:
GAAP shares—basic		59,444			53,701			58,259			29,993
Add: preferred stock conversion		—			—			—			18,267

Non-GAAP shares—basic		59,444			53,701			58,259			48,260

GAAP shares—diluted		59,444			53,701			58,259			29,993
Add: preferred stock and other securities conversion		5,264			9,124			6,526			27,433

Non-GAAP shares—diluted		64,708			62,825			64,785			57,426

Non-GAAP net income per share:
Basic	$	0.05		$	0.06		$	0.00		$	0.14

Diluted	$	0.05		$	0.05		$	0.00		$	0.12


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Adjusted EBITDA:
Net loss	$	(6,022	)	$	(1,432	)	$	(28,685	)	$	(6,845	)
Add back: interest expense, net		216			77			407			2,708
Add back: provision for income taxes		1,982			910			5,062			2,490
Add back: depreciation and amortization		15,033			11,146			45,127			32,654
Add back: stock-based compensation		4,661			1,970			11,992			4,782
Add back: other (income) expense, net		(486	)		33			(1,363	)		(109	)

Adjusted EBITDA	$	15,384		$	12,704		$	32,540		$	35,680

Add: impact of business combination accounting rules		2,593			183			10,861			768

Adjusted EBITDA excluding the impact of business combination accounting rules	$	17,977		$	12,887		$	43,401		$	36,448

THE ACTIVE NETWORK, INC.

FUTURE PERFORMANCE—2012 AND 2013 OUTLOOK

(In thousands, except per share data)


	Estimated 4th Quarter 2012						Estimated Full Year 2012
	Low End			High End			Low End			High End
4th Quarter and Full Year 2012 Outlook
Reconciliation of GAAP to Non-GAAP Results:
Net loss	$	(18,000	)	$	(13,000	)	$	(46,700	)	$	(41,700	)
Interest, taxes and other		2,000			1,000			6,100			5,100
Depreciation and amortization		16,000			15,000			61,100			60,100
Stock-based compensation		5,000			4,000			17,000			16,000

Adjusted EBITDA	$	5,000		$	7,000		$	37,500		$	39,500

Add: impact of business combination accounting rules		1,600			1,600			12,500			12,500

Adjusted EBITDA excluding the impact of business combination accounting rules	$	6,600		$	8,600		$	50,000		$	52,000


Net Loss Per Share:
Net loss	$	(18,000	)	$	(13,000	)	$	(46,700	)	$	(41,700	)

Weighted average shares—basic and diluted		60,700			61,000			58,800			59,000
Net loss per share—basic and diluted	$	(0.30	)	$	(0.21	)	$	(0.79	)	$	(0.71	)


	Estimated Full Year 2013
	Low End			High End
Full Year 2013 Outlook
Reconciliation of GAAP to Non-GAAP Results:
Net loss	$	(38,000	)	$	(31,000	)
Interest, taxes and other		6,000			5,000
Depreciation and amortization		60,000			59,000
Stock-based compensation		22,000			21,000

Adjusted EBITDA	$	50,000		$	54,000


Net Loss Per Share:
Net loss	$	(38,000	)	$	(31,000	)

Weighted average shares—basic and diluted		64,000			65,000
Net loss per share—basic and diluted	$	(0.59	)	$	(0.48	)

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^© 2012 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.


Media Contact:		Investor Contact:

Mona Klausing, ACTIVE Network		Christine Greany, The Blueshirt Group
Mona.Klausing@ACTIVENetwork.com		christine@blueshirtrgroup.com
1-858-964-3813		1-858-523-1732

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ACTIVE NETWORK INC - FORM 8-K - EX-99.1 - PRESS RELEASE - November 1, 2012

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