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

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8-K - FORM 8-K - ACTIVE NETWORK INC	d487249d8k.htm

Exhibit 99.1

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ACTIVE Network Reports Fourth Quarter and Fiscal Year 2012 Financial Results

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Fourth Quarter Revenue Increases 23% to $93.7 Million

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2012 Revenue Increases 24% to $418.9 Million

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2012 Registrations Up 12% and Revenue Per Registration Up 8%

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Reaffirming Full Year 2013 Guidance

SAN DIEGO, CALIF. – February 14, 2013 – ACTIVE Network (NYSE: ACTV), the leader in cloud-based Activity and Participant Management™ (APM) solutions, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2012.

Q4 2012 Financial Highlights:

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

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Total net revenue up 23% to $93.7 million.

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Technology revenue increased 25% and constituted 88%, or $82.0 million, of total net revenue.

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Net registration revenue increased 20% to $55.8 million with the number of registrations up 7% and the revenue per registration up 13%.

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Marketing services revenue constituted 12%, or $11.6 million, of total net revenue.

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Net loss was $14.3 million compared to a net loss of $8.5 million.

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Adjusted EBITDA, a non-GAAP financial measure, was $5.9 million up from $0.4 million in 2011 (Adjusted EBITDA in 2011 included $1.9 million of severance costs associated with the acquisition of StarCite).

Fiscal Year 2012 Financial Highlights:

(All comparisons are made to fiscal year 2011)

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Total net revenue up 24% to $418.9 million.

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Technology revenue increased 28% and constituted 88%, or $370.5 million, of total net revenue.

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Net registration revenue increased 21% to $275.8 million with the number of registrations up 12% and the revenue per registration up 8%.

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Approximately 55,000 organizations utilized the Company’s technology solutions, up 7%.

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Marketing services revenue constituted 12%, or $48.4 million, of total net revenue.

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Net loss was $43.0 million compared to a net loss of $27.1 million.

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Adjusted EBITDA, a non-GAAP financial measure, was $38.4 million. Excluding the impact of business combination accounting rules related to deferred revenue, Adjusted EBITDA was $50.8 million.

“In 2012, we achieved the key technology milestones we established at the beginning of the year. Our first Hunting and Fishing customer went live on our ActiveWorks^® platform, we made strong progress in transitioning our Endurance customers onto ActiveWorks, and we delivered on our data center consolidation targets. We continue to drive innovation and adoption of our horizontal ActiveWorks^® platform,” commented Executive Chairman of ACTIVE Network, Dave Alberga.

“We delivered 23% revenue growth in the fourth quarter and 24% for the full year 2012,” added Matt Landa, CEO of ACTIVE Network. “In the fourth quarter, our cross-selling efforts gained momentum as we brought in a number of Fortune 500 customers that now use our combined Strategic Meetings Management and Conference solution. We generated positive operating cash flow of $27.6 million and ended the year with a strong balance sheet. As we enter 2013, I am excited about our leading market position and our ability to capitalize on new opportunities. During the year, we will continue to make targeted investments in our sales capabilities to drive increased adoption of our APM technology.”

Q4 2012 Key Business Highlights

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Marquee customer highlights included wins from City of Santa Monica, San Antonio YMCA, and Sun Valley Resort and strong technology successes with Loews Hotels and Nestlé.

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ACTIVE launched Registration Protector in partnership with Allianz Global to protect registration fees for both event organizers and participants when participants can’t show up on race day.

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ACTIVE Access, a new enhanced developer center, brought together all aspects of ACTIVE Network’s distribution offerings in a single, user-friendly site, developer.active.com.

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Internationally, ACTIVE expanded its footprint announcing that it has become the exclusive technology partner for RUN Ireland, the largest source for running events in that region.

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We extended our ActiveWorks Endurance platform to Australia in October and are experiencing strong initial adoption.

Financial Outlook

First Quarter 2013 - For the first quarter of 2013, ACTIVE Network expects total revenue to be in the range of $102 million to $107 million. Registrations are expected to grow approximately 2% to 7% and revenue per registration is expected to grow approximately 7% to 9% compared to the same period in the prior year. The Company expects Adjusted EBITDA in the range of $2 million to $5 million. The Company expects a net loss of $21 million to $17 million.

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Full Year 2013 - Active Network reiterated 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.

“Our fourth quarter results were in-line with our guidance - as registrations, one of our main drivers, accelerated 7% and revenue per registration grew 13% from the prior year period,” said Scott Mendel, CFO of ACTIVE Network. “During 2012, approximately 55,000 organizations used our technology solutions to manage their events and activities, up 7% over 2011.”

Conference Call Information

ACTIVE Network will host a conference call to discuss fourth quarter and fiscal year 2012 results today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call dial-in number is (800) 573-4840 for domestic participants and (617) 224-4326 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 February 14, 2013 through 11:59 p.m. Eastern Time (8:59 p.m. Pacific Time) on February 21, 2013. To listen to the replay, dial (888) 286-8010 or (617) 801-6888 outside of the United States and use the passcode 38594946. 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

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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 December 31,						Twelve Months Ended December 31,
	2012			2011			2012			2011
Net Revenue:
Technology revenue	$	82,027		$	65,478		$	370,472		$	290,480
Marketing services revenue		11,645			10,567			48,421			46,910

Total net revenue		93,672			76,045			418,893			337,390
Cost of net revenue:
Cost of technology revenue		42,916			34,976			184,954			144,962
Cost of marketing services revenue		1,608			1,711			6,865			5,952

Total cost of net revenue		44,524			36,687			191,819			150,914

Gross profit		49,148			39,358			227,074			186,476
Operating expenses:
Sales and marketing		23,629			17,281			97,091			70,251
Research and development		18,454			16,572			81,408			66,753
General and administrative		16,615			16,493			65,924			51,126
Amortization of intangibles		5,497			3,872			22,277			14,962

Total operating expenses		64,195			54,218			266,700			203,092

Loss from operations		(15,047	)		(14,860	)		(39,626	)		(16,616	)
Interest income		14			28			87			119
Interest expense		(184	)		(91	)		(664	)		(2,890	)
Other income (expense), net		(206	)		(123	)		1,157			(14	)

Loss before provision (benefit) for income taxes		(15,423	)		(15,046	)		(39,046	)		(19,401	)
Provision (benefit) for income taxes		(1,082	)		(6,564	)		3,980			(4,074	)

Net loss		(14,341	)		(8,482	)		(43,026	)		(15,327	)
Accretion of redeemable convertible preferred stock		—			—			—			(11,810	)

Net loss attributable to common stockholders	$	(14,341	)	$	(8,482	)	$	(43,026	)	$	(27,137	)

Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.24	)	$	(0.16	)	$	(0.73	)	$	(0.75	)

Weighted-average shares used to compute net loss per share attributable to common stockholders:
Basic and diluted		60,423			54,109			58,804			36,072

THE ACTIVE NETWORK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)


	December 31, 2012			December 31, 2011(1)
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	58,493		$	108,699
Restricted cash		1,145			1,502
Registration receivable		16,260			14,006
Accounts receivable, net		51,363			52,463
Inventories		4,809			1,662
Prepaid expenses and other current assets		8,922			7,509

Total current assets		140,992			185,841
Property and equipment, net		41,236			33,830
Software development costs, net		51,151			45,093
Goodwill		243,716			243,320
Intangible assets, net		62,806			90,340
Other long-term assets		2,569			2,133

Total assets	$	542,470		$	600,557

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	8,174		$	8,516
Registration fees payable		61,272			72,405
Accrued expenses		38,865			41,106
Deferred revenue		66,846			54,919
Current portion of long-term debt		—			5,000
Capital lease obligations, current portion		2,774			3,317
Other current liabilities		4,373			42,613

Total current liabilities		182,304			227,876
Capital lease obligations, net of current portion		2,462			1,652
Other long-term liabilities		6,192			6,147
Deferred tax liability		19,065			18,243

Total liabilities		210,023			253,918
Stockholders’ equity:
Common stock		62			58
Treasury stock		(11,959	)		(11,959	)
Additional paid-in capital		653,694			625,875
Accumulated other comprehensive income		8,934			7,923
Accumulated deficit		(318,284	)		(275,258	)

Total stockholders’ equity		332,447			346,639

Total liabilities and stockholders’ equity	$	542,470		$	600,557

(1)

Includes adjustment to the 12/31/11 balance sheet for comparability. The Company has concluded that certain deferred tax assets should have been recorded as current assets in the financial statements for the period ended December 31, 2011 which results in an increase in other current assets and a corresponding increase in Deferred tax liability of $1,330.

THE ACTIVE NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Twelve Months Ended December 31,
	2012			2011
Operating activities
Net loss	$	(43,026	)	$	(15,327	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization of property and equipment		33,343			24,386
Amortization of intangible assets		27,972			20,471
Stock-based compensation expense		16,728			7,795
Deferred income taxes		1,370			(5,016	)
Other non-cash items		(2,669	)		174
Change in operating assets and liabilities, net of effect of acquisitions:
Restricted cash		357			4,190
Registration receivable		(2,254	)		(5,378	)
Accounts receivable		1,849			(6,961	)
Inventories		(3,147	)		(1,662	)
Prepaid expenses and other assets		(2,512	)		1,071
Accounts payable and accrued expenses		(3,141	)		887
Registration fees payable		(11,133	)		31,738
Deferred revenue		11,894			6,400
Other liabilities		1,921			2,935

Net cash provided by operating activities		27,552			65,703
Investing activities
Purchases of property and equipment		(17,765	)		(12,514	)
Capitalized software development		(23,026	)		(18,651	)
Cash paid for acquisitions, net of cash acquired		(38,175	)		(35,144	)
Payment of contingent consideration		—			(625	)

Net cash used in investing activities		(78,966	)		(66,934	)
Financing activities
Proceeds from issuance of common stock and repurchase of unvested common stock		10,955			5,187
Payments on capital lease obligations		(4,730	)		(2,595	)
Proceeds (repayment) of long-term debt		(5,000	)		(36,628	)
Net proceeds from initial public offering		—			112,566

Net cash provided by financing activities		1,225			78,530
Effect of exchange rates on cash		(17	)		(41	)

Net increase (decrease) in cash and cash equivalents		(50,206	)		77,258
Cash and cash equivalents at beginning of period		108,699			31,441

Cash and cash equivalents at end of period	$	58,493		$	108,699

THE ACTIVE NETWORK, INC.

SUPPLEMENTARY DATA

(In thousands, except revenue per registration)

(Unaudited)


	Three Months Ended December 31,						% change	Twelve Months Ended December 31,						% change
	2012			2011			% change	2012			2011			% change
Operational Data:
Organizations		n/a			n/a		n/a		54.9			51.3		7%
Net registration revenue		55,750			46,386		20%		275,826			228,453		21%
Registrations		18,434			17,305		7%		89,900			80,274		12%
Net registration revenue per registration	$	3.02		$	2.68		13%	$	3.07		$	2.85		8%

	Three Months Ended December 31,						% or bps change	Twelve Months Ended December 31,						% or bps change
	2012			2011			% or bps change	2012			2011			% or bps change
GAAP and Non-GAAP Gross Profit Margin:
Total net revenue	$	93,672		$	76,045		23%	$	418,893		$	337,390		24%
Add: impact of business combination accounting rules		1,512			703				12,373			1,471

Non-GAAP total net revenue	$	95,184		$	76,748		24%	$	431,266		$	338,861		27%

GAAP gross profit	$	49,148		$	39,358		25%	$	227,074		$	186,476		22%
Add back: stock-based compensation		183			61				657			168
Add back: depreciation & amortization		8,980			6,722				32,708			23,518
Add: impact of business combination accounting rules		1,512			703				12,373			1,471

Non-GAAP gross profit	$	59,823		$	46,844		28%	$	272,812		$	211,633		29%

Gross profit margin:
GAAP gross profit margin		52.5	%		51.8	%	70 bps		54.2	%		55.3	%	(110) bps
Non-GAAP gross profit margin		62.8	%		61.0	%	180 bps		63.3	%		62.5	%	80 bps

	Three Months Ended December 31,							Twelve Months Ended December 31,
	2012			2011				2012			2011
Stock-Based Compensation Expense:
Cost of net revenue	$	183		$	61			$	657		$	168
Sales and marketing		1,054			373				3,763			1,413
Research and development		622			279				2,404			915
General and administrative		2,877			2,300				9,904			5,299

Total stock-based compensation	$	4,736		$	3,013			$	16,728		$	7,795

THE ACTIVE NETWORK, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands, except per share data)

(Unaudited)


	Three Months Ended December 31,						Twelve Months Ended December 31,
	2012			2011			2012			2011
Non-GAAP Earnings:
Non-GAAP net (loss) income:
GAAP net loss	$	(14,341	)	$	(8,482	)	$	(43,026	)	$	(15,327	)
Add back: stock-based compensation		4,736			3,013			16,728			7,795
Add back: amortization of intangibles		6,840			5,161			27,972			20,471
Add: impact of business combination accounting rules		1,512			703			12,373			1,471
Income tax effect		(4,581	)		(3,107	)		(19,976	)		(10,408	)

Non-GAAP net (loss) income	$	(5,834	)	$	(2,712	)	$	(5,929	)	$	4,002

Non-GAAP shares:
GAAP shares—basic		60,423			54,109			58,804			36,072
Add: preferred stock conversion					—						13,663

Non-GAAP shares—basic		60,423			54,109			58,804			49,735

GAAP shares—diluted		60,423			54,109			58,804			36,072
Add: preferred stock and other securities conversion					—						22,598

Non-GAAP shares—diluted		60,423			54,109			58,804			58,670

Non-GAAP net (loss) income per share:
Basic	$	(0.10	)	$	(0.05	)	$	(0.10	)	$	0.08

Diluted	$	(0.10	)	$	(0.05	)	$	(0.10	)	$	0.07


	Three Months Ended December 31,						Twelve Months Ended December 31,
	2012			2011			2012			2011
Adjusted EBITDA:
Net loss	$	(14,341	)	$	(8,482	)	$	(43,026	)	$	(15,327	)
Add back: interest expense, net		170			63			577			2,771
Add back: provision (benefit) for income taxes		(1,082	)		(6,564	)		3,980			(4,074	)
Add back: depreciation and amortization		16,188			12,203			61,315			44,857
Add back: stock-based compensation		4,736			3,013			16,728			7,795
Add back: other (income) expense, net		206			123			(1,157	)		14

Adjusted EBITDA	$	5,877		$	356		$	38,417		$	36,036

Add: acquisition-related severance costs		—			1,977			—			1,977
Add: impact of business combination accounting rules		1,512			703			12,373			1,471

Adjusted EBITDA excluding the impact of acquisition-related severance costs and business combination accounting rules	$	7,389		$	3,036		$	50,790		$	39,484

THE ACTIVE NETWORK, INC.

FUTURE PERFORMANCE—1ST QUARTER AND FULL YEAR 2013 OUTLOOK

(In thousands, except per share data)


	Estimated 1st Quarter 2013						Estimated Full Year 2013
	Low End			High End			Low End			High End
Reconciliation of GAAP to Non-GAAP Results:
Net loss	$	(21,000	)	$	(17,000	)	$	(38,000	)	$	(31,000	)
Interest, taxes and other		1,000			2,000			6,000			5,000
Depreciation and amortization		16,000			15,000			60,000			59,000
Stock-based compensation		6,000			5,000			22,000			21,000

Adjusted EBITDA	$	2,000		$	5,000		$	50,000		$	54,000


Net loss per share:
Net loss	$	(21,000	)	$	(17,000	)	$	(38,000	)	$	(31,000	)

Weighted average shares—basic and diluted		61,000			62,000			63,000			64,000
Net loss per share—basic and diluted	$	(0.34	)	$	(0.27	)	$	(0.60	)	$	(0.48	)


Non-GAAP net loss:
GAAP net loss	$	(21,000	)	$	(17,000	)	$	(38,000	)	$	(31,000	)
Add back: stock-based compensation		6,000			5,000			22,000			21,000
Add back: amortization of intangibles		6,000			5,500			21,000			20,000
Income tax effect		(4,200	)		(3,675	)		(15,050	)		(14,350	)

Non-GAAP net loss	$	(13,200	)	$	(10,175	)	$	(10,050	)	$	(4,350	)

Weighted average shares—basic and diluted		61,000			62,000			63,000			64,000
Non-GAAP net loss per share—basic and diluted	$	(0.22	)	$	(0.16	)	$	(0.16	)	$	(0.07	)

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^© 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.


Media Contact:		Investor Contact:

Megan Lavine, ACTIVE Network		Brinlea Johnson, The Blueshirt Group
PR@ACTIVEnetwork.com		Brinlea@BlueshirtGroup.com
1-858-652-6133		1-212-331-8424

		Allise Furlani, The Blueshirt Group
		Allise@BlueshirtGroup.com
		1-212-331-8433

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ACTIVE NETWORK INC - FORM 8-K - EX-99.1 - February 14, 2013

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