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| 8-K - 8-K - Voltari Corp | vltc-8xkreq12013pressrelea.htm |
Voltari Reports First Quarter 2013 Results
NEW YORK, May 15, 2013 (GLOBE NEWSWIRE) -- Voltari Corporation (Nasdaq:VLTC), which empowers brands and agencies to maximize their advertising dollars through smart marketing and advertising solutions, today announced financial results for the first quarter ended March 31, 2013.
First Quarter Results
Total consolidated revenue in the first quarter of 2013 was $18.4 million, as compared to $22.8 million in the first quarter of 2012. Net income from continuing operations was $196,000, as compared to net loss from continuing operations of $(4.0) million in the first quarter of 2012. EBITDA from continuing operations (EBITDA) was $2.3 million, as compared to an EBITDA loss from continuing operations of $(1.7) million in the first quarter of 2012.
Voltari ended the first quarter of 2013 with $54.3 million of cash and cash equivalents, as compared to $51.5 million as of December 31, 2012.
Management Commentary
"We are pleased to have completed the recent reorganization of Motricity to Voltari. As we transition from the legacy carrier business to a media and advertising focused business, we have made appropriate adjustments to our expense structure. We are now operating as a digital advertising company with over ten years of mobile experience, dedicated to helping companies get the most out of their marketing budgets. Our strategic initiatives include the development of new products and services to assist marketers and advertisers in connecting with customers, improving customer engagement and increasing the ease of buying products. We have a solid cash position and intend to grow both organically and through acquisitions. To that end, we have engaged Gridley & Company to identify strategic acquisition candidates that would enhance and grow our position in mobile media," said Richard Stalzer, Chief Executive Officer.
Business Update
In the second half of 2013 the Company's legacy carrier business will diminish and the go-forward business will be focused on the high-growth mobile and cross-channel advertising sectors through Voltari's integrated, highly scalable managed service platform. Voltari leverages advanced predictive analytics capabilities to deliver the right content, to the right person at the right time.
Since launching the Voltari Connect platform in August of 2012, Voltari has worked with over 130 advertisers across multiple verticals including retail, automotive, entertainment, consumer packaged goods and travel-including dozens of FORTUNE 100 brands.
Additional Information
For more information regarding Voltari's results of operations for the first quarter of 2013 and disclosures regarding risk factors, please visit the Company's SEC filings page at http://investor.motricity.com/sec.cfm.
Use of Non-GAAP Measures
This press release includes EBITDA as a non-GAAP financial measure. EBITDA is not a measure of financial performance or liquidity calculated in accordance with accounting principles generally accepted in the U.S., referred to herein as GAAP, and should be viewed as a supplement to, not a substitute for, our results of operations presented on the basis of GAAP. Reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measures is detailed in the table below.
Our non-GAAP measures should be read in conjunction with the corresponding GAAP measures. EBITDA has limitations as an analytical tool and you should not consider it in isolation from, or as a substitute for, analysis of our results as reported in accordance with GAAP. EBITDA does not purport to represent cash flow provided by, or used in, operating activities as defined by GAAP.
We define EBITDA as net income (loss) before income (loss) from discontinued operations, interest expense, provision (benefit) for income taxes, and depreciation and amortization. EBITDA is not necessarily comparable to similarly-titled measures reported by other companies.
We believe EBITDA is useful to management, investors and other users of our financial statements in evaluating our operating performance because this financial measure is an additional tool to compare business performance across companies and across periods. We believe that EBITDA is often used by investors to measure a company's operating performance without regard to items such as interest expense, taxes and depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired.
We use EBITDA:
• | as a measure of operating performance to assist in comparing performance from period to period on a consistent basis; |
• | as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations; |
• | as a primary measure to review and assess the operating performance of our company and management team in connection with our executive compensation plan incentive payments; and |
• | in communications with our Board of Directors, stockholders, analysts and investors concerning our financial performance. |
The following is a reconciliation of net income (loss) attributable to common shareholders, a directly comparable GAAP measure, to EBITDA from continuing operations for each of the quarters ended:
March 31, 2011 | June 30, 2011 | September 30, 2011 | December 31, 2011 | March 31, 2012 | June 30, 2012 | September 30, 2012 | December 31, 2012 | March 31, 2013 | |||||||||||||||||||
Net income (loss) attributable to common shareholders | $ | (6.1 | ) | $ | (4.3 | ) | $ | (174.5 | ) | $ | (10.4 | ) | $ | (8.7 | ) | $ | (1.9 | ) | $ | 0.5 | $ | (25.2 | ) | $ | (0.9 | ) | |
Accretion of redeemable preferred stock | -- | -- | -- | -- | -- | -- | -- | (0.1 | ) | (0.1 | ) | ||||||||||||||||
Redeemable preferred stock dividends | -- | -- | -- | -- | -- | -- | -- | (0.9 | ) | (1 | ) | ||||||||||||||||
Income (loss) from discontinued operations | 0.5 | (1.4 | ) | (32.8 | ) | (4.7 | ) | (4.7 | ) | (1.7 | ) | -- | -- | -- | |||||||||||||
Interest expense | -- | -- | (0.2 | ) | (0.5 | ) | (0.4 | ) | (0.5 | ) | (0.5 | ) | (0.5 | ) | (0.5 | ) | |||||||||||
Provision (benefit) for income taxes | 0.4 | 0.4 | (6.4 | ) | 0.3 | 0.1 | (0.1 | ) | 0.1 | (0.3 | ) | -- | |||||||||||||||
Depreciation and amortization | 3.7 | 4.1 | 2.6 | 3.3 | 1.8 | 2.0 | 2.8 | 2.4 | 1.6 | ||||||||||||||||||
EBITDA from continuing operations | $ | (2.5 | ) | $ | 1.6 | $ | (145.3 | ) | $ | (1.6 | ) | $ | (1.7 | ) | $ | 2.2 | $ | 3.9 | $ | (21.6 | ) | $ | 2.3 | ||||
Forward-Looking Statements
Statements made in this release and related statements that express Voltari's or its management's intentions, indications, beliefs, expectations, guidance, estimates, forecasts or predictions of the future constitute forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, and relate to matters that are not historical facts. They include, without limitation, statements regarding: our view of general economic and market conditions; our exploration and review of strategic and financing options; estimates of impairment charges and our ability to develop, produce, market, license or sell our products, solutions and services, compete domestically and internationally, reduce or control expenses, improve efficiency, realign resources, continue operational improvement, and about the applicability of accounting policies used in our financial reporting. These statements represent beliefs and expectations only as of the date they were made. We may elect to update forward-looking statements but we expressly disclaim any obligation to do so, even if our beliefs and expectations change. Actual results may differ from those expressed or implied in our forward-looking statements.
Such forward-looking statements involve and are subject to certain risks and uncertainties that may cause our actual results to differ materially from those discussed in a forward-looking statement. These include, but are not limited to: the sufficiency of our liquidity and capital resources and our ability to raise additional capital or generate the cash flows necessary to repay our term loan; our reliance on a limited number of customers for a substantial portion of our revenues, including the pressures on pricing and contract terms from customers with substantial purchasing power and further consolidations in the telecommunications industry; our ability to realign our business to focus on our mobile advertising and enterprise business and obtain customers for that business; the highly competitive nature of the mobile services industry in which many of our competitors have significantly greater resources, which they are using to support significantly discounted pricing; the rapid technological changes in the mobile data
services industry, which could render our existing services obsolete; our ability to attract and retain key employees and qualified personnel; impact of the recent departure of members of our executive team and our ongoing leadership transition; our ability to recognize the expected benefits from the reduction in force implemented in 2011, the beginning of 2012, and the first quarter of 2013; the possibility that the process of exploring strategic or financing options will not lead to any strategic transaction or additional financing on favorable terms or at all; the potential that the process will distract the attention of our Board of Directors and management from our business; the potential that we will incur significant expenses pursuing one or more strategic or financing transactions unsuccessfully; the risk that our pursuit of strategic or financing options will be disruptive to our business; the risk of claims or other litigation arising from our pursuit of strategic options; the potential that the pursuit of strategic or financing options will otherwise have a material adverse effect on our business, results of operations and financial condition; economic and political risks related to our international operations; risks of new product offerings reducing our customers' influence over access to mobile data services; our ability to integrate any future acquisitions and business combinations effectively; the impact of worldwide economic conditions and related uncertainties and the health of and prospects for the overall mobile services industry; risks related to the use and protection of proprietary information, including our ability to safeguard third party confidential information; our ability to develop strategies to address our markets successfully and to meet customer demands with respect to products, services, support and service level commitments; disruptions in datacenter services and other capacity constraints; uncertainties inherent in the development of new products and services and the enhancement of existing products and services, including technical risks, cost overruns and delays; our ability to tailor our complex solutions to our customers' needs; our ability to utilize net operating losses; our ability to maintain proper and effective internal controls; uncertainty related to whether certain terms of our term loan will have the effect of discouraging offers for our business or common stock; our reliance on third parties to develop content and applications, customer acceptance of such offerings and our liability with respect to such content; undetected software errors in our products and indemnity obligations and claims relating to our products and services; our ability to manage growth; impairment losses related to goodwill, intellectual property and equipment; risks and diversion of resources related to the litigation against us and our current and former directors and officers; actual or perceived security vulnerabilities in mobile devices; the impact of changing governmental regulations and our ability to comply therewith; risks related to the commercialization of open source software we use; the influence and control our principal stockholder may exert; and other uncertainties described more fully in our filings with the Securities and Exchange Commission.
About Voltari
For more than a decade, Voltari has empowered brands and agencies to maximize their advertising dollars through smart marketing and advertising solutions. Voltari's real-time, machine-learning optimization delivers content and messaging to people that are most interested in it, when they are most likely to interact, through an integrated and scalable managed service platform. This technology enables Voltari's clients' campaigns to gain efficiencies that improve their performance over time. Voltari's technology, expertise and unique go-to-market approach continually deliver higher ROI for its customers while remaining respectful of consumer privacy and compliance with all relevant privacy statutes. For more information, visit www.voltari.com or follow @voltarimedia on Twitter.
Supplemental Data Schedule | |||||||||||||||||||||||||||
March 31, 2011 | June 30, 2011 | September 30, 2011 | December 31, 2011 | March 31, 2012 | June 30, 2012 | September 30, 2012 | December 31, 2012 | March 31, 2013 | |||||||||||||||||||
Revenue details | |||||||||||||||||||||||||||
North American carrier revenue | $ | 21.9 | $ | 21.8 | $ | 19.7 | $ | 19.3 | $ | 18.8 | $ | 18.6 | $ | 18.9 | $ | 17.6 | $ | 14.9 | |||||||||
International carrier revenue | 0.9 | 0.3 | 0.2 | 0.2 | -- | 0.4 | 0.7 | 0.6 | 0.4 | ||||||||||||||||||
Voltari Media | -- | 1.0 | 1.6 | 1.0 | 0.8 | 1.3 | 1.2 | 2.5 | 1.7 | ||||||||||||||||||
Enterprise | 1.5 | 2.7 | 3.3 | 2.3 | 3.2 | 1.9 | 2.2 | 1.3 | 1.4 | ||||||||||||||||||
Total revenues | $ | 24.3 | $ | 25.8 | $ | 24.8 | $ | 22.8 | $ | 22.8 | $ | 22.2 | $ | 23.0 | $ | 22.0 | $ | 18.4 | |||||||||
EBITDA from continuing operations | $ | (2.5 | ) | $ | 1.6 | $ | (145.3 | ) | $ | (1.6 | ) | $ | (1.7 | ) | $ | 2.2 | $ | 3.9 | $ | (21.6 | ) | $ | 2.3 | ||||
EBITDA margin from continuing operations | (10 | )% | 6 | % | (586 | )% | (7 | )% | (7 | )% | 10 | % | 17 | % | (98 | )% | 12 | % | |||||||||
Voltari Corporation | ||||||
Condensed Consolidated Balance Sheets | ||||||
(in thousands, except share data) | ||||||
(unaudited) | ||||||
March 31, 2013 | December 31, 2012 | |||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 54,328 | $ | 51,528 | ||
Restricted short-term investments | 407 | 407 | ||||
Accounts receivable, net of allowance for doubtful accounts of $239 and $287, respectively | 11,742 | 13,936 | ||||
Prepaid expenses and other current assets | 1,537 | 2,140 | ||||
Total current assets | 68,014 | 68,011 | ||||
Property and equipment, net | 5,923 | 6,656 | ||||
Goodwill | 2,416 | 2,416 | ||||
Intangible assets, net | 3,925 | 4,262 | ||||
Other assets | 171 | 172 | ||||
Total assets | $ | 80,449 | $ | 81,517 | ||
Liabilities, redeemable preferred stock and stockholders' equity | ||||||
Current liabilities | ||||||
Accounts payable and accrued expenses | $ | 6,646 | $ | 7,958 | ||
Accrued compensation | 2,827 | 3,285 | ||||
Deferred revenue | 678 | 814 | ||||
Debt facilities | 22,955 | 22,454 | ||||
Other current liabilities | 1,699 | 1,600 | ||||
Total current liabilities | 34,805 | 36,111 | ||||
Other non-current liabilities | 67 | 17 | ||||
Total liabilities | 34,872 | 36,128 | ||||
Redeemable preferred stock, $0.001 par value; 1,199,643 shares issued and outstanding at March 31, 2013 and December 31, 2012 | 27,621 | 26,539 | ||||
Stockholders' equity | ||||||
Preferred stock, $0.001 par value; 350,000,000 shares authorized; 1,199,643 shares issued and outstanding at March 31, 2013 and December 31, 2012 (see redeemable preferred stock) | -- | -- | ||||
Common stock, $0.001 par value; 625,000,000 shares authorized; 4,673,189 and 4,673,275 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively (1) | 5 | 47 | ||||
Additional paid-in capital | 572,210 | 573,166 | ||||
Accumulated deficit | (553,526 | ) | (553,722 | ) | ||
Accumulated other comprehensive loss | (733 | ) | (641 | ) | ||
Total stockholders' equity | 17,956 | 18,850 | ||||
Total liabilities, redeemable preferred stock and stockholders' equity | $ | 80,449 | $ | 81,517 | ||
(1) Prior period disclosures have been adjusted to reflect the impact of the one-for-ten reverse stock split that took effect on April 23, 2013. | ||||||
Voltari Corporation | ||||||
Condensed Consolidated Statements of Operations | ||||||
(in thousands, except share data and per share amounts) | ||||||
(unaudited) | ||||||
Three Months Ended | ||||||
March 31, | ||||||
2013 | 2012 | |||||
Revenue | $ | 18,372 | $ | 22,786 | ||
Operating expenses | ||||||
Direct third party expenses | 3,851 | 5,154 | ||||
Datacenter and network operations, excluding depreciation | 3,029 | 3,441 | ||||
Product development and sustainment, excluding depreciation | 1,947 | 5,032 | ||||
Sales and marketing, excluding depreciation | 2,418 | 2,525 | ||||
General and administrative, excluding depreciation | 4,820 | 6,298 | ||||
Depreciation and amortization | 1,560 | 1,754 | ||||
Restructuring | -- | 2,037 | ||||
Total operating expenses | 17,625 | 26,241 | ||||
Operating income (loss) | 747 | (3,455 | ) | |||
Other expense, net | ||||||
Other income (expense) | (58 | ) | 4 | |||
Interest and investment income, net | 7 | -- | ||||
Interest expense | (500 | ) | (461 | ) | ||
Other expense, net | (551 | ) | (457 | ) | ||
Income (loss) from continuing operations before income taxes | 196 | (3,912 | ) | |||
Provision for income taxes | -- | 92 | ||||
Net income (loss) from continuing operations | 196 | (4,004 | ) | |||
Net loss from discontinued operations | -- | (4,681 | ) | |||
Net income (loss) | 196 | (8,685 | ) | |||
Accretion of redeemable preferred stock | (127 | ) | -- | |||
Series J redeemable preferred stock dividends | (992 | ) | -- | |||
Net loss attributable to common stockholders | $ | (923 | ) | $ | (8,685 | ) |
Net loss per share attributable to common stockholders - basic and diluted: | ||||||
Continuing operations (1) | $ | (0.20 | ) | $ | (0.87 | ) |
Discontinued operations (1) | -- | (1.02 | ) | |||
Total net loss per share attributable to common stockholders (1) | $ | (0.20 | ) | $ | (1.89 | ) |
Weighted-average common shares outstanding - basic and diluted (1) | 4,626,954 | 4,598,078 | ||||
(1) Prior period disclosures have been adjusted to reflect the impact of the one-for-ten reverse stock split that took effect on April 23, 2013. | ||||||
CONTACT: Investor and Media Contact:
Alex Wellins
(415) 217-5861
alex@blueshirtgroup.com