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| 8-K - DIGITAL RIVER, INC. 8-K - DIGITAL RIVER INC /DE | a50798231.htm |
Exhibit 99.1
Digital River Reports Fourth Quarter and Full Year 2013 Financial Results
- Fourth quarter revenue of $101.2 million, up 3 percent year-over-year
- Fourth quarter break-even GAAP EPS; and non-GAAP EPS of $0.22 per diluted share, at the high end of guidance
- Continued strong, organic payments growth in the fourth quarter of 29 percent year-over-year
MINNEAPOLIS--(BUSINESS WIRE)--February 5, 2014--Digital River, Inc. (NASDAQ:DRIV), a leading global provider of Commerce-as-a-Service solutions, reported financial results for the fourth quarter and full year of 2013.
Fourth Quarter and Full-Year Ended December 31, 2013
GAAP
Results
Fourth quarter revenue totaled $101.2 million,
exceeding management’s fourth quarter revenue guidance of $96.5 to
$100.5 million. For the full year 2013, revenue was $389.7 million,
exceeding management’s full year 2013 revenue guidance of $385 to $389
million. In 2012, fourth quarter revenue from continuing operations was
$98.1 million, and full year revenue from continuing operations was
$370.5 million.
Fourth quarter 2013 GAAP net loss from continuing operations was $0.1 million or $0.00 per share, exceeding management’s fourth quarter GAAP guidance of a net loss from continuing operations of $0.10 to $0.03 per share. For the full year 2013, GAAP net loss from continuing operations was $18.5 million or a net loss of $0.58 per share, exceeding management’s full year 2013 GAAP guidance of a net loss from continuing operations of $0.67 to $0.60 per share. In 2012, fourth quarter GAAP net loss from continuing operations was $188.8 million or $5.77 per share, and full year GAAP net loss from continuing operations was $183.6 million or $5.53 per share.
Non-GAAP Results
Fourth quarter 2013 non-GAAP diluted
net income from continuing operations was $8.3 million or $0.22 per
diluted share, which was at the high end of management’s fourth quarter
non-GAAP guidance of $0.17 to $0.22 per diluted share. For the full year
2013, non-GAAP diluted net income from continuing operations was $20.0
million or $0.61 per diluted share, at the high end of management’s
non-GAAP guidance of $0.56 to $0.61 per diluted share. In 2012, fourth
quarter non-GAAP diluted net income from continuing operations was $12.9
million or $0.32 per diluted share, and full year non-GAAP diluted net
income from continuing operations was $41.4 million or $1.02 per diluted
share.
“I am pleased to report that we closed the year with solid results. Our revenue performance was driven by strong holiday sales through our customers’ commerce channels and the continued, strong organic growth of our global payments offerings,” said David Dobson, Digital River’s CEO. “We remain committed to creating more value for our customers and shareholders. The strategic transformation framework, which we initiated in 2013, is driving our execution priorities. As a result of the progress we have made, we have increased customer retention, expanded our business with existing customers, and started to win new customers in selected segments. As a result, we are going to redeploy some of the financial capacity we created in the fourth quarter to accelerate our technology transformation, continue to expand our global footprint and increase our investment in payments to sustain the rapid growth of this part of our business.”
Share Repurchase
During the fourth quarter, the company
repurchased approximately $7.3 million of common stock. All transactions
took place in the open market.
First Quarter and Full Year 2014 Guidance
Management’s
forward-looking financial expectations for the first quarter of 2014 are
as follows:
- Revenue, ranging from $92.0 to $95.0 million
- GAAP EPS, ranging from a net loss of $0.15 to a net loss of $0.09 per share
- Non-GAAP EPS, ranging from $0.07 to $0.11 per diluted share, using a 21 percent tax rate
Management’s forward-looking financial expectations for the full year 2014 are as follows:
- Revenue, ranging from $365 to $378 million, representing a revenue decline of 3 percent to 6 percent compared to revenue from continuing operations in 2013
- GAAP EPS, ranging from a net loss of $0.53 to a net loss of $0.39 per share
- Non-GAAP EPS, ranging from $0.35 to $0.45 per diluted share, using a 21 percent tax rate
A detailed table providing a reconciliation of the company’s GAAP and non-GAAP earnings guidance estimates can be found accompanying this press release.
Digital River will host an open-access audio webcast and conference call today at 4:45 p.m. EST to discuss fourth quarter and full year 2013 financial results. The live audio webcast can be accessed on the Investor Relations (www.digitalriver.com/investorrelations) section of its corporate website. Alternatively, to listen to the live broadcast of the call, dial +1 (408) 427-3861 and use conference ID # 31354966. A webcast and audio replay of the presentation will be archived on Digital River’s corporate website.
About Digital River, Inc.
Backed by 20 years of e-commerce
experience, Digital River is recognized as a leading global provider of
Commerce-as-a-Service solutions. Companies of all sizes rely on Digital
River’s multi-tenant, SaaS commerce, payments and marketing services to
manage and grow their online businesses. In 2013, Digital River
processed more than $30 billion in online transactions, connecting B2B
and B2C digital products and cloud service companies as well as branded
manufacturers with buyers across multiple devices and channels, and
nearly every country in the world.
Digital River is headquartered in Minneapolis with offices across the U.S., Asia, Europe and South America. For more details about Digital River, visit the corporate website, follow the company on Twitter or call +1 952-253-1234.
Non-GAAP Net Income Calculation
Digital River’s non-GAAP
net income (loss) from continuing operations is computed by adjusting
GAAP pre-tax income from continuing operations as reported on the
company’s statement of operations by adding back, when applicable,
amortization of acquisition-related intangibles, stock-based
compensation expense, intangible impairments, restructuring related
costs, litigation settlement related costs, acquisition and integration
costs, realized and unrealized investment gains or losses, and goodwill
impairments, net of a 21 percent tax rate. Non-GAAP diluted earnings per
share from continuing operations is calculated using the “if-converted”
method with respect to the issuance of the company’s 2004 and 2010
convertible notes. In computing non-GAAP diluted earnings per share from
continuing operations, if an increase in earnings per share will not
result, adjust non-GAAP net income from continuing operations to add
back debt interest and issuance cost amortization expenses, net of the
tax benefit, and then divide this amount by fully diluted shares
outstanding. This amount, representing the fully diluted earnings
computation, is selected to represent non-GAAP diluted earnings per
share from continuing operations for each period presented. To provide
further clarity, a detailed reconciliation on the comparability of the
GAAP and non-GAAP data has been provided in table form following the
financial statements accompanying this release.
Forward-Looking Statements
This press release contains
forward-looking statements, including statements regarding the company’s
anticipated future growth and future financial performance, as well as
statements containing the words “anticipates,” “believes,” “plans,”
“will,” “expects,” or “guidance” and similar words. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors, which may cause the actual results, performance or achievements
of the company, or industry results, to differ materially from those
expressed or implied by such forward-looking statements. Such factors
include, among others: the company’s operating history and variability
of operating results; competition in the commerce and payments markets;
challenges associated with international expansion; the variability of
foreign exchange rates; any breach or compromise of the company’s
security systems; our ability to successfully manage our business while
undertaking significant technical initiatives; our ability to execute
upon our payments strategy and expand our business in this sector; our
ability to achieve favorable tax rates in our international operations;
and other risk factors referenced in the company’s public filings with
the Securities and Exchange Commission, including the Annual Report on
Form 10-K for the year ended Dec. 31, 2012. The financial information
contained in this release should be read in conjunction with the
consolidated financial statements and notes thereto included in Digital
River’s most recent reports on Form 10-K and Form 10-Q, each as it may
be amended from time-to-time.
The forward-looking statements reflect management’s expectations as of February 5, 2014. Results may be materially affected by many factors, such as changes in global conditions in the financial services markets and consumer spending, fluctuations in foreign currency rates, the rate of growth of online commerce and online payments, progress with key partners, and other factors. The guidance assumes, among other things, that there are no material changes to stock-based compensation expense and anticipated tax rates. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s analysis only as of the date hereof. The company undertakes no obligation to update these forward-looking statements or future guidance to reflect events or circumstances that may arise after the date hereof.
Digital River is a registered trademark of Digital River, Inc. All other trademarks and registered trademarks are trademarks of their respective owners.
| Digital River, Inc. | ||||||||||
| Fourth Quarter Results | ||||||||||
| (Unaudited, in thousands, except share data) | ||||||||||
| Subject to reclassification | ||||||||||
| Consolidated Balance Sheets | ||||||||||
| December 31, | December 31, | |||||||||
| 2013 | 2012 | |||||||||
|
Assets |
||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | $ | 483,868 | $ | 542,851 | ||||||
| Short-term investments | 115,652 | 162,794 | ||||||||
| Accounts receivable, net of allowance of $3,206 and $4,834 | 70,865 | 55,192 | ||||||||
| Deferred tax assets | 1,479 | 457 | ||||||||
| Prepaid expenses and other | 27,878 | 31,813 | ||||||||
| Assets of discontinued operations | - | 7,561 | ||||||||
| Total current assets | 699,742 | 800,668 | ||||||||
| Property and equipment, net | 53,770 | 53,098 | ||||||||
| Goodwill | 139,318 | 108,960 | ||||||||
| Intangible assets, net of accumulated amortization of $87,865 and $78,757 | 29,217 | 11,718 | ||||||||
| Long-term investments | 56,023 | 71,735 | ||||||||
| Deferred income taxes | 1,037 | 1,792 | ||||||||
| Other assets | 2,067 | 4,313 | ||||||||
| Total assets | $ | 981,174 | $ | 1,052,284 | ||||||
|
Liabilities and stockholders' equity |
||||||||||
| Current liabilities | ||||||||||
| Accounts payable | $ | 165,438 | $ | 201,826 | ||||||
| Accrued payroll | 20,058 | 11,294 | ||||||||
| Deferred revenue | 6,904 | 13,119 | ||||||||
| Other current liabilities | 78,096 | 50,149 | ||||||||
| Liabilities of discontinued operations | - | 5,753 | ||||||||
| Total current liabilities | 270,496 | 282,141 | ||||||||
| Non-current liabilities | ||||||||||
| Convertible senior notes | 295,795 | 309,909 | ||||||||
| Other liabilities | 21,452 | 18,236 | ||||||||
| Total non-current liabilities | 317,247 | 328,145 | ||||||||
| Total liabilities | 587,743 | 610,286 | ||||||||
| Stockholders' equity | ||||||||||
| Preferred stock, $.01 par value; 5,000,000 shares authorized; no shares issued or outstanding | - | - | ||||||||
| Common stock, $.01 par value; 120,000,000 shares authorized; 50,074,977 and 48,941,402 shares issued | 501 | 489 | ||||||||
| Treasury stock at cost; 16,910,883 and 13,581,889 shares | (424,416 | ) | (368,721 | ) | ||||||
| Additional paid-in capital | 761,560 | 737,499 | ||||||||
| Retained earnings | 51,254 | 75,901 | ||||||||
|
Accumulated other comprehensive income (loss) |
4,532 | (3,170 | ) | |||||||
| Stockholders' equity | 393,431 | 441,998 | ||||||||
| Total liabilities and stockholders' equity | $ | 981,174 | $ | 1,052,284 | ||||||
| Digital River, Inc. | ||||||||||||||||||||
| Fourth Quarter Results | ||||||||||||||||||||
| (Unaudited, in thousands, except per share amounts) | ||||||||||||||||||||
| Subject to reclassification | ||||||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||||||
| Three months ended | Twelve months ended | |||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
| Revenue | $ | 101,235 | $ | 98,119 | $ | 389,679 | $ | 370,496 | ||||||||||||
| Costs and expenses (exclusive of depreciation and amortization expense shown separately below): | ||||||||||||||||||||
| Direct cost of services | 18,233 | 18,946 | 73,505 | 66,756 | ||||||||||||||||
| Network and infrastructure | 14,987 | 14,242 | 59,036 | 52,564 | ||||||||||||||||
| Sales and marketing | 26,539 | 23,223 | 106,954 | 97,816 | ||||||||||||||||
| Product research and development | 19,392 | 15,918 | 72,359 | 61,550 | ||||||||||||||||
| General and administrative | 12,239 | 18,738 | 56,279 | 55,763 | ||||||||||||||||
| Goodwill impairment | - | 175,241 | 21,249 | 175,241 | ||||||||||||||||
| Depreciation and amortization | 6,332 | 5,021 | 22,080 | 20,192 | ||||||||||||||||
| Amortization of acquisition-related intangibles | 2,183 | 1,174 | 8,543 | 4,700 | ||||||||||||||||
| Total costs and expenses | 99,905 | 272,503 | 420,005 | 534,582 | ||||||||||||||||
| Income (loss) from operations | 1,330 | (174,384 | ) | (30,326 | ) | (164,086 | ) | |||||||||||||
| Interest income | 522 | 912 | 2,451 | 3,820 | ||||||||||||||||
| Interest expense | (1,938 | ) | (2,212 | ) | (7,822 | ) | (8,968 | ) | ||||||||||||
| Other income (expense), net | (457 | ) | 4,675 | 16,260 | 4,799 | |||||||||||||||
| Income (loss) from continuing operations before income taxes | (543 | ) | (171,009 | ) | (19,437 | ) | (164,435 | ) | ||||||||||||
| Income tax expense (benefit) | (500 | ) | 17,759 | (908 | ) | 19,203 | ||||||||||||||
| Income (loss) from continuing operations | (43 | ) | (188,768 | ) | (18,529 | ) | (183,638 | ) | ||||||||||||
| Income (loss) from discontinued operations, net of tax | 120 | (11,303 | ) | (6,118 | ) | (12,230 | ) | |||||||||||||
| Net Income (loss) | $ | 77 | $ | (200,071 | ) | $ | (24,647 | ) | $ | (195,868 | ) | |||||||||
| Income (loss) per share - basic | ||||||||||||||||||||
| Income (loss) from continuing operations | $ | 0.00 | $ | (5.77 | ) | $ | (0.58 | ) | $ | (5.53 | ) | |||||||||
| Income (loss) from discontinued operations | 0.00 | (0.35 | ) | (0.19 | ) | (0.37 | ) | |||||||||||||
| Net income (loss) per share - basic | $ | 0.00 | $ | (6.11 | ) | $ | (0.77 | ) | $ | (5.90 | ) | |||||||||
| Income (loss) per share - diluted | ||||||||||||||||||||
| Income (loss) from continuing operations | $ | 0.00 | $ | (5.77 | ) | $ | (0.58 | ) | $ | (5.53 | ) | |||||||||
| Income (loss) from discontinued operations | 0.00 | (0.35 | ) | (0.19 | ) | (0.37 | ) | |||||||||||||
| Net income (loss) per share - diluted | $ | 0.00 | $ | (6.11 | ) | $ | (0.77 | ) | $ | (5.90 | ) | |||||||||
| Shares used in per share calculation - basic | 30,759 | 32,752 | 32,065 | 33,224 | ||||||||||||||||
| Shares used in per share calculation - diluted | 30,759 | 32,752 | 32,065 | 33,224 | ||||||||||||||||
| Calculation of GAAP Diluted Net Income (Loss) Per Share | ||||||||||||||||||||
| Three months ended | Twelve months ended | |||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
| GAAP net income (loss) | $ | 77 | $ | (200,071 | ) | $ | (24,647 | ) | $ | (195,868 | ) | |||||||||
| Add back debt interest expense and issuance cost amortization, net of tax benefit | - | - | - | - | ||||||||||||||||
| Adjusted net income (loss) for GAAP EPS calculation | $ | 77 | $ | (200,071 | ) | $ | (24,647 | ) | $ | (195,868 | ) | |||||||||
| Net income (loss) per share - diluted | $ | 0.00 | $ | (6.11 | ) | $ | (0.77 | ) | $ | (5.90 | ) | |||||||||
| Shares used in per share calculation - diluted | 30,759 | 32,752 | 32,065 | 33,224 | ||||||||||||||||
| Digital River, Inc. | ||||||||||
| Fourth Quarter Results | ||||||||||
| (Unaudited, in thousands) | ||||||||||
| Subject to reclassification | ||||||||||
| Consolidated Statements of Cash Flows | ||||||||||
| Twelve months ended | ||||||||||
| December 31, | ||||||||||
| 2013 | 2012 | |||||||||
|
Operating Activities: |
||||||||||
| Net income (loss) | $ | (24,647 | ) | $ | (195,868 | ) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||
| Loss on disposal of discontinued operations | 1,894 | - | ||||||||
| Amortization of acquisition-related intangibles | 8,543 | 6,832 | ||||||||
| Provision for doubtful accounts | 1,661 | 2,031 | ||||||||
| Depreciation and amortization | 22,163 | 20,307 | ||||||||
| Impairment of goodwill | 21,249 | 175,241 | ||||||||
| Impairment of intangibles | - | 235 | ||||||||
| Debt issuance cost amortization | 1,701 | 1,953 | ||||||||
| Amortization of investment premiums | 2,837 | - | ||||||||
| Loss on sale of equipment | 88 | 85 | ||||||||
| Gain on sale of investment | (17,526 | ) | (3,178 | ) | ||||||
| Gain on business divestiture | - | (246 | ) | |||||||
| Stock-based compensation expense | 20,568 | 29,517 | ||||||||
| Excess tax benefits from stock-based compensation | - | (505 | ) | |||||||
| Deferred and other income taxes | (150 | ) | 23,349 | |||||||
| Change in operating assets and liabilities (net of acquisitions): | ||||||||||
| Accounts receivable | (15,278 | ) | 2,715 | |||||||
| Prepaid and other assets | 9,744 | (8,392 | ) | |||||||
| Accounts payable | (42,669 | ) | (40,333 | ) | ||||||
| Deferred revenue | (7,288 | ) | 8,265 | |||||||
| Income tax payable | (1,679 | ) | 10,948 | |||||||
| Other accrued liabilities | 3,499 | 5,884 | ||||||||
| Net cash provided by (used in) operating activities | (15,290 | ) | 38,840 | |||||||
|
Investing Activities: |
||||||||||
| Purchases of investments | (140,900 | ) | (98,658 | ) | ||||||
| Sales of investments | 184,978 | 185,750 | ||||||||
| Cash received for cost method investments | 39,636 | 2,700 | ||||||||
| Cash paid for acquisitions, net of cash received | (55,843 | ) | - | |||||||
| Cash received from divestitures | 120 | 500 | ||||||||
| Purchases of equipment and capitalized software | (23,334 | ) | (22,035 | ) | ||||||
| Net cash provided by (used in) investing activities | 4,657 | 68,257 | ||||||||
|
Financing Activities: |
||||||||||
| Repurchase of senior convertible notes | (5,354 | ) | (43,896 | ) | ||||||
| Exercise of stock options | 1,273 | 1,567 | ||||||||
| Sales of common stock under employee stock purchase plan | 2,233 | 2,552 | ||||||||
| Repurchase of common stock | (51,208 | ) | (22,667 | ) | ||||||
| Repurchase of restricted stock to satisfy tax withholding obligation | (4,487 | ) | (5,108 | ) | ||||||
| Excess tax benefits from stock-based compensation | - | 505 | ||||||||
| Net cash provided by (used in) financing activities | (57,543 | ) | (67,047 | ) | ||||||
| Effect of exchange rate changes on cash | 9,193 | 5,608 | ||||||||
| Net increase (decrease) in cash and cash equivalents | (58,983 | ) | 45,658 | |||||||
| Cash and cash equivalents, beginning of period | 542,851 | 497,193 | ||||||||
| Cash and cash equivalents, end of period | $ | 483,868 | $ | 542,851 | ||||||
| Cash paid for interest on convertible senior notes | $ | 6,081 | $ | 7,123 | ||||||
| Cash paid for income taxes | $ | 4,292 | $ | 3,272 | ||||||
| Digital River, Inc. | |||||||||||||||||||||||||
| GAAP to non-GAAP Reconciliations | |||||||||||||||||||||||||
| (Unaudited, in thousands, except per share amounts) | |||||||||||||||||||||||||
|
UTILIZING 21% EFFECTIVE INCOME TAX RATE |
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|
Twelve months |
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| Three months ended |
ended |
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| March 31, | June 30, | September 30, | December 31, | December 31, | |||||||||||||||||||||
| 2012 | 2012 | 2012 | 2012 | 2012 | |||||||||||||||||||||
| GAAP pre-tax income (loss) from continuing operations | $ | 6,476 | $ | 1,533 | $ | (1,435 | ) | $ | (171,009 | ) | $ | (164,435 | ) | ||||||||||||
| Add back amortization of acquisition-related intangibles | 1,257 | 1,151 | 1,118 | 1,174 | 4,700 | ||||||||||||||||||||
| Add back stock-based compensation expense | 5,961 | 6,231 | 6,063 | 11,262 | 29,517 | ||||||||||||||||||||
| Add back restructuring related costs | 331 | - | - | 1,354 | 1,685 | ||||||||||||||||||||
| Add back litigation settlement related costs | - | - | 750 | - | 750 | ||||||||||||||||||||
| Add back acquisition and integration costs | - | - | 622 | 175 | 797 | ||||||||||||||||||||
| Add back unrealized investment loss (gain) | - | - | 627 | (3,568 | ) | (2,941 | ) | ||||||||||||||||||
| Add back goodwill impairment | - | - | - | 175,241 | 175,241 | ||||||||||||||||||||
| Subtotal | 14,025 | 8,915 | 7,745 | 14,629 | 45,314 | ||||||||||||||||||||
| Income tax expense @ 21% | 2,945 | 1,872 | 1,626 | 3,072 | 9,516 | ||||||||||||||||||||
| Non-GAAP income from continuing operations | 11,080 | 7,043 | 6,119 | 11,557 | 35,798 | ||||||||||||||||||||
| Add back debt interest expense and issuance cost amortization, net of tax benefit | 1,409 | 1,412 | 20 | 1,382 | 5,618 | ||||||||||||||||||||
| Adjusted income from continuing operations for non-GAAP EPS calculation | $ | 12,489 | $ | 8,455 | $ | 6,139 | $ | 12,939 | $ | 41,416 | |||||||||||||||
| Non-GAAP income from continuing operations per share - diluted | $ | 0.30 | $ | 0.21 | $ | 0.19 | $ | 0.32 | $ | 1.02 | |||||||||||||||
| Shares used in per share calculation - diluted | 41,032 | 40,783 | 33,150 | 40,163 | 40,719 | ||||||||||||||||||||
| Three months ended |
Twelve months |
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| March 31, | June 30, | September 30, | December 31, | December 31, | |||||||||||||||||||||
| 2013 | 2013 | 2013 | 2013 | 2013 | |||||||||||||||||||||
| GAAP pre-tax income (loss) from continuing operations | $ | (9,766 | ) | $ | (887 | ) | $ | (8,241 | ) | $ | (543 | ) | $ | (19,437 | ) | ||||||||||
| Add back amortization of acquisition-related intangibles | 1,928 | 2,283 | 2,149 | 2,183 | 8,543 | ||||||||||||||||||||
| Add back stock-based compensation expense | 5,575 | 6,379 | 4,341 | 4,273 | 20,568 | ||||||||||||||||||||
| Add back restructuring related costs | 2,808 | 424 | 395 | 2,164 | 5,791 | ||||||||||||||||||||
| Add back litigation settlement related costs | - | 312 | - | 45 | 357 | ||||||||||||||||||||
| Add back acquisition and integration costs | 4,532 | 269 | 94 | 806 | 5,701 | ||||||||||||||||||||
| Add back realized investment loss (gain) | (11,067 | ) | (6,459 | ) | - | - | (17,526 | ) | |||||||||||||||||
| Add back goodwill impairment | 21,249 | - | - | - | 21,249 | ||||||||||||||||||||
| Subtotal | 15,259 | 2,321 | (1,262 | ) | 8,928 | 25,246 | |||||||||||||||||||
| Income tax expense (benefit) @ 21% | 3,204 | 487 | (264 | ) | 1,875 | 5,302 | |||||||||||||||||||
| Non-GAAP income (loss) from continuing operations | 12,055 | 1,834 | (998 | ) | 7,053 | 19,944 | |||||||||||||||||||
| Add back debt interest expense and issuance cost amortization, net of tax benefit | 1,233 | - | - | 1,214 | 79 | ||||||||||||||||||||
| Adjusted income (loss) from continuing operations for non-GAAP EPS calculation | $ | 13,288 | $ | 1,834 | $ | (998 | ) | $ | 8,267 | $ | 20,023 | ||||||||||||||
| Non-GAAP income (loss) from continuing operations per share - diluted | $ | 0.33 | $ | 0.06 | $ | (0.03 | ) | $ | 0.22 | $ | 0.61 | ||||||||||||||
| Shares used in per share calculation - diluted | 39,767 | 32,739 | 31,487 | 37,709 | 32,744 | ||||||||||||||||||||
| Digital River, Inc. | ||||||||||||||||||||||
| Non-GAAP Reconciliations | ||||||||||||||||||||||
| (Unaudited, in thousands) | ||||||||||||||||||||||
| Breakdown of stock-based compensation expense | ||||||||||||||||||||||
| Three months ended |
Twelve months |
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| March 31, | June 30, | September 30, | December 31, | December 31, | ||||||||||||||||||
| 2013 | 2013 | 2013 | 2013 | 2013 | ||||||||||||||||||
| Direct cost of services | $ | 42 | $ | 47 | $ | 35 | $ | 34 | $ | 158 | ||||||||||||
| Network and infrastructure | 415 | 327 | 341 | 370 | 1,453 | |||||||||||||||||
| Sales and marketing | 1,832 | 1,799 | 1,718 | 1,382 | 6,731 | |||||||||||||||||
| Product research and development | 925 | 846 | 782 | 856 | 3,409 | |||||||||||||||||
| General and administrative | 2,361 | 3,360 | 1,465 | 1,631 | 8,817 | |||||||||||||||||
| Total | $ | 5,575 | $ | 6,379 | $ | 4,341 | $ | 4,273 | $ | 20,568 | ||||||||||||
| Breakdown of restructuring related costs | ||||||||||||||||||||||
| Three months ended |
Twelve months |
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| March 31, | June 30, | September 30, | December 31, | December 31, | ||||||||||||||||||
| 2013 | 2013 | 2013 | 2013 | 2013 | ||||||||||||||||||
| Direct cost of services | $ | - | $ | - | $ | - | $ | 109 | $ | 109 | ||||||||||||
| Network and infrastructure | 271 | - | (6 | ) | 287 | 552 | ||||||||||||||||
| Sales and marketing | 1,279 | 220 | 305 | 1,120 | 2,924 | |||||||||||||||||
| Product research and development | 275 | 64 | 96 | 478 | 913 | |||||||||||||||||
| General and administrative | 983 | 140 | - | 170 | 1,293 | |||||||||||||||||
| Total | $ | 2,808 | $ | 424 | $ | 395 | $ | 2,164 | $ | 5,791 | ||||||||||||
| Breakdown of litigation settlement related costs | ||||||||||||||||||||||
| Three months ended |
Twelve months |
|||||||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | December 31, | ||||||||||||||||||
| 2013 | 2013 | 2013 | 2013 | 2013 | ||||||||||||||||||
| Direct cost of services | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
| Network and infrastructure | - | - | - | - | - | |||||||||||||||||
| Sales and marketing | - | - | - | - | - | |||||||||||||||||
| Product research and development | - | - | - | - | - | |||||||||||||||||
| General and administrative | - | 312 | - | 45 | 357 | |||||||||||||||||
| Total | $ | - | $ | 312 | $ | - | $ | 45 | $ | 357 | ||||||||||||
| Breakdown of acquisition and integration costs | ||||||||||||||||||||||
| Three months ended |
Twelve months |
|||||||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | December 31, | ||||||||||||||||||
| 2013 | 2013 | 2013 | 2013 | 2013 | ||||||||||||||||||
| Direct cost of services | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
| Network and infrastructure | - | - | - | - | - | |||||||||||||||||
| Sales and marketing | 90 | (57 | ) | 38 | 22 | 93 | ||||||||||||||||
| Product research and development | 66 | 68 | 101 | 678 | 913 | |||||||||||||||||
| General and administrative | 4,376 | 258 | (45 | ) | 106 | 4,695 | ||||||||||||||||
| Total | $ | 4,532 | $ | 269 | $ | 94 | $ | 806 | $ | 5,701 | ||||||||||||
| Digital River, Inc. | |||||||||||||||||||||||
| Non-GAAP Guidance | |||||||||||||||||||||||
| (Unaudited, in millions except per share amounts) | |||||||||||||||||||||||
| Revenue Guidance Table | |||||||||||||||||||||||
| 2012 Actual | |||||||||||||||||||||||
| Three months ended |
Twelve months |
||||||||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | December 31, | |||||||||||||||||||
| 2012 | 2012 | 2012 | 2012 | 2012 | |||||||||||||||||||
| Commerce | $ | 92.9 | $ | 81.6 | $ | 81.0 | $ | 90.1 | $ | 345.6 | |||||||||||||
| Payments | 5.3 | 5.5 | 6.1 | 8.0 | 24.9 | ||||||||||||||||||
| Total Revenue | $ | 98.2 | $ | 87.1 | $ | 87.1 | $ | 98.1 | $ | 370.5 | |||||||||||||
| 2013 Actual | |||||||||||||||||||||||
| Three months ended |
Twelve months |
||||||||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | December 31, | |||||||||||||||||||
| 2013 | 2013 | 2013 | 2013 | 2013 | |||||||||||||||||||
| Commerce | $ | 96.7 | $ | 74.3 | $ | 72.5 | $ | 84.7 | $ | 328.2 | |||||||||||||
| Payments | 14.3 | 15.9 | 14.8 | 16.5 | 61.5 | ||||||||||||||||||
| Total Revenue | $ | 111.0 | $ | 90.2 | $ | 87.3 | $ | 101.2 | $ | 389.7 | |||||||||||||
| 2014 Guidance | |||||||||||||||||||||||
| Q1 2014 | FY 2014 | ||||||||||||||||||||||
| Low Guidance | High Guidance | Low Guidance | High Guidance | ||||||||||||||||||||
| Commerce | $ | 76.1 | $ | 78.3 | $ | 292.0 | $ | 302.0 | |||||||||||||||
| Payments | 15.9 | 16.7 | 73.0 | 76.0 | |||||||||||||||||||
| Total Expected Revenue | $ | 92.0 | $ | 95.0 | $ | 365.0 | $ | 378.0 | |||||||||||||||
| Non-GAAP Guidance Reconciliation | |||||||||||||||||||||||
| Q1 2014 | FY 2014 | ||||||||||||||||||||||
| Low Guidance | High Guidance | Low Guidance | High Guidance | ||||||||||||||||||||
| Expected GAAP net income (loss) per share from continuing operations - diluted | $ | (0.15 | ) | $ | (0.09 | ) | $ | (0.53 | ) | $ | (0.39 | ) | |||||||||||
| Add back amortization of acquisition-related intangibles, net of tax | 0.06 | 0.06 | 0.23 | 0.23 | |||||||||||||||||||
| Add back stock-based compensation expense, net of tax | 0.12 | 0.12 | 0.51 | 0.51 | |||||||||||||||||||
| Add back restructuring related costs, net of tax | - | - | 0.01 | 0.01 | |||||||||||||||||||
| Tax variability | 0.04 | 0.02 | 0.13 | 0.09 | |||||||||||||||||||
| Expected non-GAAP diluted net income (loss) per share | $ | 0.07 | $ | 0.11 | $ | 0.35 | $ | 0.45 | |||||||||||||||
| Projected Shares Used in Per Share Calculation | |||||||||||||||||||||||
| Q1 2014 | FY 2014 | ||||||||||||||||||||||
| Low Guidance | High Guidance | Low Guidance | High Guidance | ||||||||||||||||||||
| Shares used in per share calculation - GAAP diluted | 30.9 | 30.9 | 30.0 | 30.0 | |||||||||||||||||||
| Shares used in per share calculation - non-GAAP diluted | 31.4 | 31.4 | 30.5 | 30.5 | |||||||||||||||||||
CONTACT:
Digital River, Inc.
Investor Relations Contact:
Melissa
Fisher, +1 952-225-3351
Vice President, Corporate Development,
Investor Relations and Treasury
investorrelations@digitalriver.com
or
Media
Relations Contact:
Gerri Dyrek, +1 952-225-3719
Group Vice
President, Corporate Communications
publicrelations@digitalriver.com