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8-K - 8-K - RetailMeNot, Inc.d718679d8k.htm
EX-99.2 - EX-99.2 - RetailMeNot, Inc.d718679dex992.htm

Exhibit 99.1

RetailMeNot Announces First Quarter 2014 Financial Results

 

    Net Revenues were $61.3 million, up 51% year-over-year

 

    Net Income was $6.1 million

 

    Adjusted EBITDA was $21.4 million

AUSTIN, Texas, May 5, 2014 — RetailMeNot, Inc. (NASDAQ:SALE), which operates the world’s largest marketplace for digital offers, reported its financial results for the first quarter ended March 31, 2014.

First Quarter Key Metrics and Financial Results Highlights

(All comparisons are made to the first quarter of 2013)

 

    Net revenues were $61.3 million, an increase of 51% compared to $40.6 million.

 

    Organic net revenues increased 47%. Organic net revenues exclude net revenues from acquired businesses not owned during both comparative periods.

 

    Net revenues from international markets totaled $13.7 million, up 55% compared to $8.8 million and represented 22% of total net revenues.

 

    Mobile net revenues totaled $9.3 million, up 127% compared to $4.1 million and represented 15% of total net revenues.

 

    Net income was $6.1 million, down 13% compared to net income of $7.0 million. On a year-over-year basis, the decline in net income is a result of increased investment and higher stock-based compensation expense.

 

    Adjusted EBITDA was $21.4 million, up 17%, representing 35% of net revenues, compared to $18.2 million.

 

    Visits grew 26% to 155.2 million, compared to 122.9 million.

“Our first quarter business results continue to demonstrate that more consumers are coming to our websites and mobile apps to save money when they shop, and retailers are looking at our marketplace to help them drive sales online and in-store,” said Cotter Cunningham, CEO, RetailMeNot, Inc. “In 2014, our employees are focused on giving consumers the most comprehensive, high quality choice of offers that help them shop for the things they need and want. We are excited about the continued innovation we are bringing to market as we look to provide millions of consumers with the best experience on our websites and mobile apps.”

First Quarter Business Highlights and Key Strategic Announcements

 

    As of March 31, 2014, more than 16.3 million apps had been downloaded globally among RetailMeNot.com, VoucherCodes.co.uk, Poulpeo.com, and Bons-de-Reduction.com, up from 6.0 million as of March 31, 2013. During the first quarter, mobile app sessions totaled 125.3 million, versus 20.2 million during the first quarter of 2013.


    As of March 31, 2014, RetailMeNot had 20.4 million global subscribers to a newsletter or store alert, up 107% year-over-year.

Quarterly Conference Call

RetailMeNot will host a webcast to discuss its first quarter 2014 financial results and business outlook today at 5:00 p.m. Eastern Time (4:00 p.m. Central Time). A live webcast of the conference call can be accessed within the investor relations section of the RetailMeNot website at http://investor.retailmenot.com. This webcast will contain forward-looking statements and other material information regarding the company’s financial and operating results. Additionally, in advance of the conference call RetailMeNot will post first quarter 2014 Management Commentary that can be accessed at http://investor.retailmenot.com.

Following completion of the call, a recorded replay of the webcast will be available on the website at http://investor.retailmenot.com. For those without access to the Internet, a replay of the call will be available beginning at 7:00 p.m. Central Time on May 5, 2014 through May 12, 2014 at 11:59 p.m. Central Time. To listen to the telephone replay, call (855) 859-2056 within the US or (404) 537-3406 internationally, access code 25303611.

About RetailMeNot, Inc.

RetailMeNot, Inc. (www.retailmenot.com/corp/) operates the world’s largest marketplace for digital offers. The company enables consumers across the globe to find hundreds of thousands of digital offers from retailers and brands. In 2013, RetailMeNot, Inc. experienced more than 560 million visits to its websites and estimates that $3.5 billion in paid retailer sales were attributable to consumer traffic from digital offers in its marketplace. Its mobile apps have been downloaded over 16 million times. The RetailMeNot, Inc. portfolio includes www.RetailMeNot.com, the world’s largest marketplace for digital offers in the United States; www.RetailMeNot.ca in Canada; www.VoucherCodes.co.uk, the largest marketplace for digital offers in the United Kingdom; www.Deals.com in Germany; www.Actiepagina.nl, a leading digital offer site in the Netherlands;
http://www.Bons-de-Reduction.com and www.Ma-Reduc.com, leading digital offer sites in France; www.Poulpeo.com, a leading digital offer site with cash back in France; and www.Deals2Buy.com, a leading digital offer site in North America. RetailMeNot, Inc. is listed on the NASDAQ stock exchange under the ticker symbol “SALE.” Investors interested in learning more about the company can visit: http://investor.retailmenot.com/.

Be sure to “like” RetailMeNot, Inc. on Facebook and follow the company via Twitter @retailmenotinc.


Operating Metrics

Visits. RetailMeNot defines a visit as a group of interactions that take place on one of RetailMeNot’s websites from computers, smartphones, tablets or other mobile devices within a given time frame as measured by Google Analytics, a product that provides digital marketing intelligence. A single visit can contain multiple page views, events, social interactions, custom variables and e-commerce transactions. A single visitor can open multiple visits. Visits can occur on the same day, or over several days, weeks or months. As soon as one visit ends, there is then an opportunity to start a new visit. A visit ends either through the passage of time or a campaign change, with a campaign generally meaning arrival via search engine, referring site or campaign-tagged information. A visit ends through passage of time either after thirty minutes of inactivity or at midnight Pacific Time. A visit ends through a campaign change if a visitor arrives via one campaign or source, leaves the site, and then returns via another campaign or source. Visits for the period do not include interactions through our mobile applications.

Non-GAAP Financial Measures

To provide investors with additional information regarding RetailMeNot’s financial results, RetailMeNot has disclosed in the table below and elsewhere herein adjusted EBITDA, a non-GAAP financial measure. RetailMeNot has provided a reconciliation below of adjusted EBITDA to net income, the most directly comparable GAAP financial measure. RetailMeNot defines adjusted EBITDA as net income plus depreciation, amortization of intangible assets, stock-based compensation expense, third-party acquisition-related costs, other non-cash operating expenses (including asset impairment charges and compensation-related charges associated with seller notes issued in connection with acquisitions), net interest expense, other non-operating income or expense (including changes in fair value of warrant liabilities and contingent consideration) and income taxes, net of any foreign exchange income or expense.

RetailMeNot discloses adjusted EBITDA because it is a key measure used by RetailMeNot and its board of directors to understand and evaluate RetailMeNot’s financial and operating performance, establish budgets and operational goals and as an element in determining executive compensation. RetailMeNot believes it also facilitates period-to-period comparisons of operations that could otherwise be masked by the effect of the expenses that RetailMeNot excludes in this non-GAAP financial measure and facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. However, adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of RetailMeNot’s results as reported under GAAP. Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income and RetailMeNot’s other GAAP results.

Forward-looking Statements

This release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included herein regarding RetailMeNot’s strategy, future operations, future financial position, future net revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words


“anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “target” and similar expressions (or the negative of these terms) are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about management’s estimates regarding future net revenues and financial performance, visits and other statements about management’s beliefs, intentions or goals. RetailMeNot may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on RetailMeNot’s forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to, risks related to RetailMeNot’s ability to manage its growth, including accurately planning and forecasting its financial results; RetailMeNot’s ability to attract visitors to its websites from search engines; RetailMeNot’s ability to attract and retain paid retailers and maintain its relationships with performance marketing networks; RetailMeNot’s ability to obtain and maintain digital offer content and maintain the positive perception of its brand; RetailMeNot’s need to monetize digital offers available through its mobile solutions; the competitive environment for RetailMeNot’s business; changes in consumer sentiment regarding RetailMeNot’s use of cookies; RetailMeNot’s need to manage regulatory, tax and litigation risks; RetailMeNot’s ability to protect consumer data and its intellectual property; RetailMeNot’s ability to manage international business uncertainties; the impact and integration of recent and future acquisitions; and other risks and potential factors that could affect RetailMeNot’s business and financial results identified in RetailMeNot’s filings with the Securities and Exchange Commission (the “SEC”), including its annual report on Form 10-K filed with the SEC on February 18, 2014. Additional information will also be set forth in RetailMeNot’s future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that RetailMeNot makes with the SEC. RetailMeNot does not intend or undertake any duty to release publicly any updates or revisions to any forward-looking statements contained herein.

Media Contact

Brian Hoyt

RetailMeNot, Inc.

bhoyt@rmn.com

(512) 777-2957

Investor Contact

Michael Magaro

RetailMeNot, Inc.

ir@rmn.com

(512) 777-2899

– RMNSALE-F –


RetailMeNot, Inc.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)

 

     Three Months Ended March 31,  
     2014     2013  

Net revenues

   $ 61,270      $ 40,561   

Costs and expenses:

    

Cost of net revenues (1)

     4,430        2,588   

Product development (1)

     10,706        5,950   

Sales and marketing (1)

     21,172        11,190   

General and administrative (1)

     9,347        5,366   

Amortization of purchased intangible assets

     3,443        2,830   

Other operating expenses

     1,348        430   
  

 

 

   

 

 

 

Total costs and expenses

     50,446        28,354   
  

 

 

   

 

 

 

Income from operations

     10,824        12,207   

Other income (expense):

    

Interest expense, net

     (531     (649

Other income (expense), net

     28        (64
  

 

 

   

 

 

 

Income before income taxes

     10,321        11,494   

Provision for income taxes

     (4,246     (4,519
  

 

 

   

 

 

 

Net income

     6,075        6,975   
  

 

 

   

 

 

 

Preferred stock dividends on participating preferred stock

     —          (6,054
  

 

 

   

 

 

 

Total undistributed earnings

     6,075        921   

Undistributed earnings allocated to participating preferred stock

     —          (901
  

 

 

   

 

 

 

Net income attributable to common stockholders

     6,075        20   
  

 

 

   

 

 

 

Net income per share attributable to common stockholders:

    

Basic and diluted

   $ 0.11      $ 0.02   
  

 

 

   

 

 

 

Weighted average number of shares used in computing net income per share:

    

Basic

     53,149        1,000   
  

 

 

   

 

 

 

Diluted

     55,562        2,965   
  

 

 

   

 

 

 

RetailMeNot, Inc.

Condensed Consolidated Statements of Operations (continued)

(Unaudited, in thousands)

 

     Three Months Ended March 31,  
     2014      2013  

(1) Includes stock-based compensation as follows:

     

Cost of net revenues

   $ 341       $ 158   

Product development

     1,324         540   

Sales and marketing

     1,238         492   

General and administrative

     2,111         950   
  

 

 

    

 

 

 

Total

   $ 5,014       $ 2,140   
  

 

 

    

 

 

 


RetailMeNot, Inc.

Calculation of Weighted-Average Basic and Diluted Shares Assuming Conversion of

Redeemable Convertible Preferred Stock

(Unaudited, in thousands)

 

     Three Months Ended March 31,  
     2014      2013  

Basic:

     

GAAP basic weighted-average common shares

     53,149         1,000   

Add: Weighted-average shares from assumed conversion of redeemable convertible preferred stock

     —           44,180   
  

 

 

    

 

 

 

Basic weighted-average common shares (as converted basis)

     53,149         45,180   
  

 

 

    

 

 

 

Diluted:

     

Basic weighted-average common shares (as converted basis)

     53,149         45,180   

Add: Dilutive effect of stock options

     2,413         1,558   

Add: Dilutive effect of common stock warrants

     —           407   
  

 

 

    

 

 

 

Diluted weighted-average common shares (as converted basis)

     55,562         47,145   
  

 

 

    

 

 

 

RetailMeNot, Inc.

Reconciliation of Adjusted EBITDA

(Unaudited, in thousands)

 

     Three Months Ended March 31,  
     2014     2013  

Net income

   $ 6,075      $ 6,975   

Depreciation and amortization

     4,204        3,263   

Stock-based compensation expense

     5,014        2,140   

Third party acquisition-related costs

     —          194   

Other operating expenses

     1,348        430   

Interest expense, net

     531        649   

Other income (expense), net

     (28     64   

Provision for income taxes

     4,246        4,519   
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 21,390      $ 18,234   
  

 

 

   

 

 

 


RetailMeNot, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands)

 

     March 31,
2014
    Dec. 31,
2013
 

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 196,466      $ 165,881   

Accounts receivable, net

     43,417        59,286   

Prepaid assets and other current assets, net

     16,012        10,661   
  

 

 

   

 

 

 

Total current assets

     255,895        235,828   

Property and equipment, net

     11,956        10,317   

Intangible assets, net

     77,443        80,813   

Goodwill

     179,916        179,659   

Other assets, net

     6,330        5,465   
  

 

 

   

 

 

 

Total assets

   $ 531,540      $ 512,082   
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Current liabilities:

    

Accounts payable

   $ 4,214      $ 6,217   

Accrued compensation and benefits

     5,491        9,875   

Accrued expenses and other current liabilities

     6,717        5,586   

Income taxes payable

     4,504        4,835   

Current maturities of long term debt

     15,058        15,063   
  

 

 

   

 

 

 

Total current liabilities

     35,984        41,576   

Deferred tax liability—noncurrent

     5,729        8,796   

Long term debt

     24,500        26,250   

Other noncurrent liabilities

     6,031        4,151   
  

 

 

   

 

 

 

Total liabilities

     72,244        80,773   

Stockholders’ equity:

    

Common stock

     54        53   

Additional paid-In capital

     488,892        467,461   

Accumulated other comprehensive loss

     2,018        1,538   

Accumulated deficit

     (31,668     (37,743
  

 

 

   

 

 

 

Total stockholders’ equity

     459,296        431,309   
  

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 531,540      $ 512,082   
  

 

 

   

 

 

 


RetailMeNot, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

 

     Three Months Ended March 31,  
     2014     2013  

Cash flows from operating activities:

    

Net income

   $ 6,075      $ 6,975   

Adjustments to reconcile net income to cash provided by operating activities:

    

Depreciation and amortization expense

     4,204        3,263   

Stock based compensation expense

     5,014        2,140   

Excess income tax benefit from stock-based compensation

     (8,314     —     

Deferred income tax (benefit) expense

     (4     223   

Non-cash interest expense

     97        122   

Amortization of deferred compensation

     1,347        430   

Other non-cash expense and fair value change in liabilities, net

     56        36   

Provision for doubtful accounts receivable

     374        112   

Changes in operating assets and liabilities:

    

Accounts receivable, net

     15,567        7,735   

Prepaid expenses and other current assets, net

     (987     (907

Accounts payable

     (1,977     (1,812

Accrued expenses and other current liabilities

     (3,975     1,462   

Other noncurrent assets and liabilities

     830        181   
  

 

 

   

 

 

 

Net cash provided by operating activities

     18,307        19,960   

Cash flows from investing activities:

    

Payments for acquisition of businesses, net of acquired cash

     —          (1,931

Purchase of property and equipment

     (2,393     (645
  

 

 

   

 

 

 

Net cash used in investing activities

     (2,393     (2,576

Cash flows from financing activities:

    

Payments on notes payable

     (1,750     (2,225

Payments of offering costs for follow-own offering

     (64     —     

Excess income tax benefit from stock-based compensation

     8,314        —     

Payments of principal on capital lease arrangements

     (3     —     

Payments for repurchase of common stock

     (6     —     

Proceeds from exercise of options and warrants to purchase common stock

     8,139        289   
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     14,630        (1,936

Effect of foreign currency exchange rate on cash

     41        (253
  

 

 

   

 

 

 

Change in cash and cash equivalents

     30,585        15,195   

Cash and cash equivalents, beginning of period

     165,881        97,142   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 196,466      $ 112,337