Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - Actua Corp | d276396dex992.htm |
| 8-K - 8-K - Actua Corp | d276396d8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Investor inquiries:
Karen Greene
Actua
Investor Relations
610.727.6900
IR@actua.com
ACTUA ANNOUNCES THIRD QUARTER 2016 FINANCIAL RESULTS
Company announces increase in share repurchase program and intention to launch Dutch tender
Radnor, PA - (November 3, 2016) - Actua Corporation (Nasdaq: ACTA) (“Actua”) today reported its results for the third quarter ended September 30, 2016.
Highlights
| • | Closed the sale of GovDelivery to an investor group led by Vista Equity Partners, resulting in proceeds to Actua of approximately $133 million. |
| • | Expanded Actua’s existing share repurchase program from $150 million to $189.8 million, increasing Actua’s current availability from $85.2 million to $125 million. |
| • | Expects to commence a modified “Dutch auction” tender offer for up to $80 million of its common stock at a price per share not less than $12.00 and not greater than $14.00 on or about November 7, 2016. The tender offer would remain open for at least 20 business days. For details regarding the tender offer, please see the information on the tender offer located in the Investors section of the Actua website at www.actua.com. |
| • | Announced FolioDynamix’s acquisition of Summit Advisor Solutions (SAS), a Dallas-based firm focused on providing advisory services to the independent RIA market. |
“The GovDelivery transaction demonstrates the value Actua brings in building successful SaaS businesses and unlocking that value for stockholders,” said Walter Buckley, CEO of Actua. “With approximately $170 million of cash following the GovDelivery sale, we will continue to drive stockholder value by building our remaining businesses and repurchasing shares.”
Because GovDelivery is presented as a discontinued operation as of September 30, 2016, GovDelivery’s results are excluded from our continuing operations for all periods presented.
Revenue was $27.9 million for the third quarter of 2016, up from $24.9 million for the third quarter of 2015. Net loss attributable to Actua for the third quarter of 2016 was $(10.1) million, or $(0.27) per diluted share, compared to net loss attributable to Actua of $(13.9) million, or $(0.37) per diluted share, for the third quarter of 2015. Non-GAAP net loss for the third quarter of 2016 was $(1.6) million, or $(0.04) per diluted share, compared to a non-GAAP net loss of $(1.4) million, or $(0.04) per diluted share, for the comparable prior year quarter. Cash flows from operations for the third quarter of 2016 was $(0.6) million, compared to $(1.2) million for the comparable prior year quarter. Non-GAAP cash flows from operations for the third quarter of 2016 was $0.2 million, compared to $(1.2) million for the comparable prior year quarter.
Fourth Quarter 2016 Guidance
For the fourth quarter of 2016, Actua expects revenue in the range of $28.5 million to $29.5 million, non-GAAP net loss per share in the range of between $(0.06) and $(0.08) per diluted share and non-GAAP cash flow from operations of between $1.5 million and $2.5 million.
A reconciliation of the non-GAAP financial measures used above with the most comparable GAAP financial measures is included with the financial tables at the end of this release.
Please see Actua’s website at www.actua.com for more information on Actua, its businesses and its third quarter 2016 results.
Actua will host a webcast at 10:00 a.m. ET today to discuss its financial results. As part of the live webcast for this call, Actua will post a slide presentation to accompany the prepared remarks. To access the webcast, go to www.actua.com/investors/events-presentations/ and click on the webcast link. Please log on to the website approximately ten minutes prior to the call to register and download any necessary audio software. The conference call is also accessible through listen-only mode by dialing 800.708.4540 or 847.619.6397. The passcode is 43551013.
For those unable to participate in the conference call, a replay will be available from November 3, 2016 at 12:30 p.m. ET until November 10, 2016 at 11:59 p.m. ET. To access the replay, dial 888.843.7419 or 630.652.3042. The passcode is 43551013#. The replay and slide presentation also can be accessed in the investor relations section of the Actua website at www.actua.com/investors/events-presentations/.
About Actua
Actua Corporation (Nasdaq: ACTA), the multi-vertical cloud company, brings the power of the cloud to vertical markets and processes. Actua is pioneering the second wave of the SaaS revolution - the vertical wave - by growing cloud businesses that are transforming their markets. With over 700 employees delivering unrivaled domain knowledge, agility and responsiveness to our customers, Actua’s rapidly growing vertical cloud businesses are positioned to lead this wave. For the latest information about Actua and its brands, please go to www.actua.com.
-###-
Safe Harbor Statement under Private Securities Litigation Reform Act of 1995
The statements contained in this press release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve certain risks and uncertainties, including, but not limited to, risks associated with our ability to compete successfully in highly-competitive, rapidly-developing markets, the valuation of public and private cloud-based businesses by analysts, investors and other market participants, our ability to deploy capital effectively and on acceptable terms, the effect of economic conditions generally, capital spending by our customers, our ability to retain existing customer relationships and revenue streams and secure new ones, developments in the markets in which we operate and our ability to respond to those changes in a timely and effective manner, the availability, performance and security of our cloud-based technology, particularly in light of increased cybersecurity risks and concerns, our ability to retain key personnel, our ability to successfully integrate any acquired business, the impact of any potential acquisitions, dispositions, share repurchases or other strategic transactions, our ability to have continued access to capital and to manage capital resources effectively, and other risks and uncertainties detailed in Actua’s filings with the U.S. Securities and Exchange Commission. These and other factors may cause actual results to differ materially from those projected.
Actua Corporation
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
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| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenue |
$ | 27,937 | $ | 24,917 | $ | 79,977 | $ | 72,957 | ||||||||
| Operating Expenses |
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| Cost of revenue (a) |
7,441 | 6,663 | 21,451 | 20,533 | ||||||||||||
| Sales and marketing (a) |
10,281 | 9,551 | 30,861 | 26,911 | ||||||||||||
| General and administrative (a) |
11,228 | 12,542 | 34,926 | 40,889 | ||||||||||||
| Research and development (a) |
5,411 | 4,973 | 16,106 | 14,377 | ||||||||||||
| Amortization of intangible assets |
3,524 | 3,266 | 10,732 | 10,146 | ||||||||||||
| Impairment related and other |
45 | 285 | 393 | 982 | ||||||||||||
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| Total operating expenses |
37,930 | 37,280 | 114,469 | 113,838 | ||||||||||||
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| Operating income (loss) |
(9,993 | ) | (12,363 | ) | (34,492 | ) | (40,881 | ) | ||||||||
| Other income (expense): |
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| Other income (loss), net |
2,831 | 96 | 2,726 | 1,537 | ||||||||||||
| Interest income |
31 | 30 | 118 | 83 | ||||||||||||
| Interest expense |
(27 | ) | (36 | ) | (93 | ) | (104 | ) | ||||||||
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| Loss (income) before income taxes and noncontrolling interests |
(7,158 | ) | (12,273 | ) | (31,741 | ) | (39,365 | ) | ||||||||
| Income tax (expense) benefit |
(93 | ) | (29 | ) | (291 | ) | (204 | ) | ||||||||
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| (Loss) income from continuing operations |
(7,251 | ) | (12,302 | ) | (32,032 | ) | (39,569 | ) | ||||||||
| (Loss) income from discontinued operations, net of tax |
(3,842 | ) | (2,331 | ) | (8,002 | ) | (7,032 | ) | ||||||||
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| Net income (loss) |
(11,093 | ) | (14,633 | ) | (40,034 | ) | (46,601 | ) | ||||||||
| Less: Net income (loss) attributable to the noncontrolling interests |
(1,019 | ) | (751 | ) | (2,888 | ) | (2,672 | ) | ||||||||
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| Net income (loss) attributable to Actua Corporation |
$ | (10,074 | ) | $ | (13,882 | ) | $ | (37,146 | ) | $ | (43,929 | ) | ||||
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| Amounts attributable to Actua Corporation: |
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| Net (loss) income from continuing operations |
$ | (6,467 | ) | $ | (11,732 | ) | $ | (29,590 | ) | $ | (37,390 | ) | ||||
| Net (loss) income from discontinued operations |
(3,607 | ) | (2,150 | ) | (7,556 | ) | (6,539 | ) | ||||||||
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| Net (loss) income |
$ | (10,074 | ) | $ | (13,882 | ) | $ | (37,146 | ) | $ | (43,929 | ) | ||||
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| Basic and diluted net income (loss) per share: |
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| Loss from continuing operations |
$ | (0.17 | ) | $ | (0.31 | ) | $ | (0.80 | ) | $ | (1.01 | ) | ||||
| Loss from discontinued operations |
(0.10 | ) | (0.06 | ) | (0.21 | ) | (0.18 | ) | ||||||||
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| Income (loss) attributable to Actua common shareholders |
$ | (0.27 | ) | $ | (0.37 | ) | $ | (1.01 | ) | $ | (1.19 | ) | ||||
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| Shares used in computation of basic and diluted net income (loss) per common share attributable to Actua common shareholders |
36,776 | 37,146 | 36,943 | 37,038 | ||||||||||||
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| (a) Includes equity-based compensation of: |
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| Cost of revenue |
$ | 21 | $ | 48 | $ | 75 | $ | 104 | ||||||||
| Sales and marketing |
73 | 99 | 233 | 232 | ||||||||||||
| General and administrative |
2,827 | 6,159 | 10,804 | 19,722 | ||||||||||||
| Research and development |
105 | 158 | 321 | 337 | ||||||||||||
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| $ | 3,026 | $ | 6,464 | $ | 11,433 | $ | 20,395 | |||||||||
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Actua Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| September 30, | December 31, | |||||||
| 2016 | 2015 | |||||||
| ASSETS |
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| Cash and cash equivalents |
$ | 41,787 | $ | 72,457 | ||||
| Restricted cash |
1,699 | 2,206 | ||||||
| Accounts receivable, net |
17,031 | 16,167 | ||||||
| Prepaid expenses and other current assets |
4,001 | 2,776 | ||||||
| Assets of discontinued operations |
33,609 | 29,129 | ||||||
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| Total current assets |
98,127 | 122,735 | ||||||
| Fixed assets, net |
5,580 | 4,279 | ||||||
| Goodwill |
222,694 | 220,459 | ||||||
| Intangible assets, net |
73,195 | 80,443 | ||||||
| Cost method businesses |
17,249 | 18,146 | ||||||
| Deferred tax asset |
2,779 | 2,900 | ||||||
| Other assets, net |
1,158 | 1,182 | ||||||
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| Total Assets |
$ | 420,782 | $ | 450,144 | ||||
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| LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY |
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| Short-term debt |
$ | 1,320 | $ | 1,320 | ||||
| Accounts payable |
9,174 | 7,992 | ||||||
| Accrued expenses |
7,332 | 8,215 | ||||||
| Accrued compensation and benefits |
6,907 | 9,865 | ||||||
| Deferred revenue |
30,899 | 26,102 | ||||||
| Liabilities of discontinued operations |
31,691 | 24,391 | ||||||
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| Total current liabilities |
87,323 | 77,885 | ||||||
| Deferred tax liability |
266 | 266 | ||||||
| Deferred revenue |
1,215 | 2,038 | ||||||
| Other liabilities |
5,351 | 1,478 | ||||||
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| Total Liabilities |
94,155 | 81,667 | ||||||
| Redeemable noncontrolling interest |
9,362 | 10,506 | ||||||
| Total Equity |
317,265 | 357,971 | ||||||
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| Total Liabilities, Redeemable noncontrolling interest and Equity |
$ | 420,782 | $ | 450,144 | ||||
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ACTUA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
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| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| OPERATING ACTIVITIES - Continuing Operations |
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| Net income (loss) |
$ | (11,093 | ) | $ | (14,633 | ) | $ | (40,034 | ) | $ | (46,601 | ) | ||||
| (Income) loss from discontinued operations, net of tax |
3,842 | 2,331 | 8,002 | 7,032 | ||||||||||||
| Adjustments to reconcile net loss to cash provided by (used in) operating activities: |
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| Depreciation and amortization |
4,131 | 3,770 | 12,462 | 11,681 | ||||||||||||
| Equity-based compensation |
3,026 | 6,464 | 11,433 | 20,395 | ||||||||||||
| Impairment related and other |
25 | 89 | 419 | 290 | ||||||||||||
| Other (income) loss, net |
(2,831 | ) | (96 | ) | (2,726 | ) | (1,537 | ) | ||||||||
| Deferred tax asset |
69 | 47 | 121 | 123 | ||||||||||||
| Contingent consideration |
— | 196 | 32 | 692 | ||||||||||||
| Changes in operating assets and liabilities - net of acquisitions: |
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| Accounts receivable, net |
79 | (1,431 | ) | (1,012 | ) | 9,060 | ||||||||||
| Prepaid expenses and other assets |
552 | (583 | ) | (1,305 | ) | 1,425 | ||||||||||
| Accounts payable |
978 | 1,742 | 977 | (2,700 | ) | |||||||||||
| Accrued expenses |
(226 | ) | 196 | (1,000 | ) | 7,052 | ||||||||||
| Accrued compensation and benefits |
1,066 | 1,286 | (2,973 | ) | 1,194 | |||||||||||
| Deferred revenue |
(521 | ) | (388 | ) | 4,112 | (10,687 | ) | |||||||||
| Other liabilities |
335 | (238 | ) | 4,175 | (1,544 | ) | ||||||||||
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| Cash flows provided by (used in) operating activities |
(568 | ) | (1,248 | ) | (7,317 | ) | (4,125 | ) | ||||||||
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| INVESTING ACTIVITIES - Continuing Operations |
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| Capital expenditures |
(620 | ) | (187 | ) | (2,256 | ) | (1,645 | ) | ||||||||
| Change in restricted cash |
30 | (319 | ) | 581 | (251 | ) | ||||||||||
| Proceeds from sales/distribution of ownership interests |
4,408 | — | 4,454 | 1,415 | ||||||||||||
| Ownership acquisition, net of cash acquired |
(2,905 | ) | (43 | ) | (5,127 | ) | (1,300 | ) | ||||||||
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| Cash flows provided by (used in) investing activities |
913 | (549 | ) | (2,348 | ) | (1,781 | ) | |||||||||
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| FINANCING ACTIVITIES |
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| Acquisition of noncontrolling interest in subsidiary equity |
— | — | (5,446 | ) | (3,952 | ) | ||||||||||
| Payments of contingent consideration |
(1,200 | ) | — | (2,664 | ) | (1,870 | ) | |||||||||
| Borrowings of short-term debt |
— | — | — | 820 | ||||||||||||
| Repayment of capital lease obligations |
(8 | ) | — | (8 | ) | (24 | ) | |||||||||
| Purchase of treasury stock |
— | — | (9,533 | ) | (1,704 | ) | ||||||||||
| Tax withholdings related to equity-based awards |
(32 | ) | (67 | ) | (1,568 | ) | (3,925 | ) | ||||||||
| Financing activities with discontinued operations, net |
259 | (371 | ) | (1,745 | ) | (3,871 | ) | |||||||||
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| Cash flows provided by (used in) financing activities |
(981 | ) | (438 | ) | (20,964 | ) | (14,526 | ) | ||||||||
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| Effect of exchange rate on cash and cash equivalents |
71 | 3 | (41 | ) | 19 | |||||||||||
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| Net increase (decrease) in cash and cash equivalents from continuing operations |
(565 | ) | (2,232 | ) | (30,670 | ) | (20,413 | ) | ||||||||
| Discontinued Operations |
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| Cash flows used in operating activities |
(1,305 | ) | (449 | ) | (6,228 | ) | (1,111 | ) | ||||||||
| Cash flows used in investing activities |
(228 | ) | (1,739 | ) | (675 | ) | (4,900 | ) | ||||||||
| Cash flows provided by financing activities |
850 | 386 | 3,234 | 3,878 | ||||||||||||
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| Net increase (decrease) in cash and cash equivalents from discontinued operations |
(683 | ) | (1,802 | ) | (3,669 | ) | (2,133 | ) | ||||||||
| Cash and cash equivalents at beginning of period - discontinued operations |
870 | 2,651 | 3,856 | 2,982 | ||||||||||||
| Less: cash and cash equivalents at end of period - discontinued operations |
187 | 849 | 187 | 849 | ||||||||||||
| Cash and cash equivalents at beginning of period - continuing operations |
42,352 | 81,971 | 72,457 | 100,152 | ||||||||||||
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| Cash and cash equivalents at end of period - continuing operations |
$ | 41,787 | $ | 79,739 | $ | 41,787 | $ | 79,739 | ||||||||
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Actua Corporation
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
| 2015 | 2016 | |||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | ||||||||||||||||||||||
| GAAP net income (loss) attributable to Actua: |
$ | (14,765 | ) | $ | (15,282 | ) | $ | (13,882 | ) | $ | (52,151 | ) | $ | (14,331 | ) | $ | (12,741 | ) | $ | (10,074 | ) | |||||||
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| Add back: |
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| Share-based compensation |
6,994 | 6,912 | 6,464 | $ | 5,549 | 4,661 | 3,750 | 3,026 | ||||||||||||||||||||
| Amortization of intangibles |
3,587 | 3,293 | 3,266 | 3,303 | 3,582 | 3,626 | 3,524 | |||||||||||||||||||||
| Impairment related and other costs |
453 | 603 | 89 | 38,964 | 231 | 117 | 45 | |||||||||||||||||||||
| Transaction expenses |
70 | 154 | 62 | — | 47 | 209 | 630 | |||||||||||||||||||||
| Other (income) loss, net |
(1,493 | ) | 376 | 100 | (205 | ) | 90 | 15 | (2,831 | ) | ||||||||||||||||||
| Acquired businesses’ deferred revenue |
677 | 678 | 557 | 505 | 476 | 483 | 478 | |||||||||||||||||||||
| Impact of non-cash income tax benefit items |
34 | — | — | — | — | 88 | 39 | |||||||||||||||||||||
| Loss (income) from discontinued operations |
2,244 | 2,146 | 2,150 | 1,981 | 1,971 | 1,978 | 3,842 | |||||||||||||||||||||
| Impact of non-controlling interest (NCI) for discontinued operations |
(146 | ) | (166 | ) | (181 | ) | (159 | ) | (110 | ) | (101 | ) | (235 | ) | ||||||||||||||
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| Non-GAAP net income (loss) |
$ | (2,345 | ) | $ | (1,286 | ) | $ | (1,375 | ) | $ | (2,213 | ) | $ | (3,383 | ) | $ | (2,576 | ) | $ | (1,556 | ) | |||||||
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| GAAP net income (loss) per diluted share: |
$ | (0.40 | ) | $ | (0.41 | ) | $ | (0.37 | ) | $ | (1.40 | ) | $ | (0.38 | ) | $ | (0.35 | ) | $ | (0.27 | ) | |||||||
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| Add back: |
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| Share-based compensation |
0.19 | 0.18 | 0.17 | 0.15 | 0.12 | 0.10 | 0.08 | |||||||||||||||||||||
| Amortization of intangibles |
0.10 | 0.09 | 0.09 | 0.09 | 0.10 | 0.10 | 0.10 | |||||||||||||||||||||
| Impairment related and other costs |
0.01 | 0.020 | — | 1.05 | 0.01 | 0.01 | — | |||||||||||||||||||||
| Transaction expenses |
— | 0.004 | — | — | — | 0.01 | 0.02 | |||||||||||||||||||||
| Other (income) loss, net |
(0.04 | ) | 0.010 | — | (0.01 | ) | — | — | (0.08 | ) | ||||||||||||||||||
| Acquired businesses’ deferred revenue |
0.02 | 0.020 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | |||||||||||||||||||||
| Impact of non-cash income tax benefit items |
— | — | — | — | — | — | — | |||||||||||||||||||||
| Loss (income) from discontinued operations |
0.06 | 0.059 | 0.06 | 0.05 | 0.05 | 0.05 | 0.10 | |||||||||||||||||||||
| Impact of non-controlling interest (NCI) for discontinued operations |
— | — | — | — | — | — | — | |||||||||||||||||||||
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| Non-GAAP net income (loss) per diluted share |
$ | (0.06 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.09 | ) | $ | (0.07 | ) | $ | (0.04 | ) | |||||||
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| Shares used in calculation of GAAP net income (loss) per share attributable to Actua: |
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| Basic |
36,842 | 37,123 | 37,146 | 37,190 | 37,293 | 36,760 | 36,776 | |||||||||||||||||||||
| Diluted |
36,842 | 37,123 | 37,146 | 37,190 | 37,293 | 36,760 | 36,776 | |||||||||||||||||||||
| Shares used in calculation of non-GAAP net income (loss) per share attributable to Actua: |
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| Basic |
36,842 | 37,123 | 37,146 | 37,190 | 37,293 | 36,760 | 36,776 | |||||||||||||||||||||
| Diluted |
36,842 | 37,123 | 37,146 | 37,190 | 37,293 | 36,760 | 36,776 | |||||||||||||||||||||
Actua Corporation
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Continued)
(In thousands, except per share data)
(Unaudited)
| 2015 | 2016 | |||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | ||||||||||||||||||||||
| GAAP net income (loss) attributable to Actua: |
$ | (14,765 | ) | $ | (15,282 | ) | $ | (13,882 | ) | $ | (52,151 | ) | $ | (14,331 | ) | $ | (12,741 | ) | $ | (10,074 | ) | |||||||
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| Add back: |
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| Share-based compensation |
6,994 | 6,912 | 6,464 | $ | 5,549 | 4,661 | 3,750 | 3,026 | ||||||||||||||||||||
| Amortization of intangibles |
3,587 | 3,293 | 3,266 | 3,303 | 3,582 | 3,626 | 3,524 | |||||||||||||||||||||
| Impairment related and other costs |
453 | 603 | 89 | 38,964 | 231 | 117 | 45 | |||||||||||||||||||||
| Transaction expenses |
70 | 154 | 62 | — | 47 | 209 | 630 | |||||||||||||||||||||
| Other (income) loss, net |
(1,493 | ) | 376 | 100 | (205 | ) | 90 | 15 | (2,831 | ) | ||||||||||||||||||
| Acquired businesses’ deferred revenue |
677 | 678 | 557 | 505 | 476 | 483 | 478 | |||||||||||||||||||||
| Impact of non-cash income tax benefit items |
34 | — | — | — | — | 88 | 39 | |||||||||||||||||||||
| Loss (income) from discontinued operations |
2,244 | 2,146 | 2,150 | 1,981 | 1,971 | 1,978 | 3,842 | |||||||||||||||||||||
| Impact of non-controlling interest (NCI) for discontinued operations |
(146 | ) | (166 | ) | (181 | ) | (159 | ) | (110 | ) | (101 | ) | (235 | ) | ||||||||||||||
| Interest expense (income), net |
17 | (4 | ) | (2 | ) | 8 | 36 | 45 | (4 | ) | ||||||||||||||||||
| Income tax expense (current/cash only) |
141 | — | 59 | (38 | ) | 24 | 146 | (6 | ) | |||||||||||||||||||
| Depreciation |
538 | 493 | 504 | 514 | 515 | 604 | 739 | |||||||||||||||||||||
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| Adjusted EBITDA |
$ | (1,649 | ) | $ | (797 | ) | $ | (814 | ) | $ | (1,729 | ) | $ | (2,808 | ) | $ | (1,781 | ) | $ | (827 | ) | |||||||
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| GAAP Cost of revenue |
$ | 6,859 | $ | 7,011 | $ | 6,663 | $ | 6,887 | $ | 6,722 | $ | 7,288 | $ | 7,288 | ||||||||||||||
| Share-based compensation |
23 | $ | 33 | $ | 48 | $ | 34 | 32 | 22 | 21 | ||||||||||||||||||
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| Adjusted Cost of revenue |
$ | 6,836 | $ | 6,978 | $ | 6,615 | $ | 6,853 | $ | 6,690 | $ | 7,266 | $ | 7,267 | ||||||||||||||
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| GAAP Sales and marketing |
$ | 8,438 | $ | 8,922 | $ | 9,551 | $ | 8,921 | $ | 10,119 | $ | 10,461 | $ | 10,461 | ||||||||||||||
| Share-based compensation |
55 | 78 | 99 | 65 | 88 | 72 | 73 | |||||||||||||||||||||
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| Adjusted Sales and marketing |
$ | 8,383 | $ | 8,844 | $ | 9,452 | $ | 8,856 | $ | 10,031 | $ | 10,389 | $ | 10,388 | ||||||||||||||
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| GAAP General and administrative |
$ | 13,953 | $ | 14,394 | $ | 12,542 | $ | 13,627 | $ | 12,326 | $ | 11,372 | $ | 11,372 | ||||||||||||||
| Share-based compensation |
6,896 | 6,667 | 6,159 | 5,336 | 4,427 | 3,548 | 2,829 | |||||||||||||||||||||
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| Adjusted General and administrative |
$ | 7,057 | $ | 7,727 | $ | 6,383 | $ | 8,291 | $ | 7,899 | $ | 7,824 | $ | 8,543 | ||||||||||||||
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| GAAP Research and development |
$ | 4,464 | $ | 4,940 | $ | 4,973 | $ | 4,619 | $ | 5,307 | $ | 5,388 | $ | 5,388 | ||||||||||||||
| Share-based compensation |
45 | 134 | 158 | 114 | 114 | 102 | 105 | |||||||||||||||||||||
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| Adjusted Research and development |
$ | 4,419 | $ | 4,806 | $ | 4,815 | $ | 4,505 | $ | 5,193 | $ | 5,286 | $ | 5,283 | ||||||||||||||
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| GAAP Cash flows provided by (used in) operating activities |
$ | (1,609 | ) | $ | (1,268 | ) | $ | (1,248 | ) | $ | (344 | ) | $ | (4,109 | ) | $ | (2,640 | ) | $ | (568 | ) | |||||||
| Impairment related and other costs |
— | 94 | — | 68 | 170 | 938 | 800 | |||||||||||||||||||||
| Transaction expenses |
81 | 99 | 6 | 49 | — | 232 | — | |||||||||||||||||||||
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| Adjusted Cash flows provided by (used in) operating activities |
$ | (1,528 | ) | $ | (1,075 | ) | $ | (1,242 | ) | $ | (227 | ) | $ | (3,939 | ) | $ | (1,470 | ) | $ | 232 | ||||||||
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About Actua’s Non-GAAP Financial Measures
This release contains non-GAAP financial measures. The tables above reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures.
Non-GAAP financial measures should not be considered as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. Actua strongly urges investors and potential investors in our securities to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures that are included in this press release.
Actua’s management believes that its non-GAAP financial measures provide useful information to investors because they allow investors to view the business through the eyes of management and provide meaningful supplemental information regarding Actua’s operating results, as they exclude amounts that Actua excludes as part of its monitoring of operating results and assessment of the performance of the business.
Actua presents the following non-GAAP financial measures in this press release: (1) non-GAAP net income (loss) (which term may be used interchangeably with adjusted net income (loss) by management during quarterly earnings presentations), (2) non-GAAP net income (loss) per diluted share (which term may be used interchangeably with adjusted net income (loss) per diluted share by management during quarterly earnings presentations), (3) Adjusted EBITDA, (4) Adjusted Cost of revenue, (5) Adjusted Sales and marketing, (6) Adjusted General and administrative, (7) Adjusted Research and development and (8) non-GAAP cash flows from operations. Actua excludes items from these non-GAAP financial measures as described below.
Non-GAAP net income (loss) excludes from GAAP net income (loss) the following items:
| • | Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies. |
| • | Amortization of intangibles. Actua excludes amortization of acquired intangibles, which consists primarily of customer relationships and technology, because they are expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and Actua believes that doing so facilitates comparisons to its historical operating results and to the results of other companies. |
| • | Impairment related and other costs. Actua excludes the effect of impairment related and other costs, which primarily include impairment charges, revaluation of contingent consideration, restructuring and severance fees, settlement costs and other one-time costs, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations. |
| • | Transaction expenses. Actua excludes the effect of acquisition related expenses because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations. |
| • | Other income (loss), net. Actua excludes the effect of other income (loss), net, which primarily includes transaction-driven gains and losses, as well as certain foreign currency impacts, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations. |
| • | Acquired businesses’ deferred revenue. Actua includes acquired businesses’ previously deferred revenues that are not recognized under GAAP because Actua considers them a part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on its operations. |
| • | Impact of non-cash income tax benefit items. Actua excludes the impact of any non-cash income tax benefit items as Actua believes it is useful for investors to understand the effect of this item and does not consider them a part of ongoing operating results when assessing the performance of its business. |
| • | (Loss) income from discontinued operations. Actua excludes the income (loss) from discontinued operations as Actua believes it is useful for investors to understand the effect of these items for all periods presented as Actua does not consider them a part of ongoing operating results when assessing the performance of its business. |
| • | Impact of non-controlling interest (NCI) for discontinued operations. Actua does not own 100% of the discontinued operations presented. Therefore, Actua excludes the impact of the NCI for discontinued operations as Actua believes it is useful for investors to understand the effect of this item for all periods presented as compared to what has historically been provided as Actua does not consider it a part of ongoing operating results when assessing the performance of its business. |
Non-GAAP net income (loss) per diluted share is calculated as follows:
| • | Non-GAAP net income (loss) (as defined above) is the numerator. |
| • | Shares used in calculation of non-GAAP net income (loss) per diluted share. For periods where GAAP and non-GAAP net income (loss) are both losses, Actua uses the same number of shares used to calculate GAAP and non-GAAP net loss per share. For periods where GAAP and non-GAAP net income (loss) are both income, Actua uses the same number of shares used to calculate GAAP and non-GAAP net income per diluted share. For periods where GAAP net income (loss) is a loss but non-GAAP net income (loss) is income, Actua includes the impact of incremental dilutive securities for the period to determine non-GAAP net income per diluted share. For periods where GAAP net income (loss) is income but non-GAAP net income (loss) is a loss, Actua excludes the impact of incremental dilutive securities for the period to determine non-GAAP net loss per diluted share. |
Adjusted EBITDA excludes from GAAP net income (loss) the following items:
| • | Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies. |
| • | Amortization of intangibles. Actua excludes amortization of acquired intangibles, which consists primarily of customer relationships and technology, because they are expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and Actua believes that doing so facilitates comparisons to its historical operating results and to the results of other companies. |
| • | Impairment related and other costs. Actua excludes the effect of impairment related and other costs, which primarily include impairment charges, revaluation of contingent consideration, restructuring and severance fees, settlement costs and other one-time costs, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations. |
| • | Transaction expenses. Actua excludes the effect of acquisition related expenses because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations. |
| • | Other income (loss), net. Actua excludes the effect of other income (loss), net, which primarily includes transaction-driven gains and losses and revaluation of contingent consideration, as well as certain foreign currency impacts because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations. |
| • | Acquired businesses’ deferred revenue. Actua includes acquired businesses’ previously deferred revenues that are not recognized under GAAP because Actua considers them a part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on its operations. |
| • | Impact of non-cash income tax benefit items. Actua excludes the impact of any non-cash income tax benefit items as Actua believes it is useful for investors to understand the effect of this item and Actua does not consider them a part of ongoing operating results when assessing the performance of its business. |
| • | (Loss) income from discontinued operations. Actua excludes the income (loss) from discontinued operations as Actua believes it is useful for investors to understand the effect of these items for all periods presented as Actua does not consider them a part of ongoing operating results when assessing the performance of its business. |
| • | Impact of non-controlling interest (NCI) for discontinued operations. Actua does not own 100% of the discontinued operations presented. Therefore, Actua excludes the impact of the NCI for discontinued operations as Actua believes it is useful for investors to understand the effect of this item for all periods presented as compared to what has historically been provided as Actua does not consider it a part of ongoing operating results when assessing the performance of its business. |
| • | Interest expense (income), net. Actua excludes income and expense from interest as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business. |
| • | Income tax expense (current/cash only). Actua excludes the impact of any current, cash income tax expense as Actua believes it is useful for investors to understand the effect of this item and does not consider them a part of ongoing operating results when assessing the performance of its business. |
| • | Depreciation. Actua excludes depreciation expense as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business. |
Adjusted Cost of revenue excludes from GAAP Cost of revenue operating expenses the following item:
| • | Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the cost of revenue category on Actua’s statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies. |
Adjusted Sales and marketing excludes from GAAP Sales and marketing operating expenses the following item:
| • | Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the sales and marketing category on Actua’s statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies. |
Adjusted General and administrative excludes from GAAP General and administrative operating expenses the following item:
| • | Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the general and administrative category on Actua’s statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies. |
Adjusted Research and development excludes from GAAP Research and development operating expenses the following item:
| • | Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the research and development category on Actua’s statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies. |
Adjusted Cash flows from operations excludes from GAAP Cash flows from operations the cash impact of the following items:
| • | Impairment related and other costs. Actua excludes the cash effect of impairment related and other costs, which primarily include severance payments, contingent consideration payments, payments associated with restructuring costs, settlement costs and other one-time costs, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s cash flows. |
| • | Transaction expenses. Actua excludes the cash effect of acquisition related expenses because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s cash flows. |
Actua believes that the following considerations apply to the non-GAAP financial measures that it presents:
| • | Actua’s management uses non-GAAP net income (loss), non-GAAP net income (loss) per diluted share, adjusted EBITDA, adjusted cost of revenue, adjusted sales and marketing, adjusted general and administrative, adjusted research and development and non-GAAP cash flows from operations in internal reports used by management in monitoring and making decisions regarding Actua’s business, including in monthly financial reports prepared for management and in periodic reports to Actua’s Board of Directors. |
| • | An important limitation of Actua’s non-GAAP financial measures is that they exclude expenses or cash flows, some of which may be significant, that are required by GAAP to be recorded. In addition, non-GAAP financial measures are subject to inherent limitations because they reflect the exercise of judgments by management about which charges to exclude in the non-GAAP financial measures. |
To mitigate the limitations associated with non-GAAP financial measures, Actua reconciles its non-GAAP financial measures to the nearest comparable GAAP financial measures and recommends that investors and potential investors do not give undue weight to its non-GAAP financial measures.
Actua is providing the following historical GAAP revenues, as reported to provide information as to what our GAAP revenues are excluding the revenues of GovDelivery, as they are now presented net within discontinued operations, in those respective periods in the table below.
Actua Corporation
Reconciliation of GAAP Revenue, as reported to GAAP Revenue (excluding GovDelivery)
(In thousands)
(Unaudited)
| 2015 | 2016 | |||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | ||||||||||||||||||||||
| GAAP Revenue, as reported: |
$ | 30,592 | $ | 33,536 | $ | 34,140 | $ | 35,153 | $ | 34,610 | $ | 36,709 | N/A | |||||||||||||||
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| GovDelivery revenue (a) |
7,859 | 8,229 | 9,223 | 9,678 | 9,424 | 9,855 | N/A | |||||||||||||||||||||
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| GAAP Revenue (excluding GovDelivery): |
$ | 22,733 | $ | 25,307 | $ | 24,917 | $ | 25,475 | $ | 25,186 | $ | 26,854 | $ | 27,937 | ||||||||||||||
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| (a) | GovDelivery is treated as a discontinued operations in this Q3 2016 earnings release and will be treated as a discontinued operations when we file our Form 10-Q for the quarter ended September 30, 2016 |