LiveWorld Announces 3rd Quarter Financial Results
SAN JOSE, Calif. & NEW YORK & LONDON, Nov 04, 2009 (BUSINESS WIRE) --
LiveWorld, Inc. (Pink Sheets:LVWD), a leading social media marketing agency, today reported $2.5 million in total revenues and net income of $7,000 for the third quarter of 2009 as compared to $2.7 million in total revenues and net loss of $602,000 for the third quarter of 2008. The Company saw lower revenues as a result of fewer new client acquisitions, which was partially offset by new projects from existing clients. The $609,000 increase in the net income was attributable to efficiencies the Company has been able to obtain in the delivery of services to clients.
"We have delivered improved quarterly results in this challenging economic environment, as we continued to focus on the efficient delivery of services to our clients," said David Houston, Chief Financial Officer of LiveWorld. "A central point of our operating plan has been to not only improve our financial results and maintain positive cash flow, but also to continue our investment in product development. As we move into 2010 we believe our product offerings meet the needs of our clients and will drive the growth and profitability of the company."
The Company generated $29,000 in cash during the third quarter of 2009, which was an improvement of $396,000 when compared to the cash burn of $367,000 for the third quarter of 2008. The Company ended the quarter with $1.5 million in cash and cash equivalents. The Company reported a positive working capital balance of approximately $1.4 million for the third quarter of 2009 as compared to the $1.2 million it had at the end of the fourth quarter of 2008.
On a non-GAAP basis the Company reported net income of $189,000 for third quarter of 2009, which was an improvement of $541,000 from the $352,000 net loss for the third quarter of 2008. LiveWorld defines non-GAAP net income or Adjusted EBITDA as net income or loss before interest income, income taxes, depreciation and amortization, and non-cash stock-based compensation expense. Adjusted EBITDA is not a term defined by GAAP and as a result LiveWorld's measure of Adjusted EBITDA might not be comparable to similarly titled measures used by other companies.
Detailed quarterly financial information may be downloaded at www.liveworld.com (financials page) or at www.pinksheets.com.
About LiveWorld
LiveWorld is the go-to social media marketing agency for everything global corporations need to leverage the power of social networks to build their brands and their business. LiveWorld thinks differently about how companies can use social networks for customer dialogue and relationships and is the only company that offers the combination of a full technology platform, moderation services, community management and marketing strategy, all in one place. This combination -- unique in the industry -- is the reason why more global brands turn to LiveWorld than any other firm for their ongoing, integrated social media marketing strategy and implementation.
With 25 years of experience, an extensive applications hosting platform, and a track record of delivering over 1 million hours of moderation services, LiveWorld offers its clients a team of experienced community managers and moderators who oversee activity and user content online. LiveWorld deploys its services in more than 70 country-language combinations, and is the trusted partner of leading brands worldwide, including: A&E, The Campbell Soup Company, eBay, MINI Cooper USA, and many others.
LiveWorld is headquartered in San Jose, California with additional offices in New York City and London. For further information visit www.liveworld.com
"Safe Harbor" Statement Under The Private Securities Litigation Reform Act:
This press release may contain forward-looking information concerning LiveWorld's plans, objectives, future expectations, forecasts and prospects. These statements may include those regarding LiveWorld's current or future financial performance including but not limited to lists of clients, revenue and profit, use of cash, investments, relationships and the actual or potential impact of stock option expense, and the results of its product development efforts. The balance sheet, operating results, and statements of cash flows for the periods ended September 30, 2009, December 31, 2008, and September 30, 2008 were neither audited nor reviewed by an independent accounting firm and are subject to change upon such a review or audit being completed. Actual results may differ materially from those expressed in the forward looking statements made as a result of, among other things, final accounting adjustments and results, LiveWorld's ability to attract new clients and preserve or expand its relationship with existing clients, LiveWorld's ability to retain and attract high quality employees, including its management staff, the ability to deliver new innovative products in a timely manner, changing accounting treatments, and other risks applicable to the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.
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LIVEWORLD, INC.
UNAUDITED CONDENSED BALANCE SHEETS
(In thousands, except share data)
September 30, December 31,
2009 2008
ASSETS
Current assets
Cash and cash equivalent $ 1,545 $ 1,363
Accounts receivable, net 1,094 1,237
Prepaid expenses 152 140
Total current assets 2,791 2,741
Property and equipment, net 326 588
Investment in joint venture 849 837
Other assets 18 5
Total assets $ 3,984 $ 4,170
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 214 $ 121
Accrued employee expenses 436 396
Other accrued liabilities 43 71
Current portion of capital lease obligations 135 177
Current portion of note payable 24 74
Deferred revenue 493 737
Total current liabilities 1,345 1,575
Long-term capital lease obligation 52 145
Total liabilities 1,397 1,720
Stockholders' equity
Common stock: $0.001 par value, 100,000,000 shares authorized 33 33
33,151,981 issued and outstanding as of December 31, 2008 and
September 30, 2009 respectively
Additional paid-in capital 140,632 140,345
Accumulated deficit (138,078 ) (137,929 )
Total stockholders' equity 2,587 2,450
Total liabilities and stockholders' equity $ 3,984 $ 4,170
LIVEWORLD, INC.
UNAUDITED CONDENSED STATEMENT OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Total revenues $ 2,549 $ 2,664 $ 7,441 $ 8,758
Cost of revenues 858 1,020 2,428 3,158
Gross Margin 1,690 1,644 5,014 5,600
Operating Expense
Product development 548 766 1,643 2,393
Sales and marketing 513 715 1,606 2,058
General and administrative 530 682 1,598 2,101
Stock-based compensation 96 104 286 276
Total operating expense 1,687 2,266 5,135 6,827
Income (loss) from operations 3 (622 ) (121 ) (1,227 )
Interest Income (expense), net (8 ) (2 ) (28 ) 24
Other income ---- 6 ---- ----
Loss before tax (5 ) (618 ) (149 ) (1,204 )
Provision for income taxes 2 (1 ) (13 ) (4 )
Equity in net loss of unconsolidated affiliate 10 17 13 (35 )
Net income (loss) 7 (602 ) (149 ) (1,243 )
Basic income (loss) per share $ 0.00 $ (0.02 ) $ (0.00 ) $ (0.04 )
Shares used in computing basic income (loss) per share 33,151,981 30,862,811 33,151,981 30,862,811
Diluted net income (loss) per share $ 0.00 $ (0.02 ) $ (0.00 ) $ (0.04 )
Shares used in computing diluted net income (loss) per share 39,129,214 30,862,811 33,151,981 30,862,811
Departmental allocation of stock-based compensation:
Product development $ 50 $ 51 $ 143 $ 137
Sales and marketing 19 24 66 63
General and administrative 27 28 78 76
Total stock-based compensation $ 96 $ 104 $ 286 $ 276
LIVEWORLD, INC.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Cash flows from operating activities:
Net income (loss) $ 7 $ (602 ) $ (149 ) $ (1,243 )
Adjustments to reconcile net income (loss) provided by (used in)
operating activities:
Depreciation of long-lived assets 80 149 301 473
Stock-based compensation 96 104 286 276
Equity in net loss of unconsolidated affiliate (10 ) (17 ) (12 ) 35
Changes in operating assets and liabilities:
Accounts receivable 53 42 143 232
Other assets 30 37 (24 ) (73 )
Accounts payable 91 (45 ) 93 (282 )
Accrued liabilities 6 (50 ) 12 40
Deferred revenue (252 ) 88 (245 ) (44 )
Net cash provided by (used in) operating activities 100 (294 ) 405 (586 )
Cash flows from investing activities:
Purchase of property and equipment ---- (25 ) (39 ) (253 )
Net cash provided by (used in) investing activities ---- (25 ) (39 ) (253 )
Cash flows from financing activities:
Capital lease financing (46 ) 19 (134 ) 214
Note payable financing (25 ) (67 ) (50 ) ----
Net cash provided by (used for) financing activities (71 ) (48 ) (184 ) 214
Change in cash and cash equivalent 29 (367 ) 182 (625 )
Cash and cash equivalents, beginning of period 1,516 1,762 1,363 2,020
Cash and cash equivalents, end of period $ 1,545 $ 1,395 $ 1,545 $ 1,395
We define Adjusted EBITDA as net income or (loss) excluding net interest income, income taxes, depreciation and amortization, and non-cash stock-based compensation expense. The following table reconciles Adjusted EBITDA to the reported net income or loss:
LIVEWORLD
RECONCILIATION OF ADJUSTED EBITDA TO NET LOSS
(In thousands)
Three Months Ended September 30, Nine Months Ended September 30,
$ in 000's 2009 2008 2009 2008
Reported net income (loss) $ 7 $ (602 ) $ (149 ) $ (1,243 )
Depreciation and amortization 80 149 301 473
Stock-based compensation 96 104 286 276
Interest income, net 8 (4 ) 28 (24 )
Provisions for income taxes (2 ) 1 13 4
Adjusted EBITDA $ 189 $ (352 ) $ 479 $ (514 )
Adjusted EBITDA does not represent funds available for management's discretionary use and is not intended to represent cash flow from operations. Adjusted EBITDA has limitations and should not be construed as a substitute for net income loss or as a better measure of liquidity than cash flows from operating activities, which are determined in accordance with United States Generally Accepted Accounting Principles ("GAAP") and therefore Adjusted EBITDA should only be used as supplemental information. Adjusted EBITDA excludes components that are significant in understanding and assessing our results of operations and cash flows. In addition, Adjusted EBITDA in not a term defined by GAAP and as a result, our measure of Adjusted EBITDA might not be comparable to similarly titled measures used by other companies.
However, Adjusted EBITDA is used by management to evaluate, assess and benchmark our performance as a service provider. We believe understanding the costs directly related to the delivery of our services is beneficial to the management of the Company. Adjusted EBITDA is relevant and useful information, which is often reported and widely used by analysts, investors and other interested parties as a measurement of the delivery of a product or service. Accordingly, we are disclosing this information to permit a more comprehensive analysis of our operating performance, to provide an additional measure of performance and liquidity and to provide additional information with respect to our ability to meet future debt service, capital expenditure and working capital requirements.
Our Adjusted EBITDA financial information is also comparable to net cash provided by operating activities. The table below reconciles Adjusted EBITDA to the GAAP disclosure of net cash provided (used in) operating activities:
LIVEWORLD
RECONCILIATION OF ADJUSTED EBITDA TO NET CASH PROVIDED BY (USED
IN) OPERATING ACTIVITIES
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
$ in 000's 2009 2008 2009 2008
Net Cash Provided by (used in) operating activities $ 100 $ (294 ) $ 405 $ (587 )
Interest income, net 8 (4 ) 28 (24 )
Taxes (2 ) 1 13 4
Equity in net loss of unconsolidated affiliate 10 17 12 (35 )
Changes in accounts receivable (53 ) (42 ) (143 ) (232 )
Changes in other assets (30 ) (37 ) 24 73
Changes in accounts payable (91 ) 45 (93 ) 282
Changes in accrued liabilities (6 ) 50 (12 ) (40 )
Changes in deferred revenues 252 88 245 44
Adjusted EBITDA $ 189 $ (352 ) $ 479 $ (514 )
The reconciliation of Adjusted EBITDA to net cash provided by (used in) operating our Company should be viewed as supplemental information to our statement of cash flows and not as a substitute.
SOURCE: LiveWorld, Inc.
Krause Taylor Associates Barbara Krause, 1 408-981-2429 (PR) barbara@krause-taylor.com or LiveWorld David Houston, 1 408-615-8496 (IR) dhouston@liveworld.com
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