LIVEPERSON INC - Quarter Report: 2006 September (Form 10-Q)

 

 

 

 

 

 

 

 

 

 

 

 

		September 30, 2006			December 31, 2005
		(Unaudited)			(Note 1(B))
ASSETS
Current assets:
Cash and cash equivalents		$	19,786		$	17,117
Accounts receivable, net of allowances for doubtful accounts of $97 and $67 as of September 30, 2006
and December 31, 2005, respectively			3,593			1,727
Prepaid expenses and other current assets			1,037			591
Deferred tax assets			1,100			--
Total current assets			25,516			19,435
Property and equipment, net			1,121			575
Intangibles, net			3,113			790
Goodwill			6,875			--
Security deposits			283			180
Other assets			612			446
Total assets		$	37,520		$	21,426
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	544		$	346
Accrued expenses			3,468			1,803
Deferred revenue			3,026			1,618
Total current liabilities			7,038			3,767
Other liabilities			612			446
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.001 par value per share; 5,000,000 shares authorized, 0 shares issued and outstanding
at September 30, 2006 and December 31, 2005			--			--
Common stock, $.001 par value per share; 100,000,000 shares authorized, 40,962,192 shares issued and
outstanding at September 30, 2006 and 37,979,271 shares issued and outstanding at December 31, 2005			41			38
Additional paid-in capital			130,262			118,556
Accumulated deficit			(100,424	)		(101,381	)
Accumulated other comprehensive loss			(9	)		--
Total stockholders’ equity			29,870			17,213
Total liabilities and stockholders’ equity		$	37,520		$	21,426

 

 

 

 

		Three Months Ended September 30,						Nine Months Ended September 30,
		2006			2005			2006			2005
Revenue		$	8,881		$	5,724		$	23,174		$	15,960
Operating expenses:
Cost of revenue			2,142			1,114			5,246			2,997
Product development			1,381			663			3,280			2,027
Sales and marketing			3,104			1,715			8,605			4,889
General and administrative			1,750			1,034			4,689			3,400
Amortization of intangibles			447			232			911			699
Total operating expenses			8,824			4,758			22,731			14,012
Income from operations			57			966			443			1,948
Other income:
Interest income			200			81			514			184
Total other income			200			81			514			184
Income before provision for income taxes			257			1,047			957			2,132
Provision for income taxes			--			358			--			738
Net income		$	257		$	689		$	957		$	1,394
Basic net income per common share		$	0.01		$	0.02		$	0.02		$	0.04
Diluted net income per common share		$	0.01		$	0.02		$	0.02		$	0.04
Weighted average shares outstanding used in basic net income
per common share calculation			40,547,309			37,555,696			39,242,174			37,492,285
Weighted average shares outstanding used in diluted net income
per common share calculation			43,854,202			39,839,001			42,981,377			39,528,089

 

 

 

 

 

		Nine Months Ended September 30,
		2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	957		$	1,394
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense			1,580			--
Depreciation			340			115
Loss on disposal of fixed assets			111			--
Amortization of intangibles			911			699
Tax benefit from employee stock option exercises			--			697
Provision for doubtful accounts, net			30			30
CHANGES IN OPERATING ASSETS AND LIABILITIES (net of acquisition):
Accounts receivable			(1,646	)		129
Prepaid expenses and other current assets			(349	)		(92	)
Security deposits			(37	)		(4	)
Accounts payable			15			(104	)
Accrued expenses			(235	)		(291	)
Deferred revenue			541			371
Net cash provided by operating activities			2,218			2,944
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, including capitalized software			(434	)		(240	)
Cash acquired in Proficient acquisition			382			--
Acquisition of intangible asset			(233	)		--
Net cash used in investing activities			(285	)		(240	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock in connection with the exercise of options			745			113
Net cash provided by financing activities			745			113
Effect of foreign exchange rate changes on cash and cash equivalents			(9	)		--
Net increase in cash and cash equivalents			2,669			2,817
Cash and cash equivalents at the beginning of the period			17,117			12,425
Cash and cash equivalents at the end of the period		$	19,786		$	15,242

Supplemental Disclosures:
Cash paid during the period for:
Income taxes		$	--		$	18
Supplemental Disclosure of non-cash investing activities:
Value of common stock issued for net assets of Proficient business acquired		$	8,282			--

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

		Three Months Ended September 30, 2006			Nine Months Ended September 30, 2006
Cost of revenue		$	78		$	161
Product development expense			142			372
Sales and marketing expense			197			492
General and administrative expense			140			555
Total stock based compensation included in operating expenses		$	557		$	1,580

 

		Three Months Ended September 30, 2006
Dividend yield			0.0	%
Risk-free interest rate			4.8	%
Expected life (in years)			4
Historical volatility			78.0	%

 

 

		Three Months Ended September 30, 2005			Nine Months Ended September 30, 2005
Net income as reported		$	689		$	1,394
Deduct: Pro forma stock-based compensation cost		$	(493	)	$	(1,501	)
Pro forma net (loss)		$	196		$	(107	)
Basic net income (loss) per common share:
As reported		$	0.02		$	0.04
Pro forma		$	0.01		$	(0.00	)
Diluted net income (loss) per common share:
As reported		$	0.02		$	0.04
Pro forma		$	0.00		$	(0.00	)

 

 

 

 

 

		Options			Weighted Average Exercise Price
Options outstanding at December 31, 2005			8,300,053		$	2.16
Options granted			1,078,500		$	5.19
Options exercised			(983,507	)	$	0.77
Options cancelled			(267,875	)	$	2.13
Options outstanding at September 30, 2006			8,127,171		$	2.71
Options exercisable at September 30, 2006			4,321,546		$	2.13

 

 

Options Outstanding											Options Exercisable
Exercise Price		Number Outstanding			Weighted Average Remaining Contractual Life			Weighted Average Exercise Price			Number Outstanding			Weighted Average Exercise Price
$0.00-$1.00			2,228,232			5.33		$	0.58			1,774,607		$	0.54
$1.01-$2.00			1,081,949			5.83		$	1.95			751,949		$	1.95
$2.01-$5.00			3,932,365			8.05		$	3.29			1,408,365		$	2.96
$5.01-$11.00			884,625			7.16		$	6.45			386,625		$	6.69
			8,127,171									4,321,546

 

 

		Shares			Weighted Average Grant-Date Fair Value
Nonvested Shares at January 1, 2006			3,827,250		$	1.65
Granted			1,078,500		$	3.17
Vested			(946,000	)	$	2.44
Cancelled			(154,125	)	$	2.12
Nonvested Shares at September 30, 2006			3,805,625		$	3.38

 

 

 

 

 

 

 

		Three Months Ended September 30,						Nine Months Ended September 30,
		2006			2005			2006			2005
Basic			40,547,309			37,555,696			39,242,174			37,492,285
Effect of assumed exercised options/warrants			3,306,893			2,283,305			3,739,203			2,035,804
Diluted			43,854,202			39,839,001			42,981,377			39,528,089

 

 

 

 

 

 

 

 

		September 30, 2006			December 31, 2005
		(Unaudited)
Computer equipment and software		$	4,551		$	1,936
Furniture, equipment and building improvements			367			182
			4,918			2,118
Less accumulated depreciation			3,797			1,543
Total		$	1,121		$	575

 

		September 30, 2006			December 31, 2005
		(Unaudited)
Payroll and related costs		$	1,829		$	1,182
Professional services and consulting fees			539			461
Restructuring charges			571			--
Sales commissions			272			99
Interest expense			149			--
Other			108			61
Total		$	3,468		$	1,803

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash		$	382
Accounts receivable			250
Other currents assets			97
Property and equipment			563
Other assets			66
Intangible assets			3,000
Goodwill			6,875
			11,233
Liabilities assumed			(697	)
Deferred revenue			(867	)
Restructuring liability			(933	)
Total purchase price consideration		$	8,736

 

 

		Weighted Average Useful Life (months)			Amount
Customer contracts			36		$	2,400,000
Technology			18			500,000
Non-compete agreements			24			100,000
					$	3,000,000

 

 

 

 

		Three Months Ended September 30,						Nine Months Ended September 30,
		2006			2005			2006			2005
Revenue		$	9,158		$	6,198		$	25,159		$	17,678
Net loss		$	(6	)	$	(693	)	$	(2,166	)	$	(2,409	)
Basic and diluted net loss per common share		$	(0.00	)	$	(0.02	)	$	(0.06	)	$	(0.06	)
Weighted average shares outstanding - basic and diluted			42,546,723			39,555,110			41,241,588			39,491,699

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	compensation costs relating to employees who provide customer support and implementation services to our clients;

 

·	compensation costs relating to our network support staff;

 

·	allocated occupancy costs and related overhead; and

 

·	the cost of supporting our infrastructure, including expenses related to server leases, infrastructure support costs and Internet connectivity, as well as depreciation of certain hardware and software.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

		Payments due by period
		(in thousands)
Contractual Obligations		Total			Less than 1 year			1-3 years			3-5 years			More than 5 years
Operating leases		$	4,644		$	432		$	3,317		$	895		$	—
Total		$	4,644		$	432		$	3,317		$	895		$	—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31.1

Certification by Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

31.2

Certification by Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

32.1

Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

32.2

Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

 

	LIVEPERSON, INC.
	(Registrant)
Date: November 9, 2006	By:	/s/ ROBERT P. LOCASCIO
		Name: Robert P. LoCascio
		Title:  Chief Executive Officer (duly authorized officer)

 

Date: November 9, 2006	By:	/s/ TIMOTHY E. BIXBY
		Name: Timothy E. Bixby
		Title:   President, Chief Financial Officer and Secretary (principal financial and accounting officer)

 

 

 

 

31.1	Certification by Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

31.2	Certification by Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

32.1	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

32.2	Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002