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

PR Newswire

AUSTIN, Texas, May 5, 2014 /PRNewswire/ -- RetailMeNot, Inc. (SALE), which operates the world's largest marketplace for digital offers, reported its financial results for the first quarter ended March 31, 2014.

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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 

$0.11


$0.02

 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


December 31, 2013

 Assets 




 Current assets: 




 Cash and cash equivalents 

$             196,466


$                       165,881

 Accounts receivable, net 

43,417


59,286

 Prepaids 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 (Deficit) 




 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 (deficit): 




 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 (deficit) 

459,296


431,309

 Total Liabilities and Stockholders' Equity (Deficit) 

$            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 employee stock-based awards

(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 (used in) operating activities 

18,307


19,960

 Cash flows from investing activities: 




Payments for acquisition of businesses, net of acquired cash

-


(1,931)

Proceeds from sale of property and equipment

-


-

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)

    Proceeds from public offerings, net of offering costs

(64)


-

    Excess income tax benefit from employee stock-based awards

8,314


-

    Obligation under capital lease

(3)


-

    Payments for repurchase of common stock

(6)


-

    Proceeds from exercise of options and warrants to purchase
    common stock, net of shares witheld for taxes

8,139


289

 Net cash provided by (used in) financing activities 

14,630


(1,936)

 Effect of exchange rate changes 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

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