Q4 Revenue Increases 33% Vs. Prior Year
NEW YORK, NY - Feb. 6 2002 —LivePerson, Inc. (NasdaqSC: LPSN), a provider of technology facilitating real-time online customer interaction, today announced financial results for the quarter and year ended December 31, 2002.
Revenue for the three months ended December 31, 2002 was $2.4 million, a 10% increase from $2.2 million in the third quarter, and up 33% versus the prior year period. Revenue for the year was $8.2 million, up 5% from the prior year.
"We are pleased with the top line progress in the fourth quarter," CEO Robert LoCascio stated. "We delivered 10% sequential quarterly growth, which was twice our expectations of 5%. We have now seen three consecutive quarters of accelerating revenue growth. Given our increasing visibility, I am confident that we are in a strong position to deliver our revenue guidance for 2003 of at least $11 million, and EBITDA margins of 15%."
LivePerson`s growth in the quarter was driven by increasing business with existing clients Bell Canada, eBay, Maersk Shipping and Microsoft, as well as new client wins Dow Corning and eLuxury. The successful completion of the integration of clients acquired through the NewChannel transaction announced in July 2002 also contributed to revenue growth, as the fourth quarter was the first full quarter post-integration. The Company expects full payback on the NewChannel investment within the first ten months, or 15% faster than original expectations.
Net loss for the quarter was $(1.3) million or $(0.04) per share, as compared to a net loss of $(28,000) or $(0.00) per share in the prior quarter, and net loss of $(1.2) million, or $(0.03) per share in the fourth quarter of 2001. The Company incurred an additional restructuring charge of $1.2 million in the quarter due primarily to the settlement of a previously disclosed hardware vendor lawsuit related to our 2001 restructuring initiatives. Net loss for the quarter excluding this charge was $(60,000).
Net loss for the year was $(6.8) million as compared to $(27.3) million in the prior year. Net loss for the year 2002 included, in addition to the restructuring charge, a non-cash expense related to the cumulative effect of an accounting change of $5.3 million. Net loss for the prior year included a net restructuring charge of $11.0 million. Excluding these charges, net loss for the year 2002 was $(247,000) as compared to $(16.2) million in the prior year.
Earnings/(loss) before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter was $(0.8) million, as compared to $0.2 million in the third quarter, and versus $(0.3) million in the fourth quarter of 2001. Excluding the restructuring charge, EBITDA in the fourth quarter was $0.3 million.
EBITDA for the year was $(0.5) million as compared to $(23.6) million in the prior year. Excluding the net restructuring charges of $1.2 million and $11.0 million, respectively, EBITDA for the year was $0.7 million as compared to $(12.6) million in the prior year.
Cash balance was $8.0 million at year-end as compared to $10 million in the prior quarter. Cash outlays for the legal settlement referred to above ($2.0 million) and a progress payment related to the NewChannel transaction ($0.5 million) were offset by positive cash from operations of approximately $0.5 million.
Financial Expectations
The Company currently expects the following financial results in 2003:
--Sequential quarterly revenue growth of 5%, or $2.5 million in Q1 2003
--Annual revenue growth of 35% or better, to $11 million for the full year 2003
--EBITDA margins of 15% for both Q1 2003 and the full year 2003
--EBITDA of $0.4 million in Q1 2003 and $1.6 million for the full year 2003
Customers Drive Growth
Over the past year, global brands such as eBay, EarthLink, Ameritrade, Kinkos, Microsoft, AT&T and Computer Associates have expanded their use of LivePerson as they realize tremendous benefits from using real-time communications for online sales, support and marketing. One of the major benefits of live chat for customer support is decreased support costs and increased efficiency. Prudential noted in an eWeek article recently that while the average help desk problem resolved over the phone costs about $16 per call, a real-time chat session costs about $3.50 to resolve similar issues. They are also able to solve 95% of inquiries to the help desk through LivePerson. Clients that use LivePerson to facilitate sales and lead generation online note significant improvement in sales conversion rates.
Product Innovation and Expansion
Throughout 2002, LivePerson continued to invest in research and development. In September 2002, we launched LivePerson Sales Edition, a complementary product to our flagship click-to-chat application, LivePerson Service Edition. This application brings immediate ROI to companies such as Computer Associates, AT&T, Bell South and Microsoft that use their Web site to generate sales or leads. By tracking a visitor`s activity on a Web site, companies are able to proactively engage only the most likely buyers into an online sales consultation.
About LivePerson
LivePerson (http://www.liveperson.com) is a leading Application Service Provider (ASP) of technology facilitating real-time sales and customer service for companies doing business on the Internet. The LivePerson service enables online businesses to communicate with Internet users in real time, thereby enhancing the online experience. With LivePerson Exchange, consisting of Chat, FAQ, Email and Document Management, LivePerson offers clients the opportunity to increase sales, lower customer service costs and increase responsiveness to customer needs. LivePerson is headquartered in New York City.
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