OpenTable, Inc. Announces First Quarter Financial Results - WFXG FOX54 Augusta - Your News One Hour Earlier

OpenTable, Inc. Announces First Quarter Financial Results

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SOURCE OpenTable, Inc.

-- Increases Revenue by 18% over Q1 2013 to $53.8 Million --

-- Grows Seated Diners by 25% over Q1 2013 --

-- Non-GAAP EPS of $0.45 --

SAN FRANCISCO, May 1, 2014 /PRNewswire/ -- OpenTable, Inc. (NASDAQ: OPEN), the world's leading provider of online restaurant reservations, today reported its financial results for the first quarter ended March 31, 2014.

OpenTable, Inc. Logo.

OpenTable reported consolidated net revenues for Q1 2014 of $53.8 million, an 18% increase over Q1 2013.  Consolidated net loss for Q1 2014 was $3.6 million, or $0.16 per diluted share, which includes a one-time non-cash impairment expense of an acquired intangible asset of $12.6 million.  Non-GAAP consolidated net income for Q1 2014, was $11.0 million, or $0.45 per diluted share, which excludes tax-affected stock-based compensation expense, tax-affected acquisition-related expenses, tax-affected amortization of acquired intangibles and tax-affected impairment of acquired intangibles. 

OpenTable provides operating results by geography as the Company is at different stages of development in its North America and International operations. 

North America Results

  • Installed restaurant base as of March 31, 2014, totaled 23,862, a 19% increase over March 31, 2013.
  • Seated diners totaled 42.5 million, a 24% increase over Q1 2013.
  • Revenues totaled $46.0 million, a 17% increase over Q1 2013. 
  • Non-GAAP adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation and acquisition-related expenses) totaled $20.7 million, or 45% of North America revenues, a 4% increase over Q1 2013.

International Results

  • Installed restaurant base as of March 31, 2014, totaled 7,721, compared to 7,829 as of March 31, 2013.  
  • Seated diners totaled 4.3 million, a 38% increase over Q1 2013. 
  • Revenues totaled $7.8 million, a 29% increase over Q1 2013.
  • Q1 2014 includes a one-time non-cash impairment expense of an acquired intangible asset of $12.6 million related to the toptable trademark. As part of our brand evolution, we're adopting OpenTable as our global brand.
  • Non-GAAP adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation, acquisition-related expenses and impairment of acquired intangibles), totaled a loss of $0.6 million compared to a loss of $1.7 million in Q1 2013. 

"As part of our evolution to a dining experiences company – and with our rebrand of toptable to OpenTable in the UK – we have a tremendous opportunity to be the global dining passport for consumers around the world," said Matt Roberts, Chief Executive Officer of OpenTable.   

Q1 2014 Consolidated Financial and Operating Summary

  • Installed restaurant base as of March 31, 2014, totaled 31,583.
  • Seated diners totaled 46.7 million, a 25% increase over Q1 2013.
  • Total revenues were $53.8 million in Q1 2014, up 18% over Q1 2013 revenues of $45.5 million
    • Reservation revenues were $34.3 million in Q1 2014, up 27% over Q1 2013 revenues of $27.1 million.  Reservation revenues primarily increased as a result of the increase in seated diners. 
    • Subscription revenues were $16.6 million in Q1 2014, up 13% over Q1 2013 revenues of $14.7 million.  Subscription revenues primarily increased as a result of the increase in installed restaurants using our ERB solution. 
    • Other revenues were $2.9 million in Q1 2014, down 22% over Q1 2013 revenues of $3.8 million.  The decrease is primarily due to the change in the pricing of our promotional products from a flat rate to a pay-for-performance model, which is now classified as reservation revenues. 
  • Total costs and expenses were $56.4 million in Q1 2014. Excluding the $12.6 million impairment expense, costs and expenses were $43.8 million, up 23% over Q1 2013 costs and expenses of $35.6 million.  The increase was primarily driven by an increase in online marketing expenses and a 19% increase in headcount.
  • Total operating loss was $2.6 million in Q1 2014 compared to income of $9.9 million in Q1 2013.  Non-GAAP consolidated operating income, excluding stock-based compensation expense, acquisition-related expenses, amortization of acquired intangibles and impairment of acquired intangibles, was $16.3 million in Q1 2014 compared to $15.5 million in Q1 2013. 
  • The Q1 2014 GAAP income tax expense was $1.0 million, or a (40)% tax rate. On a non-GAAP basis, income tax expense was $5.3 million, or an effective tax rate of 33%.
  • Consolidated net loss was $3.6 million, or $0.16 per diluted share, in Q1 2014 compared to net income of $7.1 million, or $0.30 per diluted share, in Q1 2013.  Non-GAAP consolidated net income, which excludes tax-affected stock-based compensation expense, tax-affected acquisition-related expenses, tax-affected amortization of acquired intangibles and tax-affected impairment of acquired intangibles, was $11.0 million, or $0.45 per diluted share, in Q1 2014 compared to $10.7 million, or $0.45 per diluted share, in Q1 2013.  
  • As of March 31, 2014, OpenTable had cash and cash equivalents and short-term investments of $117.6 million

"During the first quarter the business continued to deliver solid operating metrics, adjusted EBITDA margins and cash flows even as we invest for the future," said Duncan Robertson, CFO of OpenTable.

Business Outlook

As of today, OpenTable is providing guidance for Q2 2014 and the full year 2014 on revenue, non-GAAP adjusted EBITDA and other consolidated metrics. 

Q2 2014 Guidance:

  • In the North America segment the Company estimates revenue to be in the range of $47.0 million to $48.2 million and non-GAAP adjusted EBITDA to be in the range of $22.2 million to $23.4 million.   
  • In the International segment the Company estimates revenue to be in the range of $7.7 million to $8.1 million and non-GAAP adjusted EBITDA loss to be in the range of $2.1 million to $1.5 million.
  • On a consolidated basis the Company estimates revenue to be in the range of $54.7 million to $56.3 million, non-GAAP adjusted EBITDA to be in the range of $20.1 million to $21.9 million, GAAP EPS to be in the range of $0.23 to $0.28 and non-GAAP EPS to be in the range of $0.43 to $0.48.

Full Year 2014 Guidance:

  • In the North America segment the Company estimates revenue to be in the range of $189.7 million to $194.3 million and non-GAAP adjusted EBITDA to be in the range of $88.8 million to $93.0 million
  • In the International segment the Company estimates revenue to be in the range of $32.2 million to $33.8 million and non-GAAP adjusted EBITDA loss to be in the range of $5.2 million to $3.5 million.
  • On a consolidated basis the Company estimates revenue to be in the range of $221.9 million to $228.1 million, non-GAAP adjusted EBITDA to be in the range of $83.6 million to $89.5 million, GAAP EPS to be in the range of $0.63 and $0.78 and non-GAAP EPS to be in the range of $1.81 to $1.96.

Quarterly Conference Call

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET and will be available through May 31, 2014, at http://investors.opentable.com/events.cfm.  This call may contain forward-looking statements and other material information regarding the Company's financial and operating results.

About Non-GAAP Financial Information

This press release contains certain non-GAAP financial measures.  Tables are provided in the press release that reconcile the non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP).    The reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures in the tables below include all information reasonably available to the Company at the date of this press release and adjustments that the Company can reasonably predict.  Events that could cause the reconciliation to change include, but are not limited to, acquisitions and divestitures of businesses, goodwill and other asset impairments, and sales of available-for-sale debt securities and other investments. 

The non-GAAP financial measures in this press release include non-GAAP consolidated net income and the related per diluted share amounts, non-GAAP consolidated operating income and non-GAAP adjusted EBITDA.  Non-GAAP financial measure adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, acquisition-related expenses and impairment of acquired intangibles.  

To supplement the Company's consolidated financial statements presented on a GAAP basis, management believes that these non-GAAP measures provide useful information about the Company's core operating results and thus are appropriate to enhance the overall understanding of the Company's past financial performance and its prospects for the future. Management believes it is useful to exclude stock-based compensation, acquisition-related expenses, amortization of acquired intangibles and impairment of acquired intangibles because they do not reflect the underlying performance of the Company's business operations. These adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results and trends and performance.  Management uses these non-GAAP measures to evaluate the Company's financial results.  The presentation of non-GAAP measures is not meant to be considered in isolation or as a substitute for or superior to financial results determined in accordance with GAAP.

Background Information

The Company reports consolidated operations in U.S. dollars and operates in two geographic segments: North America and International. The North America segment is comprised of all operations in the United States, Canada and Mexico, and the International segment is comprised of all non-North America operations, which includes operations in Europe and Asia. The Company generates substantially all of its revenues from its restaurant customers. The Company's revenues primarily include monthly subscription fees, a fee for each restaurant guest seated through online reservations, and other revenue. 

Forward-Looking Statements

This press release and its attachments contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties.  These forward-looking statements include guidance for Q2 2014 and the full year 2014 and the quotations from management in this press release.  The Company's actual results may differ materially from those anticipated in these forward-looking statements.  Factors that may contribute to such differences include, among others, the Company's ability to accurately forecast revenues and expenses; worldwide economic conditions; the Company's ability to maintain an adequate rate of growth; the Company's ability to effectively manage its growth; the Company's ability to attract new restaurant customers; the Company's ability to increase the number of visitors to its websites and mobile applications and convert those visitors into diners; the Company's ability to retain existing restaurant customers and diners or encourage repeat reservations; the effects of increased competition; the Company's ability to successfully enter new markets and manage its international expansion; the impact of the fluctuations in currency exchange rates; the Company's ability to successfully manage any acquisitions of businesses, solutions or technologies; interruptions in service and any related impact on the Company's reputation; costs associated with defending intellectual property infringement and other claims; and the impact of natural catastrophic events.  More information about potential factors that could affect the Company's business and financial results is contained in the Company's annual report on Form 10-K for the year ended December 31, 2013 and the Company's other filings with the SEC.  The Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.

About OpenTable, Inc.

OpenTable is the world's leading provider of online restaurant reservations, seating over 15 million diners per month via online bookings across more than 31,000 restaurants. The OpenTable network connects restaurants and diners, helping diners discover and book the perfect table and helping restaurants deliver personalized hospitality to keep guests coming back. The OpenTable service enables diners to see which restaurants have available tables, select a restaurant based on verified diner reviews, menus and other helpful information, and easily book a reservation. In addition to the Company's website and mobile apps, OpenTable powers online reservations for nearly 600 partners, including many of the Internet's most popular global and local brands. For restaurants, the OpenTable hospitality solutions enable them to manage their reservation book, streamline their operations and enhance their service levels. Since its inception in 1998, OpenTable has seated over 620 million diners around the world.  The Company is headquartered in San Francisco, California, and the OpenTable service is available throughout the United States, as well as in Canada, Germany, Japan, Mexico and the UK. More information is available on http://www.opentable.com.

OpenTable, OpenTable.com, OpenTable logos, toptable and other service names are the trademarks of OpenTable, Inc. and/or its affiliates.

OPENTABLE, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS










March 31,


December 31,


2014


2013


(In thousands)

ASSETS








CURRENT ASSETS:




  Cash and cash equivalents

$            103,469


$            100,283

  Short-term investments

14,126


14,263

  Accounts receivable, net 

26,537


25,359

  Prepaid expenses and other current assets

3,976


4,659

  Deferred tax asset

18,966


17,861





           Total current assets

167,074


162,425





Property, equipment and software, net

32,101


30,972

Goodwill

80,845


79,271

Intangibles, net

17,538


23,376

Deferred tax asset

15,552


14,092

Other assets

846


835





TOTAL ASSETS

$            313,956


$            310,971





LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:




  Accounts payable and accrued expenses

$              11,057


$              13,832

  Accrued compensation

4,807


4,692

  Deferred revenue

1,829


1,556

  Dining rewards payable

40,289


37,509

           Total current liabilities

57,982


57,589





  Deferred revenue - non-current

1,675


1,894

  Deferred tax liability

29


2,508

  Income tax liability

15,276


15,597

  Other long-term liabilities

3,001


3,121





           Total liabilities

77,963


80,709









STOCKHOLDERS' EQUITY:




  Common stock

3


3

  Additional paid-in capital

272,833


263,697

  Treasury stock

(74,247)


(74,247)

  Accumulated other comprehensive income

1,333


1,095

  Retained earnings

36,071


39,714





           Total stockholders' equity

235,993


230,262





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$            313,956


$            310,971





 

OPENTABLE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS








Three Months Ended



March 31,



2014


2013



(In thousands, except per share amounts)






REVENUES


$             53,779


$             45,501






COSTS AND EXPENSES:





  Operations and support (1)


14,335


11,363

  Sales and marketing (1)


13,857


10,502

  Technology (1)


6,243


4,500

  General and administrative (1)


9,307


9,219

  Impairment of acquired intangibles

12,648


-






           Total costs and expenses

56,390


35,584






Income (loss) from operations

(2,611)


9,917

Other income, net


-


13






Income (loss) before taxes

(2,611)


9,930

Income tax expense 


1,032


2,789






NET INCOME (LOSS)


$             (3,643)


$               7,141






Net income (loss) per share:




  Basic


$               (0.16)


$                 0.31

  Diluted


$               (0.16)


$                 0.30






Weighted average shares outstanding:




  Basic


23,443


22,937

  Diluted


23,443


23,785











(1) Stock-based compensation included in above line items:



  Operations and support

$                  174


$                    23

  Sales and marketing


1,227


1,127

  Technology


1,510


1,063

  General and administrative

1,451


2,380



$               4,362


$               4,593






Other Operational Data:





  Installed restaurants (at period end):




    North America


23,862


20,128

    International


7,721


7,829

    Total


31,583


27,957






  Seated diners (in thousands):




    North America


42,473


34,268

    International


4,271


3,088

    Total


46,744


37,356






  Headcount (at period end):




    North America


492


401

    International


172


158

    Total


664


559






Additional Financial Data:




  Revenues:





    North America





Reservation


$             28,723


$            23,492

Subscription


14,484


12,890

Other


2,764


3,063

Total North America Revenues

$             45,971


$            39,445

    International





Reservation


$               5,542


$              3,565

Subscription


2,096


1,792

Other


170


699

Total International Revenues

7,808


6,056

    Total Revenues


$             53,779


$            45,501






  Income (loss) from operations:




    North America


$             11,784


$            12,976

    International


(14,395)


(3,059)

    Total


$             (2,611)


$              9,917






  Depreciation and amortization:




    North America


$               4,761


$              2,549

    International


757


993

    Total


$               5,518


$              3,542






  Stock-based compensation:




    North America


$               4,018


$              4,207

    International


344


386

    Total


$               4,362


$               4,593






OPENTABLE, INC.

RECONCILIATION OF GAAP TO NON-GAAP OPERATING RESULTS













Three Months Ended



March 31,



2014


2013



(In thousands, except per share amounts)






Non-GAAP consolidated net income per share:




GAAP net income (loss) "as reported"

$                  (3,643)


$                    7,141

Add back: stock-based compensation expense

4,362


4,593

Income tax effect of stock-based compensation

(1,070)


(1,783)

Add back: acquisition-related expenses

127


90

Income tax effect of acquisition-related expenses

(48)


(34)

Add back: amortization of acquired intangibles

1,799


946

Income tax effect of amortization of intangibles

(630)


(270)

Add back: impairment of acquired intangibles

12,648


-

Income tax effect of impairment of acquired intangibles

(2,530)


-






NON-GAAP CONSOLIDATED NET INCOME 

$                  11,015


$                  10,683






Non-GAAP diluted net income per share

$                     0.45


$                     0.45






Weighted average diluted shares outstanding

24,378


23,785






Non-GAAP consolidated operating income:




GAAP income (loss) from operations "as reported"

$                  (2,611)


$                    9,917

Add back: stock-based compensation expense

4,362


4,593

Add back: acquisition-related expenses

127


90

Add back: amortization of acquired intangibles

1,799


946

Add back: impairment of acquired intangibles

12,648


-






NON-GAAP OPERATING INCOME


$                  16,325


$                  15,546






North America Adjusted EBITDA:





GAAP operating income "as reported"


$                  11,784


$                  12,976






Adjustments:





  Stock-based compensation expense


4,018


4,207

  Acquisition-related expense


127


90

  Amortization of acquired intangibles


1,799


586

  Depreciation and other amortization expense

2,962


1,963






           North America Adjusted EBITDA


$                  20,690


$                  19,822






International Adjusted EBITDA:





GAAP operating loss "as reported"


$                (14,395)


$                  (3,059)






Adjustments:





  Stock-based compensation expense


344


386

  Amortization of acquired intangibles


-


360

  Impairment of acquired intangibles


12,648


-

  Depreciation and other amortization expense

757


633






           International Adjusted EBITDA


$                     (646)


$                  (1,680)






Consolidated Adjusted EBITDA:





GAAP operating income (loss) "as reported"

$                  (2,611)


$                    9,917






Adjustments:





  Stock-based compensation expense


4,362


4,593

  Acquisition-related expense


127


90

  Amortization of acquired intangibles


1,799


946

  Impairment of acquired intangibles


12,648


-

  Depreciation and other amortization expense

3,719


2,596






           Consolidated Adjusted EBITDA


$                  20,044


$                  18,142






OPENTABLE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FORWARD-LOOKING GUIDANCE


















Forward-Looking Guidance


Three Months Ending


Twelve Months Ending


June 30, 2014


December 31, 2014


Range of Estimate


Range of Estimate


From


To


From


To


(In thousands, except per share amounts)









Non-GAAP consolidated net income per share:








GAAP net income

$  5,608


$  6,770


$  15,366


$  19,085

Add back: stock-based compensation expense

5,047


5,047


18,358


18,358

Income tax effect of stock-based compensation

(1,517)


(1,517)


(5,061)


(5,061)

Add back: acquisition-related expenses

-


-


127


127

Income tax effect of acquisition-related expenses

-


-


(48)


(48)

Add back: amortization of acquired intangibles

2,313


2,313


8,632


8,632

Income tax effect of amortization of intangibles

(872)


(872)


(3,206)


(3,206)

Add back: impairment of acquired intangibles

-


-


12,648


12,648

Income tax effect of impairment of acquired intangibles

-


-


(2,530)


(2,530)









NON-GAAP CONSOLIDATED NET INCOME 

$ 10,579


$ 11,741


$  44,286


$  48,005









GAAP diluted net income per share

$     0.23


$     0.28


$      0.63


$      0.78

Non-GAAP diluted net income per share

$     0.43


$     0.48


$      1.81


$      1.96









Weighted average diluted shares outstanding

24,400


24,400


24,500


24,500









North America Adjusted EBITDA:








GAAP operating income

$ 12,052


$ 13,252


$  49,598


$  53,798









Adjustments:








  Stock-based compensation expense

4,502


4,502


16,418


16,418

  Amortization of acquired intangibles

2,313


2,313


8,632


8,632

  Acquisition-related expense

-


-


127


127

  Depreciation and other amortization expense

3,333


3,333


14,025


14,025









           North America Adjusted EBITDA

$ 22,200


$ 23,400


$  88,800


$  93,000









International Adjusted EBITDA:








GAAP operating loss

$  (3,344)


$  (2,744)


$ (22,258)


$ (20,558)









Adjustments:








  Stock-based compensation expense

545


545


1,940


1,940

  Impairment of acquired intangibles

-


-


12,648


12,648

  Depreciation and other amortization expense

699


699


2,470


2,470









           International Adjusted EBITDA

$  (2,100)


$  (1,500)


$  (5,200)


$   (3,500)









Consolidated Adjusted EBITDA:








GAAP operating income 

$   8,708


$ 10,508


$  27,340


$  33,240









Adjustments:








  Stock-based compensation expense

5,047


5,047


18,358


18,358

  Acquisition-related expense

-


-


127


127

  Amortization of acquired intangibles

2,313


2,313


8,632


8,632

  Impairment of acquired intangibles

-


-


12,648


12,648

  Depreciation and other amortization expense

4,032


4,032


16,495


16,495









           Consolidated Adjusted EBITDA

$  20,100


$ 21,900


$  83,600


$  89,500









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