AUSTIN, Texas, May 3, 2016 /PRNewswire/ -- RetailMeNot,
Inc. (NASDAQ:SALE), a leading digital savings destination
connecting consumers with retailers, restaurants and brands, both
online and in-store, today announced its financial results for the
first quarter ended March 31,
2016.
"The first quarter of the year is off to a solid start, with
total net revenues and adjusted EBITDA coming in above the high end
of guidance," said Cotter Cunningham, CEO & Founder,
RetailMeNot, Inc. "Expanding the ways consumers can save
utilizing the RetailMeNot App and global websites, remains a top
priority for the business. The GiftCard Zen acquisition,
coupled with enhancements to our food and dining experience on
mobile are just two of the ways we believe will help drive the
business forward."
First Quarter Financial Results Highlights and Key
Operating Metrics
(All comparisons are made to the first quarter of 2015 unless
otherwise noted. Amounts may not compute due to
rounding.)
- Total net revenues declined 9% to $54.6
million.
- In-store + advertising net revenues increased 36% to
$10.5 million, representing 19% of
total net revenues.
- Mobile online transaction net revenues increased 7% to
$5.9 million, representing 11% of
total net revenues.
- Desktop online transaction net revenues declined 19% to
$38.2 million, representing 70% of
total net revenues.
- Net revenues from international markets were $12.2 million, representing 22% of total net
revenues.
- GAAP net loss was $36 thousand,
compared to GAAP net income of $4.1
million.
- Non-GAAP net income was $6.3
million, compared to a non-GAAP net income of $10.8 million.
- EPS was $0.00 per share, based on
49.2 million fully-diluted, weighted-average shares
outstanding.
- Non-GAAP EPS was $0.13 per share,
based on 50.0 million fully-diluted, weighted-average shares
outstanding.
- Adjusted EBITDA was $12.3
million, representing 22% of total net revenues.
- Total website visits were 162.2 million, down 10%.
- Mobile visits in the quarter declined 1% to 69.9 million, or
43% of total visits.
- Desktop visits in the quarter declined 15% to 92.3
million.
- Mobile unique visitors grew 5% totaling 19.2 million.
Business Outlook
With the acquisition of GiftCard Zen completed in the second
quarter of 2016, RetailMeNot, Inc. will provide financial results
for subsequent periods in two separate operating segments, with one
representing the "core" RetailMeNot business and the other
representing the "gift card" business.
For our core business, in addition to total net revenues, the
company will be providing adjusted segment operating income, or
SOI, guidance, as we believe this to be an important financial
metric to evaluate the operating performance of that business.
Adjusted SOI is defined as operating income of the core business
segment plus depreciation, amortization of intangible assets,
stock-based compensation expense, third-party acquisition-related
costs and other operating expenses (including non-cash impairments
and compensation arrangements entered into in connection with
acquisitions).
For our gift card business, the company defines net revenues as
the gross market value of the gift card sold, or "GMV", net of
returns. Gross profit is determined in accordance with GAAP
and represents the difference between net revenues (which includes
GMV, net of returns) less the cost of the gift card sold, including
adjustments for shipping and chargebacks.
The company will also provide guidance combining the results of
both businesses on a consolidated basis.
Second Quarter 2016
With respect to our core business, the company expects the
following:
- Total net revenues to be in the range of $47.0 to $52.0 million.
- Adjusted segment operating income to be in the range of
$3.5 to $7.5 million, representing
adjusted segment operating income margins of 11% at the
midpoint.
With respect to our gift card business, the company expects the
following:
- Total net revenues to be in the range of $11.5 to $12.5 million.
- Gross profit to be in the range of $575
to $625 thousand, or gross profit margins of 5% at the
midpoint.
On a consolidated basis, the company expects the following:
- Total net revenues to be in the range of $58.5 to $64.5 million, or growth of 16% at the
midpoint.
- Adjusted EBITDA, inclusive of the impact of the GiftCard Zen
acquisition, to be in the range of $3.0 to
$7.0 million, or adjusted EBITDA margins of 8% at the
midpoint.
Full Year 2016
With respect to the core business, the company expects the
following:
- Total net revenues to be in the range of $228.0 to $241.0 million, or a decline of 6% at
the midpoint.
- Adjusted segment operating income in the range of $52.0 to $63.0 million, representing adjusted
segment operating income margins of 24.5% at the midpoint.
With respect to the gift card business, the company expects the
following:
- Total net revenues to be in the range of $43.0 to $49.0 million, or growth of 36% at the
midpoint.
- Gross profit to be in the range of $2.2
to $2.4 million, or gross profit margins of 5% at the
midpoint.
On a consolidated basis, the company expects the following:
- Total net revenues to be in the range of $271.0 to $290.0 million, or growth of 13% at the
midpoint.
- Adjusted EBITDA, inclusive of the impact of the GiftCard Zen
acquisition, to be in the range of $50.0 to
$61.0 million, or adjusted EBITDA margins of 20% at the
midpoint.
The above statements are based on current expectations and
actual results may differ materially as explained under the caption
"Forward-looking Statements" below. Information
about RetailMeNot's use of non-GAAP financial measures,
including adjusted EBITDA and adjusted SOI, is provided below under
the caption "Use of Non-GAAP Financial Measures."
Quarterly Conference Call
RetailMeNot will host a webcast to discuss its first quarter
financial results and its second quarter and 2016 business outlook
today at 7:00 a.m. Central Time
(8:00 a.m. Eastern 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.
Following completion of the call, a replay of the call will be
available beginning at 9:30 a.m. Eastern
Time on May 3, 2016. To
listen to the telephone replay, call (877) 344-7529 within the US,
or (412) 317-0088 if calling internationally. Access Code
10082940.
RetailMeNot uses its investor relations website
(http://investor.retailmenot.com) as a means of disclosing material
non-public information and for complying with its disclosure
obligations under Regulation FD. Accordingly, investors should
monitor the investor relations website, in addition to following
press releases, SEC filings, public conference calls and
webcasts.
About RetailMeNot, Inc.
RetailMeNot (http://www.retailmenot.com/corp/) is a leading
digital savings destination connecting consumers with retailers,
restaurants and brands, both online and in-store. The company
enables consumers across the globe to find hundreds of thousands of
digital offers to save money while they shop or dine out. During
the 12 months ended March 31, 2016, RetailMeNot, Inc.
experienced over 700 million visits to its websites. It also
averaged 19.2 million mobile unique visitors per month during the
three months ended March 31, 2016. RetailMeNot, Inc. estimates
that approximately $4.8 billion in retailer sales were
attributable to consumer transactions from paid digital offers in
its marketplace in 2015, more than $600 million of which
were attributable to its in-store solution. The RetailMeNot, Inc.
portfolio of websites and mobile applications includes
RetailMeNot.com in the United
States; RetailMeNot.ca
in Canada; VoucherCodes.co.uk in the United
Kingdom; retailmenot.de in Germany; Actiepagina.nl
in the Netherlands; ma-reduc.com and Poulpeo.com
in France; RetailMeNot.es in Spain, RetailMeNot.it
in Italy, RetailMeNot.pl in Poland and GiftCardZen.com
and Deals2Buy.com 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.
Key Operating Metrics
Visits. RetailMeNot defines a visit as a group of interactions
that take place on one of RetailMeNot Inc.'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 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 30 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.
Mobile Unique Visitors. This amount represents the average
number of mobile unique visitors per month for the three month
period ending March 31, 2016.
RetailMeNot counts each of the following as a mobile unique
visitor: (i) the first time a specific mobile device accesses one
of our mobile applications during a calendar month, and (ii) the
first time a specific mobile device accesses one of our mobile
websites using a specific web browser during a calendar month. If a
mobile device accesses more than one of our mobile websites or
mobile applications in a single calendar month, the first access to
each such mobile website or mobile application is counted as a
mobile unique visitor as they are tracked separately for each
mobile domain. We measure mobile unique visitors with a combination
of internal data sources and Google Analytics data.
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our
financial results, this document includes references to
consolidated adjusted EBITDA and adjusted Segment Operating Income
(SOI) of the core business segment which are non-GAAP financial
measures. For a reconciliation of consolidated adjusted
EBITDA to net income, the most directly comparable GAAP financial
measure, see the table provided below in this release. A
reconciliation of adjusted Segment Operating Income to Operating
Income of the core business segment, the most directly comparably
GAAP financial measure, will be provided in future periods.
RetailMeNot defines consolidated adjusted EBITDA as net income
(loss) plus depreciation, amortization of intangible assets,
stock-based compensation expense, third-party acquisition-related
costs, other operating expenses (including non-cash impairments and
compensation arrangements entered into in connection with
acquisitions), net interest expense, other non-operating income or
expense (including net foreign exchange gains and losses) and
income taxes.
RetailMeNot defines adjusted SOI as operating income of the core
business segment plus depreciation, amortization of intangible
assets, stock-based compensation expense, third-party
acquisition-related costs and other operating expenses (including
non-cash impairments and compensation arrangements entered into in
connection with acquisitions).
RetailMeNot discloses consolidated adjusted EBITDA and adjusted
SOI because these are the key measures 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 consolidated adjusted
EBITDA and adjusted SOI also facilitate period-to-period
comparisons of operations that could otherwise be masked by the
effect of the expenses that RetailMeNot excludes in these non-GAAP
financial measures and facilitates comparisons with other peer
companies, many of which use similar non-GAAP financial measures to
supplement their GAAP results.
Consolidated adjusted EBITDA and adjusted SOI have limitations
as analytical tools, and you should not consider these measures in
isolation or as substitutes for analysis of RetailMeNot's results
as reported under GAAP. Because of these limitations, you should
consider consolidated adjusted EBITDA and adjusted SOI alongside
other financial performance measures, including various cash flow
metrics, operating income (loss), net income (loss) 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," "could," "estimate," "expect,"
"intend," "may," "plan," "potential," "predict," "project," "seek,"
"should," "target," "will," "would" 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, adjusted EBITDA, adjusted segment
operating income, gross profit and other financial performance,
visits, mobile unique visitors, e-mail subscribers, other consumer
engagement metrics, new product and content offerings 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, (1) RetailMeNot's ability to attract
visitors to its websites from search engines, to attract and retain
users and to increase users' engagement with its solutions; (2)
RetailMeNot's ability to monetize digital offers through its mobile
solutions; (3) RetailMeNot's ability to attract and retain paid
retailers and maintain its relationships with performance marketing
networks and suppliers of gift cards; (4) RetailMeNot's ability to
manage the growth in scope and complexity of its business,
including accurately planning and forecasting its financial
results; (5) RetailMeNot's ability to obtain and maintain high
quality digital offer content and maintain the positive perception
of its brands; (6) the competitive environment for RetailMeNot's
business; (7) changes in consumer sentiment regarding RetailMeNot's
use of cookies; (8) RetailMeNot's need to manage regulatory, tax
and litigation risks, including regulations related to gift cards
and imposing sales tax on e-commerce or m-commerce; (9)
RetailMeNot's ability to use and protect consumer data and to
protect its intellectual property; (10) RetailMeNot's ability to
manage international business uncertainties; (11) the impact and
integration of current and future acquisitions; and (12) 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 19, 2016. 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.
Investor Contact
Michael
Magaro
mmagaro@rmn.com
(512) 777-2899
Media Contact
Brian
Hoyt
media@rmn.com
(512) 777-2957
RetailMeNot,
Inc.
|
Condensed
Consolidated Statements of Operations
|
(Unaudited, in
thousands, except per share data)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2016
|
|
2015
|
|
|
|
|
Net
revenues
|
$ 54,649
|
|
$ 60,384
|
Costs and
expenses:
|
|
|
|
Cost of net revenues
(1)
|
5,200
|
|
5,346
|
Product development
(1)
|
12,611
|
|
13,320
|
Sales and marketing
(1)
|
23,325
|
|
21,641
|
General and
administrative (1)
|
10,226
|
|
9,570
|
Amortization of
purchased intangible assets
|
1,954
|
|
2,626
|
Other operating
expenses
|
832
|
|
765
|
Total costs and
expenses
|
54,148
|
|
53,268
|
Income from
operations
|
501
|
|
7,116
|
|
|
|
|
Other income
(expense):
|
|
|
|
Interest expense,
net
|
(600)
|
|
(421)
|
Other income
(expense), net
|
122
|
|
(243)
|
|
|
|
|
Income before
income taxes
|
23
|
|
6,452
|
Provision for income
taxes
|
(59)
|
|
(2,393)
|
|
|
|
|
Net income
(loss)
|
$ (36)
|
|
$ 4,059
|
|
|
|
|
Net income (loss)
per share:
|
|
|
|
Basic
|
$ 0.00
|
|
$ 0.08
|
Diluted
|
$ 0.00
|
|
$ 0.07
|
|
|
|
|
Weighted average
number of common shares used in computing net income (loss) per
share:
|
|
|
|
Basic
|
49,188
|
|
54,029
|
Diluted
|
49,188
|
|
55,035
|
RetailMeNot,
Inc.
|
Condensed
Consolidated Statements of Operations (continued)
|
(Unaudited, in
thousands)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2016
|
|
2015
|
(1)
Includes stock-based compensation as follows:
|
|
|
|
Cost of net
revenues
|
$ 495
|
|
$ 589
|
Product
development
|
2,096
|
|
2,259
|
Sales and
marketing
|
1,477
|
|
1,422
|
General and
administrative
|
2,514
|
|
2,543
|
Total
|
$ 6,582
|
|
$ 6,813
|
RetailMeNot,
Inc.
|
Reconciliation of
Adjusted EBITDA
|
(Unaudited, in
thousands)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2016
|
|
2015
|
|
|
|
|
Net income
(loss)
|
$ (36)
|
|
$ 4,059
|
Depreciation
and amortization
|
3,950
|
|
3,926
|
Stock-based
compensation expense
|
6,582
|
|
6,813
|
Third party
acquisition-related costs
|
424
|
|
55
|
Other operating
expenses
|
832
|
|
765
|
Interest
expense, net
|
600
|
|
421
|
Other (income)
expense, net
|
(122)
|
|
243
|
Provision for
income taxes
|
59
|
|
2,393
|
|
|
|
|
Adjusted
EBITDA
|
$ 12,289
|
|
$ 18,675
|
RetailMeNot,
Inc.
|
Reconciliation of
Non-GAAP Net Income and Non-GAAP Diluted EPS
|
(Unaudited, in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2016
|
|
2015
|
GAAP Income before
income taxes
|
$
23
|
|
$ 6,452
|
GAAP Provision for
income taxes
|
(59)
|
|
(2,393)
|
GAAP Net income
(loss)
|
$ (36)
|
|
$ 4,059
|
Non-GAAP adjustments
to net income (loss):
|
|
|
|
Amortization of
purchased intangibles
|
1,954
|
|
2,626
|
Stock-based
compensation expense
|
6,582
|
|
6,813
|
Third party
acquisition-related costs
|
424
|
|
55
|
Other operating
expenses
|
832
|
|
765
|
Less: Tax
effect of adjustments above
|
(3,468)
|
|
(3,544)
|
Total non-GAAP
net income
|
$ 6,288
|
|
$ 10,774
|
|
|
|
|
Diluted net income
(loss) per share:
|
|
|
|
GAAP
|
$ 0.00
|
|
$ 0.07
|
Non-GAAP
|
$ 0.13
|
|
$ 0.20
|
|
|
|
|
Shares used in
non-GAAP diluted EPS calculation:
|
|
|
|
Weighted-average
shares outstanding used in calculating GAAP diluted EPS
|
49,188
|
|
55,035
|
Additional dilutive
securities for non-GAAP diluted EPS
|
824
|
|
-
|
Weighted-average
shares outstanding used in calculating non-GAAP diluted
EPS
|
50,012
|
|
55,035
|
|
|
|
|
Reconciliation of
non-GAAP effective tax rate:
|
|
|
|
GAAP Effective tax
rate
|
256.5%
|
|
37.1%
|
Tax effect of
non-GAAP adjustments to net income
|
-220.6%
|
|
-1.6%
|
Non-GAAP effective
tax rate
|
35.9%
|
|
35.5%
|
RetailMeNot,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited, in
thousands)
|
|
As of March
31,
|
|
As of
December 31,
|
|
2016
|
|
2015
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
256,909
|
|
$
259,769
|
Accounts
receivable, net
|
43,772
|
|
67,504
|
Prepaids and
other current assets, net
|
9,743
|
|
9,959
|
Total
current assets
|
310,424
|
|
337,232
|
|
|
|
|
Property and
equipment, net
|
20,710
|
|
21,382
|
Intangible
assets, net
|
59,538
|
|
61,245
|
Goodwill
|
175,516
|
|
174,725
|
Other assets,
net
|
6,925
|
|
8,040
|
Total
assets
|
$
573,113
|
|
$
602,624
|
|
|
|
|
Liabilities
and Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
5,699
|
|
$
8,713
|
Accrued
compensation and benefits
|
6,859
|
|
10,136
|
Accrued
expenses and other current liabilities
|
8,219
|
|
7,155
|
Income taxes
payable
|
1,883
|
|
5,109
|
Current
maturities of long term debt
|
10,000
|
|
10,000
|
Total
current liabilities
|
32,660
|
|
41,113
|
|
|
|
|
Deferred tax
liability--noncurrent
|
3,157
|
|
1,498
|
Long term
debt
|
58,474
|
|
60,872
|
Other
noncurrent liabilities
|
7,786
|
|
7,752
|
Total
liabilities
|
102,077
|
|
111,235
|
|
|
|
|
Stockholders' equity:
|
|
|
|
Common
stock
|
49
|
|
51
|
Additional
paid-in capital
|
474,225
|
|
495,151
|
Accumulated
other comprehensive loss
|
(4,272)
|
|
(4,883)
|
Retained
earnings
|
1,034
|
|
1,070
|
Total
stockholders' equity
|
471,036
|
|
491,389
|
Total
liabilities and stockholders' equity
|
$
573,113
|
|
$
602,624
|
RetailMeNot,
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited, in
thousands)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
(36)
|
|
$ 4,059
|
Adjustments to
reconcile net income (loss) to cash provided by
operating activities:
|
|
|
|
Depreciation and
amortization expense
|
3,950
|
|
3,926
|
Stock based
compensation expense
|
6,582
|
|
6,813
|
Excess income tax
benefit from stock-based compensation
|
(18)
|
|
(755)
|
Deferred income tax
expense (benefit)
|
2,229
|
|
1,698
|
Non-cash interest
expense
|
102
|
|
102
|
Impairment of
assets
|
834
|
|
-
|
Amortization of
deferred compensation
|
-
|
|
768
|
Other non-cash (gains)
losses, net
|
(1,524)
|
|
1,038
|
Provision for doubtful
accounts receivable
|
149
|
|
(252)
|
Changes in
operating assets and liabilities:
|
|
|
|
Accounts receivable,
net
|
23,552
|
|
23,142
|
Prepaid expenses and
other current assets, net
|
(2,116)
|
|
(843)
|
Accounts
payable
|
(2,924)
|
|
376
|
Accrued expenses and
other current liabilities
|
(5,577)
|
|
(10,084)
|
Other noncurrent
assets and liabilities
|
1,149
|
|
634
|
Net cash provided
by operating activities
|
26,352
|
|
30,622
|
Cash flows from
investing activities:
|
|
|
|
Payments for
acquisition of businesses, net of acquired cash
|
-
|
|
-
|
Proceeds from sale of
property and equipment
|
2
|
|
-
|
Purchase of other
assets
|
(42)
|
|
(2)
|
Purchase of
non-marketable investment
|
-
|
|
-
|
Purchase of property
and equipment
|
(2,155)
|
|
(2,332)
|
Net cash used in
investing activities
|
(2,195)
|
|
(2,334)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from notes
payable, net of issuance costs
|
-
|
|
29,950
|
Payments on notes
payable
|
(2,500)
|
|
-
|
Excess income tax
benefit from stock-based compensation and other
|
18
|
|
755
|
Payments of principal
on capital lease arrangements
|
-
|
|
(3)
|
Payments for
repurchase of common stock
|
(23,770)
|
|
(24,473)
|
Proceeds from issuance
of common stock, net of tax payments related to net share
settlement of equity awards
|
(1,051)
|
|
2,393
|
Net cash provided
by (used in) financing activities
|
(27,303)
|
|
8,622
|
Effect of foreign
currency exchange rate on cash
|
286
|
|
(1,077)
|
Change in cash and
cash equivalents
|
(2,860)
|
|
35,833
|
Cash and cash
equivalents, beginning of period
|
259,769
|
|
244,482
|
|
|
|
|
Cash and cash
equivalents, end of period
|
$ 256,909
|
|
$ 280,315
|
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SOURCE RetailMeNot, Inc.