LITTLETON, Mass.--(BUSINESS WIRE)--LiveWire Mobile, Inc. (Pinksheets: LVWR - News), a leading provider of managed personalization services for mobile operators and subscribers, today announced financial results for the second quarter ended June 30, 2009:
Revenues increased 14% from second quarter of 2008; essentially flat from first quarter ended March 31, 2009
Revenues increase driven by 80% year-over year growth in managed services revenue, despite declining cap-ex revenue and handset distribution royalties
Gross profit improves to 70% from negative 2% in the second quarter of 2008
85% reduction in year-over-year second quarter loss from continuing operations
Cash of $7.3 million as of June 30, 2009
Second quarter restructuring plan expected to achieve significant operating expense reduction, adjusted EBITDA profitability and positive cash flow from operations for the second half of 2009
Signed agreement with new North American customer for ringback tone managed service during the second quarter of 2009; expected service launch in the fourth quarter of 2009
Launched new integrated storefront managed service for an existing customer in August 2009; now delivering ringtones, wallpapers, games and java applications in addition to music downloads and subscriptions
Total revenues from continuing operations for the second quarter of 2009 were $3.7 million, an increase of 14% compared to $3.3 million for the corresponding quarter in 2008 and essentially flat with $3.8 million for the first quarter of 2009.
Gross profit from continuing operations for the second quarter of 2009 was 70%, or $2.6 million, an increase of more than thirty-six times compared to negative 2%, or $(0.1) million, in the second quarter of 2008, and an increase of 32%, from 53%, or $2.0 million for the first quarter of 2009. The improvement in gross profit is primarily attributable to increases in managed services revenues, which have a higher gross profit than cap-ex product and service revenues, as well as cost reductions related to restructuring actions. Gross profit can be impacted by the mix and proportion of cap-ex product and service revenues relative to total revenues.
Adjusted EBITDA from continuing operations (a non-GAAP financial measure) was $(0.7) million, or $(0.01) per share, for the second quarter of 2009, a 91% improvement compared to $(7.3) million, or $(0.16) per share, in the second quarter of 2008, and a 71% improvement compared to $(2.3) million, or $(0.05) per share, for the first quarter of 2009. A complete reconciliation between adjusted EBITDA and operating loss on a GAAP basis is provided in the financial tables at the end of this press release.
Loss from continuing operations for the second quarter of 2009 was $(1.5) million, or $(0.03) per share, an 85% decrease compared to $(10.2) million, or $(0.22) per share, for the second quarter of 2008, and a 41% decrease compared to $(2.6) million, or $(0.06) per share, for the first quarter of 2009.
Net loss for the second quarter of 2009 was $(1.7) million, or $(0.04) per share, a decrease of 79% compared to $(8.2) million, or $(0.18) per share, for the second quarter of 2008, which included a $1.0 million restructuring charge, and a decrease of 40% compared to $(2.9) million, or $(0.06) per share, for the first quarter of 2009. The second quarter of 2009 includes $0.9 million of restructuring charges related to the restructuring plan announced in May 2009. The plan consists primarily of costs associated with a workforce reduction principally at its operations in India, with additional reductions in headcount in Littleton, Massachusetts, Canada and the U.K., and other associated costs. The majority of these workforce reductions were completed by the end of the second quarter of 2009, with the remainder expected to be completed by the end of the year. Restructuring expense in the second quarter of 2009 also includes approximately $(0.5) million related to changes in estimates associated with previously exited facilities.
Cash totaled $7.3 million on June 30, 2009, compared to $11.3 million on March 31, 2009 and $19.3 million on December 31, 2008. The decrease in cash was primarily due to cash used in operations during the quarter and first half of the year, including payments made under restructuring plans, our lease termination agreement and for other exited facilities.
Business Perspective
Joel Hughes, CEO of LiveWire Mobile, said, “We have successfully transitioned the Company into a world-class managed service provider, delivering multiple content services to mobile operators, including our integrated storefront on our Infuse personalization platform. We have demonstrated traction in growing our managed services business, evidenced by our year-over-year growth of 80% in managed service revenues and recent and expected new service launches as previously noted. Additionally, with our second quarter restructuring largely completed, we believe the Company will achieve a significant reduction in operating expenses, adjusted EBITDA profitability and positive cash flow for the second half of 2009.”
Use of Non-GAAP Financial Measures
In addition to reporting its financial results in accordance with generally accepted accounting principles, or GAAP, the Company has also provided in this release adjusted EBITDA from continuing operations which is a non-GAAP financial measure adjusted to exclude certain non-cash and other specified expenses. The Company believes the use of non-GAAP measures in addition to GAAP measures is an additional useful method of evaluating its results of operations. Management uses these non-GAAP financial measures when evaluating the Company's financial results, as well as for internal planning and forecasting purposes. Specifically, the Company has excluded stock-based compensation, amortization of intangible assets, depreciation, restructuring charges, interest income and expense, other income/expense, goodwill impairment and adjustments, and taxes from its non-GAAP financial measures. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the expected results calculated in accordance with GAAP and reconciliations to those expected results should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company may consider whether other significant non-recurring items that arise in the future should also be excluded in calculating the non-GAAP financial measures it uses. Reconciliations between the non-GAAP financial measures on a GAAP basis and a non-GAAP basis are provided herein, as applicable.
About LiveWire Mobile, Inc.
LiveWire Mobile (Pinksheets:LVWR - News) is a leading provider of managed personalization services for mobile operators and subscribers. LiveWire Mobile’s integrated suite of mobile personalization services includes ringback tones, ringtones, full track downloads, and other applications, as well as, dedicated content and service marketing, integrated storefront management and marketing. LiveWire Mobile makes mobile personalization services easier to use and helps operators drive service usage and adoption. For more information, please visit www.livewiremobile.com.
LiveWire Mobile is a trademark of LiveWire Mobile, Inc.
Statements other than historical facts included or referred to in this Press Release are “forward-looking statements”, including forward-looking statements about the anticipated costs and completion of our second quarter 2009 restructuring plan, our future operating expense reductions, adjusted EBITDA profitability and positive cash flow, the impact of restructuring on our business and operations, including the closing of certain international subsidiaries, growth and market opportunities for our managed services business, customer opportunities and anticipated product and service launches, development initiatives and cash management. These statements are based on management’s expectations as of the date of this document and are subject to uncertainties and changes in circumstances. Actual results may differ materially from these expectations due to risks and uncertainties including, but not limited to, actual expenses of our restructuring plan, delays in completion of our restructuring plan, uncertainties with respect to our ability to achieve operating expense reductions, adjusted EBITDA profitability and positive cash flow, the impact of restructuring on our business and operations, the implementation and market acceptance of our strategy to focus on managed services in North America, uncertainties with respect to our ability to grow our managed service business, the size of our target market, our ability to expand our relationships with existing customers and attract new customers, customer concentration (including with Sprint Nextel Corporation and Ericsson AB), our ability to timely launch our products and services to customers, our ability to execute on our development initiatives, our ability to effectively manage cash (including the release of the entire cash balance in escrow in connection with the sale of the Communications Platforms business to Dialogic Corporation), and other risks. We encourage you to read our Annual Report for the year ended December 31, 2008 for certain additional risk factors. In addition, while management may elect to update forward-looking statements at some point in the future, management specifically disclaims any obligation to do so, even if its estimates change. Any reference to our website in this press release is not intended to incorporate the contents thereof into this press release or any other public announcement.
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