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Actua Announces First Quarter 2015 Financial Results

RADNOR, Pa., May 5, 2015 (GLOBE NEWSWIRE) -- Actua Corporation (Nasdaq:ACTA) ("Actua") today reported its results for the first quarter ended March 31, 2015.

Revenue was $30.6 million for the first quarter of 2015, up from $18.4 million for the first quarter of 2014. Net income (loss) attributable to Actua common shareholders for the first quarter of 2015 was $(14.8) million, or $(0.40) per diluted share, compared to net income (loss) of $(10.2) million, or $(0.27) per diluted share, for the comparable prior year quarter. Non-GAAP net income (loss) for the first quarter of 2015 was $(3.8) million, or $(0.10) per share, compared to a non-GAAP net income (loss) of $(3.6) million, or $(0.10) per diluted share, for the comparable prior year quarter. Cash flow from operations was a use of $(4.4) million for the first quarter of 2015, compared to a use of $(9.7) million for the comparable prior year quarter.

"Our targeted efforts to drive greater sales and marketing productivity, as well as improve operating leverage, fueled a strong start to the year," said Walter Buckley, Actua's Chief Executive Officer. "Each of the businesses exceeded our expectations, and we achieved significant improvement in operating cash flow. We look forward to building on our positive momentum throughout 2015."

A reconciliation of the non-GAAP financial measures used above with the most comparable GAAP financial measure is included with the financial tables at the end of this release.

2015 Guidance

Actua now expects 2015 Non-GAAP net income (loss) per share in the range of $(0.36) and $(0.40) per diluted share for 2015, an improvement from its original guidance of between $(0.37) and $(0.41) per diluted share. Actua now expects 2015 annual cash flow from operations to be a use in the range of $(5.0) million and $(9.0) million, an improvement from its original guidance of a use between $(6.0) million and $(10.0) million.

Actua continues to expect 2015 annual GAAP revenue in the range of between $133.0 million and $138.0 million, which corresponds to revenue of between $135.5 million and $140.5 million after adding back a reduction of $2.5 million related to acquired deferred revenue adjustments required by GAAP.

Actua's Chief Financial Officer, R. Kirk Morgan added, "Our improved outlook regarding full-year 2015 Non-GAAP net income (loss) per share and cash flow from operations guidance reflects our strong performance in the first quarter as well as our view into the rest of 2015."

Please see Actua's website at www.actua.com for more information on Actua, its businesses and its first quarter 2015 results.

Actua will host a webcast at 10:00 a.m. ET today to discuss its financial results. As part of the live webcast for this call, Actua will post a slide presentation to accompany the prepared remarks. To access the webcast, go to www.actua.com/investors/events-presentations/ and click on the webcast link. Please log on to the website approximately ten minutes prior to the call to register and download and install any necessary audio software. The conference call is also accessible through listen-only mode by dialing 866.318.8615 or 617.399.5134. The participant pass code for either dial-in is 44837857.

For those unable to participate in the conference call, a replay will be available from May 5, 2015 at 2:00 p.m. ET until May 12, 2015 at 11:59 p.m. ET. To access the replay, dial 888.286.8010 or 617.801.6888. The passcode is 73884560. The replay and slide presentation also can be accessed in the investor relations section of the Actua website at www.actua.com/investors/events-presentations/.

About ACTUA

Actua Corporation (Nasdaq:ACTA), the multi-vertical cloud company, brings the power of the cloud to vertical markets and processes. Actua is pioneering the second wave of the SaaS revolution – the vertical wave – by growing cloud businesses that are transforming their markets. With approximately 800 employees delivering unrivaled domain knowledge, agility and responsiveness to our customers, Actua's rapidly growing vertical cloud businesses are positioned to lead this wave. For the latest information about Actua and its brands, please go to www.actua.com.

Safe Harbor Statement under Private Securities Litigation Reform Act of 1995

The statements contained in this press release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve certain risks and uncertainties, including, but not limited to, risks associated with our ability to compete successfully in highly-competitive rapidly-developing markets, the effect of economic conditions generally, capital spending by our customers, our ability to retain existing customer relationships and secure new ones, developments in the markets in which we operate and our ability to respond to those changes in a timely and effective manner, the availability, performance and security of our cloud-based technology, particularly in light of increased cybersecurity risks and concerns, our ability to retain key personnel, our ability to deploy capital effectively and on acceptable terms, our ability to successfully integrate any acquired business, the impact of any potential acquisitions, dispositions or other strategic transactions, our ability to have continued access to capital and to manage capital resources effectively, and other risks and uncertainties detailed in Actua's filings with the U.S. Securities and Exchange Commission. Those and other factors may cause actual results to differ materially from those projected.

Actua Corporation
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended March 31,
2015 2014
Revenue $ 30,592 $ 18,422
Operating Expenses
Cost of revenue (a) 9,732 4,899
Sales and marketing (a) 11,236 8,531
General and administrative (a) 15,436 10,009
Research and development (a) 7,093 3,253
Amortization of intangibles 4,016 2,301
Impairment related and other 174 --
Total operating expenses 47,687 28,993
Operating income (loss) (17,095) (10,571)
Other income (expense):
Other income (loss), net 1,365 300
Interest income 19 86
Interest expense (37) (511)
Income (loss) before income taxes, equity loss and discontinued operations (15,748) (10,696)
Income tax benefit (expense) (177) (94)
Equity loss -- (312)
Income (loss) from continuing operations (15,925) (11,102)
Income (loss) from discontinued operations -- 48
Net income (loss) (15,925) (11,054)
Less: Net income (loss) attributable to the noncontrolling interest (1,160) (904)
Net income (loss) attributable to Actua $ (14,765) $ (10,150)
Amounts attributable to Actua common shareholders:
Net income (loss) from continuing operations $ (14,765) $ (10,198)
Net income (loss) from discontinued operations -- 48
Net income (loss) attributable to Actua common shareholders $ (14,765) $ (10,150)
Basic and diluted net income (loss) per share:
Income (loss) from continuing operations attributable to Actua common shareholders $ (0.40) $ (0.27)
Income (loss) from discontinued operations attributable to Actua common shareholders -- 0.00
Income (loss) attributable to Actua common shareholders $ (0.40) $ (0.27)
Shares used in computation of basic net income (loss) per common share attributable to Actua common shareholders 36,842 37,096
(a) Includes equity-based compensation of:
Cost of revenue $ 26 $ 19
Sales and marketing 58 41
General and administrative 7,093 3,760
Research and development 45 28
$ 7,222 $ 3,848
Actua Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 31, December 31,
2015 2014
ASSETS
Cash and cash equivalents $ 88,280 $ 103,134
Restricted cash 992 1,132
Accounts receivable, net 23,796 23,134
Deferred tax asset 182 182
Prepaid expenses and other current assets 4,314 3,979
Total current assets 117,564 131,561
Fixed assets, net 9,121 7,947
Goodwill and Intangibles, net 362,495 366,511
Cost and equity method investments 18,146 17,672
Deferred tax asset 2,989 2,998
Other assets, net 1,952 1,652
Total Assets $ 512,267 $ 528,341
LIABILITIES AND EQUITY
Current maturities of other long-term debt $ 500 $ 500
Accounts payable 12,044 12,595
Accrued expenses 8,488 7,735
Accrued compensation and benefits 7,211 9,241
Deferred revenue 37,322 33,238
Total current liabilities 65,565 63,309
Long-term debt 820 --
Deferred revenue 1,240 1,256
Deferred tax liability 266 266
Other liabilities 4,904 4,408
Total Liabilities 72,795 69,239
Redeemable noncontrolling interest 3,486 6,221
Total Equity 435,986 452,881
Total Liabilities, Redeemable noncontrolling interest and Equity $ 512,267 $ 528,341
Actua Corporation
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended March 31,
2015 2014
Operating Activities - continuing operations
Net income (loss) $ (15,925) $ (11,054)
(Income) loss from discontinued operations, including gain on sale, net of tax -- (48)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization 5,240 3,123
Equity-based compensation 7,222 3,848
Other (income) loss (1,365) (300)
Equity loss -- 312
Deferred tax asset (13) --
Changes in assets and liabilities, net of effect of acquisitions:
Accounts receivable, net (662) (3,802)
Prepaid expenses and other assets (635) 22
Accounts payable (551) 42
Accrued expenses (251) (1,193)
Accrued compensation and benefits (2,030) (3,567)
Deferred revenue 4,068 3,030
Other liabilities 496 (64)
Cash flows provided by (used in) operating activities (4,406) (9,651)
Investing Activities - continuing operations
Capital expenditures, net (2,340) (608)
Change in restricted cash 140 (164)
Proceeds from sales/distributions of ownership interests 1,415 293
Ownership acquisitions, net of cash acquired (1,257) --
Cash flows provided by (used in) investing activities (2,042) (479)
Financing Activities - continuing operations
Acquisition of noncontrolling interest in subsidiary equity (3,952) --
Borrowings of long-term debt 820 --
Repayments of long-term debt and capital lease obligations (24) (3,488)
Purchase of treasury stock (1,704) --
Tax withholdings related to equity-based awards (3,494) (1,271)
Cash received for stock options exercised 65 --
Cash flows provided by (used in) financing activities (8,289) (4,759)
Effect of exchange rate on cash (117) --
Discontinued Operations:
Cash flows provided by (used in) operating activities -- 48
Cash flows provided by (used in) investing activities -- --
Cash flows provided by (used in) financing activities -- --
Net increase(decrease) in cash and cash equivalents from discontinued operations -- 48
Net increase (decrease) in cash and cash equivalents (14,854) (14,841)
Cash and cash equivalents at beginning of period 103,134 334,656
Cash and cash equivalents at end of period $ 88,280 $ 319,815
Actua Corporation
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
2014 2015
Q1 Q2 Q3 Q4 Q1
GAAP Net income (loss) attributable to Actua: ($10,150) ($12,894) ($10,680) $10,404 ($14,765)
Add back:
Share-based compensation 3,848 6,712 6,357 6,917 7,222
Amortization of intangibles 2,301 2,275 2,373 3,569 4,016
Impairment related and other costs 247 1,645 256 352 360
Transaction expenses 90 257 1,548 773 70
Other (income) loss, net (300) (637) (96) (4,280) (1,365)
Acquired businesses' deferred revenue 76 76 336 1,991 677
Equity loss 312 320 144 -- --
Impact on non-cash income tax benefit items -- (800) (2,131) (10,749) 34
Loss (Income) from discontinued operations (48) (1,315) (2,426) (10,237) --
Non-GAAP net income (loss) ($3,624) ($4,361) ($4,319) ($1,260) ($3,751)
GAAP Net income (loss) per diluted share: ($0.27) ($0.35) ($0.29) $0.28 ($0.40)
Add back:
Share-based compensation $0.10 $0.18 $0.17 $0.19 $0.20
Amortization of intangibles $0.06 $0.06 $0.06 $0.10 $0.11
Impairment related and other $0.01 $0.04 $0.01 $0.01 $0.01
Transaction expenses $0.00 $0.01 $0.04 $0.02 $0.00
Other (income) loss, net ($0.01) ($0.02) ($0.00) ($0.11) ($0.04)
Acquired businesses' deferred revenue $0.00 $0.00 $0.01 $0.05 $0.02
Equity loss $0.01 $0.01 $0.00 $0.00 $0.00
Impact on non-cash income tax benefit items $0.00 ($0.02) ($0.06) ($0.29) $0.00
Income from discontinued operations ($0.00) ($0.03) ($0.06) ($0.28) $0.00
Non-GAAP net income (loss) per diluted share ($0.10) ($0.12) ($0.12) ($0.03) ($0.10)
Shares used in calculation of GAAP net income (loss) per share attributable to Actua:
Basic 37,096 37,313 37,335 36,780 36,842
Diluted 37,096 37,313 37,335 36,780 36,842
Shares used in calculation of non-GAAP net income (loss) per share attributable to Actua:
Basic 37,096 37,313 37,335 36,780 36,842
Diluted 37,096 37,313 37,335 36,780 36,842

About Actua's Non-GAAP Financial Measures

This release contains non-GAAP financial measures. The tables above reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures.

Non-GAAP financial measures should not be considered as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. Actua strongly urges investors and potential investors in our securities to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures that are included in this release.

Actua's management believes that its non-GAAP financial measures provide useful information to investors because they allow investors to view the business through the eyes of management and provide meaningful supplemental information regarding Actua's operating results, as they exclude amounts that Actua excludes as part of its monitoring of operating results and assessment of the performance of the business.

Actua presents the following non-GAAP financial measures in this release: (1) non-GAAP net income (loss) (which term may be used interchangeably with adjusted net income (loss) by management during earnings call presentations) and (2) non-GAAP net income (loss) per diluted share (which term may be used interchangeably with adjusted net income (loss) per diluted share by management during earnings call presentations). Actua excludes items from these non-GAAP financial measures as described below.

Non-GAAP net income (loss) excludes, from GAAP net income (loss), the following items:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua's results with results of other companies.
  • Amortization of intangibles. Actua excludes amortization of acquired intangibles, which consists primarily of customer relationships and technology, because they are expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and Actua believes that doing so facilitates comparisons to its historical operating results and to the results of other companies.
  • Impairment-related and other costs. Actua excludes the effect of impairment-related and other costs, which primarily include impairment charges, revaluation of contingent consideration, restructuring and severance fees, settlement costs and other one-time costs, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua's operations.
  • Transaction expenses. Actua excludes the effect of acquisition related expenses because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua's operations.
  • Other income (loss), net. Actua excludes the effect of other income (loss), net, which primarily includes transaction-driven gains and losses, as well as certain foreign currency impacts, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua's operations.
  • Acquired businesses' deferred revenue. Actua includes acquired businesses' previously deferred revenues that are not recognized under GAAP because Actua considers them a part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on its operations.
  • Equity loss. In accordance with GAAP, Actua recognizes its share of the earnings or losses of each company accounted for under the equity method and adjusts the carrying amount for each such company for its share of the earnings or losses of the company. Actua excludes GAAP equity income (loss) because it is significantly impacted by factors outside its direct control.
  • Impact of non-cash income tax benefit items. Actua excludes the impact of any non-cash income tax benefit items as Actua believes it is useful for investors to understand the effect of this item and Actua does not consider them a part of ongoing operating results when assessing the performance of its business.
  • Income (loss) from discontinued operations. Actua excludes the income (loss) from discontinued operations as Actua believes it is useful for investors to understand the effect of these items for all periods presented as Actua does not consider them a part of ongoing operating results when assessing the performance of its business.

Non-GAAP net income (loss) per diluted share is calculated as follows:

  • Non-GAAP net income (loss) (as defined above) is the numerator.
  • Shares used in calculation of non-GAAP net income (loss) per diluted share. For periods where GAAP and non-GAAP net income (loss) are both losses, Actua uses the same number of shares used to calculate GAAP and non-GAAP net loss per share. For periods where GAAP and non-GAAP net income (loss) are both income, Actua uses the same number of shares used to calculate GAAP and non-GAAP net income per diluted share. For periods where GAAP net income (loss) is a loss but non-GAAP net income (loss) is income, Actua includes the impact of incremental dilutive securities for the period to determine non-GAAP net income per diluted share. For periods where GAAP net income (loss) is income but non-GAAP net income (loss) is a loss, Actua excludes the impact of incremental dilutive securities for the period to determine non-GAAP net loss per diluted share.

Actua believes that the following considerations apply to the non-GAAP financial measures that it presents:

  • Actua's management uses non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share in internal reports used by management in monitoring and making decisions regarding Actua's business, including in monthly financial reports prepared for management and in periodic reports to Actua's Board of Directors.
  • An important limitation of Actua's non-GAAP financial measures is that they exclude expenses or cash flows, some of which may be significant, that are required by GAAP to be recorded. In addition, non-GAAP financial measures are subject to inherent limitations because they reflect the exercise of judgments by management about which charges to exclude from the non-GAAP financial measures.
  • To mitigate the limitations associated with non-GAAP financial measures, Actua reconciles its non-GAAP financial measures to the nearest comparable GAAP financial measures and recommends that investors and potential investors do not give undue weight to its non-GAAP financial measures.
CONTACT: Investor inquiries: Karen Greene Actua Investor Relations 610.727.6900 IR@actua.com

Source:Actua Corporation