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Actua Announces First Quarter 2016 Financial Results

RADNOR, Pa., May 05, 2016 (GLOBE NEWSWIRE) -- Actua Corporation (Nasdaq:ACTA) (“Actua”) today reported its results for the first quarter ended March 31, 2016.

Revenue was $34.6 million for the first quarter of 2016, up from $30.6 million for the first quarter of 2015. Net loss attributable to Actua for the first quarter of 2016 was $(14.3) million, or $(0.38) per diluted share, compared to net loss attributable to Actua of $(14.8) million, or $(0.40) per diluted share, for the first quarter of 2015. Non-GAAP net loss for the first quarter of 2016 was $(4.3) million, or $(0.11) per diluted share, compared to a non-GAAP net loss of $(3.8) million, or $(0.10) per diluted share, for the comparable prior year quarter. Since early March, Actua has repurchased 1.0 million shares of its common stock for $9.5 million.

“We are off to a solid start for the year,” said Walter Buckley, CEO of Actua. “We are especially pleased with the bookings momentum we saw during the quarter, particularly at Bolt. This momentum reaffirms the value we deliver to our customers and positions us well for future revenue and earnings growth.”

2016 Guidance

Actua continues to expect (1) annual GAAP revenue in the range of between $155.0 million and $160.0 million, representing growth in the range of between 16% and 20% compared to 2015, (2) positive annual non-GAAP cash flows from operations in the range of between $3.0 million and $8.0 million, and (3) non-GAAP net loss per share in the range of between $(0.35) and $(0.40) per diluted share. Actua now expects diluted shares outstanding of 37.0 million shares for full year 2016, after taking into account the impact of its recent share repurchases.

“Cash flows from operations was a use of $(13.2) million for the first quarter of 2016, compared to a use of $(4.4) million for the first quarter of 2015. This was in line with our expectations,” said R. Kirk Morgan, CFO of Actua. “As the cycle of our cash collections activity has shifted to the fourth quarter, we expect significant positive cash flows for the last nine months of the year that will result in annual non-GAAP cash flows from operations within our guidance range.”

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

Please see Actua’s website at www.actua.com for more information on Actua, its businesses and its first quarter 2016 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 888.771.4371 or 847.585.4405. The passcode is 42215393.

For those unable to participate in the conference call, a replay will be available from May 5, 2016 at 12:30 p.m. ET until May 12, 2016 at 11:59 p.m. ET. To access the replay, dial 888.843.7419 or 630.652.3042. The passcode is 42215393#. 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 900 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,
2016 2015
Revenue $34,610 $30,592
Operating Expenses
Cost of revenue (a) 10,192 9,732
Sales and marketing (a) 13,159 11,236
General and administrative (a) 14,496 15,436
Research and development (a) 7,550 7,093
Amortization of intangibles 4,064 4,016
Impairment related and other 231 346
Total operating expenses 49,692 47,859
Operating income (loss) (15,082) (17,267)
Other income (expense):
Other income (loss), net (156) 1,537
Interest income 48 19
Interest expense (46) (37)
Income (loss) before income taxes (15,236) (15,748)
Income tax benefit (expense) (147) (177)
Net income (loss) (15,383) (15,925)
Less: Net income (loss) attributable to the noncontrolling interest (1,052) (1,160)
Net income (loss) attributable to Actua $(14,331) $(14,765)
Basic and diluted net income (loss) per share:
Income (loss) attributable to Actua common shareholders $(0.38) $(0.40)
Shares used in computation of basic and diluted net income (loss) per common share attributable to Actua common shareholders 37,293 36,842
(a) Includes equity-based compensation of:
Cost of revenue $41 $26
Sales and marketing 104 58
General and administrative 4,774 7,093
Research and development 124 45
$5,043 $7,222


Actua Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 31, December 31,
2016 2015
ASSETS
Cash and cash equivalents $53,292 $76,313
Restricted cash 2,354 2,206
Accounts receivable, net 28,310 19,902
Prepaid expenses and other current assets 4,761 4,876
Total current assets 88,717 103,297
Fixed assets, net 11,225 8,781
Goodwill 226,034 226,034
Intangible assets, net 87,444 89,395
Cost method investments 18,646 18,146
Deferred tax asset 2,905 2,900
Other assets, net 1,686 1,591
Total Assets $436,657 $450,144
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
Short-term debt $5,390 $1,320
Accounts payable 10,002 11,301
Accrued expenses 12,337 10,979
Accrued compensation and benefits 6,757 12,251
Deferred revenue 46,977 40,282
Total current liabilities 81,463 76,133
Deferred tax liability 266 266
Deferred revenue 1,356 2,038
Other liabilities 6,801 3,230
Total Liabilities 89,886 81,667
Redeemable noncontrolling interest 5,823 10,506
Total Equity 340,948 357,971
Total Liabilities, Redeemable noncontrolling interest and Equity $436,657 $450,144


Actua Corporation
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended March 31,
2016 2015
Operating Activities
Net income (loss) $(15,383) $(15,925)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization 4,942 5,240
Equity-based compensation 5,043 7,222
Impairment related and other 215
Other (income) loss 156 (1,537)
Deferred tax asset (5) (13)
Contingent consideration 16 172
Changes in assets and liabilities, net of effect of acquisitions:
Accounts receivable, net (8,659) (662)
Prepaid expenses and other assets 19 (636)
Accounts payable (2,452) (551)
Accrued expenses 207 1,063
Accrued compensation and benefits (5,658) (2,030)
Deferred revenue 6,191 2,755
Other liabilities 2,204 496
Cash flows provided by (used in) operating activities (13,164) (4,406)
Investing Activities
Capital expenditures, net (995) (2,340)
Change in restricted cash (148) 140
Proceeds from sales/distributions of ownership interests 46 1,415
Ownership acquisitions, net of cash acquired (2,168) (1,257)
Cash flows provided by (used in) investing activities (3,265) (2,042)
Financing Activities
Acquisition of noncontrolling interest in subsidiary equity (5,515) (3,952)
Borrowings of long-term debt 4,674 820
Repayments of long-term debt and capital lease obligations (145) (24)
Purchase of treasury stock (4,048) (1,704)
Tax withholdings related to equity-based awards (1,529) (3,494)
Cash received for stock options exercised 65
Cash flows provided by (used in) financing activities (6,563) (8,289)
Effect of exchange rate on cash (29) (117)
Net increase (decrease) in cash and cash equivalents (23,021) (14,854)
Cash and cash equivalents at beginning of period 76,313 103,134
Cash and cash equivalents at end of period $53,292 $88,280


Actua Corporation
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
20152016
Q1Q2Q3Q4Q1
GAAP net income (loss) attributable to Actua: $(14,765) $(15,282) $(13,882) $(52,151) $(14,331)
Add back:
Share-based compensation 7,222 7,121 6,661 $6,030 5,043
Amortization of intangibles 4,016 3,706 3,728 3,801 4,064
Impairment related and other costs 532 663 228 39,155 231
Transaction expenses 70 180 108 92
Other (income) loss, net (1,537) 425 144 (204) 156
Acquired businesses' deferred revenue 677 678 557 505 476
Impact on non-cash income tax benefit items 34
Non-GAAP net income (loss) $(3,751) $(2,509) $(2,456) $(2,864) $(4,269)
GAAP net income (loss) per diluted share: $(0.40) $(0.41) $(0.37) $(1.40) $(0.38)
Add back:
Share-based compensation 0.20 0.19 0.18 0.16 0.14
Amortization of intangibles 0.11 0.10 0.10 0.10 0.11
Impairment related and other costs 0.01 0.02 0.01 1.05 0.01
Transaction expenses
Other (income) loss, net (0.04) 0.01 (0.01)
Acquired businesses' deferred revenue 0.02 0.02 0.01 0.01 0.01
Impact on non-cash income tax benefit items
Non-GAAP net income (loss) per diluted share $(0.10) $(0.07) $(0.07) $(0.08) $(0.11)
Shares used in calculation of GAAP net income (loss) per share attributable to Actua:
Basic 36,842 37,123 37,335 37,190 37,293
Diluted 36,842 37,123 37,335 37,190 37,293
Shares used in calculation of non-GAAP net income (loss) per share attributable to Actua:
Basic 36,842 37,123 37,335 37,190 37,293
Diluted 36,842 37,123 37,335 37,190 37,293


Actua Corporation
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Continued)
(In thousands, except per share data)
(Unaudited)
20152016
Q1Q2Q3Q4Q1
GAAP net income (loss) attributable to Actua: $(14,765) $(15,282) $(13,882) $(52,151) $(14,331)
Add back:
Share-based compensation 7,222 7,121 6,661 $6,030 5,043
Amortization of intangibles 4,016 3,706 3,728 3,801 4,064
Impairment related and other costs 532 663 228 39,155 231
Transaction expenses 70 180 108 92
Other (income) loss, net (1,537) 425 144 (204) 156
Acquired businesses' deferred revenue 677 678 557 505 476
Impact on non-cash income tax benefit items 34
Interest expense (income), net 18 (4) 2 2 (2)
Income tax expense (current/cash only) 143 1 41 41 3
Depreciation 1,224 1,123 1,076 1,072 878
Adjusted EBITDA $(2,366) $(1,389) $(1,337) $(1,749) $(3,390)
GAAP Cost of revenue $9,732 $9,783 $9,627 $10,087 $10,192
Share-based compensation 26 $29 $48 $54 41
Adjusted Cost of revenue $9,706 $9,754 $9,579 $10,033 $10,151
GAAP Sales and marketing $11,236 $12,163 $12,945 $12,070 $13,159
Share-based compensation 58 79 173 118 104
Adjusted Sales and marketing $11,178 $12,084 $12,772 $11,952 $13,055
GAAP General and administrative $15,936 $15,966 $14,440 $16,015 $14,496
Share-based compensation 7,093 6,887 6,270 5,717 4,774
Adjusted General and administrative $8,843 $9,079 $8,170 $10,298 $9,722
GAAP Research and development $7,093 $7,373 $7,612 $7,090 $7,550
Share-based compensation 45 52 170 141 124
Adjusted Research and development $7,048 $7,321 $7,442 $6,949 $7,426

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 quarterly earnings presentations), (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 quarterly earnings presentations), (3) Adjusted EBITDA, (4) Adjusted Cost of revenue, (5) Adjusted Sales and marketing, (6) Adjusted General and administrative and (7) Adjusted Research and development. 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.

  • 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 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.

Adjusted EBITDA 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 and revaluation of contingent consideration, 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.

  • 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.

  • Interest expense (income), net. Actua excludes income and expense from interest as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business.

  • Income tax expense (current/cash only). Actua excludes the impact of any current, cash income tax expense as Actua believes it is useful for investors to understand the effect of this item and does not consider them a part of ongoing operating results when assessing the performance of its business.

  • Depreciation. Actua excludes depreciation expense as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business.

Adjusted Cost of revenue excludes from GAAP Cost of revenue operating expenses the following item:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the cost of revenue category on Actua's statements of operations 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.

Adjusted Sales and marketing excludes from GAAP Sales and marketing operating expenses the following item:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the sales and marketing category on Actua's statements of operations 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.

Adjusted General and administrative excludes from GAAP General and administrative operating expenses the following item:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the general and administrative category on Actua's statements of operations 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.

Adjusted Research and development excludes from GAAP Research and development operating expenses the following item:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the research and development category on Actua's statements of operations 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.

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), non-GAAP net income (loss) per diluted share, adjusted EBITDA, adjusted cost of revenue, adjusted sales and marketing, adjusted general and administrative and adjusted research and development 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.


Investor inquiries: Karen Greene Actua Investor Relations 610.727.6900 IR@actua.com

Source:Actua Corporation