OPENTABLE INC 
By 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.
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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 Twelve Months
Ending Ending
June 30, 2014 December 31,
2014
------------- -------------
Range of Range of
Estimate 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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SOURCE OpenTable, Inc.
