-
Leaf Group Properties Reach Nearly 52 Million Average Monthly
Unique Visitors in the U.S. during Q1
-
Q1 Marketplaces Revenue Grows 18% Year-over-Year
-
Q1 Livestrong.com Revenue Grows 45% Year-over-Year
-
Total Q1 Revenue of $27.2 Million
-
Leaf Group acquires home décor brand Deny Designs
SANTA MONICA, Calif.--(BUSINESS WIRE)--
Leaf Group Ltd. (NYSE: LFGR), a diversified Internet company comprised
of several marketplace and media properties, today reported financial
results for the first quarter ended March 31, 2017.
“We are excited to kick off 2017 with the third consecutive quarter of
revenue growth on a pro forma basis,” said Sean Moriarty, CEO of Leaf
Group. “Our Marketplaces business demonstrates the company’s positive
momentum, with Q1 Marketplaces revenue up 18% year-over-year.”
|
|
|
Financial Summary
|
|
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
March 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
Marketplaces revenue
|
|
|
$
|
15,876
|
|
|
|
$
|
13,462
|
|
|
Media revenue
|
|
|
|
11,362
|
|
|
|
|
13,507
|
|
|
Total revenue
|
|
|
$
|
27,238
|
|
|
|
$
|
26,969
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(10,018
|
)
|
|
|
$
|
(11,909
|
)
|
|
EPS - basic and diluted
|
|
|
$
|
(0.50
|
)
|
|
|
$
|
(0.59
|
)
|
|
Adjusted EBITDA(1)
|
|
|
$
|
(4,425
|
)
|
|
|
$
|
(5,055
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
$
|
(7,699
|
)
|
|
|
$
|
(6,900
|
)
|
|
Free cash flow(1)
|
|
|
$
|
(8,715
|
)
|
|
|
$
|
(8,018
|
)
|
|
(1)
|
|
These non-GAAP financial measures are described below and reconciled
to their most directly comparable GAAP measures in the accompanying
tables.
|
|
|
|
|
Q1 2017 Financial Summary:
“Our continued focus in acquiring and retaining new customers in our
Marketplaces business and strategic optimization of our infrastructure
are improving topline growth and narrowing operating losses,” said
Rachel Glaser, Leaf Group’s CFO.
Leaf Group is comprised of two service offerings: Marketplaces and Media.
For the first quarter of 2017:
-
Total revenue increased year-over-year due to an 18% increase in
Marketplaces revenue, partially offset by a 16% decline in Media
revenue. On a pro forma basis eliminating the impact of the
dispositions of the Cracked business and certain other non-strategic
properties, total revenue increased 9% year-over-year.
-
Marketplaces revenue grew 18% year-over-year driven primarily by
increased traffic, higher conversion rates and new product
introductions.
-
Media revenue declined 16% year-over-year driven primarily by the
divestitures of certain media properties including Cracked, as well as
lower ad monetization yields and traffic declines on eHow. On a pro
forma basis eliminating the impact of the dispositions of the Cracked
business and certain other non-strategic properties, Media revenue
declined 1% year-over-year, and increased 1% quarter-over-quarter.
-
Adjusted EBITDA was $(4.4) million for the quarter, primarily
reflecting increased marketing efforts and additional headcount in the
Marketplaces business, partially offset by lower costs in the Media
business.
-
Cash and cash equivalents was $41.5 million at period end with no debt
outstanding. In May 2017, the company acquired Deny Designs for a
total purchase price of $12.0 million, including $6.7 million in cash
paid upon closing, the issuance of approximately 215,000 shares of
Leaf Group common stock and deferred consideration of $3.6 million in
cash.
Business Highlights:
-
On a consolidated basis, Leaf Group’s properties reached nearly 52
million average monthly unique visitors in the U.S. during Q1,
including more than 37 million average monthly mobile visitors
(source: Jan – Mar 2017 U.S. comScore).
-
Society6 revenue grew 17% year-over-year in Q1 driven by increased
traffic from paid and social media marketing, increased conversion
rates, a recent change in shipping terms and the release of three new
products in the first quarter. Society6 has continued to focus on
customer acquisition, with new customer growth of 18% year-over-year
in Q1.
-
Saatchi Art revenue increased 29% year-over-year in Q1, driven by
increasing conversion rates, including from the Art Advisory services
offered, and higher traffic. Saatchi Art continued to build its
customer base, with new and repeat customers both increasing more than
28% year-over-year during Q1.
-
The Media business continued to see the long-term benefits resulting
from recent strategy shifts and continues to launch editorial branded
sites. The Media team also launched Hunker.com, a new brand that
explores home design through the lens of personal identity and style.
Additionally, Livestrong.com revenue grew 45% in Q1 on a
year-over-year basis, driven both by a 15% increase in visits and
additional branded and programmatic sales revenue.
-
Deny Designs, an original home décor brand and manufacturer based in
Denver, Colorado, joined Leaf Group’s portfolio of marketplace
businesses in May 2017. Deny Design’s highly curated collection of
home goods and established relationships with retail distribution
partners create strategic synergies to strengthen Leaf Group’s
position within the home décor sector.
Operating Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
%
Change
|
|
|
Marketplaces Metrics:(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Transactions(2)
|
|
|
|
267,768
|
|
|
|
227,202
|
|
|
18
|
%
|
|
Average Revenue per Transaction(3)
|
|
|
$
|
59.28
|
|
|
$
|
59.25
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media Metrics:(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Visits(5) (in thousands)
|
|
|
|
695,543
|
|
|
|
785,979
|
|
|
(12)
|
%
|
|
Revenue per Visit (RPV)(6)
|
|
|
$
|
16.34
|
|
|
$
|
17.18
|
|
|
(5)
|
%
|
|
Video Views(7) (in thousands)
|
|
|
|
205,650
|
|
|
|
156,521
|
|
|
31
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Social Metrics (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Social Media Followers(8) - Marketplaces
|
|
|
|
2,222
|
|
|
|
N/A (9)
|
|
|
N/A
|
(9)
|
|
Social Media Followers(8) - Media
|
|
|
|
13,160
|
|
|
|
N/A (9)
|
|
|
N/A
|
(9)
|
|
(1)
|
|
Marketplaces Metrics do not include revenue or transactions related
to The Other Art Fair business.
|
|
(2)
|
|
Number of transactions is defined as the total number of
Marketplaces transactions successfully completed online by a
customer during the applicable period.
|
|
(3)
|
|
Average revenue per transaction is calculated by dividing
Marketplaces revenue for a period by the number of transactions
initiated in that period.
|
|
(4)
|
|
Media Metrics include visits and revenue generated by Cracked.com
and other non-core media properties prior to their respective
disposition dates and are not adjusted to be shown on a pro forma
basis.
|
|
(5)
|
|
Visits are defined as the total number of times users access the
company’s content across (a) one of its owned and operated online
properties and/or (b) one of its partners’ online properties, to the
extent that the visited partner web pages are hosted by the company.
In each case, breaks of access of at least 30 minutes constitute a
unique visit.
|
|
(6)
|
|
RPV is defined as Media revenue per one thousand visits.
|
|
(7)
|
|
Video Views are defined as the total number of views of all of the
company’s Media videos on Facebook and YouTube, or on Leaf Group
properties or third party sites via YouTube or any other embedded
video player, during the applicable period. The company includes in
this metric (i) views of videos published by any of the company’s
Media properties, including Livestrong.com, eHow, category-specific
sites and international sites; and (ii) videos viewed on multiple
YouTube channels affiliated with certain properties.
|
|
(8)
|
|
Social Media Followers are defined as the sum of all Facebook,
Pinterest, Instagram and Twitter followers, as well as all YouTube
subscribers, across Leaf Group's Marketplaces or Media properties,
as applicable, as of the last day of the relevant period. Social
Media Followers includes subscribers for multiple YouTube channels
affiliated with certain Leaf Group properties. Individuals are
counted more than once if they follow multiple properties or the
same property on multiple platforms, or if they subscribe to
multiple YouTube channels.
|
|
(9)
|
|
The company did not track Social Media Followers across all
platforms prior to the third quarter of 2016. As of March 31, 2016,
the company’s Marketplaces properties had 0.8 million total Social
Media Followers on Facebook and YouTube and the company’s Media
properties had 10.9 million total Social Media Followers on Facebook
and YouTube.
|
|
|
|
|
Conference Call and Webcast Information
Leaf Group will host a corresponding conference call and live webcast
today at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). To access the
conference call, dial 877-201-0168 (U.S./CAN) or 647-788-4901
(International) and reference conference ID 4797805. To participate on
the live call, analysts should dial-in at least 10 minutes prior to the
commencement of the call. A live webcast also will be available on the
Investor Relations section of Leaf Group’s corporate website at http://ir.leafgroup.com
and via replay beginning approximately two hours after the completion of
the call.
Use of Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared
and presented in accordance with generally accepted accounting
principles in the United States of America (“GAAP”), Leaf Group uses
certain non-GAAP financial measures, as described below. These non-GAAP
financial measures are presented to enhance the user’s overall
understanding of Leaf Group’s financial performance and should not be
considered a substitute for, or superior to, the financial information
prepared and presented in accordance with GAAP. The non-GAAP financial
measures presented in this release, together with the GAAP financial
results, are the primary measures used by the company’s management and
board of directors to understand and evaluate the company’s financial
performance and operating trends, including period-to-period
comparisons, because they exclude certain expenses and gains that
management believes are not indicative of the company’s core operating
results. Management also uses these measures to prepare and update the
company’s short and long term financial and operational plans, to
evaluate investment decisions, and in its discussions with investors,
commercial bankers, equity research analysts and other users of the
company’s financial statements. Accordingly, the company believes that
these non-GAAP financial measures provide useful information to
investors and others in understanding and evaluating the company’s
operating results in the same manner as management and in comparing
operating results across periods and to those of Leaf Group’s peer
companies.
The use of non-GAAP financial measures has certain limitations because
they do not reflect all items of income and expense, or cash flows, that
affect the company’s financial performance and operations. An additional
limitation of non-GAAP financial measures is that they do not have
standardized meanings, and therefore other companies, including peer
companies, may use the same or similarly named measures but exclude or
include different items or use different computations. Management
compensates for these limitations by reconciling these non-GAAP
financial measures to their most comparable GAAP financial measures in
the tables captioned “Reconciliations of Non-GAAP Financial Measures”
included at the end of this release. In addition to the non-GAAP
financial measures presented in this press release, the company is also
providing certain pro forma financial information to reflect the
dispositions of the Cracked business and certain other non-strategic
properties. Investors and others are encouraged to review the company’s
financial information in its entirety and not rely on a single financial
measure.
The company defines Adjusted earnings before interest, taxes,
depreciation and amortization (Adjusted EBITDA) as net income (loss)
excluding interest (income) expense, income tax expense (benefit), and
certain other non-cash or non-recurring items impacting net income
(loss) from time to time, principally comprised of depreciation and
amortization, stock-based compensation and acquisition, disposition and
realignment costs. Management believes that the exclusion of certain
expenses and gains in calculating Adjusted EBITDA provides a useful
measure for period-to-period comparisons of the company’s underlying
core revenue and operating costs that is focused more closely on the
current costs necessary to operate the company’s businesses and reflects
its ongoing business in a manner that allows for meaningful analysis of
trends. Management also believes that excluding certain non-cash charges
can be useful because the amount of such expenses is the result of
long-term investment decisions made in previous periods rather than
day-to-day operating decisions.
The company defines Free Cash Flow as net cash provided by (used
in) operating activities net of cash outflows from acquisition,
disposition and realignment activities; capital expenditures to acquire
property and equipment; and purchases of intangible assets. Management
believes that Free Cash Flow provides investors with useful information
to measure operating liquidity because it reflects the company’s
underlying cash flows from recurring operating activities after
investing in capital assets and intangible assets. Free Cash Flow is
used by management, and may also be useful for investors, to assess the
company’s ability to generate cash flow for a variety of strategic
opportunities, including reinvesting in the business, pursuing new
business opportunities and potential acquisitions, paying dividends and
repurchasing shares.
About Leaf Group
Leaf Group Ltd. (NYSE: LFGR) is a diversified Internet company that
builds platforms across its marketplaces (Society6, Saatchi Art and The
Other Art Fair) and various media properties (including Livestrong.com,
eHow and Cuteness) to enable communities of creators to reach passionate
audiences in large and growing lifestyle categories. In addition, Leaf
Group’s diverse advertising offerings help brands and publishers find
innovative ways to engage with their customers. For more information
about Leaf Group, visit www.leafgroup.com.
Cautionary Information Regarding Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. The
forward-looking statements set forth in this press release include
statements regarding potential synergies achieved from acquisitions and
our future financial performance. In addition, statements containing
words such as “guidance,” “may,” “believe,” “anticipate,” “expect,”
“intend,” “plan,” “project,” “projections,” “business outlook,” and
“estimate” or similar expressions constitute forward-looking statements.
Actual results may differ materially from the results predicted, and
reported results should not be considered an indication of future
performance. These forward-looking statements involve risks and
uncertainties regarding the company’s future financial performance, and
are based on current expectations, estimates and projections about the
company’s industry, financial condition, operating performance and
results of operations, including certain assumptions related thereto.
Potential risks and uncertainties that could affect the company’s
operating and financial results are described in Leaf Group’s annual
report on Form 10-K for the fiscal year ending December 31, 2016 filed
with the Securities and Exchange Commission (http://www.sec.gov)
on February 23, 2017, as such risks and uncertainties are updated in
Leaf Group’s quarterly reports on Form 10-Q filed with the Securities
and Exchange Commission, including, without limitation, information
under the captions “Risk Factors” and “Management's Discussion and
Analysis of Financial Condition and Results of Operations.” These risks
and uncertainties include, among others: the company’s ability to
successfully drive and increase traffic to its media and marketplaces
properties; the company’s ability to attract new customers and artists
to its marketplaces and successfully grow its marketplaces business; the
impact of increasing mobile usage on the company’s marketplaces
business; changes in the methodologies of internet search engines,
including ongoing algorithmic changes made by Google, Bing and Yahoo!;
the effects of shifting consumption of media content and online shopping
from desktop to mobile devices and/or social media platforms; the
potential impact on advertising revenue of lower ad unit rates, a
reduction in online advertising spending, a loss of advertisers, lower
advertising yields and/or increased availability of ad blocking
software, particularly on mobile devices; the impact of certain changes
made to the business model for the company’s media properties, including
the ability to successfully launch, manage and grow new vertically
focused web properties; our ability to effectively integrate, manage,
operate and grow our recently acquired Deny Designs marketplace
business; the company’s dependence on material agreements with a
specific business partner for a significant portion of its revenue; the
company’s ability to successfully expand its current lines of business
and grow new lines of business; changes in amortization or depreciation
expense due to a variety of factors; potential write downs, reserves
against or impairment of assets including receivables, goodwill,
intangibles (including media content) or other assets; and the company’s
ability to retain key personnel. From time to time, the company may
consider acquisitions or divestitures that, if consummated, could be
material. Any forward-looking statements regarding financial metrics are
based upon the assumption that no such acquisition or divestiture is
consummated during the relevant periods. If an acquisition or
divestiture were consummated, actual results could differ materially
from any forward-looking statements. The company does not intend to
revise or update the information set forth in this press release, except
as required by law, and may not provide this type of information in the
future.
|
|
|
Leaf Group Ltd. and Subsidiaries
|
|
Unaudited Condensed Consolidated Statements of Operations
|
|
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
March 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Product revenue
|
|
|
$
|
14,584
|
|
|
|
$
|
12,464
|
|
|
Service revenue
|
|
|
|
12,654
|
|
|
|
|
14,505
|
|
|
Total revenue
|
|
|
|
27,238
|
|
|
|
|
26,969
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Product costs
|
|
|
|
10,534
|
|
|
|
|
8,507
|
|
|
Service costs (exclusive of amortization of intangible assets shown
separately below)(1)(2)
|
|
|
|
5,790
|
|
|
|
|
8,039
|
|
|
Sales and marketing(1)(2)
|
|
|
|
6,724
|
|
|
|
|
6,127
|
|
|
Product development(1)(2)
|
|
|
|
4,750
|
|
|
|
|
5,614
|
|
|
General and administrative(1)(2)
|
|
|
|
7,653
|
|
|
|
|
8,530
|
|
|
Amortization of intangible assets
|
|
|
|
1,837
|
|
|
|
|
3,032
|
|
|
Total operating expenses
|
|
|
|
37,288
|
|
|
|
|
39,849
|
|
|
Loss from operations
|
|
|
|
(10,050
|
)
|
|
|
|
(12,880
|
)
|
|
Interest income
|
|
|
|
43
|
|
|
|
|
2
|
|
|
Interest expense
|
|
|
|
(2
|
)
|
|
|
|
—
|
|
|
Other income (expense), net
|
|
|
|
3
|
|
|
|
|
980
|
|
|
Loss before income taxes
|
|
|
|
(10,006
|
)
|
|
|
|
(11,898
|
)
|
|
Income tax expense
|
|
|
|
(12
|
)
|
|
|
|
(11
|
)
|
|
Net loss
|
|
|
$
|
(10,018
|
)
|
|
|
$
|
(11,909
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
|
|
|
$
|
(0.50
|
)
|
|
|
$
|
(0.59
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares - basic and diluted
|
|
|
|
19,942
|
|
|
|
|
20,213
|
|
|
__________________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Depreciation expense included in the above line items:
|
|
|
|
|
|
|
|
|
|
Service costs
|
|
|
$
|
743
|
|
|
|
$
|
1,464
|
|
|
Sales and marketing
|
|
|
|
9
|
|
|
|
|
13
|
|
|
Product development
|
|
|
|
23
|
|
|
|
|
41
|
|
|
General and administrative
|
|
|
|
655
|
|
|
|
|
1,181
|
|
|
Total depreciation
|
|
|
$
|
1,430
|
|
|
|
$
|
2,699
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Stock-based compensation included in the above line
items(3):
|
|
|
|
|
|
|
|
|
|
Service costs
|
|
|
$
|
155
|
|
|
|
$
|
262
|
|
|
Sales and marketing
|
|
|
|
201
|
|
|
|
|
208
|
|
|
Product development
|
|
|
|
396
|
|
|
|
|
399
|
|
|
General and administrative
|
|
|
|
1,326
|
|
|
|
|
1,050
|
|
|
Total stock-based compensation
|
|
|
$
|
2,078
|
|
|
|
$
|
1,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leaf Group Ltd. and Subsidiaries
|
|
Unaudited Condensed Consolidated Balance Sheets
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
41,504
|
|
|
|
$
|
50,864
|
|
|
Accounts receivable, net
|
|
|
|
6,713
|
|
|
|
|
6,849
|
|
|
Prepaid expenses and other current assets
|
|
|
|
6,250
|
|
|
|
|
8,139
|
|
|
Total current assets
|
|
|
|
54,467
|
|
|
|
|
65,852
|
|
|
Property and equipment, net
|
|
|
|
11,175
|
|
|
|
|
11,503
|
|
|
Intangible assets, net
|
|
|
|
9,491
|
|
|
|
|
11,273
|
|
|
Goodwill
|
|
|
|
11,177
|
|
|
|
|
11,167
|
|
|
Other assets
|
|
|
|
1,315
|
|
|
|
|
1,457
|
|
|
Total assets
|
|
|
$
|
87,625
|
|
|
|
$
|
101,252
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
2,449
|
|
|
|
$
|
2,451
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
11,547
|
|
|
|
|
15,017
|
|
|
Deferred revenue
|
|
|
|
1,624
|
|
|
|
|
2,180
|
|
|
Total current liabilities
|
|
|
|
15,620
|
|
|
|
|
19,648
|
|
|
Deferred tax liability
|
|
|
|
51
|
|
|
|
|
108
|
|
|
Other liabilities
|
|
|
|
1,593
|
|
|
|
|
1,746
|
|
|
Total liabilities
|
|
|
|
17,264
|
|
|
|
|
21,502
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
2
|
|
|
|
|
2
|
|
|
Additional paid-in capital
|
|
|
|
513,819
|
|
|
|
|
513,139
|
|
|
Treasury stock
|
|
|
|
(35,706
|
)
|
|
|
|
(35,641
|
)
|
|
Accumulated other comprehensive loss
|
|
|
|
(98
|
)
|
|
|
|
(112
|
)
|
|
Accumulated deficit
|
|
|
|
(407,656
|
)
|
|
|
|
(397,638
|
)
|
|
Total stockholders’ equity
|
|
|
|
70,361
|
|
|
|
|
79,750
|
|
|
Total liabilities and stockholders’ equity
|
|
|
$
|
87,625
|
|
|
|
$
|
101,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leaf Group Ltd. and Subsidiaries
|
|
Unaudited Condensed Consolidated Statements of Cash Flows
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(10,018
|
)
|
|
|
$
|
(11,909
|
)
|
|
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
3,267
|
|
|
|
|
5,731
|
|
|
Deferred income taxes
|
|
|
|
(57
|
)
|
|
|
|
—
|
|
|
Stock-based compensation
|
|
|
|
2,078
|
|
|
|
|
1,919
|
|
|
Gain on disposal of businesses and online properties
|
|
|
|
—
|
|
|
|
|
(973
|
)
|
|
Other
|
|
|
|
1
|
|
|
|
|
(31
|
)
|
|
Change in operating assets and liabilities, net of effect of
acquisitions and disposals:
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
134
|
|
|
|
|
1,872
|
|
|
Prepaid expenses and other current assets
|
|
|
|
903
|
|
|
|
|
462
|
|
|
Other long-term assets
|
|
|
|
1
|
|
|
|
|
(12
|
)
|
|
Accounts payable
|
|
|
|
40
|
|
|
|
|
(53
|
)
|
|
Accrued expenses and other liabilities
|
|
|
|
(3,493
|
)
|
|
|
|
(3,675
|
)
|
|
Deferred revenue
|
|
|
|
(555
|
)
|
|
|
|
(231
|
)
|
|
Net cash used in operating activities
|
|
|
|
(7,699
|
)
|
|
|
|
(6,900
|
)
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
|
(1,058
|
)
|
|
|
|
(1,480
|
)
|
|
Purchases of intangible assets
|
|
|
|
(46
|
)
|
|
|
|
(4
|
)
|
|
Cash received from disposal of businesses and online properties, net
of cash disposed
|
|
|
|
385
|
|
|
|
|
650
|
|
|
Restricted deposits
|
|
|
|
742
|
|
|
|
|
136
|
|
|
Other
|
|
|
|
1
|
|
|
|
|
31
|
|
|
Net cash provided by (used in) investing activities
|
|
|
|
24
|
|
|
|
|
(667
|
)
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds from exercises of stock options and purchases under ESPP
|
|
|
|
309
|
|
|
|
|
1
|
|
|
Repurchases of common stock
|
|
|
|
(65
|
)
|
|
|
|
—
|
|
|
Taxes paid on net share settlements of restricted stock units
|
|
|
|
(1,791
|
)
|
|
|
|
(492
|
)
|
|
Cash paid for acquisition holdback
|
|
|
|
(119
|
)
|
|
|
|
—
|
|
|
Other
|
|
|
|
(16
|
)
|
|
|
|
—
|
|
|
Net cash used in financing activities
|
|
|
|
(1,682
|
)
|
|
|
|
(491
|
)
|
|
Effect of foreign currency on cash and cash equivalents
|
|
|
|
(3
|
)
|
|
|
|
1
|
|
|
Change in cash and cash equivalents
|
|
|
|
(9,360
|
)
|
|
|
|
(8,057
|
)
|
|
Cash and cash equivalents, beginning of period
|
|
|
|
50,864
|
|
|
|
|
38,570
|
|
|
Cash and cash equivalents, end of period
|
|
|
$
|
41,504
|
|
|
|
$
|
30,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leaf Group Ltd. and Subsidiaries
|
|
Reconciliations of Non-GAAP Financial Measures
|
|
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(10,018
|
)
|
|
|
$
|
(11,909
|
)
|
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) expense
|
|
|
|
12
|
|
|
|
|
11
|
|
|
Interest (income) expense, net
|
|
|
|
(41
|
)
|
|
|
|
(2
|
)
|
|
Other (income) expense, net(1)
|
|
|
|
(3
|
)
|
|
|
|
(980
|
)
|
|
Depreciation and amortization(2)
|
|
|
|
3,267
|
|
|
|
|
5,731
|
|
|
Stock-based compensation(3)
|
|
|
|
2,078
|
|
|
|
|
1,919
|
|
|
Acquisition, disposition and realignment costs(4)
|
|
|
|
280
|
|
|
|
|
175
|
|
|
Adjusted EBITDA
|
|
|
$
|
(4,425
|
)
|
|
|
$
|
(5,055
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow:
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
$
|
(7,699
|
)
|
|
|
$
|
(6,900
|
)
|
|
Purchases of property and equipment
|
|
|
|
(1,058
|
)
|
|
|
|
(1,480
|
)
|
|
Purchases of intangible assets
|
|
|
|
(46
|
)
|
|
|
|
(4
|
)
|
|
Acquisition, disposition and realignment cash flows(4)
|
|
|
|
88
|
|
|
|
|
366
|
|
|
Free Cash Flow
|
|
|
$
|
(8,715
|
)
|
|
|
$
|
(8,018
|
)
|
|
(1)
|
|
Primarily consists of income from the disposition of certain
non-core media properties.
|
|
(2)
|
|
Represents depreciation expense of the company’s long-lived tangible
assets and amortization expense of its finite-lived intangible
assets, including amortization expense related to its investment in
media content assets as included in the company’s GAAP results of
operations.
|
|
(3)
|
|
Represents the fair value of stock-based awards granted to
employees, as included in the company’s GAAP results of operations.
|
|
(4)
|
|
Represents such items, when applicable, as (a) legal, accounting and
other professional fees directly attributable to acquisition,
disposition or corporate realignment activities and (b) employee
severance and other payments attributable to acquisition,
disposition or corporate realignment activities.
|
|
|
|
|
|
|
|
Leaf Group Ltd. and Subsidiaries
|
|
Reconciliations of Pro Forma Financial Measures
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2017
|
|
|
|
|
Revenue
|
|
|
Pro Forma
Adjustments(1)
|
|
|
Pro Forma Revenue
|
|
Revenue - Pro Forma:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketplaces
|
|
|
$
|
15,876
|
|
|
$
|
—
|
|
|
$
|
15,876
|
|
Media
|
|
|
|
11,362
|
|
|
|
—
|
|
|
|
11,362
|
|
Total Revenue
|
|
|
$
|
27,238
|
|
|
$
|
—
|
|
|
$
|
27,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2016
|
|
|
|
|
Revenue
|
|
|
Pro Forma
Adjustments(1)
|
|
|
Pro Forma Revenue
|
|
Marketplaces
|
|
|
$
|
13,462
|
|
|
$
|
—
|
|
|
$
|
13,462
|
|
Media
|
|
|
|
13,507
|
|
|
|
(2,076)
|
|
|
|
11,431
|
|
Total Revenue
|
|
|
$
|
26,969
|
|
|
$
|
(2,076)
|
|
|
$
|
24,893
|
|
(1)
|
|
Represents revenue associated with the divested Cracked business and
certain other divested non-strategic properties.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170504006482/en/
Source: Leaf Group Ltd.