Friday, October 31, 2014 Last update: 9:03 AM
FreshNews.com - Covering Large & Obscure Tech Companies Since 1996

RetailMeNot Announces Second Quarter 2014 Financial Results

Companies mentioned in this article: RetailMeNot, Inc.

AUSTIN, Texas, Aug. 4, 2014 /PRNewswire/ -- RetailMeNot, Inc. (NASDAQ:SALE), which operates the world's largest marketplace for digital offers, reported its financial results for the second quarter ended June 30, 2014.

Second Quarter Key Metrics and Financial Results Highlights

(All comparisons are made to the second quarter of 2013)

    --  Net revenues were $59.5 million, an increase of 37% compared to $43.4
        million.
    --  Organic net revenues increased 34%.  Organic net revenues exclude net
        revenues from acquired businesses not owned during both comparative
        periods.
    --  Net revenues from international markets totaled $13.5 million, up 57%
        compared to $8.6 million and represented 23% of total net revenues.
    --  Mobile net revenues totaled $10.7 million, up 114% compared to $5.0
        million and represented 18% of total net revenues.  Mobile net revenues
        include net revenues from our mobile websites and applications and our
        in-store product.
    --  Net income was $4.3 million, down 16% compared to net income of $5.1
        million.  On a year-over year basis, the decline in net income is a
        result of increased investment primarily in product development, sales
        and marketing, and higher stock-based compensation expense.
    --  Adjusted EBITDA was $19.7 million, up 25%, representing 33% of net
        revenues, compared to $15.7 million.
    --  Visits grew 27% to 154.2 million, compared to 121.2 million.

"Our results continue to demonstrate the value of our multi-channel services that help consumers save money and enable retailers to increase sales in the United States and international markets," said Cotter Cunningham, CEO and Founder, RetailMeNot, Inc. "Overall we saw strong growth in consumer usage and engagement across platforms. We believe that from discovery to purchase, we offer retailers high ROI channels that help them turn shoppers into buyers."

Second Quarter Business Highlights and Key Strategic Announcements

As of June 30, 2014, 18.5 million mobile apps have been downloaded globally among RetailMeNot.com, Deals2Buy.com, VoucherCodes.co.uk, Poulpeo.com, and Bons-de-Reduction.com, up from 7.1 million as of June 30, 2013. During the second quarter, mobile app sessions totaled 169.2 million, versus 26.5 million during the second quarter of 2013. App sessions are defined as a combination of user initiated app launches and push notifications and geo-fence triggered alerts delivered by us to mobile devices. As of June 30, 2014, RetailMeNot had 22.9 million global subscribers to a newsletter or store alert, up 98% year-over-year.

Quarterly Conference Call

RetailMeNot will host a webcast to discuss its second quarter 2014 financial results and business outlook today at 4:30 p.m. Eastern Time (3:30 p.m. Central Time). A live webcast of the conference call can be accessed within the investor relations section of the RetailMeNot website at http://investor.retailmenot.com. This webcast will contain forward-looking statements and other material information regarding the company's financial and operating results. Additionally, in advance of the conference call RetailMeNot will post second quarter 2014 Management Commentary that can be accessed at http://investor.retailmenot.com.

Following completion of the call, a recorded replay of the webcast will be available on the website at http://investor.retailmenot.com. For those without access to the Internet, a replay of the call will be available beginning at 6:30 p.m. Central Time on August 4, 2014 through August 11, 2014 at 11:59 p.m. Central Time. To listen to the telephone replay, call (855) 859-2056 within the US or (404) 537-3406 internationally, access code 66435482.

About RetailMeNot, Inc.

RetailMeNot, Inc. (www.retailmenot.com/corp/) operates the world's largest marketplace for digital offers. The company enables consumers across the globe to find hundreds of thousands of digital offers from retailers and brands. In 2013, RetailMeNot, Inc. experienced more than 560 million visits to its websites and estimates that $3.5 billion in paid retailer sales were attributable to consumer traffic from digital offers in its marketplace. Its mobile apps have been downloaded over 18.5 million times. The RetailMeNot, Inc. portfolio includes www.RetailMeNot.com, the world's largest marketplace for digital offers in the United States; www.RetailMeNot.ca in Canada; www.VoucherCodes.co.uk, the largest marketplace for digital offers in the United Kingdom; www.Deals.com in Germany; www.Actiepagina.nl, a leading digital offer site in the Netherlands; http://www.Bons-de-Reduction.com and www.Ma-Reduc.com, leading digital offer sites in France; www.Poulpeo.com, a leading digital offer site with cash back in France; and www.Deals2Buy.com, a leading digital offer site in North America. RetailMeNot, Inc. is listed on the NASDAQ stock exchange under the ticker symbol "SALE." Investors interested in learning more about the company can visit: http://investor.retailmenot.com/.

Be sure to "like" RetailMeNot, Inc. on Facebook and follow the company via Twitter @retailmenotinc.

Operating Metrics

Visits. RetailMeNot defines a visit as a group of interactions that take place on one of RetailMeNot's websites from computers, smartphones, tablets or other mobile devices within a given time frame as measured by Google Analytics, a product that provides digital marketing intelligence. A single visit can contain multiple page views, events, social interactions, custom variables and e-commerce transactions. A single visitor can open multiple visits. Visits can occur on the same day, or over several days, weeks or months. As soon as one visit ends, there is then an opportunity to start a new visit. A visit ends either through the passage of time or a campaign change, with a campaign generally meaning arrival via search engine, referring site or campaign-tagged information. A visit ends through passage of time either after 30 minutes of inactivity or at midnight Pacific Time. A visit ends through a campaign change if a visitor arrives via one campaign or source, leaves the site, and then returns via another campaign or source. Visits for the period do not include interactions through our mobile applications.

Non-GAAP Financial Measures

To provide investors with additional information regarding RetailMeNot's financial results, RetailMeNot has disclosed in the table below and elsewhere herein adjusted EBITDA, a non-GAAP financial measure. RetailMeNot has provided a reconciliation below of adjusted EBITDA to net income, the most directly comparable GAAP financial measure. RetailMeNot defines adjusted EBITDA as net income plus depreciation, amortization of intangible assets, stock-based compensation expense, third-party acquisition-related costs, other non-cash operating expenses (including compensation arrangements entered into in connection with acquisitions), net interest expense, other non-operating income or expense (including changes in fair value of warrant liabilities and contingent consideration) and income taxes, net of any foreign exchange income or expense.

RetailMeNot discloses adjusted EBITDA because it is a key measure used by RetailMeNot and its board of directors to understand and evaluate RetailMeNot's financial and operating performance, establish budgets and operational goals and as an element in determining executive compensation. RetailMeNot believes it also facilitates period-to-period comparisons of operations that could otherwise be masked by the effect of the expenses that RetailMeNot excludes in this non-GAAP financial measure and facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. However, adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of RetailMeNot's results as reported under GAAP. Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income and RetailMeNot's other GAAP results.

Forward-looking Statements

This release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included herein regarding RetailMeNot's strategy, future operations, future financial position, future net revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "seek," "should," "target," "will," "would" and similar expressions (or the negative of these terms) are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about management's estimates regarding future net revenues and financial performance, visits and other statements about management's beliefs, intentions or goals. RetailMeNot may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on RetailMeNot's forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to, risks related to RetailMeNot's ability to manage its growth, including accurately planning and forecasting its financial results; RetailMeNot's ability to attract visitors to its websites from search engines; RetailMeNot's ability to attract and retain paid retailers and maintain its relationships with performance marketing networks; RetailMeNot's ability to obtain and maintain digital offer content and maintain the positive perception of its brand; RetailMeNot's need to monetize digital offers available through its mobile solutions; the competitive environment for RetailMeNot's business; changes in consumer sentiment regarding RetailMeNot's use of cookies; RetailMeNot's need to manage regulatory, tax and litigation risks; RetailMeNot's ability to protect consumer data and its intellectual property; RetailMeNot's ability to manage international business uncertainties; the impact and integration of recent and future acquisitions; and other risks and potential factors that could affect RetailMeNot's business and financial results identified in RetailMeNot's filings with the Securities and Exchange Commission (the "SEC"), including its annual report on Form 10-K filed with the SEC on February 18, 2014 and its most recent quarterly report on Form 10-Q filed with the SEC on May 7, 2014. Additional information will also be set forth in RetailMeNot's future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that RetailMeNot makes with the SEC. RetailMeNot does not intend or undertake any duty to release publicly any updates or revisions to any forward-looking statements contained herein.

Investor Contact
Michael Magaro
RetailMeNot, Inc.
mmagaro@rmn.com
(512) 777-2899

Media Contact
Brian Hoyt
RetailMeNot, Inc.
bhoyt@rmn.com
(512) 777-2957

-- RMNSALE-F -


                                                       RetailMeNot, Inc.

                                        Condensed Consolidated Statements of Operations

                                       (Unaudited, in thousands, except per share data)


                                                               Three Months Ended June 30,                      Six Months Ended June 30,
                                                               ---------------------------                      -------------------------

                                                                       2014                      2013                      2014                  2013
                                                                       ----                      ----                      ----                  ----


    Net revenues                                                    $59,506                   $43,401                  $120,776               $83,962

    Costs and expenses:

    Cost of net revenues (1)                                          4,648                     2,872                     9,078                 5,460

    Product development (1)                                          12,980                     6,939                    23,686                12,888

    Sales and marketing (1)                                          19,195                    14,085                    40,367                25,275

    General and administrative
     (1)                                                            10,291                     7,303                    19,638                12,669

    Amortization of purchased
     intangible assets                                                3,194                     2,787                     6,637                 5,618

    Other operating expenses                                          1,112                       428                     2,460                   858
                                                                      -----                       ---                     -----                   ---

    Total costs and expenses                                         51,420                    34,414                   101,866                62,768
                                                                     ------                    ------                   -------                ------

    Income from operations                                            8,086                     8,987                    18,910                21,194


    Other income (expense):

    Interest expense, net                                             (494)                    (605)                  (1,025)              (1,254)

    Other income (expense), net                                       (328)                       42                     (300)                 (22)
                                                                       ----                       ---                      ----                   ---


    Income before income taxes                                        7,264                     8,424                    17,585                19,918

    Provision for income taxes                                      (2,938)                  (3,301)                  (7,184)              (7,820)
                                                                     ------                    ------                    ------                ------


    Net income                                                        4,326                     5,123                    10,401                12,098
                                                                      =====                     =====                    ======                ======


    Preferred stock dividends on
     participating preferred
     stock                                                                -                  (6,122)                        -             (12,176)
                                                                        ---                   ------                       ---              -------


    Total undistributed earnings
     (loss)                                                           4,326                     (999)                   10,401                  (78)

    Undistributed earnings
     allocated to participating
     preferred stock                                                      -                        -                        -                    -
                                                                        ---                      ---                      ---                  ---


    Net income (loss)
     attributable to common
     stockholders                                                     4,326                     (999)                   10,401                  (78)
                                                                      =====                      ====                    ======                   ===


    Net income (loss) per share attributable to common
     stockholders:

     Basic                                                            $0.08                    -$0.68                     $0.19                -$0.06
                                                                      =====                    ======                     =====                ======

     Diluted                                                          $0.08                    -$0.68                     $0.19                -$0.06
                                                                      =====                    ======                     =====                ======


    Weighted average number of shares used in computing net
     income (loss) per share:

     Basic                                                           53,791                     1,466                    53,472                 1,234
                                                                     ======                     =====                    ======                 =====

     Diluted                                                         55,377                     1,466                    55,455                 1,234
                                                                     ======                     =====                    ======                 =====



                                                       RetailMeNot, Inc.

                                  Condensed Consolidated Statements of Operations (continued)

                                                   (Unaudited, in thousands)


                                                               Three Months Ended June 30,                   Six Months Ended June 30,
                                                               ---------------------------                   -------------------------

                                                                       2014                      2013                      2014                  2013
                                                                       ----                      ----                      ----                  ----

     (1) Includes stock-based compensation as follows:

      Cost of net revenues                                             $470                      $135                      $811                  $293

      Product development                                             1,896                       504                     3,220                 1,044

      Sales and marketing                                             1,476                       516                     2,714                 1,008

      General and administrative                                      2,524                     1,156                     4,635                 2,106
                                                                      -----                     -----                     -----                 -----

     Total                                                           $6,366                    $2,311                   $11,380                $4,451
                                                                     ======                    ======                   =======                ======



                                                       RetailMeNot, Inc.

    Calculation of Weighted-Average Basic and Diluted Shares Assuming Conversion of Redeemable Convertible Preferred Stock

                                                   (Unaudited, in thousands)


                                                               Three Months Ended June 30,                   Six Months Ended June 30,
                                                               ---------------------------                   -------------------------

                                                                       2014                      2013                      2014                  2013
                                                                       ----                      ----                      ----                  ----

    Basic:

         GAAP basic weighted-average
          common shares                                              53,791                     1,466                    53,472                 1,234

         Add: Weighted-average
          shares from assumed
          conversion of redeemable
          convertible preferred stock                                     -                   44,180                         -               44,180
                                                                        ---                   ------                       ---               ------

    Basic weighted-average
     common shares (as converted
     basis)                                                          53,791                    45,646                    53,472                45,414
                                                                     ======                    ======                    ======                ======


    Diluted:

         Basic weighted-average
          common shares (as converted
          basis)                                                     53,791                    45,646                    53,472                45,414

         Add: Dilutive effect of
          stock options                                               1,586                     1,540                     1,983                 1,608

         Add: Dilutive effect of
          common stock warrants                                           -                        -                        -                  202
                                                                        ---                      ---                      ---                  ---

    Diluted weighted-average
     common shares (as converted
     basis)                                                          55,377                    47,186                    55,455                47,224
                                                                     ======                    ======                    ======                ======



                                                       RetailMeNot, Inc.

                                               Reconciliation of Adjusted EBITDA

                                                   (Unaudited, in thousands)


                                                               Three Months Ended June 30,                   Six Months Ended June 30,
                                                               ---------------------------                   -------------------------

                                                                       2014                      2013                      2014                  2013
                                                                       ----                      ----                      ----                  ----


     Net income                                                      $4,326                    $5,123                   $10,401               $12,098

     Depreciation and
      amortization                                                    4,086                     3,266                     8,290                 6,529

     Stock-based compensation
      expense                                                         6,366                     2,311                    11,380                 4,451

     Third party acquisition-
      related costs                                                       -                      723                         -                  917

     Other operating expenses                                         1,112                       428                     2,460                   858

     Interest expense, net                                              494                       605                     1,025                 1,254

     Other income (expense), net                                        328                      (42)                      300                    22

     Provision for income taxes                                       2,938                     3,301                     7,184                 7,820
                                                                      -----                     -----                     -----                 -----

     Adjusted EBITDA                                                $19,650                   $15,715                   $41,040               $33,949
                                                                    =======                   =======                   =======               =======


                                                            RetailMeNot, Inc.

                                                  Condensed Consolidated Balance Sheets

                                                        (Unaudited, in thousands)


                                                                Jun-14                  Dec-13
                                                                ------                  ------

     Assets

     Current assets:

     Cash and
      cash
      equivalents                                                           $213,905            $165,881

     Accounts
      receivable,
      net                                                                     41,881              59,286

     Prepaids
      and other
      current
      assets,
      net                                                                     15,355              10,661
                                                                              ------              ------

     Total
      current
      assets                                                                 271,141             235,828


     Property
      and
      equipment,
      net                                                                     12,897              10,317

     Intangible
      assets,
      net                                                                     74,166              80,813

     Goodwill                                                                179,562             179,659

     Other
      assets,
      net                                                                      5,790               5,465
                                                                               -----               -----

     Total
      assets                                                                $543,556            $512,082
                                                                            ========            ========


     Liabilities, Redeemable Convertible Preferred
      Stock
     and Stockholders' Equity (Deficit)

     Current liabilities:

     Accounts
      payable                                                                 $4,267              $6,217

     Accrued
      compensation
      and
      benefits                                                                 7,455               9,875

     Accrued
      expenses
      and other
      current
      liabilities                                                              6,339               5,586

     Income
      taxes
      payable                                                                  4,098               4,835

     Current
      maturities
      of long
      term debt                                                               13,269              15,063
                                                                              ------              ------

     Total
      current
      liabilities                                                             35,428              41,576


     Deferred
      tax
      liability-
      -
      noncurrent                                                               4,580               8,796

     Long term
      debt                                                                    22,750              26,250

     Other
      noncurrent
      liabilities                                                              6,227               4,151
                                                                               -----               -----

     Total
      liabilities                                                             68,985              80,773


     Stockholders' equity (deficit):

     Common
      stock                                                                       54                  53

     Additional
      paid-In
      capital                                                                499,858             467,461

      Accumulated
      other
      comprehensive
      income                                                                   2,000               1,538

      Accumulated
      deficit                                                               (27,341)           (37,743)

      Total
       stockholders'
       equity
       (deficit)                                                             474,571             431,309
                                                                             -------             -------

      Liabilities,
      Redeemable
      Convertible
      Preferred
      Stock                                                                 $543,556            $512,082
     and Stockholders' Equity (Deficit)
                                                                                                    ===


                                                         RetailMeNot, Inc.

                                          Condensed Consolidated Statements of Cash Flows

                                                     (Unaudited, in thousands)


                                                               Three Months Ended June 30,          Six Months June 30,
                                                               ---------------------------          -------------------

                                                                       2014                    2013                2014       2013
                                                                       ----                    ----                ----       ----

     Cash flows from operating activities:

    Net income                                                       $4,326                  $5,123             $10,401    $12,098

    Adjustments to reconcile net income to cash provided by
     operating activities:

     Depreciation and
      amortization expense                                            4,086                   3,266               8,290      6,529

     Stock based compensation
      expense                                                         6,366                   2,311              11,380      4,451

     Excess income tax benefit
      from employee stock-
      based awards                                                  (2,209)                      -           (10,523)         -

     Deferred income tax
      benefit (expense)                                             (1,784)                (1,028)            (1,788)     (805)

     Non-cash interest expense                                           96                     113                 193        235

     Amortization of deferred
      compensation                                                    1,112                     430               2,459        860

     Other non-cash expense
      and fair value change in
      liabilities, net                                                  308                     121                 363        157

     Provision for doubtful
      accounts receivable                                               447                      30                 822        142

    Changes in operating assets and liabilities:

    Accounts receivable, net                                          1,220                 (1,237)             16,787      6,498

    Prepaid expenses and other
     current assets, net                                              (320)                (1,555)            (1,307)   (2,462)

    Accounts payable                                                     11                   (148)            (1,966)   (1,960)

    Accrued expenses and other
     current liabilities                                              4,926                     612                 951      2,074

    Other noncurrent assets
     and liabilities                                                  (425)                   (85)                405         96
                                                                       ----                     ---                 ---        ---

     Net cash provided by (used
      in) operating activities                                       18,160                   7,953              36,467     27,913

     Cash flows from investing activities:

      Payments for acquisition
       of businesses, net of
       acquired cash                                                   (75)                      -               (75)   (1,931)

      Purchase of other assets                                        (101)                  (546)              (101)     (546)

      Purchase of property and
       equipment                                                    (1,066)                (1,187)            (3,459)   (1,832)
                                                                     ------                  ------              ------     ------

     Net cash used in investing
      activities                                                    (1,242)                (1,733)            (3,635)   (4,309)

     Cash flows from financing activities:

        Payments on notes payable                                   (3,500)                (3,975)            (5,250)   (6,200)

        Proceeds from public
         offerings, net of
         offering costs                                                   3                       -               (61)         -

        Excess income tax benefit
         from employee stock-
         based awards                                                 2,209                       -             10,523          -

        Obligation under capital
         lease                                                          (3)                    (5)                (6)       (5)

        Payments for repurchase of
         common stock                                                     -                      -                (6)         -

        Proceeds from exercise of
         options and warrants to
         purchase                                                     1,658                     280               9,797        569
        common stock, net of shares withheld
         for taxes
                                                                                                                            ---

     Net cash provided by (used
      in) financing activities                                          367                 (3,700)             14,997    (5,636)

     Effect of exchange rate
      changes on cash                                                   154                      14                 195      (239)
                                                                        ---                     ---                 ---       ----


     Change in cash and cash
      equivalents                                                    17,439                   2,534              48,024     17,729

      Cash and cash equivalents,
       beginning of period                                          196,466                 112,337             165,881     97,142
                                                                    -------                 -------             -------     ------


      Cash and cash equivalents,
       end of period                                               $213,905                $114,871            $213,905   $114,871
                                                                   ========                ========            ========   ========

SOURCE RetailMeNot, Inc.