2014

OpenTable, Inc. Announces Second Quarter Financial Results -- Increases Revenue by 15% to $39.6 Million --

-- Grows Seated Diners by 27% over Q2 2011 --

-- Achieves EPS of $0.25 and Non-GAAP EPS of $0.42 --

SAN FRANCISCO, Aug. 2, 2012 /PRNewswire/ -- OpenTable, Inc. (NASDAQ: OPEN), a leading provider of free, real-time online restaurant reservations for diners and reservation and guest management solutions for restaurants, today reported its financial results for the second quarter ended June 30, 2012.

(Logo:  http://photos.prnewswire.com/prnh/20110606/MM07085LOGO )

OpenTable reported consolidated net revenues for Q2 2012 of $39.6 million, a 15% increase over Q2 2011.  Consolidated net income for Q2 2012 was $5.7 million, or $0.25 per diluted share.  Non-GAAP consolidated net income for Q2 2012, which excludes tax-affected stock-based compensation expense, tax-affected acquisition-related expenses and tax-affected amortization of acquired intangibles, was $9.7 million, or $0.42 per diluted share. 

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 June 30, 2012, totaled 18,373, an 18% increase over June 30, 2011.
  • Seated diners totaled 28.0 million, a 26% increase over Q2 2011.
  • Revenues totaled $34.5 million, an 18% increase over Q2 2011. 
  • Non-GAAP adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation and acquisition-related expenses) totaled $18.1 million, or 52% of North America revenues, a 22% increase over Q2 2011.

International Results

  • Installed restaurant base as of June 30, 2012, totaled 6,664.  Prior to the relaunch of the toptable site, we targeted and successfully migrated the toptable restaurants that accounted for more than 90% of toptable seated diners in Q1 2012.  At the time of the toptable relaunch in May 2012, we proactively removed 1,578 toptable restaurants from our International installed restaurant base as they had not migrated to OpenTable technology.  This removal of restaurants from our installed base was an anticipated one-time event and reflects a group of restaurants that accounted for less than 10% of toptable seated diners in Q1 2012. 
  • Seated diners totaled 2.2 million, a 39% increase over Q2 2011. 
  • Revenues totaled $5.1 million, a 1% increase over Q2 2011. 
  • Non-GAAP adjusted EBITDA totaled a loss of $0.8 million compared to a loss of $0.5 million in Q2 2011. 

"We're pleased with the progress we're making across a variety of areas that support future growth in both our North America and International businesses," said Matt Roberts, President and CEO of OpenTable. "The relaunch of the toptable site marks a significant milestone as it lays the foundation for growth in the UK, which is at the core of our International business.  We're excited that London now represents our largest concentration of local restaurant customers in the world."

Q2 2012 Consolidated Financial and Operating Summary

  • Installed restaurant base as of June 30, 2012, totaled 25,037, an 11% increase over June 30, 2011.
  • Seated diners totaled 30.3 million, a 27% increase over Q2 2011.
  • Total revenues were $39.6 million in Q2 2012, up 15% over Q2 2011 revenues of $34.3 million
    • Reservation revenues were $22.3 million in Q2 2012, up 22% over Q2 2011 revenues of $18.3 million.  Reservation revenues primarily increased as a result of the increase in seated diners. 
    • Subscription revenues were $13.9 million in Q2 2012, up 11% over Q2 2011 revenues of $12.6 million.  Subscription revenues primarily increased as a result of the increase in installed restaurants using our Electronic Reservation Book solution. 
    • Other revenues were $3.3 million in Q2 2012, down 3% over Q2 2011 revenues of $3.4 million.  The decrease is primarily the result of a decrease in revenue from third-party restaurant coupon sales, partially offset by an increase in advertising revenues and featured private dining sales. 
  • Total operating expenses were $30.7 million in Q2 2012, up 24% over Q2 2011 operating expenses of $24.8 million.  The increase was primarily driven by an increase in stock-based compensation, performance-based compensation and a 7% increase in headcount.
  • Total operating income was $8.9 million in Q2 2012 compared to $9.5 million in Q2 2011.  Non-GAAP consolidated operating income, excluding stock-based compensation expense, acquisition-related expenses and amortization of acquired intangibles was $15.2 million in Q2 2012 compared to $12.4 million in Q2 2011. 
  • The Q2 2012 GAAP income tax expense was $3.1 million, or a 35% tax rate. 
  • Consolidated net income was $5.7 million, or $0.25 per diluted share, in Q2 2012 compared to $6.3 million, or $0.26 per diluted share, in Q2 2011.  Non-GAAP consolidated net income, which excludes tax-affected stock-based compensation expense, tax-affected acquisition-related expenses, and tax-affected amortization of acquired intangibles was $9.7 million, or $0.42 per diluted share, in Q2 2012 compared to $8.1 million, or $0.33 per diluted share, in Q2 2011.  
  • As of June 30, 2012, OpenTable had cash and cash equivalents and short-term investments of $71.9 million

"During the second 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 Q3 2012 and the full year 2012 on revenue, non-GAAP adjusted EBITDA and other consolidated metrics. 

Q3 2012 Guidance:

  • In the North America segment the Company estimates revenue to be in the range of $33.9 million to $34.6 million and non-GAAP adjusted EBITDA to be in the range of $16.0 million to $17.0 million
  • In the International segment the Company estimates revenue to be in the range of $5.2 million to $5.6 million and non-GAAP adjusted EBITDA loss to be in the range of $0.6 million to $1.0 million.
  • On a consolidated basis the Company estimates revenue to be in the range of $39.1 million to $40.2 million, non-GAAP adjusted EBITDA to be in the range of $15.0 million to $16.4 million and non-GAAP EPS to be in the range of $0.34 to $0.38.

Full Year 2012 Guidance:

  • In the North America segment the Company estimates revenue to be in the range of $138.0 million to $141.0 million and non-GAAP adjusted EBITDA to be in the range of $69.0 million to $72.5 million
  • In the International segment the Company estimates revenue to be in the range of $22.0 million to $23.0 million and non-GAAP adjusted EBITDA loss to be in the range of $2.0 million to $3.0 million.
  • On a consolidated basis the Company estimates revenue to be in the range of $160.0 million to $164.0 million, non-GAAP adjusted EBITDA to be in the range of $66.0 million to $70.5 million and non-GAAP EPS to be in the range of $1.54 to $1.66.

Treatful Acquisition:

  • On July 27, 2012, the Company agreed to acquire Treat Technologies, Inc., a provider of the Treatful-branded online gift card solutions for restaurants, for approximately $4 million in cash pursuant to an agreement and plan of merger. The completion of the acquisition is subject to customary closing conditions.

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 August 30, 2012, 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, and acquisition-related expenses.   Within the Company's reconciliation to non-GAAP diluted net income per share, the impact of undistributed earnings allocated to participating securities has been excluded.

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 and amortization 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, including installation fees for the Electronic Reservation Book (including training). 

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 Q3 2012 and the full year 2012 and the quotations from management in this press release, as well as any statements regarding the Company's strategic and operational plans.  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 impact of the current economic climate on the Company's business; 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 website and convert those visitors into diners; the Company's ability to retain existing restaurant customers and diners or encourage repeat reservations; the Company's ability to successfully enter new markets and manage its international expansion; 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; and costs associated with defending intellectual property infringement and other claims.  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, 2011 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 a leading provider of free, real-time online restaurant reservations for diners and reservation and guest management solutions for restaurants.  The OpenTable network delivers the convenience of online restaurant reservations to diners and the operational benefits of a computerized reservation book to restaurants.  OpenTable has more than 25,000 restaurant customers, and, since its inception in 1998, has seated more than 350 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.  OpenTable also owns and operates toptable, a leading restaurant reservation site in the UK.      

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










June 30,


December 31,


2012


2011

ASSETS








CURRENT ASSETS:




  Cash and cash equivalents

$       57,543,000


$       36,519,000

  Short-term investments

14,344,000


13,411,000

  Accounts receivable, net 

18,760,000


18,795,000

  Prepaid expenses and other current assets

3,299,000


2,708,000

  Deferred tax asset

11,089,000


11,238,000





           Total current assets

105,035,000


82,671,000





Property, equipment and software, net

17,968,000


16,150,000

Goodwill

42,705,000


42,312,000

Intangibles, net

14,637,000


16,403,000

Deferred tax asset

9,063,000


5,466,000

Other assets

1,038,000


813,000





TOTAL ASSETS

$     190,446,000


$     163,815,000





LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:




  Accounts payable and accrued expenses

$         6,207,000


$         7,004,000

  Accrued compensation

5,063,000


4,518,000

  Deferred revenue

1,620,000


1,752,000

  Dining rewards payable

24,379,000


20,827,000

           Total current liabilities

37,269,000


34,101,000





  Deferred revenue — non-current

2,252,000


2,249,000

  Deferred tax liability

3,515,000


3,915,000

  Income tax liability

13,635,000


13,215,000

  Other long-term liabilities

63,000


108,000





           Total liabilities

56,734,000


53,588,000









STOCKHOLDERS' EQUITY:




  Common stock

2,000


2,000

  Additional paid-in capital

192,641,000


171,465,000

  Treasury stock

(50,673,000)


(41,963,000)

  Accumulated other comprehensive loss

(1,176,000)


(1,634,000)

  Accumulated deficit

(7,082,000)


(17,643,000)





           Total stockholders' equity

133,712,000


110,227,000





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$     190,446,000


$     163,815,000

 

OPENTABLE, INC.

UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS












Three Months Ended


Six Months Ended



June 30,


June 30,



2012


2011


2012


2011



(In thousands, except per share amounts)










REVENUES


$         39,558


$         34,290


$       78,927


$       67,997










COSTS AND EXPENSES:









  Operations and support (1)


10,338


9,686


20,858


19,158

  Sales and marketing (1)


8,483


6,403


17,343


14,215

  Technology (1)


3,610


3,531


6,858


7,578

  General and administrative (1)


8,250


5,148


17,601


11,010










           Total costs and expenses


30,681


24,768


62,660


51,961










Income from operations


8,877


9,522


16,267


16,036

Other income, net


13


24


30


45










Income before taxes


8,890


9,546


16,297


16,081

Income tax expense 


3,145


3,221


5,736


5,571










NET INCOME


$           5,745


$           6,325


$       10,561


$       10,510










Net income per share:









  Basic


$           0.25


$           0.27


$        0.47


$        0.45

  Diluted


$           0.25


$           0.26


$        0.46


$        0.43










Weighted average shares outstanding:









  Basic


22,578


23,558


22,557


23,446

  Diluted


23,169


24,615


23,164


24,573



















(1) Stock-based compensation included in above line items:








  Operations and support


$                    333


$                    446


$                 634


$                 858

  Sales and marketing


1,375


493


2,756


1,003

  Technology


642


437


1,164


888

  General and administrative


2,903


460


6,623


2,091



$                 5,253


$                 1,836


$            11,177


$              4,840










Other Operational Data:









  Installed restaurants (at period end):









    North America


18,373


15,560


18,373


15,560

    International


6,664


7,067


6,664


7,067

    Total


25,037


22,627


25,037


22,627










  Seated diners (in thousands):









    North America


28,038


22,196


55,754


43,066

    International


2,244


1,618


4,498


3,171

    Total


30,282


23,814


60,252


46,237










  Headcount (at period end):









    North America


418


378


418


378

    International


161


162


161


162

    Total


579


540


579


540










Additional Financial Data:









  Revenues:









    North America









Reservation


$         19,721


$         15,560


$       38,935


$       30,536

Subscription


12,265


11,090


24,165


21,711

Other


2,486


2,592


5,095


5,769

Total North America Revenues


$         34,472


$         29,242


$       68,195


$       58,016

    International









Reservation


$           2,590


$           2,736


$        5,703


$        5,367

Subscription


1,662


1,472


3,302


2,869

Other


834


840


1,727


1,745

Total International Revenues


5,086


5,048


10,732


9,981

    Total Revenues


$         39,558


$         34,290


$       78,927


$       67,997










  Income (loss) from operations:









    North America


$         11,374


$         12,240


$       21,354


$       22,325

    International


(2,497)


(2,718)


(5,087)


(6,289)

    Total


$           8,877


$           9,522


$       16,267


$       16,036










  Depreciation and amortization:









    North America


$           1,859


$           1,741


$        3,548


$        3,436

    International


1,270


1,209


2,758


2,345

    Total


$           3,129


$           2,950


$        6,306


$        5,781










  Stock-based compensation:









    North America


$           4,791


$              862


$       10,226


$        2,881

    International


462


974


951


1,959

    Total


$           5,253


$           1,836


$       11,177


$        4,840

 

OPENTABLE, INC.

RECONCILIATION OF GAAP TO NON-GAAP OPERATING RESULTS





















Three Months Ended


Six Months Ended



June 30,


June 30,



2012


2011


2012


2011



(In thousands, except per share amounts)










Non-GAAP consolidated net income per share:









GAAP net income "as reported"


$         5,745


$         6,325


$        10,561


$        10,510

Add back: stock-based compensation expense


5,253


1,836


11,177


4,840

Income tax effect of stock-based compensation


(2,022)


(778)


(4,302)


(1,918)

Add back: acquisition-related expenses


51


-


51


-

Income tax effect of acquisition-related expenses


(19)


-


(19)


-

Add back: amortization of acquired intangibles


978


1,005


1,949


1,993

Income tax effect of amortization of intangibles


(259)


(272)


(515)


(558)










NON-GAAP CONSOLIDATED NET INCOME 


$         9,727


$         8,116


$        18,902


$        14,867










Non-GAAP diluted net income per share


$           0.42


$           0.33


$           0.82


$           0.61










Weighted average diluted shares outstanding


23,169


24,615


23,164


24,573










Non-GAAP consolidated operating income:









GAAP income from operations "as reported"


$         8,877


$         9,522


$        16,267


$        16,036

Add back: stock-based compensation expense


5,253


1,836


11,177


4,840

Add back: acquisition-related expenses


51


-


51


-

Add back: amortization of acquired intangibles


978


1,005


1,949


1,993










NON-GAAP OPERATING INCOME


$        15,159


$        12,363


$        29,444


$        22,869










North America Adjusted EBITDA:









GAAP operating income "as reported"


$        11,374


$        12,240


$        21,354


$        22,325










Adjustments:









  Stock-based compensation expense


4,791


862


10,226


2,881

  Acquisition-related expense


51


-


51


-

  Amortization of acquired intangibles


88


88


176


176

  Depreciation and other amortization expense


1,771


1,653


3,372


3,260










           North America Adjusted EBITDA


$        18,075


$        14,843


$        35,179


$        28,642










International Adjusted EBITDA:









GAAP operating loss "as reported"


$        (2,497)


$        (2,718)


$        (5,087)


$        (6,289)










Adjustments:









  Stock-based compensation expense


462


974


951


1,959

  Amortization of acquired intangibles


890


917


1,773


1,817

  Depreciation and other amortization expense


380


292


985


528










           International Adjusted EBITDA


$          (765)


$          (535)


$        (1,378)


$        (1,985)

 

OPENTABLE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FORWARD-LOOKING GUIDANCE





















Forward-Looking Guidance



Three Months Ending


Twelve Months Ending



September 30, 2012


December 31, 2012



Range of Estimate


Range of Estimate



From


To


From


To



(In thousands, except per share amounts)










Non-GAAP consolidated net income per share:









GAAP net income


$         3,866


$         4,719


$        19,975


$        22,765

Add back: stock-based compensation expense


5,545


5,545


21,631


21,631

Income tax effect of stock-based compensation


(2,107)


(2,107)


(8,253)


(8,253)

Add back: acquisition-related expenses


-


-


51


51

Income tax effect of acquisition-related expenses


-


-


(19)


(19)

Add back: amortization of acquired intangibles


962


962


3,326


3,326

Income tax effect of amortization of intangibles


(260)


(260)


(882)


(882)










NON-GAAP CONSOLIDATED NET INCOME 


$         8,006


$         8,859


$        35,829


$        38,619










Non-GAAP diluted net income per share


$           0.34


$           0.38


$           1.54


$           1.66










Weighted average diluted shares outstanding


23,500


23,500


23,300


23,300










North America Adjusted EBITDA:









GAAP operating income


$         9,003


$        10,003


$        41,502


$        45,002










Adjustments:









  Stock-based compensation expense


5,053


5,053


19,872


19,872

  Acquisition-related expense


-


-


51


51

  Amortization of acquired intangibles


88


88


320


320

  Depreciation and other amortization expense


1,856


1,856


7,255


7,255










           North America Adjusted EBITDA


$        16,000


$        17,000


$        69,000


$        72,500










International Adjusted EBITDA:









GAAP operating loss


$        (2,686)


$        (2,286)


$        (9,395)


$        (8,395)










Adjustments:









  Stock-based compensation expense


492


492


1,759


1,759

  Amortization of acquired intangibles


874


874


3,006


3,006

  Depreciation and other amortization expense


320


320


1,630


1,630










           International Adjusted EBITDA


$        (1,000)


$          (600)


$        (3,000)


$        (2,000)










Consolidated Adjusted EBITDA:









GAAP operating income 


$         6,317


$         7,717


$        32,107


$        36,607










Adjustments:









  Stock-based compensation expense


5,545


5,545


21,631


21,631

  Acquisition-related expense


-


-


51


51

  Amortization of acquired intangibles


962


962


3,326


3,326

  Depreciation and other amortization expense


2,176


2,176


8,885


8,885










           Consolidated Adjusted EBITDA


$        15,000


$        16,400


$        66,000


$        70,500

 

SOURCE OpenTable, Inc.



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