OpenTable, Inc. Announces Third Quarter Financial Results -- Increases Revenue by 16% to $39.7 Million --

-- Grows Seated Diners by 26% over Q3 2011 --

-- Achieves EPS of $0.26 and Non-GAAP EPS of $0.42 --

SAN FRANCISCO, Nov. 1, 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 third quarter ended September 30, 2012.

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

OpenTable reported consolidated net revenues for Q3 2012 of $39.7 million, a 16% increase over Q3 2011.  Consolidated net income for Q3 2012 was $5.9 million, or $0.26 per diluted share.  Non-GAAP consolidated net income for Q3 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 September 30, 2012, totaled 18,975, a 17% increase over September 30, 2011.
  • Seated diners totaled 27.4 million, a 26% increase over Q3 2011.
  • Revenues totaled $34.5 million, a 19% increase over Q3 2011. 
  • Non-GAAP adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation and acquisition-related expenses) totaled $17.8 million, or 52% of North America revenues, a 31% increase over Q3 2011.

International Results

  • Installed restaurant base as of September 30, 2012, totaled 7,385.  As previously reported, with the relaunch of the toptable site in Q2 2012, in an anticipated one-time event, we removed restaurants that did not migrate to OpenTable technology from our installed restaurant base.  After adjusting for this one-time event, our installed restaurant base as of September 30, 2012, represented an 80% increase over our installed base of OpenTable technology-enabled restaurants as of September 30, 2011.   
  • Seated diners totaled 2.3 million, a 30% increase over Q3 2011. 
  • Revenues totaled $5.2 million, a 1% decrease over Q3 2011 primarily driven by changes in per seated diner fees made at toptable earlier in the year and lower other revenue.
  • Non-GAAP adjusted EBITDA totaled a loss of $0.3 million compared to a loss of $0.7 million in Q3 2011. 

"We continue to see a meaningful shift to mobile, which we view as a long-term positive for the business," said Matt Roberts, President and CEO of OpenTable.  "Approximately one third of the 27 million diners we seated in North America during the quarter were attributable to mobile, and we're strategically positioned to further capitalize on the opportunity."

Q3 2012 Consolidated Financial and Operating Summary

  • Installed restaurant base as of September 30, 2012, totaled 26,360.
  • Seated diners totaled 29.7 million, a 26% increase over Q3 2011.
  • Total revenues were $39.7 million in Q3 2012, up 16% over Q3 2011 revenues of $34.4 million
    • Reservation revenues were $21.9 million in Q3 2012, up 22% over Q3 2011 revenues of $18.0 million.  Reservation revenues primarily increased as a result of the increase in seated diners. 
    • Subscription revenues were $14.3 million in Q3 2012, up 10% over Q3 2011 revenues of $12.9 million.  Subscription revenues primarily increased as a result of the increase in installed restaurants using our Electronic Reservation Book solution. 
    • Other revenues were $3.6 million in Q3 2012, up 5% over Q3 2011 revenues of $3.4 million.  The increase is primarily the result of an increase in revenue from advertising on the OpenTable network, partially offset by a decrease in revenue from third-party restaurant coupon sales. 
  • Total operating expenses were $30.6 million in Q3 2012, up 7% over Q3 2011 operating expenses of $28.5 million.  The increase was primarily driven by an increase in stock-based compensation expense and a 3% increase in headcount.
  • Total operating income was $9.2 million in Q3 2012 compared to $5.8 million in Q3 2011.  Non-GAAP consolidated operating income, excluding stock-based compensation expense, acquisition-related expenses and amortization of acquired intangibles was $15.2 million in Q3 2012 compared to $10.8 million in Q3 2011. 
  • The Q3 2012 GAAP income tax expense was $3.3 million, or a 35% tax rate. 
  • Consolidated net income was $5.9 million, or $0.26 per diluted share, in Q3 2012 compared to $4.1 million, or $0.17 per diluted share, in Q3 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 Q3 2012 compared to $7.4 million, or $0.30 per diluted share, in Q3 2011.  
  • As of September 30, 2012, OpenTable had cash and cash equivalents and short-term investments of $86.1 million

"During the third 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 Q4 2012 and the full year 2012 on revenue, non-GAAP adjusted EBITDA and other consolidated metrics. 

Hurricane Sandy:

  • Hurricane Sandy has interrupted operations at many of the Company's restaurant customers along the East Coast. The key determinants of the impact will be the magnitude and duration of the disruption, which are still largely unknown at this time. The Company estimates the negative impact of Hurricane Sandy on Q4 2012 North America reservation revenue will be approximately $0.5 million.

Q4 2012 Guidance:

  • In the North America segment the Company estimates revenue to be in the range of $35.9 million to $37.2 million and non-GAAP adjusted EBITDA to be in the range of $18.6 million to $19.9 million.   
  • In the International segment the Company estimates revenue to be in the range of $5.6 million to $5.9 million and non-GAAP adjusted EBITDA loss to be in the range of $0.5 million to $0.9 million.
  • On a consolidated basis the Company estimates revenue to be in the range of $41.5 million to $43.1 million, non-GAAP adjusted EBITDA to be in the range of $17.7 million to $19.4 million and non-GAAP EPS to be in the range of $0.41 to $0.45.

Full Year 2012 Guidance:

  • In the North America segment the Company estimates revenue to be in the range of $138.6 million to $139.9 million and non-GAAP adjusted EBITDA to be in the range of $71.5 million to $72.9 million
  • In the International segment the Company estimates revenue to be in the range of $21.6 million to $21.9 million and non-GAAP adjusted EBITDA loss to be in the range of $2.1 million to $2.5 million.
  • On a consolidated basis the Company estimates revenue to be in the range of $160.2 million to $161.8 million, non-GAAP adjusted EBITDA to be in the range of $69.0 million to $70.8 million and non-GAAP EPS to be in the range of $1.64 to $1.68.

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 November 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 Q4 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 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 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; 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, 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 26,000 restaurant customers, and, since its inception in 1998, has seated over 385 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










September 30,


December 31,


2012


2011


(In thousands)

ASSETS








CURRENT ASSETS:




  Cash and cash equivalents

$              85,158


$              36,519

  Short-term investments

978


13,411

  Accounts receivable, net 

19,186


18,795

  Prepaid expenses and other current assets

3,083


2,708

  Deferred tax asset

10,960


11,238





           Total current assets

119,365


82,671





Property, equipment and software, net

19,206


16,150

Goodwill

46,318


42,312

Intangibles, net

15,828


16,403

Deferred tax asset

11,925


5,466

Other assets

1,088


813





TOTAL ASSETS

$            213,730


$            163,815





LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:




  Accounts payable and accrued expenses

$                9,435


$                7,004

  Accrued compensation

4,992


4,518

  Deferred revenue

1,597


1,752

  Deferred tax liability

107


-

  Dining rewards payable

25,899


20,827

           Total current liabilities

42,030


34,101





  Deferred revenue — non-current

2,141


2,249

  Deferred tax liability

3,933


3,915

  Income tax liability

14,849


13,215

  Other long-term liabilities

71


108





           Total liabilities

63,024


53,588









STOCKHOLDERS' EQUITY:




  Common stock

2


2

  Additional paid-in capital

201,606


171,465

  Treasury stock

(50,673)


(41,963)

  Accumulated other comprehensive income (loss)

905


(1,634)

  Accumulated deficit

(1,134)


(17,643)





           Total stockholders' equity

150,706


110,227





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$            213,730


$            163,815





 

 

OPENTABLE, INC.

UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS












Three Months Ended


Nine Months Ended



September 30,


September 30,



2012


2011


2012


2011



(In thousands, except per share amounts)










REVENUES


$         39,738


$         34,356


$      118,665


$     102,353










COSTS AND EXPENSES:









  Operations and support (1)


10,544


9,916


31,402


29,074

  Sales and marketing (1)


8,216


7,477


25,559


21,692

  Technology (1)


3,741


3,748


10,599


11,326

  General and administrative (1)

8,072


7,407


25,673


18,417










           Total costs and expenses


30,573


28,548


93,233


80,509










Income from operations


9,165


5,808


25,432


21,844

Other income, net


36


23


66


68










Income before taxes


9,201


5,831


25,498


21,912

Income tax expense 


3,253


1,775


8,989


7,346










NET INCOME


$           5,948


$           4,056


$        16,509


$       14,566










Net income per share:









  Basic


$           0.26


$           0.17


$         0.73


$        0.62

  Diluted


$           0.26


$           0.17


$         0.71


$        0.59










Weighted average shares outstanding:









  Basic


22,641


23,695


22,585


23,530

  Diluted


23,261


24,488


23,188


24,545



















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







  Operations and support


$                    332


$                    431


$                  966


$              1,289

  Sales and marketing


1,290


571


4,046


1,574

  Technology


1,020


431


2,184


1,319

  General and administrative


2,268


2,536


8,891


4,627



$                 4,910


$                 3,969


$             16,087


$              8,809










Other Operational Data:









  Installed restaurants (at period end):









    North America


18,975


16,237


18,975


16,237

    International


7,385


7,629


7,385


7,629

    Total


26,360


23,866


26,360


23,866










  Seated diners (in thousands):









    North America


27,438


21,818


83,192


64,884

    International


2,302


1,768


6,800


4,939

    Total


29,740


23,586


89,992


69,823










  Headcount (at period end):









    North America


425


403


425


403

    International


162


165


162


165

    Total


587


568


587


568










Additional Financial Data:









  Revenues:









    North America









Reservation


$         19,193


$         15,154


$        58,128


$       45,690

Subscription


12,510


11,406


36,675


33,117

Other


2,789


2,521


7,884


8,290

Total North America Revenues


$         34,492


$         29,081


$      102,687


$       87,097

    International









Reservation


$           2,718


$           2,861


$         8,421


$        8,228

Subscription


1,754


1,531


5,056


4,400

Other


774


883


2,501


2,628

Total International Revenues


5,246


5,275


15,978


15,256

    Total Revenues


$         39,738


$         34,356


$      118,665


$     102,353










  Income (loss) from operations:









    North America


$         11,581


$           8,532


$        32,935


$       30,857

    International


(2,416)


(2,724)


(7,503)


(9,013)

    Total


$           9,165


$           5,808


$        25,432


$       21,844










  Depreciation and amortization:









    North America


$           1,912


$           1,726


$         5,460


$        5,162

    International


1,455


1,321


4,213


3,666

    Total


$           3,367


$           3,047


$         9,673


$        8,828










  Stock-based compensation:









    North America


$           4,221


$           3,295


$        14,447


$        6,176

    International


689


674


1,640


2,633

    Total


$           4,910


$           3,969


$        16,087


$        8,809

 

 

OPENTABLE, INC.

RECONCILIATION OF GAAP TO NON-GAAP OPERATING RESULTS





















Three Months Ended


Nine Months Ended



September 30,


September 30,



2012


2011


2012


2011



(In thousands, except per share amounts)










Non-GAAP consolidated net income per share:









GAAP net income "as reported"


$         5,948


$         4,056


$        16,509


$        14,566

Add back: stock-based compensation expense


4,910


3,969


16,087


8,809

Income tax effect of stock-based compensation


(1,996)


(1,403)


(6,298)


(3,321)

Add back: acquisition-related expenses


53


-


104


-

Income tax effect of acquisition-related expenses


(21)


-


(40)


-

Add back: amortization of acquired intangibles


1,089


993


3,038


2,986

Income tax effect of amortization of intangibles


(311)


(264)


(826)


(822)










NON-GAAP CONSOLIDATED NET INCOME 


$         9,672


$         7,351


$        28,574


$        22,218










Non-GAAP diluted net income per share


$           0.42


$           0.30


$           1.23


$           0.91










Weighted average diluted shares outstanding


23,261


24,488


23,188


24,545










Non-GAAP consolidated operating income:









GAAP income from operations "as reported"


$         9,165


$         5,808


$        25,432


$        21,844

Add back: stock-based compensation expense


4,910


3,969


16,087


8,809

Add back: acquisition-related expenses


53


-


104


-

Add back: amortization of acquired intangibles


1,089


993


3,038


2,986










NON-GAAP OPERATING INCOME


$        15,217


$        10,770


$        44,661


$        33,639










North America Adjusted EBITDA:









GAAP operating income "as reported"


$        11,581


$         8,532


$        32,935


$        30,857










Adjustments:









  Stock-based compensation expense


4,221


3,295


14,447


6,176

  Acquisition-related expense


53


-


104


-

  Amortization of acquired intangibles


201


87


377


263

  Depreciation and other amortization expense


1,711


1,639


5,083


4,899










           North America Adjusted EBITDA


$        17,767


$        13,553


$        52,946


$        42,195










International Adjusted EBITDA:









GAAP operating loss "as reported"


$        (2,416)


$        (2,724)


$        (7,503)


$        (9,013)










Adjustments:









  Stock-based compensation expense


689


674


1,640


2,633

  Amortization of acquired intangibles


888


906


2,661


2,723

  Depreciation and other amortization expense


567


415


1,552


943










           International Adjusted EBITDA


$          (272)


$          (729)


$        (1,650)


$        (2,714)

 

 

OPENTABLE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FORWARD-LOOKING GUIDANCE





















Forward-Looking Guidance



Three Months Ending


Twelve Months Ending



December 31, 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


$         6,438


$         7,509


$        22,947


$        24,018

Add back: stock-based compensation expense


4,486


4,486


20,573


20,573

Income tax effect of stock-based compensation


(1,742)


(1,742)


(8,040)


(8,040)

Add back: acquisition-related expenses


-


-


104


104

Income tax effect of acquisition-related expenses


-


-


(40)


(40)

Add back: amortization of acquired intangibles


587


587


3,625


3,625

Income tax effect of amortization of intangibles


(216)


(216)


(1,042)


(1,042)










NON-GAAP CONSOLIDATED NET INCOME 


$         9,553


$        10,624


$        38,127


$        39,198










Non-GAAP diluted net income per share


$           0.41


$           0.45


$           1.64


$           1.68










Weighted average diluted shares outstanding


23,400


23,400


23,300


23,300










North America Adjusted EBITDA:









GAAP operating income


$        12,247


$        13,547


$        45,083


$        46,483










Adjustments:









  Stock-based compensation expense


4,002


4,002


18,449


18,449

  Acquisition-related expense


-


-


104


104

  Amortization of acquired intangibles


227


227


604


604

  Depreciation and other amortization expense


2,124


2,124


7,260


7,260










           North America Adjusted EBITDA


$        18,600


$        19,900


$        71,500


$        72,900










International Adjusted EBITDA:









GAAP operating loss


$        (2,062)


$        (1,662)


$        (9,514)


$        (9,114)










Adjustments:









  Stock-based compensation expense


484


484


2,124


2,124

  Amortization of acquired intangibles


360


360


3,021


3,021

  Depreciation and other amortization expense


318


318


1,869


1,869










           International Adjusted EBITDA


$          (900)


$          (500)


$        (2,500)


$        (2,100)










Consolidated Adjusted EBITDA:









GAAP operating income 


$        10,185


$        11,885


$        35,569


$        37,369










Adjustments:









  Stock-based compensation expense


4,486


4,486


20,573


20,573

  Acquisition-related expense


-


-


104


104

  Amortization of acquired intangibles


587


587


3,625


3,625

  Depreciation and other amortization expense


2,442


2,442


9,129


9,129










           Consolidated Adjusted EBITDA


$        17,700


$        19,400


$        69,000


$        70,800

SOURCE OpenTable, Inc.



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