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LiveWorld Announces First Quarter 2007 Results
Company Grows Revenue Year-Over-Year and Continues to Diversify Its Strong Customer Base
SAN JOSE, Calif.--(BUSINESS WIRE)--LiveWorld, Inc. (Pink Sheets:LVWD - News), a leading online social networking and community services marketing agency, today reported revenue of $2.6 million for the first quarter ended March 31, 2007, and this represents 5% growth over the $2.5 million in revenue for the first quarter ended March 31, 2006. This includes 112% year-over-year growth excluding revenues from the company's two largest clients, AOL US and eBay, demonstrating the Company's progress in new customer wins and diversifying its revenue mix.
"In the first quarter we continued to diversify our client and revenue base and capitalize on the growth and marketing power of online social networks," said Peter Friedman, LiveWorld's Chairman & CEO. "We have strong relationships with key clients AOL and eBay, and are leveraging our LiveWorld - WPP joint venture to generate and secure new client relationships. We expanded our product line with our new LiveWorld Video service, which enables brands to provide a fully-featured private label user video upload solution that seamlessly integrates with their sites."
"First quarter revenues were impacted by typical seasonally, but we are optimistic that our current investments will help fuel revenue growth in the second half of the year," said David Houston, Chief Financial Officer. "We are carefully managing our financials and are positioning the Company to move from the Pink Sheets to trade on the OTC market. We believe our targeted investments in product development will build a solid foundation that positions the company for revenue growth in 2007."
Revenue: Total revenues for the first quarter ended March 31, 2007 were approximately $2.6 million, representing 5% growth over the prior year period and compares to $2.9 million for the fourth quarter of fiscal year 2006. The anticipated year-over-year decline in AOL US revenues was more than fully offset by growth in revenues from other clients. These other revenues (excluding AOL US and eBay) increased to approximately $1.2 million for the first quarter of 2007, from approximately $545,000 in the first quarter 2006, or 112% year-over-year.
Net Loss Including the Impact of Non-Cash Stock Option and Warrant Expense: The net loss for the first quarter of 2007, including non-cash stock option and warrant expenses, was approximately $623,000, or a loss of $0.02 per share. First quarter net loss includes non-cash stock based compensation of approximately $67,000. This compares to net income for first quarter of 2006, including stock option expense, of approximately $82,000 and a net loss of approximately $35,000 for the fourth quarter of 2006.
Cash: The Company ended the first quarter of 2007 with approximately $3.3 million in cash and equivalents, up from $1.4 million in cash and cash equivalents for the first quarter of 2006 and an increase from the $3.2 million reported at the fiscal year ended December 31, 2006. For the first quarter of 2007, the Company was cash positive from operations, generating approximately $204,000.
Adjusted EBTIDA: Our Adjusted EBITDA for the first quarter of 2007 were approximately ($437,000), compared to $169,000, for the first quarter of 2006. This reduction of Adjusted EBITDA was a result of an increased spending for product development, sales and marketing, and general and administrative costs. LiveWorld defines Adjusted EBITDA as net income or loss with an add-back for depreciation and amortization, non-cash stock-based compensation expense, non-cash based warrant expense, interest income net, other income and income taxes. Adjusted EBITDA is not a term defined by GAAP and as a result LiveWorld's measure of Adjusted EBITDA might not be comparable to similarly titled measures used by other companies.
About LiveWorld, Inc.
LiveWorld (OTC Pink Sheets: LVWD.PK - News, www.liveworld.com - News) is a leading interactive marketing agency specializing in white label online social networks and communities for Fortune 1000 companies.
LiveWorld designs, builds, application hosts, moderates and community manages social networks, blogs, user video and community sites for its clients, as well as providing overall social network strategy and brand consulting. Among the unique benefits LiveWorld offers its customers is a team of experienced moderators, who oversee the activity and user content on LiveWorld, client and third party provided sites. LiveWorld deploys its services in over 30 country-language combinations.
With twenty years of experience, an extensive applications hosting platform, and a track record of delivering over 1 million hours of moderation services, LiveWorld is the trusted partner of leading brands worldwide, including: America Online, A&E Television Networks, AOL UK, BBC Worldwide, BEA Systems, BlogSafety.com, Breast Cancer.org, eBay, The Campbell Soup Company, Discovery Communications, HBO, IDG, Intel, JumpTheShark.com, Kraft Foods, Land Rover, Match.com, Mattel, MINI Cooper USA, MTV, The NBA, QVC, Tulane University, TV Guide and Verizon. Agency relationships have included AKQA (consumer packaged goods client), AOL Media (Dove, Target, media clients), Beamland (MINI Cooper), Euro RSCG (Campbells, MIN Cooper), Digit (BBC Worldwide), Hill, Holiday, Connors, Cosmopulos (financial services client), Ogilvy (Dove, Mattel), Questus (Verizon), and Wunderman UK (Land Rover).
LiveWorld is headquartered in San Jose, California. For further information, visit www.liveworld.com.
"Safe Harbor" Statement Under The Private Securities Litigation Reform Act:
This press release may contain forward-looking information concerning LiveWorld's plans, objectives, future expectations, forecasts and prospects. These statements may include those regarding LiveWorld's current or future financial performance including but not limited to lists of clients, revenue and profit, use of cash, investments, relationships and the actual or potential impact of stock option expense, LiveWorld's efforts to list its securities on the OTCBB, and the results of its product development efforts. Actual results may differ materially from those expressed in the forward looking statements made as a result of, among other things, final accounting adjustments and results, LiveWorld's ability to attract new clients and preserve or expand its relationship with existing clients, the success of the LiveWorld-WPP joint venture, LiveWorld's ability to retain and attract high quality employees, including its management staff, the ability to deliver new innovative products in a timely manner, changing accounting treatments, and other risks applicable to the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances. (See the Company's May 15, 2007 Registration Statement on Form 10-SB for a list that includes other possible risk factors.)
LIVEWORLD INC.
BALANCE SHEET
(In thousands, except per share data)
March 31,
---------------------
2006 2007
---------- ----------
ASSETS
Current Assets
Cash and cash equivalents $ 3,217 $ 3,280
Accounts receivable, net 1,222 729
Accrued development and set up 72 64
Prepaid expenses 47 73
Other current assets 13 16
---------- ----------
Total current assets 4,571 4,162
Property and equipment, net 1,110 1,087
Investment in joint venture 216 186
Other assets 4 5
---------- ----------
Total assets $ 5,901 $ 5,440
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 343 $ 534
Accrued salaries and wages 91 27
Accrued vacation 278 345
Due to officers 34 6
Other accrued liabilities 73 102
Current portion of capital lease obligation 53 53
Deferred revenue 527 440
---------- ----------
Total current liabilities 1,399 1,507
Long-term capital lease obligation 121 108
---------- ----------
Total liabilities 1,520 1,615
Stockholders' equity
Common stock: $.001 par value, 100,000,000
shares authorized
30,682,811 and 30,682,811 issued and
outstanding at December 31, 2006 and March
31, 2007, respectively 31 31
Note receivable from stockholder ---- ----
Additional paid-in capital 139,589 139,656
Accumulated deficit (135,239) (135,862)
---------- ----------
Total stockholders' equity 4,381 3,825
---------- ----------
Total liabilities and stockholders' equity $ 5,901 $ 5,440
========== ==========
LIVEWORLD INC.
STATEMENT OF OPERATIONS
(In thousands, except per share data)
Three Months Ended March 31,
-----------------------------
2006 2007
-------------- --------------
Total revenues $ 2,464 $ 2,585
Cost of revenues 1,032 1,050
-------------- --------------
Gross Margin 1,432 1,535
Operating expenses
Product development 340 596
Sales and marketing 520 589
General and administrative 501 908
Stock based compensation 1 67
Warrant expense ---- ----
Total operating expenses 1,362 2,160
-------------- --------------
Income (loss) from operations 70 (625)
Other income (expense)
Interest income (expense) net 25 46
Gain/(loss) on sale of assets ---- ----
Settlement income, net ---- ----
-------------- --------------
Income (loss) before tax 95 (579)
Provisions for income tax (13) (14)
============== ==============
Equity in net loss of unconsolidated
affiliate ---- (30)
-------------- --------------
Net income (loss) 82 (623)
============== ==============
Basic net income (loss) per share $ 0.00 $ (0.02)
============== ==============
Shares used in computing basic income
(loss) per share 26,816,889 30,957,688
Diluted net income (loss) per share $ 0.00 $ (0.02)
============== ==============
Shares used in computing diluted income
(loss) per share 42,886,768 30,957,688
Departmental allocation of stock-based
compensation:
Costs of revenues $ ---- $ ----
Product development 1 30
Sales and marketing ---- 15
General and administrative ---- 22
Total stock based compensation $ 1 $ 67
============== ==============
LIVEWORLD
STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended March 31,
----------------------------
2006 2007
------------- --------------
Cash flows from operating activities:
Net income (loss) $ 82 $ (623)
Adjustments to reconcile net income
(loss) provided by (use in) operating
activities:
Stock-based compensation expense 1 67
Warrant expense ---- ----
Depreciation of long-lived assets 98 151
Loss on sale of assets ---- ----
Equity in net loss of unconsolidated
affiliate ---- 30
Changes in operating assets and
liabilities:
Accounts receivable (140) 493
Accrued development and setup ---- 8
Other assets 33 (31)
Accounts payable 311 191
Accrued liabilities (12) 5
Deferred revenue (26) (87)
------------- --------------
Net cash provided (used) by operating
activities 347 204
Cash flows from investing activities:
Purchase of property and equipment (345) (128)
Investment joint venture ---- ----
Proceeds from sale of property and
equipment ---- ----
------------- --------------
Net cash provided (used) by investing
activities (345) (128)
Cash flows from financing activities:
Payments on capital leases ---- (13)
Proceeds from exercise of stock options ---- ----
Proceeds from issuance of common stock ---- ----
Proceeds from repayment of note
receivable from stockholder 3 ----
Repurchase of common stock ---- ----
------------- --------------
Net cash provided by (used for) financing
activities 3 (13)
Change in cash and cash equivalent 5 63
Cash and cash equivalents, beginning of
period 1,426 3,217
Cash and cash equivalents, end of period $ 1,431 $ 3,280
============= ==============
Supplemental disclosure of cash flow
activities
Income taxes paid $ 13 $ 9
============= ==============
Interest expense paid $ ---- $ 3
============= ==============
LIVEWORLD
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME OR (LOSS)
(In thousands)
For the Three Months Ended
March 31,
--------------------------
$ in 000's 2006 2007
------------ -------------
Reported net income (loss) $ 82 $ (623)
Depreciation and amortization 98 151
Stock-based compensation 1 67
Warrant expense ---- ----
Interest income - net (25) (46)
Provision for income taxes 13 14
------------ -------------
Adjusted EBITDA $ 169 $ (437)
============ =============
LIVEWORLD
RECONCILIATION OF ADJUSTED EBITDA TO NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
(In thousands)
For the Three Months Ended
March 31,
--------------------------
$ in thousands 2006 2007
------------ -------------
Net cash provided by (used in) operating
activities $ 347 $ 204
Interest income - net (25) (46)
Taxes 13 14
Sale of assets ---- ----
Equity in net loss of unconsolidated
affiliate ---- (30)
Change in accounts receivable 140 (493)
Change in other current assets (33) 31
Changes in accounts payable (311) (191)
Change in accrued development and set-up ---- (8)
Change in accrued liabilities 12 (5)
Change in deferred revenue 26 87
------------ -------------
Adjusted EBITDA $ 169 $ (437)
============ =============
LiveWorld Contacts
PR Contact: Betty Taylor, bettyt@krause-taylor.com, Ph: 408-918-9080
IR Contact: Brinlea Johnson: The Blueshirt Group, for LiveWorld, 212 867-2593