OpenTable, Inc.
Feb 6, 2014
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OpenTable, Inc. Announces Fourth Quarter and Full Year 2013 Financial Results

-- Increases Revenue by 22% over Q4 2012 to $52.3 Million --
-- Grows Seated Diners by 34% over Q4 2012 --
-- Achieves EPS of $0.43 and Non-GAAP EPS of $0.59 --

SAN FRANCISCO, Feb. 6, 2014 /PRNewswire/ -- OpenTable, Inc. (NASDAQ: OPEN), the world's leading provider of online restaurant reservations, today reported its financial results for the fourth quarter and fiscal year ended December 31, 2013.

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

OpenTable reported consolidated net revenues for Q4 2013 of $52.3 million, a 22% increase over Q4 2012.  Consolidated net income for Q4 2013 was $10.3 million, or $0.43 per diluted share.  Non-GAAP consolidated net income for Q4 2013, which excludes tax-affected stock-based compensation expense, tax-affected acquisition-related expenses and tax-affected amortization of acquired intangibles, was $14.3 million, or $0.59 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. 

Q4 2013 North America Results

  • Installed restaurant base as of December 31, 2013, totaled 23,824, a 20% increase over December 31, 2012.
  • Seated diners totaled 39.8 million, a 33% increase over Q4 2012.
  • Revenues totaled $44.7 million, a 22% increase over Q4 2012. 
  • Non-GAAP adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation and acquisition-related expenses) totaled $22.6 million, or 51% of North America revenues, a 19% increase over Q4 2012.

Q4 2013 International Results

  • Installed restaurant base as of December 31, 2013, totaled 7,729, compared to 7,716 as of December 31, 2012.   
  • Seated diners totaled 4.2 million, a 43% increase over Q4 2012. 
  • Revenues totaled $7.6 million, a 21% increase over Q4 2012.
  • Non-GAAP adjusted EBITDA totaled a loss of $0.1 million compared to a loss of $0.1 million in Q4 2012. 

"We're pleased with the accelerated diner growth we delivered in North America and with the strong momentum we saw in our International business in 2013," said Matt Roberts, Chief Executive Officer of OpenTable.  "As we look to the year ahead, we believe the convenience and benefits that our diners and restaurant customers enjoy today are just the beginning of the value we can deliver as a company focused more broadly on the experience of dining out." 

Q4 2013 Consolidated Financial and Operating Summary

  • Installed restaurant base as of December 31, 2013, totaled 31,553.
  • Seated diners totaled 44.0 million, a 34% increase over Q4 2012.
  • Total revenues were $52.3 million in Q4 2013, a 22% increase over Q4 2012 revenues of $43.0 million
    • Reservation revenues were $32.5 million in Q4 2013, up 33% over Q4 2012 revenues of $24.5 million.  Reservation revenues primarily increased as a result of the increase in seated diners. 
    • Subscription revenues were $16.3 million in Q4 2013, up 12% over Q4 2012 revenues of $14.5 million.  Subscription revenues primarily increased as a result of the increase in installed restaurants using our Electronic Reservation Book solution. 
    • Other revenues were $3.5 million in Q4 2013, down 12% over Q4 2012 revenues of $4.0 million.  The decrease is primarily due to the change in the pricing of our promotional products from a flat rate to a pay-for-performance model, which is now classified as reservation revenues. 
  • Total costs and expenses were $39.1 million in Q4 2013, up 23% over Q4 2012 costs and expenses of $31.9 million.  The increase was primarily driven by an increase in online marketing expenses and amortization of intangibles from various acquisitions, combined with an 8% increase in headcount.
  • Total operating income was $13.2 million in Q4 2013 compared to $11.1 million in Q4 2012.  Non-GAAP consolidated operating income, excluding stock-based compensation expense, acquisition-related expenses and amortization of acquired intangibles was $19.0 million in Q4 2013 compared to $16.4 million in Q4 2012. 
  • The Q4 2013 GAAP income tax expense was $2.9 million, or a 22% tax rate.  In Q4 2013, the Company benefitted from certain non-recurring changes in estimates in its tax provision which resulted in a $1.7 million, or $0.07 per diluted share, reduction in Q4 2013 income tax expense.
  • Consolidated net income was $10.3 million, or $0.43 per diluted share, in Q4 2013 compared to $7.5 million, or $0.32 per diluted share, in Q4 2012.  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 $14.3 million, or $0.59 per diluted share, in Q4 2013 compared to $10.7 million, or $0.46 per diluted share, in Q4 2012.  
  • As of December 31, 2013, OpenTable had cash and cash equivalents and short-term investments of $114.5 million

2013 Consolidated Financial and Operating Summary

  • Total revenues were $190.1 million in 2013, up 18% over 2012 revenues of $161.6 million.
  • Operating income totaled $46.4 million in 2013, or 24% of consolidated revenues, a   27% increase over 2012.  Non-GAAP consolidated operating income, excluding stock-based compensation expense, acquisition-related expenses and amortization of acquired intangibles, was $69.1 million in 2013, or 36% of consolidated revenues, a 13% increase over 2012.
  • Non-GAAP adjusted EBITDA totaled $81.5 million in 2013, or 43% of consolidated revenues, a 16% increase over 2012.

"With Q4 2013 North America seated diner growth rates accelerating for the fourth sequential quarter, it's gratifying to see early returns on the investments we made in 2013," said Duncan Robertson, Chief Financial Officer of OpenTable.  "We believe our continued investments position the Company well for growth in 2014 and beyond."

Business Outlook

As of today, OpenTable is providing guidance for Q1 2014 and the full year 2014 on revenue, non-GAAP adjusted EBITDA and other consolidated metrics. 

Q1 2014 Guidance:

  • In the North America segment the Company estimates revenue to be in the range of $45.8 million to $47.0 million and non-GAAP adjusted EBITDA to be in the range of $20.5 million to $21.7 million.   
  • In the International segment the Company estimates revenue to be in the range of $7.5 million to $7.9 million and non-GAAP adjusted EBITDA loss to be in the range of $1.5 million to $1.8 million.
  • On a consolidated basis the Company estimates revenue to be in the range of $53.3 million to $54.9 million, non-GAAP adjusted EBITDA to be in the range of $18.7 million to $20.2 million, GAAP EPS to be in the range of $0.24 to $0.28 and non-GAAP EPS to be in the range of $0.39 to $0.43.

Full Year 2014 Guidance:

  • In the North America segment the Company estimates revenue to be in the range of $189.0 million to $195.0 million and non-GAAP adjusted EBITDA to be in the range of $88.0 million to $93.8 million
  • In the International segment the Company estimates revenue to be in the range of $32.0 million to $34.0 million and non-GAAP adjusted EBITDA loss to be in the range of $3.4 million to $5.3 million.
  • On a consolidated basis the Company estimates revenue to be in the range of $221.0 million to $229.0 million, non-GAAP adjusted EBITDA to be in the range of $82.7 million to $90.4 million, GAAP EPS to be in the range of $1.09 and $1.29 and non-GAAP EPS to be in the range of $1.71 to $1.92.

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 February 28, 2014, 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.

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. 

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 Q1 2014 and the full year 2014 and quotations from management in this press release.  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 Company's ability to accurately forecast revenues and expenses; worldwide economic conditions; 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 effects of increased competition; the Company's ability to successfully enter new markets and manage its international expansion; the impact of the fluctuations in currency exchange rates; 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, 2012 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 the world's leading provider of online restaurant reservations, seating over 14 million diners per month via online bookings across more than 31,000 restaurants. The OpenTable network connects restaurants and diners, helping diners discover and book the perfect table and helping restaurants deliver personalized hospitality to keep guests coming back. The OpenTable service enables diners to see which restaurants have available tables, select a restaurant based on verified diner reviews, menus and other helpful information, and easily book a reservation. In addition to the Company's website and mobile apps, OpenTable powers online reservations for nearly 600 partners, including many of the Internet's most popular global and local brands. For restaurants, the OpenTable hospitality solutions enable them to manage their reservation book, streamline their operations and enhance their service levels. Since its inception in 1998, OpenTable has seated more than 575 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, the leading consumer destination site for restaurant reservations in the UK.  More information is available on http://www.opentable.com.      

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










December 31,


December 31,


2013


2012


(In thousands)

ASSETS








CURRENT ASSETS:




  Cash and cash equivalents

$            100,283


$            102,772

  Short-term investments

14,263


733

  Accounts receivable, net 

25,359


22,015

  Prepaid expenses and other current assets

4,659


2,924

  Deferred tax asset

17,861


14,353





           Total current assets

162,425


142,797





Property, equipment and software, net

30,972


21,271

Goodwill

79,271


46,304

Intangibles, net

23,376


15,226

Deferred tax asset

14,092


10,628

Other assets

835


1,021





TOTAL ASSETS

$            310,971


$            237,247





LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:




  Accounts payable and accrued expenses

$              13,832


$              13,847

  Accrued compensation

4,692


5,167

  Deferred revenue

1,556


1,563

  Deferred tax liability

-


107

  Dining rewards payable

37,509


27,611

           Total current liabilities

57,589


48,295





  Deferred revenue — non-current

1,894


2,054

  Deferred tax liability

2,508


3,268

  Income tax liability

15,597


15,639

  Other long-term liabilities

3,121


76





           Total liabilities

80,709


69,332









STOCKHOLDERS' EQUITY:




  Common stock

3


2

  Additional paid-in capital

263,697


211,408

  Treasury stock

(74,247)


(50,685)

  Accumulated other comprehensive income 

1,095


861

  Retained earnings 

39,714


6,329





           Total stockholders' equity

230,262


167,915





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$            310,971


$            237,247

 

OPENTABLE, INC.

UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS












Three Months Ended


Twelve Months Ended



December 31,


December 31,



2013


2012


2013


2012



(In thousands, except per share amounts)










REVENUES


$         52,291


$         42,967


$      190,050


$     161,632










COSTS AND EXPENSES:









  Operations and support (1)


12,535


10,506


48,185


41,908

  Sales and marketing (1)


12,399


8,972


41,926


34,531

  Technology (1)


5,784


3,965


20,089


14,564

  General and administrative (1)


8,346


8,407


33,421


34,080










           Total costs and expenses


39,064


31,850


143,621


125,083










Income from operations


13,227


11,117


46,429


36,549

Other income, net


9


33


(10)


99










Income before taxes


13,236


11,150


46,419


36,648

Income tax expense 


2,922


3,687


13,034


12,676










NET INCOME


$         10,314


$           7,463


$        33,385


$       23,972










Net income per share:









  Basic


$           0.44


$           0.33


$         1.45


$        1.06

  Diluted


$           0.43


$           0.32


$         1.39


$        1.03










Weighted average shares outstanding:









  Basic


23,309


22,802


23,042


22,639

  Diluted


24,254


23,459


23,974


23,249



















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







  Operations and support


$                    280


$                    331


$                  787


$              1,297

  Sales and marketing


972


1,128


3,675


5,174

  Technology


1,323


1,101


5,088


3,285

  General and administrative


1,671


1,999


7,237


10,890



$                 4,246


$                 4,559


$             16,787


$            20,646










Other Operational Data:









  Installed restaurants (at period end):









    North America


23,824


19,801


23,824


19,801

    International


7,729


7,716


7,729


7,716

    Total


31,553


27,517


31,553


27,517










  Seated diners (in thousands):









    North America


39,770


29,861


144,143


113,053

    International


4,241


2,971


13,964


9,771

    Total


44,011


32,832


158,107


122,824










  Headcount (at period end):









    North America


461


423


461


423

    International


164


157


164


157

    Total


625


580


625


580










Additional Financial Data:









  Revenues:









    North America









     Reservation


$         27,076


$         20,801


$        98,088


$       78,929

     Subscription


14,279


12,696


54,377


49,371

     Other


3,324


3,154


11,996


11,038

     Total North America Revenues


$         44,679


$         36,651


$      164,461


$     139,338

    International









     Reservation


$           5,417


$           3,678


$        16,995


$       12,099

     Subscription


2,021


1,834


7,468


6,890

     Other


174


804


1,126


3,305

     Total International Revenues


7,612


6,316


25,589


22,294

    Total Revenues


$         52,291


$         42,967


$      190,050


$     161,632










  Income (loss) from operations:









    North America


$         14,421


$         12,739


$        54,260


$       45,674

    International


(1,194)


(1,622)


(7,831)


(9,125)

    Total


$         13,227


$         11,117


$        46,429


$       36,549










  Depreciation and amortization:









    North America


$           4,066


$           2,072


$        13,485


$        7,532

    International


713


1,003


3,723


5,216

    Total


$           4,779


$           3,075


$        17,208


$       12,748










  Stock-based compensation:









    North America


$           3,859


$           4,046


$        15,266


$       18,493

    International


387


513


1,521


2,153

    Total


$           4,246


$           4,559


$        16,787


$       20,646

 

 

OPENTABLE, INC.

RECONCILIATION OF GAAP TO NON-GAAP OPERATING RESULTS





















Three Months Ended


Twelve Months Ended



December 31,


December 31,



2013


2012


2013


2012



(In thousands, except per share amounts)










Non-GAAP consolidated net income per share:









GAAP net income "as reported"


$        10,314


$         7,463


$        33,385


$        23,972

Add back: stock-based compensation expense


4,246


4,559


16,787


20,646

Income tax effect of stock-based compensation


(1,312)


(1,729)


(5,268)


(8,027)

Add back: acquisition-related expenses


286


95


1,037


199

Income tax effect of acquisition-related expenses


(109)


(35)


(391)


(75)

Add back: amortization of acquired intangibles


1,243


600


4,847


3,638

Income tax effect of amortization of intangibles


(413)


(273)


(1,444)


(1,099)










NON-GAAP CONSOLIDATED NET INCOME 


$        14,255


$        10,680


$        48,953


$        39,254










Non-GAAP diluted net income per share


$           0.59


$           0.46


$           2.04


$           1.69










Weighted average diluted shares outstanding


24,254


23,459


23,974


23,249










Non-GAAP consolidated operating income:









GAAP income from operations "as reported"


$        13,227


$        11,117


$        46,429


$        36,549

Add back: stock-based compensation expense


4,246


4,559


16,787


20,646

Add back: acquisition-related expenses


286


95


1,037


199

Add back: amortization of acquired intangibles


1,243


600


4,847


3,638










NON-GAAP OPERATING INCOME


$        19,002


$        16,371


$        69,100


$        61,032










North America Adjusted EBITDA:









GAAP operating income "as reported"


$        14,421


$        12,739


$        54,260


$        45,674










Adjustments:









  Stock-based compensation expense


3,859


4,046


15,266


18,493

  Acquisition-related expense


286


95


1,037


199

  Amortization of acquired intangibles


1,243


228


3,772


605

  Depreciation and other amortization expense


2,823


1,844


9,713


6,927










           North America Adjusted EBITDA


$        22,632


$        18,952


$        84,048


$        71,898










International Adjusted EBITDA:









GAAP operating loss "as reported"


$        (1,194)


$        (1,622)


$        (7,831)


$        (9,125)










Adjustments:









  Stock-based compensation expense


387


513


1,521


2,153

  Amortization of acquired intangibles


-


372


1,075


3,033

  Depreciation and other amortization expense


713


631


2,648


2,183










           International Adjusted EBITDA


$            (94)


$          (106)


$        (2,587)


$        (1,756)










Consolidated Adjusted EBITDA:









GAAP operating income "as reported"


$        13,227


$        11,117


$        46,429


$        36,549










Adjustments:









  Stock-based compensation expense


4,246


4,559


16,787


20,646

  Acquisition-related expense


286


95


1,037


199

  Amortization of acquired intangibles


1,243


600


4,847


3,638

  Depreciation and other amortization expense


3,536


2,475


12,361


9,110










           Consolidated Adjusted EBITDA


$        22,538


$        18,846


$        81,461


$        70,142

 

OPENTABLE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FORWARD-LOOKING GUIDANCE





















Forward-Looking Guidance



Three Months Ending


Twelve Months Ending



March 31, 2014


December 31, 2014



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


$         5,940


$         6,900


$        26,607


$        31,535

Add back: stock-based compensation expense


4,280


4,280


18,672


18,672

Income tax effect of stock-based compensation


(1,603)


(1,603)


(6,993)


(6,993)

Add back: amortization of acquired intangibles


1,363


1,363


6,071


6,071

Income tax effect of amortization of intangibles


(529)


(529)


(2,356)


(2,356)










NON-GAAP CONSOLIDATED NET INCOME 


$         9,451


$        10,411


$        42,001


$        46,929










GAAP diluted net income per share


$           0.24


$           0.28


$           1.09


$           1.29

Non-GAAP diluted net income per share


$           0.39


$           0.43


$           1.71


$           1.92










Weighted average diluted shares outstanding


24,400


24,400


24,500


24,500










North America Adjusted EBITDA:









GAAP operating income


$        12,160


$        13,360


$        50,837


$        56,637










Adjustments:









  Stock-based compensation expense


3,937


3,937


17,106


17,106

  Amortization of acquired intangibles


1,363


1,363


6,071


6,071

  Depreciation and other amortization expense


3,040


3,040


13,986


13,986










           North America Adjusted EBITDA


$        20,500


$        21,700


$        88,000


$        93,800










International Adjusted EBITDA:









GAAP operating loss


$        (2,900)


$        (2,600)


$        (9,349)


$        (7,449)










Adjustments:









  Stock-based compensation expense


343


343


1,566


1,566

  Amortization of acquired intangibles


-


-


-


-

  Depreciation and other amortization expense


757


757


2,483


2,483










           International Adjusted EBITDA


$        (1,800)


$        (1,500)


$        (5,300)


$        (3,400)










Consolidated Adjusted EBITDA:









GAAP operating income 


$         9,260


$        10,760


$        41,488


$        49,188










Adjustments:









  Stock-based compensation expense


4,280


4,280


18,672


18,672

  Amortization of acquired intangibles


1,363


1,363


6,071


6,071

  Depreciation and other amortization expense


3,797


3,797


16,469


16,469










           Consolidated Adjusted EBITDA


$        18,700


$        20,200


$        82,700


$        90,400

SOURCE OpenTable, Inc.

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