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LiveDeal, Inc. Announces Fiscal 2009 Third-Quarter and Year-to-Date Financial Results
Posted by: gurufocus (IP Logged)
Date: August 17, 2009 08:28AM

Press Release: LiveDeal, Inc. Announces Fiscal 2009 Third-Quarter and Year-to-Date Financial Results

LAS VEGAS--(BUSINESS WIRE)--LiveDeal, Inc. (NASDAQ: LIVE), a provider of web-based customer acquisition services for small local businesses and Internet Yellow Pages directory services, announced today its financial results for the third quarter and nine months of fiscal 2009. LiveDeal will host a conference call today, Monday, August 17 at 4:15 p.m. EDT (1:15 p.m. PDT) to discuss these results. Dial-in information is provided below.

Fiscal 2009 Third-Quarter and Year-to-Date Financial Results

For the third quarter of fiscal 2009, total revenue was $2.48 million, compared to $5.43 million in the same quarter of fiscal 2008. Approximately $4.1 million of the decline in revenues was attributable to a reduction in LiveDeal’s Yellow Pages directory services business, which resulted in part from the sale of a large portion of the Company’s customer list during the second quarter. This decrease was partially offset by approximately $1.14 million in revenue from LiveDeal’s Direct Sales business, which provides web-based customer acquisition services for small local businesses.

The Company reported a net loss for the quarter of $2.1 million, or a net loss of $0.35 per fully diluted share. The loss included the net impact of approximately $0.42 million in restructuring charges and expenses related to the separation of its former CEO.

As the Company reported during the quarter, the company initiated significant restructuring that consolidated the company into its Las Vegas Headquarters and initiated cost reductions that are intended to save the company over $1.8 million, or $0.29 per share over the fiscal year. At the same time it has initiated an aggressive program to roll out products and services to enhance current search engine marketing products that address the most critical needs of small business as it migrates from offline to online customer acquisition.

"We are taking steps to reduce cost and repositioning the company for profitable growth," said Richard Sommer, Chief Executive Officer. "Local is one of the great opportunity spaces on the Internet, and LiveDeal is well positioned to grow in that space."

Net revenues for the first nine months of fiscal 2009 decreased to $11.0 million from $17.9 million in the same period of last year for reasons similar to those stated above. The Company expects the percentage of its total revenues derived from its Direct Sales business to continue to increase as the Company emphasizes this premium segment (which includes the LiveSites, LiveAdvisor and LiveClicks products) over its legacy Yellow Pages directory services business.

The Company reported a net loss of $20.3 million for the first nine months of fiscal 2009, versus a net loss of $1.25 million for the same period in fiscal 2008. The net loss for the first nine months of fiscal 2009 included a charge of $16.1 million for the impairment of goodwill and intangible assets related to its legacy businesses.

As of June 30, 2009, LiveDeal had cash on hand of $9.2 million and no long-term debt.

Fiscal 2009 Third-Quarter Highlights and Subsequent Events

  • Richard Sommer named Chief Executive Officer (CEO)
  • Initiated restructuring to reduce costs by $1.8 million or $0.29 per share.

During the Fiscal Second Quarter the Board of Directors replaced Mike Edelhart with Richard Sommer as Chief Executive Officer in order to continue to focus the company for growth. Mr. Sommer has previously been CEO of some of the fastest growing companies in Silicon Valley in the late 1980s and 1990s in his first tenure. He has led three previous search engine marketing companies that have been extremely successful in aggressive growth and profitability, including Realtor.com and HomeGain. All three search engine marketing (SEM) companies had as their primary customers small and medium size businesses including Realtors and Mortgage Brokers.

Further, the company initiated significant restructuring that consolidated the company into its Las Vegas Headquarters and initiated cost reductions that are intended to save the company over $1.8 million, or $0.29 per share over the fiscal year.

The Company continued to focus its efforts on being the \'small business Internet partner\' who helps small businesses use the Internet and technology to bring them customers and grow their business.

As a result of the growth in the Company\'s Direct Sales – Customer Acquisition Services business, the Company addressed its revenue recognition policy. Previously, the company recognised the value of the non-cancel-able portion of the Direct Sales\' customer contract as a receivable and billed the customer for the amount of the contract over the period of the contract. The Company only recognized a portion of the contract value as a revenue each month on a pro-rata basis, with the remainder of the non cancel-able portion of the contract maintained as a deferred revenue liability. In the fiscal second quarter 2009, the company adjusted its balance sheet presentation related to direct sales contracts to include in accounts receivable only those amounts that are outstanding receivables after having been billed in accordance with the terms of the contract. There was no material impact to the Company\'s financial condition, operating cash flows, and results of operations as a result of this correction. Prior periods have been adjusted to conform to the current period presentation.

Conference Call Information

LiveDeal will host a conference call to discuss its third quarter 2009 results and provide an update with respect to its business today, Monday, August 17th at 4:15 p.m. EDT (1:15 p.m. PDT). To participate in the conference call, dial (800) 510-9661 (domestic) or (617) 614-3452 (international). The passcode for the call is 770665518.

To listen to the live webcast of the conference call, please visit the Investor Relations portion of our website at [investor.livedeal.com] or go directly to the webcast link.

About LiveDeal, Inc.

LiveDeal, Inc. provides local customer acquisition services for small businesses combined with an Internet Yellow Pages directory to deliver an affordable way for businesses to extend their marketing reach to local, relevant customers via the Internet. Through its online property, www.livedeal.com, LiveDeal delivers local search engine marketing (SEM) such as its LiveClicks ™ and LiveAdvisor™ products that combine leading technology with a strong partnership model and an inside sales team to create an efficient platform local businesses need to create and optimize their Internet search advertising campaigns. LiveDeal partners with Google, Yahoo!, MSN and others. LiveDeal, Inc. is headquartered in Las Vegas, Nevada. For more information, please visit www.livedeal.com.

We have two inter-related primary lines of business: (1) We deliver a suite of customer acquisition services for small businesses, sold via telemarketing and supported by our websites and software that we have developed or licensed to manage search and other Internet services efficiently, and (2) we maintain a Yellow Pages directory with listings in every city and ZIP code across the U.S.

Forward-Looking and Cautionary Statements

This press release may include statements that constitute “forward-looking statements,” which are often characterized by the terms “may,” “believes,” “projects,” “expects,” or “anticipates,” and do not reflect historical facts. Forward-looking statements involve risks, uncertainties and other factors that may cause actual results, performance or achievements of LiveDeal, Inc. and its subsidiaries to be materially different from those expressed or implied by such forward-looking statements. Forward-looking statements included in this press release include statements concerning the Company’s expectation that: (i) it will achieve a healthy foundation for future growth and value creation; (ii) it will realize deferred revenue in fiscal 2009 and/or subsequent periods; (iii) it will capture a larger share of the local Internet business; (iv) its expanded suite of products will yield favorable results; and (v) its revenues will increasingly come from the Company’s Direct Sales business.

Factors that may affect forward-looking statements and the Company’s business generally include but are not limited to (i) the risk factors and cautionary statements set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008; (ii) other factors or statements described in the Company’s other filings with the Securities and Exchange Commission; and (iii) other factors that LiveDeal is currently unable to identify or quantify, but may exist in the future.

Forward-looking statements speak only as of the date the statement was made. LiveDeal does not undertake and specifically declines any obligation to update any forward-looking statements.

LIVEDEAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
     
 
June 30, September 30,
2009   2008
(unaudited) (as restated)
 
Assets
Cash and cash equivalents $ 9,205,343 $ 4,639,787
Certificates of deposit 100,000 -
Accounts receivable, net 1,644,966 6,326,272
Prepaid expenses and other current assets 437,141 792,309
Customer acquisition costs, net - 642,220
Income taxes receivable 595,713 487,532
Deferred tax asset, net of valuation allowance   271,148     949,121
Total current assets 12,254,311 13,837,241
Accounts receivable, long term portion, net 2,701,813 2,011,143
Property and equipment, net 667,659 959,854
Deposits and other assets 81,712 83,547
Intangible assets, net 2,375,170 6,736,078
Goodwill - 11,706,406
Deferred tax asset, long term, net of valuation allowance   -     3,863,502
Total assets $ 18,080,665   $ 39,197,771
 
Liabilities and Stockholders\' Equity
Liabilities:
Accounts payable $ 635,887 $ 1,078,712
Accrued liabilities 1,725,711 1,437,149
Current portion of capital lease obligation   68,820     61,149
Total current liabilities 2,430,418 2,577,010
Long term portion of capital lease obligation   135,729     170,838
Total liabilities   2,566,147     2,747,848
 
Commitments and contingencies
 
Stockholders\' equity:

Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 127,840 issued and outstanding, liquidation preference $38,202

10,866 10,866

Common stock, $0.001 par value, 100,000,000 shares authorized, 6,135,933 and 6,513,687 issued and outstanding at June 30, 2009 and September 30, 2008, respectively

6,136 6,514
Paid in capital 20,259,099 20,884,112
Retained earnings (accumulated deficit)   (4,761,583 )   15,548,431
Total stockholders\' equity   15,514,518     36,449,923
 
Total liabilities and stockholders\' equity $ 18,080,665   $ 39,197,771
 
 
LIVEDEAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
           
Three Months ended Nine Months ended
June 30, June 30,
2009

2008

2009 2008
 
Net revenues $ 2,448,569 $ 5,427,012 $ 11,006,358 $ 17,872,608
Cost of services   812,321     1,115,293     3,879,853     3,190,324  
Gross profit   1,636,248     4,311,719     7,126,505     14,682,284  
 
Operating expenses:
General and administrative expenses 3,812,983 4,807,460 12,126,364 12,047,495
Impairment of goodwill and intangible assets - - 16,111,494 -
Sales and marketing expenses   130,627     1,242,050     2,416,012     3,915,945  
Total operating expenses   3,943,610     6,049,510     30,653,870     15,963,440  
Operating loss (2,307,362 ) (1,737,791 ) (23,527,365 ) (1,281,156 )
Other income (expense):
Interest income, net 7,487 14,837 27,406 78,588
Other income (expense)   77,786     (18,269 )   7,341,784     (14,637 )
Total other income (expense)   85,273     (3,432 )   7,369,190     63,951  
 
Loss from continuing operations before income taxes (2,222,089 ) (1,741,223 ) (16,158,175 ) (1,217,205 )
Income tax provision (benefit)   (105,117 )   (221,763 )   4,057,695     (2,486 )
Loss from continuing operations (2,116,972 ) (1,519,460 ) (20,215,870 ) (1,214,719 )
 
Discontinued operations:

Income (loss) from discontinued component, including disposal costs

7,422 (97,760 ) (147,999 ) (58,345 )
Income tax provision (benefit)   2,773     (36,523 )   (55,293 )   (21,798 )
Income (loss) from discontinued operations 4,649 (61,237 ) (92,706 ) (36,547 )
       
Net loss $ (2,112,323 ) $ (1,580,697 ) $ (20,308,576 ) $ (1,251,266 )
 
Earnings per share - basic1:
Loss from continuing operations $ (0.35 ) $ (0.24 ) $ (3.37 ) $ (0.20 )
Discontinued operations   -     (0.01 )   (0.02 )   (0.01 )
Net loss $ (0.35 ) $ (0.25 ) $ (3.38 ) $ (0.20 )
 
Earnings per share - diluted1:
Loss from continuing operations $ (0.35 ) $ (0.24 ) $ (3.37 ) $ (0.20 )
Discontinued operations   -     (0.01 )   (0.02 )   (0.01 )
Net loss $ (0.35 ) $ (0.25 ) $ (3.38 ) $ (0.20 )