Press Releases

RetailMeNot Announces Third Quarter 2014 Financial Results
-- Net Revenues of $56.5 million, up 19% year-over-year
-- Net Income of $2.5 million
-- GAAP EPS of $0.05; non-GAAP EPS of $0.16
-- Adjusted EBITDA of $16.7 million

AUSTIN, Texas, Nov. 3, 2014 /PRNewswire/ -- RetailMeNot, Inc. (NASDAQ: SALE), the operator of the world's largest marketplace for digital offers, today announced its financial results for the third quarter ended September 30, 2014.

RetailMeNot, Inc.

Third Quarter Financial Results Highlights and Key Operating Metrics

(All comparisons are made to the third quarter of 2013 unless otherwise noted)

  • Net revenues were $56.5 million, an increase of 19%.
  • Net revenues from international markets totaled $13.2 million, up 37% and representing 23% of total net revenues.
  • Mobile net revenues totaled $11.7 million, up 101% and representing 21% of total net revenues.  Mobile net revenues include net revenues from our mobile websites, mobile applications and our in-store products.
  • GAAP net income was $2.5 million, reflecting a decline of 55%, compared to $5.6 million.
  • Non-GAAP net income was $9.1 million, reflecting a decline of 6%, compared to $9.6 million.
  • EPS for the quarter was $0.05 per share, based on 55.1 million fully-diluted, weighted-average shares outstanding.
  • Non-GAAP EPS was $0.16 per share, based on 55.1 million fully-diluted, weighted-average shares outstanding.
  • Adjusted EBITDA was $16.7 million, up 2% and representing 30% of total net revenues.
  • Visits grew 22% to 161.5 million.

"I am pleased with the strong user engagement levels we have seen this quarter and am especially proud of the release of the redesigned RetailMeNot mobile app, which highlights an enhanced personalized and relevant savings experience for our users," said Cotter Cunningham, CEO & Founder, RetailMeNot, Inc. "As we enter the holiday shopping season, we will continue to focus on broader consumer engagement through our mobile channel, and we look forward to offering retailers new opportunities to help build their brand, increase store traffic and grow sales."

Monthly mobile unique visitors totaled 14.5 million, up 81% from the prior year.  Global subscribers to email and store alerts totaled 25.8 million, up 87% year-over-year.

RetailMeNot counts each of the following as a monthly mobile unique visitor: (i) the first time a specific mobile device accesses one of our mobile applications during a calendar month, and (ii) the first time a specific mobile device accesses one of our mobile websites using a specific web browser during a calendar month. If a mobile device accesses more than one of our mobile websites or mobile applications in a single calendar month, the first access to each such mobile website or mobile application is counted as a monthly mobile unique visitor as they are tracked separately for each mobile domain. We measure monthly mobile unique visitors with a combination of internal data sources and Google Analytics data.

Business Outlook

Our outlook reflects continued improvement in organic search rankings resulting in an increase in overall traffic growth.  The majority of this visit growth is coming from an acceleration in lower monetizing mobile visits in the US.  Our outlook also incorporates weaker than expected visit growth in our international markets and the impact of foreign exchange rates. As a result of these trends, we have tightened our top line growth outlook for the fourth quarter and full year:

Fourth Quarter 2014

  • Net revenues are expected to be in the range of $84.7 to $86.7 million, or growth of 9% at the mid-point.
  • Adjusted EBITDA is expected to be in the range of $32.2 to $35.2 million, or adjusted EBITDA margins of 39% at the mid-point. 

Full Year 2014

  • Net revenues are expected to be in the range of $262.0 to $264.0 million, or growth of 25% at the mid-point.
  • Adjusted EBITDA is expected to be in the range of $90.0 to $93.0 million, or adjusted EBITDA margins of 35% at the mid-point.

The above statements are based on current expectations and actual results may differ materially as explained in "Forward-looking Statements" below. Information about RetailMeNot's use of non-GAAP financial measures is provided below under the caption "Use of Non-GAAP Financial Measures".

Quarterly Conference Call

RetailMeNot will host a webcast to discuss its third quarter 2014 financial results and business outlook today at 4:30 p.m. Eastern Time (3:30 p.m. Central Time). 

A live webcast of the conference call can be accessed within the investor relations section of the RetailMeNot website at http://investor.retailmenot.com. This webcast will contain forward-looking statements and other material information regarding the company's financial and operating results. Additionally, in advance of the conference call, RetailMeNot will post third quarter 2014 Management Commentary that can be accessed at http://investor.retailmenot.com

Following completion of the call, a recorded replay of the webcast will be available on the website at http://investor.retailmenot.com.  A replay of the call will be available beginning at 6:30 p.m. Central Time on November 3, 2014 through November 10, 2014 at 11:59 p.m. Central Time. To listen to the telephone replay, call (855) 859-2056 within the US, or (404) 537-3406 if calling internationally.  Access Code 15206550. 

About RetailMeNot, Inc. 

RetailMeNot, Inc. (www.retailmenot.com/corp/) operates the world's largest marketplace for digital offers. The company enables consumers across the globe to find hundreds of thousands of digital offers from their favorite retailers and brands. During the 12 months ended September 30, 2014, RetailMeNot, Inc. experienced more than 655 million visits to its websites.  RetailMeNot estimates $3.5 billion in paid retailer sales in 2013 were attributable to consumer traffic from digital offers in its marketplace. The RetailMeNot, Inc. portfolio includes RetailMeNot.com, the largest digital offer marketplace in the United States; RetailMeNot.ca in Canada; VoucherCodes.co.uk, the largest digital offer marketplace in the United Kingdom; Deals.com in Germany; Actiepagina.nl, a leading digital offer site in the Netherlands; Bons-de-Reduction.com and Ma-Reduc.com, leading digital offer sites in France; Poulpeo.com, a leading digital offer site with cash back in France; and Deals2Buy.com, a leading digital offer site in North America. RetailMeNot, Inc. is listed on the NASDAQ stock exchange under the ticker symbol "SALE." Investors interested in learning more about the company can visit http://investor.retailmenot.com.

Key Operating Metrics

Visits. RetailMeNot defines a visit as a group of interactions that take place on one of RetailMeNot's websites from computers, smartphones, tablets or other mobile devices within a given time frame as measured by Google Analytics, a product that provides digital marketing intelligence. A single visit can contain multiple page views, events, social interactions and e-commerce transactions. A single visitor can open multiple visits. Visits can occur on the same day, or over several days, weeks or months. As soon as one visit ends, there is then an opportunity to start a new visit. A visit ends either through the passage of time or a campaign change, with a campaign generally meaning arrival via search engine, referring site or campaign-tagged information. A visit ends through passage of time either after 30 minutes of inactivity or at midnight Pacific Time. A visit ends through a campaign change if a visitor arrives via one campaign or source, leaves the site, and then returns via another campaign or source.  Visits for the period do not include interactions through our mobile applications.

Use of Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, this press release includes references to Adjusted EBITDA, non-GAAP net income and non-GAAP net income per share, all of which are non-GAAP financial measures.  For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, see the tables provided in this release below.

RetailMeNot defines adjusted EBITDA as net income plus depreciation, amortization of intangible assets, stock-based compensation expense, third-party acquisition-related costs, other non-cash operating expenses (including compensation arrangements entered into in connection with acquisitions), net interest expense, other non-operating income or expense (including changes in fair value of warrant liabilities and contingent consideration) and income taxes, net of any foreign exchange income or expense.

RetailMeNot discloses adjusted EBITDA because it is a key measure used by RetailMeNot and its board of directors to understand and evaluate RetailMeNot's financial and operating performance, establish budgets and operational goals and as an element in determining executive compensation.  RetailMeNot believes it also facilitates period-to-period comparisons of operations that could otherwise be masked by the effect of the expenses that RetailMeNot excludes in this non-GAAP financial measure and facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. 

Our presentation of non-GAAP net income and non-GAAP net income per share excludes the impact of amortization of purchased intangible assets, stock-based compensation expense, third party acquisition-related costs, other non-cash operating expenses (including compensation arrangements entered into in connection with acquisitions), other income or expense and income taxes, net of the tax effect of the adjustments above.  These measures are not key metrics used by RetailMeNot or its board of directors to measure financial or operating performance or otherwise manage the business. However, RetailMeNot provides non-GAAP net income and non-GAAP net income per share as supplemental information for investors, as they facilitate period-to-period comparisons of operations that could otherwise be masked by the effect of the expenses that RetailMeNot excludes in these non-GAAP financial measures and facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.  

Adjusted EBITDA, non-GAAP net income and non-GAAP net income per share have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of RetailMeNot's results as reported under GAAP. Because of these limitations, you should consider Adjusted EBITDA, non-GAAP net income and non-GAAP net income per share alongside other financial performance measures, including various cash flow metrics, net income and RetailMeNot's other GAAP results.

Forward-looking Statements

This release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included herein regarding RetailMeNot's strategy, future operations, future financial position, future net revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "seek," "should," "target," "will," "would" and similar expressions (or the negative of these terms) are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about management's estimates regarding future net revenues and financial performance, visits and other statements about management's beliefs, intentions or goals. RetailMeNot may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on RetailMeNot's forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to, (1) risks related to RetailMeNot's ability to manage its growth, including accurately planning and forecasting its financial results; (2) RetailMeNot's ability to attract visitors to its websites from search engines; (3)  RetailMeNot's ability to attract and retain paid retailers and maintain its relationships with performance marketing networks; (4) RetailMeNot's ability to obtain and maintain digital offer content and maintain the positive perception of its brand; (5) RetailMeNot's need to monetize digital offers available through its mobile solutions; (6) the competitive environment for RetailMeNot's business; (7) changes in consumer sentiment regarding RetailMeNot's use of cookies; (8) RetailMeNot's need to manage regulatory, tax and litigation risks; (9) RetailMeNot's ability to protect consumer data and its intellectual property; (10) RetailMeNot's ability to manage international business uncertainties; (11) the impact and integration of recent and future acquisitions; and (12) other risks and potential factors that could affect RetailMeNot's business and financial results identified in RetailMeNot's filings with the Securities and Exchange Commission (the "SEC"), including its annual report on Form 10-K filed with the SEC on February 18, 2014 and its most recent quarterly report on Form 10-Q filed with the SEC on August 6, 2014.  Additional information will also be set forth in RetailMeNot's future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that RetailMeNot makes with the SEC. RetailMeNot does not intend or undertake any duty to release publicly any updates or revisions to any forward-looking statements contained herein.

Investor Contact
Michael Magaro
RetailMeNot, Inc.
mmagaro@rmn.com 
(512) 777-2899

Media Contact
Brian Hoyt
RetailMeNot, Inc.
bhoyt@rmn.com 
(512) 777-2957

RetailMeNot, Inc.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)










Three Months Ended September 30,


Nine Months Ended September 30,


2014


2013


2014


2013









Net revenues

$56,470


$47,350


$177,246


$131,312

Costs and expenses:








Cost of net revenues (1)

4,598


3,275


13,676


8,735

Product development (1)

12,310


8,214


35,996


21,103

Sales and marketing (1)

19,198


15,699


59,565


40,974

General and administrative (1)

10,915


7,250


30,553


19,919

Amortization of purchased intangible assets

2,923


3,056


9,560


8,673

Other operating expenses

750


441


3,210


1,299

Total costs and expenses

50,694


37,935


152,560


100,703

Income from operations

5,776


9,415


24,686


30,609









Other income (expense):








Interest expense, net

(374)


(1,156)


(1,399)


(2,410)

Other income (expense), net

(674)


473


(974)


451









Income before income taxes

4,728


8,732


22,313


28,650

Provision for income taxes

(2,200)


(3,139)


(9,384)


(10,959)









Net income

2,528


5,593


12,929


17,691









Preferred stock dividends on participating preferred stock

-


(7,752)


-


(19,928)









Total undistributed earnings (loss)

2,528


(2,159)


12,929


(2,237)

Undistributed earnings allocated to participating preferred stock

-


-


-


-









Net income (loss) attributable to common stockholders

2,528


(2,159)


12,929


(2,237)









Net income (loss) per share attributable to common stockholders:








 Basic 

$0.05


-$0.06


$0.24


-$0.16

 Diluted 

$0.05


-$0.06


$0.23


-$0.16









Weighted average number of shares used in computing net income (loss) per share:








 Basic 

53,999


38,235


53,668


13,703

 Diluted 

55,086


38,235


55,366


13,703

















RetailMeNot, Inc.

Condensed Consolidated Statements of Operations (continued)

(Unaudited, in thousands)










Three Months Ended September 30,


Nine Months Ended September 30,


2014


2013


2014


2013

 (1)  Includes stock-based compensation as follows: 








Cost of net revenues

$496


$156


$1,307


$449

Product development

1,939


597


5,159


1,641

Sales and marketing

1,305


560


4,019


1,568

General and administrative

2,588


1,304


7,223


3,410

 Total 

$6,328


$2,617


$17,708


$7,068

 

RetailMeNot, Inc.

Reconciliation of Adjusted EBITDA

(Unaudited, in thousands)










Three Months Ended September 30,


Nine Months Ended September 30,


2014


2013


2014


2013









 Net income 

$   2,528


$    5,593


$  12,929


$  17,691

 Depreciation and amortization 

3,869


3,547


12,159


10,076

 Stock-based compensation expense 

6,328


2,617


17,708


7,068

 Third party acquisition-related costs 

-


388


-


1,305

 Other operating expenses 

750


441


3,210


1,299

 Interest expense, net 

374


1,156


1,399


2,410

 Other income (expense), net 

674


(473)


974


(451)

 Provision for income taxes 

2,200


3,139


9,384


10,959









 Adjusted EBITDA 

$  16,723


$  16,408


$   57,763


$  50,357

























RetailMeNot, Inc.

Reconciliation of Non-GAAP Net Income and  Non-GAAP Diluted EPS

(Unaudited, in thousands, except per share data)


















Three Months Ended September 30,


Nine Months Ended September 30,


2014


2013


2014


2013

GAAP Income before income taxes

4,728


8,732


22,313


28,650

GAAP provision for income taxes

(2,200)


(3,139)


(9,384)


(10,959)

GAAP Net income

$   2,528


$    5,593


$  12,929


$  17,691

Non-GAAP adjustments to net income:








 Amortization of purchased intangibles 

2,923


3,056


9,560


8,673

 Stock-based compensation expense 

6,328


2,617


17,708


7,068

 Third party acquisition-related costs 

-


388


-


1,305

 Other operating expenses 

750


441


3,210


1,299

 Other income (expense), net 

-


(17)


(12)


(59)

 Less: Tax effect of adjustments above 

(3,478)


(2,454)


(10,131)


(5,457)

 Total non-GAAP net income 

$    9,051


$    9,624


$  33,264


$  30,520









Diluted net income per share








GAAP  

$      0.05


$    (0.06)


$       0.23


$     (0.16)

Non-GAAP

$      0.16


$       0.19


$       0.60


$       0.62









Shares used in non-GAAP diluted EPS calculation:








Weighed-average shares outstanding used in calculating GAAP diluted EPS

55,086


38,235


55,366


13,703

Additional dilutive securities for non-GAAP diluted EPS

-


2,681


-


2,225

Weighted-average shares from assumed conversion of preferred stock prior to IPO

-


11,045


-


33,014

Weighted-average shares outstanding used in calculating non-GAAP diluted EPS

55,086


51,961


55,366


48,942









Reconciliation of non-GAAP effective tax rate:








GAAP Effective tax rate

47%


36%


42%


38%

Tax effect of non-GAAP adjustments to net income

-8%


1%


-5%


-3%

Non-GAAP effective tax rate

39%


37%


37%


35%

 

RetailMeNot, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands)






Sep-14


Dec-13

 Assets 




 Current assets: 




 Cash and cash equivalents 

$   215,694


$    165,881

 Accounts receivable, net 

42,212


59,286

 Prepaids and other current assets, net 

14,926


10,661

 Total current assets 

272,832


235,828





 Property and equipment, net 

15,267


10,317

 Intangible assets, net 

73,803


80,813

 Goodwill 

177,863


179,659

 Other assets, net 

4,665


5,465

 Total assets 

$  544,430


$  512,082





 Liabilities, Redeemable Convertible Preferred Stock
 and Stockholders' Equity (Deficit) 




 Current liabilities: 




 Accounts payable 

$        4,158


$         6,217

 Accrued compensation and benefits 

10,300


9,875

 Accrued expenses and other current liabilities 

5,753


5,586

 Income taxes payable 

2,480


4,835

 Current maturities of long term debt 

7,000


15,063

 Total current liabilities 

29,691


41,576





 Deferred tax liability--noncurrent 

3,620


8,796

 Long term debt 

21,000


26,250

 Other noncurrent liabilities 

6,749


4,151

 Total liabilities 

61,060


80,773





 Stockholders' equity (deficit): 




 Common stock 

54


53

 Additional paid-In capital 

508,513


467,461

 Accumulated other comprehensive loss 

(383)


1,538

 Accumulated deficit 

(24,814)


(37,743)

 Total stockholders' equity (deficit) 

483,370


431,309

 Liabilities, Redeemable Convertible Preferred Stock
 and Stockholders' Equity (Deficit) 

$  544,430


$  512,082

 

RetailMeNot, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)










Three Months Ended September 30,


Nine Months September 30,


2014


2013


2014


2013

 Cash flows from operating activities: 








Net income

$2,528


$5,593


$12,929


$17,691

 Adjustments to reconcile net income to cash provided by operating activities: 








Depreciation and amortization expense

3,869


3,547


12,159


10,076

Stock based compensation expense

6,328


2,617


17,708


7,068

Excess income tax benefit from employee stock-based awards and other

(1,481)


(1,287)


(12,004)


(1,287)

Deferred income tax benefit 

(1,008)


(2,048)


(2,796)


(2,853)

Non-cash interest expense

97


665


290


900

Impairment of assets

-


-


-


-

Amortization of deferred compensation

751


441


3,210


1,301

Other non-cash expense and fair value change in liabilities, net

579


(221)


942


(64)

Provision for doubtful accounts receivable

1,145


-


1,967


142

Changes in operating assets and liabilities:








Accounts receivable, net

(2,230)


(4,175)


14,557


2,323

Prepaid expenses and other current assets, net

1,723


739


416


(1,723)

Accounts payable

1,231


613


(735)


(1,347)

Accrued expenses and other current liabilities

1,294


1,195


2,245


3,269

Other noncurrent assets and liabilities

271


(626)


676


(530)

 Net cash provided by (used in) operating activities 

15,097


7,053


51,564


34,966

 Cash flows from investing activities: 








Payments for acquisition of businesses, net of acquired cash

-


(14,469)


(75)


(16,400)

Purchase of other assets

(3,285)


(305)


(3,386)


(851)

Purchase of property and equipment

(3,395)


(2,328)


(6,854)


(4,160)

 Net cash used in investing activities 

(6,680)


(17,102)


(10,315)


(21,411)

 Cash flows from financing activities: 








    Proceeds from notes payable, net of issuance costs

-


33,069


-


33,069

    Payments on notes payable

(8,023)


(30,975)


(13,273)


(37,175)

    Payments of preferred stock dividends

-


(58,682)


-


(58,682)

    Proceeds from public offerings, net of offering costs

-


85,365


(61)


85,365

    Excess income tax benefit from stock-based compensation and other

1,481


1,287


12,004


1,287

    Payments of principal on capital lease arrangements

(1)


(3)


(7)


(8)

    Payments for repurchase of common stock

-


-


(6)


-

    Proceeds from exercise of options and warrants to purchase
    common stock

830


1,083


10,627


1,652

 Net cash provided by (used in) financing activities 

(5,713)


31,144


9,284


25,508

 Effect of exchange rate changes on cash 

(915)


442


(720)


203









 Change in cash and cash equivalents 

1,789


21,537


49,813


39,266

  Cash and cash equivalents, beginning of period 

213,905


114,871


165,881


97,142









  Cash and cash equivalents, end of period 

$215,694


$136,408


$215,694


$136,408

Logo - http://photos.prnewswire.com/prnh/20130626/DA38415LOGO

SOURCE RetailMeNot, Inc.


Media Contacts

North America
RetailMeNot PR Department
Media Inquiries: +1 512 777 2957
France
Sophie Cazaux
RetailMeNot, France, S.A.S
+33 (0) 1 42 61 15 80