Digital River Releases First Quarter 2010 Financial Results
Minneapolis — April 29, 2010 - Digital River, Inc. (NASDAQ: DRIV), a leading
provider of global e-commerce solutions, reports its first quarter financial results.
First Quarter Ended March 31, 2010
GAAP Results
First quarter revenue totaled $98.7 million, compared to $102.9 million during the same period in 2009. These results were in line with management’s first
quarter revenue guidance of $95 - $99 million. Core revenue for the first quarter, which excludes all Symantec revenue, was $81.5 million.
First quarter GAAP net income was $7.0 million, or $0.18 per diluted share. This compares to GAAP net income of $13.3 million, or $0.36 per diluted share,
in the first quarter of 2009. These results exceeded management’s first quarter earnings guidance of $0.05 - $0.10 per diluted share.
Non-GAAP Results
First quarter non-GAAP net income was $11.4 million, or $0.30 per diluted share. This compares to non-GAAP net income of $20.8 million, or $0.56 per diluted
share, in the first quarter of 2009. These results exceeded management’s first quarter earnings guidance of $0.18 - $0.23 per diluted share.
Non-GAAP net income is computed by starting with GAAP pre-tax income as reported on the Company’s statement of income, then adding back the write-off of
debt financing costs, amortization of acquisition-related intangibles, one-time restructuring charges and stock-based compensation expense, to calculate non
-GAAP pre-tax income. This amount is then taxed at 27 percent to arrive at non-GAAP net income. This amount is then divided by fully-diluted GAAP shares
outstanding, which includes shares underlying the Company’s convertible senior notes, to derive non-GAAP diluted net income per share. To provide further
clarity, a detailed reconciliation on the comparability of the GAAP and non-GAAP data has been provided in table form following the financial statements
accompanying this release.
Today, the Company also announced an anticipated second quarter charge of approximately $2 million. The charge is primarily related to a reduction in
workforce.
“We signed some great new clients during the first quarter and earnings exceeded expectations,” said Joel Ronning, Digital River’s CEO. “While we had a
solid first quarter, we made a commitment to our shareholders last October that we would align our cost structure with revenue in 2010 following the loss of
a major customer. Even though we took this action, we remain optimistic about the business opportunities we see in our core markets and our opportunities for
growth.”
2010 Guidance
Forward-looking guidance for the quarter ending June 30, 2010, is as follows:
Second Quarter
- Core revenue, (revenue excluding Symantec) is expected to increase 15 percent compared to the same period last year;
- Revenue related to Symantec is expected to be approximately $4.5 million;
- Restructuring charge of approximately $2 million, primarily related to a reduction in workforce;
- GAAP diluted net loss per share of $0.12, assuming a 28 percent tax rate; and
- Non-GAAP diluted net income per share of $0.05, assuming a 27 percent tax rate.
Digital River will hold a conference call today at 4:45 p.m. EDT to discuss first quarter financial results.
A live webcast of Digital River’s earnings conference call can be accessed at http://www.digitalriver.com/investorrelations/. Alternatively, a live broadcast of the call may be
heard by using conference ID # 69894855 and dialing (877) 303-3145 inside the United States or Canada, or by calling +1 (408) 427-3861 from international
locations. A webcast replay of the call will be archived on Digital River’s corporate Web site.
Click here to access the Q1 2010
financial tables.
About Digital River, Inc.
Digital River, Inc., a leading provider of global e-commerce solutions, builds and manages online businesses for software and game publishers, consumer
electronics manufacturers, distributors, online retailers and affiliates. Its multi-channel e-commerce solution, which supports both direct and indirect
sales, is designed to help companies of all sizes maximize online revenues as well as reduce the costs and risks of running an e-commerce operation. The
company’s comprehensive platform offers site development and hosting, order management, fraud management, export controls, tax management, physical and
digital product fulfillment, multi-lingual customer service, advanced reporting and strategic marketing services.
Founded in 1994, Digital River is headquartered in Minneapolis with offices across the U.S., Asia, Europe and South America. For more details about
Digital River, visit the corporate Web site at www.digitalriver.com or call +1 952-253-1234.
Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding the Company’s anticipated future growth, including future financial
performance, as well as statements containing the words “anticipates,” “believes,” “plans,” “will,” or “expects” and similar words. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company,
or industry results, to differ materially from those expressed or implied by such forward-looking statements. Such factors include, among others: the
Company’s operating history and variability of operating results; competition in the e-commerce market; challenges associated with international expansion;
our ability to manage costs in light of the loss of a major customer; the variability of foreign exchange rates; our ability to successfully manage our
business while undertaking significant internal investments; our ability to achieve favorable tax rates in our international operations; and other risk
factors referenced in the Company’s public filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended
Dec. 31, 2009. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto
included in Digital River’s most recent report on Form 10-K as it may be amended from time-to-time.
The forward-looking statements reflect Digital River’s expectations as of April 29, 2010. Results may be materially affected by many factors, such as
changes in global conditions in the financial services markets and consumer spending, fluctuations in foreign currency rates, the rate of growth of online
commerce and the Internet, progress with key partners and other factors. The guidance assumes, among other things, that there are no changes to stock-based
compensation expense and anticipated tax rates. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management's
analysis only as of the date hereof. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that
may arise after the date hereof.
Digital River is a registered trademark of Digital River, Inc. All other trademarks and registered trademarks are trademarks of their respective
owners.
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