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TheStreet Open House

Groupon Announces Third Quarter 2012 Results

Stocks in this article: GRPN

Groupon encourages investors to use its investor relations website as a way of easily finding information about the company. Groupon promptly makes available on this website, free of charge, the reports that the company files or furnishes with the SEC, corporate governance information (including Groupon’s Global Code of Conduct), and select press releases and social media postings.

Groupon, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
         

Three Months Ended September 30,

Nine Months Ended September 30,

2011 2012 2011 2012
Operating activities
Net (loss) income $ (14,416 ) $ (940 ) $ (238,083 ) $ 29,016
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization 7,058 15,310 22,754 39,836
Stock-based compensation 3,340 22,619 60,922 77,706
Deferred income taxes 2,839 (3,389 ) 602 9,608
Excess tax benefits on stock-based compensation (7,791 ) (2,870 ) (11,323 ) (24,620 )
Loss on equity method investees 11,211 138 19,974 8,694
Acquisition-related (benefit) expense, net (4,793 ) 2,431 (4,793 ) 744
Gain on redemption of common stock (4,916 ) - (4,916 ) -
Gain on E-Commerce transaction - - - (56,032 )
Change in assets and liabilities, net of acquisitions:
Restricted cash (7,116 ) 973 (8,141 ) (1,855 )
Accounts receivable (16,618 ) (10,274 ) (69,690 ) (2,189 )
Prepaid expenses and other current assets (23,802 ) (3,192 ) (41,023 ) (24,937 )
Accounts payable (7,550 ) (5,094 ) (21,924 ) 13,174
Accrued merchant payables 98,002 21,868 314,872 53,889
Accrued expenses and other current liabilities 34,207 4,933 108,963 68,010
Other, net   (5,244 )   (425 )   (6,824 )   10,073  
Net cash provided by operating activities 64,411 42,088 121,370 201,117
 
Net cash used in investing activities (43,048 ) (35,629 ) (112,526 ) (142,226 )
 
Net cash provided by financing activities 8,608 2,707 120,292 18,590
 
Effect of exchange rate changes on cash and cash equivalents   (11,129 )   6,047     (4,034 )   595  
Net increase in cash and cash equivalents 18,842 15,213 125,102 78,076
Cash and cash equivalents, beginning of period   225,093     1,185,798     118,833     1,122,935  
Cash and cash equivalents, end of the period $ 243,935   $ 1,201,011   $ 243,935   $ 1,201,011  
Groupon, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
       

Three Months Ended September 30,

Nine Months Ended September 30,
2011 2012 2011 2012
Revenue:
Third party and other revenue $ 422,989 $ 423,564 $ 1,111,094 $ 1,466,602
Direct revenue   7,172     144,988     7,172     229,568  
Total revenue   430,161     568,552     1,118,266     1,696,170  
Cost of revenue:
Third party and other revenue 62,339 54,173 156,907 233,834
Direct revenue   5,707     127,613     5,707     202,634  
Total cost of revenue   68,046     181,786     162,614     436,468  
Operating expenses:
Marketing 170,349 70,919 613,173 275,941
Selling, general and administrative 196,798 287,978 565,686 871,455
Acquisition-related (benefit) expense, net   (4,793 )   2,431     (4,793 )   744  
Total operating expenses   362,354     361,328     1,174,066     1,148,140  
(Loss) income from operations (239 ) 25,438 (218,414 ) 111,562
Interest and other income, net 8,269 617 9,808 54,445
Loss on equity method investees   (11,211 )   (138 )   (19,974 )   (8,694 )
(Loss) income before provision for income taxes (3,181 ) 25,917 (228,580 ) 157,313
Provision for income taxes   11,235     26,857     9,503     128,297  
Net (loss) income (14,416 ) (940 ) (238,083 ) 29,016
Less: Net loss (income) attributable to noncontrolling interests   3,843     (706 )   23,602     (2,806 )
Net (loss) income attributable to Groupon, Inc. (10,573 ) (1,646 ) (214,481 ) 26,210
Redemption of preferred stock in excess of carrying value - - (34,327 ) -
Adjustment of redeemable noncontrolling interests to redemption value   (43,656 )   (1,333 )   (59,307 )   (12,498 )
Net (loss) income attributable to common stockholders $ (54,229 ) $ (2,979 ) $ (308,115 ) $ 13,712  
 
Net (loss) earnings per share
Basic $ (0.18 ) $ (0.00 ) $ (1.01 ) $ 0.02
Diluted $ (0.18 ) $ (0.00 ) $ (1.01 ) $ 0.02
 
Weighted average number of shares outstanding
Basic 307,605,060 653,223,610 305,288,502 648,021,943
Diluted 307,605,060 653,223,610 305,288,502 663,557,250
Groupon, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
   
December 31, 2011 September 30, 2012
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 1,122,935 $ 1,201,011
Accounts receivable, net 108,747 110,058
Prepaid expenses and other current assets   91,645     121,338  
Total current assets 1,323,327 1,432,407
Property and equipment, net of accumulated depreciation of $14,627 and $37,564, respectively 51,800 103,876
Goodwill 166,903 196,978
Intangible assets, net 45,667 51,447
Investments in equity interests 50,604 131,039
Deferred income taxes, non-current 46,104 48,753
Other non-current assets   90,071     68,314  
Total Assets $ 1,774,476   $ 2,032,814  
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 40,918 $ 60,016
Accrued merchant payables 520,723 573,477
Accrued expenses 212,007 245,083
Deferred income taxes, current 76,841 75,203
Other current liabilities   144,673     171,422  
Total current liabilities 995,162 1,125,201
Deferred income taxes, non-current 7,428 28,585
Other non-current liabilities   70,766     74,643  

Total Liabilities

  1,073,356     1,228,429  
Commitments and contingencies
Redeemable noncontrolling interests 1,653 7,190
Stockholders' Equity
Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 641,745,225 shares issued and outstanding at December 31, 2011; 2,000,000,000 shares authorized, 652,501,880 shares issued and outstanding at September 30, 2012 64 65
Class B common stock, par value $0.0001 per share, 10,000,000 shares authorized, 2,399,976 shares issued and outstanding at December 31, 2011 and September 30, 2012 - -
Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized, no shares issued and outstanding at December 31, 2011 and September 30, 2012 - -
Additional paid-in capital 1,388,253 1,459,485
Accumulated deficit (698,704 ) (672,494 )
Accumulated other comprehensive income   12,928     11,956  
Total Groupon, Inc. Stockholders' Equity 702,541 799,012
Noncontrolling interests   (3,074 )   (1,817 )
Total Equity   699,467     797,195  

Total Liabilities and Equity

$ 1,774,476   $ 2,032,814  
Groupon, Inc.
Segment Information
(in thousands)
(unaudited)
   
Three Months Ended September 30, Nine Months Ended September 30,
2011 2012 2011 2012
North America
Gross Billings (1) $ 400,978 $ 552,369 $ 1,086,119 $ 1,654,201
Revenue $ 161,525 $ 291,603 $ 455,342 $ 790,349
Segment operating expenses (2)   142,689     252,510     468,785     667,655  
Segment operating income (loss) $ 18,836 $ 39,093 $ (13,443 ) $ 122,694
Segment income (loss) as a percent of segment revenue 11.7 % 13.4 % (3.0 ) % 15.5 %
 
International
Gross Billings (1) $ 756,232 $ 665,887 $ 1,668,514 $ 2,205,531
Revenue $ 268,636 $ 276,949 $ 662,924 $ 905,821
Segment operating expenses (2)   289,164     265,554     811,766     838,503  
Segment operating (loss) income $ (20,528 ) $ 11,395 $ (148,842 ) $ 67,318
Segment (loss) income as a percent of segment revenue (7.6 ) % 4.1 % (22.5 ) % 7.4 %
 
Consolidated
Gross Billings (1) $ 1,157,210 $ 1,218,256 $ 2,754,633 $ 3,859,732
Revenue $ 430,161 $ 568,552 $ 1,118,266 $ 1,696,170
Segment operating expenses (2)   431,853     518,064     1,280,551     1,506,158  
Segment operating (loss) income $ (1,692 ) $ 50,488 $ (162,285 ) $ 190,012
Segment (loss) income as a percent of segment revenue (0.4 ) % 8.9 % (14.5 ) % 11.2 %
 
Stock-based compensation 3,340 22,619 60,922 77,706
Acquisition-related (benefit) expense, net   (4,793 )   2,431     (4,793 )   744  
Operating (loss) income (239 ) 25,438 (218,414 ) 111,562
 
Interest and other income, net (8,269 ) (617 ) (9,808 ) (54,445 )
Loss on equity method investees   11,211     138     19,974     8,694  
(Loss) income before provision for income taxes (3,181 ) 25,917 (228,580 ) 157,313
Provision (benefit) for income taxes   11,235     26,857     9,503     128,297  
Net (loss) income $ (14,416 ) $ (940 ) $ (238,083 ) $ 29,016  

(1) Represents the total dollar value of customer purchases of goods and services, excluding any applicable taxes and net of estimated refunds.

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