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Bazaarvoice, Inc. Announces Its Financial Results For The Fourth Fiscal Quarter And Fiscal Year Ended April 30, 2013

Stocks in this article: BV

Forward-looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management are forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "will," "would" and similar and "target" expressions 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 revenue and financial performance, the ability to continue developing network solutions to leverage our consumer audience reach, content and data to create incremental value for clients, and other statements about management's beliefs, intentions or goals. We may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on our 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, our expectations regarding our revenue, expenses, sales and operations; our limited operating history; our ability to integrate the operations of Longboard Media, Inc. as announced in our release on Form 8-K on November 5, 2012; our ability to operate in a new and unproven market; our ability to effectively manage growth, especially in light of our announced management changes; our ability to manage expansion into international markets and new vertical industries; our ability to successfully identify, manage and integrate potential acquisitions; and other risks and potential factors that could affect Bazaarvoice's business and financial results identified in our Form 10-K for the fiscal year ended April 30, 2012, our Form 10-Q for the fiscal quarter ended January 31, 2013 and Form S-1 as filed with the Securities and Exchange Commission on July 12, 2012. Additional information will also be set forth in our future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend and undertake no duty to release publicly any updates or revisions to any forward-looking statements contained herein.

 
 
Bazaarvoice, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
     
  April 30, April 30,
  2013 2012
Assets  
Current assets:    
Cash and cash equivalents  $ 25,045  $ 74,367
Restricted cash  604  500
Short-term investments  70,290  50,834
Accounts receivable, net  29,261  17,977
Prepaid expenses and other current assets  6,632  3,873
Total current assets  131,832  147,551
Property, equipment and capitalized internal-use software development costs, net  14,593  8,868
Goodwill  141,833  -- 
Acquired intangible assets, net  51,924  -- 
Other non-current assets  1,761  448
Total assets  $ 341,943  $ 156,867
Liabilities and stockholders' equity    
Current liabilities:    
Accounts payable  $ 6,637  $ 2,523
Accrued expenses and other current liabilities  32,390  12,725
Deferred revenue  54,854  42,152
Total current liabilities  93,881  57,400
Deferred revenue less current portion  2,049  3,434
Deferred tax liability, long-term  2,032  31
Other liabilities, long-term  2,632  2,404
Total liabilities  100,594  63,269
Stockholders' equity:    
Common stock  7  6
Additional paid-in capital  370,397  158,769
Accumulated other comprehensive loss  (146)  (20)
Accumulated deficit  (128,909)  (65,157)
Total stockholders' equity  241,349  93,598
Total liabilities and stockholders' equity  $ 341,943  $ 156,867
 
 
 
Bazaarvoice, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except net loss per share data)
         
  Three Months Twelve Months
  Ended April 30, Ended April 30,
  2013 2012 2013 2012
Revenue  $ 43,330  $ 31,431  $ 160,296  $ 106,136
Cost of revenue  14,158  10,325  55,107  36,441
Gross profit  29,172  21,106  105,189  69,695
Operating expenses:        
Sales and marketing  23,003  14,257  76,885  49,726
Research and development  8,690  6,811  33,046  20,789
General and administrative  10,744  6,047  43,207  21,895
Acquisition-related and other  7,441  --   12,212  -- 
Amortization of acquired intangible assets  1,381  --   3,924  -- 
Total operating expenses  51,259  27,115  169,274  92,410
Operating loss  (22,087)  (6,009)  (64,085)  (22,715)
Other income (expense), net:        
Interest income  107  --   217  17
Other income (expense)  (580)  (15)  (1,031)  (820)
Total other income (expense), net  (473)  (15)  (814)  (803)
Loss before income taxes  (22,560)  (6,024)  (64,899)  (23,518)
Income tax expense (benefit)  584  343  (1,147)  811
Net loss  $ (23,144)  $ (6,367)  $ (63,752)  $ (24,329)
Accretion of redeemable convertible preferred stock  --   (3)  --   (38)
Net loss applicable to common stockholders  $ (23,144)  $ (6,370)  $ (63,752)  $ (24,367)
Net loss per share applicable to common stockholders:        
Basic and diluted  $ (0.32)  $ (0.13)  $ (0.92)  $ (0.92)
Basic and diluted weighted average number of shares outstanding  73,121  48,236  69,336  26,403
 
 
 
Bazaarvoice, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
         
  Three Months Twelve Months
  Ended April 30, Ended April 30,
  2013 2012 2013 2012
         
Operating activities:        
Net loss  $ (23,144)  $ (6,367)  $ (63,752)  $ (24,329)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:      
Depreciation and amortization expense  3,427  861  10,900  3,108
Stock-based expense  3,381  1,952  22,453  7,710
Revaluation of contingent consideration  (1,000)  --   (1,000)  -- 
Bad debt expense  1,216  158  2,859  1,083
Excess tax benefit related to stock-based compensation  (145)  (78)  (510)  (78)
Changes in operating assets and liabilities:        
Accounts receivable  (168)  2,828  (10,749)  (5,566)
Prepaid expenses and other current assets  (2,023)  (1,661)  (1,766)  (1,132)
Other non-current assets  (1,593)  63  (432)  (298)
Accounts payable  453  (1,197)  974  808
Accrued expenses and other current liabilities  6,256  51  13,283  5,176
Deferred revenue  3,986  3,461  8,633  13,432
Other liabilities, long-term  253  (235)  (2,699)  (234)
Net cash used in operating activities  (9,101)  (164)  (21,806)  (320)
Investing activities:        
Acquisitions, net of cash acquired, and purchase of intangible asset  --   --   (60,750)  -- 
Purchases of property, equipment and capitalized internal-use software development costs  (2,849)  (1,313)  (10,853)  (5,119)
Purchases of short-term investments  (16,250)  (50,884)  (90,828)  (50,884)
Proceeds from maturities of short-term investments  22,541  --   61,310  -- 
Proceeds from sale of short-term investments  5,018  --   10,032  -- 
Increase in restricted cash  --   --   --   (250)
Net cash provided by (used in) investing activities  8,460  (52,197)  (91,089)  (56,253)
Financing activities:        
Proceeds from initial public offering, net of costs  --   113,716  --   112,778
Proceeds from follow-on stock offering, net of costs  --   --   51,943  -- 
Proceeds from exercise of stock options  1,756  571  11,226  3,049
Excess tax benefit related to stock-based compensation  145  78  510  78
Net cash provided by financing activities  1,901  114,365  63,679  115,905
Effect of exchange rate fluctuations on cash and cash equivalents  (60)  58  (106)  (15)
Net decrease in cash and cash equivalents  1,200  62,062  (49,322)  59,317
Cash and cash equivalents at beginning of period  23,845  12,305  74,367  15,050
Cash and cash equivalents at end of period  $ 25,045  $ 74,367  $ 25,045  $ 74,367
         
Supplemental disclosure of other cash flow information:        
Cash paid for income taxes  $ 204  $ 225  $ 440  $ 330
Supplemental disclosure of non-cash investing and financing activities:        
Purchase of intangible asset recorded in accrued expenses and other current liabilities  $ 205  $ --   $ 705  $ -- 
Accretion of redeemable convertible preferred stock  $ --   $ 3  $ --   $ 38
Issuance of stock for acquisition  --   --   125,497  -- 
 
 
 
Bazaarvoice, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited)
(in thousands, except net loss per share data)
         
  Three Months Twelve Months
  Ended April 30, Ended April 30,
  2013 2012 2013 2012
Non-GAAP net loss and net loss per share:        
GAAP net loss  $ (23,144)  $ (6,367)  $ (63,752)  $ (24,329)
Stock-based expense (1)  3,381  1,952  22,453  7,710
Contingent consideration related to acquisition (2)  (410)  --   (410)  -- 
Amortization of acquired intangible assets  1,831  --   5,514  -- 
Acquisition-related and other expense  7,441  --   12,212  -- 
Other stock-related expense (3)  2,200  --   2,200  -- 
Income tax adjustment for non-GAAP items  39  119  64  119
Non-GAAP net loss  $ (8,662)  $ (4,296)  $ (21,719)  $ (16,500)
         
GAAP basic and diluted shares  73,121  48,236  69,336  26,403
Assumed preferred stock conversion  --   7,439  --   21,934
Non-GAAP basic and diluted shares  73,121  55,675  69,336  48,337
Non-GAAP basic and diluted net loss per share  $ (0.12)  $ (0.08)  $ (0.31)  $ (0.34)
         
Adjusted EBITDA:        
GAAP net loss  $ (23,144)  $ (6,367)  $ (63,752)  $ (24,329)
Stock-based expense (1)  3,381  1,952  22,453  7,710
Contingent consideration related to acquisition (2)  (410)  --   (410)  -- 
Adjusted depreciation and amortization (4)  2,537  552  8,436  2,104
Acquisition-related and other expense  7,441  --   12,212  -- 
Other stock-related expense (3)  2,200  --   2,200  -- 
Income tax expense (benefit)  584  343  (1,147)  811
Total other (income) expense, net  473  15  814  803
Adjusted EBITDA  $ (6,938)  $ (3,505)  $ (19,194)  $ (12,901)
         
(1) Stock-based expense includes the following:        
Cost of revenue  $ 384  $ 234  $ 1,704  $ 1,220
Sales and marketing  845  636  4,250  1,869
Research and development  756  406  3,126  1,326
General and administrative  1,396  676  13,373  3,295
Stock-based expense  $ 3,381  $ 1,952  $ 22,453  $ 7,710
         
(2) Contingent consideration related to acquisition includes the following:        
(a) Revaluation of contingent consideration        
General and administrative  $ (1,000)  $ --   $ (1,000)  $ -- 
(b) Contingent consideration included in compensation expense        
General and administrative  295  --   295  -- 
Sales and marketing  295  --   295  -- 
Contingent consideration related to acquisition  $ (410)  $ --   $ (410)  $ -- 
         
Revaluation of contingent consideration is the decrease in fair value of the liability-classified contingent consideration related to the acquisition of Longboard Media, Inc. Contingent consideration included in compensation expense relates to certain Longboard Media, Inc. employees whose right to receive such compensation is forfeited if they terminate their employment. We exclude these items from our non-GAAP financial measures in order to facilitate the comparison of post-acquisition operating results.
 
(3) Other stock-related expense includes the following:        
General and administrative  $ 2,200  $ --   $ 2,200  $ -- 
Other stock-related expense  $ 2,200  $ --   $ 2,200  $ -- 
         
Other stock-related expense represents a non-recurring estimated liability for taxes and related items in connection with our treatment of certain stock option grants. Since the estimated liability directly relates to stock option grants and as stock-based expenses are consistently excluded from our non-GAAP financial measures, we have excluded this estimated liability.
 
(4) Adjusted depreciation and amortization includes the following:        
Cost of revenue  $ 681  $ 194  $ 2,481  $ 825
Sales and marketing  120  117  601  490
Research and development  173  136  647  431
General and administrative  182  105  783  358
Amortization of acquired intangible assets  1,381  --   3,924  -- 
Adjusted depreciation and amortization  $ 2,537  $ 552  $ 8,436  $ 2,104
 
 
 
Bazaarvoice, Inc.
Selected Quarterly Financial and Operational Metrics
(unaudited)
(in thousands, except active enterprise clients and full-time employees data)
                 
  Three Months Ended
  Jul 31, Oct 31, Jan 31, Apr 30, Jul 31, Oct 31, Jan 31, Apr 30,
  2011 2011 2012 2012 2012 2012 2013 2013
Revenue (1)  $ 22,088  $ 25,015  $ 27,602  $ 31,431  $ 35,662  $ 38,626  $ 42,678  $ 43,330
Cost of revenue  7,797  8,805  9,514  10,325  12,633  14,099  14,217  14,158
Gross profit  14,291  16,210  18,088  21,106  23,029  24,527  28,461  29,172
Operating expenses:                
Sales and marketing  11,192  12,125  12,152  14,257  15,322  17,850  20,710  23,003
Research and development  3,343  4,576  6,059  6,811  7,494  7,948  8,914  8,690
General and administrative  5,099  4,815  5,934  6,047  16,196  7,484  8,783  10,744
Acquisition-related and other  --   --   --   --   1,384  1,366  2,021  7,441
Amortization of acquired intangible assets  --   --   --   --   480  898  1,165  1,381
Total operating expenses  19,634  21,516  24,145  27,115  40,876  35,546  41,593  51,259
Operating loss  (5,343)  (5,306)  (6,057)  (6,009)  (17,847)  (11,019)  (13,132)  (22,087)
Total other income (expense), net  (84)  (367)  (337)  (15)  (404)  51  12  (473)
Net loss before income taxes  (5,427)  (5,673)  (6,394)  (6,024)  (18,251)  (10,968)  (13,120)  (22,560)
Income tax expense (benefit)  109  178  181  343  288  274  (2,293)  584
Net loss  (5,536)  (5,851)  (6,575)  (6,367)  (18,539)  (11,242)  (10,827)  (23,144)
                 
Stock-based expense (2)  1,558  1,697  2,503  1,952  12,338  3,595  3,139  3,381
Contingent consideration related to acquisition (3)  --   --   --   --   --   --   --   (410)
Adjusted depreciation and amortization (4)  471  512  569  552  1,338  2,099  2,462  2,537
Acquisition-related and other expense  --   --   --   --   1,384  1,366  2,021  7,441
Other stock-related expense (5)  --   --   --   --   --   --   --   2,200
Income tax expense (benefit)  109  178  181  343  288  274  (2,293)  584
Total other (income) expense, net  84  367  337  15  404  (51)  (12)  473
Adjusted EBITDA  $ (3,314)  $ (3,097)  $ (2,985)  $ (3,505)  $ (2,787)  $ (3,959)  $ (5,510)  $ (6,938)
                 
Number of active enterprise clients (at period end) (6)  640  701  737  790  1,076  1,109  1,179  1,208
Full-time employees (at period end)  520  566  608  640  771  777  796  783
                 
(1) Revenue includes the following:                
SaaS  $ 22,088  $ 25,015  $ 27,602  $ 31,431  $ 35,662  $ 38,626  $ 40,710  $ 42,373
Media  --   --   --   --   --   --   1,968  957
Revenue  $ 22,088  $ 25,015  $ 27,602  $ 31,431  $ 35,662  $ 38,626  $ 42,678  $ 43,330
                 
(2) Stock-based expense includes the following:                
Cost of revenue  $ 323  $ 344  $ 319  $ 234  $ 294  $ 583  $ 443  $ 384
Sales and marketing  402  412  419  636  1,825  870  710  845
Research and development  204  360  356  406  642  1,054  674  756
General and administrative  629  581  1,409  676  9,577  1,088  1,312  1,396
Stock-based expense  $ 1,558  $ 1,697  $ 2,503  $ 1,952  $ 12,338  $ 3,595  $ 3,139  $ 3,381
                 
(3) Contingent consideration related to acquisition includes the following:                
(a) Revaluation of contingent consideration                
General and administrative  $ --   $ --   $ --   $ --   $ --   $ --   $ --   $ (1,000)
(b) Contingent consideration included in compensation expense                
General and administrative  --   --   --   --   --   --   --   295
Sales and marketing  --   --   --   --   --   --   --   295
Contingent consideration related to acquisition  $ --   $ --   $ --   $ --   $ --   $ --   $ --   $ (410)
                 
Revaluation of contingent consideration is the decrease in fair value of the liability-classified contingent consideration related to the acquisition of Longboard Media, Inc Contingent consideration included in compensation expense relates to certain Longboard Media, Inc. employees whose right to receive such compensation is forfeited if they terminate their employment. We exclude these items from our non-GAAP financial measures in order to facilitate the comparison of post-acquisition operating results.
 
(4) Adjusted depreciation and amortization includes the following:                
Cost of revenue  $ 207  $ 214  $ 210  $ 194  $ 437  $ 681  $ 682  $ 681
Sales and marketing  129  124  120  117  133  175  173  120
Research and development  68  93  134  136  144  161  169  173
General and administrative  67  81  105  105  144  184  273  182
Amortization of acquired intangible assets  --   --   --   --   480  898  1,165  1,381
Adjusted depreciation and amortization  $ 471  $ 512  $ 569  $ 552  $ 1,338  $ 2,099  $ 2,462  $ 2,537
                 
(5) Other stock-related expense includes the following:                
General and administrative  $ --   $ --   $ --   $ --   $ --   $ --   $ --   $ 2,200
Other stock-related expense  $ --   $ --   $ --   $ --   $ --   $ --   $ --   $ 2,200
                 
Other stock-related expense represents a non-recurring estimated liability for taxes and related items in connection with our treatment of certain stock option grants. Since the estimated liability directly relates to stock option grants and as stock-based expenses are consistently excluded from our non-GAAP financial measures, we have excluded this estimated liability.
 
(6) In connection with our acquisition of PowerReviews, which closed in June 2012, we expanded the types of clients that we serve. To reflect differences among our clients and the services that we offer, we now define our clients as "active enterprise clients" and "active network clients," the definitions of which are set forth herein and in our Form 10-Q for the fiscal quarter ended January 31, 2013. Historical references to active clients for periods prior to the closing of the acquisition include both active enterprise clients and active network clients on an aggregate basis. As a result of this prospective nomenclature change resulting from our acquisition of PowerReviews, active clients and active client retention rates for periods prior to June 2012 and after June 2012 may not be directly comparable as we have not made this distinction retrospectively. This change also has a corresponding impact on metrics that are driven by the number of clients, such as revenue per active client.
CONTACT: Bazaarvoice Investor Relations Contact:
         Bazaarvoice Investor Relations
         Seth Potter
         ICR, Inc. on behalf of Bazaarvoice, Inc.
         (646) 277-1230
         seth.potter@icrinc.com
         
         Media Contact:
         Matt Krebsbach
         Bazaarvoice, Inc.
         (512) 551-6612
         matt.krebsbach@bazaarvoice.com

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