Limelight Networks(R) Reports First Quarter 2012 Results and Announces $15 Million Stock Repurchase Program

TEMPE, Ariz., May 3, 2012 (GLOBE NEWSWIRE) -- Limelight Networks, Inc. (Nasdaq:LLNW) ("Limelight") today reported first quarter 2012 financial results.

"Limelight Networks' suite of high-value solutions allow our customers to manage their entire digital presence across web, mobile, social, and large screen channels on one platform," said Jeff Lunsford, chairman and chief executive officer. "These cloud-based solutions are being well-received by customers and prospects, and contributed to 66% year-over-year growth in our value added services. Our high-performance global compute and delivery platform allows us to offer advanced features across mobile, video and content management, website acceleration, content delivery, transcoding, live streaming, social enablement and cloud storage. The integration of these differentiates Limelight from point solution providers and allows our customers to streamline their workflow, deliver exceptional multi-screen experiences to their customers, and enhance their bottom lines."

Specific highlights for the first quarter included:

• Revenue of $44.3 million, representing 7% year-over-year growth from continuing operations
• Value added services revenue growth of 66% year-over-year
• Value added services comprised 31% of revenue:

-- Limelight video platform and mobile revenue grew in excess of 80% year-over-year

-- Enterprise cloud storage revenue grew in excess of 50% year-over-year

-- Site and application acceleration services revenue grew in excess of 45% year-over-year

Financial Highlights

For the first quarter of 2012, the Company reported revenue of $44.3 million from continuing operations, adjusted EBITDA of $2.2 million and non-GAAP net loss, before share-based compensation, litigation expenses, amortization of intangible assets, acquisition-related expenses, and discontinued operations of $5.5 million or 5 cents per basic share. GAAP net loss from continuing operations was $9.7 million, or 9 cents per basic share.

Capital investments were $5.7 million in the quarter. The Company ended the quarter with no bank debt and approximately $137 million in cash and cash equivalents and short-term marketable securities.

Stock Buyback Program

During the first quarter, the Company repurchased approximately $1.2 million of common stock under the repurchase plan. The Company has completed its initial repurchase program, having repurchased approximately 9.7 million shares of common stock for approximately $25.2 million (including commissions) at an average price of $2.59 per share since commencement. In addition, on May 2, 2012, our Board of Directors authorized a new $15 million share repurchase program. 

Q2 2012 Outlook

The Company anticipates second quarter revenue to be in the range of $45-46 million. 

Financial Tables

Use of Non-GAAP Financial Measures

To evaluate our business, we consider and use Non-GAAP net income (loss) and Adjusted EBITDA as a supplemental measure of operating performance. These measures include the same adjustments that management takes into account when it reviews and assesses operating performance on a period-to-period basis. We consider Non-GAAP net income (loss) to be an important indicator of overall business performance because it allows us to illustrate the impact of the effects of share-based compensation, litigation expenses, amortization of intangibles, acquisition related expenses and discontinued operations. We define EBITDA as GAAP net income (loss) before interest income, interest expense, other income and expense, provision for income taxes, depreciation and amortization, and discontinued operations. We believe that EBITDA provides a useful metric to investors to compare us with other companies within our industry and across industries. We define Adjusted EBITDA as EBITDA adjusted for operational expenses that we do not consider reflective of our ongoing operations. We use Adjusted EBITDA as a supplemental measure to review and assess operating performance. We also believe use of Adjusted EBITDA facilitates investors' use of operating performance comparisons from period to period. In addition, it should be noted that our performance-based executive officer bonus structure is tied closely to our performance as measured in part by certain non-GAAP financial measures.

The terms Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are not defined under United States generally accepted accounting principles, or United States GAAP, and are not measures of operating income, operating performance or liquidity presented in accordance with United States GAAP. Our Non-GAAP net income (loss), EBITDA and Adjusted EBITDA have limitations as analytical tools, and when assessing our operating performance, Non-GAAP net income (loss), EBITDA and Adjusted EBITDA should not be considered in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with United States GAAP. Some of these limitations include, but are not limited to:

• EBITDA and Adjusted EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
• they do not reflect changes in, or cash requirements for, our working capital needs;
• they do not reflect the cash requirements necessary for litigation costs;
• they do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt that we may incur;
• they do not reflect income taxes or the cash requirements for any tax payments;
• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will be replaced sometime in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;
• while share-based compensation is a component of operating expense, the impact on our financial statements compared to other companies can vary significantly due to such factors as the assumed life of the options and the assumed volatility of our common stock; and
• other companies may calculate EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.

We compensate for these limitations by relying primarily on our GAAP results and using Non-GAAP net income (loss) and Adjusted EBITDA only as supplemental support for management's analysis of business performance. Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are calculated as follows for the periods presented in thousands:

Reconciliation of Non-GAAP Financial Measures

In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, the Company is presenting the most directly comparable GAAP financial measures and reconciling the non-GAAP financial metrics to the comparable GAAP measures.

Conference Call

At approximately 4:30 p.m. EDT (1:30 p.m. PDT) today, management will host a quarterly conference call for investors. Investors can access this call toll-free at 877-388-8480 within the United States or +1 678-809-1592 outside of the U.S. The conference call will also be audiocast live from http://www.limelight.com and a replay will be available following the call from the Company's website.

Safe-Harbor Statement

This press release contains forward-looking statements concerning, among other things, the outlook for the Company's revenues, net loss and stock-based compensation expenses, customer growth, market growth, pricing pressures, expansion into additional market segments, product and services improvements, the integration of acquired businesses and litigation and acquisition related expenses. Forward-looking statements represent the current judgment and expectations of Limelight Networks and are not guarantees and are subject to a number of risks and uncertainties that could cause actual results to differ materially including, but not limited to, risks and uncertainties discussed in the Company's Annual Report on Form 10K and other filings with the Securities and Exchange Commission and the final review of the results and amendments and preparation of quarterly financial statements, including consultation with our outside auditors. Accordingly, readers are cautioned not to place undue reliance on any forward-looking statements. The Company assumes no duty or obligation to update or revise any forward-looking statements for any reason.

About Limelight Networks, Inc.

Limelight Networks, Inc. (Nasdaq:LLNW) is a trusted provider of integrated cloud-based applications that leverage Limelight's scalable, high-performance, global computing platform. We give organizations whose Internet, mobile, and social initiatives are critical to their success a complete solution to upload, manage, publish, monetize, accelerate, and analyze their online and mobile content. The Limelight team of experts and end-to-end offering allow customers to streamline all of the processes throughout the content lifecycle and optimize the performance of content across all channels — empowering them to quickly and cost-effectively orchestrate a successful digital presence that improves brand awareness, drives revenue, and enhances customer relationships. For more information, please visit www.limelight.com or follow us on Twitter at www.twitter.com/llnw.

Copyright (C) 2012 Limelight Networks, Inc. All rights reserved. All product or service names are the property of their respective owners.

CONTACT: Heather Miller

         215-867-8600 ext. 239

         media@llnw.com

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