UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 8, 2012
GROUPON, INC.
(Exact name of registrant as specified in its charter)
Delaware |
|
001-35335 |
|
27-0903295 |
(State or other |
|
(Commission |
|
(I.R.S. Employer |
jurisdiction |
|
File Number) |
|
Identification No.) |
of incorporation) |
|
|
|
|
600 West Chicago Avenue |
|
|
Suite 620 |
|
|
Chicago, Illinois |
|
60654 |
(Address of principal executive offices) |
|
(Zip Code) |
(312) 676-5773
(Registrants telephone number, including area
code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 |
Results of Operations and Financial Condition.* |
On March 30, 2012, Groupon, Inc. (the Company) issued a press release announcing revised financial results for its fiscal quarter and year ended December 31, 2011 and reaffirming its previously provided guidance for its fiscal quarter ending March 31, 2012. This press release revises financial results for the fiscal quarter ended December 31, 2011 contained in the Companys press release dated February 8, 2012 as previously furnished on Form 8-K. Financial results for prior periods, including as of and for the nine months ended September 30, 2011, were not impacted by the revisions. A copy of the press release dated March 30, 2012 is attached hereto as Exhibit 99.1.
A revised version of the contents of the Companys press release dated February 8, 2012 is below.
GROUPON ANNOUNCES FOURTH QUARTER 2011 RESULTS
· Revenue of $492.2 million, up 186% year-over-year
· Free Cash Flow of $155.1 million, up 258% year-over-year
· Operating Loss of $15.0 million, down from $336.1 million loss
· Non-GAAP EPS of negative $0.06, including $0.06 of tax from international operations, up from negative $0.53
· Active customers increase to over 33 million, up over 275% year-over-year
Groupon, Inc. (NASDAQ: GRPN) today announced financial results for its fourth quarter ended December 31, 2011.
Revenue increased 186% to $492.2 million in the fourth quarter 2011, compared to $172.2 million in the fourth quarter 2010. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter was $2.9 million. Gross billings, which reflects the gross amounts collected from customers for Groupons sold, excluding any applicable taxes and net of estimated refunds, increased 196% to $1.2 billion in the fourth quarter 2011, compared with $415.3 million in the fourth quarter 2010.
Groupon had a strong fourth quarter and we finished 2011 having helped 250,000 local merchants across 47 countries grow their businesses while saving Groupon customers billions of dollars, said Andrew Mason, CEO and Co-Founder of Groupon. We will continue to invest in new services and tools that help our merchant partners be more successful and drive local commerce around the world.
Operating loss was $15.0 million in the fourth quarter 2011, compared with a loss from operations of $336.1 million in the fourth quarter 2010. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter was $8.4 million. Consolidated segment operating income (CSOI), which is a non-GAAP financial measure that excludes the impact of stock-based compensation and acquisition-related charges, improved to a gain of $18.0 million in the fourth quarter, compared with a loss of $143.4 million in the fourth quarter 2010. Fourth quarter 2011 operating results included losses of over $40.0 million principally from less mature markets within the international segment.
Operating cash flow increased 226% to $169.1 million for fourth quarter 2011, compared with $51.9 million for fourth quarter 2010. Free cash flow, which is a non-GAAP financial measure
that reflects cash flow from operations less purchases of property and equipment, increased 258% to $155.1 million for the three months ended December 31, 2011, compared with $43.3 million for the three months ended December 31, 2010. At the end of the quarter, Groupon had $1.2 billion in cash and cash equivalents and no long-term debt.
Fourth quarter 2011 net loss attributable to common stockholders decreased by 83% to $65.4 million, or a loss of $0.12 per share, from a net loss attributable to stockholders of $378.6 million, or a loss of $1.08 per share, in fourth quarter 2010. Pro-forma net income attributable to common stockholders for the fourth quarter improved to a loss of $32.5 million, or a pro-forma loss of $0.06 per share, from a prior year pro-forma net loss attributable to common stockholders of $185.8 million, or a pro-forma loss per share of $0.53. Pro-forma net income is a non-GAAP financial measure that excludes the impact of stock-based compensation and acquisition-related charges. The pro-forma loss of $0.06 per share includes $34.2 million of tax expense, an effective tax rate of approximately 134%, related to profitability in certain international countries as well as additional income tax provisions related to the establishment of the companys international headquarters in Switzerland. This resulted in an unusually high effective tax rate as compared to the companys current average statutory rate of approximately 33%.
Full-Year 2011
Revenue increased 415% to $1.6 billion in 2011, compared with $312.9 million in revenue in 2010. The favorable impact on revenue from year-over-year changes in foreign exchange rates throughout the year was $44.0 million.
Gross billings increased 435% to $4.0 billion in 2011, compared with $745.3 million in gross billings in 2010.
Full year 2011 loss from operations was $233.4 million, compared with the loss from operations of $420.3 million in 2010. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the year was $13.0 million. Consolidated segment operating losses improved to a loss of $144.3 million in 2011 from a loss of $181.0 million in 2010.
Operating cash flow increased 234% to $290.5 million in 2011, compared with $86.9 million in 2010. Free cash flow increased 242% to $246.6 million for the twelve months ended December 31, 2011, compared with $72.2 million for the twelve months ended December 31, 2010.
Net loss attributable to common stockholders decreased to $373.5 million in 2011, or a loss of $1.03 per share, from a net loss attributable to common stockholders of $456.3 million, or a loss of $1.33 per share, in 2010. Pro-forma net loss attributable to common stockholders for the full year resulted in a loss of $284.4 million, or a pro-forma loss of $0.79 per share, from a prior year pro-forma net loss attributable to common stockholders of $217.0 million, or a pro-forma loss per share $0.63. The pro-forma loss per share of $0.79 includes $43.7 million of tax expense related to profitability in certain international countries as well as additional income tax provisions related to the establishment of the companys international headquarters in Switzerland.
Summary Consolidated and Segment Results
|
|
Three Months Ended |
|
|
|
Twelve Months Ended |
|
|
| ||||||||
|
|
December 31, |
|
Y/Y % |
|
December 31, |
|
Y/Y % |
| ||||||||
|
|
2010 |
|
2011 |
|
Growth |
|
2010 |
|
2011 |
|
Growth |
| ||||
|
|
(dollars in thousands, except per share data) |
| ||||||||||||||
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
(unaudited) |
|
|
| ||||
Revenue (gross billings of $415,269, $1,230,868, $34,082, $745,348 and $3,985,501) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
North America |
|
$ |
88,363 |
|
$ |
179,638 |
|
103.3 |
% |
$ |
200,412 |
|
$ |
634,980 |
|
216.8 |
% |
International |
|
83,861 |
|
312,526 |
|
272.7 |
% |
112,529 |
|
975,450 |
|
766.8 |
% | ||||
Consolidated revenue |
|
$ |
172,224 |
|
$ |
492,164 |
|
185.8 |
% |
$ |
312,941 |
|
$ |
1,610,430 |
|
414.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operating loss |
|
(336,129 |
) |
(14,972 |
) |
95.5 |
% |
(420,344 |
) |
(233,386 |
) |
44.5 |
% | ||||
Consolidated segment operating (loss) income |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
North America |
|
$ |
(21,905 |
) |
$ |
18,239 |
|
183.3 |
% |
$ |
(10,437 |
) |
$ |
4,796 |
|
146.0 |
% |
International |
|
(121,456 |
) |
(287 |
) |
99.8 |
% |
(170,556 |
) |
(149,129 |
) |
12.6 |
% | ||||
CSOI(1) |
|
$ |
(143,361 |
) |
$ |
17,952 |
|
112.5 |
% |
$ |
(180,993 |
) |
$ |
(144,333 |
) |
20.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net loss attributable to common stockholders |
|
$ |
(378,610 |
) |
$ |
(65,379 |
) |
82.7 |
% |
$ |
(456,320 |
) |
$ |
(373,494 |
) |
18.2 |
% |
Pro-forma net loss attributable to common stockholders(2) |
|
$ |
(185,842 |
) |
$ |
(32,455 |
) |
82.5 |
% |
$ |
(216,969 |
) |
$ |
(284,441 |
) |
31.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net loss per share attributable to common stockholders |
|
$ |
(1.08 |
) |
$ |
(0.12 |
) |
|
|
$ |
(1.33 |
) |
$ |
(1.03 |
) |
|
|
Pro-forma loss per share(3) |
|
$ |
(0.53 |
) |
$ |
(0.06 |
) |
|
|
$ |
(0.63 |
) |
$ |
(0.79 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average basic shares |
|
351,494,664 |
|
528,421,712 |
|
|
|
342,698,772 |
|
362,261,324 |
|
|
| ||||
Weighted average diluted shares |
|
351,494,664 |
|
528,421,712 |
|
|
|
342,698,772 |
|
362,261,324 |
|
|
|
(1) Consolidated segment operating (loss) income, or CSOI, is a non-GAAP financial measure. See Reconciliation of Non-GAAP Financial Measures for a reconciliation of this measure to the most applicable financial measure under U.S. GAAP. We do not allocate stock-based compensation and acquisition-related expense to the segments.
(2) Pro-forma net income attributable to common stockholders is a non-GAAP financial measure. This measure excludes stock-based compensation and acquisition-related costs. See Reconciliation of Non-GAAP Financial Measures for a reconciliation of this measure to the most applicable financial measure under U.S. GAAP.
(3) Pro-forma loss per share attributable to common stockholders is a non-GAAP measure. It calculates loss per share based on pro forma net income attributable to common stockholders, which is described above. See Reconciliation of Non-GAAP Financial Measures for a reconciliation of this measure to the most applicable financial measure under U.S. GAAP.
Fourth Quarter and Full-Year 2011 Highlights
· As of December 31, 2011, Groupons worldwide active customer base grew to over 33 million, an increase of over 275% year-over-year and more than 20% quarter-over-quarter. Active customers are defined as customers who have purchased a Groupon in the trailing twelve months and may include individual customers with multiple registrations.
· Trailing twelve month gross billings per average active customer, which is a proxy for the total annualized spend per average customer, increased to $187 in fourth quarter 2011 from $160 in fourth quarter 2010.
· Fourth quarter 2011 North America segment results were aided by the companys second annual Grouponicus seasonal promotion, which served 40 North American markets with local deals, travel deals and goods chosen specifically for their giftability.
· Worldwide, more than 26 million people have downloaded the Groupon mobile app on their smartphones.
· In just over six months from launching Groupon Now!, Groupon has expanded this offering to 31 markets and served deals from nearly 20,000 merchant partners in North America.
· Groupon continued to invest in creating additional value for its merchant partners, with fourth quarter 2011 releases of merchant tools including Groupon Merchant Center, Groupon Scheduler, and Groupon Rewards.
· Groupon increased its long-term technology investments, expanding into new facilities in Palo Alto to accommodate the more than four times growth in its engineering and product development staff in 2011.
First Quarter 2012 Guidance
· Revenue is expected to be between $510 million and $550 million, an increase of between 73% and 86% compared with first quarter 2011.
· Income from operations is expected to be between $15 million and $35 million, compared with a loss from operations of $117.1 million in first quarter 2011.
· This guidance includes approximately $35 million for stock-based compensation and acquisition-related expense, and it assumes, among other things, no additional business acquisitions or investments and no further revisions to stock-based compensation estimates.
Non-GAAP Financial Measures
This release includes the following financial measures defined as non-GAAP financial measures by the SEC: Free cash flow, CSOI and pro-forma net income. Groupon believes free cash flow is an important indicator for its business because it measures the amount of cash the company generates after spending on marketing, wages and benefits, capital expenditures and other items. Free cash flow also reflects changes in working capital. Groupon believes CSOI is an important measure for management to evaluate the performance of its business as it represents the operating results of its segments as reported under U.S. GAAP and does not include certain non-cash expenses. Groupon believes pro-forma net income is an important measure for management to evaluate the performance of its business, as it represents the net income of its segments as reported under U.S. GAAP and also does not include certain non-cash expenses. Free cash flow, CSOI and pro-forma net income may be different from similar measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For a reconciliation of these non-GAAP financial measures to the nearest comparable U.S. GAAP measures, see Reconciliation of Non-GAAP Financial Measures included in this release.
Note on Forward Looking Statements
The statements in this release that refer to plans and expectations for the next quarter or the future are forward-looking statements that involve a number of risks and uncertainties, and actual results could differ materially from those discussed. The risks and uncertainties that could cause our results to differ materially from those included in the forward-looking statements include, but are not limited to, our ability to continue to expand our business and continue revenue growth; our ability to manage the growth of our organization; responding to changes in the markets in which we compete for business; retaining existing merchant partners and adding new merchant partners; competing against smaller competitors and competitors with more financial resources than us; developing new product and service offerings that are appealing to customers; maintaining a strong brand; effectively dealing with challenges arising from our international operations; integrating our technology platforms; managing refund risks; retaining our executive team; regulations, including the CARD Act and regulation of the Internet; tax liabilities; tax legislation; maintaining our information technology infrastructure; security breaches; protecting our intellectual property; handling acquisitions, joint ventures and strategic investments effectively; seasonality; payment-related risks; customer and merchant partner fraud; global economic uncertainty; compliance with rules and regulations associated with being a public company; and our ability to raise capital if necessary. We urge you to refer to the factors included under the headings Risk Factors and Managements Discussion and Analysis of
Financial Condition and Results of Operations in the Companys Form 10-K for the year ended December 31, 2011, copies of which may be obtained by visiting the companys Investor Relations web site at http://investor.groupon.com or the SECs web site at www.sec.gov. Groupons actual results could differ materially from those predicted or implied and reported results should not be considered an indication of future performance.
You should not rely upon forward-looking statements as predictions of future events. Although Groupon believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither the company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements reflect Groupons expectations as of March 30, 2012. Groupon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this earnings release to conform these statements to actual results or to changes in its expectations.
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 Groupons Code of Business Conduct and Ethics), and select press releases and social media postings.
Contacts:
Groupon Investor Relations |
|
Groupon Public Relations |
Kartik Ramachandran, 312-999-3098 |
|
Julie Mossler, 312-242-2033 |
ir@groupon.com |
|
|
Groupon, Inc.
Consolidated Statements of Cash Flows
|
|
Year Ended December 31, |
| |||||||
|
|
2009 |
|
2010 |
|
2011 |
| |||
|
|
(in thousands) |
| |||||||
|
|
|
|
|
|
(unaudited) |
| |||
Net cash provided by operating activities |
|
$ |
7,510 |
|
$ |
86,885 |
|
$ |
290,447 |
|
Net cash used in investing activities |
|
(1,961 |
) |
(11,879 |
) |
(147,433 |
) | |||
Net cash provided by financing activities |
|
3,798 |
|
30,445 |
|
867,205 |
| |||
Effect of exchange rate changes on cash and cash equivalents |
|
|
|
1,069 |
|
(6,117 |
) | |||
Net increase in cash and cash equivalents |
|
9,347 |
|
106,520 |
|
1,004,102 |
| |||
Cash and cash equivalents, beginning of year |
|
2,966 |
|
12,313 |
|
118,833 |
| |||
Cash and cash equivalents, end of year |
|
$ |
12,313 |
|
$ |
118,833 |
|
$ |
1,122,935 |
|
Groupon, Inc.
Consolidated Statements of Operations
|
|
Three Months Ended |
|
Year Ended December 31, |
| |||||||||||
|
|
2010 |
|
2011 |
|
2009 |
|
2010 |
|
2011 |
| |||||
|
|
(dollars in thousands, except per share data) |
| |||||||||||||
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
(unaudited) |
| |||||
Revenue (gross billings of $415,269, $1,230,868, $34,082, $745,348 and $3,985,501) |
|
$ |
172,224 |
|
$ |
492,164 |
|
$ |
14,540 |
|
$ |
312,941 |
|
$ |
1,610,430 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
Cost of revenue |
|
25,191 |
|
96,265 |
|
4,716 |
|
42,896 |
|
258,879 |
| |||||
Marketing |
|
200,927 |
|
155,299 |
|
5,053 |
|
290,569 |
|
768,472 |
| |||||
Selling, general and administrative |
|
116,896 |
|
255,316 |
|
5,848 |
|
196,637 |
|
821,002 |
| |||||
Acquisition-related |
|
165,339 |
|
256 |
|
|
|
203,183 |
|
(4,537 |
) | |||||
Total operating expenses |
|
508,353 |
|
507,136 |
|
15,617 |
|
733,285 |
|
1,843,816 |
| |||||
Loss from operations |
|
(336,129 |
) |
(14,972 |
) |
(1,077 |
) |
(420,344 |
) |
(233,386 |
) | |||||
Interest and other income (expense), net |
|
(1,646 |
) |
(3,835 |
) |
(16 |
) |
284 |
|
5,973 |
| |||||
Equity-method investment activity, net of tax |
|
|
|
(6,678 |
) |
|
|
|
|
(26,652 |
) | |||||
Loss before provision for income taxes |
|
(337,775 |
) |
(25,485 |
) |
(1,093 |
) |
(420,060 |
) |
(254,065 |
) | |||||
(Benefit) provision for income taxes |
|
(2,172 |
) |
34,194 |
|
248 |
|
(6,674 |
) |
43,697 |
| |||||
Net loss |
|
(335,603 |
) |
(59,679 |
) |
(1,341 |
) |
(413,386 |
) |
(297,762 |
) | |||||
Less: Net loss (income) attributable to noncontrolling interests |
|
22,373 |
|
(5,267 |
) |
|
|
23,746 |
|
18,335 |
| |||||
Net loss attributable to Groupon, Inc. |
|
(313,230 |
) |
(64,946 |
) |
(1,341 |
) |
(389,640 |
) |
(279,427 |
) | |||||
Dividends on preferred stock |
|
(62 |
) |
|
|
(5,575 |
) |
(1,362 |
) |
|
| |||||
Redemption of preferred stock in excess of carrying value |
|
(52,893 |
) |
(433 |
) |
|
|
(52,893 |
) |
(34,327 |
) | |||||
Adjustment of redeemable noncontrolling interests to redemption value |
|
(12,425 |
) |
|
|
|
|
(12,425 |
) |
(59,740 |
) | |||||
Net loss attributable to common stockholders |
|
$ |
(378,610 |
) |
$ |
(65,379 |
) |
$ |
(6,916 |
) |
$ |
(456,320 |
) |
$ |
(373,494 |
) |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net loss per share attributable to common stockholders |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
|
$ |
(1.08 |
) |
$ |
(0.12 |
) |
$ |
(0.02 |
) |
$ |
(1.33 |
) |
$ |
(1.03 |
) |
Diluted |
|
$ |
(1.08 |
) |
$ |
(0.12 |
) |
$ |
(0.02 |
) |
$ |
(1.33 |
) |
$ |
(1.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Weighted average number of shares outstanding |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
|
351,494,664 |
|
528,421,712 |
|
337,208,284 |
|
342,698,772 |
|
362,261,324 |
| |||||
Diluted |
|
351,494,664 |
|
528,421,712 |
|
337,208,284 |
|
342,698,772 |
|
362,261,324 |
|
Groupon, Inc.
Consolidated Balance Sheets
|
|
December 31, |
| ||||
|
|
2010 |
|
2011 |
| ||
|
|
(in thousands) |
| ||||
|
|
|
|
(unaudited) |
| ||
Assets |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
118,833 |
|
$ |
1,122,935 |
|
Accounts receivable, net |
|
42,407 |
|
108,747 |
| ||
Prepaid expenses and other current assets |
|
12,615 |
|
91,645 |
| ||
Total current assets |
|
173,855 |
|
1,323,327 |
| ||
Property and equipment, net |
|
16,490 |
|
51,800 |
| ||
Goodwill |
|
132,038 |
|
166,903 |
| ||
Intangible assets, net |
|
40,775 |
|
45,667 |
| ||
Other non-current assets |
|
18,412 |
|
186,779 |
| ||
Total Assets |
|
$ |
381,570 |
|
$ |
1,774,476 |
|
Liabilities and Stockholders Equity |
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Accounts payable and accrued merchant payable |
|
$ |
219,952 |
|
$ |
561,641 |
|
Other current liabilities |
|
150,467 |
|
433,521 |
| ||
Total current liabilities |
|
370,419 |
|
995,162 |
| ||
Deferred income taxes, non-current |
|
604 |
|
7,428 |
| ||
Other non-current liabilities |
|
1,017 |
|
70,766 |
| ||
Total Liabilities |
|
372,040 |
|
1,073,356 |
| ||
Redeemable noncontrolling interest |
|
2,983 |
|
1,653 |
| ||
Total Equity |
|
6,547 |
|
699,467 |
| ||
Total Liabilities and Equity |
|
$ |
381,570 |
|
$ |
1,774,476 |
|
Groupon, Inc.
Segment Information
|
|
Three Months Ended |
|
Twelve Months Ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2010 |
|
2011 |
|
2010 |
|
2011 |
| ||||
|
|
(in thousands) |
| ||||||||||
|
|
(unaudited) |
|
(unaudited) |
|
|
|
(unaudited) |
| ||||
North America |
|
|
|
|
|
|
|
|
| ||||
Revenue |
|
$ |
88,363 |
|
$ |
179,638 |
|
$ |
200,412 |
|
$ |
634,980 |
|
Segment operating expenses(1) |
|
110,268 |
|
161,399 |
|
210,849 |
|
630,184 |
| ||||
Segment operating (loss) income |
|
(21,905 |
) |
18,239 |
|
(10,437 |
) |
4,796 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
International |
|
|
|
|
|
|
|
|
| ||||
Revenue |
|
$ |
83,861 |
|
$ |
312,526 |
|
$ |
112,529 |
|
$ |
975,450 |
|
Segment operating expenses(1) |
|
205,317 |
|
312,813 |
|
283,085 |
|
1,124,579 |
| ||||
Segment operating (loss) income |
|
(121,456 |
) |
(287 |
) |
(170,556 |
) |
(149,129 |
) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Consolidated |
|
|
|
|
|
|
|
|
| ||||
Revenue |
|
$ |
172,224 |
|
$ |
492,164 |
|
$ |
312,941 |
|
$ |
1,610,430 |
|
Segment operating expenses(1) |
|
315,585 |
|
474,212 |
|
493,934 |
|
1,754,763 |
| ||||
Segment operating (loss) income |
|
(143,361 |
) |
17,952 |
|
(180,993 |
) |
(144,333 |
) | ||||
Stock-based compensation |
|
27,429 |
|
32,668 |
|
36,168 |
|
93,590 |
| ||||
Acquisition-related |
|
165,339 |
|
256 |
|
203,183 |
|
(4,537 |
) | ||||
Interest and other expense (income), net |
|
1,646 |
|
3,835 |
|
(284 |
) |
(5,973 |
) | ||||
Equity-method investment activity, net |
|
|
|
6,678 |
|
|
|
26,652 |
| ||||
Loss before income taxes |
|
(337,775 |
) |
(25,485 |
) |
(420,060 |
) |
(254,065 |
) | ||||
Provision (benefit) for income taxes |
|
(2,172 |
) |
34,194 |
|
(6,674 |
) |
43,697 |
| ||||
Net loss |
|
$ |
(335,603 |
) |
$ |
(59,679 |
) |
$ |
(413,386 |
) |
$ |
(297,762 |
) |
(1) Represents operating expenses, excluding stock-based compensation and acquisition-related expense, which are not allocated to segments.
Segment highlights |
|
|
|
|
|
|
|
|
|
Y/Y revenue growth: |
|
|
|
|
|
|
|
|
|
North America |
|
855 |
% |
103 |
% |
1,278 |
% |
217 |
% |
International |
|
100 |
% |
273 |
% |
100 |
% |
767 |
% |
Consolidated |
|
1,761 |
% |
186 |
% |
2,052 |
% |
415 |
% |
Y/Y segment operating income growth: |
|
|
|
|
|
|
|
|
|
North America |
|
1,302 |
% |
183 |
% |
985 |
% |
146 |
% |
International |
|
(100 |
)% |
100 |
% |
(100 |
)% |
13 |
% |
Consolidated |
|
9,078 |
% |
113 |
% |
18,174 |
% |
20 |
% |
Revenue mix |
|
|
|
|
|
|
|
|
|
North America |
|
51 |
% |
37 |
% |
64 |
% |
39 |
% |
International |
|
49 |
% |
64 |
% |
36 |
% |
61 |
% |
|
|
100 |
% |
100 |
% |
100 |
% |
100 |
% |
Groupon, Inc.
Supplemental Financial Information
Historical Consolidated Statements of Cash Flows
|
|
Twelve |
|
Three Months Ended |
|
Twelve |
| ||||||||||||
|
|
Dec. 31, |
|
Mar. 31, |
|
June 30, |
|
Sept. 30, |
|
Dec. 31, |
|
Dec. 31, |
| ||||||
|
|
2010 |
|
2011 |
|
2011 |
|
2011 |
|
2011 |
|
2011 |
| ||||||
|
|
(in thousands) |
| ||||||||||||||||
|
|
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
| ||||||
Net cash provided by operating activities |
|
$ |
86,885 |
|
$ |
17,940 |
|
$ |
39,019 |
|
$ |
64,411 |
|
$ |
169,077 |
|
$ |
290,447 |
|
Net cash used in investing activities |
|
(11,879 |
) |
(44,294 |
) |
(25,184 |
) |
(43,048 |
) |
(34,907 |
) |
(147,433 |
) | ||||||
Net cash provided by (used in) financing activities |
|
30,445 |
|
112,106 |
|
(422 |
) |
8,608 |
|
746,913 |
|
867,205 |
| ||||||
Effect of exchange rate changes on cash and cash equivalents |
|
1,069 |
|
4,103 |
|
2,992 |
|
(11,129 |
) |
(2,083 |
) |
(6,117 |
) | ||||||
Net increase in cash and cash equivalents |
|
106,520 |
|
89,855 |
|
16,405 |
|
18,842 |
|
879,000 |
|
1,004,102 |
| ||||||
Cash and cash equivalents, beginning of period |
|
12,313 |
|
118,833 |
|
208,688 |
|
225,093 |
|
243,935 |
|
118,833 |
| ||||||
Cash and cash equivalents, end of period |
|
$ |
118,833 |
|
$ |
208,688 |
|
$ |
225,093 |
|
$ |
243,935 |
|
$ |
1,122,935 |
|
$ |
1,122,935 |
|
Groupon, Inc.
Supplemental Financial Information
Historical Consolidated Statements of Operations
|
|
Twelve |
|
Three Months Ended |
|
Twelve |
| ||||||||||||
|
|
Dec. 31, |
|
Mar. 31, |
|
June 30, |
|
Sept. 30, |
|
Dec. 31, |
|
Dec. 31, |
| ||||||
|
|
2010 |
|
2011 |
|
2011 |
|
2011 |
|
2011 |
|
2011 |
| ||||||
|
|
(dollars in thousands, except per share data) |
| ||||||||||||||||
|
|
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
| ||||||
Revenue |
|
$ |
312,941 |
|
$ |
295,523 |
|
$ |
392,582 |
|
$ |
430,161 |
|
$ |
492,164 |
|
$ |
1,610,430 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cost of revenue |
|
42,896 |
|
39,765 |
|
54,803 |
|
68,046 |
|
96,265 |
|
258,879 |
| ||||||
Marketing |
|
290,569 |
|
230,085 |
|
212,739 |
|
170,349 |
|
155,299 |
|
768,472 |
| ||||||
Selling, general and administrative |
|
196,637 |
|
142,821 |
|
226,067 |
|
196,798 |
|
255,316 |
|
821,002 |
| ||||||
Acquisition-related |
|
203,183 |
|
|
|
|
|
(4,793 |
) |
256 |
|
(4,537 |
) | ||||||
Total operating expenses |
|
733,285 |
|
412,671 |
|
493,609 |
|
430,400 |
|
507,136 |
|
1,843,816 |
| ||||||
Loss from operations |
|
(420,344 |
) |
(117,148 |
) |
(101,027 |
) |
(239 |
) |
(14,972 |
) |
(233,386 |
) | ||||||
Interest and other income (expense), net |
|
284 |
|
1,060 |
|
479 |
|
8,269 |
|
(3,835 |
) |
5,973 |
| ||||||
Equity-method investment activity, net of tax |
|
|
|
(882 |
) |
(7,881 |
) |
(11,211 |
) |
(6,678 |
) |
(26,652 |
) | ||||||
Loss before provision for income taxes |
|
(420,060 |
) |
(116,970 |
) |
(108,429 |
) |
(3,181 |
) |
(25,485 |
) |
(254,065 |
) | ||||||
(Benefit) provision for income taxes |
|
(6,674 |
) |
(3,079 |
) |
1,347 |
|
11,235 |
|
34,194 |
|
43,697 |
| ||||||
Net loss |
|
(413,386 |
) |
(113,891 |
) |
(109,776 |
) |
(14,416 |
) |
(59,679 |
) |
(297,762 |
) | ||||||
Less: Net loss (income) attributable to noncontrolling interests |
|
23,746 |
|
11,223 |
|
8,536 |
|
3,843 |
|
(5,267 |
) |
18,335 |
| ||||||
Net loss attributable to Groupon, Inc. |
|
$ |
(389,640 |
) |
$ |
(102,668 |
) |
$ |
(101,240 |
) |
$ |
(10,573 |
) |
$ |
(64,946 |
) |
$ |
(279,427 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net loss per share attributable to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Basic |
|
$ |
(1.33 |
) |
$ |
(0.48 |
) |
$ |
(0.35 |
) |
$ |
(0.18 |
) |
$ |
(0.12 |
) |
$ |
(1.03 |
) |
Diluted |
|
$ |
(1.33 |
) |
$ |
(0.48 |
) |
$ |
(0.35 |
) |
$ |
(0.18 |
) |
$ |
(0.12 |
) |
$ |
(1.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Weighted average number of shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Basic |
|
342,698,772 |
|
307,849,412 |
|
303,414,676 |
|
307,605,060 |
|
528,421,712 |
|
362,261,324 |
| ||||||
Diluted |
|
342,698,772 |
|
307,849,412 |
|
303,414,676 |
|
307,605,060 |
|
528,421,712 |
|
362,261,324 |
|
Groupon, Inc.
Supplemental Financial Information
Historical Consolidated Balance Sheets
|
|
Dec. 31, |
|
Mar. 31, |
|
June 30, |
|
Sept. 30, |
|
Dec. 31, |
| |||||
|
|
2010 |
|
2011 |
|
2011 |
|
2011 |
|
2011 |
| |||||
|
|
(in thousands) |
| |||||||||||||
|
|
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
| |||||
Assets |
|
|
|
|
|
|
|
|
|
|
| |||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and cash equivalents |
|
$ |
118,833 |
|
$ |
208,688 |
|
$ |
225,093 |
|
$ |
243,935 |
|
$ |
1,122,935 |
|
Accounts receivable, net |
|
42,407 |
|
60,717 |
|
99,674 |
|
109,852 |
|
108,747 |
| |||||
Prepaid expenses and other current assets |
|
12,615 |
|
21,324 |
|
50,947 |
|
111,856 |
|
91,645 |
| |||||
Total current assets |
|
173,855 |
|
290,729 |
|
375,714 |
|
465,643 |
|
1,323,327 |
| |||||
Property and equipment, net |
|
16,490 |
|
26,928 |
|
36,532 |
|
41,374 |
|
51,800 |
| |||||
Goodwill |
|
132,038 |
|
154,438 |
|
162,796 |
|
169,152 |
|
166,903 |
| |||||
Intangible assets, net |
|
40,775 |
|
43,052 |
|
39,516 |
|
50,141 |
|
45,667 |
| |||||
Other non-current assets |
|
18,412 |
|
26,263 |
|
23,154 |
|
69,257 |
|
186,779 |
| |||||
Total Assets |
|
$ |
381,570 |
|
$ |
541,410 |
|
$ |
637,712 |
|
$ |
795,567 |
|
$ |
1,774,476 |
|
Liabilities and Stockholders Equity |
|
|
|
|
|
|
|
|
|
|
| |||||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| |||||
Accounts payable and accrued merchant payable |
|
$ |
219,952 |
|
$ |
328,587 |
|
$ |
440,927 |
|
$ |
505,931 |
|
$ |
561,641 |
|
Other current liabilities |
|
150,467 |
|
190,890 |
|
239,691 |
|
260,762 |
|
433,521 |
| |||||
Total current liabilities |
|
370,419 |
|
519,477 |
|
680,618 |
|
766,693 |
|
995,162 |
| |||||
Deferred income taxes, non-current |
|
604 |
|
1,437 |
|
2,180 |
|
4,788 |
|
7,428 |
| |||||
Other non-current liabilities |
|
1,017 |
|
13,353 |
|
23,533 |
|
39,719 |
|
70,766 |
| |||||
Total Liabilities |
|
372,040 |
|
534,267 |
|
706,331 |
|
811,200 |
|
1,073,356 |
| |||||
Redeemable noncontrolling interest |
|
2,983 |
|
2,744 |
|
681 |
|
2,198 |
|
1,653 |
| |||||
Total Equity |
|
6,547 |
|
4,399 |
|
(69,300 |
) |
(17,831 |
) |
699,467 |
| |||||
Total Liabilities and Equity |
|
$ |
381,570 |
|
$ |
541,410 |
|
$ |
637,712 |
|
$ |
795,567 |
|
$ |
1,774,476 |
|
Reconciliation of Non-GAAP Financial Measures
Free Cash Flow
The following is a reconciliation of free cash flow to the most comparable U.S. GAAP measure, Net cash provided by operating activities, for the years ended December 31, 2011, 2010, and 2009, and the three months ended December 31, 2011 and 2010:
|
|
Three Months Ended |
|
|
|
|
|
|
| |||||||
|
|
December 31, |
|
Year Ended December 31, |
| |||||||||||
|
|
2010 |
|
2011 |
|
2009 |
|
2010 |
|
2011 |
| |||||
|
|
(in thousands) |
| |||||||||||||
|
|
(unaudited) |
| |||||||||||||
Net cash provided by operating activities |
|
$ |
51,919 |
|
$ |
169,077 |
|
$ |
7,510 |
|
$ |
86,885 |
|
$ |
290,447 |
|
Purchases of property and equipment |
|
(8,589 |
) |
(13,986 |
) |
(290 |
) |
(14,681 |
) |
(43,811 |
) | |||||
Free cash flow |
|
$ |
43,330 |
|
$ |
155,091 |
|
$ |
7,220 |
|
$ |
72,204 |
|
$ |
246,636 |
|
Consolidated Segment Operating Income (CSOI)
The following is a reconciliation of CSOI to the most comparable U.S. GAAP measure, Loss from operations, for the years ended December 31, 2011 and 2010 and the three months ended December 31, 2011 and 2010:
|
|
Three Months Ended |
|
Twelve Months Ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2010 |
|
2011 |
|
2010 |
|
2011 |
| ||||
|
|
(in thousands) |
| ||||||||||
|
|
(unaudited) |
| ||||||||||
Loss from operations |
|
$ |
(336,129 |
) |
$ |
(14,972 |
) |
$ |
(420,344 |
) |
$ |
(233,386 |
) |
Stock-based compensation(1) |
|
27,429 |
|
32,668 |
|
36,168 |
|
93,590 |
| ||||
Acquisition-related(2) |
|
165,339 |
|
256 |
|
203,183 |
|
(4,537 |
) | ||||
CSOI |
|
$ |
(143,361 |
) |
$ |
17,952 |
|
$ |
(180,993 |
) |
$ |
(144,333 |
) |
(1) |
Represents non-cash stock-based compensation expense recorded within selling, general and administrative expenses, marketing expenses and cost of revenue on the income statement. |
|
|
(2) |
Primarily represents non-cash charges for remeasurement of the fair value of contingent consideration related to acquisitions made by us in 2010 and 2011. |
Pro-forma net loss attributable to common stockholders
The following is a reconciliation of pro-forma net loss attributable to common stockholders to the most comparable U.S. GAAP measure, Net loss attributable to common stockholders, for the years ended December 31, 2011 and 2010 and the three months ended December 31, 2011 and 2010:
|
|
December 31, |
|
Year Ended December 31, |
| ||||||||
|
|
2010 |
|
2011 |
|
2010 |
|
2011 |
| ||||
|
|
(in thousands) |
| ||||||||||
|
|
(unaudited) |
| ||||||||||
Net loss attributable to common stockholders |
|
$ |
(378,610 |
) |
$ |
(65,379 |
) |
$ |
(456,320 |
) |
$ |
(373,494 |
) |
Stock-based compensation(1) |
|
27,429 |
|
32,668 |
|
36,168 |
|
93,590 |
| ||||
Acquisition-related(2) |
|
165,339 |
|
256 |
|
203,183 |
|
(4,537 |
) | ||||
Pro-forma net loss attributable to common stockholders |
|
$ |
(185,842 |
) |
$ |
(32,455 |
) |
$ |
(216,969 |
) |
$ |
(284,441 |
) |
|
|
|
|
|
|
|
|
|
| ||||
Weighted average basic shares |
|
351,494,664 |
|
528,421,712 |
|
342,698,772 |
|
362,261,324 |
| ||||
Pro-forma loss per share |
|
$ |
(0.53 |
) |
$ |
(0.06 |
) |
$ |
(0.63 |
) |
$ |
(0.79 |
) |
(1) |
Represents non-cash stock-based compensation expense recorded within selling, general and administrative expenses, marketing expenses and cost of revenue on the income statement. |
|
|
(2) |
Primarily represents non-cash charges for remeasurement of the fair value of contingent consideration related to acquisitions made by us in 2010 and 2011. |
Foreign exchange rate neutral operating results
The effect on the companys consolidated statements of operations from changes in exchange rates versus the U.S. Dollar is as follows:
|
|
Three Months Ended |
|
Year Ended |
| ||||||||||||||
|
|
December 31, 2011 |
|
December 31, 2011 |
| ||||||||||||||
|
|
At Avg. |
|
Exchange |
|
|
|
At Avg. |
|
Exchange |
|
|
| ||||||
|
|
Q4 2010 Rates |
|
Rate |
|
As |
|
2010 |
|
Rate |
|
As |
| ||||||
|
|
Rates (1) |
|
Effect (2) |
|
Reported |
|
Rates (1) |
|
Effect (2) |
|
Reported |
| ||||||
|
|
(in thousands) | |||||||||||||||||
|
|
(unaudited) | |||||||||||||||||
Revenue |
|
$ |
495,085 |
|
$ |
(2,921 |
) |
$ |
492,164 |
|
$ |
1,566,450 |
|
$ |
43,980 |
|
$ |
1,610,430 |
|
Loss from operations |
|
|
(23,403 |
) |
|
8,431 |
|
|
(14,972 |
) |
|
(220,397 |
) |
|
(12,989 |
) |
|
(233,386 |
) |
(1) |
Represents the outcome that would have resulted had exchange rates in the reported period been the same as those in effect in the comparable prior year period for operating results. |
|
|
(2) |
Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior year period for operating results. |
Item 9.01 |
|
Financial Statements and Exhibits. | ||
|
|
|
|
|
(d) |
|
Exhibits: |
|
|
|
|
|
|
|
|
|
Exhibit No. |
|
Description |
|
|
99.1* |
|
Press Release dated March 30, 2012. |
*The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed to be filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
GROUPON, INC. | |
|
| |
|
|
|
Dated: March 30, 2012 |
By: |
/s/ Jason E. Child |
|
Name: |
Jason E. Child |
|
Title: |
Chief Financial Officer |
Exhibit Index
Exhibit No. |
|
Description |
99.1* |
|
Press Release dated March 30, 2012. |
*The information in Exhibit 99.1 is being furnished and shall not be deemed to be filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Exhibit 99.1
GROUPON ANNOUNCES REVISED FOURTH QUARTER AND FULL YEAR 2011 RESULTS, CONFIRMS FIRST QUARTER GUIDANCE
Refund reserve accrual increased to better reflect Q4 evolution in Groupons deal mix.
No change to previously announced Operating Cash Flow and Free Cash Flow results.
CHICAGO(BUSINESS WIRE)March 30, 2012Groupon, Inc. (NASDAQ: GRPN) today announced a revision of its reported financial results for its fourth quarter and year ended December 31, 2011. Groupon also affirmed its guidance for the first quarter of 2012.
The revisions resulted in a reduction to fourth quarter 2011 revenue of $14.3 million. The revisions also resulted in an increase to fourth quarter operating expenses that reduced operating income by $30.0 million, net income by $22.6 million, and earnings per share by $0.04. Financial results for prior periods, including as of and for the nine months ended September 30, 2011, were not affected by the revisions.
There is no change to Groupons previously reported operating cash flow of $169.1 million for the fourth quarter 2011 and $290.5 million for the full year 2011. There is also no change to Groupons previously reported free cash flow, which is a non-GAAP financial measure that reflects cash flow from operations less purchases of property and equipment, of $155.1 million for the fourth quarter 2011 and $246.6 million for the full year 2011.
The revisions are primarily related to an increase to the Companys refund reserve accrual to reflect a shift in the Companys fourth quarter deal mix and higher price point offers, which have higher refund rates. The revisions have an impact on both revenue and cost of revenue. A more detailed explanation of the refund reserve is included in the Critical Accounting Policies and Estimates section of Groupons Annual Report on Form 10-K for the year ended December 31, 2011, filed today with the Securities and Exchange Commission (SEC).
We remain confident in the fundamentals of our business, as our performance continues to highlight the value that we provide to customers and merchants, said Jason Child, Groupon CFO. Groupon affirmed its guidance contained in its February 8, 2012 press release regarding expectations for first quarter 2012 revenue of $510 million to $550 million and income from operations of $15 million to $35 million. This guidance includes approximately $35 million for stock-based compensation and acquisition-related expense, and it assumes no material business acquisitions or investments and no further revisions to stock-based compensation estimates.
In conjunction with the completion of the audit of Groupons financial statements for the year ended December 31, 2011 by its independent auditor, Ernst & Young LLP, the Company included a statement of a material weakness in its internal controls over its financial statement close process in its Annual Report on Form 10-K for year ended December 31, 2011. The Company has been working for several months with another global accounting firm in preparation for reporting on the effectiveness of its internal controls by the end of 2012, as required following Groupons initial public offering last year. The Company continues to implement process improvement initiatives and augment its staffing, and is expanding the accounting firms engagement scope to address the underlying causes of the material weakness. Further discussion of the material weakness can be found in the Companys Form 10-K, filed today with the SEC.
Final financial results for Groupons year ended December 31, 2011 are included in its Form 10-K, filed today with the SEC. Revised financial results for Groupons fourth quarter ended December 31, 2011 are included in its amended Form 8-K, filed today with the SEC.
Groupon to Webcast First Quarter Financial Results Conference Call on May 14, 2012
The Company also announced today that it intends to hold a conference call to discuss its first quarter 2012 financial results on Monday, May 14th, 2012, at 5:00 p.m. EDT. The webcast can be accessed live at http://investor.groupon.com.
Extension of Lock-Up Period
In connection with Companys initial public offering, the underwriters and certain holders of Groupon common stock entered into agreements restricting the sale or transfer of shares of common stock during the 180-day period following the closing of the IPO. These agreements provide for an automatic extension in the event the Company announced that it will release earnings or other material news within the 16-day period following the originally-scheduled expiration of the agreements. These agreements were originally scheduled to expire on May 2, 2012. As a result of the Companys scheduled release of its earnings on May 14, 2012, the lock-up agreements described above will be automatically extended through June 1, 2012.
Non-GAAP Financial Measures
This release includes the following financial measure defined as a non-GAAP financial measure by the SEC: free cash flow. Groupon believes free cash flow is an important indicator for its business because it measures the amount of cash the Company generates after spending on marketing, wages and benefits, capital expenditures and other items. Free cash flow also reflects changes in working capital. Free cash flow may be different from similar measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of
accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For a reconciliation of this non-GAAP financial measure to the nearest comparable U.S. GAAP measure, see Reconciliation of Non-GAAP Financial Measure included in this release.
Note on Forward-Looking Statements
The statements in this release that refer to plans and expectations for the next quarter or the future are forward-looking statements that involve a number of risks and uncertainties, and actual results could differ materially from those discussed. The risks and uncertainties that could cause our results to differ materially from those included in the forward-looking statements include, but are not limited to, our ability to continue to expand our business and continue revenue growth; our ability to manage the growth of our organization; responding to changes in the markets in which we compete for business; retaining existing merchant partners and adding new merchant partners; competing against smaller competitors and competitors with more financial resources than us; developing new product and service offerings that are appealing to customers; maintaining a strong brand; effectively dealing with challenges arising from our international operations; integrating our technology platforms; managing refund risks; retaining our executive team; litigation; regulations, including the CARD Act and regulation of the Internet; tax liabilities; tax legislation; maintaining our information technology infrastructure; security breaches; protecting our intellectual property; handling acquisitions, joint ventures and strategic investments effectively; seasonality; payment-related risks; customer and merchant partner fraud; global economic uncertainty; compliance with rules and regulations associated with being a public company; and our ability to raise capital if necessary. We urge you to refer to the factors included under the headings Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations in the Companys Form 10-K for the year ended December 31, 2011, copies of which may be obtained by visiting the Companys Investor Relations web site at http://investor.groupon.com or the SECs web site at www.sec.gov. Groupons actual results could differ materially from those predicted or implied and reported results should not be considered an indication of future performance.
You should not rely upon forward-looking statements as predictions of future events. Although Groupon believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements reflect Groupons expectations as of March 30, 2012. Groupon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this earnings release to conform these statements to actual results or to changes in its expectations.
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 Groupons Code of Conduct), and select press releases and social media postings.
Contacts: |
|
|
Groupon Investor Relations |
|
Groupon Public Relations |
Kartik Ramachandran, 312-999-3098 |
|
Julie Mossler, 312-242-2033 |
ir@groupon.com |
|
|
Reconciliation of Non-GAAP Financial Measures
Free Cash Flow
The following is a reconciliation of free cash flow to the most comparable U.S. GAAP measure, Net cash provided by operating activities, for the years ended December 31, 2011, 2010, and 2009, and the three months ended December 31, 2011 and 2010:
|
|
Three Months Ended |
|
Year Ended December 31, |
| |||||||||||
|
|
2010 |
|
2011 |
|
2009 |
|
2010 |
|
2011 |
| |||||
|
|
(in thousands) |
| |||||||||||||
|
|
(unaudited) |
| |||||||||||||
Net cash provided by operating activities |
|
$ |
51,919 |
|
$ |
169,077 |
|
$ |
7,510 |
|
$ |
86,885 |
|
$ |
290,447 |
|
Purchases of property and equipment |
|
(8,589 |
) |
(13,986 |
) |
(290 |
) |
(14,681 |
) |
(43,811 |
) | |||||
Free cash flow |
|
$ |
43,330 |
|
$ |
155,091 |
|
$ |
7,220 |
|
$ |
72,204 |
|
$ |
246,636 |
|