?Ancestry.com Subscriber Growth up 19% year-over-year?
? Q3 Total Revenue $128 million, up 24% year-over-year ?
PROVO, Utah, Oct. 24, 2012 -- Ancestry.com Inc. (Nasdaq:ACOM), the
world's largest online family history resource, reported today financial
results for the third quarter ended September 30, 2012.
"We are very pleased with our third quarter results that featured strong
financial performance and subscriber metrics and solid execution on our
content and product initiatives," said Tim Sullivan, Chief Executive
Officer of Ancestry.com. "We completed the indexing of the 1940 US Federal
Census, a key milestone for Ancestry.com and the family history category,
and we continued to make progress with our mobile app platform and
AncestryDNA rollout."
Separately, on October 22, 2012 the Company reported that a company
owned by the Permira funds and co-investors entered into a definitive
merger agreement to acquire Ancestry.com for $32.00 per share in cash in a
transaction valued at $1.6 billion. The transaction, which is subject to
the approval of holders of a majority of the outstanding shares of
Ancestry.com common stock and other customary closing conditions, is
expected to close in early 2013.
Ancestry.com Web Sites Highlights
- Subscribers totaled approximately 2,020,000 as of September 30, 2012,
a 19% increase over the end of the third quarter of 2011 and a 1%
increase from the end of the second quarter of 2012.
- Gross subscriber additions were 286,000 in the third quarter of 2012,
compared to 274,000 in the third quarter of 2011 and 361,000 in the
second quarter of 2012.
- Monthly churn1 was 3.9% in the third quarter of 2012,
compared to 4.2% in the third quarter of 2011 and 3.4% in the second
quarter of 2012.
- Subscriber acquisition cost2 in the third quarter of 2012
was $84.14, compared to $93.64 in the third quarter of 2011 and $81.49
in the second quarter of 2012.
- Average monthly revenue per subscriber3 in the third
quarter of 2012 was $18.68, compared to $18.68 in the third quarter of
2011 and $18.84 in the second quarter of 2012.
Third Quarter 2012 Financial Highlights
- Total revenue for the third quarter of 2012 was $128.4 million,
an increase of 24% over $103.1 million in the third quarter of 2011.
- Operating income for the third quarter of 2012 was $35.9
million, compared to $27.2 million in the third quarter of 2011.
- Adjusted EBITDA4 for the third quarter of 2012 was
$51.3 million, compared to $40.1 million in the third quarter of 2011.
Adjusted EBITDA margin for the third quarter of 2012 was 39.9%, compared
to 38.9% in the third quarter of 2011.
- Net income was $24.9 million, or $0.54 per fully diluted share,
for the third quarter of 2012 compared to $19.1 million, or $0.40 per
fully diluted share, in the third quarter of 2011.
- Free cash flow5 totaled $30.8 million for the third
quarter of 2012 compared to $30.6 million for the third quarter of 2011.
- Cash and cash equivalents totaled $64.6 million as of September
30, 2012.
Recent Business Highlights
- The Company completed the acquisition of Archives.com.
- The Company completed the acquisition of 1000Memories and its popular
Shoebox app.
- The Company released the first complete and searchable 1940 US
Federal Census database on August 2, 2012 with 134 million searchable
indexed records.
- The Company ended the quarter with approximately 11 billion records;
new collections included:
-- Over 13 million vital records from Indiana, Tennessee, Ohio,
Washington, and Kansas
-- Approximately 1 million new passenger lists and naturalization
records from New York, Texas, Washington, Pennsylvania, US Virgin
Islands, and Puerto Rico
-- 4.4 million records from the US WWII Navy Muster Lists
-- Several international collections including the UK Trade
Directories, Irish Historic Newspapers, and the Mecklenburg Census from
Germany
- The Company added a monthly mobile membership allowing customers to
discover their family history on-the-go via a smart phone or iPad.
- The continued rollout of AncestryDNA aimed at enhancing the family
history experience by revealing genetic ethnicities, genetic cousins,
and recent common ancestors.
Conference Call & Webcast
Ancestry.com has canceled the third quarter 2012 earnings conference
call and webcast with analysts and investors that had been scheduled for
October 24, 2012.
Use of Non-GAAP Measures
The Company believes that adjusted EBITDA and free cash flow are useful
measures of operating performance because they exclude items that the
Company does not consider indicative of its core performance. In the case
of adjusted EBITDA, net income is adjusted for such expenses as interest,
income taxes, stock-based compensation and certain non-cash and
non-recurring items. Free cash flow subtracts from adjusted EBITDA the
capitalization of content databases, purchases of property and equipment
and cash paid for income taxes and interest. However, these non-GAAP
measures should be considered in addition to, not as a substitute for or
superior to, net income and net cash provided by operating activities, or
other financial measures prepared in accordance with GAAP. A
reconciliation to the GAAP equivalents of these non-GAAP measures is
contained in tabular form on the attached unaudited summary financial
statements.
The Company uses adjusted EBITDA and free cash flow as measures of
operating performance; for planning purposes, including the preparation of
the annual operating budget; to allocate resources to enhance the
financial performance of its business; to evaluate the effectiveness of
its business strategies; to provide consistency and comparability with
past financial performance; to facilitate a comparison of its results with
those of other companies; and in communications with its board of
directors concerning its financial performance. The Company also uses
adjusted EBITDA and has used free cash flow as factors when determining
the incentive compensation pool.
About Ancestry.com
Ancestry.com Inc. (Nasdaq:ACOM) is the world's largest online family
history resource, with more than 2 million paying subscribers. More than
11 billion records have been added to the site in the past 15 years.
Ancestry users have created more than 40 million family trees containing
approximately 4 billion profiles. In addition to its flagship site,
Ancestry.com offers several localized Web sites designed to empower people
to discover, preserve and share their family history.
The Ancestry.com, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=13617
Forward-looking Statements
This press release contains forward-looking statements. These statements
relate to future events or to future financial performance and involve
known and unknown risks, uncertainties, and other factors that may cause
the Company's actual results, levels of activity, performance, or
achievements to be materially different from those anticipated in these
forward-looking statements. In some cases, you can identify
forward-looking statements by the use of words such as "appears," "may,"
"designed," "expect," "intend," "focus," "seek," "anticipate," "believe,"
"estimate," "predict," "potential," "should," "continue" or "work" or the
negative of these terms or other comparable terminology. These statements
include statements describing the Company's subscriber base, its reach,
its activities to enhance subscribers' experience and deliver product
innovations and enhancements, improved features and tools, its activities
to develop and promote its products (including DNA services), its business
outlook, its leadership position and its opportunities and prospects for
growth, including growth in revenues, adjusted EBITDA and number of
subscribers. These forward-looking statements are based on information
available to the Company as of the date of this press release.
Forward-looking statements involve a number of risks and uncertainties
that could cause actual results to differ materially from those
anticipated by these forward-looking statements. Such risks and
uncertainties include a variety of factors, some of which are beyond the
Company's control. In particular, such risks and uncertainties include the
Company's continued ability to attract and retain subscribers; its
continued ability to acquire content and make it available online; its
ability to add tools and features and provide value to satisfy customer
demand; difficulties encountered in consummating the recently announced
acquisition of the Company and integrating acquired businesses and
retaining customers; the timing and amount of investments in the Company's
DNA service; market conditions; the Company's common stock price; the
availability of cash and credit; the adverse impact of competitive product
announcements; NBC's failure to renew Who Do You Think You Are?;
failure to achieve anticipated revenues and operating performance; changes
in overall economic conditions; the loss of key employees; competitors'
actions; pricing and gross margin pressures; inability to control costs
and expenses; and significant litigation.
Information concerning additional factors that could cause results to
differ materially from those projected in the forward-looking statements
is contained under the caption "Risk Factors" in the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2012, and in
discussions in other of the Company's SEC filings.
These forward-looking statements should not be relied upon as
representing our views as of any subsequent date and the Company assumes
no obligation to publicly update or revise these forward-looking
statements for any reason, whether as a result of new information, future
events, or otherwise.
1Monthly churn is a measure representing the number
of subscribers to the Ancestry.com Web sites that cancel in the quarter
divided by the sum of beginning subscribers and gross subscriber additions
during the quarter. To arrive at monthly churn, the results are divided by
three.
2 Subscriber acquisition cost is external marketing
and advertising expense associated with the Ancestry.com Web sites for the
quarter, divided by gross subscriber additions to the Ancestry.com Web
sites in the quarter.
3 Average monthly revenue per subscriber is total
subscription revenues earned in the quarter from subscriptions to the
Ancestry.com Web sites divided by the average number of subscribers in the
quarter, divided by three. The average number of subscribers for the
quarter is calculated by taking the average of the beginning and ending
number of subscribers for the quarter.
4 Adjusted EBITDA is defined as net income plus
other expense, net; income tax expense; non-cash charges including
depreciation, amortization, impairment of intangible assets and
stock-based compensation expense; and certain non-recurring (income)
expenses.
5 Free cash flow subtracts from adjusted EBITDA
capitalization of content databases, purchases of property and equipment
and cash paid for income taxes and interest.
| |
| Ancestry.com Inc. |
| Consolidated Balance
Sheets |
| (in thousands) |
| |
September 30, |
|
December 31, |
| |
2012 |
|
2011 |
| Assets |
(unaudited) |
|
|
| Current assets: |
|
|
|
| Cash and cash equivalents |
$ 64,625 |
|
$ 48,998 |
| Restricted cash |
16,157 |
|
1,702 |
| Accounts receivable, net |
9,854 |
|
7,599 |
| Income tax receivable |
4,784 |
|
1,763 |
| Deferred income taxes |
4,911 |
|
4,823 |
| Prepaid expenses and other current assets |
7,692 |
|
7,945 |
| Total current assets |
108,023 |
|
72,830 |
| Property and equipment, net |
28,272 |
|
21,701 |
| Content databases, net |
95,787 |
|
76,646 |
| Intangible assets, net |
52,731 |
|
17,594 |
| Goodwill |
372,901 |
|
302,422 |
| Other assets |
12,367 |
|
2,656 |
| Total assets |
$ 670,081 |
|
$ 493,849 |
| Liabilities and stockholders' equity |
|
|
|
| Current liabilities: |
|
|
|
| Accounts payable |
$ 13,363 |
|
$ 9,817 |
| Accrued expenses |
37,904 |
|
33,428 |
| Escrow liability |
15,957 |
|
1,297 |
| Deferred revenues |
143,418 |
|
108,654 |
| Debt |
55,000 |
|
10,000 |
| Total current liabilities |
265,642 |
|
163,196 |
| Deferred income taxes |
15,527 |
|
14,925 |
| Other long-term liabilities |
14,199 |
|
5,219 |
| Total liabilities |
295,368 |
|
183,340 |
| Commitments and contingencies |
|
|
|
| Stockholders' equity: |
|
|
|
| Common stock |
49 |
|
48 |
| Additional paid-in capital |
393,250 |
|
374,948 |
| Treasury stock |
(175,000) |
|
(162,168) |
| Accumulated other comprehensive income |
873 |
|
564 |
| Retained earnings |
155,541 |
|
97,117 |
| Total stockholders' equity |
374,713 |
|
310,509 |
| Total liabilities and stockholders' equity |
$ 670,081 |
|
$ 493,849 |
| |
| Ancestry.com Inc. |
| Consolidated Statements of
Income |
| (in thousands, except per
share data) |
| |
|
|
|
|
| |
Three Months Ended |
Nine Months Ended |
| |
September 30, 2012 |
September 30, 2011 |
September 30, 2012 |
September 30, 2011 |
| Revenues: |
(unaudited) |
(unaudited) |
| Subscription revenues |
$ 118,932 |
$ 98,093 |
$ 334,565 |
$ 279,983 |
| Product and other revenues |
9,423 |
5,008 |
21,404 |
15,454 |
| Total revenues |
128,355 |
103,101 |
355,969 |
295,437 |
| Costs of revenues: |
|
|
|
|
| Cost of subscription revenues |
16,776 |
15,292 |
49,473 |
43,290 |
| Cost of product and other revenues |
6,319 |
1,558 |
12,688 |
5,227 |
| Total cost of revenues |
23,095 |
16,850 |
62,161 |
48,517 |
| Gross profit |
105,260 |
86,251 |
293,808 |
246,920 |
| Operating expenses: |
|
|
|
|
| Technology and development |
19,887 |
14,773 |
55,292 |
42,683 |
| Marketing and advertising |
30,810 |
30,266 |
105,303 |
94,324 |
| General and administrative |
14,108 |
9,753 |
37,483 |
29,221 |
| Amortization of acquired intangible assets |
4,577 |
4,304 |
10,362 |
12,871 |
| Total operating expenses |
69,382 |
59,096 |
208,440 |
179,099 |
| Income from operations |
35,878 |
27,155 |
85,368 |
67,821 |
| Other income (expense), net |
102 |
(393) |
87 |
(929) |
| Income before income taxes |
35,980 |
26,762 |
85,455 |
66,892 |
| Income tax expense |
(11,080) |
(7,711) |
(27,031) |
(22,313) |
| Net income |
$ 24,900 |
$ 19,051 |
$ 58,424 |
$ 44,579 |
| |
|
|
|
|
| Net income per common share |
|
|
|
|
| Basic |
$ 0.58 |
$ 0.43 |
$ 1.36 |
$ 0.99 |
| Diluted |
$ 0.54 |
$ 0.40 |
$ 1.28 |
$ 0.90 |
| Weighted average common shares outstanding |
|
|
|
|
| Basic |
43,094 |
44,670 |
42,877 |
45,209 |
| Diluted |
45,974 |
48,173 |
45,750 |
49,436 |
| |
|
|
|
|
| Reconciliation of adjusted EBITDA and
free cash flow to net income: |
|
|
|
| Net income |
$ 24,900 |
$ 19,051 |
$ 58,424 |
$ 44,579 |
| Other income (expense), net |
(102) |
393 |
(87) |
929 |
| Income tax expense |
11,080 |
7,711 |
27,031 |
22,313 |
| Depreciation |
3,754 |
3,341 |
10,907 |
9,793 |
| Amortization |
7,554 |
6,681 |
18,476 |
19,663 |
| Stock-based compensation expense |
4,083 |
2,942 |
11,086 |
6,868 |
| Adjusted EBITDA |
$ 51,269 |
$ 40,119 |
$ 125,837 |
$ 104,145 |
| Capitalization of content databases |
(6,288) |
(4,673) |
(18,966) |
(14,624) |
| Purchases of property and equipment |
(7,326) |
(4,573) |
(17,443) |
(8,991) |
| Cash paid for interest |
(337) |
(107) |
(537) |
(333) |
| Cash paid for income taxes |
(6,537) |
(126) |
(27,061) |
(3,683) |
| Free cash flow |
$ 30,781 |
$ 30,640 |
$ 61,830 |
$ 76,514 |
| |
| Ancestry.com Inc. |
| Other Data |
| |
| |
Three Months Ended |
| |
September 30,
2012 |
June 30,
2012 |
March 31,
2012 |
December 31,
2011 |
September 30,
2011 |
June 30,
2011 |
March 31,
2011 |
| Total subscribers |
2,020,043 |
2,005,409 |
1,869,571 |
1,702,563 |
1,701,322 |
1,672,319 |
1,615,169 |
| Gross subscriber additions |
285,683 |
360,685 |
389,928 |
219,886 |
273,979 |
321,687 |
424,531 |
| Monthly churn |
3.9% |
3.4% |
3.6% |
3.8% |
4.2% |
4.6% |
3.7% |
| Subscriber acquisition cost |
$84.14 |
$81.49 |
$88.11 |
$107.88 |
$93.64 |
$81.23 |
$69.56 |
| Average monthly revenue per subscriber |
$18.68 |
$18.84 |
$18.49 |
$18.38 |
$18.68 |
$18.88 |
$18.05 |
Source: http://blog.eogn.com/eastmans_online_genealogy/2012/10/ancestrycom-inc-reports-q3-2012-financial-results.html
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Public release date: 25-Oct-2012
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