RetailMeNot, Inc. Announces First Quarter 2016 Financial Results

First Quarter Financial Results Highlights and Key Operating Metrics (All comparisons are made to the first quarter of 2015 unless otherwise noted. Amounts may not compute due to rounding.)

Total net revenues declined 9% to $54.6 million. In-store + advertising net revenues increased 36% to $10.5 million, representing 19% of total net revenues.

Mobile online transaction net revenues increased 7% to $5.9 million, representing 11% of total net revenues. Desktop online transaction net revenues declined 19% to $38.2 million, representing 70% of total net revenues. Net revenues from international markets were $12.2 million, representing 22% of total net revenues.

GAAP net loss was $36 thousand, compared to GAAP net income of $4.1 million. Non-GAAP net income was $6.3 million, compared to a non-GAAP net income of $10.8 million. EPS was $0.00 per share, based on 49.2 million fully-diluted, weighted-average shares outstanding. Non-GAAP EPS was $0.13 per share, based on 50.0 million fully-diluted, weighted-average shares outstanding. Adjusted EBITDA was $12.3 million, representing 22% of total net revenues.

Total website visits were 162.2 million, down 10%. Mobile visits in the quarter declined 1% to 69.9 million, or 43% of total visits. Desktop visits in the quarter declined 15% to 92.3 million. Mobile unique visitors grew 5% totaling 19.2 million.

Business Outlook

With the acquisition of GiftCard Zen completed in the second quarter of 2016, RetailMeNot, Inc. will provide financial results for subsequent periods in two separate operating segments, with one representing the “core” RetailMeNot business and the other representing the “gift card” business.  For our core business, in addition to total net revenues, the company will be providing adjusted segment operating income, or SOI, guidance, as we believe this to be an important financial metric to evaluate the operating performance of that business.

Adjusted SOI is defined as operating income of the core business segment plus depreciation, amortization of intangible assets, stock-based compensation expense, third-party acquisition-related costs and other operating expenses (including non-cash impairments and compensation arrangements entered into in connection with acquisitions). For our gift card business, the company defines net revenues as the gross market value of the gift card sold, or “GMV”, net of returns.  Gross profit is determined in accordance with GAAP and represents the difference between net revenues (which includes GMV, net of returns) less the cost of the gift card sold, including adjustments for shipping and chargebacks. The company will also provide guidance combining the results of both businesses on a consolidated basis.

Second Quarter 2016 With respect to our core business, the company expects the following: Total net revenues to be in the range of $47.0 to $52.0 million. Adjusted segment operating income to be in the range of $3.5 to $7.5 million, representing adjusted segment operating income margins of 11% at the midpoint. With respect to our gift card business, the company expects the following: Total net revenues to be in the range of $11.5 to $12.5 million. Gross profit to be in the range of $575 to $625 thousand, or gross profit margins of 5% at the midpoint.

On a consolidated basis, the company expects the following: Total net revenues to be in the range of $58.5 to $64.5 million, or growth of 16% at the midpoint. Adjusted EBITDA, inclusive of the impact of the GiftCard Zen acquisition, to be in the range of $3.0 to $7.0 million, or adjusted EBITDA margins of 8% at the midpoint. Full Year 2016 With respect to the core business, the company expects the following: Total net revenues to be in the range of $228.0 to $241.0 million, or a decline of 6% at the midpoint. Adjusted segment operating income in the range of $52.0 to $63.0 million, representing adjusted segment operating income margins of 24.5% at the midpoint.

With respect to the gift card business, the company expects the following: Total net revenues to be in the range of $43.0 to $49.0 million, or growth of 36% at the midpoint. Gross profit to be in the range of $2.2 to $2.4 million, or gross profit margins of 5% at the midpoint.

On a consolidated basis, the company expects the following: Total net revenues to be in the range of $271.0 to $290.0 million, or growth of 13% at the midpoint. Adjusted EBITDA, inclusive of the impact of the GiftCard Zen acquisition, to be in the range of $50.0 to $61.0 million, or adjusted EBITDA margins of 20% at the midpoint.

The above statements are based on current expectations and actual results may differ materially as explained under the caption “Forward-looking Statements” below.  Information about RetailMeNot’s use of non-GAAP financial measures, including adjusted EBITDA and adjusted SOI, is provided below under the caption “Use of Non-GAAP Financial Measures.” Quarterly Conference Call RetailMeNot will host a webcast to discuss its first quarter financial results and its second quarter and 2016 business outlook today at 7:00 a.m. Central Time (8:00 a.m. Eastern Time).  A live webcast of the conference call can be accessed within the investor relations section of the RetailMeNot website at http://investor.retailmenot.com.  This webcast will contain forward-looking statements and other material information regarding the company’s financial and operating results. Following completion of the call, a replay of the call will be available beginning at 9:30 a.m. Eastern Time on May 3, 2016.  To listen to the telephone replay, call (877) 344-7529 within the US, or (412) 317-0088 if calling internationally.  Access Code 10082940.  RetailMeNot uses its investor relations website (http://investor.retailmenot.com) as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor the investor relations website, in addition to following press releases, SEC filings, public conference calls and webcasts. About RetailMeNot, Inc.  RetailMeNot (http://www.retailmenot.com/corp/) is a leading digital savings destination connecting consumers with retailers, restaurants and brands, both online and in-store. The company enables consumers across the globe to find hundreds of thousands of digital offers to save money while they shop or dine out. During the 12 months ended March 31, 2016, RetailMeNot, Inc. experienced over 700 million… Read more

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