Company Website:
http://www.digitalriver.com
MINNEAPOLIS -- (Business Wire)
Digital River, Inc. (NASDAQ:DRIV),
a leading global provider of Commerce-as-a-Service solutions, today
announced that the company, in a privately-negotiated transaction,
repurchased $150 million in aggregate principal amount of its 2.0%
Convertible Senior Notes due 2030 for $153.75 million in cash, excluding
accrued interest. Following the closing of this repurchase,
approximately $145.75 million in aggregate principal amount of Notes
remain outstanding.
The company expects to record a one-time pre-tax charge in the first
quarter of fiscal 2014 of approximately $5.2 million related to
settlement of the Notes and acceleration of the recognition of deferred
financing costs associated with the repurchased Notes. Excluding the
one-time charge, pre-tax savings related to interest and amortization of
deferred financing costs on the repurchased Notes will be approximately
$0.3 million and $2.9 million for first quarter 2014 and full year 2014,
respectively.
“Given the upcoming put date of our Notes and the yield available on
short-term investments, we were delighted to take advantage of the
opportunity to increase shareholder value through our capital allocation
strategy,” said Stefan Schulz, Digital River’s chief financial officer.
As a result of the transaction, management has updated the EPS guidance
that was previously provided on Feb. 5, 2014, to the following:
GAAP EPS guidance:
-
First quarter 2014 GAAP EPS, ranging from a net loss of $0.31 to a net
loss of $0.25 per share; and
-
Full year 2014 GAAP EPS, ranging from a net loss of $0.59 to a net
loss of $0.45 per share.
Non-GAAP EPS guidance, which excludes the impact of the one-time charge:
-
First quarter 2014 non-GAAP EPS, ranging from $0.08 to $0.12 per
diluted share, using a 21 percent tax rate; and
-
Full year 2014 non-GAAP EPS, ranging from $0.41 to $0.51 per diluted
share, using a 21 percent tax rate.
About Digital River, Inc.
Backed by 20 years of e-commerce
experience, Digital River is recognized as a leading global provider of
Commerce-as-a-Service solutions. Companies of all sizes rely on Digital
River’s multi-tenant, SaaS commerce, payments and marketing services to
manage and grow their online businesses. In 2013, Digital River
processed more than $30 billion in online transactions, connecting B2B
and B2C digital products and cloud service companies as well as branded
manufacturers with buyers across multiple devices and channels, and
nearly every country in the world.
Digital River is headquartered in Minneapolis with offices across the
U.S., Asia, Europe and South America. For more details about Digital
River, visit the corporate
website, follow the company on Twitter
or call +1 952-253-1234.
Non-GAAP Net Income Calculation
Digital River’s non-GAAP
net income (loss) from continuing operations is computed by adjusting
GAAP pre-tax income from continuing operations as reported on the
company’s statement of operations by adding back, when applicable,
amortization of acquisition-related intangibles, stock-based
compensation expense, intangible impairments, restructuring related
costs, litigation settlement related costs, acquisition and integration
costs, realized and unrealized investment gains or losses, goodwill
impairments, and one-time impacts of debt repurchases, net of a 21
percent tax rate. Non-GAAP diluted earnings per share from continuing
operations is calculated using the “if-converted” method with respect to
the issuance of the company’s Convertible Senior Notes. In computing
non-GAAP diluted earnings per share from continuing operations, if an
increase in earnings per share will not result, adjust non-GAAP net
income from continuing operations to add back debt interest and issuance
cost amortization expenses, net of the tax benefit, and then divide this
amount by fully diluted shares outstanding. This amount, representing
the fully diluted earnings computation, is selected to represent
non-GAAP diluted earnings per share from continuing operations for each
period presented.
Forward-Looking Statements
This press release contains
forward-looking statements, including statements regarding the company’s
anticipated future growth and future financial performance, as well as
statements containing the words “anticipates,” “believes,” “plans,”
“will,” “expects,” or “guidance” and similar words. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors, which may cause the actual results, performance or achievements
of the company, or industry results, to differ materially from those
expressed or implied by such forward-looking statements. Such factors
include, among others: the company’s operating history and variability
of operating results; competition in the commerce and payments markets;
challenges associated with international expansion; the variability of
foreign exchange rates; any breach or compromise of the company’s
security systems; our ability to successfully manage our business while
undertaking significant technical initiatives; our ability to execute
upon our payments strategy and expand our business in this sector; our
ability to achieve favorable tax rates in our international operations;
and other risk factors referenced in the company’s public filings with
the Securities and Exchange Commission, including the Annual Report on
Form 10-K for the year ended Dec. 31, 2013. The financial information
contained in this release should be read in conjunction with the
consolidated financial statements and notes thereto included in Digital
River’s most recent reports on Form 10-K and Form 10-Q, each as it may
be amended from time-to-time.
The forward-looking statements reflect management’s expectations as
of March 5, 2014. Results may be materially affected by many factors,
such as changes in global conditions in the financial services markets
and consumer spending, fluctuations in foreign currency rates, the rate
of growth of online commerce and online payments, progress with key
partners, and other factors. The guidance assumes, among other things,
that there are no material changes to stock-based compensation expense
and anticipated tax rates. Readers are cautioned not to place undue
reliance on forward-looking statements, which reflect management’s
analysis only as of the date hereof. The company undertakes no
obligation to update these forward-looking statements or future guidance
to reflect events or circumstances that may arise after the date hereof.
Digital River is a registered trademark of Digital River, Inc. All
other trademarks and registered trademarks are trademarks of their
respective owners.
Contacts:
Digital River, Inc.
Investor Relations Contact:
Melissa
Fisher, +1 952-225-3351
Vice President, Corporate Development,
Investor Relations and Treasury
investorrelations@digitalriver.com
or
Media
Relations Contact:
Gerri Dyrek, +1 952-225-3719
Group Vice
President, Corporate Communications
publicrelations@digitalriver.com
Source: Digital River, Inc.
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