Here’s how payers are betting on digital health (Med City News)
This Analyst Says It's Time to Close Out of Netflix (Fortune)
Mondelez Drops Hershey Takeover Bid (Fortune)
SAP launches HCM app center with more than 100 partners (ZDNet)
This Analyst Says It's Time to Close Out of Netflix (Fortune)
Mondelez Drops Hershey Takeover Bid (Fortune)
SAP launches HCM app center with more than 100 partners (ZDNet)
Pitchbook: Early investors in Jet.com recieved 10.7x return
Tom Paine
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| Marc Lore |
Investors in Jet.com certainly did well, including Penn-related MentorTech Ventures.
The website Pitchbook reported that investors in Hoboken-based Jet.com's initial Series A (June 2014) earned a multiple of 10.7x their investment. The largest beneficiary may have been New Enterprise Associates, which led the round. MentorTech Ventures was an investor in the Series A, as it was in a $140 million round in early 2015. Technically Philly had reported that MentorTech had invested $8 million in Jet.çom, forming a special purpose fund to invest beyond its normal limits for one company.
Returns on the February 2015 round slipped to 4.3x, and for the final huge Fidelity-led $350 million round late last year, fell to 2.1x. But if a firm can put its money somewhere for less than a year and get more than twice as much back, its certainly happy.
Walmart agreed to buy e-commerce startup Jet.com in early August for about $3.3 billion. Jet.com raised a total of $565 million in venture capital.
MentorTech had previously invested in Quidsi, Marc Lore's earlier startup, that was sold to Amazon for $545 million in 2010.
MentorTech's total return on Jet.com will depend on how much of the $8 million it invested in the Series A as opposed to the latter round.
Lore, a Bucknell graduate, may be permanently on leave as a student from Wharton. He doesn't need to return.
Frank Recruitment Group Opens Office in Philadelphia
Global IT recruitment firm to add 250 people to its Philadelphia office
Business Wire
Frank Recruitment Group Opens Office in Philadelphia
Global IT recruitment firm to add 250 people to its Philadelphia office
August 23, 2016 01:20 PM Eastern Daylight Time
LONDON & PHILADELPHIA--(BUSINESS WIRE)--Frank Recruitment Group (“FRG”), a leading global staffing and recruiting firm focused exclusively on the enterprise software market, today announced the opening of its Philadelphia office. The company plans to hire 250 people, most of whom will be recent college graduates interested in becoming recruiters. FRG provides robust training and support that prepares new hires to become specialists who recruit and place technology experts in jobs around the world. In April of this year, FRG was acquired by TPG Growth, the middle market buyout and growth equity platform of leading alternative asset firm TPG.
“As the demand for specialized technology experts grows, an efficient, scalable approach to placing them in jobs has the potential to revolutionize the recruiting industry. We look forward to partnering with the team to continue the company’s growth in Philadelphia and beyond.”
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With 10 offices spanning Europe, Asia, and the Unites States, FRG employs more than 900 individuals globally. FRG’s industry-leading “FRG University” prepares all new hires for the recruiting market, and the company provides ongoing immersive training and mentorship programs to promote career and talent development. This unique training, along with industry-leading compensation, allows FRG to attract and retain talent and position its clients for success.
“Entering a new market and building a team is exciting for us, as at our core, FRG is a people-centric business,” said James Lloyd Townshend, CEO of FRG. “We are focused on enabling our employees, providing them with top-level training, fast-track career progression, and ongoing professional development. We help young graduates take advantage of the significant—and lucrative—opportunities that are available in the tech recruiting industry. We look forward to bringing our specialized model to a new city.”
FRG has flourished as a result of its focus on the fast-growing technology recruitment market. The firm operates six core brands, each focused on recruiting software professionals that specialize in a different technology product. In 2007, the company launched its original brand, Nigel Frank, which recruits professionals who specialize in Microsoft Dynamics. In addition to Nigel Frank, the company has since added:
Mason Frank International, which recruits for Salesforce experts
Churchill Frank, which focuses on experts in big data software
Anderson Frank, which recruits NetSuite software professionals
Pearson Frank, which places talent in Java, Web and PHP jobs
Washington Frank, which specializes in staffing opportunities in emerging cloud technologies
“At TPG Growth, we’re focused on identifying disruptive models that can transform industries,” said Shamik Patel, Principal at TPG Growth. “As the demand for specialized technology experts grows, an efficient, scalable approach to placing them in jobs has the potential to revolutionize the recruiting industry. We look forward to partnering with the team to continue the company’s growth in Philadelphia and beyond.”
TPG Growth’s portfolio includes numerous companies that, like FRG, leverage opportunities for disruption, such as Airbnb, e.l.f. cosmetics, ipsy, Spotify, and Uber.
FRG’s Philadelphia office formally opens September 12, 2016. The office has hired 40 individuals to-date and is currently hosting regular recruitment events for its new office. Upcoming recruitment events will occur on August 31st and September 6th at Ten Penn Center (1801 Market Street Philadelphia, PA). For more information about job opportunities, please contact joinUSA@frankgroup.com
About Frank Recruitment Group
Frank Recruitment Group was founded in Newcastle, UK in 2007 and is a leading global niche IT recruitment business that employs more than 900 people across its offices in London, New York, Newcastle, San Francisco, Melbourne and Singapore. The group operates six trading brands; each aligned with a specific technology product. Nigel Frank was established in 2007 and is the global leader in recruiting Microsoft Dynamics professionals. Its second core brand, Mason Frank, was launched in 2010 and is the largest global provider of Salesforce professionals. In 2014, the Company launched two additional brands: Churchill Frank, which focuses on Big Data solutions; and Washington Frank, FRG’s incubator brand, which specializes in staffing opportunities in emerging cloud technologies. In 2016, FRG launched two further brands; Anderson Frank, which specializes in NetSuite staffing and Pearson Frank, which recruits Java and PHP developers. FRG plans to expand its outreach globally and attract more recruiters in strategic hubs to continue to meet demand for the Company’s services. For more information, visit www.frankgroup.com.
Contacts
Media:
TPG
Erika White, +1 415-743-1550
ewhite@tpg.com
Doylestown-based clinical trials tech firm Bioclinica is being acquired by buyout firm Cinven Ltd for reported $1.4 billion
Tom Paine
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Doylestown-based Bioclinica is being acquired by buyout firm Cinven Ltd, it was announced yesterday, in a deal reported to be valued at $1.4 billion, including debt. Cinven is acquiring it from two other buyout firms, Water Street Healthcare Partners and JLL Partners.
Reuter first reported Bioclinica's owners were looking for a buyer in May.
Since being taken private in 2013, Bioclinica has made several acquisitions, including its January acquisition of clinical trial payments specialist Clinverse, which was backed by Edison Partners. Bioclinica is reported to have EBITDA (earnings before interest, taxes, depreciation and amortization ) in the $100 million range.
Bioclinica was founded in 1990 as Bio-Imaging Technologies and has over 2300 employees, according to its website.
While several firms in the Philly area have one or more of the tools needed for clinical trials, the key to Bioclinica's strategy has been to integrate several of them.
Europe-based Cinven has several other healthcare-related companies in its portfolio.
"This is an excellent opportunity to invest in a leading provider of technology-enabled services to the clinical trial industry with a collection of high growth businesses across the globe," said Alex Leslie, Partner at Cinven, in a statement. John Hubbard will continue as Bioclinica's CEO.
JLL Partners took Bioclinica private in 2013 for $113 million, but not all the difference between that and the reported sale
price is pure profit. One must account for the dollars or equity spent on nine mergers and acquisitions since 2013.
As Qlik's purchase is consummated, Tableau names AWS vet as new CEO
Tom Paine
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Done Deal.
That was the word today, as Thoma Bravo announced it had completed its $3 billion buyout of business intelligence vendor Qlik.
The private equity deal, reached in early June, was approved by Qlik shareholders last week. Shares of Qlik common stock were removed from listing on The NASDAQ Stock Market, with trading in Qlik shares suspended prior to the opening of business today.
Although the Philly area loses a major, publicly traded tech firm, at least Qlik remains based in Radnor. Although nothing is immutable; there is always a chance that the company, which has about 10% of approximately 2500 employees based out of Radnor, might be subject to some future combination with a company based elsewhere, and headquarters is usually the first to go in such situations.
In its last earnings report as a public company in July, Qlik reported revenue of $180.6 million and a net GAAP loss of 7 cents per share.
Though Thoma Bravo has no particular tie to the Philadelphia area that I know of, it now has four portfolio companies here. The other three are Elemica (Wayne), iPipeline (Exton), and Sparta Systems (Hamilton, NJ).
Ironically, the closest to being Qlik's arch rival, Seattle-based Tableau, today announced that Amazon Web Services veteran Adam Selipsky will become Tableau’s new CEO, replacing co-founder Christian Chabot, who will remain as chairman. That Selipsky comes from AWS may be an indictor of a greater emphasis on Tableau's cloud offering in the future.
Tableau, which had been on a torrid growth pace, lost almost 50% of its value on one day in February of this year after a missed forecast and hasn't really recovered since. In its most recent quarter Tableau reported a net GAAP loss of $47.5 million on revenue
of $198.5 million.
Does SAP still love Delco? Yes, says SAP North America President Jennifer Morgan
Tom Paine
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| Downtown Newtown Square |
Update 8/21: In a letter to the Delco Times, SAP North America President Jennifer Morgan reaffirmed SAP's commitment to keeping its NA headquarters in Newtown Square.
"Delaware County and the greater Philadelphia area is our home and it will continue to be the home of SAP in North America even as we continue to grow, expand, and refine our real estate footprint across the U.S. and Canada," she wrote.
Don't know what to make of a SAP America SVP dissing Delco.
In an article in the Daily Local News, Brian Reaves, senior vice president and head of diversity and inclusion at SAP, seemed to suggest that SAP America's east coast center of gravity would shift from Newtown Square (Delaware County PA) to New York City, where the company is opening spanking new offices at Hudson Yards. He found about three different ways to say Delco wasn't cool enough to attract millenial workers.
One minor quibble: neither the original Daily Local article or the followup article identified the context in which Reaves remarks were made; the occasion, the reason for the remarks, etc.
“Quite honestly, kind of like what’s happening in Germany right now, although we’re in Waldorf, Germany, where we’ve now opened up Berlin, people start to see the major cities as - I think in people’s minds regardless of what the physical paper looks like, I would think they’ll start to brand us more tied to New York City. So, it’s pretty exciting, pretty exciting coming up.”
Reaves said that while Newtown Square would remain North American headquarters from a "legal perspective," in substance New York City would be.
Newtown Square, where around the corner from SAP the Foxcatcher tragedy took place (before SAP arrived). Which once hosted a PGA Championship at Aronimink, only to lose its last opportunity to host a major due to lack of minority membership. Where I used to stare at cornfields from my office on the other side of Route 3.
But those things are in the past. SAP moved to Newtown Square from a location near the airport around 2000. Its changed, and even has some chain restaurants and a Whole Foods. And people outnumber horses. On the whole a nice place and a trendy and wealthy zip, but it doesn't offer much housing for young people and its true to say its a far cry from NYC.
The sense I get from the article is that Reaves was out of line, and SAP communications people pushed back against his comments, restating SAP's commitment to keeping North American headquarters in Newtown Square, which SAP says now houses 2800 employees. But no doubt there was a grain of truth in Reaves' comments.
Oberthur Technologies cuts EMV production time to just 5 days with its X-PRESS solution
OT CUTS EMV PRODUCTION TIME TO JUST 5 DAYS WITH ITS X-PRESS SOLUTION
Oberthur Technologies (OT), the No. 1 provider of chip payment cards in the United States, announced today the U.S. launch of its X-Press Solution which provides turnkey, expedited EMV-card supply within five days for card orders up to 25,000. OT is a one-stop shop for card issuers with large or small card orders at national banks, credit unions and community banks.
“OT’s X-Press Solution offers card issuers unmatched high-quality chip cards at a fraction of the standard lead time,” said Martin Ferenczi, President for North America at OT. “We thoroughly revamped our production processes to expedite chip-card supply based on feedback from issuers wanting to rapidly provide EMV fraud reduction benefits to cardholders.”
The X-Press Solution features full product support for MasterCard, Visa, American Express and Discover chip cards.
This market-first solution will be based at OT’s 100,000-square-foot ISO 9001 and 14001 certified Manufacturing Supercenter located in Exton, Pennsylvania, which has produced more than a quarter of a billion chip cards. OT’s X-Press Solution provides best-in-class card design and EMV technical support. A dedicated customer service team manages the entire process. Fully calibrated .pdf proofs are delivered within 24 hours and optional plastic samples in 48 hours. The X-Press Solution provides the speed, quality and service needed for flawless EMV migration.
OT globally has shipped more than two billion EMV credit and debit cards from its network of four regional secure manufacturing hubs and 39 card personalization centers. Having established its U.S. footprint in 1996, the company is the No. 1 provider of chip payment cards in the U.S. market. OT has been personalizing EMV cards since 2010 in its bi-coastal personalization service centers located in Northern Virginia and Southern California.
For more about EMV in the USA, visit www.oberthur.com/emv.
ABOUT OBERTHUR TECHNOLOGIES
OT is a world leader in embedded digital security that protects you when you connect, authenticate or pay.
OT is strategically positioned in high growth markets and offers embedded security software solutions for “end-point” devices as well as associated remote management solutions to a huge portfolio of international clients, including banks and financial institutions, mobile operators, authorities and governments, as well as manufacturers of connected objects and equipment.
OT employs over 6,500 employees worldwide, including almost 700 R&D people. With a global footprint of 4 regional secure manufacturing hubs and 39 secure service centers, OT’s international network serves clients in 169 countries. For more information: www.oberthur.com
Contacts
for Oberthur Technologies
Trent Freeman, +1 310-824-9000
tfreeman@olmsteadwilliams.com
Philly Tech People News 8/20/2016: Former 'Nova sub-4 minute miler oversees $800 billion; Unisys CFO retiring, replacement named
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This Basically Anonymous Fund Manager Oversees $800 Billion (Bloomberg)
SAP Appoints Thomas Laur President of SAP Connected Health Group (HIT Consultant)
Chief Financial Officer (CFO) Janet Haugen to Retire from Unisys; Company Names Inder M. Singh to Succeed Haugen as CFO
Verizon Enterprise Picks Up a Former EMC CIO (Wall Street Journal: CIO Journal)
Brian Williams Is Said to Get MSNBC Show (NY Times)
Hill International Announces Board and Executive Changes
Ed. Design Studio Names CEO, Selects New Ed-Tech Cohort (EdWeek)
Maria Renz shadows and advises Jeff Bezos (Seattle Times)
Renz, a New Jersey native, was CEO of Amazon's Quidsi.
My Alarm Center appoints Megan MacDonald as VP of Marketing
Brownstein Group Taps Laura Emanuel to Bolster A/E/C Public Relations Practice Group
Top Industry Analysts Rank Veeva Systems Among Largest, Most Strategic Software Vendors in Life Sciences
Veeva’s industry cloud solutions gain momentum as companies unify business processes for faster time to market and greater compliance
Business Wire
Top Industry Analysts Rank Veeva Systems Among Largest, Most Strategic Software Vendors in Life Sciences
Veeva’s industry cloud solutions gain momentum as companies unify business processes for faster time to market and greater compliance
August 18, 2016 07:03 AM Eastern Daylight Time
PLEASANTON, Calif.--(BUSINESS WIRE)--As life sciences companies continue their transition from legacy on-premises and horizontal cloud software to industry-specific cloud applications, Veeva Systems (NYSE:VEEV) is strengthening its position as a fast-growing, strategic vendor in the industry across its most critical functions. According to Gartner, Veeva’s extensive cloud-based multitenant software solution set across research and development (R&D) and commercial is building the company into a strategic-level vendor for global pharma and biotech clients.1
“Veeva has leveraged its strong position in the life science CRM space to provide an optimized omni-channel solution for its customers, with access to its cloud-based content management, master data management, and system-wide customer data”
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Increased complexity in life sciences – from global stakeholder ecosystems to regulatory requirements – is driving organizations to streamline operations to be more efficient and agile. This is in an effort to accelerate innovation and get products to market faster and more effectively on a global scale. Organizations are implementing new cloud approaches to improve collaboration and provide smarter ways of working.
As a result, the industry is increasingly relying on Veeva’s applications to streamline their global business operations, with 35 of the top 50 pharmaceutical companies using Veeva Vault to unify their processes and content on a single platform in the areas of commercial, clinical, regulatory, quality and medical.2 Customers are turning to Veeva to help them improve overall business agility, compliance, and risk mitigation.
Over the next five years, Gartner expects migration to multichannel marketing to strengthen and grow within pharma and recognized Veeva as one of only two vendors to offer complete CRM products, support, and services across most of the globe.3 Veeva is in the market share leadership position of the pharma CRM vendor landscape.4
According to IDC Health Insights, Veeva’s continued momentum in the sales and marketing space has strengthened its leadership in the industry.5 “Veeva has leveraged its strong position in the life science CRM space to provide an optimized omni-channel solution for its customers, with access to its cloud-based content management, master data management, and system-wide customer data,” according to the report.
In R&D, Vault Clinical, Vault RIM, and Vault Quality are helping companies streamline their end-to-end clinical trial processes, respond faster to business changes and health authority requests, and integrate their quality processes and content. Within commercial operations, Veeva Commercial Cloud is improving how life sciences companies bring together customer data, compliant content, and multichannel engagement to market and sell more effectively. While Veeva Medical Solutions help organizations discover, target, and engage the right opinion leaders.
“There is a significant shift occurring in the industry to cloud applications that streamline and unify business processes,” said Paul Shawah, vice president of product marketing at Veeva. “Our focus on industry-specific applications is helping our customers transform their R&D, commercial, and medical operations to support faster product launches and quickly adopt new business models. Industry analysts validate that we are gaining momentum as a strategic partner to the industry.”
Additional Information
Stay updated on the latest Veeva news on LinkedIn: linkedin.com/company/veeva-systems
Follow @veevasystems on Twitter: twitter.com/veevasystems
Like Veeva on Facebook: facebook.com/veevasystems
About Veeva Systems
Veeva Systems Inc. is a leader in cloud-based software for the global life sciences industry. Committed to innovation, product excellence, and customer success, Veeva has more than 400 customers, ranging from the world's largest pharmaceutical companies to emerging biotechs. Veeva is headquartered in the San Francisco Bay Area, with offices in Europe, Asia, and Latin America. For more information, visit www.veeva.com.
Forward-looking Statements
This release contains forward-looking statements, including the market demand for and acceptance of Veeva’s products and services, the results from use of Veeva’s products and services, and general business conditions, particularly in the life sciences industry. Any forward-looking statements contained in this press release are based upon Veeva’s historical performance and its current plans, estimates, and expectations, and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Veeva’s expectations as of the date of this press announcement. Subsequent events may cause these expectations to change, and Veeva disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially. Additional risks and uncertainties that could affect Veeva’s financial results are included under the captions, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the company’s filing on Form 10-Q for the period ended April 30, 2016. This is available on the company’s website at veeva.com under the Investors section and on the SEC’s website at sec.gov. Further information on potential risks that could affect actual results will be included in other filings Veeva makes with the SEC from time to time.
1 Stephen Davies (Gartner: March 18, 2016), Market Guide for CRM in Pharma and Biotech
2 As of April 30, 2016.
3 Stephen Davies (Gartner: March 18, 2016), Market Guide for CRM in Pharma and Biotech
4 Stephen Davies (Gartner: March 18, 2016), Market Guide for CRM in Pharma and Biotech
5 Alan S. Louie, Ph.D., Michael Townsend, Eric Newmark (IDC Health Insights: June 2016), Business Strategy: Top Software Vendors in the Life Science Industry, 2015
Contacts
Veeva Systems
Roger Villareal, 925-264-8885
roger.villareal@veeva.com
or
Lisa Barbadora, 610-420-3413
pr@veeva.com
Blast from the past? Comcast 2011 agreement with Verizon lives on, in one real sense
Tom Paine
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Subscribe in a readerI think an old Google Alert brought this to my attention (See actual webpage) .
My first though was to wonder if this was something new, or left over from the old JMA (Joint Marketing Agreement) that came with Comcast and other cable partners' $3.6 billion spectrum sale to Verizon in 2011. It was the latter, Comcast confirmed.
Under the JMA, the plan was that Verizon would resell Comcast cable services (which in some areas competed directly with Verizon's FiOS), and Comcast would resell Verizon's wireless services. Its unlikely much was sold in either direction; Comcast says it has never released any numbers. And a related joint product development effort also fizzled out.
The webpage is certainly functioning, though I haven't determined yet whether it could actually lead to a transaction.
Of course, Comcast has more recently activated its MVNO (mobile virtual network operator) rights with Verizon per the 2011 agreement and created a new wireless business unit, for whatever it may be planning in that sphere. Comments made this week by a Comcast executive suggest the company is still evaluating its options.
Many analysts have expected it to try some combination utilizing MVNO (it can also use Sprint) and its own enormous WiFi network, though my understanding is getting these to work in synch with each other is still difficult technologically.
Also, separately, Comcast indicated that its not prepared to comment yet on progress to date on its arrangement with Amazon allowing it (Amazon) to resell Comcast cable services directly to consumers, announced in March. The Amazon/Comcast is seen as an effort to try a different customer service model (Amazon's).
Does the town next door have faster internet? This map will tell you
In the race for Internet speed, Gloucester and Cumberland are lagging behind. Data from the Federal Communications Commission highlights the disparities across New Jersey when it comes to broadband technology. The two counties lag on maximum advertised download speed, which 32 out of 39 New Jersey Internet Service Providers reported to the FCC. The median download…
Roundup: NJ’s Privately-Held Tech Companies Talk About Their Results: SHI and iCIMS
Esther Surden
Publisher & Editor, NJTechWeekly.com
 |
| Thai Lee of SHI International | SHI website |
SHI International: SHI International Corp. (Somerset), which calls itself one of North America’s 15 largest IT solution providers, reported a record $3.3 billion in revenue for the first half of 2016 — a 12 percent increase year over year. The company said that its close partnerships with legacy providers and emerging partners contributed to the growth, despite new challenges faced by the IT channel.
Addressing those hurdles, SHI President and CEO Thai Lee noted that large mergers, acquisitions and disruptive technologies continue to change the IT landscape, and that cloud, data-center and hybrid solutions have shifted how organizations support their IT environments.
“Born-in-the-cloud technologies and advanced data-center solutions from dozens of SHI’s emerging partners have driven new growth and replaced traditional business in the IT marketplace,” said Lee in a press release.
“In the past 12 months, SHI recognized over $400 million in revenue from emerging partners, the vast majority of which are cloud-based. Our relationships with those providers and our ability to help customers understand, evaluate, and deploy a growing number of advanced solutions have been key to our continued growth,” she said.
“SHI is a #1 partner for 10 of the industry’s largest IT providers, more than double the number in 2009, and we’ve become a strong #2 partner to dozens of other major industry leaders,” she added.
Microsoft’s legacy and cloud-based technologies drove considerable growth in the first half of 2016, the company statement said, as did a broad portfolio of security solutions and data-center software and storage components.
To support its partners and clients alike, SHI continued adding to its sales and support teams, hiring 1,000 employees in the last 12 months. Over the same time frame, SHI has also doubled the size of its advanced-solutions teams to deliver additional support to customers’ data-center transformation initiatives.
 |
| Colin Day at Bell Works | Esther Surden |
iCIMS: Matawan-based iCIMS Inc. announced its financial results for the second quarter ended June 30, 2016, saying that its revenue increased 45 percent compared with the same period in 2015. This marked the 11th straight quarter of revenue growth greater than 30 percent.
“Our results have exceeded our expectations and underscore two key trends: companies continue to recognize the importance of recruiting great people, and they are increasingly choosing best-to-market software to help them hire top talent,” stated Colin Day, chairman and CEO of iCIMS, Inc., in a release.
According to the release, some key highlights for the first half of 2016 are as follows:
- iCIMS continued to expand its market share by winning customers of every size and in every industry. Some of the new customers added during the second quarter include Massage Envy, ExpressJet Airlines, City Gear, Group 1 Automotive, and Southeastern Freight Lines, among many others.
- iCIMS’ Hiring Trends Report has become a leading source of insight into the U.S. economy, providing hiring companies and labor economists with useful information about labor trends in the United States.
- There was the launch of the first phase of UNIFi, the iCIMS developer platform that enables other developers to build and integrate applications that work seamlessly with the iCIMS Talent Acquisition Suite of software. UNIFi immediately became the largest ecosystem of third party products in talent acquisition, with more than 100 add-on products available to iCIMS customers on the first day of availability.
Esther Surden is Publisher and Editor of NJTechWeekly, and a contributor to Philly Tech News. This article originally appeared in NJTechWeekly, and is republished here with her permission.
Malvern-based Scala, pioneer in digital signage, sold to Ohio competitor
Tom Paine
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Scala, Inc., the Malvern-based company that's been a global leader in the digital signage industry, has agreed to sell a controlling majority interest in itself to Dayton, Ohio-based Stratacache, it was announced Monday. Terms were not disclosed.
The website Sixteen-Nine.com, which covers the digital signage industry, noted that "the deal is not all that big a surprise, as Scala has been known to be on the market, for the right price, for the last few years. The executive house-cleaning that saw CEO Tom Nix and several other execs leave in June was a bit of a signal that things weren’t going all that swimmingly for the company."
While Scala had long been the gold standard in the industry, it had suffered in recent years from its attachment to a proprietary architecture in a market that was increasingly moving to open source, among other factors. But Scala's value to Stratacache is in its unmatched global partner network.
"Combining the largest U.S. digital signage company with the largest international digital signage company will provide significant operational synergies and allow both firms to deliver enhanced solutions and services to customers across the globe. Stratacache’s strong balance sheet and large-scale operations will enhance Scala’s competitive edge – and Scala’s global channels and significant reseller and partner network will fuel Stratacache’s growing business outside of the United States," Stratacache’s release announcing the deal stated.
Scala was founded in 1987 by a Norwegian entrepreneur, and as I understand it landed in West Chester to be close to Commodore International, as its initial platform was based on the Amiga. However, Commodore soon thereafter folded and Scala eventually switched to Windows, but remained in West Chester until moving to Malvern in recent years.
But Scala continued under largely European ownership and board oversight.
While Scala was never a huge local employer (59 according to the latest count on LinkedIn), its force multiplier was its large international partner network. And I'm sure that if that network wasn't getting the product or support it needed, those issues found their way back to the board.
Stratacache has 270 employees, presumably not including those joining from Scala, according to the Dayton Business Journal.
LiquidHub to Enhance Design-Thinking Capabilities with Electronic Ink Acquisition to Strengthen Human-Centered Research Expertise
LiquidHub to Enhance Design-Thinking Capabilities with Electronic Ink
Acquisition to Strengthen Human-Centered Research Expertise
PHILADELPHIA – August 12, 2016 – LiquidHub, a customer engagement company, today announced the acquisition of Electronic Ink, a human-centered design consultancy, with a client roster that includes such brand names as Penske, Morgan Stanley, Johnson & Johnson, and Ford Motor Company. With the addition of Electronic Ink, LiquidHub brings expanded design-thinking resources under one roof to deliver compelling customer experiences faster and at greater scale.
“Companies who enjoy the most successful business transformation solutions are those who go beyond examining customer preferences or patterns of behavior; they dig deeper to understand customers as people and study how they interact with technology,” said Jonathan Brassington, CEO of LiquidHub. “The addition of Electronic Ink’s research expertise will bring insights of human context to all aspects of our clients’ businesses. Having worked on assignments over the years with their talented team, I am thrilled to welcome them to our organization.”
Electronic Ink will strengthen LiquidHub’s digital marketing and creative capabilities, adding focused research on the human effect of technology on people. Their design skills allow them to create impactful visualizations that enable clients to easily understand the output of that research for greater ideation and solution development. Electronic Ink’s core competencies complement and integrate nicely with LiquidHub’s structured innovation solutions and customer engagement capabilities, providing even deeper insight into the human experience.
“Design that is rooted in human insight is foundational for success in today’s digitally-driven economy,” said Harold Hambrose, founder and CEO of Electronic Ink. “That foundation must be grounded in understanding the human effect on technology across the consumer ecosystem, including operations. That’s what we uniquely bring to LiquidHub and that’s what is so exciting – our ability to build on the already outstanding talents of a leader in the customer engagement space. The opportunities for our employees and clients on both sides are tremendous. I am thrilled to be joining the team.”
“I am proud of the groundbreaking work Electronic Ink has created and the reputation we have established over the course of our more than 25 years in the design industry,” said Joe Weiss, chairman of Electronic Ink. “I know this next chapter will be equally successful as we join forces with another industry leader dedicated to raising the bar on innovation and delivering human-centered solutions that help businesses become brand leaders.”
About Electronic Ink
Electronic Ink is a research and design consultancy dedicated to improving the effectiveness of human capital and bringing insight to the way people interact with technology, environments and one another. We improve the design and usability of business processes, the software that supports these processes, and customer and employee experiences for Fortune 500 clients around the world. Connect with us on Twitter and LinkedIn.
About LiquidHub
LiquidHub is a customer engagement company that partners with businesses to improve customer experience and drive growth. Headquartered in Philadelphia, with operations in North America, Asia, and Europe, we serve companies globally, helping them solve their most complex challenges through design expertise and technology innovation. Our customer successes are the result of a culture rooted in thought leadership and delivery excellence. For more information about LiquidHub, please visit www.liquidhub.com or follow us on Twitter or LinkedIn.
TPG has agreed to buy cable television providers RCN and Grande Communications for about $2.25 billion
Tom Paine
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Private-equity firm TPG has agreed to buy cable television providers RCN and Grande Communications for about $2.25 billion including debt, the Wall Street Journal reported Sunday night. The seller is Abry Partners.
RCN, a so-called 'overbuilder' that provides competitive cable services in some areas, serves parts of Delaware County and the Lehigh Valley. It began existence by acquiring a controlling interest in C-TEC of Wilkes-Barre, and Twin County Cable in Lehigh Valley in the 1990s.
An interesting aspect of the deal, which may be announced on Monday, is that Google Capital, Alphabet Inc.’s growth-equity investment fund, is taking a minority stake in the companies. Perhaps its trying to learn more about the cable business, as reports have indicated that Alphabet is reassessing expansion plans for Google Fiber.
The two separate deals were announced Monday.
RCN, based in Princeton, had more ambitious plans prior to the 2000-era tech bust, which resulted in a period of bankruptcy.
Grande Communications provides similar services in portions of Texas. RCN and Grande will be integrated after their acquisitions, though its unclear what that means.
According to SNL Kagan data, RCN has about 289,000 video subs, and Grande 88,000. The combined companies say they service over 640,000 residential and business customers. RCN would not provide subscription numbers for its Pennsylvania locations.
Princeton-based Patriot Media Consulting, which has managed the two companies for Abry, is part of the new ownership group and will continue in its management role.
Dentsu Aegis Network to acquire majority stake in Columbia, MD-based marketing agency Merkle, valued ~ $1.5 billion
Tom Paine
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In the late 1980s and early 90s, database marketing was one of the hot buzzwords, and a great deal of effort went in to trying to figure what it actually consisted of. Was it a product or a service? What did it look like? There wasn't really a model to build from.
The truth was that database marketing was a difficult, often rather messy business that typically involved crunching together data from different sources, when the data was not as good and the data crunching tools weren't nearly as good as today. And disk space was at an incredible premium, governing almost every operational consideration.
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| David Williams |
Williams built Merkle both organically and later through strategic acquisitions, adding proprietary tools such as a cross-device identity management system, a CRM-matching database for publishers, and a database known as the M1 audience platform.
All this led Japanese holding company Dentsu Aegis Network to acquire a majority stake in Columbia-based Merkle this past week in a transaction that values Merkle at about $1.5 billion. Dentsu Aegis replaced Technology Crossover Ventures (TCV) as Merkle's primary owner, although obviously its interest is more strategic than simply financial. Merkle had $436 million in revenue in 2015, up 14% over 2014.
Merkle was originally a direct marketing play, and though that still applies today it is known more for its ability to feed hungry CRM systems, both on the consumer and BtoB sides. The term it uses to describe what it does is 'performance marketing,' as well as a CRM Agency.
Merkle has more than 3,400 employees worldwide and over 65 employees in its Philadelphia (King of Prussia) office. The Philadelphia office is led by Dean McCarney, a Senior Director within Merkle’s Vertical Markets Group.
Naturally, in Philly Merkle has a bit of a Pharma bent, and in fact is a sponsor of Digital Pharma East 2016 to be held in Philadelphia in October.
Dentsu has 8100 employees in the Americas, headquartered out of New York.
Williams, by the way, began his career at Butcher & Singer, a Philadelphia-based investment bank, and holds a Bachelor of Science in business administration from Shippensburg University.
Accolade Raises More than $70 Million, Led by Andreessen Horowitz, to Transform Healthcare
Accolade Raises More than $70 Million, Led by Andreessen Horowitz, to Transform Healthcare
SEATTLE – August 11, 2016 – Accolade, Inc., an on-demand healthcare concierge for employers, health plans and health systems, announced it has raised more than $70 million in new Series E funding led by Andreessen Horowitz and with participation from Madrona Venture Group and others. Accolade will use the capital to expand its technology platform, R&D, and sales and marketing initiatives as it reinvents the healthcare experience for millions of Americans.
“Accolade is simply the best tool we’ve seen to help companies simultaneously improve both the quality and the cost of healthcare,” said Jeff Jordan, general partner of Andreessen Horowitz. “It’s delivering magical results—the service makes employees healthier and happier with their benefits, while at the same time driving big savings to employers and insurance companies. We are proud to be supporting Rajeev Singh and his team to build a big, important company.”
Accolade improves the healthcare experience for consumers by applying a proprietary engagement and influence model that guides them through the healthcare system in a deeply personalized manner. This unique model blends personalized service with clinical support and consumer engagement technologies to uncover inefficient healthcare utilization and its substantial impact on healthcare costs and outcomes. Accolade’s multi-modal approach is built from the ground up to combine human touch, science and technology, which leads to market-leading consumer engagement levels, extraordinarily high consumer satisfaction scores and cost savings ranging from 5-15 percent.
“We’re leading a movement to reinvent healthcare to better serve and support employers, health plans, health systems and the hundreds of millions of people in their networks,” said Rajeev Singh, Accolade CEO. “To bend the cost curve in healthcare while significantly raising consumer satisfaction, you need a deeply personalized model for the consumer that blends human touch with clinical expertise and state of the art engagement technology. Andreessen Horowitz and Madrona, two of the top investors in the world, have studied the space and come to the same conclusions we have about the market need and the advantages of our approach."
The Accolade model is powered by a data science strategy that combines deep datasets culled from hundreds of sources, along with personal insights gleaned from unique relationships between Accolade Health Assistants® and the individuals and families they support. Accolade’s relationship-based approach, mobile offerings, analytics tools and clinical models present a data-centric view of the whole person, not just one condition, to create a level of personalization and engagement that is not seen elsewhere in healthcare.
“Technology, through big data, analytics and machine learning, is changing healthcare -- how it is delivered and how patients find the right providers and treatment. It’s a complicated problem, but with a team led by Rajeev Singh, the company has the ability to blend cutting edge technology with a human touch to improve how tens of thousands of employees and health plan subscribers receive their healthcare,” said Matt McIlwain, managing director, Madrona Venture Group.
Including the current financing, Accolade has raised more than $90 million in its Series E round, which began in July 2015 with $22.5 million invested by a subsidiary of Independence Health Group and McKesson Ventures. As part of this investment, Accolade will add Jeff Jordan, Andreessen Horowitz general partner and former CEO of OpenTable, to its board of directors.
About Accolade
Accolade is an on-demand healthcare concierge for employers, health plans and health systems. Accolade’s team of compassionate, trusted professionals is supported by breakthrough science and technologies to guide people through the healthcare system in a deeply personalized manner. Accolade customers experience industry-leading engagement levels, satisfaction scores unseen in health care, better health outcomes, and cost savings of 5-15 percent. Accolade has been recognized as one of the nation’s 25 most promising companies by Forbes magazine, the fastest-growing private healthcare company by Inc. 500 and a Top Workplace for five consecutive years.
We're Boldly Reinventing Healthcare
We're Boldly Reinventing Healthcare
As an on-demand healthcare concierge that's focused on employers, health plans and health systems, we're taking on the enormous task of reinventing healthcare.
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Phiily Tech People News 8/9/2016: Lubert elected PSU board chair; Dow Chemical Names Melanie Kalmar CIO
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Despite criticism over Sandusky payouts, Lubert elected PSU board chair (Philly.com)
Dow Chemical Names Melanie Kalmar CIO (Wall Street Journal)
SAP SuccessFactors Appoints Kerry Sain as Chief Revenue Officer
Thank You, SAP
(Sameer Patel / Enterprise Irregulars)
Patel is leaving as SVP for Enterprise Social and Collaborative Software in SAP's cloud business unit.
OCIO Hirtle Callaghan Names New CEO (Chief Investment Officer)
What Vanguard's hire of a sizzling Wall Streeter reveals about Bill McNabb's determination to avoid the whiff of stale passivity (RIABiz)
Google’s self-driving car CTO Chris Urmson departs (The Verge)
Urmson had joined Google from Carnegie Mellon.
PEI-Genesis Names Peter Austin Vice President of Product Management, Marketing & Training
Ecolane Welcomes Ryan Larsen Back to Drive Results as Senior Vice President
In early June, QVC’s US sales "began to experience significant headwinds"
Tom Paine
Follow @phillytechnews
Subscribe in a readerI haven't run a time series to test it, but I've often thought that QVC sales might be a good proxy for changes in GDP, if you exclude items containing gems and precious metals which I understand make up a smaller portion of home shopping TV revenue these days anyway.
So when I read (in Liberty Interactive's Q2 2016 earnings released on Friday) what happened to QVC revenue beginning in early June, and apparently continuing at least through July, it definitely got my attention:
Beginning in early June QVC’s US sales began to experience significant &headwinds, which have continued. The sales declines, as compared to prior periods, have averaged in the mid to high single digit percentages.
QVC has developed many initiatives intended to reverse the negative trends and QVC is optimistic, although there is no guarantee, that these actions will have a positive effect.
However, even if these initiatives begin to reverse these trends, it is believed that QVC’s US net revenue and adjusted OIBDA will likely experience negative growth rates for the third quarter.
Now that's not apocalyptic stuff, buts its certainly a sharp, sudden downtown. And QVC really didn't try to single out specific factors, indicating it might be across the board.
Shares of Liberty Interactive Corp. QVC Group (NASDAQ: QVCA) closed down more than 21 percent Friday afternoon.
QVC Group revenue for the second quarter increased 21 percent to $2.4 billion, but much of that growth came from of zulily's contribution. Q2 2016 results are compared to Q2 2015, prior to the acquisition of zulily.
QVC US revenue grew by 2% and operating income by 4%.
zulily revenue grew 23% to $366 million and operating loss was $43 million, mostly
due to an acquisition-related purchase accounting adjustment. zulily adjusted OIBDA(2) grew 121% to $31 million.
But remember, the sharp downturn began when Q2 was two thirds over.
Liberty Interactive Corporation Reports Second Quarter 2016 Financial Results
Business Wire
Liberty Interactive Corporation Reports Second Quarter 2016 Financial Results
August 05, 2016 08:15 AM Eastern Daylight Time
ENGLEWOOD, Colo.--(BUSINESS WIRE)--Liberty Interactive Corporation ("Liberty Interactive") (Nasdaq: QVCA, QVCB, LVNTA, LVNTB) today reported second quarter 2016 results. Highlights include(1):
“We reported solid second quarter results, with good sales growth in most markets”
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Attributed to QVC Group
Grew QVC consolidated revenue by 3% and operating income by 4%
QVC consolidated adjusted OIBDA(2) grew by 4%, excluding QVC France start-up expenses
Grew QVC US revenue by 2% and operating income by 4%(3)
QVC US adjusted OIBDA(2) increased by 4%(3)
QVC consolidated mobile penetration was 58% of QVC.com orders, a 850 basis point increase
QVC US mobile penetration was 57% of QVC.com orders, a 900 basis point increase
zulily revenue grew 23% to $366 million and operating loss was $43 million, primarily as a result of approximately $62 million of amortization of intangible assets recognized in purchase accounting
zulily adjusted OIBDA(2) grew 121% to $31 million
From May 1, 2016 through July 31, 2016, repurchased 5.7 million QVCA shares at an average price per share of $25.75 and a total cost of $146 million
Attributed to Liberty Ventures Group
Closed $2.4 billion investment in Liberty Broadband Series C shares (LBRDK) on May 18, 2016, at a price of $56.23 per share
Completed the spin-off of CommerceHub, Inc. (“CommerceHub”) on July 22, 2016
Filed amended form S-4 announcing split-off of Liberty Expedia Holdings (“Liberty Expedia”) on June 10, 2016; refiled on July 19, 2016
“QVC continues forward in a choppy retail environment,” said Greg Maffei, Liberty Interactive President and CEO. “Activity has been high at Liberty Ventures. With the closing of the Charter and Time Warner Cable transaction, we closed the investment in Liberty Broadband and have seen an increase in value of over $300 million. We completed the spin-off of CommerceHub and are pleased with the market interest and response. We continue to make progress on the split-off of Liberty Expedia and filed amended S-4’s in June and July.”
QVC GROUP – For the quarter, QVC Group's revenue increased 21% to $2.4 billion, operating income decreased 11% to $254 million, adjusted OIBDA increased 9% to $487 million, net income increased 13% to $127 million and adjusted net income(4) increased 34% to $215 million. QVC Group’s reported GAAP results include the zulily acquisition beginning in the fourth quarter of 2015 (see the “zulily” section below for a further discussion of the impact of the acquisition).
QVC
“We reported solid second quarter results, with good sales growth in most markets,” said QVC President and CEO Mike George. “Late in the quarter, we experienced a deceleration in demand in the US that has continued. As a result, our near-term perspective is more cautious. Longer term, we remain well-positioned with our highly differentiated retail model, strong customer retention, and our ability to deliver compelling experiences across immersive commerce platforms.”
QVC's ONE Q organizational structure is allowing it to better leverage its global scale and capabilities, to enhance its competitive position and to create operational efficiencies. Beginning in the first quarter of 2016, QVC began allocating certain corporate costs for management reporting purposes differently. Historically, QVC allocated these costs to the market from which the services were provided. Now, as more of QVC's centralized costs support initiatives in multiple markets, QVC is allocating costs to the markets that will benefit from the expenditures. These management cost allocations are related to certain functions, such as merchandising, commerce platforms, information technology, human resources, legal, finance, brand and communications, corporate development and administration. The cost allocations (from QVC US to QVC International) totaled approximately $7 million in the second quarter and are expected to approximate $34 million in 2016. As a result of the allocations, the US segment's operating income and adjusted OIBDA margins were each positively impacted 49 basis points and the international segment's operating income and adjusted OIBDA margins were negatively impacted 110 basis points in the second quarter. There was no impact to consolidated operating income and adjusted OIBDA margins. With the completion of the ONE Q implementation, QVC's financial disclosure is consistent with the way it evaluates its business performance and manages its operations.
QVC's consolidated revenue increased 3% in the second quarter to $2.1 billion. eCommerce revenue increased 11% to $939 million and grew to 46% of consolidated revenue in the quarter from 42% a year ago. Mobile orders were 58% of total eCommerce orders in the quarter, compared to 49% a year ago. Operating income increased 4% to $307 million and adjusted OIBDA increased 3% to $463 million. Operating income margin increased 17 basis points and adjusted OIBDA margin was essentially flat.
US Dollar denominated results were favorably impacted by exchange rate fluctuations in the second quarter. The Dollar weakened against the Japanese Yen and Euro 12% and 2%, respectively, and strengthened versus the British Pound 6%. On a constant currency basis(5), consolidated revenue, operating income and adjusted OIBDA increased 2%, 4% and 2%, respectively, compared to a 3%, 4% and 3% increase in US Dollars, respectively.
QVC's US revenue increased 2% to $1.4 billion in the second quarter. Units sold increased 4%, average selling price per unit ("ASP") decreased 3% to $56.60 and returns as a percentage of gross product revenue improved 82 basis points. The US experienced growth primarily in the apparel and accessories categories, which was partially offset by declines primarily in jewelry and electronics. eCommerce revenue increased 11% to $727 million and grew more than 400 basis points to 51% of total US revenue. Operating income increased 4% to $236 million and adjusted OIBDA increased 4% to $363 million. Operating income margin and adjusted OIBDA margin increased 46 and 60 basis points, respectively, reflecting the aforementioned cost allocations from ONE Q. Excluding the cost allocations, operating income increased 1% and operating income margin was essentially flat, while adjusted OIBDA increased 2% and adjusted OIBDA margin increased 11 basis points. These results reflect lower bonus and benefit expenses of approximately $16 million and $4 million, respectively, favorable inventory obsolescence expense and higher credit card income, which were partially offset by higher bad debt expenses of approximately $15 million (of which approximately two-thirds represents an increase in accruals for prior periods), increased freight expenses and lower product margins.
Beginning in early June QVC’s US sales began to experience significant headwinds, which have continued. The sales declines, as compared to prior periods, have averaged in the mid to high single digit percentages. QVC has developed many initiatives intended to reverse the negative trends and QVC is optimistic, although there is no guarantee, that these actions will have a positive effect. However, even if these initiatives begin to reverse these trends, it is believed that QVC’s US net revenue and adjusted OIBDA will likely experience negative growth rates for the third quarter.
QVC's international revenue increased 7% to $635 million in the second quarter. The revenue performance included the net impact of the aforementioned favorable exchange rate fluctuations. On a constant currency basis(5), international revenue increased 4% in the quarter, reflecting strong gains in all markets except Japan. Units sold increased 4% and ASP in constant currency was essentially flat. QVC International experienced growth in all categories except accessories. International eCommerce revenue increased 10% to $212 million and grew approximately 80 basis points to 33% of total international revenue. Operating income increased 4% to $71 million and adjusted OIBDA was flat at $100 million. On a constant currency basis(5), operating income decreased 1% and adjusted OIBDA decreased 5%, primarily due to the cost allocations from ONE Q and France start-up costs. On a constant currency basis and excluding the cost allocations and QVC France’s operating income and adjusted OIBDA losses of $9 million and $8 million, respectively, in Q2-16 and $5 million in Q2-15, international operating income increased 15%, operating margin increased 133 basis points, adjusted OIBDA increased 5% and adjusted OIBDA margin increased 15 basis points, primarily due to favorable fixed costs and inventory obsolescence and lower depreciation and amortization, which were partially offset by lower product margins and higher freight expenses.
CNR Home Shopping Co., Ltd. ("CNRS"), QVC's joint venture in China, increased revenue 4% in local currency in the second quarter. CNRS' operating loss and adjusted OIBDA deficit in local currency decreased 33% and 43%, respectively, reflecting lower freight, improved product margins and lower marketing costs, which were partially offset by higher carriage expenses. This joint venture is being accounted for as an equity method investment, and as a result, QVC reported a $1 million reduction in net income for the quarter.
QVC's total debt, net of original issue discount, was $5.3 billion at June 30, 2016, a decrease of $0.2 billion from March 31, 2016.
zulily
“We accelerated our revenue growth in the second quarter,” said zulily President and CEO Darrell Cavens. “Our merchandising and operational execution are driving strong growth in our business. As we look to the back half of 2016 and beyond, we remain obsessed about offering fresh new products and experiences every day that strengthen our brand and market presence. Additionally, we continue to find valuable new ways to expand our customer reach and leverage the collaboration with QVC to deliver incremental growth opportunities.”
Liberty Interactive acquired zulily on October 1, 2015. Prior to the acquisition, zulily utilized a retail calendar, whereby each fiscal year consisted of four 13-week quarters, with one extra week added in the fourth quarter every five to six years. Upon acquisition by Liberty Interactive, zulily changed its fiscal year to a calendar year end on a prospective basis. As a result, the following discussion of zulily’s results for the three months ended June 30, 2016 includes comparisons to zulily’s results for the three months ended June 28, 2015. In addition, zulily has reclassified certain costs between financial statement line items to conform with Liberty Interactive’s reporting structure for ease of comparability for all reporting periods. zulily's stand-alone operating results for the three months ended June 28, 2015 and June 30, 2016 were as follows:
(amounts in millions)
Three Months Ended
June 28, 2015 June 30, 2016
Net revenue $ 297 366
Cost of sales 212 257
Gross profit 85 109
Operating expenses 9 11
SG&A expenses (excluding stock-based compensation) 62 67
Adjusted OIBDA 14 31
Stock-based compensation 5 6
Depreciation 4 6
Amortization of intangible assets — 62
Operating income (loss) $ 5 (43 )
zulily revenue increased 23% to $366 million in the second quarter driven by strong growth in total orders and a slight increase in average order value. Mobile orders maintained positive growth and came in at 63% of total orders placed in the quarter, compared to 56% in the year prior.
Operating loss was $(43) million in the second quarter as compared to $5 million of income in the same period last year. zulily’s second quarter operating loss includes $62 million of amortization of intangible assets, primarily recognized in purchase accounting.
Adjusted OIBDA increased 121% in the second quarter to $31 million, up from $14 million a year ago. Adjusted OIBDA margin increased 376 basis points, primarily attributed to improved operational efficiency in transportation and fulfillment and a decrease in SG&A expenses as a percentage of revenue due to top-line revenue growth over a partially fixed cost base.
Share Repurchases
From May 1, 2016 through July 31, 2016, Liberty Interactive repurchased approximately 5.7 million Series A QVC Group shares (Nasdaq: QVCA) at an average cost per share of $25.75 for total cash consideration of $146 million. Since the creation of the QVC Group stock (including its predecessor, Liberty Interactive Group) in May 2006, Liberty Interactive has repurchased shares for aggregate cash consideration of $6.5 billion, representing approximately 42.8% of the shares outstanding at the time of the creation of the QVC Group stock. All repurchases up to August 9, 2012, the date on which the QVC Group stock was recapitalized to create the Liberty Ventures Group stock, were comprised of shares of the combined stocks. The remaining repurchase authorization as of August 1, 2016 for QVC Group stock was approximately $518 million.
QVC Group consists of Liberty Interactive’s subsidiaries, QVC, Inc. and zulily, llc, and Liberty Interactive’s interest in HSN.
LIBERTY VENTURES GROUP – On May 13, 2016, a wholly owned subsidiary attributed to Liberty Ventures entered into a margin loan agreement which provides for $450 million of available borrowings. Pursuant to the margin loan agreement, approximately 5 million shares of Charter Communications, Inc. (“Charter”) were pledged as collateral. The margin loan matures on November 13, 2017 and had $375 million outstanding as of June 30, 2016.
On May 18, 2016, Liberty Interactive completed a $2.4 billion investment in Liberty Broadband in connection with the merger of Charter and Time Warner Cable, Inc. The proceeds of this investment were used by Liberty Broadband to fund, in part, its acquisition of $5 billion of stock in the new public parent company, New Charter, of the combined enterprises. Liberty Interactive, along with third party investors, all of whom invested on the same terms as Liberty Interactive, purchased newly issued shares of Liberty Broadband Series C common stock at a per share price of $56.23, which was determined based upon the fair value of Liberty Broadband’s net assets on a sum-of-the-parts basis at the time the investment agreements were executed. Liberty Interactive’s investment in Liberty Broadband was funded using cash on hand and is attributed to the Liberty Ventures Group.
On June 10, 2016, Liberty Interactive filed an amendment to its registration statement disclosing that the previously announced spin-off of Liberty Expedia (comprised of, among other things, Liberty Interactive’s interest in Expedia, Inc., Liberty Interactive’s subsidiary Bodybuilding.com, LLC and $400 million of debt) would be changed to a mandatory redemptive split-off. The transaction is subject to, among other conditions, shareholder approval and is expected to be completed at the end of the third quarter or early in the fourth quarter of 2016.
Subsequent to June 30, 2016:
Holders of the 0.75% Exchangeable Senior Debentures exchanged approximately $148 million principal value and Liberty Ventures Group elected to make cash payments totaling approximately $173 million to settle the obligations, which are expected to be funded through a combination of cash on hand, margin loan capacity, as well as the sale of Time, Inc. (“TIME”) and Time Warner, Inc. (“TWX”) shares. Pro-forma for these exchanges, there are approximately 1.2 million shares of CHTR, 2 million shares of TWX and 0.25 million shares of TIME underlying the remaining 0.75% Exchangeable Senior Debentures.
Liberty Ventures Group entered into a margin loan agreement which provides for $300 million of available borrowings. Pursuant to the margin loan agreement, Liberty Ventures’ shares of Expedia were pledged as collateral. The margin loan matures on the earlier of the Expedia Holdings split-off date or December 31, 2016.
On July 22, 2016, Liberty Interactive completed the previously announced spin-off of CommerceHub and distributed to holders of Liberty Ventures Series A and Series B common stock (i) 0.1 of a share of the corresponding series of CommerceHub common stock and (ii) 0.2 of a share of CommerceHub Series C common stock, in each case, for each share of Liberty Ventures common stock held through the distribution date, July 22, 2016. CommerceHub began regular-way trading on July 25th under the tickers CHUBA, CHUBB and CHUBK. CommerceHub will be conducting its Q2 quarterly earnings conference call on August 22nd.
Share Repurchases
There were no repurchases of Liberty Ventures Group common stock (Nasdaq: LVNTA) from May 1, 2016 through July 31, 2016. The total remaining repurchase authorization for Liberty Ventures Group stock as of July 31, 2016 was $650 million.
Including the impact of the CommerceHub spin-off, the businesses and assets attributed to the Liberty Ventures Group are all of Liberty Interactive's businesses and assets other than those attributed to the QVC Group, including its interests in Expedia, Liberty Broadband, Lending Tree and FTD, its subsidiaries Bodybuilding.com and Evite, and minority interests in Charter, Time Warner and Interval Leisure.
FOOTNOTES
(1) Liberty Interactive's President and CEO, Greg Maffei, will discuss these highlights and other matters in Liberty Interactive's earnings conference call which will begin at 12:15 p.m. (E.D.T.) on August 5, 2016. For information regarding how to access the call, please see “Important Notice” later in this document.
(2) For a definition of adjusted OIBDA and applicable reconciliations and a definition of adjusted OIBDA margin, see the accompanying schedules.
(3) Including the impact of the new cost allocations associated with ONE Q.
(4) For a definition of adjusted net income and applicable reconciliations, see the accompanying schedules.
(5) For a definition of constant currency financial metrics and applicable reconciliations, see the accompanying schedules.
QVC GROUP FINANCIAL METRICS – QUARTER
(amounts in millions) 2Q15 2Q16 % Change
Revenue
QVC US $ 1,406 $ 1,428 2 %
QVC International(1) 592 635 7 %
Total QVC Revenue 1,998 2,063 3 %
zulily(2) NA 366 NA
Intergroup eliminations NA (5 ) NA
Total QVC Group Revenue $ 1,998 $ 2,424 21 %
Gross Margins
QVC US 38.0 % 37.6 %
QVC International(1) 38.7 % 38.0 %
zulily(2) NA % 29.8 %
Operating Income
QVC US(3) $ 226 $ 236 4 %
QVC International(1)(3) 68 71 4 %
Total QVC Operating Income 294 307 4 %
zulily NA (43 ) NA
Corporate and Other (10 ) (10 ) - %
Total QVC Group Operating Income $ 284 $ 254 (11 ) %
Adjusted OIBDA
QVC US(3) $ 349 $ 363 4 %
QVC International(1)(3) 100 100 - %
Total QVC Adjusted OIBDA 449 463 3 %
zulily(2) NA 31 NA
Corporate and Other (4 ) (7 ) 75 %
Total QVC Group Adjusted OIBDA $ 445 $ 487 9 %
Net Income and Adjusted Net Income
Total QVC Group Net Income $ 112 $ 127 13 %
Total QVC Group Adjusted Net Income(4) $ 161 $ 215 34 %
China JV(5)
Revenue $ 38 $ 38 - %
Adjusted OIBDA $ (5 ) $ (1 ) 80 %
(amounts in millions)
QVCA Shares Outstanding
7/31/2015 7/31/2016
Outstanding A and B shares 461 476
(amounts in millions) Quarter ended Quarter ended
QVCA and QVCB Basic and Diluted Shares
6/30/2015 6/30/2016
Basic Weighted Average Shares Outstanding ("WASO")
469 479
Potentially dilutive Shares 7 6
Diluted WASO 476 485
(1) Includes QVC France, QVC Germany, QVC Italy, QVC Japan and QVC UK.
(2) Includes zulily as of the beginning of the fourth quarter 2015.
(3) Includes the reallocation of $7 million in corporate costs from QVC US to QVC International for the second quarter 2016.
(4) See reconciling schedule 4.
(5) This joint venture is being accounted for as an equity investment.
QVC OPERATING METRICS – QUARTER
(amounts in millions) 2Q15 2Q16 % Change
QVC - Consolidated
Total eCommerce revenue ($) $ 848 $ 939 11 %
Total eCommerce revenue (%) 42.4 % 45.5 % 310 bps
Mobile % of total eCommerce(1) 49.4 % 57.9 % 850 bps
LTM Total Customers(2) 12.5 12.7 2 %
QVC - US
US eCommerce revenue ($) $ 655 $ 727 11 %
US eCommerce revenue (%) 46.6 % 50.9 % 430 bps
Mobile % of US eCommerce(1) 47.6 % 56.6 % 900 bps
LTM Total Customers(2) 8.1 8.2 1 %
Return Rate 19.3 % 18.5 % (80 ) bps
zulily
Mobile % of total orders 56.0 % 63.2 % 720 bps
LTM Total Customers(2) 4.9 5.0 2 %
(1) Based on gross US Dollar orders.
(2) LTM: Last twelve months.
NOTES
Unless otherwise noted, the foregoing discussion compares financial information for the three months ended June 30, 2016 to the same period in 2015.
The following financial information with respect to Liberty Interactive's equity affiliates and available for sale securities is intended to supplement Liberty Interactive's condensed consolidated statements of operations which are included in its Form 10-Q.
Fair Value of Public Holdings
(amounts in millions) 3/31/2016 6/30/2016
HSN(1) $ 1,047 $ 979
Total Attributed QVC Group $ 1,047 $ 979
Charter(2) $ — $ 1,225
Expedia(3) 2,545 2,509
FTD(4) 268 255
Liberty Broadband(5) — 2,561
Tree.com(6) 271 245
Other Public Holdings(7) 1,662 479
Total Attributed Liberty Ventures Group $ 4,746 $ 7,274
(1) Represents fair value of QVC Group's investment in HSN. In accordance with GAAP, QVC Group accounts for this investment using the equity method of accounting and includes this investment in its attributed balance sheet at its historical carrying value which aggregated $180 million and $182 million at March 31, 2016 and June 30, 2016, respectively.
(2) Represents fair value of Liberty Ventures Group’s investment in Charter. Liberty Ventures Group accounts for this investment at fair value.
(3) Represents fair value of Liberty Ventures Group's investment in Expedia. In accordance with GAAP, Liberty Ventures Group accounts for this investment using the equity method of accounting and includes this investment in its attributed balance sheet at its historical carrying value which aggregated $894 million and $888 million at March 31, 2016 and June 30, 2016, respectively.
(4) Represents fair value of Liberty Ventures Group's investment in FTD. In accordance with GAAP, Liberty Ventures Group accounts for this investment using the equity method of accounting and includes this investment in its attributed balance sheet at its historical carrying value which aggregated $261 million and $259 million at March 31, 2016 and June 30, 2016, respectively.
(5) Represents fair value of Liberty Ventures Group’s investment in Liberty Broadband. In accordance with GAAP, Liberty Ventures Group accounts for this investment using the equity method of accounting, but has elected fair value treatment.
(6) Represents fair value of Liberty Ventures Group's investment in Tree.com. In accordance with GAAP, Liberty Ventures Group accounts for this investment using the equity method of accounting and includes this investment in its attributed balance sheet at its historical carrying values which aggregated $28 million and $28 million at March 31, 2016 and June 30, 2016, respectively.
(7) Represents Liberty Ventures Group's other public holdings which are accounted for at fair value. This figure includes Liberty Ventures Group’s investment in Interval, which was reclassified as available for sale during the second quarter. For the period ended March 31, 2016, Interval Leisure was classified as an equity method security with a historical carrying value of $118 million.
Cash and Debt
The following presentation is provided to separately identify cash and liquid investments and debt information.
(amounts in millions) 3/31/2016 6/30/2016
Cash and Liquid Investments Attributable to:
QVC Group $ 440 $ 394
Liberty Ventures Group(1) 2,904 116
Total Liberty Consolidated Cash and Liquid Investments $ 3,344 $ 510
Less:
Short-term marketable securities - Liberty Ventures Group $ 601 $ —
Total Liberty Consolidated Cash (GAAP) $ 2,743 $ 510
Debt:
Senior notes and debentures(2) $ 791 $ 791
Senior exchangeable debentures(3) 346 345
QVC senior notes(2) 3,550 3,550
QVC bank credit facility 1,894 1,675
Other 72 76
Total Attributed QVC Group Debt $ 6,653 $ 6,437
Unamortized discount, fair market value adjustment and deferred loan costs (38 ) (39 )
Total Attributed QVC Group Debt (GAAP) $ 6,615 $ 6,398
Senior exchangeable debentures(3) $ 2,040 $ 1,419
Ventures margin loan — 375
Other 33 29
Total Attributed Liberty Ventures Group Debt $ 2,073 $ 1,823
Fair market value adjustment 188 6
Total Attributed Liberty Ventures Group Debt (GAAP) $ 2,261 $ 1,829
Total Liberty Interactive Corporation Debt (GAAP) $ 8,876 $ 8,227
(1) Includes $601 million of short-term marketable securities with an original maturity greater than 90 days as of March 31, 2016.
(2) Face amount of Senior Notes and Debentures with no reduction for the unamortized discount.
(3) Face amount of Senior Exchangeable Debentures with no reduction for the fair market value adjustment.
Total cash and liquid investments attributed to the QVC Group declined $46 million in the second quarter. Share repurchases, debt repayment and capital expenditures were partially offset by cash provided by operations. Total debt attributed to the QVC Group decreased by $216 million, primarily due to repayments on QVC’s credit facility.
Total cash and liquid investments attributed to the Liberty Ventures Group declined $2.8 billion, primarily due to the investment in Liberty Broadband as well as net repayment of certain debt obligations.
Important Notice: Liberty Interactive (Nasdaq: QVCA, QVCB, LVNTA, LVNTB) President and CEO, Greg Maffei, will discuss Liberty Interactive's earnings release in a conference call which will begin at 12:15 p.m. (E.D.T.) on August 5, 2016. The call can be accessed by dialing (844) 307-2219 or (678) 509-7635 at least 10 minutes prior to the start time. The call will also be broadcast live across the Internet and archived on our website. To access the webcast go to http://www.libertyinteractive.com/events. Links to this press release and replays of the call will also be available on Liberty Interactive's website.
This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about business strategies, market potential, future financial prospects, market conditions, sales demand, the expected benefits and synergies from the acquisition of zulily, the implementation of new marketing and fulfillment processes at zulily, new service and product offerings, the monetization of our non-core assets, the continuation of our stock repurchase program, the estimated liabilities under exchangeable debentures, the satisfaction of the conditions to the proposed split-off of Liberty Expedia and other matters that are not historical facts. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, possible changes in market acceptance of new products or services, competitive issues, regulatory matters affecting our businesses, continued access to capital on terms acceptable to Liberty Interactive, changes in law and government regulations that may impact the derivative instruments that hedge certain of our financial risks, the availability of investment opportunities, and market conditions conducive to stock repurchases. These forward-looking statements speak only as of the date of this presentation, and Liberty Interactive expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Interactive's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Please refer to the publicly filed documents of Liberty Interactive, including the most recent Forms 10-K and 10-Q, for additional information about Liberty Interactive and about the risks and uncertainties related to Liberty Interactive's business which may affect the statements made in this presentation.
Additional Information
Nothing in this press release shall constitute a solicitation to buy or an offer to sell shares of the split-off entity or any of Liberty Interactive’s tracking stocks. The offer and sale of shares in the proposed split-off will only be made pursuant to Liberty Expedia’s effective registration statement. Liberty Interactive stockholders and other investors are urged to read the registration statement and the joint proxy statement/prospectus regarding the transaction (a preliminary filing of which has been made with the SEC) and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they contain important information about the split-off. Copies of these SEC filings are available free of charge at the SEC’s website (http://www.sec.gov). Copies of the filings together with the materials incorporated by reference therein are also available, without charge, by directing a request to Liberty Interactive Corporation, 12300 Liberty Boulevard, Englewood, Colorado 80112, Attention: Investor Relations, Telephone: (720) 875-5420.
Participants in a Solicitation
The directors and executive officers of Liberty Interactive and other persons may be deemed to be participants in the solicitation of proxies in respect of proposals to approve the split-off. Information regarding the directors and executive officers of Liberty Interactive is available in its definitive proxy statement, which was filed with the SEC on July 8, 2016, and certain of its Current Reports on Form 8-K. For other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, see the joint proxy statement/ prospectus (a preliminary filing of which has been made with the SEC). Free copies of this document may be obtained as described in the preceding paragraph.
NON-GAAP FINANCIAL MEASURES
This press release includes a presentation of adjusted OIBDA, which is a non-GAAP financial measure, for Liberty Interactive, the QVC Group, QVC (and certain of its subsidiaries), zulily and the Liberty Ventures Group together with a reconciliation to that entity or such businesses’ operating income, as determined under GAAP. Liberty Interactive defines adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and administrative expenses, excluding all stock-based compensation, and excludes from that definition depreciation and amortization and restructuring and impairment charges that are included in the measurement of operating income pursuant to GAAP. Further, this press release includes adjusted OIBDA margin which is also a non-GAAP financial measure. Liberty Interactive defines adjusted OIBDA margin as adjusted OIBDA divided by revenue.
Liberty Interactive believes adjusted OIBDA is an important indicator of the operational strength and performance of its businesses, including each business' ability to service debt and fund capital expenditures. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. Because adjusted OIBDA is used as a measure of operating performance, Liberty Interactive views operating income as the most directly comparable GAAP measure. Adjusted OIBDA is not meant to replace or supersede operating income or any other GAAP measure, but rather to supplement such GAAP measures in order to present investors with the same information that Liberty Interactive's management considers in assessing the results of operations and performance of its assets. Please see the attached schedules for applicable reconciliations.
In addition, this presentation includes references to adjusted net income, which is a non-GAAP financial measure, for QVC Group. Liberty Interactive defines adjusted net income as net income, excluding the impact of purchase accounting amortization (net of deferred tax benefit).
Liberty Interactive believes adjusted net income is an important indicator of financial performance, in particular for QVC Group, due to the impact of purchase accounting amortization. Because adjusted net income is used as a measure of overall financial performance, Liberty Interactive views net income as the most directly comparable GAAP measure. Adjusted net income is not meant to replace or supersede net income or any other GAAP measure, but rather to supplement such GAAP measures in order to present investors with a valuable supplemental metric of financial performance. Please see the attached schedules for a reconciliation of adjusted net income to net income (loss) calculated in accordance with GAAP for QVC Group (Schedule 4).
This presentation also references certain financial metrics on a constant currency basis, which is a non-GAAP measure, for QVC Group. Constant currency financial metrics, as presented herein, are calculated by translating the current-year and prior-year reported amounts into comparable amounts using a single foreign exchange rate for each currency.
Liberty Interactive believes constant currency financial metrics are an important indicator of financial performance, in particular for QVC Group, due to the translational impact of foreign currency fluctuations relating to its subsidiaries in the UK, Germany, Italy, Japan and France, as well as its JV in China. We use constant currency financial metrics to provide a framework to assess how our businesses performed excluding the effects of foreign currency exchange fluctuations. Please see the attached schedules for a reconciliation of the impact of foreign currency fluctuations on revenue, operating income and adjusted OIBDA (Schedule 5).
SCHEDULE 1
The following table provides a reconciliation of QVC Group's adjusted OIBDA to its operating income calculated in accordance with GAAP for the three months ended June 30, 2015, September 30, 2015, December 31, 2015, March 31, 2016, and June 30, 2016, respectively.
QUARTERLY SUMMARY
(amounts in millions) 2Q15 3Q15 4Q15 1Q16 2Q16
QVC Group
Adjusted OIBDA(1)(2) 445 421 620 433 487
Depreciation and amortization (149 ) (141 ) (215 ) (209 ) (214 )
Stock compensation expense (12 ) (16 ) (20 ) (18 ) (19 )
Operating Income $ 284 $ 264 $ 385 $ 206 $ 254
(1) Includes zulily beginning with the fourth quarter of 2015.
(2) zulily’s results for the fourth quarter 2015 include the impact of a $17 million non-cash, one-time reduction in deferred revenue.
SCHEDULE 2
The following table provides a reconciliation of adjusted OIBDA for QVC (and certain of its subsidiaries) and zulily (beginning with the fourth quarter of 2015) to that entity or such businesses' operating income (loss) calculated in accordance with GAAP for the three months ended June 30, 2015, September 30, 2015, December 31, 2015, March 31, 2016 and June 30, 2016, respectively. As there are no material reconciling items between adjusted OIBDA and operating income for the QVC China joint venture for the referenced periods, no reconciliation has been provided.
QUARTERLY SUMMARY
(amounts in millions) 2Q15 3Q15 4Q15 1Q16 2Q16
QVC Group
QVC Adjusted OIBDA
QVC US $ 349 $ 333 $ 479 $ 326 $ 363
QVC International 100 97 129 89 100
Consolidated QVC adjusted OIBDA 449 430 608 415 463
Depreciation and amortization (148 ) (141 ) (146 ) (148 ) (146 )
Stock compensation (7 ) (9 ) (7 ) (6 ) (10 )
Operating Income $ 294 $ 280 $ 455 $ 261 $ 307
zulily
Adjusted OIBDA(1) $ NA $ NA $ 21 $ 23 $ 31
Depreciation and amortization NA NA (69 ) (61 ) (68 )
Stock compensation NA NA (5 ) (5 ) (6 )
Operating Income $ NA $ NA $ (53 ) $ (43 ) $ (43 )
(1) Includes zulily as of the beginning of the fourth quarter 2015. Fourth quarter 2015 adjusted OIBDA includes the impact of a $17 million one-time, non-cash purchase accounting reduction in deferred revenue.
SCHEDULE 3
The following table provides a reconciliation of adjusted OIBDA for QVC Group and the Liberty Ventures Group to the Liberty Interactive Corporation operating income (loss) calculated in accordance with GAAP for the three months ended June 30, 2015, September 30, 2015, December 31, 2015, March 31, 2016 and June 30, 2016, respectively.
QUARTERLY SUMMARY
(amounts in millions) 2Q15 3Q15 4Q15 1Q16 2Q16
QVC Group Adjusted OIBDA $ 445 $ 421 $ 620 $ 433 $ 487
Liberty Ventures Group Adjusted OIBDA 14 13 14 4 8
Consolidated Liberty Interactive Corp. Adjusted OIBDA $ 459 $ 434 $ 634 $ 437 $ 495
Depreciation and amortization (161 ) (150 ) (224 ) (217 ) (221 )
Stock compensation (29 ) (37 ) (46 ) (31 ) (24 )
Consolidated Liberty Interactive Corp. Operating Income $ 269 $ 247 $ 364 $ 189 $ 250
SCHEDULE 4
The following table provides a reconciliation of QVC Group's adjusted net income to its net income calculated in accordance with GAAP for the three months ended June 30, 2015, September 30, 2015, December 31, 2015, March 31, 2016 and June 30, 2016, respectively.
QUARTERLY SUMMARY
(amounts in millions) 2Q15 3Q15 4Q15 1Q16 2Q16 LTM
QVC Group
Net income(1) $ 112 $ 154 $ 223 $ 90 $ 127 $ 594
QVC purchase accounting amort., net deferred tax benefit (2) 49 49 50 50 50 199
zulily purchase accounting amort., net deferred tax benefit (3) — — 39 36 38 113
QVC Group Adjusted net income $ 161 $ 203 $ 312 $ 176 $ 215 $ 906
QVCA/B shares outstanding as of July 31, 2016 476
Adjusted LTM earnings per share $ 1.90
(1) Includes the results of zulily beginning in the fourth quarter of 2015. zulily’s results for the fourth quarter 2015 include the impact of a $17 million non-cash, one-time reduction in deferred revenue, net of book deferred tax benefit.
(2) Add-back relates to non-cash, non-tax deductible purchase accounting amortization from Liberty Interactive’s acquisition of QVC, net of book deferred tax benefit (gross non-cash, non-tax deductible purchase accounting amortization was $316 million for the twelve months ended December 31, 2015, and is applied ratably across the four quarters in each year).
(3) Add-back relates to non-cash, non-tax deductible purchase accounting amortization from Liberty Interactive’s acquisition of zulily, net of book deferred tax benefit.
SCHEDULE 5
The following table provides a comparison of the year over year percentage change in QVC Group's constant currency revenue, operating income, adjusted OIBDA and ASP to the comparable figures calculated in accordance with GAAP for the three months ended June 30, 2016.
Percent Change for
Three Months Ended 6/30/2016
QVC
As Reported Constant Currency
Consolidated Revenue 3 % 2 %
Consolidated Operating Income 4 % 4 %
Consolidated Adj. OIBDA 3 % 2 %
International Revenue 7 % 4 %
International Operating Income 4 % (1 )%
International Adj. OIBDA — (5 )%
International ASP 1 % —
LIBERTY INTERACTIVE CORPORATION
BALANCE SHEET INFORMATION
June 30, 2016 - (unaudited)
Attributed
QVC Ventures Inter-group Consolidated
Group Group Eliminations Liberty
amounts in millions
Assets
Current assets:
Cash and cash equivalents $ 394 116 — 510
Trade and other receivables, net 861 52 (1 ) 912
Inventory, net 1,043 45 — 1,088
Other current assets 190 14 — 204
Total current assets 2,488 227 (1 ) 2,714
Investments in available-for-sale securities and other cost investments 4 1,766 — 1,770
Investments in affiliates, accounted for using the equity method 225 1,300 — 1,525
Investment in Liberty Broadband measured at fair value — 2,561 — 2,561
Property and equipment, net 1,194 36 — 1,230
Intangible assets not subject to amortization 9,396 128 — 9,524
Intangible assets subject to amortization, net 1,274 39 — 1,313
Other assets, at cost, net of accumulated amortization 49 7 — 56
Total assets $ 14,630 6,064 (1 ) 20,693
Liabilities and Equity
Current liabilities:
Intergroup payable (receivable) $ 221 (221 ) — —
Accounts payable 622 19 — 641
Accrued liabilities 586 48 — 634
Current portion of debt 356 1,431 — 1,787
Other current liabilities 126 27 (1 ) 152
Total current liabilities 1,911 1,304 (1 ) 3,214
Long-term debt 6,042 398 — 6,440
Deferred income tax liabilities 1,226 2,531 — 3,757
Other liabilities 273 15 — 288
Total liabilities 9,452 4,248 (1 ) 13,699
Equity/Attributed net assets (liabilities) 5,066 1,826 — 6,892
Noncontrolling interests in equity of subsidiaries 112 (10 ) — 102
Total liabilities and equity $ 14,630 6,064 (1 ) 20,693
LIBERTY INTERACTIVE CORPORATION
STATEMENT OF OPERATIONS INFORMATION
Three months ended June 30, 2016 - (unaudited)
Attributed
QVC Ventures Consolidated
Group Group Liberty
amounts in millions
Revenue:
Net retail sales $ 2,424 139 2,563
Operating costs and expenses:
Cost of sales 1,538 83 1,621
Operating, including stock-based compensation 157 20 177
Selling, general and administrative, including stock-based compensation 261 33 294
Depreciation and amortization 214 7 221
2,170 143 2,313
Operating income (loss) 254 (4 ) 250
Other income (expense):
Interest expense (71 ) (21 ) (92 )
Share of earnings (losses) of affiliates, net 9 (9 ) —
Realized and unrealized gains (losses) on financial instruments, net 5 338 343
Gains (losses) on dispositions — 2 2
Other, net 20 79 99
(37 ) 389 352
Earnings (loss) before income taxes 217 385 602
Income tax benefit (expense) (79 ) (136 ) (215 )
Net earnings (loss) 138 249 387
Less net earnings (loss) attributable to noncontrolling interests 11 — 11
Net earnings (loss) attributable to Liberty stockholders $ 127 249 376
LIBERTY INTERACTIVE CORPORATION
STATEMENT OF OPERATIONS INFORMATION
Three months ended June 30, 2015 - (unaudited)
Attributed
QVC Ventures Consolidated
Group Group Liberty
amounts in millions
Revenue:
Net retail sales $ 1,998 254 2,252
Operating costs and expenses:
Cost of sales 1,234 175 1,409
Operating, including stock-based compensation 142 24 166
Selling, general and administrative, including stock-based compensation 189 58 247
Depreciation and amortization 149 12 161
1,714 269 1,983
Operating income (loss)
284 (15 ) 269
Other income (expense):
Interest expense (70 ) (20 ) (90 )
Share of earnings (losses) of affiliates, net 9 78 87
Realized and unrealized gains (losses) on financial instruments, net 8 24 32
Gains (losses) on dispositions — 111 111
Other, net (31 ) 2 (29 )
(84 ) 195 111
Earnings (loss) from continuing operations before income taxes 200 180 380
Income tax benefit (expense) (80 ) (42 ) (122 )
Net earnings (loss) 120 138 258
Less net earnings (loss) attributable to noncontrolling interests 8 8 16
Net earnings (loss) attributable to Liberty stockholders $ 112 130 242
LIBERTY INTERACTIVE CORPORATION
STATEMENT OF CASH FLOWS INFORMATION
Six months ended June 30, 2016 - (unaudited)
Attributed
QVC Ventures Consolidated
Group Group Liberty
amounts in millions
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ 236 222 458
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 423 15 438
Stock-based compensation 37 18 55
Cash payments for stock-based compensation
— (91 ) (91 )
Excess tax benefit from stock-based compensation
(7 ) (1 ) (8 )
Share of (earnings) losses of affiliates, net (30 ) 51 21
Cash receipts from return on equity investments 14 13 27
Realized and unrealized gains (losses) on financial instruments, net (4 ) (332 ) (336 )
(Gains) losses on dispositions — (9 ) (9 )
Deferred income tax (benefit) expense (94 ) 390 296
Other, net 22 (85 ) (63 )
Intergroup tax allocation 274 (274 ) —
Intergroup tax payments (104 ) 104 —
Changes in operating assets and liabilities
Current and other assets 369 23 392
Payables and other current liabilities (491 ) (17 ) (508 )
Net cash provided (used) by operating activities 645 27 672
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash proceeds from dispositions — 129 129
Investments in and loans to cost and equity investees — (42 ) (42 )
Capital expended for property and equipment (110 ) (15 ) (125 )
Purchases of short term and other marketable securities — (264 ) (264 )
Sales of short term and other marketable securities 12 1,162 1,174
Investment in Liberty Broadband — (2,400 ) (2,400 )
Other investing activities, net (2 ) 1 (1 )
Net cash provided (used) by investing activities (100 ) (1,429 ) (1,529 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of debt 778 587 1,365
Repayments of debt (923 ) (1,096 ) (2,019 )
Repurchases of Liberty common stock (417 ) — (417 )
Min. withholding taxes on net settlements of stock-based comp (13 ) — (13 )
Excess tax benefit from stock-based compensation 7 1 8
Other financing activities, net (13 ) 3 (10 )
Net cash provided (used) by financing activities (581 ) (505 ) (1,086 )
Effect of foreign currency rates on cash 4 — 4
Net increase (decrease) in cash and cash equivalents (32 ) (1,907 ) (1,939 )
Cash and cash equivalents at beginning of period 426 2,023 2,449
Cash and cash equivalents at end period $ 394 116 510
LIBERTY INTERACTIVE CORPORATION
STATEMENT OF CASH FLOWS INFORMATION
Six months ended June 30, 2015 - (unaudited)
Attributed
QVC Ventures Consolidated
Group Group Liberty
amounts in millions
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ 280 130 410
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 301 28 329
Stock-based compensation 24 20 44
Cash payments for stock based compensation — (10 ) (10 )
Excess tax benefit from stock-based compensation (14 ) (2 ) (16 )
Share of losses (earnings) of affiliates, net (33 ) (57 ) (90 )
Cash receipts from return on equity investments 14 13 27
Realized and unrealized gains (losses) on financial instruments, net 2 (30 ) (28 )
(Gains) losses on dispositions — (111 ) (111 )
Deferred income tax (benefit) expense (91 ) 61 (30 )
Other, net 25 7 32
Intergroup tax allocation 43 (43 ) —
Intergroup tax payments (55 ) 55 —
Changes in operating assets and liabilities
Current and other assets 283 4 287
Payables and other current liabilities (208 ) (38 ) (246 )
Net cash provided (used) by operating activities 571 27 598
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisitions — (20 ) (20 )
Cash proceeds from dispositions — 271 271
Investments in and loans to cost and equity investees (2 ) (96 ) (98 )
Cash receipts from return of equity investments 200 — 200
Capital expended for property and equipment (80 ) (24 ) (104 )
Purchases of short term and other marketable securities (80 ) (546 ) (626 )
Sales of short term and other marketable securities 93 584 677
Other investing activities, net (47 ) — (47 )
Net cash provided (used) by investing activities 84 169 253
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of debt 1,098 369 1,467
Repayments of debt (1,288 ) (340 ) (1,628 )
Repurchases of QVC Group common stock (377 ) — (377 )
Min. withholding taxes on net settlements of stock-based comp (14 ) 1 (13 )
Excess tax benefit from stock-based compensation 14 2 16
Other financing activities, net (4 ) (20 ) (24 )
Net cash provided (used) by financing activities (571 ) 12 (559 )
Effect of foreign currency rates on cash (9 ) — (9 )
Net increase (decrease) in cash and cash equivalents 75 208 283
Cash and cash equivalents at beginning of period 422 1,884 2,306
Cash and cash equivalents at end period $ 497 2,092 2,589
Contacts
Liberty Interactive Corporation
Courtnee Chun, (720) 875-5420
LIBERTY INTERACTIVE CORPORATION
NASDAQ:QVCA View stock quote and chart View SEC Filings
Release Summary
Liberty Interactive Corporation reports second quarter 2016 financial results.
Release Versions
E
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