UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 2011
comScore, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 000-1158172 | 54-1955550 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
11950 Democracy Drive
Suite 600
Reston, Virginia 20190
(Address of principal executive offices, including zip code)
Suite 600
Reston, Virginia 20190
(Address of principal executive offices, including zip code)
(703) 438-2000
(Registrant’s telephone number, including area code)
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
Attached hereto as Exhibit 99.1 and incorporated by reference herein is financial information for
comScore, Inc. (the “Company”) for the three and six month periods ended June 30, 2011 as well as
forward-looking statements relating to the third quarter ending September 30, 2011 and full year
ending December 31, 2011 as presented in a press release issued on August 3, 2011.
The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is
being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of
that section, nor shall it be deemed incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in
such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. | Description | |
99.1
|
Press release dated August 3, 2011 announcing second quarter 2011 financial results |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| comScore, Inc. |
||||
| By: | /s/ Kenneth J. Tarpey | |||
| Kenneth J. Tarpey | ||||
| Chief Financial Officer | ||||
Date: August 3, 2011
EXHIBIT INDEX
| Exhibit No. | Description | |
99.1
|
Press release dated August 3, 2011 announcing second quarter 2011 financial results |
Exhibit
99.1
comScore Reports Second Quarter 2011 Results
Second quarter revenue grows 38% year-over-year
Second quarter non-GAAP adjusted EBITDA increases 23% year-over-year
Second quarter non-GAAP EPS reaches $0.16 per share
RESTON, VA — August 3, 2011 — comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital
world, today announced financial results for the second quarter 2011.
In the second quarter of 2011, comScore achieved quarterly revenue of $58.1 million, which was an
increase of 38% over the second quarter of 2010. GAAP loss before income taxes was ($6.2) million
in the second quarter of 2011 and GAAP net loss was ($8.2) million, or ($0.26) per basic and
diluted share. Non-GAAP net income in the second quarter of 2011 was $5.4 million or $0.16 per
diluted share. Adjusted EBITDA was $11.1 million in the second quarter of 2011, an increase of 23%
from adjusted EBITDA of $9.0 million in the second quarter of 2010.
Dr. Magid Abraham, comScore’s president and chief executive officer said, “We are pleased to report
revenue and adjusted EBITDA above our previously announced guidance, with a sequential improvement
in adjusted EBITDA margin. In the second quarter we saw continued strength from core products such
as Media Metrix 360 and our AdEffx suite, and growing momentum for new products like our Digital
Analytix web analytics product and Nexius Xplore products which help wireless carriers optimize
their networks and customer relationships. We added 53 net new customers during the quarter, and
renewals by existing customers were again within historical ranges of 90% or higher on a constant
dollar basis. We continued to renew existing contracts and expand our client relationships with
new and existing customers. We also believe that we are beginning to capitalize on a number of
cross-selling opportunities created by our widening product portfolio that meet a broader set of
customer needs.”
“Last week, we launched Social Essentials, our new social media measurement product that is one of
the first products to help advertisers assess the “earned social media” generated by the fans of
their brands and by viral sharing to their circle of friends on Facebook. We have also introduced
our Smart Lift Attribution Model, a new methodology that enables our ad effectiveness products to
scientifically measure the contribution of publishers and creative execution to the lift generated
by branding and direct online ad campaigns. Finally, we launched Device Essentials, which offers
granular measurement of mobile usage by type of mobile platform and device. We believe these new
products enhance our competitive lead in the areas of social media, advertising effectiveness,
mobile and cross media measurement, and will add to our future growth opportunities.”
“In addition, we announced today a definitive agreement to acquire AdXpose, subject to customary
closing conditions. AdXpose is a provider of powerful technology for comprehensive online campaign
verification, fraud detection, and real time enforcement of brand safety rules, which prevent a
brand ad from appearing on a page with content objectionable to the advertiser. We believe the
combination of AdXpose with our ad
1
effectiveness suite including Campaign Essentials, will create the opportunity for comScore to
introduce to the industry a true digital currency in which advertisers pay for validated digital ad
impressions, not just delivered impressions which form the basis for current online Gross Rating
Point (GRP) metrics. We believe these GRP metrics , while useful in traditional media, are ill
suited for measuring online media and can be misleading to advertisers. We also believe the
increased transparency, accountability and real time optimization that we expect to be able to
provide with this integrated suite will help the digital media industry deliver what advertisers
are demanding to increase their usage of online media.”
Second Quarter 2011 Financial and Business Summary
(Dollars in millions, except per share data)
| 2Q11 | 2Q10 | Change | ||||||||||
Revenue |
$ | 58.1 | $ | 42.0 | 38.3 | % | ||||||
GAAP (Loss)
Income Before Income Taxes |
$ | (6.2 | ) | $ | 1.8 | NM | ||||||
GAAP Net (Loss) Income |
$ | (8.2 | ) | $ | 0.8 | NM | ||||||
GAAP EPS |
$ | (0.26 | ) | $ | 0.03 | NM | ||||||
Adjusted EBITDA* |
$ | 11.1 | $ | 9.0 | 23.3 | % | ||||||
Adjusted EBITDA Margin* |
19.1 | % | 21.4 | % | -10.7 | % | ||||||
Non-GAAP Net Income* |
$ | 5.4 | $ | 6.4 | -15.6 | % | ||||||
Non-GAAP EPS* |
$ | 0.17 | $ | 0.20 | -15.0 | % | ||||||
Operating Cash Flow |
$ | 4.6 | $ | 5.9 | -22.0 | % | ||||||
Free Cash Flow* |
$ | 1.9 | $ | 5.0 | -62.0 | % | ||||||
Deferred Revenue |
$ | 73.1 | $ | 51.7 | 41.4 | % | ||||||
Subscription Revenue |
$ | 49.5 | $ | 36.5 | 35.6 | % | ||||||
Project Revenue |
$ | 8.6 | $ | 5.5 | 56.4 | % | ||||||
Existing Customer Revenue |
$ | 49.1 | $ | 38.1 | 28.9 | % | ||||||
New Customer Revenue |
$ | 9.0 | $ | 3.9 | 130.8 | % | ||||||
International Revenue |
$ | 14.7 | $ | 6.5 | 126.2 | % | ||||||
Customer Count |
1,860 | 1,421 | 30.9 | % | ||||||||
| * | A complete reconciliation of GAAP to non-GAAP historical results is set forth in the attachment to this press release. |
Financial Outlook
Dr. Abraham concluded, “We remain very positive about our outlook and competitive position. We
have a number of new product lines in web and mobile analytics still in the early stages of
adoption We believe our recently announced offerings such as Social Essentials and the Campaign
Verification services incorporating the AdXpose technology will have a positive impact on our
future results. These products uniquely address essential industry needs, and are poised to
accelerate our growth in due time. However, we are slightly revising our 2011 expectations to
account for the cost of the AdXpose integration, the reduced activity of a handful of customers in
the TV copy testing area, and exogenous industry circumstances that have stretched the sales cycles
for several larger customer transactions. While we have not directly discerned a macro-economic
impact on our business year to date, our revisions also reflect caution about recent data
highlighting increased concerns as to macroeconomic weakness which may negatively impact project
2
revenue. Though we expect these dynamics to moderate our previously announced revenue growth
expectations for 2011, we believe our market position and our subscription revenue trends remain
strong. We believe we have assembled a powerful product portfolio that will allow us to capitalize
on important industry trends, which is expected to help our growth prospects in 2012 and beyond.”
comScore’s expectations for the third quarter of 2011 are outlined in the table below:
GAAP Revenue
|
$58.2 million to $58.8 million | |
GAAP (loss) before income taxes
|
($8.3) million to ($8.9) million | |
Adjusted EBITDA*
|
$8.8 million to $9.4 million | |
Estimated fully-diluted shares
|
33.6 million |
comScore’s expectations for full year 2011 are outlined in the table below:
GAAP Revenue
|
$231.1 million to $234.7 million | |
GAAP (loss) before income taxes
|
($18.3) million to ($20.1) million | |
Adjusted EBITDA*
|
$43.6 million to $45.4 million | |
Estimated fully-diluted shares
|
33.6 million |
| * | Reconciliations of GAAP to non-GAAP measures are set forth in the attachment to this press release. |
Due to the high variability and difficulty in predicting certain items that affect GAAP net income,
such as tax rates and stock price, comScore is unable to provide a complete reconciliation of
Adjusted EBITDA to net income (loss) on a forward-looking basis without unreasonable efforts.
However, a reconciliation of forward-looking Adjusted EBITDA to GAAP income (loss) before income
taxes is set forth in the attachment to this press release.
Conference Call Information:
Management will provide commentary on the company’s results in a conference call on Wednesday,
August 3, 2011 at 5:00 pm ET.
The conference call and replay can be accessed by telephone and webcast as follows:
Call-in Number: 888-680-0892, Pass code 78199128
(International) 617-213-4858, Pass code 78199128
(International) 617-213-4858, Pass code 78199128
Replay Number: 888-286-8010, Pass code 89909802
(International) 617-801-6888, Pass code 89909802
(International) 617-801-6888, Pass code 89909802
3
Webcast (live and replay): http://ir.comscore.com/events.cfm
About comScore
comScore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world and preferred
source of digital business analytics. For more information, please visit
http://www.comscore.com/companyinfo.
Non-GAAP Financial Measures
comScore reports all financial information required in accordance with generally accepted
accounting principles (GAAP). comScore believes, however, that evaluating its ongoing operating
results will be enhanced if it also discloses certain non-GAAP information because it is useful to
understand comScore’s performance, as it excludes non-cash and other charges that many investors
believe may obscure comScore’s on-going operating results.
For example, comScore uses non-GAAP revenue and non-GAAP net income, which excludes stock-based
compensation, amortization of acquired intangible assets, impairment of marketable securities,
costs from acquisitions and restructurings, the non-cash deferred tax provision, litigation costs and gains
and the purchase accounting impact on acquired deferred revenue. Nexius and Nedstat recorded
deferred revenue related to past transactions for which revenue would have been recognized in
future periods as revenue recognition criteria were satisfied. Purchase accounting for the
acquisition requires comScore to record acquired deferred revenue to its current fair value. As a
result, in post-acquisition reporting periods, the Company does not recognize the full amount of
this revenue that otherwise would have been recognized by Nexius and Nedstat as independent
companies. comScore has and will adjust for the effect of the deferred revenue adjustment in
non-GAAP revenue and non-GAAP net income to reflect the full amount of this impact and help
investors evaluate the intrinsic profitability of the business under steady state revenue
accounting. comScore also reports non-GAAP EPS (diluted), which uses non-GAAP net income in lieu of
GAAP net income in calculating earnings per share.
In addition, comScore believes that adjusted EBITDA is a useful measure for investors to use to
evaluate its operating performance. Adjusted EBITDA comprises non-GAAP net income further adjusted
to exclude the cash tax provision, depreciation, interest income (expense), net and costs and
benefits not associated with ongoing operations, such as acquisition and litigation related costs
and gains. A reconciliation of comScore’s GAAP results to these non-GAAP measures is included in
the financial tables accompanying this release.
The company believes that adjusted EBITDA is an important indicator of the company’s operational
strength and the performance of its business because it provides a link between profitability and
operating cash flow. Adjusted EBITDA is also widely used by investors and analysts as a
supplemental measure to evaluate the overall operating performance of companies in comScore’s
industry. comScore’s management also uses adjusted EBITDA extensively as a measure of operating
performance because it does not include the impact of items not directly resulting from its core
operations. Moreover, the company’s management uses the
4
measure for planning purposes, to allocate resources and to evaluate the effectiveness of the company’s business strategies and management’s
performance.
The company believes that excluding certain costs from non-GAAP net income and EPS and from
adjusted EBITDA provides a meaningful indication to investors of the expected on-going operating
performance of the company. Specifically as it relates to acquisitions and restructurings, the
exclusion of these costs reflects the expected benefits realized or to be realized upon the
integration of acquired entities into comScore, and the realized benefits of the restructurings.
comScore’s management also uses free cash flow as a non-GAAP measure of the company’s operating
cash flow less cash expenditures for capital spending and acquisition-related costs as a key
indicator of the company’s operating cash flow performance net of these expenditures.
Whenever comScore uses such historical non-GAAP financial measures, it provides a reconciliation of
historical non-GAAP financial measures to the most closely applicable GAAP financial measure.
Investors are encouraged to review the related GAAP financial measures and the reconciliation of
these historical non-GAAP financial measures to their most directly comparable GAAP financial
measure included in the financial tables accompanying this release. Although the company provides
a reconciliation of historical non-GAAP financial measures, due to the high variability and difficulty in predicting certain items that
affect net income, such as tax rates and stock price, comScore is unable to provide a complete
reconciliation of adjusted EBITDA to net income on a forward-looking basis without unreasonable
efforts. However, a reconciliation of forward-looking adjusted EBITDA to GAAP income (loss) before
income taxes is set forth in the attachment to this press release.
These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from
GAAP measures with the same captions and may differ from non-GAAP financial measures with the same
or similar captions that are used by other companies. The use of certain non-GAAP financial
measures requires management to make estimates and assumptions regarding amounts of assets and
liabilities and the amounts of revenue and expense during the reporting periods. Significant
estimates and assumptions are inherent in the analysis and the measurement of certain elements of
non-GAAP financial measures such as the impact of purchase accounting on acquired deferred revenue
and the amortization of deferred contract costs associated with acquired deferred revenue.
comScore bases its estimates on historical experience and assumptions that it believes are
reasonable. Actual results could differ from those estimates.
Cautionary Statement
This press release contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without
limitation, comScore’s expectations regarding the continued growth of its customer base;
expectations regarding continued financial growth; expectations as to customer renewal rates;;
expectations regarding the customer reception, impact and financial benefits of certain products,
including Media Metrix 360, Digital Analytix, Nexius Xplore products, Device Essentials, Campaign
Verification Services and Social Essentials ; expectations regarding the integration and
development of new products; expectations regarding
5
acquisitions, including our pending acquisition of AdXpose, and the resulting impacts,
opportunities and benefits to comScore; expectations about the closing of our acquisition of
AdXpose; expectations regarding investment in long-term growth and performance; expectations and
forecasts of future financial performance, including related growth rates and components thereof;
and assumptions related to the market and economic environment and assumptions related to growth
for the third quarter and the full year 2011. These statements involve risks and uncertainties that
could cause our actual results to differ materially, including, but not limited to: comScore’s
ability to generate strong revenue and margin growth in future periods; comScore’s ability to
retain existing large customers and obtain new large customers; risks related to the domestic and
global economies and the effects they may have on comScore, its industry or its customers;
comScore’s ability to manage its growth, including through acquisitions; the unanticipated costs of
asserting and defending comScore’s intellectual property rights; comScore’s ability to sell new or
additional products and attract new customers; comScore’s ability to sell additional
subscription-based products to customers; comScore’s ability to sell additional products and
services to existing customers; limitations over comScore’s control of certain variables in
financial forecasts such as its stock price and the resulting effect on its tax rates; and the
volatility of quarterly results and expectations.
For a detailed discussion of these and other risk factors, please refer to comScore’s Annual Report
on Form 10-K for the period ended December 31, 2010 and Quarterly Report on Form 10-Q for the
period ended March 31, 2011 and from time to time other filings with the Securities and Exchange
Commission (the “SEC”), which are available on the SEC’s Web site (http://www.sec.gov).
Stockholders of comScore are cautioned not to place undue reliance on our forward-looking
statements, which speak only as of the date such statements are made. comScore does not undertake
any obligation to publicly update any forward-looking statements to reflect events, circumstances
or new information after the date of this press release, or to reflect the occurrence of
unanticipated events.
Contact:
Kenneth Tarpey
Chief Financial Officer
comScore, Inc.
(703) 438-2305
ktarpey@comscore.com
Kenneth Tarpey
Chief Financial Officer
comScore, Inc.
(703) 438-2305
ktarpey@comscore.com
6
comScore, Inc.
Condensed Consolidated Statements of Operations
(dollars in thousands, except share and per share data)
Condensed Consolidated Statements of Operations
(dollars in thousands, except share and per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
Revenues |
$ | 58,095 | $ | 41,962 | $ | 111,046 | $ | 78,101 | ||||||||
Cost of revenues (excludes amortization of intangible assets resulting |
||||||||||||||||
from acquisitions shown below) (1) |
19,302 | 12,374 | 36,440 | 22,733 | ||||||||||||
Selling and marketing (1) |
19,717 | 12,892 | 37,886 | 25,610 | ||||||||||||
Research and development (1) |
8,833 | 6,088 | 16,732 | 11,135 | ||||||||||||
General and administrative (1) |
13,977 | 8,167 | 24,295 | 14,373 | ||||||||||||
Amortization of intangible assets resulting from acquisitions |
2,434 | 658 | 4,428 | 1,165 | ||||||||||||
Total expenses from operations |
64,263 | 40,179 | 119,781 | 75,016 | ||||||||||||
(Loss) income from operations |
(6,168 | ) | 1,783 | (8,735 | ) | 3,085 | ||||||||||
Interest and other (expense) income, net |
(124 | ) | 40 | (213 | ) | 154 | ||||||||||
Gain (loss) from foreign currency |
102 | (12 | ) | 252 | (129 | ) | ||||||||||
(Loss) income before income taxes |
(6,190 | ) | 1,811 | (8,696 | ) | 3,110 | ||||||||||
Income tax benefit (provision) |
(2,039 | ) | (986 | ) | 133 | (2,056 | ) | |||||||||
Net (loss) income |
$ | (8,229 | ) | $ | 825 | $ | (8,563 | ) | $ | 1,054 | ||||||
Net (loss) income available to common stockholders per common share: |
||||||||||||||||
Basic |
$ | (0.26 | ) | $ | 0.03 | $ | (0.27 | ) | $ | 0.03 | ||||||
Diluted |
$ | (0.26 | ) | $ | 0.03 | $ | (0.27 | ) | $ | 0.03 | ||||||
Weighted -average number of shares used in per share calculation -
common stock |
||||||||||||||||
Basic |
31,832,105 | 30,965,800 | 31,744,988 | 30,817,853 | ||||||||||||
Diluted |
31,832,105 | 31,736,718 | 31,744,988 | 31,625,650 | ||||||||||||
(1) Amortization of stock-based compensation is included in
the line items
above as follows: |
||||||||||||||||
Cost of revenues |
$ | 605 | $ | 246 | $ | 1,068 | $ | 476 | ||||||||
Selling and marketing |
2,066 | 1,037 | 4,019 | 2,256 | ||||||||||||
Research and development |
627 | 315 | 1,058 | 579 | ||||||||||||
General and administrative |
2,208 | 1,889 | 4,886 | 2,850 | ||||||||||||
Note: Results for the second quarter of 2011 include approximately $1.2 million of revenue and
$0.6 million of expense recognized in accordance with the establishment of vendor-specific
objective evidence criteria for certain sales from our Nexius line of products.
7
comScore, Inc.
Condensed Consolidated Balance Sheets
(dollars in thousands)
Condensed Consolidated Balance Sheets
(dollars in thousands)
| June 30, | December 31, | |||||||
| 2011 | 2010 | |||||||
| (unaudited) | * | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 39,945 | $ | 33,736 | ||||
Short-term investments |
2,591 | — | ||||||
Accounts receivable, net of allowances of $875 and $725, respectively |
53,330 | 54,269 | ||||||
Prepaid expenses and other current assets |
8,566 | 8,391 | ||||||
Deferred tax assets |
6,151 | 6,701 | ||||||
Total current assets |
110,583 | 103,097 | ||||||
Long-term investments |
— | 2,819 | ||||||
Property and equipment, net |
29,746 | 28,637 | ||||||
Other non-current assets |
1,486 | 733 | ||||||
Long-term deferred tax assets |
12,709 | 11,316 | ||||||
Intangible assets, net |
47,873 | 50,260 | ||||||
Goodwill |
88,910 | 86,217 | ||||||
Total assets |
$ | 291,307 | $ | 283,079 | ||||
Liabilities and stockholders’ equity |
||||||||
Current Liabilities: |
||||||||
Accounts payable |
$ | 9,703 | $ | 5,588 | ||||
Accrued expenses |
19,175 | 15,297 | ||||||
Deferred revenues |
71,797 | 70,611 | ||||||
Deferred rent |
924 | 941 | ||||||
Deferred tax liability |
— | 132 | ||||||
Capital lease obligations |
5,423 | 4,659 | ||||||
Total current liabilities |
107,022 | 97,228 | ||||||
Deferred rent, long-term |
8,083 | 8,019 | ||||||
Deferred revenue, long-term |
1,292 | 843 | ||||||
Deferred tax liability, long-term |
— | 744 | ||||||
Capital lease obligations, long-term |
7,669 | 7,959 | ||||||
Other long-term liabilities |
2,178 | 2,454 | ||||||
Total liabilities |
126,244 | 117,247 | ||||||
Stockholders’ equity: |
||||||||
Common stock |
32 | 32 | ||||||
Additional paid-in capital |
221,679 | 216,895 | ||||||
Accumulated other comprehensive income |
5,176 | 2,166 | ||||||
Accumulated deficit |
(61,824 | ) | (53,261 | ) | ||||
Total stockholders’ equity |
165,063 | 165,832 | ||||||
Total liabilities and stockholders’ equity |
$ | 291,307 | $ | 283,079 | ||||
| * | Information derived from the audited Consolidated Financial Statements |
8
comScore, Inc.
Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2011 | 2010 | |||||||
| (unaudited) | ||||||||
Operating
Activities: |
||||||||
Net (loss) income |
$ | (8,563 | ) | $ | 1,054 | |||
Adjustments to reconcile net (loss) income to net cash
provided by operating activities: |
||||||||
Depreciation |
6,391 | 3,486 | ||||||
Amortization of intangible assets resulting from acquisitions |
4,428 | 1,166 | ||||||
Provisions for bad debts |
69 | 17 | ||||||
Stock-based compensation |
11,031 | 6,165 | ||||||
Amortization of deferred rent |
(482 | ) | (440 | ) | ||||
Amortization of bond premium |
— | 173 | ||||||
Deferred tax (benefit) provision |
(1,484 | ) | 1,072 | |||||
Loss on asset disposal |
8 | 1 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
1,417 | 1,623 | ||||||
Prepaid expenses and other current assets |
(736 | ) | 47 | |||||
Accounts payable, accrued expenses, and other liabilities |
7,218 | 2,233 | ||||||
Deferred revenues |
(125 | ) | 3,688 | |||||
Deferred rent |
520 | 407 | ||||||
Net cash provided by operating activities |
19,692 | 20,692 | ||||||
Investing activities: |
||||||||
Acquisitions, net of cash acquired |
(834 | ) | (16,788 | ) | ||||
Sales and maturities of investments |
— | 25,324 | ||||||
Purchase of property and equipment |
(4,222 | ) | (2,624 | ) | ||||
Net cash (used in) provided used in investing activities |
(5,056 | ) | 5,912 | |||||
Financing activities: |
||||||||
Proceeds from the exercise of common stock options |
271 | 789 | ||||||
Repurchase of common stock |
(6,081 | ) | (3,608 | ) | ||||
Principal payments on capital lease obligations |
(2,653 | ) | (420 | ) | ||||
Debt issuance costs |
(69 | ) | ||||||
Net cash used in financing activities |
(8,532 | ) | (3,239 | ) | ||||
Effect of exchange rate changes on cash |
105 | (322 | ) | |||||
Net (decrease) increase in cash and cash equivalents |
6,209 | 23,043 | ||||||
Cash and cash equivalents at beginning of period |
33,736 | 58,284 | ||||||
Cash and cash equivalents at end of period |
$ | 39,945 | $ | 81,327 | ||||
9
Reconciliation of GAAP revenue to non-GAAP Revenue
(dollars in thousands)
(dollars in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
Revenue |
$ | 58,095 | $ | 41,962 | $ | 111,046 | $ | 78,101 | ||||||||
Purchase accounting impact on acquired deferred revenue |
300 | — | 1,600 | — | ||||||||||||
Non-GAAP Revenue |
$ | 58,395 | $ | 41,962 | $ | 112,646 | $ | 78,101 | ||||||||
Reconciliation from Income before income taxes to Non-GAAP Net Income and Adjusted EBITDA
(dollars in thousands, except per share amounts)
(dollars in thousands, except per share amounts)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
(Loss) income before income taxes |
$ | (6,190 | ) | $ | 1,811 | $ | (8,696 | ) | $ | 3,110 | ||||||
Deferred tax benefit (provision) |
295 | (261 | ) | 1,484 | (1,072 | ) | ||||||||||
Current cash tax benefit (provision) |
(2,334 | ) | (725 | ) | (1,351 | ) | (984 | ) | ||||||||
Net(loss) income |
(8,229 | ) | 825 | (8,563 | ) | 1,054 | ||||||||||
Purchase accounting impact on acquired deferred revenue |
300 | — | 1,600 | — | ||||||||||||
Amortization of acquired intangibles |
2,434 | 658 | 4,428 | 1,165 | ||||||||||||
Stock-based compensation |
5,506 | 3,487 | 11,031 | 6,161 | ||||||||||||
Costs related to acquisitions and restructuring |
426 | 1,176 | 563 | 1,975 | ||||||||||||
Costs related to litigation |
5,218 | — | 5,443 | — | ||||||||||||
Deferred tax (benefit) provision |
(285 | ) | 261 | (1,474 | ) | 1,072 | ||||||||||
Non-GAAP net income |
5,360 | 6,407 | 13,018 | 11,427 | ||||||||||||
Current cash tax (benefit) provision |
2,334 | 725 | 1,351 | 984 | ||||||||||||
Depreciation |
3,290 | 1,867 | 6,391 | 3,486 | ||||||||||||
Interest Exp (income), net |
125 | (27 | ) | 230 | (110 | ) | ||||||||||
Adjusted EBITDA |
11,109 | 8,972 | 20,990 | 15,787 | ||||||||||||
Adjusted EBITDA margin (%) |
19 | % | 21 | % | 19 | % | 20 | % | ||||||||
EPS (diluted) |
$ | (0.26 | ) | $ | 0.03 | $ | (0.27 | ) | $ | 0.03 | ||||||
Non-GAAP EPS (diluted) |
$ | 0.17 | $ | 0.20 | $ | 0.40 | $ | 0.36 | ||||||||
Weighted -average number of shares used in per share
calculation -common stock |
||||||||||||||||
GAAP EPS (diluted) |
31,832,105 | 31,736,718 | 31,744,988 | 31,625,650 | ||||||||||||
Non-GAAP EPS (diluted) |
32,537,182 | 31,736,718 | 32,421,332 | 32,477,746 | ||||||||||||
10
Reconciliation from GAAP Operating Cash Flow to Free Cash Flow
(dollars in thousands)
(dollars in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
Net cash provided by operating activities |
$ | 4,571 | $ | 5,937 | $ | 19,692 | $ | 20,692 | ||||||||
Purchase of property and equipment |
(2,644 | ) | (935 | ) | (4,222 | ) | (2,624 | ) | ||||||||
Free cash flow |
$ | 1,927 | $ | 5,002 | $ | 15,470 | $ | 18,068 | ||||||||
Reconciliation of GAAP revenue to non-GAAP revenue and reconciliation from Income before income taxes to
Adjusted EBITDA (Guidance)
(dollars in thousands)
Forecasted amounts for the three and twelve months ended September 30, and December 31, 2011 are based on
the mid-points of the range of guidance provided herein
The three and twelve months ended September 30, and December 31, 2010 reflect reported results
Adjusted EBITDA (Guidance)
(dollars in thousands)
Forecasted amounts for the three and twelve months ended September 30, and December 31, 2011 are based on
the mid-points of the range of guidance provided herein
The three and twelve months ended September 30, and December 31, 2010 reflect reported results
| Three Months Ended | Full Year | |||||||||||||||
| September 30, | December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
Revenue |
$ | 58,500 | $ | 45,703 | $ | 232,500 | $ | 174,999 | ||||||||
Purchase accounting impact on acquired deferred revenue |
— | 1,788 | 1,600 | 3,888 | ||||||||||||
Non-GAAP Revenue |
58,500 | 47,491 | 234,100 | 178,887 | ||||||||||||
(Loss) income before income taxes |
$ | (8,550 | ) | $ | (3,317 | ) | $ | (19,150 | ) | $ | (1,753 | ) | ||||
Purchase accounting impact on acquired deferred revenue |
— | 1,788 | 1,600 | 3,888 | ||||||||||||
Amortization of acquired intangibles |
2,900 | 1,380 | 10,800 | 4,534 | ||||||||||||
Stock-based compensation |
6,000 | 5,754 | 23,200 | 17,774 | ||||||||||||
Costs related to acquisitions and restructuring |
1,200 | 2,467 | 2,100 | 5,421 | ||||||||||||
Costs related to litigation |
4,100 | — | 12,000 | — | ||||||||||||
Gain on sale of investments |
(200 | ) | (200 | ) | — | |||||||||||
Depreciation |
3,500 | 2,289 | 13,600 | 8,422 | ||||||||||||
Interest (income) expense, net |
150 | 36 | 550 | (7 | ) | |||||||||||
Adjusted EBITDA |
$ | 9,100 | $ | 10,397 | $ | 44,500 | $ | 38,279 | ||||||||
Adjusted EBITDA margin (%) |
16 | % | 23 | % | 19 | % | 22 | % | ||||||||
11