UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 9, 2020
(Exact name of registrant as specified in charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of principal executive offices, including zip code)
(703 ) 438–2000
(Registrant’s telephone number, including area code)
N/A
(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:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
1
Item 2.02 Results of Operations and Financial Condition.
On November 9, 2020, comScore, Inc. (the "Company") issued a press release announcing its financial results for the period ended September 30, 2020. A copy of the press release announcing the foregoing is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
The information in this Item 2.02, 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 (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 (the "Securities Act") or the Exchange Act, regardless of any general incorporation language in such filing.
Item 8.01 Other Events
On November 9, 2020, the Company issued a press release providing an update on its strategic alternatives review process. A copy of the press release is attached as Exhibit 99.2 hereto and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
| 104 | Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document | |||||||
2
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/ Gregory A. Fink | |||||||
Gregory A. Fink | ||||||||
| Chief Financial Officer and Treasurer | ||||||||
Date: November 9, 2020
3
Exhibit 99.1
FOR IMMEDIATE RELEASE
Comscore Reports Third Quarter 2020 Results
Television Revenue Rebounds During Pandemic
Continued Momentum with TV, Digital and Agency Clients
RESTON, Va., November 9, 2020 - Comscore, Inc. (Nasdaq: SCOR), a trusted partner for planning, transacting, and evaluating media across platforms, today reported financial results for the quarter ended September 30, 2020.
Third Quarter 2020 Financial Highlights
•Revenue of $88.0 million compared to $94.3 million in the third quarter of 2019
•Net loss of $11.1 million, or $(0.16) per share compared to a net loss of $10.6 million, or $(0.16) per share in the third quarter of 2019
•Adjusted EBITDA of $7.3 million compared to $6.4 million in the third quarter of 2019
Recent Key Renewals, Partnerships and New Business Developments
•Awarded three new patents: device co-location identification, household device identification, household viewership aggregation
•Local TV – Graham Media Group, Morgan Murphy and Weigel Broadcasting
•National TV – Secured renewal of ESPN’s SEC Network and expanded to include the ACC Network
•Syndicated Digital – News Break, Nextdoor, The Orchard, Truex, and World Surf League
•Activation – Launched advanced streaming behavior segments in Tru Optik Data Marketplace
•Agency – Canvas Worldwide and exclusive agreement with Pinnacle (a major agency representing WeatherTech and others)
•OnDemand – STX Entertainment and Open Road Films
•Connected TV – Partnered with Samba to expand TV footprint and deliver international CTV measurement – signed first major client in EU
•Movies – Secured renewals with over a dozen customers and launched next-generation movie theater management system, signed by Marcus Theatres, fourth largest U.S. theater operator with over 1,100 screens
•Gaming – Twitch expansion for eSports and Gaming
“I am pleased with the progress Comscore made during the third quarter, despite market conditions that remained challenging. Our TV product grew revenue high single digit percentage year-over-year in the quarter, Addressable continued to expand, and we continued to generate higher levels of adjusted EBITDA compared to the prior year,” said Bill Livek, CEO and Executive Vice Chairman of Comscore. “Thus far in 2020, we have recognized more than a $22 million positive swing in adjusted EBITDA due to financial discipline, and we remain well-positioned when the impact of the pandemic eases.”
“As we look to 2021, Comscore is poised to win the future of media measurement with a host of new products centered around a new impressions-based currency with enhanced advertising capabilities. These and other solutions position Comscore to drive long-term value for our media industry partners and shareholders,” Livek concluded.
Third Quarter Summary Results
Revenue in the third quarter of 2020 was $88.0 million, compared to $94.3 million in the year-ago quarter. Ratings and Planning revenue was $62.7 million in the third quarter of 2020, compared to $65.3 million in the year-ago quarter. The decrease was driven by lower revenue from syndicated digital partially offset by higher TV revenue. National TV revenue rose compared to the third quarter of last year due in part to the Company's new partnership with LiveRamp. Local TV revenue was flat compared to the prior year; however, Local TV added and renewed a number of clients in the quarter.
Analytics and Optimization revenue was $17.4 million in the third quarter of 2020 compared to $18.3 million in the year-ago quarter. The decrease was due in part to lower Custom, Lift and Survey revenue compared to the prior year, partially offset by higher Activation revenue which also rebounded sequentially from the second quarter of 2020 when it was impacted by lower ad spending from the pandemic.
Movies Reporting and Analytics revenue was $7.8 million in the third quarter of 2020 compared to $10.7 million in the year-ago quarter. Revenue continues to be impacted by ongoing theater closures. We expect theater closures to continue affecting Movies revenue until theaters reopen at scale.
Expenses from cost of revenues, sales and marketing, research and development and general and administrative were $85.2 million compared to $95.9 million in the year-ago quarter. The decrease relates to a significant reduction in compensation expense due to lower headcount, as well as lower facility costs, professional fees and other general operating expenses. A portion of this reduction relates to temporary actions the Company implemented to reduce costs given the current economic uncertainty.
Net loss for the third quarter of 2020 was $11.1 million, or $(0.16) per share, compared to a net loss of $10.6 million, or $(0.16) per share reported in the year-ago quarter.
For the third quarter of 2020, non-GAAP adjusted EBITDA was $7.3 million, compared to adjusted EBITDA of $6.4 million in the year-ago quarter. Adjusted EBITDA excludes stock-based compensation expense; impairment charges; investigation, litigation and legacy audit-related expense; restructuring expense; change in fair value of financing derivatives, warrants liability and equity securities investment; and other items as presented in the accompanying tables.
Balance Sheet and Liquidity
As of September 30, 2020, cash, cash equivalents and restricted cash totaled $51.8 million, including $19.6 million in restricted cash. Total debt principal as of September 30, 2020, including $204.0 million of senior secured convertible notes, was $223.2 million.
Conference Call Information for today, Monday, November 9th at 5:00 p.m. ET
Management will provide commentary on the Company's results in a conference call today at 5:00 p.m. ET. To access the call, dial +1 844-229-7593 (domestic) or +1 314-888-4258 (international) and reference conference ID # 1886568. Participants are advised to dial in at least 10 minutes prior to the call to register. Additionally, a live webcast of the conference call will be available on the Investor Relations section of the Company's website at ir.comscore.com/events-presentations. Following the conference call, a replay will be available by dialing +1 855-859-2056 (domestic) or +1 404-537-3406 (international) with passcode # 1886568. The replay will also be available via webcast at ir.comscore.com/events-presentations.
About Comscore
Comscore is a trusted partner for planning, transacting and evaluating media across platforms. With a data footprint that combines digital, linear TV, over-the-top and theatrical viewership intelligence with advanced audience insights, Comscore allows media buyers and sellers to quantify their multiscreen behavior and make business decisions with confidence. A proven leader in measuring digital and TV audiences and advertising at scale, Comscore is the industry's emerging, third-party source for reliable and comprehensive cross-platform measurement.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal and state securities laws, including, without limitation, Comscore's expectations, forecasts, plans and opinions regarding continued momentum with TV, digital and agency clients; the impact of the Covid-19 pandemic on the Company's business, customers and the broader media industry; the impact of movie theater closures; new and enhanced products; adjusted EBITDA achievement; creation of long-term shareholder and partner value; cost reductions; and growth opportunities, market positioning and strategy. These statements involve risks and uncertainties that could cause actual events to differ materially from expectations, including, but not limited to, the scope and duration of the Covid-19 pandemic and related government mandates, changes in consumer behavior, customer payment collections, contract execution and renewals, external market conditions, and Comscore's ability to achieve its expected strategic, financial and operational plans. For additional discussion of risk factors, please refer to Comscore's respective Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q, and other filings that Comscore makes from time to time with the U.S. Securities and Exchange Commission (the "SEC"), which are available on the SEC's website (www.sec.gov).
Investors 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 intend or undertake, and expressly disclaims, any duty or 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.
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our financial results, we are disclosing herein non-GAAP net income (loss) and adjusted EBITDA, which are non-GAAP financial measures used by our management to understand and evaluate our core operating performance and trends. We believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results, as they permit our investors to view our core business performance using the same metrics that management uses to evaluate our performance. Nevertheless, our use of these non-GAAP financial measures has limitations as an analytical tool, and investors should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP. Instead, you should consider these measures alongside GAAP-based financial performance measures, net income (loss), various cash flow metrics, and our other GAAP financial results. Set forth below are reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures. These reconciliations should be carefully evaluated.
Press
Neil Ripley
Comscore, Inc.
646-746-0579
press@comscore.com
Investors
Christopher Ferris
Comscore, Inc.
212-277-6547
cferris@comscore.com
COMSCORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
| As of | As of | ||||||||||
| September 30, 2020 | December 31, 2019 | ||||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 32,221 | $ | 46,590 | |||||||
| Restricted cash | 19,613 | 20,183 | |||||||||
| Accounts receivable, net of allowances of $2,763 and $1,919, respectively | 59,808 | 71,853 | |||||||||
| Prepaid expenses and other current assets | 16,217 | 15,357 | |||||||||
| Total current assets | 127,859 | 153,983 | |||||||||
| Property and equipment, net | 31,269 | 31,693 | |||||||||
| Operating right-of-use assets | 30,216 | 36,689 | |||||||||
| Other non-current assets | 4,641 | 2,979 | |||||||||
| Deferred tax assets | 2,131 | 2,374 | |||||||||
| Intangible assets, net | 59,041 | 79,559 | |||||||||
| Goodwill | 417,065 | 416,418 | |||||||||
| Total assets | $ | 672,222 | $ | 723,695 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 42,130 | $ | 44,804 | |||||||
| Accrued expenses | 47,593 | 55,507 | |||||||||
| Contract liabilities | 50,040 | 58,158 | |||||||||
| Customer advances | 8,483 | 9,886 | |||||||||
| Warrants liability | 1,960 | 7,725 | |||||||||
| Current operating lease liabilities | 6,886 | 6,764 | |||||||||
| Other current liabilities | 5,549 | 7,393 | |||||||||
| Total current liabilities | 162,641 | 190,237 | |||||||||
| Secured term note | 12,565 | 12,463 | |||||||||
| Financing derivatives | 14,700 | 21,587 | |||||||||
| Senior secured convertible notes | 190,533 | 184,075 | |||||||||
| Non-current operating lease liabilities | 37,868 | 42,497 | |||||||||
| Non-current contract liabilities | 4,026 | 291 | |||||||||
| Deferred tax liabilities | 501 | 287 | |||||||||
| Other non-current liabilities | 15,434 | 13,284 | |||||||||
| Total liabilities | 438,268 | 464,721 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders' equity: | |||||||||||
| Preferred stock, $0.001 par value per share; 5,000,000 shares authorized at September 30, 2020 and December 31, 2019; no shares issued or outstanding as of September 30, 2020 and December 31, 2019 | — | — | |||||||||
| Common stock, $0.001 par value per share; 150,000,000 shares authorized as of September 30, 2020 and December 31, 2019; 78,077,140 shares issued and 71,312,344 shares outstanding as of September 30, 2020, and 76,829,926 shares issued and 70,065,130 shares outstanding as of December 31, 2019 | 71 | 70 | |||||||||
| Additional paid-in capital | 1,617,602 | 1,609,358 | |||||||||
| Accumulated other comprehensive loss | (10,892) | (12,333) | |||||||||
| Accumulated deficit | (1,142,843) | (1,108,137) | |||||||||
| Treasury stock, at cost, 6,764,796 shares as of September 30, 2020 and December 31, 2019 | (229,984) | (229,984) | |||||||||
| Total stockholders' equity | 233,954 | 258,974 | |||||||||
| Total liabilities and stockholders' equity | $ | 672,222 | $ | 723,695 | |||||||
COMSCORE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(In thousands, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
| Revenues | $ | 87,952 | $ | 94,300 | $ | 266,046 | $ | 293,482 | ||||||||||||||||||
Cost of revenues (1) (2) | 46,466 | 47,390 | 137,213 | 152,791 | ||||||||||||||||||||||
Selling and marketing (1) (2) | 17,131 | 20,421 | 52,351 | 68,590 | ||||||||||||||||||||||
Research and development (1) (2) | 9,501 | 14,064 | 29,402 | 49,163 | ||||||||||||||||||||||
General and administrative (1) (2) | 12,136 | 14,064 | 41,420 | 50,541 | ||||||||||||||||||||||
| Amortization of intangible assets | 6,750 | 6,970 | 20,514 | 23,151 | ||||||||||||||||||||||
Restructuring (1) | — | 2,270 | — | 5,149 | ||||||||||||||||||||||
| Investigation and audit related | — | 980 | — | 4,176 | ||||||||||||||||||||||
| Settlement of litigation, net | — | (2,100) | — | 2,900 | ||||||||||||||||||||||
| Impairment of right-of-use and long-lived assets | — | — | 4,671 | — | ||||||||||||||||||||||
| Impairment of goodwill | — | — | — | 224,272 | ||||||||||||||||||||||
| Impairment of intangible asset | — | — | — | 17,308 | ||||||||||||||||||||||
| Total expenses from operations | 91,984 | 104,059 | 285,571 | 598,041 | ||||||||||||||||||||||
| Loss from operations | (4,032) | (9,759) | (19,525) | (304,559) | ||||||||||||||||||||||
| Interest expense, net | (9,027) | (8,175) | (26,729) | (23,176) | ||||||||||||||||||||||
| Other income, net | 4,191 | 6,733 | 12,862 | 6,621 | ||||||||||||||||||||||
| (Loss) gain from foreign currency transactions | (2,012) | 1,194 | (2,152) | 768 | ||||||||||||||||||||||
| Loss before income taxes | (10,880) | (10,007) | (35,544) | (320,346) | ||||||||||||||||||||||
| Income tax (provision) benefit | (241) | (552) | 838 | 2,740 | ||||||||||||||||||||||
| Net loss | $ | (11,121) | $ | (10,559) | $ | (34,706) | $ | (317,606) | ||||||||||||||||||
| Net loss per common share: | ||||||||||||||||||||||||||
| Basic and diluted | $ | (0.16) | $ | (0.16) | $ | (0.49) | $ | (5.16) | ||||||||||||||||||
| Weighted-average number of shares used in per share calculation - Common Stock: | ||||||||||||||||||||||||||
| Basic and diluted | 71,222,122 | 64,157,167 | 70,638,292 | 61,603,357 | ||||||||||||||||||||||
| Comprehensive loss: | ||||||||||||||||||||||||||
| Net loss | $ | (11,121) | $ | (10,559) | $ | (34,706) | $ | (317,606) | ||||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||||
| Foreign currency cumulative translation adjustment | 2,750 | (2,950) | 1,441 | (2,894) | ||||||||||||||||||||||
| Total comprehensive loss | $ | (8,371) | $ | (13,509) | $ | (33,265) | $ | (320,500) | ||||||||||||||||||
(1) Stock-based compensation expense is included in the line items above as follows: | ||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
| Cost of revenues | $ | 503 | $ | 396 | $ | 1,199 | $ | 1,880 | ||||||||||||||||||
| Selling and marketing | 625 | 756 | 1,954 | 3,159 | ||||||||||||||||||||||
| Research and development | 386 | 469 | 817 | 1,863 | ||||||||||||||||||||||
| General and administrative | 1,010 | 1,392 | 3,558 | 7,368 | ||||||||||||||||||||||
| Restructuring | — | 129 | — | (137) | ||||||||||||||||||||||
| Total stock-based compensation expense | $ | 2,524 | $ | 3,142 | $ | 7,528 | $ | 14,133 | ||||||||||||||||||
(2) Excludes amortization of intangible assets, which is presented as a separate line item. | ||||||||||||||||||||||||||
COMSCORE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
| Nine Months Ended September 30, | |||||||||||
| 2020 | 2019 | ||||||||||
| Operating activities: | |||||||||||
| Net loss | $ | (34,706) | $ | (317,606) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation | 10,317 | 9,447 | |||||||||
| Non-cash operating lease expense | 4,195 | 3,987 | |||||||||
| Amortization expense of finance leases | 1,209 | 1,974 | |||||||||
| Amortization of intangible assets | 20,514 | 23,151 | |||||||||
| Bad debt expense | 1,664 | 657 | |||||||||
| Impairment of goodwill | — | 224,272 | |||||||||
| Impairment of intangible asset | — | 17,308 | |||||||||
| Stock-based compensation | 7,528 | 14,133 | |||||||||
| Deferred tax provision (benefit) | 254 | (3,951) | |||||||||
| Change in fair value of financing derivatives | (6,887) | (2,900) | |||||||||
| Change in fair value of warrants liability | (5,765) | (4,893) | |||||||||
| Change in fair value of investment in equity securities | — | 2,324 | |||||||||
| Impairment of right-of-use and long-lived assets | 4,671 | — | |||||||||
| Non-cash interest expense on senior secured convertible notes | 3,060 | 17,374 | |||||||||
| Accretion of debt discount | 5,550 | 4,607 | |||||||||
| Amortization of deferred financing costs | 1,140 | 795 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | 10,675 | 14,951 | |||||||||
| Prepaid expenses and other assets | (2,918) | 2,115 | |||||||||
| Accounts payable, accrued expenses and other liabilities | (12,380) | 6,913 | |||||||||
| Contract liabilities and customer advances | (5,180) | (11,748) | |||||||||
| Operating lease liabilities | (4,784) | (6,034) | |||||||||
| Net cash used in operating activities | (1,843) | (3,124) | |||||||||
| Investing activities: | |||||||||||
Proceeds from sale of investment in equity securities | — | 3,776 | |||||||||
| Purchases of property and equipment | (200) | (2,810) | |||||||||
| Capitalized internal-use software costs | (11,428) | (8,800) | |||||||||
| Net cash used in investing activities | (11,628) | (7,834) | |||||||||
| Financing activities: | |||||||||||
| Proceeds from private placement, net of issuance costs paid | — | 19,769 | |||||||||
| Proceeds from sale-leaseback financing transaction | — | 4,252 | |||||||||
| Proceeds from the exercise of stock options | 142 | 1,191 | |||||||||
| Payments for taxes related to net share settlement of equity awards | (76) | (1,227) | |||||||||
| Principal payments on finance leases | (1,284) | (2,080) | |||||||||
| Principal payments on software license arrangements | (258) | (1,997) | |||||||||
| Net cash (used in) provided by financing activities | (1,476) | 19,908 | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 8 | (658) | |||||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (14,939) | 8,292 | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 66,773 | 50,198 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 51,834 | $ | 58,490 | |||||||
| As of September 30, | |||||||||||
| 2020 | 2019 | ||||||||||
| Cash and cash equivalents | $ | 32,221 | $ | 53,839 | |||||||
| Restricted cash | 19,613 | 4,651 | |||||||||
| Total cash, cash equivalents and restricted cash | $ | 51,834 | $ | 58,490 | |||||||
Reconciliation of Non-GAAP Financial Measures
The following table presents a reconciliation of net loss (GAAP) to adjusted EBITDA for each of the periods identified:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands) | 2020 (Unaudited) | 2019 (Unaudited) | 2020 (Unaudited) | 2019 (Unaudited) | |||||||||||||||||||
| Net loss (GAAP) | $ | (11,121) | $ | (10,559) | $ | (34,706) | $ | (317,606) | |||||||||||||||
| Interest expense, net | 9,027 | 8,175 | 26,729 | 23,176 | |||||||||||||||||||
| Amortization of intangible assets | 6,750 | 6,970 | 20,514 | 23,151 | |||||||||||||||||||
| Depreciation | 3,529 | 3,336 | 10,317 | 9,447 | |||||||||||||||||||
| Amortization expense of finance leases | 425 | 613 | 1,209 | 1,974 | |||||||||||||||||||
| Income tax provision (benefit) | 241 | 552 | (838) | (2,740) | |||||||||||||||||||
| EBITDA | 8,851 | 9,087 | 23,225 | (262,598) | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Stock-based compensation expense | 2,524 | 3,013 | 7,528 | 14,270 | |||||||||||||||||||
| Restructuring | — | 2,270 | — | 5,149 | |||||||||||||||||||
| Investigation and audit related | — | 980 | — | 4,176 | |||||||||||||||||||
| Private placement issuance cost | — | (416) | — | 738 | |||||||||||||||||||
| Settlement of certain litigation, net | — | (2,100) | — | 2,900 | |||||||||||||||||||
| Impairment of right-of-use and long-lived assets | — | — | 4,671 | — | |||||||||||||||||||
| Impairment of goodwill | — | — | — | 224,272 | |||||||||||||||||||
| Impairment of intangible asset | — | — | — | 17,308 | |||||||||||||||||||
Other income, net (1) | (4,072) | (6,385) | (12,506) | (5,469) | |||||||||||||||||||
| Adjusted EBITDA | $ | 7,303 | $ | 6,449 | $ | 22,918 | $ | 746 | |||||||||||||||
(1) Adjustments to other income, net, reflect non-cash changes in the fair value of financing derivatives, warrants liability and equity securities investment included in other income, net and certain legal expenses defined by the senior secured convertible notes and classified as general and administrative expenses on our Condensed Consolidated Statements of Operations and Comprehensive Loss. We sold our investment in equity securities in 2019.
The following table presents a reconciliation of net loss (GAAP) to non-GAAP net loss for each of the periods identified:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands) | 2020 (Unaudited) | 2019 (Unaudited) | 2020 (Unaudited) | 2019 (Unaudited) | |||||||||||||||||||
| Net loss (GAAP) | $ | (11,121) | $ | (10,559) | $ | (34,706) | $ | (317,606) | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Amortization of intangible assets | 6,750 | 6,970 | 20,514 | 23,151 | |||||||||||||||||||
| Stock-based compensation expense | 2,524 | 3,013 | 7,528 | 14,270 | |||||||||||||||||||
| Restructuring | — | 2,270 | — | 5,149 | |||||||||||||||||||
| Investigation and audit related | — | 980 | — | 4,176 | |||||||||||||||||||
| Private placement issuance cost | — | (416) | — | 738 | |||||||||||||||||||
| Settlement of certain litigation, net | — | (2,100) | — | 2,900 | |||||||||||||||||||
| Impairment of right-of-use and long-lived assets | — | — | 4,671 | — | |||||||||||||||||||
| Impairment of goodwill | — | — | — | 224,272 | |||||||||||||||||||
| Impairment of intangible asset | — | — | — | 17,308 | |||||||||||||||||||
Other income, net (1) | (4,072) | (6,385) | (12,506) | (5,469) | |||||||||||||||||||
| Non-GAAP net loss | $ | (5,919) | $ | (6,227) | $ | (14,499) | $ | (31,111) | |||||||||||||||
(1) Adjustments to other income, net, reflect non-cash changes in the fair value of financing derivatives, warrants liability and equity securities investment included in other income, net and certain legal expenses defined by the senior secured convertible notes and classified as general and administrative expenses on our Condensed Consolidated Statements of Operations and Comprehensive Loss. We sold our investment in equity securities in 2019.
We do not provide GAAP net income (loss) on a forward-looking basis because we are unable to predict with reasonable certainty our future stock-based compensation expense, litigation and restructuring expense, fair value adjustments for financing derivatives and warrants, variable interest expense for outstanding senior secured convertible notes, and any unusual gains or losses without unreasonable effort. These items are uncertain, depend on various factors, and could be material to results computed in accordance with GAAP. For this reason, we are unable without unreasonable effort to provide a reconciliation of adjusted EBITDA or non-GAAP net loss to the most directly comparable GAAP measure, GAAP net income (loss), on a forward-looking basis.
Revenues
Revenues from our three offerings of products and services are as follows:
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| (In thousands) | 2020 (Unaudited) | % of Revenue | 2019 (Unaudited) | % of Revenue | $ Variance | % Variance | |||||||||||||||||||||||||||||
| Ratings and Planning | $ | 62,718 | 71.3 | % | $ | 65,334 | 69.3 | % | $ | (2,616) | (4.0) | % | |||||||||||||||||||||||
| Analytics and Optimization | 17,432 | 19.8 | % | 18,252 | 19.3 | % | (820) | (4.5) | % | ||||||||||||||||||||||||||
| Movies Reporting and Analytics | 7,802 | 8.9 | % | 10,714 | 11.4 | % | (2,912) | (27.2) | % | ||||||||||||||||||||||||||
| Total revenues | $ | 87,952 | 100.0 | % | $ | 94,300 | 100.0 | % | $ | (6,348) | (6.7) | % | |||||||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| (In thousands) | 2020 (Unaudited) | % of Revenue | 2019 (Unaudited) | % of Revenue | $ Variance | % Variance | |||||||||||||||||||||||||||||
| Ratings and Planning | $ | 190,018 | 71.4 | % | $ | 204,833 | 69.8 | % | $ | (14,815) | (7.2) | % | |||||||||||||||||||||||
| Analytics and Optimization | 49,827 | 18.8 | % | 57,003 | 19.4 | % | (7,176) | (12.6) | % | ||||||||||||||||||||||||||
| Movies Reporting and Analytics | 26,201 | 9.8 | % | 31,646 | 10.8 | % | (5,445) | (17.2) | % | ||||||||||||||||||||||||||
| Total revenues | $ | 266,046 | 100.0 | % | $ | 293,482 | 100.0 | % | $ | (27,436) | (9.3) | % | |||||||||||||||||||||||
Exhibit 99.2
FOR IMMEDIATE RELEASE
Comscore Provides Update on Strategic Alternatives Review Process
RESTON, Va., November 9, 2020 - Comscore, Inc. (Nasdaq: SCOR), a trusted partner for planning, transacting, and evaluating media across platforms, today provided an update regarding its review of strategic alternatives announced last year. Comscore's board of directors and management, supported by its legal and financial advisors, have conducted a thorough and deliberate review process.
Comscore confirmed today that it is in advanced discussions with respect to a recapitalization transaction with an anchor investor. The transaction, if consummated, would result in a significant reduction in Comscore's outstanding indebtedness, enhancing its balance sheet and liquidity profile. In addition, the transaction would provide for enhanced commercial relationships to support Comscore's growth initiatives.
Comscore and the other relevant parties are working to conclude negotiations. However, there can be no assurances regarding the timing of any action or transaction nor that the strategic review process will result in any particular outcome, including the transaction described above. The Company does not intend to provide additional updates unless or until it determines that further disclosure is necessary.
About Comscore
Comscore is a trusted partner for planning, transacting and evaluating media across platforms. With a data footprint that combines digital, linear TV, over-the-top and theatrical viewership intelligence with advanced audience insights, Comscore allows media buyers and sellers to quantify their multiscreen behavior and make business decisions with confidence. A proven leader in measuring digital and TV audiences and advertising at scale, Comscore is the industry's emerging, third-party source for reliable and comprehensive cross-platform measurement.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal and state securities laws, including, without limitation, Comscore's expectations, plans and opinions regarding a potential recapitalization transaction, reduction in outstanding indebtedness, balance sheet enhancement and liquidity profile, commercial relationships, growth initiatives, the timing to conclude negotiations, the Company's strategic review process, and the Company's intention to provide additional updates. These statements involve risks and uncertainties that could cause actual events to differ materially from expectations, including, but not limited to, changes in the timing or terms of the potential transaction; failure to obtain any required approvals or consents; external market conditions; changes in commercial relationships; and Comscore's ability to achieve its expected strategic, financial and operational plans. For additional discussion of risk factors, please refer to Comscore's respective Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and other filings that Comscore makes from time to time with the U.S. Securities and Exchange Commission (the "SEC"), which are available on the SEC's website (www.sec.gov).
Investors 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 intend or undertake, and expressly disclaims, any duty or 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.
Press
Neil Ripley
Comscore, Inc.
646-746-0579
press@comscore.com
Investors
Christopher Ferris
Comscore, Inc.
212-277-6547
cferris@comscore.com