MCLEAN, Va., May 26, 2015 /PRNewswire/ -- CYREN (NASDAQ:
CYRN) today announced its first quarter 2015 financial results for
the period ending March 31, 2015.
During the quarter, CYREN passed significant milestones for
CYREN WebSecurity (CWS), its flagship cloud-based security
platform. This momentum is being generated by an expanded sales and
marketing strategy for CWS, and the launch of several key product
enhancements, such as carrier-grade solutions to secure public
Wi-Fi hotspots. The expanded sales strategy leverages the
assets from CYREN's entire internal sales force in concert with
external business development partners to more rapidly tap into the
positive market feedback for this advanced cybersecurity
solution.
"During the first quarter, we signed a 5,000-user enterprise
customer, which is our largest CWS contract to date, building a
positive foundation for the rest of the year," said Lior Samuelson, CEO and Chairman of the Board at
CYREN. "As our multichannel sales approach evolves, we are actively
increasing our direct-to-enterprise approach as well as the
productivity of our growing network of OEM and service provider
partners, distributors and resellers to continue to grow our
bookings and sign larger customer agreements. We have also seen
interest in our new carrier security offering, which positions us
for future subscriber growth."
First Quarter 2015 Financial Highlights:
- Revenues in accordance with U.S. Generally Accepted Accounting
Principles (US GAAP) totaled $7.0 million for the first
quarter of 2015 compared to $8.1
million for the first quarter of 2014. As in the
second half of 2014, first quarter revenues were partially impacted
by the continued decline of the Euro; CYREN generates approximately
40% of its revenues in Euros.
- Non-GAAP revenues totaled $7.0
million for the first quarter of 2015 compared to
$8.1 million for the first quarter of
2014. The difference between non-GAAP and GAAP revenue is derived
from the fact that deferred revenues consolidated from acquired
companies are recorded based on fair value rather than book value
for GAAP purposes.
- GAAP net loss for the first quarter of 2015 was $1.7 million, compared to a loss of $2.1 million for the first quarter of 2014 and a
loss of $2.2 million in the previous
sequential quarter.
- GAAP loss per basic and diluted share for the first quarter of
2015 was $0.05, compared to a loss of
$0.08 for the first quarter of
2014.
- Non-GAAP net loss for the first quarter of 2015 was
$1.0 million, compared to a loss of
$1.4 million for the first quarter of
2014, and a loss of $1.4 million in
the previous sequential quarter.
- Non-GAAP loss per basic and diluted share for the first quarter
of 2015 was $0.03, compared to a loss
of $0.05 for the first quarter of
2014.
- Cash used by operating activities during the quarter was
$2.0 million.
- Cash as of March 31, 2015 was
$8.5 million, compared to
$11.1 million as of December 31, 2014. As of March 31, the company had drawn $4.4 million under its credit facility, compared
to $4.8 million as of December 31, 2014. During the quarter, the
company renewed its credit facility for another year at a reduced
limit of $6.0 million.
For information regarding the non-GAAP financial measures
discussed in this release, please see "Use of Non-GAAP Financial
Information" and "Reconciliation of Selected GAAP Measures to Non
GAAP Measures."
Business Highlights:
- Launched a new direct-to-enterprise CWS sales model, part of a
company-wide focus on increasing market share in the
rapidly-growing cloud-based Internet security sector. The new sales
model has already generated a robust pipeline numbering in the tens
of thousands of enterprise seats.
- Signed the largest CWS contract to date through our two tier
distribution channel with an enterprise customer that has 5,000
users, validating the growing demand for this powerful cloud-based
security solution.
- Signed new CWS reseller agreements with Blue Tie and
ExchangeMyMail, two leading email oriended managed service
providers in the United
States.
- Expanded CYREN's international CWS reseller network by signing
new agreements with Technidata in Mexico, Nobel Security in Argentina, InstaSafe in India and Infosight Solutions in the
Philippines.
- Released DNS-based policy and security enforcement, a major
feature enhancement for CYREN WebSecurity. DNS-based
enforcement enables CYREN to compete in additional service provider
markets offering web security protection for public networks and
consumer networks. DNS-based enforcement also provides CWS
enterprise customers with a fast, but reliable, security policy
enforcement option that can streamline the deployment process and
enable protection for new locations in a matter of minutes.
- Signed a multi-year agreement with Dell to integrate CYREN's
antimalware technology into Dell SonicWALL Email Security
appliances, software, virtual appliances and hosted services. The
agreement with Dell reflects CYREN's continued support for its OEM
base and rapidly expanding partner network.
- Primetals Technologies, a joint venture between Mitsubishi
Heavy Industries, Ltd. and Siemens AG, selected CYREN's
EmailSecurity solution as its main defense against cyberattacks,
malware and email threats.
- CYREN participated as an exhibitor at the RSA Conference in
San Francisco, the world's largest
info security show with over 30,000 industry professionals in
attendance. This year's event proved to be CYREN's most successful
RSA conference to date, with hundreds of potential leads and dozens
of key meetings with strategic partners.
Financial Results Conference Call
The company has scheduled a conference call later
today, Tuesday, May 26, 2015, at 10
a.m. Eastern Time (5 p.m.
Israel Time) to discuss its first quarter 2015 results.
To participate, please call one of the following
teleconferencing numbers by dialing in at least 10 minutes before
the conference call commences. If you are unable to connect using
the toll-free numbers, please try the international dial-in
number.
US Dial-in Number: 1-877-545-1407
Israel Dial-in Number: 1-80-925-8243
International Dial-in Number: 1-719-325-4818
The call will be simultaneously webcast live on the investor
relations section of CYREN's website at
http://www.cyren.com/ir.html.
For those unable to listen to the live call, a webcast replay of
the call will be available from the day after the call in the
investor relations section of CYREN's corporate website.
About CYREN
Founded in 1991, CYREN (NASDAQ and TASE:
CYRN) is a long-time innovator in cyber intelligence, offering next
generation Security as a Service solutions to enterprises and
powering the security solutions of more than 200 of the world's
largest IT and security technology providers. Providing real-time
detection of cyber attacks in many of the largest networks, CYREN
maintains the broadest and deepest real-time Internet threat
database in the world. Every day, CYREN collects and analyzes 17
billion pieces of threat data to protect 600 million global users.
Threat data is gathered and cyber intelligence disseminated through
500,000 global points of presence in 200 countries. Visit
www.cyren.com.
Blog: blog.cyren.com
Facebook: www.facebook.com/CyrenWeb
LinkedIn: www.linkedin.com/company/cyren
Twitter: twitter.com/CyrenInc
To download CYREN's investor relations app please visit Apple's
App Store for the iPhone and iPad or Google Play for Android mobile
devices.
Use of Non-GAAP Measures
Non-GAAP financial measures consist of GAAP financial measures
adjusted to exclude: stock-based compensation expenses,
amortization and impairment of acquired intangible assets,
executive termination costs, deferred taxes and deferred revenues
related to acquisitions, acquisition related costs, one-time
settlement agreements, reorganization expenses and adjustments to
earn-out obligations. The purpose of such adjustments is to give an
indication of the company's performance exclusive of non-cash
charges and other items that are considered by management to be
outside of the company's core operating results. The company's
non-GAAP financial measures are not meant to be considered in
isolation or as a substitute for comparable GAAP measures, and
should be read only in conjunction with the company's consolidated
financial statements prepared in accordance with GAAP.
Company management regularly uses supplemental non-GAAP
financial measures internally to understand, manage and evaluate
the business and make operating decisions.
These non-GAAP measures are among the primary factors management
uses in planning for and forecasting future periods. The company
believes this adjustment is useful to investors as a measure of the
ongoing performance of the business. The company believes these
non-GAAP financial measures provide consistent and comparable
measures to help investors understand the company's current and
future operating cash flow performance. These non-GAAP financial
measures may differ materially from the non-GAAP financial measures
used by other companies. Reconciliation between results on a GAAP
and non-GAAP basis is provided in a table immediately following the
Consolidated Statements of Income. The presentation of this
non-GAAP financial information is not intended to be considered in
isolation or as a substitute for the financial information prepared
and presented in accordance with GAAP. Management uses both GAAP
and non-GAAP measures when evaluating the business internally and
therefore felt it important to make these non-GAAP adjustments
available to investors.
This press release contains forward-looking statements,
including projections about the company's business, within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. For example, statements
in the future tense, and statements including words such as
"expect," "plan," "estimate," "anticipate," or "believe" are
forward-looking statements. These statements are based on
information available at the time of the press release and the
company assumes no obligation to update any of them. The statements
in this press release are not guarantees of future performance and
actual results could differ materially from current expectations as
a result of numerous factors, including business conditions and
growth or deterioration in the internet security market,
technological developments, products offered by competitors,
availability of qualified staff, and technological difficulties and
resource constraints encountered in developing new products, as
well as those risks described in the company's Annual Reports on
Form 20-F, reports on Form 6-K and prospectus supplement dated
May 15, 2015 and prospectus dated
July 3, 2014 filed pursuant to Rule
424(b)(2), which are available through www.sec.gov.
U.S. Investor Contact
Garth Russell
KCSA Strategic
Communications
+1 212 896 1250
grussell@kcsa.com
Israel Investor Contact
Iris
Lubitch
SmartTteam
+972 54 2528007
Iris@smartteam.co.il
Company Contact
Mike Myshrall, CFO
CYREN
+1 703 760 3320
mike.myshrall@CYREN.com
Media Contact
Matthew
Zintel
Zintel Public Relations
+1 281 444 1590
matthew.zintel@zintelpr.com
CYREN
LTD.
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
(in thousands of U.S.
dollars, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
March
31
|
|
|
2015
|
|
2014
|
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
|
|
Revenues
|
$
6,993
|
|
$
8,090
|
|
|
|
|
|
|
Cost of
revenues
|
2,063
|
|
2,022
|
|
|
|
|
|
|
Gross
profit
|
4,930
|
|
6,068
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development, net
|
2,709
|
|
2,900
|
|
|
|
|
|
|
Sales and
marketing
|
2,242
|
|
2,992
|
|
|
|
|
|
|
General and
administrative
|
1,414
|
|
2,267
|
|
|
|
|
|
|
Adjustment of
earn-out obligation
|
(2)
|
|
-
|
|
|
|
|
|
|
Total operating
expenses
|
6,363
|
|
8,159
|
|
|
|
|
|
|
Operating
(loss)
|
(1,433)
|
|
(2,091)
|
|
|
|
|
|
|
Other income
(expense)
|
-
|
|
200
|
|
|
|
|
|
|
Financial expense,
net
|
(151)
|
|
(296)
|
|
|
|
|
|
|
Net loss before
taxes
|
(1,584)
|
|
(2,187)
|
|
|
|
|
|
|
Tax benefit
(expense)
|
(86)
|
|
45
|
|
|
|
|
|
|
Net
loss
|
|
|
|
|
$
(1,670)
|
|
$
(2,142)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share -
basic
|
$
(0.05)
|
|
$
(0.08)
|
|
|
|
|
|
|
Loss per share -
diluted
|
$
(0.05)
|
|
$
(0.08)
|
|
|
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
Basic
|
31,398
|
|
26,519
|
|
|
|
|
|
|
Diluted
|
31,398
|
|
26,519
|
|
CYREN
LTD.
|
|
|
|
|
RECONCILIATION OF
SELECTED GAAP MEASURES TO NON-GAAP MEASURES
|
|
|
|
|
(in thousands
of U.S.dollars, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
March
31
|
|
2015
|
|
2014
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
GAAP operating
loss
|
$
(1,433)
|
|
$
(2,091)
|
Stock-based
compensation (1)
|
263
|
|
304
|
Amortization of
intangible assets (2)
|
385
|
|
424
|
Adjustment to
earn-out liabilities (3)
|
(2)
|
|
-
|
Executive
terminations (5)
|
-
|
|
139
|
Adjustment to
deferred revenues (6)
|
43
|
|
52
|
Reorganization
expenses (8)
|
-
|
|
75
|
|
|
|
|
Non-GAAP operating
loss
|
$
(744)
|
|
$
(1,097)
|
|
|
|
|
GAAP net
loss
|
$
(1,670)
|
|
$
(2,142)
|
Stock-based
compensation (1)
|
263
|
|
304
|
Amortization of
intangible assets (2)
|
385
|
|
424
|
Adjustment to
earn-out liabilities (3)
|
23
|
|
93
|
Income taxes
(4)
|
(83)
|
|
(101)
|
Executive
terminations (5)
|
-
|
|
139
|
Adjustment to
deferred revenues (6)
|
43
|
|
52
|
Settlement agreements
(7)
|
-
|
|
(200)
|
Reorganization
expenses (8)
|
-
|
|
75
|
|
|
|
|
Non-GAAP net
loss
|
$
(1,039)
|
|
$
(1,356)
|
|
|
|
|
GAAP loss per share
(diluted)
|
(0.05)
|
|
(0.08)
|
Stock-based
compensation (1)
|
0.01
|
|
0.01
|
Amortization of
intangible assets (2)
|
0.01
|
|
0.02
|
Adjustment to
earn-out liabilities (3)
|
0.00
|
|
0.00
|
Income taxes
(4)
|
(0.00)
|
|
(0.00)
|
Executive
terminations (5)
|
0.00
|
|
0.01
|
Adjustment to
deferred revenues (6)
|
0.00
|
|
0.00
|
Settlement agreements
(7)
|
0.00
|
|
(0.01)
|
Reorganization
expenses (8)
|
0.00
|
|
0.00
|
|
|
|
|
Non-GAAP loss per
share (diluted)
|
(0.03)
|
|
(0.05)
|
|
|
|
|
Numbers of shares
used in computing non-GAAP loss per share (diluted)
|
31,398
|
|
26,519
|
|
|
|
|
(1) Stock-based
compensation
|
|
|
|
Cost of
revenues
|
$
16
|
|
$
12
|
Research and
development
|
64
|
|
73
|
Sales and
marketing
|
73
|
|
72
|
General and
administrative
|
110
|
|
147
|
|
|
|
|
|
$
263
|
|
$
304
|
(2) Amortization
of intangible assets
|
|
|
|
Cost of
revenues
|
$
190
|
|
$
197
|
Sales and
marketing
|
195
|
|
227
|
|
|
|
|
|
$
385
|
|
$
424
|
(3) Adjustment to
earn-out liabilities
|
|
|
|
General and
administrative
|
$
(2)
|
|
$
-
|
Financial expenses,
net
|
25
|
|
93
|
|
|
|
|
|
$
23
|
|
$
93
|
(4) Income
taxes
|
|
|
|
Deferred tax asset -
tax benefit
|
$
(83)
|
|
$
(101)
|
|
|
|
|
|
$
(83)
|
|
$
(101)
|
(5) Executive
terminations
|
|
|
|
General and
administrative
|
$
-
|
|
$
139
|
|
|
|
|
|
$
-
|
|
$
139
|
(6) Adjustment to
deferred revenues
|
|
|
|
Revenues
|
$
43
|
|
$
52
|
|
|
|
|
|
$
43
|
|
$
52
|
(7) Settlement
agreements
|
|
|
|
General and
administrative
|
$
-
|
|
$
(200)
|
|
|
|
|
|
$
-
|
|
$
(200)
|
(8) Reorganization
expenses
|
|
|
|
General and
administrative
|
$
-
|
|
$
75
|
|
|
|
|
|
$
-
|
|
$
75
|
CYREN
LTD.
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
(in thousands of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
March
31
|
|
December
31
|
|
2015
|
|
2014
|
|
Unaudited
|
|
Audited
|
|
|
|
|
Assets
|
|
|
|
Current Assets:
|
|
|
|
Cash and cash
equivalents
|
$
8,489
|
|
$
11,063
|
Trade receivables,
net
|
3,792
|
|
4,444
|
Prepaid expenses and
other receivables
|
1,763
|
|
1,019
|
Total current
assets
|
14,044
|
|
16,526
|
|
|
|
|
Lease
deposits
|
69
|
|
70
|
Deferred tax
assets
|
-
|
|
13
|
Severance pay
fund
|
550
|
|
594
|
Property and
equipment, net
|
2,279
|
|
2,401
|
Goodwill and
intangible assets, net
|
29,110
|
|
31,869
|
Total long-term
assets
|
32,008
|
|
34,947
|
Total
assets
|
$
46,052
|
|
$
51,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
Current Liabilities:
|
|
|
|
Credit
line
|
$
4,543
|
|
$
4,900
|
Trade
payables
|
873
|
|
646
|
Employees and payroll
accruals
|
2,064
|
|
2,359
|
Deferred tax
liability
|
119
|
|
120
|
Accrued expenses and
other liabilities
|
865
|
|
1,394
|
Earn-out
consideration
|
2,058
|
|
2,269
|
Deferred
revenues
|
3,123
|
|
4,097
|
Total current
liabilities
|
13,645
|
|
15,785
|
|
|
|
|
Deferred
revenues
|
1,264
|
|
1,042
|
Deferred tax
liability
|
1,693
|
|
1,984
|
Earn-out
consideration
|
762
|
|
837
|
Accrued severance
pay
|
640
|
|
666
|
Other
liabilities
|
88
|
|
100
|
Total long-term
liabilities
|
4,447
|
|
4,629
|
|
|
|
|
Shareholders'
equity
|
27,960
|
|
31,059
|
Total liabilities and
shareholders' equity
|
$
46,052
|
|
$
51,473
|
CYREN
LTD.
|
|
|
|
|
CONDENSED
CONSOLIDATED CASH FLOW DATA
|
|
|
|
|
(in thousands of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
March
31
|
|
2015
|
|
2014
|
Cash flows from
operating activities:
|
Unaudited
|
|
Unaudited
|
|
|
|
|
Net loss
|
$
(1,670)
|
|
$
(2,142)
|
|
|
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
Depreciation
|
320
|
|
321
|
Stock-based
compensation
|
263
|
|
304
|
Amortization of
intangible assets
|
385
|
|
424
|
Accrued interest,
accretion of discount and exchange rate differences on credit
line
|
43
|
|
52
|
Accretion and change
in fair value of earn-out consideration, net
|
23
|
|
93
|
|
|
|
|
|
|
|
|
Changes in assets and
liabilities:
|
|
|
|
Trade
receivables
|
760
|
|
(741)
|
Deferred
taxes
|
(44)
|
|
(101)
|
Prepaid expenses and
other receivables
|
(777)
|
|
225
|
Trade
payables
|
179
|
|
168
|
Change in long-term
lease deposits
|
(2)
|
|
2
|
Employees and payroll
accruals, accrued expenses and other liabilities
|
(740)
|
|
(1,216)
|
Deferred
revenues
|
(780)
|
|
202
|
Accrued severance
pay, net
|
18
|
|
24
|
Net cash used in
operating activities
|
(2,022)
|
|
(2,385)
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
(174)
|
|
(346)
|
Net cash used in
investing activities
|
(174)
|
|
(346)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from credit
line
|
4,400
|
|
1,000
|
Repayment of credit
line
|
(4,800)
|
|
-
|
Proceeds from options
exercised
|
69
|
|
295
|
Net cash provided
by (used in) financing activities
|
(331)
|
|
1,295
|
Effect of exchange
rate changes on cash and cash equivalents
|
(47)
|
|
6
|
Decrease in cash
and cash equivalents
|
(2,574)
|
|
(1,430)
|
Cash and cash
equivalents at the beginning of the period
|
11,063
|
|
3,757
|
Cash and cash
equivalents at the end of the period
|
$
8,489
|
|
$
2,327
|
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SOURCE CYREN