MCLEAN, Va., May 17, 2016 /PRNewswire/ -- CYREN (NASDAQ: CYRN)
today announced its first quarter 2016 financial results for the
period ending March 31, 2016.
"CYREN started 2016 with a strong first quarter, continuing the
sequential revenue growth that we have seen for the past few
quarters," said Lior Samuelson, CEO
and Chairman of the Board at CYREN. "We saw an increase in demand
for both our CYREN WebSecurity ("CWS") offering and our embedded
solutions. With the general availability release of CWS 3.0,
we now provide a cybersecurity platform that is more powerful than
solutions of other leading cloud security providers. We
expect to continue to benefit from the general market trend of
businesses shifting their security spending from appliance-based to
cloud-based security solutions."
CYREN experienced one of its strongest quarters in history in
terms of contract renewals, expansions and operating cash
flow. During the first quarter, several large customer
contracts were renewed and expanded for multi-year, multi-million
dollar extensions. Operating cash flow for the first quarter
was $2.9 million, driven in part by
customer pre-payments for services. The positive operating
cash flow enabled CYREN to pay down its line of credit in full, and
the company ended the quarter with no debt.
During the quarter, CYREN invested heavily in recruiting and
building a world-class sales and marketing team, including key
executive hires from the security sector. This expansion
includes the opening of the company's new office in Austin, Texas in order to tap into one of the
hottest technology recruiting markets in the country. Through
this expansion, CYREN joins the ranks of other Austin security technology employers such as
Dell, IBM and Forcepoint.
First Quarter 2016 Financial Highlights:
- Revenues for the first quarter of 2016 were $7.4 million, compared to $7.0 million for the first quarter of 2015, and
$7.1 million for the fourth quarter
of 2015. The increase in revenue is attributable to growth in both
the embedded business, as well as the highest level of revenue
recognition in CYREN WebSecurity since the service was
launched.
- Non-GAAP revenues totaled $7.5
million for the first quarter of 2016, compared to
$7.0 million for the first quarter of
2015, and $7.2 million for the fourth
quarter of 2015. 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 2016 was $1.5 million, compared to a loss of $1.7 million in the first quarter of 2015, and a
loss of $1.2 million in the fourth
quarter of 2015. The increased sequential loss is primarily due to
additional investments in the company's Sales and Marketing
resources over the past two quarters.
- Loss per basic and diluted share for the first quarter of 2016
was $0.04, compared to a loss of
$0.05 for the first quarter of 2015,
and a loss of $0.03 for the fourth
quarter of 2015.
- Non-GAAP net loss for the first quarter of 2016 was
$1.9 million, compared to a loss of
$1.0 million for the first quarter of
2015, and a loss of $1.4 million in
the fourth quarter of 2015.
- Non-GAAP loss per basic and diluted share was $0.05 for the first quarter of 2016, compared to
a loss of $0.03 in both the first
quarter of 2015 and the fourth quarter of 2015.
- Cash generated by operating activities during the first quarter
was $2.9 million, compared to
operating cash usage of $2.0 million
in the first quarter of 2015, and operating cash usage of
$0.6 million during the fourth
quarter of 2015.
- Cash as of March 31, 2016 was
$14.0 million, compared to
$16.4 million as of December 31, 2015. During the quarter, CYREN paid
down in full and terminated its line of credit, ending the quarter
with no debt.
For information regarding the non-GAAP financial measures
discussed in this release, please see "Use of Non-GAAP Financial
Measures" and "Reconciliation of Selected GAAP Measures to Non-GAAP
Measures."
Recent Business Highlights:
- The March 2016 general
availability release of CWS 3.0 integrates CYREN's enhanced cyber
threat capabilities and a new advanced threat protection module to
stop zero-day threats, Advanced Persistent Threats (APTs) and
evasive malware.
- During the quarter, CYREN renewed and expanded a multi-year,
multi-million dollar contract with one of the largest
publicly-traded security technology companies. The agreement
includes several of CYREN's antispam, anti-malware and cyber
intelligence solutions for use within UTM appliances and
cloud-based security services.
- Signed several new CWS customers, including both enterprise and
service providers utilizing CWS full proxy and DNS capabilities.
During the quarter, CYREN displaced incumbent vendors such as
Websense/Forcepoint and OpenDNS in several accounts.
- CYREN was recently awarded a cybersecurity grant from the
National Authority for Technological Innovation (NATI), formerly
known as the Office of the Chief Scientist (OCS), at Israel's Ministry of Economy and Industry.
CYREN is unique in the Israeli security industry, having been
recognized by the NATI for developing innovative cybersecurity
technology several years in a row.
- CYREN hired several key executives from the security industry
to further build out its Sales, Marketing and Product Management
teams. Key hires in recent months include industry veterans from
Zscaler, Check Point and Radware who bring to CYREN decades of
combined expertise in the security sector.
- CYREN had a strong presence at the RSA Security Conference in
San Francisco, where CWS was named
best Anti-Malware Solution by Cyber Defense Magazine. CWS received
recognition for its continued security protection from the latest
malware threats, including the Locky Virus Ransomeware which rose
to epidemic levels during the quarter.
Financial Results Conference Call:
The company will also host a conference call at 10 a.m. Eastern Time (5
p.m. Israel Time) on Tuesday, May 17,
2016.
US Dial-in
Number: 1-888-503-8175
Israel Dial-in
Number:
1-80-924-5906
International Dial-in Number: 1-719-325-2315
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 participate in the live conference call, a
replay will be available until May 31,
2016. To access the replay, the U.S. dial in number is
1-877-870-5176 and the non-U.S. dial in number is 1-858-384-5517.
Callers will be prompted for replay conference ID number 3421066.
An archived version of the webcast will also be available on the
investor relations section of the company's website.
About CYREN
CYREN (NASDAQ and TASE: CYRN)
protects more than 600 million users against cyber attacks and data
breaches through its cloud-based web, email, mobile and endpoint
security solutions. Relied upon by many of the world's largest
technology companies such as Dell, Google, McAfee and
Microsoft, CYREN offers enterprise-focused security as a
service (SecaaS) solutions as well as embedded solutions for
software and security firms. CYREN's global cloud
security platform processes more than 17 billion daily transactions
and uses innovative zero-day protection technology to proactively
block over 130 million threats each day. Learn more
at www.cyren.com.
Blog: blog.cyren.com
Facebook: www.facebook.com/CyrenWeb
LinkedIn: www.linkedin.com/company/cyren
Twitter: twitter.com/CyrenInc or
twitter.com/cyren_ir
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 Financial Measures
Non-GAAP financial measures consist of GAAP financial measures
adjusted to exclude: stock-based compensation expenses,
amortization of acquired intangible assets, executive termination
costs, deferred taxes and deferred revenues related to
acquisitions, one-time settlement agreements, reorganization
expenses, adjustments to earn-out obligations and capitalization of
technology. 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 and reports on Form 6-K, 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
SmarTeam
+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
|
|
2016
|
|
2015
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
Revenues
|
$ 7,411
|
|
$ 6,993
|
|
|
|
|
Cost of
revenues
|
1,905
|
|
2,063
|
|
|
|
|
Gross
profit
|
5,506
|
|
4,930
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development, net
|
2,299
|
|
2,709
|
|
|
|
|
Sales and
marketing
|
2,828
|
|
2,242
|
|
|
|
|
General and
administrative
|
1,737
|
|
1,414
|
|
|
|
|
Adjustment of
earn-out obligation
|
-
|
|
(2)
|
|
|
|
|
Total operating
expenses
|
6,864
|
|
6,363
|
|
|
|
|
Operating
loss
|
(1,358)
|
|
(1,433)
|
|
|
|
|
Other income,
net
|
7
|
|
-
|
|
|
|
|
Financial expense,
net
|
(93)
|
|
(151)
|
|
|
|
|
Loss before
taxes
|
(1,444)
|
|
(1,584)
|
|
|
|
|
Tax
expense
|
(51)
|
|
(86)
|
|
|
|
|
|
|
|
|
Net
loss
|
$ (1,495)
|
|
$ (1,670)
|
|
|
|
|
|
|
|
|
Loss per share -
basic
|
$ (0.04)
|
|
$ (0.05)
|
|
|
|
|
Loss per share -
diluted
|
$ (0.04)
|
|
$ (0.05)
|
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
|
Basic
|
39,121
|
|
31,398
|
|
|
|
|
Diluted
|
39,121
|
|
31,398
|
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
|
|
2016
|
|
2015
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
GAAP operating
loss
|
$ (1,358)
|
|
$ (1,433)
|
Stock-based
compensation (1)
|
247
|
|
263
|
Amortization of
intangible assets (2)
|
394
|
|
385
|
Adjustment to
earn-out liabilities (3)
|
-
|
|
(2)
|
Adjustment to
deferred revenues (5)
|
42
|
|
43
|
Capitalization of
technology (6)
|
(947)
|
|
-
|
|
|
|
|
Non-GAAP operating
loss
|
$ (1,622)
|
|
$ (744)
|
|
|
|
|
GAAP net
loss
|
$ (1,495)
|
|
$ (1,670)
|
Stock-based
compensation (1)
|
247
|
|
263
|
Amortization of
intangible assets (2)
|
394
|
|
385
|
Adjustment to
earn-out liabilities (3)
|
-
|
|
23
|
Amortization of
deferred tax assets (4)
|
(77)
|
|
(83)
|
Adjustment to
deferred revenues (5)
|
42
|
|
43
|
Capitalization of
technology (6)
|
(978)
|
|
-
|
|
|
|
|
Non-GAAP net
loss
|
$ (1,867)
|
|
$ (1,039)
|
|
|
|
|
GAAP loss per share
(diluted)
|
$ (0.04)
|
|
$ (0.05)
|
Stock-based
compensation (1)
|
0.01
|
|
0.01
|
Amortization of
intangible assets (2)
|
0.01
|
|
0.01
|
Adjustment to
earn-out liabilities (3)
|
0.00
|
|
(0.00)
|
Amortization of
deferred tax assets (4)
|
(0.00)
|
|
(0.00)
|
Adjustment to
deferred revenues (5)
|
0.00
|
|
0.00
|
Capitalization of
technology (6)
|
(0.03)
|
|
0.00
|
|
|
|
|
Non-GAAP loss per
share (diluted)
|
$ (0.05)
|
|
$ (0.03)
|
|
|
|
|
Numbers of shares
used in computing non-GAAP loss per share (diluted)
|
39,121
|
|
31,398
|
|
|
|
|
(1) Stock-based
compensation
|
|
|
|
Cost of
revenues
|
$ 12
|
|
$ 16
|
Research and
development
|
83
|
|
64
|
Sales and
marketing
|
52
|
|
73
|
General and
administrative
|
100
|
|
110
|
|
|
|
|
|
$ 247
|
|
$ 263
|
(2) Amortization
of intangible assets
|
|
|
|
Cost of
revenues
|
$ 206
|
|
$ 190
|
Sales and
marketing
|
188
|
|
195
|
|
|
|
|
|
$ 394
|
|
$ 385
|
(3) Adjustment to
earn-out liabilities
|
|
|
|
General and
administrative
|
$
-
|
|
$
(2)
|
Financial expenses,
net
|
-
|
|
25
|
|
|
|
|
|
$
-
|
|
$ 23
|
(4) Amortization
of deferred tax assets
|
|
|
|
Tax
expense
|
$ (77)
|
|
$ (83)
|
|
|
|
|
|
$ (77)
|
|
$ (83)
|
(5) Adjustment to
deferred revenues
|
|
|
|
Revenues
|
$ 42
|
|
$ 43
|
|
|
|
|
|
$ 42
|
|
$ 43
|
(6) Capitalization
of technology
|
|
|
|
Research and
development
|
$ (947)
|
|
$
-
|
Financial expenses,
net
|
(31)
|
|
-
|
|
|
|
|
|
$ (978)
|
|
$
-
|
|
|
|
|
CYREN
LTD.
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
(in thousands of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
March
31
|
|
December
31
|
|
2016
|
|
2015
|
|
Unaudited
|
|
Audited
|
|
|
|
|
Assets
|
|
|
|
Current Assets:
|
|
|
|
Cash and cash
equivalents
|
$ 14,026
|
|
$
16,379
|
Trade receivables,
net
|
3,631
|
|
3,849
|
Prepaid expenses and
other receivables
|
1,147
|
|
949
|
Total current
assets
|
18,804
|
|
21,177
|
|
|
|
|
Lease
deposits
|
93
|
|
79
|
Severance pay
fund
|
694
|
|
700
|
Property and
equipment, net
|
2,286
|
|
2,321
|
Goodwill and
intangible assets, net
|
31,504
|
|
30,128
|
Total long-term
assets
|
34,577
|
|
33,228
|
Total
assets
|
$ 53,381
|
|
$
54,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
Credit
line
|
$
-
|
|
$
4,169
|
Trade
payables
|
415
|
|
603
|
Employees and payroll
accruals
|
2,230
|
|
2,500
|
Accrued expenses and
other liabilities
|
994
|
|
764
|
Earn-out
consideration
|
2,453
|
|
2,346
|
Deferred
revenues
|
4,971
|
|
3,269
|
Total current
liabilities
|
11,063
|
|
13,651
|
|
|
|
|
Deferred
revenues
|
2,947
|
|
824
|
Deferred tax
liability
|
1,620
|
|
1,627
|
Accrued severance
pay
|
878
|
|
824
|
Other
liabilities
|
137
|
|
131
|
Total long-term
liabilities
|
5,582
|
|
3,406
|
|
|
|
|
Shareholders'
equity
|
36,736
|
|
37,348
|
Total liabilities and
shareholders' equity
|
$ 53,381
|
|
$
54,405
|
CYREN
LTD.
|
|
CONDENSED
CONSOLIDATED CASH FLOW DATA
|
(in thousands of U.S.
dollars)
|
|
|
Three months
ended
|
|
March
31
|
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
Unaudited
|
|
Unaudited
|
|
|
|
|
Net loss
|
$ (1,495)
|
|
$ (1,670)
|
|
|
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
Loss on disposal of
property and equipment
|
2
|
|
-
|
Depreciation
|
323
|
|
320
|
Stock-based
compensation
|
247
|
|
263
|
Amortization of
intangible assets
|
394
|
|
385
|
Accrued interest,
accretion of discount and exchange rate differences on credit
line
|
(19)
|
|
43
|
Accretion and change
in fair value of earn-out consideration, net
|
-
|
|
23
|
|
|
|
|
Changes in assets and
liabilities:
|
|
|
|
Trade
receivables
|
129
|
|
760
|
Deferred
taxes
|
(73)
|
|
(44)
|
Prepaid expenses and
other receivables
|
(192)
|
|
(777)
|
Change in long-term
lease deposits
|
(14)
|
|
(2)
|
Trade
payables
|
(209)
|
|
179
|
Employees and payroll
accruals, accrued expenses and other liabilities
|
(40)
|
|
(740)
|
Deferred
revenues
|
3,827
|
|
(780)
|
Accrued severance
pay, net
|
60
|
|
18
|
Other long-term
liabilities
|
(1)
|
|
-
|
Net cash provided
by (used in) operating activities
|
2,939
|
|
(2,022)
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Capitalization of
technology
|
(978)
|
|
-
|
Purchase of property
and equipment
|
(263)
|
|
(174)
|
Net cash used in
investing activities
|
(1,241)
|
|
(174)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from credit
line
|
-
|
|
4,400
|
Repayment of credit
line
|
(4,150)
|
|
(4,800)
|
Proceeds from options
exercised
|
-
|
|
69
|
Net cash used in
financing activities
|
(4,150)
|
|
(331)
|
Effect of exchange
rate changes on cash and cash equivalents
|
99
|
|
(47)
|
Decrease in cash
and cash equivalents
|
(2,353)
|
|
(2,574)
|
Cash and cash
equivalents at the beginning of the period
|
16,379
|
|
11,063
|
Cash and cash
equivalents at the end of the period
|
$ 14,026
|
|
$ 8,489
|
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SOURCE CYREN