Fluent, Inc. (NASDAQ: FLNT), a leading data-driven performance
marketing company, today reported results for the fourth quarter
and fiscal year ended December 31, 2020.
Ryan Schulke, Fluent’s Chief Executive Officer, commented, "Our
fourth quarter results came in at the high end of the ranges we
previewed in mid-January. Our results for the quarter and the full
year reflect significant strides on the advertiser side of our
business, adding and fortifying strategic partnerships with major
brands, which in turn enhances the value of Fluent’s brand
equity.
To support our sustainable long-term growth strategy, we
continue to evolve our media properties, platform and traffic
quality. As our industry is evolving rapidly, both commercially and
through a regulatory lens, we are leading by example. In 2020, we
commenced a Traffic Quality Initiative, to further enhance our
value proposition for our clients and position Fluent as an
industry leader. We see our commitment to higher quality
traffic as the road to sustainable growth, notwithstanding a
reduction in our near-term revenue profile during this
transition.
Our clients are leaning in for more, and we are recalibrating
our media strategy to fundamentally deliver high-value customer
acquisition solutions to build value and drive growth for our
clients and Fluent.”
Fourth Quarter Highlights
- Revenue increased 2.5% to $82.0 million,
from $80.0 million in Q4 2019
- Net income of $0.2 million, or $0.00 per
share, compared to net income of $1.0 million,
or $0.01 per share
- Media margin of $32.0 million, an
increase of 21.8% over prior year period and representing
39.0% of revenue
- Adjusted EBITDA of $11.1 million,
representing 13.6% of revenue
- Adjusted net income of $5.4 million,
or $0.07 per share
Full-Year 2020 Highlights
- Revenue increased 10.3% to $310.7 million,
from $281.7 million in 2019
- Net income of $2.2 million, or $0.03 per share,
compared to net loss of $1.7 million, or $0.02
per share
- Media margin of $110.4 million, an increase of 18.0%
over prior period and representing 35.5% of
revenue
- Adjusted EBITDA of $41.2 million, an increase of
18.7% over prior period and representing 13.3% of
revenue
- Adjusted net income $19.7 million, or $0.25 per
share
Media margin, adjusted EBITDA and adjusted net income are
non-GAAP financial measures, as defined and reconciled
below.
Business Outlook
- Strategic client relationships driving strong demand on
Fluent’s performance marketplace
- Monetization, as measured by media margin per
registration, up two-fold in-year 2020 (Q4 vs. Q1), enabled by
investments in technology and analytics; remains robust in Q1
2021
- Traffic Quality Initiative reducing revenue during
transition to higher value strategy
- Winopoly contact center capability scaling quickly, exceeding
expectations
Conference Call
Fluent, Inc. will host a conference call on Tuesday, March
16, 2021 at 4:30 PM ET to discuss its 2020 fourth
quarter and full-year financial results. To listen to the
conference call on your telephone, please dial (888) 339-0797 for
domestic callers, or (412) 317-5248 for international callers. To
access the live audio webcast, visit the Fluent website at
investors.fluentco.com. Please login at least 15 minutes prior to
the start of the call to ensure adequate time for any downloads
that may be required. Following completion of the conference call,
a recorded replay of the webcast will be available for those unable
to participate. To listen to the telephone replay, please dial
(877) 344-7529 or (412) 317-0088, with the replay passcode
10153134. The replay will also be available for one week on the
Fluent website at investors.fluentco.com.
About Fluent, Inc.
Fluent (NASDAQ: FLNT) is a leading performance marketing company
with expertise in creating meaningful connections between consumers
and brands. Leveraging our proprietary first-party database of
opted-in consumer profiles, Fluent drives intelligent growth
strategies that deliver superior outcomes. Founded in 2010, the
company is headquartered in New York City. For more information,
visit www.fluentco.com.
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995
The matters contained in this press release may be considered to
be “forward-looking statements” within the meaning of the
Securities Act of 1933 and the Securities Exchange Act of 1934.
Those statements include statements regarding the intent, belief or
current expectations or anticipations of Fluent and members of our
management team. Factors currently known to management that could
cause actual results to differ materially from those in
forward-looking statements include the following: compliance with a
significant number of governmental laws and regulations, including
those laws and regulations regarding privacy and data; the outcome
of litigation, regulatory investigations or other legal proceedings
in which we are involved or may become involved; failure to
safeguard the personal information and other data contained in our
database; failure to adequately protect intellectual property
rights or allegations of infringement of intellectual property
rights; unfavorable global economic conditions, including as a
result of health and safety concerns around the ongoing COVID-19
pandemic; dependence on our key personnel; dependence on
third-party service providers; management of the growth of our
operations, including international expansion and the
integration of acquired business units or personnel; the
impact of the Traffic Quality Initiative, including our ability to
replace lower quality consumer traffic with traffic that meets our
quality requirements; ability to compete and manage media costs in
an industry characterized by rapidly-changing internet media and
advertising technology, evolving industry standards, regulatory
uncertainty, and changing user and client demands; management
of unfavorable publicity and negative public perception about our
industry; failure to compete effectively against other online
marketing and advertising companies; competition we face for web
traffic; dependence on third-party publishers, internet search
providers and social media platforms for a significant portion of
visitors to our websites; dependence on emails, text messages
and telephone calls, among other channels, to reach users for
marketing purposes; liability related to actions of third-party
publishers; limitations on our or our third-party publishers’
ability to collect and use data derived from user
activities; ability to remain competitive with the
shift to mobile applications; failure to detect
click-through or other fraud on advertisements; impact of increased
fulfillment costs; failure to meet our clients’ performance
metrics or changing needs; compliance with the covenants of our
credit agreement; and the potential for failures in our internal
control over financial reporting. These and additional factors to
be considered are set forth under “Risk Factors” in our Annual
Report on Form 10-K for the fiscal year ended December 31,
2020 and in our other filings with the Securities and Exchange
Commission. Fluent undertakes no obligation to update or revise
forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results or expectations.
FLUENT, INC.CONSOLIDATED
BALANCE SHEETS(Amounts in thousands, except share
and per share data)(unaudited)
|
|
December 31, 2020 |
|
|
December 31, 2019 |
|
ASSETS: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
21,087 |
|
|
$ |
18,679 |
|
Accounts receivable, net of
allowance for doubtful accounts of $368 and $1,967,
respectively |
|
|
62,669 |
|
|
|
60,915 |
|
Prepaid expenses and other
current assets |
|
|
2,435 |
|
|
|
1,921 |
|
Total current assets |
|
|
86,191 |
|
|
|
81,515 |
|
Restricted cash |
|
|
1,480 |
|
|
|
1,480 |
|
Property and equipment,
net |
|
|
2,201 |
|
|
|
2,863 |
|
Operating lease right-of-use
assets |
|
|
8,284 |
|
|
|
9,865 |
|
Intangible assets, net |
|
|
45,417 |
|
|
|
55,603 |
|
Goodwill |
|
|
165,088 |
|
|
|
164,774 |
|
Other non-current assets |
|
|
1,559 |
|
|
|
993 |
|
Total
assets |
|
$ |
310,220 |
|
|
$ |
317,093 |
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
7,692 |
|
|
$ |
21,574 |
|
Accrued expenses and other
current liabilities |
|
|
31,568 |
|
|
|
20,358 |
|
Deferred revenue |
|
|
1,373 |
|
|
|
1,140 |
|
Current portion of long-term
debt |
|
|
7,293 |
|
|
|
6,873 |
|
Current portion of operating
lease liability |
|
|
2,291 |
|
|
|
2,282 |
|
Total current liabilities |
|
|
50,217 |
|
|
|
52,227 |
|
Long-term debt, net |
|
|
33,283 |
|
|
|
44,098 |
|
Operating lease liability,
net |
|
|
7,290 |
|
|
|
9,056 |
|
Other non-current
liabilities |
|
|
2,545 |
|
|
|
775 |
|
Total
liabilities |
|
|
93,335 |
|
|
|
106,156 |
|
Contingencies |
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
Preferred stock — $0.0001 par
value, 10,000,000 Shares authorized; Shares outstanding — 0 shares
for both periods |
|
|
— |
|
|
|
— |
|
Common stock — $0.0005 par
value, 200,000,000 Shares authorized; Shares issued — 80,295,141
and 78,642,078, respectively; and Shares outstanding — 76,349,274
and 75,873,679, respectively |
|
|
40 |
|
|
|
39 |
|
Treasury stock, at cost —
3,945,867 and 2,768,399 shares, respectively |
|
|
(9,999 |
) |
|
|
(8,184 |
) |
Additional paid-in
capital |
|
|
411,753 |
|
|
|
406,198 |
|
Accumulated deficit |
|
|
(184,909 |
) |
|
|
(187,116 |
) |
Total shareholders’
equity |
|
|
216,885 |
|
|
|
210,937 |
|
Total liabilities and
shareholders’ equity |
|
$ |
310,220 |
|
|
$ |
317,093 |
|
|
|
|
|
|
|
|
|
|
FLUENT, INC.CONSOLIDATED
STATEMENTS OF OPERATIONS(Amounts in thousands,
except share and per share
data)(unaudited)
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
$ |
81,996 |
|
|
$ |
80,011 |
|
|
$ |
310,719 |
|
|
$ |
281,684 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue (exclusive of depreciation and amortization) |
|
|
56,733 |
|
|
|
55,905 |
|
|
|
215,135 |
|
|
|
194,435 |
|
Sales and marketing (1) |
|
|
3,040 |
|
|
|
2,336 |
|
|
|
11,683 |
|
|
|
11,545 |
|
Product development (1) |
|
|
3,403 |
|
|
|
1,570 |
|
|
|
12,604 |
|
|
|
8,055 |
|
General and administrative (1) |
|
|
12,906 |
|
|
|
13,687 |
|
|
|
46,798 |
|
|
|
48,065 |
|
Depreciation and amortization |
|
|
3,810 |
|
|
|
3,675 |
|
|
|
15,302 |
|
|
|
13,940 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
817 |
|
|
|
— |
|
Write-off of long-lived assets |
|
|
1 |
|
|
|
145 |
|
|
|
1 |
|
|
|
425 |
|
Total costs and
expenses |
|
|
79,893 |
|
|
|
77,318 |
|
|
|
302,340 |
|
|
|
276,465 |
|
Income from
operations |
|
|
2,103 |
|
|
|
2,693 |
|
|
|
8,379 |
|
|
|
5,219 |
|
Interest expense, net |
|
|
(1,168 |
) |
|
|
(1,628 |
) |
|
|
(5,350 |
) |
|
|
(6,892 |
) |
Income (loss) before
income taxes |
|
|
935 |
|
|
|
1,065 |
|
|
|
3,029 |
|
|
|
(1,673 |
) |
Income tax expense |
|
|
(757 |
) |
|
|
(109 |
) |
|
|
(822 |
) |
|
|
(74 |
) |
Net income
(loss) |
|
$ |
178 |
|
|
$ |
956 |
|
|
$ |
2,207 |
|
|
$ |
(1,747 |
) |
Basic and diluted
income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.00 |
|
|
$ |
0.01 |
|
|
$ |
0.03 |
|
|
$ |
(0.02 |
) |
Diluted |
|
$ |
0.00 |
|
|
$ |
0.01 |
|
|
$ |
0.03 |
|
|
$ |
(0.02 |
) |
Weighted average
number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
78,600,700 |
|
|
|
79,328,262 |
|
|
|
78,611,145 |
|
|
|
79,373,789 |
|
Diluted |
|
|
79,899,702 |
|
|
|
79,701,600 |
|
|
|
79,525,176 |
|
|
|
79,373,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts include
share-based compensation expense as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
$ |
163 |
|
|
$ |
150 |
|
|
$ |
822 |
|
|
$ |
971 |
|
Product development |
|
|
285 |
|
|
|
89 |
|
|
|
1,099 |
|
|
|
889 |
|
General and administrative |
|
|
98 |
|
|
|
2,083 |
|
|
|
3,473 |
|
|
|
8,481 |
|
Total share-based compensation
expense |
|
$ |
546 |
|
|
$ |
2,322 |
|
|
$ |
5,394 |
|
|
$ |
10,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FLUENT, INC.CONSOLIDATED
STATEMENTS OF CASH FLOWS(Amounts in
thousands)(unaudited)
|
|
Year Ended December 31, |
|
|
|
2020 |
|
|
2019 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
2,207 |
|
|
$ |
(1,747 |
) |
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
15,302 |
|
|
|
13,940 |
|
Non-cash interest expense |
|
|
1,407 |
|
|
|
1,387 |
|
Share-based compensation
expense |
|
|
5,394 |
|
|
|
10,341 |
|
Goodwill impairment |
|
|
817 |
|
|
|
— |
|
Write-off of long-lived
assets |
|
|
1 |
|
|
|
425 |
|
Non-cash accrued compensation
expense for Put/Call Consideration |
|
|
1,775 |
|
|
|
— |
|
Provision for bad debts |
|
|
269 |
|
|
|
2,550 |
|
Deferred income taxes |
|
|
120 |
|
|
|
35 |
|
Changes in assets and
liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(1,990 |
) |
|
|
(6,978 |
) |
Prepaid expenses and other
current assets |
|
|
(514 |
) |
|
|
104 |
|
Other non-current assets |
|
|
(566 |
) |
|
|
(551 |
) |
Operating lease assets and
liabilities, net |
|
|
(176 |
) |
|
|
1,473 |
|
Accounts payable |
|
|
(13,882 |
) |
|
|
6,028 |
|
Accrued expenses and other
current liabilities |
|
|
10,026 |
|
|
|
(1,626 |
) |
Deferred revenue |
|
|
233 |
|
|
|
663 |
|
Other |
|
|
(125 |
) |
|
|
(26 |
) |
Net cash provided by operating
activities |
|
|
20,298 |
|
|
|
26,018 |
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Business acquisition, net of
cash acquired |
|
|
(1,426 |
) |
|
|
(7,246 |
) |
Capitalized costs included in
intangible assets |
|
|
(2,783 |
) |
|
|
(2,624 |
) |
Acquisition of property and
equipment |
|
|
(64 |
) |
|
|
(2,088 |
) |
Net cash used in investing
activities |
|
|
(4,273 |
) |
|
|
(11,958 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Repayments of long-term
debt |
|
|
(11,802 |
) |
|
|
(8,034 |
) |
Repurchase of treasury
stock |
|
|
(1,300 |
) |
|
|
(1,792 |
) |
Taxes paid related to net
share settlement of vesting of restricted stock units |
|
|
(515 |
) |
|
|
(3,120 |
) |
Debt financing costs |
|
|
— |
|
|
|
(204 |
) |
Net cash used in financing
activities |
|
|
(13,617 |
) |
|
|
(13,150 |
) |
Net increase in cash, cash
equivalents and restricted cash |
|
|
2,408 |
|
|
|
910 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
20,159 |
|
|
|
19,249 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
22,567 |
|
|
$ |
20,159 |
|
|
|
|
|
|
|
|
|
|
Definitions, Reconciliations and Uses of Non-GAAP
Financial Measures
The following non-GAAP measures are used in this release:
Media margin is defined as revenue minus cost of revenue
(exclusive of depreciation and amortization) attributable to
variable costs paid for media and related expenses. Media margin is
also presented as percentage of revenue.
Adjusted EBITDA is defined as net income (loss), excluding (1)
income tax expense, (2) interest expense, net, (3) depreciation and
amortization, (4) goodwill impairment, (5) write-off of long-lived
assets, (6) accrued compensation expense for Put/Call
Consideration, (7) share-based compensation expense, (8)
acquisition-related costs, (9) restructuring and certain severance
costs, (10) certain litigation and other related costs, and (11)
one-time items.
Adjusted net income is defined as net
income (loss) excluding (1) goodwill impairment,
(2) write-off of long-lived assets, (3) accrued
compensation expense for Put/Call Consideration, (4) share-based
compensation expense, (5) acquisition-related costs, (6)
restructuring and certain severance costs, (7) certain litigation
and other related costs, and (8) one-time items. Adjusted net
income is also presented on a per share (basic and diluted)
basis.
Below is a reconciliation of media margin from net income
(loss), which we believe is the most directly comparable GAAP
measure.
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
(In
thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net income (loss) |
|
$ |
178 |
|
|
$ |
956 |
|
|
$ |
2,207 |
|
|
$ |
(1,747 |
) |
Income tax expense |
|
|
757 |
|
|
|
109 |
|
|
|
822 |
|
|
|
74 |
|
Interest expense, net |
|
|
1,168 |
|
|
|
1,628 |
|
|
|
5,350 |
|
|
|
6,892 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
817 |
|
|
|
— |
|
Write-off of long-lived
assets |
|
|
1 |
|
|
|
145 |
|
|
|
1 |
|
|
|
425 |
|
Depreciation and
amortization |
|
|
3,810 |
|
|
|
3,675 |
|
|
|
15,302 |
|
|
|
13,940 |
|
General and
administrative |
|
|
12,906 |
|
|
|
13,687 |
|
|
|
46,798 |
|
|
|
48,065 |
|
Product development |
|
|
3,403 |
|
|
|
1,570 |
|
|
|
12,604 |
|
|
|
8,055 |
|
Sales and marketing |
|
|
3,040 |
|
|
|
2,336 |
|
|
|
11,683 |
|
|
|
11,545 |
|
Non-media cost of revenue
(1) |
|
|
6,749 |
|
|
|
2,182 |
|
|
|
14,837 |
|
|
|
6,341 |
|
Media
margin |
|
$ |
32,012 |
|
|
$ |
26,288 |
|
|
$ |
110,421 |
|
|
$ |
93,590 |
|
Revenue |
|
$ |
81,996 |
|
|
$ |
80,011 |
|
|
$ |
310,719 |
|
|
$ |
281,684 |
|
Media margin % of
revenue |
|
|
39.0 |
% |
|
|
32.9 |
% |
|
|
35.5 |
% |
|
|
33.2 |
% |
(1) Represents the portion of cost of revenue (exclusive of
depreciation and amortization) not attributable to variable costs
paid for media and related expenses.
Below is a reconciliation of adjusted EBITDA from net income
(loss), which we believe is the most directly comparable GAAP
measure.
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
(In
thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net income (loss) |
|
$ |
178 |
|
|
$ |
956 |
|
|
$ |
2,207 |
|
|
$ |
(1,747 |
) |
Income tax expense |
|
|
757 |
|
|
|
109 |
|
|
|
822 |
|
|
|
74 |
|
Interest expense, net |
|
|
1,168 |
|
|
|
1,628 |
|
|
|
5,350 |
|
|
|
6,892 |
|
Depreciation and
amortization |
|
|
3,810 |
|
|
|
3,675 |
|
|
|
15,302 |
|
|
|
13,940 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
817 |
|
|
|
— |
|
Write-off of long-lived
assets |
|
|
1 |
|
|
|
145 |
|
|
|
1 |
|
|
|
425 |
|
Accrued compensation expense
for Put/Call Consideration |
|
|
591 |
|
|
|
— |
|
|
|
1,775 |
|
|
|
— |
|
Share-based compensation
expense |
|
|
546 |
|
|
|
2,322 |
|
|
|
5,394 |
|
|
|
10,341 |
|
Acquisition-related costs |
|
|
22 |
|
|
|
35 |
|
|
|
173 |
|
|
|
483 |
|
Restructuring and certain
severance costs |
|
|
50 |
|
|
|
1,596 |
|
|
|
615 |
|
|
|
1,956 |
|
Certain litigation and other
related costs |
|
|
4,022 |
|
|
|
1,044 |
|
|
|
8,715 |
|
|
|
2,135 |
|
One-time items |
|
|
— |
|
|
|
17 |
|
|
|
— |
|
|
|
185 |
|
Adjusted
EBITDA |
|
$ |
11,145 |
|
|
$ |
11,527 |
|
|
$ |
41,171 |
|
|
$ |
34,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Below is a reconciliation of adjusted net income and the
related measure of adjusted net income per share from net
income (loss), which we believe is the most directly
comparable GAAP measure.
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
(In thousands, except
share data) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net income (loss) |
|
$ |
178 |
|
|
$ |
956 |
|
|
$ |
2,207 |
|
|
$ |
(1,747 |
) |
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
817 |
|
|
|
— |
|
Write-off of long-lived
assets |
|
|
1 |
|
|
|
145 |
|
|
|
1 |
|
|
|
425 |
|
Accrued compensation expense
for Put/Call Consideration |
|
|
591 |
|
|
|
— |
|
|
|
1,775 |
|
|
|
— |
|
Share-based compensation
expense |
|
|
546 |
|
|
|
2,322 |
|
|
|
5,394 |
|
|
|
10,341 |
|
Acquisition-related costs |
|
|
22 |
|
|
|
35 |
|
|
|
173 |
|
|
|
483 |
|
Restructuring and certain
severance costs |
|
|
50 |
|
|
|
1,596 |
|
|
|
615 |
|
|
|
1,956 |
|
Certain litigation and other
related costs |
|
|
4,022 |
|
|
|
1,044 |
|
|
|
8,715 |
|
|
|
2,135 |
|
One-time items |
|
|
— |
|
|
|
17 |
|
|
|
— |
|
|
|
185 |
|
Adjusted net
income |
|
$ |
5,410 |
|
|
$ |
6,115 |
|
|
$ |
19,697 |
|
|
$ |
13,778 |
|
Adjusted net income
per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.07 |
|
|
$ |
0.08 |
|
|
$ |
0.25 |
|
|
$ |
0.17 |
|
Diluted |
|
$ |
0.07 |
|
|
$ |
0.08 |
|
|
$ |
0.25 |
|
|
$ |
0.17 |
|
Adjusted weighted
average number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
78,600,700 |
|
|
|
79,328,262 |
|
|
|
78,611,145 |
|
|
|
79,373,789 |
|
Diluted |
|
|
79,899,702 |
|
|
|
79,701,600 |
|
|
|
79,525,176 |
|
|
|
80,280,293 |
|
We present media margin, adjusted EBITDA and adjusted net income
as supplemental measures of our financial and operating performance
because we believe they provide useful information to investors.
More specifically:
Media margin, as defined above, is a measure of the efficiency
of the Company’s operating model. We use media margin and the
related measure of media margin as a percentage of revenue as
primary metrics to measure the financial return on our media and
related costs, specifically to measure the degree by which the
revenue generated from our digital marketing services exceeds the
cost to attract the consumers to whom offers are made through our
services. Media margin is used extensively by our management to
manage our operating performance, including evaluating operational
performance against budgeted media margin and understanding the
efficiency of our media and related expenditures. We also use media
margin for performance evaluations and compensation decisions
regarding certain personnel.
Adjusted EBITDA, as defined above, is another primary metric by
which we evaluate the operating performance of our business, on
which certain operating expenditures and internal budgets are based
and by which, in addition to media margin and other factors, our
senior management is compensated. The first three adjustments
represent the conventional definition of EBITDA, and the remaining
adjustments are items recognized and recorded under US GAAP in
particular periods but might be viewed as not necessarily
coinciding with the underlying business operations for the periods
in which they are so recognized and recorded. These adjustments
include certain severance costs associated with department-specific
reorganizations and certain litigation and other related costs
associated with legal matters outside the ordinary course of
business, including costs and accruals related to the NY AG and FTC
matters. Items are considered one-time in nature if they are
non-recurring, infrequent or unusual and have not occurred in the
past two years or are not expected to recur in the next two years,
in accordance with SEC rules. Adjusted EBITDA for
the year ended December 31, 2019 excluded as one-time
items $0.2 million of costs associated with the move of our
corporate headquarters. There were no other material
adjustments for one-time items in the periods presented.
Adjusted net income, as defined above, and the related measure
of adjusted net income per share exclude certain items that are
recognized and recorded under US GAAP in particular periods but
might be viewed as not necessarily coinciding with the underlying
business operations for the periods in which they are so recognized
and recorded. Adjusted net income for the year ended December
31, 2019 excluded as one-time items $0.2 million of costs
associated with the move of our corporate headquarters. There were
no other material adjustments for one-time items in the periods
presented. We believe adjusted net income affords investors a
different view of the overall financial performance of the Company
than adjusted EBITDA and the US GAAP measure of net
income (loss).
Media margin, adjusted EBITDA, adjusted net income and adjusted
net income per share are not intended to be performance measures
that should be regarded as an alternative to, or more meaningful
than, net income (loss) as indicators of operating performance.
None of these metrics are presented as measures of liquidity. The
way we measure media margin, adjusted EBITDA and adjusted net
income may not be comparable to similarly titled measures presented
by other companies and may not be identical to corresponding
measures used in our various agreements.
Contact Information: Investor
RelationsFluent, Inc.(917)
310-2070InvestorRelations@fluentco.com
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