Perion Expects 2012 Revenue Growth to Exceed 30%
January 11 2012 - 8:00AM
Business Wire
Perion Network Ltd. (NASDAQ: PERI) a digital media company that
helps make the everyday life of 40+ year old second wave adopters
easier and more enjoyable, today announced its guidance for
2012.
2012 non-GAAP Financial Metrics:
- Revenue is expected to be $48 - $50
million, representing 30%+ year over year growth
- EBITDA is expected to be $9.5 - $11
million , representing a 20% - 22% EBITDA margin
- Net Income is expected to be $7 - $8
million, representing a 14% - 17% net profit margin
- Smilebox to contribute roughly $15
million in revenue and $2 million in EBITDA
Commenting on the guidance, Mr. Josef Mandelbaum, Perion’s CEO
said, “In 2012 we expect our expanded product portfolio to drive
significant top line growth and provide us with strong and
sustainable profit margins.”
“The acquisition of Smilebox is surpassing our expectations and
as a result will be the largest contributor to our growth in 2012.
The realization of both revenue and cost synergies are the main
contributors to the success of the acquisition to date. The
Smilebox product line will generate non-GAAP revenues of roughly
$15 million in 2012, compared to approximately $11.5 million in
2011. The increase in revenues, coupled with the improved cost
structure, is expected to generate EBITDA of $2 million in 2012,
compared to an estimated $1.5 million loss for the full year of
2011. These results will enable us to realize approximately a 7%
return on cash utilized for the acquisition in 2012 and double
digit annual returns in each subsequent year,” Mandelbaum
continued.
Based on preliminary unaudited information, management confirmed
that revenues, EBITDA and net income for 2011 will all be in line
with previously provided guidance. The $37 million in revenues
would represent a 25% year over year growth from 2010.
Additionally, while it is premature to report precise numbers, for
the fourth quarter, Smilebox will be cash flow positive and appears
to be slightly better than breakeven.
2012 Operating Metrics:
- Total downloads for the year are
expected to exceed 28 million compared to 17.5 million for
2011
- Installed base is expected to exceed
14.5 million at the end of the year as compared to 12.2 million at
the end of 2011
- Premium users are expected to exceed
500,000 at the end of the year as compared to 390,000 at the end of
2011
“2011 was a very exciting year for us, we accomplished a lot and
I expect 2012 to be even better. We will continue to grow our
portfolio through acquisitions, partnerships and new product
innovations, all centered on the needs of our 40+ year old Second
Wave Adopter (“SWA”). We also expect to integrate social aspects
into more of our products and to expand our product offering onto
mobile platforms like the iPhone, iPad, Android and others, as our
users begin to adopt these devices. Lastly, we will expand into
other consumer verticals, like safety & security, through our
Fixie product line,” Mandelbaum concluded.
Revenue and other financial estimates contained in this press
release have not been audited or reviewed by Perion’s independent
auditors, and accordingly they express no opinion or other form of
assurance as to this information. The Company provides no assurance
that these preliminary results will not change following the
Company’s completion of its financial audit of results of
operations for the fiscal fourth quarter 2011, which are expected
to be completed by March 2012.
Conference Call
Perion will host a conference call to discuss the 2012 guidance
tomorrow, January 12th at 10:00 AM EST (17:00 PM Israel Time). To
listen to the call and view the accompanying slide presentation,
please visit the Investor Relations section of Perion’s website at
www.perion.com. Click on the link provided for the webcast, or dial
1-(866)-744-5399. Callers from Israel may access the call by
dialing (03) 918-0685. The webcast will be archived on the
company’s website.
About Perion Network Ltd.
Founded in 2000, Perion (NASDAQ:PERI) is a digital media company
that provides products and services to 40+ year old second wave
adopters (SWA) to help make their everyday life simpler and more
enjoyable. Focusing on an underserved market of SWA’s who value
their time online, Perion offers a growing portfolio of easy-to-use
products. The Company's products include: IncrediMail Premium, an
award winning e-mail product sold in over 100 countries in 10
different languages; Smilebox, a leading photo sharing and social
expression product and service that lets customers quickly turn
life's moments into digital creations to share and connect with
friends and family in a fun and personal way; PhotoJoy, a photo
discovery and sharing screensaver & wallpaper product; and
Fixie, a PC optimization product. For more information on Perion
(NASDAQ:PERI), visit www.perion.com.
Non-GAAP measures
Non-GAAP financial measures consist of GAAP financial measures
adjusted to exclude: Valuation adjustment on acquired deferred
product revenues, amortization of acquired intangible assets,
share-based compensation expenses, acquisition related expenses,
one time compensation expenses, non-recurring tax benefits. The
purpose of such adjustments is to give an indication of our
performance exclusive of non-cash charges and other items that are
considered by management to be outside of our core operating
results. Our 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 our
consolidated financial statements prepared in accordance with GAAP.
Our management regularly uses our supplemental non-GAAP financial
measures internally to understand, manage and evaluate our business
and make operating decisions. These non-GAAP measures are among the
primary factors management uses in planning for and forecasting
future periods. Business combination accounting rules requires us
to recognize a legal performance obligation related to a revenue
arrangement of an acquired entity. The amount assigned to that
liability should be based on its fair value at the date of
acquisition. The non-GAAP adjustment is intended to reflect the
full amount of such revenue. We believe this adjustment is useful
to investors as a measure of the ongoing performance of our
business. We believe these non-GAAP financial measures provide
consistent and comparable measures to help investors understand our
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. EBITDA is defined as
net income (loss) plus net interest and other (income) expense;
income tax expense; deferred revenue reconciliation due to
acquisitions; and non-cash charges including depreciation,
amortization, impairment of intangible assets and stock-based
compensation expense.
Forward Looking Statements
This press release contains historical information and
forward-looking statements within the meaning of The Private
Securities Litigation Reform Act of 1995 with respect to the
business, financial condition and results of operations of the
Company. The words "believe," "expect," "intend," "plan," "should"
and similar expressions are intended to identify forward-looking
statements. Such statements reflect the current views, assumptions
and expectations of the Company with respect to future events and
are subject to risks and uncertainties. Many factors could cause
the actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements that may be expressed or implied by such
forward-looking statements, including, among others, potential
litigation associated with the transaction, risks that the proposed
transaction disrupts current plans and operations and the potential
difficulties in employee retention as a result of the proposed
transaction and in integrating the acquired business, the
distraction of management and the Company resulting from the
proposed transaction, changes in the markets in which the Company
operates and in general economic and business conditions, loss of
key customers and unpredictable sales cycles, competitive
pressures, market acceptance of new products, inability to meet
efficiency and cost reduction objectives, changes in business
strategy and various other factors, whether referenced or not
referenced in this press release. Various other risks and
uncertainties may affect the Company and its results of operations,
as described in reports filed by the Company with the Securities
and Exchange Commission from time to time, including its annual
report on Form 20-F for the year ended December 31, 2010. The
Company does not assume any obligation to update these
forward-looking statements.
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