2014 Full Year Guidance: $460 - $470 Million
Revenue and EBITDA of $125-$130 Million
Perion Network Ltd. (NASDAQ: PERI) today announced record
financial results for the fourth quarter and full year ended
December 31, 2013.
Full Year 2013 Perion non-GAAP Financial Highlights
Include:
- Revenues increased 71% year-over-year
and were $104.6 million;
- EBITDA increased 82% year-over-year
reaching $25.5 million;
- Net income increased 95%, reaching
$20.1 million; and
- Diluted earnings per share increased
56%, reaching $1.54.
Q4 2013 Perion non-GAAP Financial Highlights Include:
- Revenues increased 47% year-over-year
reaching $31.3 million;
- EBITDA increased 56% year-over-year to
$7.7 million;
- Net income increased 77%
year-over-year, reaching $6.4 million; and
- Diluted earnings per share increased
53% year-over-year, reaching $0.49.
On January 2, 2014, Perion completed the acquisition of
Conduit’s ClientConnect in an all-stock transaction. Select
highlights of the pro-forma performance of ClientConnect as
provided by Conduit are as follows:
Full Year 2013 ClientConnect non-GAAP Financial Highlights
Include:
- Revenues were $325.5 million;
- EBITDA reached $96.8 million; and
- Net income was $86.7 million
Q4 2013 ClientConnect non-GAAP Pro Forma Financial Highlights
Include:
- Revenues were $84.1 million;
- EBITDA was $17.3 million; and
- Net income reached $17.2 million.
Josef Mandelbaum, Perion’s CEO, commented: “This was a strong
end to a record and transformational year for our company. We
exceeded our guidance and delivered year over year non-GAAP revenue
growth of 71% and non-GAAP net income doubled. More importantly, we
completed a milestone acquisition uniquely positioning us as one of
the clear industry leaders, enabling us to evolve as an even
stronger company in the future. This future is focused on
developers who are challenged to reach more customers, increase
engagement and monetize their innovations on both the desktop and
mobile platforms. Our Lifecycle Management Platform will address
all these needs, and become the industry gold standard.”
“I am also very pleased to report that the integration of
ClientConnect with Perion has gone exceedingly well, even better
than our expectations, due in large part to the talent and quality
of the combined management team,” added Mr. Mandelbaum. “In the
short time since we closed the acquisition, we have deployed
several initiatives to accelerate growth and we continue to
successfully adjust to industry changes. We are encouraged with the
preliminary results of these actions and as a result, our first
quarter as a combined company is off to a good start, despite
headwinds in the industry.”
Non-GAAP Financial Comparison for the Fourth Quarter and Full
Year of 2013:
Revenue: In the fourth quarter of 2013, Perion revenues
reached $31.3 million, reflecting a 47% increase compared to $21.4
million in the fourth quarter of 2012. This increase was
attributable to a 61% year over year increase in search generated
revenues, with products and other revenues increasing 12%.
In the full year of 2013 Perion revenues were $104.6 million,
increasing 71% from the $61.2 million recorded in 2012. Search
generated revenues increased by 101% and products and other
revenues grew by 21%. The increase in search revenues was achieved
while continuing to diversify the Company’s search partners, as we
partnered with five companies and Google accounting for only 38% of
our revenues in 2013.
Included in 2013 non GAAP revenues was $18 million in revenues
generated through a commercial transaction with Conduit, which was
entered into prior to the acquisition of their ClientConnect
business. On a GAAP accounting basis these revenues were netted
out, with $14.3 million being reduced from customer acquisition
cost and $3.1 million recorded as deferred revenues.
Customer Acquisition Costs (“CAC”): In the fourth quarter
of 2013, CAC was $14.6 million, 50% higher than the $9.7 million
spent in the fourth quarter of 2012. In the full year of 2013,
Perion invested $46.6 million in CAC, increasing 111%, compared to
the $22.1 million invested in the full year of 2012. Non GAAP CAC
in 2013 included $14.3 million expensed in generating revenues in
connection with Perion’s commercial transaction in place with
Conduit, which was entered into prior to the acquisition of their
ClientConnect business. This expense was netted against revenues
generated from the commercial transaction with Conduit and deferred
revenues in the GAAP report.
EBITDA: In the fourth quarter of 2013, EBITDA was $7.7
million, increasing $2.8 million, or 56%, compared to $4.9 million
in the fourth quarter of 2012. Perion’s EBITDA margin this quarter
was 24%, compared to 23% in the same quarter last year. In the full
year of 2013, EBITDA increased 82% to $25.5 million, or 24% of
revenues, compared to $14.0 million, or 23% or revenues, in
2012.
Net Income: In the fourth quarter of 2013, net income
increased 77%, reaching $6.4 million or $0.49 per share, compared
to $3.6 million, or $0.32 per share, in the fourth quarter of 2012.
On a GAAP basis, we recorded a net loss of $1.8 million, or ($0.14)
per share, primarily as a result of deferring $3.1 million net
revenue on a GAAP basis, $2.8 million expenses related to our
ClientConnect acquisition, as well as $2.3 million amortization of
acquired intangible assets.
In the full year of 2013, non-GAAP net income nearly doubled
compared to 2012, reaching $20.1 million, or $1.54 per share,
compared to $10.3 million, or $0.99 per share, in 2012. On a GAAP
accounting basis we recorded a $0.3 million net profit, or $0.02
per share primarily as a result of deferring $3.1 million net
revenue, $6.2 million of expenses related to the acquisition of
ClientConnect, as well as $9.3 million amortization of acquired
intangible assets and $1.5 million share based compensation.
Cash Flow from Operations: Based on U.S. GAAP, in the
full year of 2013, cash flow from operations was $15.9 million,
compared to $16.3 million in the full year of 2012. Cash flow from
operations in 2013 was due GAAP net income of $0.3 million
increased by non-cash expenses depreciation and amortization
expenses of $10.7 million, $2.7 million in other expenses, as well
as $2.2 million from change in operating assets and
liabilities.
Financial Outlook
Based on currently available information, Perion’s outlook for
the full year of 2014 is as follows:
- Revenue is expected to be in the range
of $460 million to $470 million.
- EBITDA is expected to be in the range
of $125 million to $130 million.
- Net Income is expected to be in the
range of $103 million to $108 million.
“Our strong cash flow, resources, and proven expertise enables
us to overcome industry changes, increase our investment in
customer acquisition to gain market share, as well as invest in our
platform and revenue diversification strategy,” concluded Mr.
Mandelbaum. “The key components of this strategy, involve building
a proprietary mobile distribution network, expanding our
data-driven display advertising business, and enhancing our
analytics solutions for developers. These investments, along with
expenses related to the consolidation of our headquarters and the
new profit baseline of the industry, will temper EBITDA growth in
2014. Looking ahead we are excited about our future and believe the
dynamics of the industry and the introduction of our new platform,
position us well for profitable long-term growth.”
Conference Call
Perion will host a conference call to discuss the results today,
March 3, 2014 at 10 a.m. ET (5 p.m. Israel Time). Details are as
follows:
- Dial-in number from within the United
States: 1-888-455-2260
- Dial-in number from Israel: 1 80 924
5906
- Dial-in number (other international):
1-719-325-2323
- Playback, available until March 10,
2014 by calling 1-877-870-5176 (United States) or 1-858-384-5517
(international). Pin number for the replay 9238963.
- A live webcast is accessible at
http://www.perion.com/events-presentations.
About Perion Network Ltd.
Perion powers innovation. Perion is a global performance-based
media and Internet Company, providing online publishers and app
developers advanced technology and a variety of intelligent,
data-driven solutions to monetize their application or content and
expand their reach to larger audiences. Our leading self-service
platform with simple integration and robust, built-in analytics,
empowers digital businesses to optimize distribution and maximize
revenue. Our distribution solutions, which are based on our own
experience as an app developer, position us to best understand the
needs of developers, and enable developers to focus exclusively on
creating high-quality digital product and content. The Perion team
brings decades of experience, operating and investing in
digitally-enabled businesses, and we continue to innovate and
create value for the app ecosystem. More information about Perion
may be found at www.perion.com.
Non-GAAP measures
Non-GAAP financial measures consist of GAAP financial measures
adjusted to exclude: Certain search revenues related to agreement
with Conduit; valuation adjustment on acquired deferred product
revenues; customer acquisition costs related to the revenues from
the Conduit agreement; amortization of acquired intangible assets,
share-based compensation expenses, acquisition related expenses,
taxes on amortization of acquired intangible assets; non-recurring
tax benefit; non-recurring financial income; and deferred financial
expenses. 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. Reconciliation between
results on a GAAP and non-GAAP basis is provided in a table
immediately following the Consolidated Statements of
Operations.
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 Perion.
The words “will”, “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 Perion with respect to future events and are
subject to risks and uncertainties. Many factors could cause the
actual results, performance or achievements of Perion to be
materially different from any future results, performance or
achievements that may be expressed or implied by such
forward-looking statements, or financial information, including,
among others, the failure to realize the anticipated benefits of
the ClientConnect transaction; risks entailed in integrating the
ClientConnect business with Perion’s other businesses, including
employee retention and customer acceptance; the risk that the
transaction will divert management and other resources from the
ongoing operations of the two businesses or otherwise disrupt the
conduct of those businesses, potential litigation associated with
the transaction, and general risks associated with the business of
Perion and with the ClientConnect business, including changes in
the markets in which the businesses operate and in general economic
and business conditions, loss of key customers, 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 Perion 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/A for the year ended December 31, 2012. Perion does
not assume any obligation to update these forward-looking
statements.
Source: Perion Network Ltd.
PERION NETWORK LTD.
NON-GAAP SUMMARY FINANCIAL METRICS U.S. dollars in thousands
(except per share data), unaudited
Quarter ended
December 31, Year ended December 31, 2013
2012 2013 2012 Revenue $
31,339 $ 21,371 $ 104,628 $ 61,206 EBITDA $ 7,678 $ 4,926 $
25,469 $ 13,994 Net Income $ 6,440 $ 3,634 $ 20,080 $ 10,301
Diluted EPS $ 0.49 $ 0.32 $ 1.54 $ 0.99
PERION NETWORK LTD.
GAAP FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars and number of shares in
thousands (except per share data)
Quarter ended December 31, Year
ended December 31, 2013 2012 2013
2012 unaudited
unaudited
unaudited Revenues: Search $ 10,034 $ 15,250 $ 59,038 $ 38,061
Products and other 6,829 6,116 28,110
22,162 Total revenues 16,863 21,366 87,148 60,223 Cost of revenues
2,650 1,850 11,440 5,230 Gross profit
14,213 19,516 75,708 54,993 Operating
expenses: Research and development, net 4,172 2,877 13,393 10,735
Selling and marketing 2,955 2,196 11,058 7,456 Customer acquisition
costs 3,261 9,698 32,300 22,061 General and administrative
5,220 3,307 15,077 8,560 Total operating
expenses 15,608 18,078 71,828 48,812
Operating income (loss) (1,395) 1,438 3,880 6,181 Financial expense
(income), net (51) (80) 1,233 174
Income (loss) before taxes on income (1,344) 1,518 2,647 6,007
Taxes on income 419 925 2,337 2,473 Net
income (loss) $ (1,763) $ 593 $ 310 $ 3,534 Basic earnings
(loss) per share $ (0.14) $ 0.06 $ 0.03 $ 0.35 Diluted earnings
(loss) per share $ (0.14) $ 0.05 $ 0.02 $ 0.34 Basic
weighted number of shares 12,488 10,727 12,331
10,159 Diluted weighted number of shares 12,488
11,275 13,003 10,367 PERION
NETWORK LTD. RECONCILIATION OF GAAP TO NON-GAAP RESULTS U.S.
dollars and number of shares in thousands (except per share data),
unaudited
Quarter endedDecember
31,
Year endedDecember 31,
2013 2012 2013 2012 GAAP
revenues $ 16,863 $ 21,366 $ 87,148 $ 60,223
Search revenues related to agreement with
Conduit
14,476 - 17,480 - Valuation adjustment on acquired deferred product
revenues - 5 - 983 Non-GAAP revenues $
31,339 $ 21,371 $ 104,628 $ 61,206 GAAP operating income
(loss) $ (1,395) $ 1,438 3,880 6,181
Search revenues related to agreement with
Conduit
14,476 - 17,480 -
Customer acquisition costs directly
related to the agreement with Conduit
(11,330) - (14,334) - Valuation adjustment on acquired deferred
product revenues - 5 - 983 Acquisition related expenses 2,769 1,703
6,201 2,204 Share based compensation 439 267 1,527 1,056
Amortization of acquired intangible assets 2,333
1,053 9,269 2,435 Operating income adjustments
8,687 3,028 20,143 6,678 Non-GAAP operating
income $ 7,292 $ 4,466 $ 24,023 $ 12,859 GAAP Net income $
(1,763) $ 593 $ 310 3,534 Operating income adjustments 8,687 3,028
20,143 6,678 Accretion of payment obligation related to
acquisitions 288 101 1,131 177 Non-recurring financial income (380)
- (380) - Non-recurring tax benefit (1,000) - (1,000) - Taxes
related to amortization of acquired intangible assets 608
(88) (124) (88) Non-GAAP net income $ 6,440 $
3,634 $ 20,080 $ 10,301 GAAP diluted earnings (loss)
per share $ (0.14) $ 0.05 $
0.02
$ 0.34 Non-GAAP diluted earnings per share $ 0.49 $ 0.32 $ 1.54 $
0.99 Shares used in computing US GAAP diluted earnings (loss) per
share 12,488 11,275 13,003 10,367
Shares used in computing Non-GAAP diluted earnings per share
13,061 11,275 13,003 10,367 Non-GAAP
net income $ 6,440 $ 3,634 $ 20,080 $ 10,301 Income tax expense 419
925 2,337 2,473 Taxes on amortization of acquired intangible assets
(608) 88 124 88 Interest expense (income), net (51) (80) 1,233 174
Non-recurring tax benefit 1,000 - 1,000 - Accretion of payment
obligation related to acquisitions (288) (101) (1,131) (177)
Non-recurring financial income 380 - 380 - Depreciation and
amortization 386 460 1,446
1,135
Non-GAAP EBITDA $ 7,678 $ 4,926 $ 25,469 $
13,994
PERION NETWORK LTD. RECONCILIATION OF GAAP TO
NON-GAAP RESULTS U.S. dollars and number of shares in thousands
(except per share data), unaudited
Reconciliation of Pro
forma ClientConnect GAAP to Non-GAAP results
Period endedDecember 31,
2013
(as provided by Conduit)
Quarter Year
GAAP operating income $ 11,051 $ 82,242 Acquisition related
expenses 2,077 2,077 Share based compensation 3,550 10,406
Depreciation 596 2,110 Operating income adjustments
6,223 14,593 Non-GAAP EBITDA $ 17,274 $ 96,835
GAAP Net income $ 11,215 $ 62,408 Acquisition related expenses
2,077 2,077 Share based compensation 3,550 10,406 Non-recurring tax
expense
338
11,838
Non-GAAP net income $
17,180
$
86,729
PERION NETWORK LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31,
December 31, 2013 2012 Assets
Unaudited
Current assets: Cash and cash equivalents $ 23,364 $ 21,762
Restricted cash 1,837 10,260 Trade receivables 18,665 10,246 Other
receivables and prepaid expenses 3,719 5,424 Current
assets 47,585 47,692 Property and equipment, net 1,377 1,522
Goodwill and Other intangible assets, net 64,475 72,730 Other
assets 1,438 1,215 Total assets $ 114,875 $ 123,159
Liabilities and shareholders' equity Current
liabilities: Current maturities of long term debt $ 2,300 $ 2,300
Trade payables 13,900 9,560 Deferred revenues 9,052 5,132 Payment
obligation related to acquisition 8,773 20,317 Accrued expenses and
other liabilities 16,420 14,679 Total current
liabilities 50,445 51,988 Long-term debt 4,250 6,550 Contingent
purchase consideration - 6,078 Other long term liabilities 3,610
3,833 Shareholders' equity 56,570 54,710 Total
liabilities and shareholders' equity $ 114,875 $ 123,159
PERION NETWORK LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
U.S. dollars in thousands, (unaudited)
Year ended December 31, 2013
2012
Operating
activities:
Net income $ 310 $ 3,534 Adjustments required to reconcile net
income to net cash provided by operating activities: Depreciation
and amortization 10,715 3,572 Stock based compensation expense, net
1,527
1,056 Accretion of payment obligation related to acquisitions 1,131
177 Net change in operating assets and liabilities
2,213
7,924 Net cash provided by operating activities
15,896
16,263
Investing
activities:
Purchase of property and equipment (671) (662) Restricted cash, net
(171)
- Proceeds from sale of property and equipment 4 - Capitalization
of software development and content costs (1,627) (819) Cash paid
by employees on previously exercised options of acquired company -
727 Acquisition of subsidiary - (7,307) Net cash used
in investing activities
(2,465)
(8,061)
Financing
activities:
Exercise of share options - 76 Deferred payment made in connection
with acquisitions
(9,529)
(6,626) Proceeds from long term loan - 10,000 Repayment of
long-term loans (2,300) (1,150) Net cash provided by
(used in) financing activities
(11,829)
2,300 Net Increase in cash and cash equivalents 1,602
10,502 Cash and cash equivalents at beginning of year 21,762
11,260 Cash and cash equivalents at end of year $
23,364 $ 21,762
Perion Network Ltd.Deborah MargalitPerion Investor
Relations+972-3-7696100investors@perion.comorHayden / MS-IR
LLCBrett Maas / Miri Segal-Scharia646-536-7331 /
917-607-8654Brett@haydenir.com / msegal@ms-ir.com
Perion Network (NASDAQ:PERI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Perion Network (NASDAQ:PERI)
Historical Stock Chart
From Jul 2023 to Jul 2024