Full year Total Spend increases 28% from prior
year
Tremor Video, Inc. (NYSE:TRMR), the premium video marketplace
that provides buyers and sellers with software for video ad
effectiveness, today announced financial results for the fourth
quarter and full year ended December 31, 2015.
Full Year 2015 Highlights:
- Total Spend1 of $203.9 million, up 28%
year-over-year
- Revenue of $173.8 million, up 9%
year-over-year
- Gross profit of $74.6 million, up 29%
year-over-year
- Adjusted EBITDA2 of ($4.6) million;
Adjusted EBITDA per share2 of ($0.09)
- Net loss of ($43.2) million, including
($22.7) million in non-cash impairment charges incurred in Q3
- Net loss per share of ($0.84),
including ($0.44) per share in non-cash impairment charges incurred
in Q3
Fourth Quarter 2015 Highlights:
- Total Spend1 of $67.9 million, up over
62% year-over-year
- Revenue of $51.8 million, up 24%
year-over-year
- Gross profit of $22.8 million, up 42%
year-over-year
- Adjusted EBITDA2 of $2.1 million;
Adjusted EBITDA per share2 of $0.04
- Net loss of ($2.4) million; net loss
per share of ($0.05)
(1) We define Total Spend (formerly reported as our GAAP
revenue) as the aggregate gross spend transacted through our
platforms. Total Spend is a non-GAAP financial measure. Please see
the discussion in the section called “Non-GAAP Financial Measures”
and the reconciliations included at the end of this press release.
(2) Adjusted EBITDA and Adjusted EBITDA per share are non-GAAP
financial measures. Please see the discussion in the section called
“Non-GAAP Financial Measures” and the reconciliations included at
the end of this press release.
“Significant traction in our programmatic platforms and
continued innovation in our higher function products drove our 2015
record results,” said Bill Day, Tremor Video CEO. “We believe that
we are poised to deliver further success in 2016 based on our
significant fourth quarter momentum."
As discussed further in the Company’s Form 8-K filed
concurrently with this release, we have concluded based on our
consideration of relevant accounting guidance that revenue
attributable to our supply side platform (SSP), which we introduced
in 2015, should be booked net of inventory costs. In prior periods,
we have reported SSP revenue on a gross basis. As a result, we have
determined that our previously issued quarterly financial
statements for the periods ending March 31, June 30, and September
30, 2015, should be restated to reflect the revenue attributable to
our SSP on a net basis. This restatement has the effect of
decreasing both revenue and cost of revenue in a like amount in our
financial statements for each period. The restatement has no impact
on our reported gross profit, net loss or Adjusted EBITDA for any
period. Revenue from our buyer platform will continue to be
reported on a gross basis. Our restated income statements for the
periods ended March 31, June 30, and September 30, 2015 are
included in the financial tables at the back of this release.
We will now be reporting Total Spend (formerly reported as our
GAAP revenue) to accompany our reporting of revenue. We define
Total Spend as the aggregate gross spend transacted through our
platforms.
The table below presents Total Spend, revenue, net loss,
Adjusted EBITDA, net loss per share and Adjusted EBITDA per share
for the three and twelve month periods ending December 31,
2015.
Fourth Quarter
And Full Year Results Summary (in millions, except per share
amounts), (unaudited)
Three
Months Ended Years Ended
December 31, 2015
December 31, 2014
% Change
December 31, 2015
December 31, 2014
% Change
Total Spend $67.9 $41.9 62% $203.9 $159.5 28% Revenue $51.8
$41.9 24% $173.8 $159.5 9% Gross profit $22.8 $16.1 42% $74.6 $57.8
29% Net loss1 ($2.4) ($5.4) 55% ($43.2) ($23.5) (84%) Adjusted
EBITDA $2.1 ($1.8) NA ($4.6) ($10.9) 58% Net loss per share ($0.05)
($0.11) 55% ($0.84) ($0.46) (83%) Adjusted EBITDA per share $0.04
($0.03) NA ($0.09) ($0.22) 59% (1)
During the third quarter of 2015, as
required under GAAP, the Company performed an interim impairment
test on its assetsbased on a decrease in the Company’s market
capitalization below the carrying value of its assets. As a result
of this test, theCompany recorded a non-cash impairment charge of
($22.1) million related to its goodwill and certain intangible
assets. Inaddition, the Company recorded a non-cash impairment
charge of ($0.6) million relating to certain property and
equipmentmaintained at its former headquarters.
Fourth Quarter And Full Year
Breakdown of Total Spend (in thousands), (unaudited)
Three Months Ended Years Ended
December 31, 2015
December 31, 2014
% Change
December 31, 2015
December 31, 2014
% Change
Programmatic $ 32,118 $ 5,959 439% $ 70,387 $ 14,070 400%
Non-programmatic higher function 25,717 21,137 22% 87,842 64,301
37% Non-programmatic media network 10,099 14,782
(32%) 45,653 81,116 (44%) Total Spend $ 67,934 $
41,878 62% $ 203,882 $ 159,487 28%
Guidance
Based on information available as of March 3, 2016, the Company
expects the following:
Q1 and Full Year 2016
Outlook Q1 2016 Full Year 2016 Total Spend
$48 - $50 million $255 - $265 million Revenue $34 - $36 million
$180 - $190 million Adjusted EBITDA ($5) – ($4) million $0 - $5
million
Q4 and Full Year 2015 Financial Results Webcast: Tremor
Video will review its fourth quarter 2015 results and conduct an
analyst and investor day on Thursday March 3, 2016 beginning at
1:00 PM EST. The event will be hosted by Tremor Video CEO, Bill Day
and feature presentations from himself as well as other executives
on the Company’s performance, strategy and financial outlook. The
event will be broadcast live and can be accessed on Tremor Video’s
Investor Relations website at http://investor.tremorvideo.com.
Following completion of the event, a recorded replay of the webcast
will be available on Tremor Video’s website for a period of six
months.
About Tremor Video
Tremor Video (NYSE:TRMR) provides software for video advertising
effectiveness. Our buyer and seller platforms enable seamless
transactions in a premium video marketplace by offering control and
transparency to clients. We employ patented all-screen technology
to make every advertising moment more relevant for consumers, and
deliver maximum results for buyers and sellers.
"Safe harbor" Statement:
This press release contains forward-looking statements that
involve risks, uncertainties, assumptions and other factors that
could cause actual results and the timing of certain events to
differ materially from those set forth in or implied by such
forward-looking statements. All statements other than statements of
historical fact are forward-looking statements, including, but not
limited to, statements related to Tremor Video’s future financial
results or growth potential, including first quarter 2016 and 2016
full year financial guidance, and statements with respect to future
revenue mix or the development or adoption of the company’s
solutions. Important factors that could cause actual results or the
timing of events to differ materially from those set forth in or
implied by any forward-looking statements include, without
limitation, risks and uncertainties associated with: the company’s
limited operating history and the continuing development of its
business model; unfavorable conditions in the global economy or
reductions in digital advertising spend; the company’s ability to
effectively innovate and adapt to rapidly changing technology and
client needs; increased competition as well as innovations by new
and existing competitors; expansion of the online video advertising
market; the company’s ability to attract new advertisers and
increase spend from existing advertisers; the company’s ability to
attract advertising spend from TV media buyers; risks of entering
new markets in which we have limited or no experience and
difficulty adapting our solutions for new markets; adoption of
brand-centric metrics, advanced ad formats and performance-based
pricing models by advertisers; the company’s ability to effectively
deliver video ad campaigns with demo guarantees; adoption of the
company’s programmatic solutions by advertisers and publishers;
adoption of the company’s All-Screen product by advertisers; the
company’s ability to acquire an adequate supply of premium video
advertising inventory from publishers on terms that are favorable
to it; the company’s ability to detect fraudulent or malicious
activity and ensure a high level of brand safety for its clients;
identifying, attracting and retaining qualified personnel; defects,
errors or interruptions in the company’s solutions; the company’s
ability to collect and use data to deliver video ads; the impact of
tools that block the display of video ads; the effect of regulatory
developments and industry standards regarding internet privacy and
other matters; maintaining, protecting and enhancing the company’s
intellectual property; costs associated with defending intellectual
property infringement, securities litigation and other claims;
future opportunities and plans, including the uncertainty of
expected future financial performance and results; as well as other
risks and uncertainties detailed from time-to-time under the
caption “Risk Factors” and elsewhere in Tremor Video’s filings with
the U.S. Securities and Exchange Commission, including its Annual
Report on Form 10-K for the year ended December 31, 2014 filed with
the U.S. Securities and Exchange Commission on March 16, 2015, its
Quarterly Report on Form 10-Q for the quarter ended March 31, 2015,
filed on May 11, 2015, its Quarterly Report on Form 10-Q for the
quarter ended June 30, 2015, filed on August 10, 2015, its
Quarterly Report on Form 10-Q for the nine months ended September
30, 2015 filed with the U.S. Securities and Exchange Commission on
November 9, 2015, and future filings and reports by the company,
including its Annual Report on Form 10-K for the year ended
December 31, 2015.
Forward-looking statements are based on current expectations and
beliefs and are not guarantees of future performance or events.
Investors are cautioned not to place undue reliance on any
forward-looking statements. Furthermore, forward-looking statements
speak only as of the date on which they are made, and, except as
required by law, Tremor Video disclaims any obligation to update
these forward-looking statements to reflect future events or
circumstances.
Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are
prepared and presented in accordance with U.S. generally accepted
accounting principles (“GAAP”), Tremor Video reports Total Spend,
Adjusted EBITDA, and basic and diluted Adjusted EBITDA per share,
which are non-GAAP financial measures. We define Total Spend as the
aggregate gross spend transacted through our platforms. Total Spend
does not represent revenue earned by us. We define Adjusted EBITDA
as net loss plus (minus): interest expense and other income
(expense), net, income tax expense, depreciation and amortization
expense, non-cash stock-based compensation expense, non-cash
stock-based long-term incentive compensation, non-cash impairment
charges, litigation costs associated with class action securities
litigation, executive severance costs, and acquisition related
costs. We define Adjusted EBITDA per share as Adjusted EBITDA
divided by weighted average common shares outstanding. We use these
non-GAAP financial measures for financial and operational decision
making and as a means to evaluate period-to-period comparisons. We
believe that these measures provide useful information about our
operating results, enhance the overall understanding of our past
financial performance and future prospects, and allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision making. Non-GAAP financial
measures should be considered in addition to results and guidance
prepared in accordance with GAAP, but should not be considered a
substitute for, or superior to, GAAP results. The non-GAAP
financial measures included in this press release have been
reconciled to the nearest GAAP measure in the table following the
financial statements attached to this press release. With respect
to our expectations under “Guidance” above, reconciliation of
Adjusted EBITDA guidance to the closest corresponding GAAP measure
is not available without unreasonable efforts on a forward-looking
basis due to the high variability, complexity and low visibility
with respect to the charges excluded from these non-GAAP measures,
in particular, the measures and effects of stock-based compensation
expense specific to equity compensation awards that are directly
impacted by unpredictable fluctuations in our stock price. We
expect the variability of the above charges to have a significant,
and potentially unpredictable, impact on our future GAAP financial
results.
Exhibit A
Tremor Video, Inc. Consolidated Balance Sheets
(in thousands)
December 31, 2015
2014 Assets Current assets: Cash and cash
equivalents $ 59,887 $ 77,787 Accounts receivable, net 70,778
46,765 Prepaid expenses and other current assets 3,721 1,571
Deferred tax assets, short-term - 194
Total current assets 134,386 126,317
Long-term assets: Restricted cash 600 600 Property and equipment,
net 10,094 5,574 Intangible assets, net 11,469 15,552 Goodwill
10,781 29,719 Deferred tax assets 4,077 - Other assets 794
243 Total long-term assets 37,815
51,688 Total assets $ 172,201 $ 178,005
Liabilities and stockholders' equity Current
liabilities: Accounts payable and accrued expenses $ 58,742 $
37,258 Deferred rent, short-term 401 20 Contingent consideration on
acquisition, short-term 987 - Deferred revenue 108
15 Total current liabilities 60,238 37,293 Deferred
rent, long-term 5,237 745 Deferred tax liabilities 4,587 194
Contingent consideration on acquisition, long-term 443 - Other
long-term liabilities 264 - Total
liabilities 70,769 38,232 Stockholders'
equity: Common stock 5 5 Additional paid-in capital 279,136 274,094
Accumulated other comprehensive (loss) income (55 ) 98 Accumulated
deficit (177,654 ) (134,424 ) Total stockholders'
equity 101,432 139,773 Total
liabilities and stockholders' equity $ 172,201 $ 178,005
Tremor Video, Inc. Consolidated
Statements of Operations (in thousands, except share and per
share data)
Three Months Ended
Years Ended December 31, December 31,
2015 2014 2015 2014 (unaudited)
Revenue $ 51,757 $ 41,878 $ 173,837 $ 159,487 Cost of
revenue 28,989 25,791 99,266
101,673 Gross Profit 22,768
16,087 74,571 57,814
Operating Expenses: Technology and development(1) 5,312
4,409 20,171 16,992 Sales and marketing(1) 13,089 11,505 48,879
42,623 General and administrative(1) 4,196 3,675 17,279 14,712
Depreciation and amortization 2,289 1,773 8,344 6,675 Impairment
charges - - 22,665
- Total operating expenses 24,886
21,362 117,338 81,002
Loss from operations (2,118 ) (5,275 ) (42,767
) (23,188 ) Interest and other (expense) income, net:
Interest expense (3 ) (1 ) (10 ) (4 ) Other (expense) income, net
(72 ) 61 30 46
Total interest and other (expense) income, net (75 )
60 20 42 Loss before
provision for income taxes (2,193 ) (5,215 ) (42,747 ) (23,146 )
Provision for income taxes 225 199 483 343
Net loss $ (2,418 ) $ (5,414 ) $ (43,230 ) $ (23,489
)
Net loss per share: Basic and diluted $ (0.05 ) $
(0.11 ) $ (0.84 ) $ (0.46 )
Weighted-average number of shares of
common stock outstanding:
Basic and diluted 52,186,221 51,088,012
51,684,397 50,637,541 (1)
Stock-based compensation expense included above:
Three
Months Ended Years Ended December 31, December
31, 2015 2014 2015 2014
(unaudited) Technology and development $ 213 $ 254 $
854 $ 907 Sales and marketing 266 443 1,445 1,506 General and
administrative 351 631 1,708
2,209 Total stock-based compensation expense $
830 $ 1,328 $ 4,007 $ 4,622
Tremor Video, Inc. Consolidated Statements of Cash
Flows (in thousands)
Years Ended December 31,
2015 2014 Cash flows from operating
activities: Net loss $ (43,230 ) $ (23,489 ) Adjustments required
to reconcile net loss to net cash used in operating activities:
Impairment charges 22,665 - Depreciation and amortization expense
8,344 6,675 Bad debt recovery (87 ) (16 ) Stock-based compensation
expense 4,007 4,622 Stock-based long-term incentive compensation
expense 436 673 Deferred tax benefit (61 ) - Mark-to-market expense
(income) 113 (6 ) Net changes in operating assets and liabilities:
Increase in accounts receivable (22,675 ) (5,394 ) (Increase)
decrease in prepaid expenses and other assets (3,381 ) 299 Increase
in accounts payable and accrued expenses 20,178 5,899 Increase in
deferred rent and security deposits payable 5,639 9 Increase
(decrease) in deferred revenue 93 (256 ) Net
cash used in operating activities (7,959 ) (10,984 )
Cash flows from investing activities: Purchase of property
and equipment (7,732 ) (4,026 ) Acquisition, net of cash acquired
(1,672 ) - Net cash used in investing
activities (9,404 ) (4,026 ) Cash flows from
financing activities: Proceeds from the exercise of stock option
awards 108 767 Tax withholdings related to net share settlements of
restricted stock units (494 ) (565 ) Net cash (used
in) provided by financing activities (386 ) 202
Net decrease in cash and cash equivalents (17,749 )
(14,808 ) Effect of exchange rate changes in cash and cash
equivalents (151 ) (96 ) Cash and cash equivalents at
beginning of period 77,787 92,691 Cash
and cash equivalents at end of period $ 59,887 $ 77,787
Exhibit B
Tremor Video,
Inc. Reconciliation of Total Spend to Revenue (in
thousands) (unaudited) Three Months Ended
Years Ended December 31, December 31,
2015 2014 2015 2014 Total Spend
$ 67,934 $ 41,878 $ 203,882 $ 159,487 SSP inventory costs
16,177 - 30,045 -
Revenue $ 51,757 $ 41,878 $ 173,837 $ 159,487
Tremor Video, Inc.
Reconciliation of Net Loss to Adjusted EBITDA (in
thousands) (unaudited) Three Months Ended
Years Ended December 31, December 31,
2015 2014 2015 2014 Net loss $
(2,418 ) $ (5,414 ) $ (43,230 ) $ (23,489 ) Adjustments: Non-cash
impairment charges(1) - - 22,665 - Depreciation and amortization
expense 2,289 1,773 8,344 6,675 Stock-based compensation expense
830 1,328 4,007 4,622 Executive severance 588 - 1,458 -
Acquisition-related costs(2) 333 - 892 - Litigation expenses 34 -
328 279 Stock-based long-term incentive compensation expense 174
399 436 673 Provision for income taxes 225 199 483 343 Interest and
other expense (income), net 75 (60 )
(20 ) (42 ) Total net adjustments 4,548
3,639 38,593 12,550 Adjusted
EBITDA $ 2,130 $ (1,775 ) $ (4,637 ) $ (10,939 )
Tremor Video, Inc. Reconciliation of Net
Loss to Adjusted EBITDA - Per Share (unaudited)
Three Months Ended Years Ended December 31,
December 31, 2015 2014 2015 2014
Net loss $ (0.05 ) $ (0.11 ) $ (0.84 ) $ (0.46 )
Adjustments: Non-cash impairment charges(1) - - 0.44 - Depreciation
and amortization expense 0.04 0.04 0.16 0.13 Stock-based
compensation expense 0.02 0.03 0.08 0.09 Executive severance 0.01 -
0.03 - Acquisition-related costs(2) 0.01 - 0.02 - Litigation
expenses - - - - Stock-based long-term incentive compensation
expense - 0.01 0.01 0.01 Provision for income taxes 0.01 - 0.01
0.01 Interest and other expense (income), net -
- - - Total net
adjustments 0.09 0.08 0.75
0.24 Adjusted EBITDA per share - basic and
diluted $ 0.04 $ (0.03 ) $ (0.09 ) $ (0.22 )
Weighted-average number of shares of common stock
outstanding: Basic and diluted 52,186,221
51,088,012 51,684,397 50,637,541
(1) During the third quarter of 2015, as
required under GAAP, the Company performed an interim impairment
test on its assets basedon a decrease in the Company’s market
capitalization below the carrying value of its assets. As a result
of this test, the Companyrecorded a non-cash impairment charge of
($22.1) million related to its goodwill and certain intangible
assets. In addition, the Companyrecorded a non-cash impairment
charge of ($0.6) million relating to certain property and equipment
maintained at its formerheadquarters.
(2) Reflects acquisition-related costs
incurred in connection with the Company’s acquisition of The Video
Network Pty Ltd, anAustralian proprietary limited company (“TVN”).
Includes $324 and $493, respectively, of compensation-related
expenses, relating tocertain earnout payments that are dependent on
continued employment.
Exhibit C
Tremor Video, Inc.
Restated Consolidated Statement of Operations (in
thousands) (unaudited) Three Months Ended
March 31, 2015 As Reported Adjustments As
Restated Revenue $ 40,603 $ (2,551 ) $ 38,052 Cost of
revenue 24,410 (2,551 ) 21,859
Gross Profit 16,193 - 16,193 Total operating expenses
23,033 - 23,033 Loss from
operations (6,840 ) - (6,840 ) Total interest and other
income, net 12 - 12
Loss before provision for income taxes (6,828 ) - (6,828 )
Provision for income taxes 122 - 122
Net loss $ (6,950 ) $ - $ (6,950 )
Tremor
Video, Inc. Restated Consolidated Statement of
Operations (in thousands) (unaudited)
Three Months Ended Six Months Ended June 30,
2015 June 30, 2015 As Reported Adjustments
As Restated As Reported Adjustments As
Restated Revenue $ 46,072 $ (3,668 ) $ 42,404 $ 86,675 $
(6,219 ) $ 80,456 Cost of revenue 28,062
(3,668 ) 24,394 52,472 (6,219 )
46,253 Gross Profit 18,010 - 18,010 34,203 - 34,203
Total operating expenses 23,139 -
23,139 46,172 -
46,172 Loss from operations (5,129 ) - (5,129
) (11,969 ) - (11,969 ) Total interest and other income, net
6 - 6 18
- 18 Loss before provision for
income taxes (5,123 ) - (5,123 ) (11,951 ) - (11,951 )
Provision for income taxes 117 - 117 239 - 239
Net loss $ (5,240 ) $ - $ (5,240 ) $
(12,190 ) $ - $ (12,190 )
Tremor
Video, Inc. Restated Consolidated Statement of
Operations (in thousands) (unaudited)
Three Months Ended Nine Months Ended September 30,
2015 September 30, 2015 As Reported
Adjustments As Restated As Reported
Adjustments As Restated Revenue $ 49,273 $
(7,649 ) $ 41,624 $ 135,948 $ (13,868 ) $ 122,080 Cost of revenue
31,673 (7,649 ) 24,024
84,145 (13,868 ) 70,277 Gross Profit
17,600 - 17,600 51,803 - 51,803 Total operating expenses
46,280 - 46,280
92,452 - 92,452 Loss from
operations (28,680 ) - (28,680 ) (40,649 ) - (40,649 ) Total
interest and other income, net 77 -
77 95 - 95
Loss before provision for income taxes (28,603 ) - (28,603 )
(40,554 ) - (40,554 ) Provision for income taxes 19 - 19 258
- 258 Net loss $ (28,622
) $ - $ (28,622 ) $ (40,812 ) $ - $ (40,812 )
Exhibit D
Tremor Video, Inc. Consolidated Quarterly
Statement of Operations (in thousands)
(unaudited) Q1 2014 Q2
2014 Q3 2014 Q4 2014 FY 2014 Q1
2015 Q2 2015 Q3 2015 Q4 2015 FY
2015 Revenue $ 34,869 $ 43,701 $ 39,039 $ 41,878 $
159,487 $ 38,052 $ 42,404 $ 41,624 $ 51,757 $ 173,837
Inventory costs 22,163 28,094 23,305 24,749 98,311 20,317 22,991
22,494 27,206 93,008 Other cost of revenue 780
799 741 1,042 3,362
1,542 1,403 1,530
1,783 6,258
Total cost of revenue
22,943 28,893 24,046 25,791 101,673 21,859 24,394 24,024 28,989
99,266
Gross Profit 11,926 14,808 14,993 16,087 57,814
16,193 18,010 17,600 22,768 74,571 Total operating expenses
19,081 20,131 20,428
21,362 81,002 23,033
23,139 46,280 24,886
117,338 Loss from operations (7,155 ) (5,323 )
(5,435 ) (5,275 ) (23,188 ) (6,840 ) (5,129 ) (28,680 ) (2,118 )
(42,767 ) Total interest and other (expense) income, net
5 (28 ) 5 60
42 12 6 77
(75 ) 20 Loss before provision for
income taxes (7,150 ) (5,351 ) (5,430 ) (5,215 ) (23,146 ) (6,828 )
(5,123 ) (28,603 ) (2,193 ) (42,747 ) Provision for income
taxes 79 21 44 199 343 122 117 19 225 483
Net loss $ (7,229
) $ (5,372 ) $ (5,474 ) $ (5,414 ) $ (23,489 ) $ (6,950 ) $ (5,240
) $ (28,622 ) $ (2,418 ) $ (43,230 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160303005498/en/
For Tremor Video, Inc.:Investor Relations:Andrew Posen,
212-792-2315Senior Director Investor
RelationsIR@TremorVideo.comorPublic Relations:Tremor Video
Corporate CommunicationsMandy Robinson,
646-278-7416MRobinson@TremorVideo.com
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