PERION NETWORK LTD.
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|||
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By:
|
/s/ Maoz Sigron | |
Name: Maoz Sigron | |||
Title: Chief Financial Officer
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|||
Date: November 6, 2019
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• |
Total Revenues of $65.8 million, increased 15% year-over-year;
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• |
GAAP Net Income of $2.9 million, increased 31% year-over-year;
|
• |
GAAP Earnings Per Share of $0.11, increased 38% year-over-year;
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• |
Net cash from operations were $11.1 million, increased 1% year-over-year;
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• |
Management is reaffirming its full-year guidance for Adjusted EBITDA of $25-27 million and now expects to reach or exceed the top end of the range
|
Three months ended
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Nine months ended
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|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Advertising revenues
|
$
|
21.6
|
$
|
26.2
|
$
|
61.4
|
$
|
88.7
|
||||||||
Search and other revenues
|
$
|
44.2
|
$
|
31.0
|
$
|
121.8
|
$
|
92.2
|
||||||||
Total Revenues
|
$
|
65.8
|
$
|
57.2
|
$
|
183.2
|
$
|
180.9
|
||||||||
GAAP Net Income
|
$
|
2.9
|
$
|
2.2
|
$
|
7.0
|
$
|
3.2
|
||||||||
Non-GAAP Net Income
|
$
|
5.0
|
$
|
4.3
|
$
|
12.8
|
$
|
12.0
|
||||||||
Adjusted EBITDA
|
$
|
7.6
|
$
|
6.7
|
$
|
20.2
|
$
|
18.1
|
||||||||
Net cash provided by operating activities
|
$
|
11.1
|
$
|
11.0
|
$
|
33.5
|
$
|
28.5
|
||||||||
GAAP Diluted Earnings Per Share
|
$
|
0.11
|
$
|
0.08
|
$
|
0.27
|
$
|
0.13
|
||||||||
Non-GAAP Diluted Earnings Per Share
|
$
|
0.18
|
$
|
0.16
|
$
|
0.49
|
$
|
0.44
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• |
Conference ID: 6975750
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• |
Dial-in number from within the United States: 1-800-239-9838
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• |
Dial-in number from Israel: 1-809-212-883
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• |
Dial-in number (other international): 1-323-794-2551
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• |
Playback available until November 13, 2019 by calling 1-844-512-2921 (United States) or 1-412-317-6671 (international). Please use PIN code 6975750 for the replay.
|
• |
Link to the live webcast accessible at https://www.perion.com/ir-info/
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Three months ended
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Nine months ended
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|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|||||||||||||
Revenues:
|
||||||||||||||||
Advertising
|
$
|
21,552
|
$
|
26,224
|
$
|
61,436
|
$
|
88,725
|
||||||||
Search and other
|
44,225
|
30,957
|
121,757
|
92,158
|
||||||||||||
Total Revenues
|
65,777
|
57,181
|
183,193
|
180,883
|
||||||||||||
Costs and Expenses:
|
||||||||||||||||
Cost of revenues
|
6,819
|
5,474
|
18,653
|
17,341
|
||||||||||||
Customer acquisition costs and media buy
|
34,170
|
28,808
|
94,778
|
91,798
|
||||||||||||
Research and development
|
5,976
|
4,341
|
16,448
|
14,563
|
||||||||||||
Selling and marketing
|
8,649
|
8,635
|
25,641
|
28,417
|
||||||||||||
General and administrative
|
3,562
|
3,883
|
10,039
|
13,050
|
||||||||||||
Depreciation and amortization
|
2,628
|
2,528
|
7,304
|
7,090
|
||||||||||||
Restructuring costs
|
-
|
-
|
-
|
2,075
|
||||||||||||
Total Costs and Expenses
|
61,804
|
53,669
|
172,863
|
174,334
|
||||||||||||
Income from Operations
|
3,973
|
3,512
|
10,330
|
6,549
|
||||||||||||
Financial expense, net
|
419
|
1,236
|
2,733
|
3,042
|
||||||||||||
Income before Taxes on income
|
3,554
|
2,276
|
7,597
|
3,507
|
||||||||||||
Taxes on income
|
680
|
84
|
591
|
272
|
||||||||||||
Net Income
|
$
|
2,874
|
$
|
2,192
|
$
|
7,006
|
$
|
3,235
|
||||||||
Net Earnings per Share
|
||||||||||||||||
Basic
|
$
|
0.11
|
$
|
0.08
|
$
|
0.27
|
$
|
0.13
|
||||||||
Diluted
|
$
|
0.11
|
$
|
0.08
|
$
|
0.27
|
$
|
0.13
|
||||||||
Weighted average number of shares
|
||||||||||||||||
Basic
|
25,966,097
|
25,850,188
|
25,915,134
|
25,850,188
|
||||||||||||
Diluted
|
26,895,407
|
26,420,782
|
26,054,203
|
26,516,145
|
September 30,
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
Unaudited
|
Audited
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|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
35,484
|
$
|
39,109
|
||||
Restricted cash
|
1,211
|
1,694
|
||||||
Short-term bank deposit
|
16,550
|
4,000
|
||||||
Accounts receivable, net
|
39,502
|
55,557
|
||||||
Prepaid expenses and other current assets
|
3,181
|
3,533
|
||||||
Total Current Assets
|
95,928
|
103,893
|
||||||
Property and equipment, net
|
12,155
|
15,649
|
||||||
Operating lease right-of-use assets
|
23,406
|
-
|
||||||
Goodwill and intangible assets, net
|
129,482
|
131,547
|
||||||
Deferred taxes
|
5,622
|
4,414
|
||||||
Other assets
|
736
|
943
|
||||||
Total Assets
|
$
|
267,329
|
$
|
256,446
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$
|
40,466
|
$
|
38,208
|
||||
Accrued expenses and other liabilities
|
15,849
|
17,240
|
||||||
Short-term operating lease liability
|
3,090
|
-
|
||||||
Short-term loans and current maturities of long-term and Convertible debt
|
8,333
|
16,059
|
||||||
Deferred revenues
|
3,183
|
3,794
|
||||||
Short-term payment obligation related to acquisitions
|
686
|
1,813
|
||||||
Total Current Liabilities
|
71,607
|
77,114
|
||||||
Long-Term Liabilities:
|
||||||||
Long-term debt, net of current maturities
|
10,417
|
16,667
|
||||||
Convertible debt, net of current maturities
|
-
|
7,726
|
||||||
Long-term operating lease liability
|
21,547
|
-
|
||||||
Other long-term liabilities
|
5,773
|
6,158
|
||||||
Total Liabilities
|
109,344
|
107,665
|
||||||
Shareholders’ equity:
|
||||||||
Ordinary shares
|
212
|
211
|
||||||
Additional paid-in capital
|
241,996
|
239,693
|
||||||
Treasury shares at cost
|
(1,002
|
)
|
(1,002
|
)
|
||||
Accumulated other comprehensive gain
|
36
|
142
|
||||||
Accumulated deficit
|
(83,257
|
)
|
(90,263
|
)
|
||||
Total Shareholders’ Equity
|
157,985
|
148,781
|
||||||
Total Liabilities and Shareholders’ Equity
|
$
|
267,329
|
$
|
256,446
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|||||||||||||
Operating activities:
|
||||||||||||||||
Net Income
|
$
|
2,874
|
$
|
2,192
|
$
|
7,006
|
$
|
3,235
|
||||||||
Adjustments required to reconcile net income to net cash provided by operating activities:
|
||||||||||||||||
Depreciation and amortization
|
2,628
|
2,528
|
7,304
|
7,090
|
||||||||||||
Stock based compensation expense
|
678
|
638
|
1,601
|
2,121
|
||||||||||||
Foreign currency translation
|
(103
|
)
|
-
|
(109
|
)
|
12
|
||||||||||
Accrued interest, net
|
-
|
134
|
(203
|
)
|
357
|
|||||||||||
Deferred taxes, net
|
(363
|
)
|
100
|
(1,223
|
)
|
91
|
||||||||||
Accrued severance pay, net
|
179
|
(4
|
)
|
(39
|
)
|
(749
|
)
|
|||||||||
Fair value revaluation - convertible debt
|
-
|
251
|
600
|
(741
|
)
|
|||||||||||
Restructuring costs related to impairment of property and equipment
|
-
|
-
|
-
|
462
|
||||||||||||
Net changes in operating assets and liabilities
|
5,254
|
5,165
|
18,600
|
16,580
|
||||||||||||
Net cash provided by operating activities
|
$
|
11,147
|
$
|
11,004
|
$
|
33,537
|
$
|
28,458
|
||||||||
Investing activities:
|
||||||||||||||||
Purchases of property and equipment
|
$
|
(248
|
)
|
$
|
(1,302
|
)
|
$
|
(589
|
)
|
$
|
(1,350
|
)
|
||||
Capitalization of development costs
|
-
|
(330
|
)
|
-
|
(1,449
|
)
|
||||||||||
Short-term deposits, net
|
(10,550
|
)
|
-
|
(12,550
|
)
|
5,913
|
||||||||||
Cash paid in connection with acquisitions, net of cash acquired
|
-
|
(1,667
|
)
|
(1,200
|
)
|
(1,667
|
)
|
|||||||||
Net cash provided (used) by investing activities
|
$
|
(10,798
|
)
|
$
|
(3,299
|
)
|
$
|
(14,339
|
)
|
$
|
1,447
|
|||||
Financing activities:
|
||||||||||||||||
Exercise of stock options and restricted share units
|
574
|
-
|
703
|
-
|
||||||||||||
Payment made in connection with acquisition
|
-
|
-
|
(1,813
|
)
|
-
|
|||||||||||
Repayment of convertible debt
|
-
|
-
|
(15,850
|
)
|
(8,167
|
)
|
||||||||||
Repayment of long-term loans
|
(2,083
|
)
|
(1,491
|
)
|
(6,249
|
)
|
(12,473
|
)
|
||||||||
Net cash used in financing activities
|
$
|
(1,509
|
)
|
$
|
(1,491
|
)
|
$
|
(23,209
|
)
|
$
|
(20,640
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
5
|
-
|
(97
|
)
|
44
|
|||||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
(1,155
|
)
|
6,214
|
(4,108
|
)
|
9,309
|
||||||||||
Cash and cash equivalents and restricted cash at beginning of period
|
37,850
|
35,850
|
40,803
|
32,755
|
||||||||||||
Cash and cash equivalents and restricted cash at end of period
|
$
|
36,695
|
$
|
42,064
|
$
|
36,695
|
$
|
42,064
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|||||||||||||
GAAP Net Income
|
$
|
2,874
|
$
|
2,192
|
$
|
7,006
|
$
|
3,235
|
||||||||
Share based compensation
|
678
|
638
|
1,601
|
2,121
|
||||||||||||
Amortization of acquired intangible assets
|
1,139
|
1,190
|
3,233
|
3,591
|
||||||||||||
Non-recurring fees (Expenses related to M&A activity)
|
339
|
-
|
943
|
226
|
||||||||||||
Restructuring costs
|
-
|
-
|
-
|
2,075
|
||||||||||||
Fair value revaluation of convertible debt and related derivative
|
-
|
269
|
89
|
1,063
|
||||||||||||
Foreign exchange losses associated with ASC-842
|
205
|
-
|
653
|
-
|
||||||||||||
Taxes on the above items
|
(219
|
)
|
25
|
(748
|
)
|
(313
|
)
|
|||||||||
Non-GAAP Net Income
|
$
|
5,016
|
$
|
4,314
|
$
|
12,777
|
$
|
11,998
|
||||||||
Non-GAAP Net Income
|
$
|
5,016
|
$
|
4,314
|
$
|
12,777
|
$
|
11,998
|
||||||||
Taxes on income
|
899
|
59
|
1,339
|
585
|
||||||||||||
Financial expense, net
|
214
|
967
|
1,991
|
1,979
|
||||||||||||
Depreciation
|
1,489
|
1,338
|
4,071
|
3,499
|
||||||||||||
Adjusted EBITDA
|
$
|
7,618
|
$
|
6,678
|
$
|
20,178
|
$
|
18,061
|
||||||||
Non-GAAP diluted earnings per share
|
$
|
0.18
|
$
|
0.16
|
$
|
0.49
|
$
|
0.44
|
||||||||
Shares used in computing non-GAAP diluted earnings per share
|
27,148,738
|
26,420,621
|
26,225,689
|
26,213,492
|