UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of August 2020 (Report No. 1)

Commission File Number: 000-51694

(Translation of registrant’s name into English)

1 Azrieli Center, Building A, 4th Floor

26 HaRokmim Street, Holon, Israel 5885849

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒   Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): N/A

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): N/A

The GAAP financial statements tables contained in the press release attached to this report on  Form 6-K are incorporated by reference into the Registrant’s registration statements on Form S-8 (File Nos. 333-208278, 333-203641, 333-193145, 333-192376, 333-188714, 333-171781, 333-152010, 333-133968, 333-216494 and 333-237196).

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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PERION NETWORK LTD.
	By:	/s/ Maoz Sigron
		Name: Maoz Sigron
		Title:   Chief Financial Officer

Date: August 5, 2020

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Perion Reports Revenues of $60.3 Million for the Second Quarter 2020

Company advances long-term growth strategy amidst Q2 volatility;

Accretive strategic acquisition of Pub Ocean in Q3;

Tel Aviv & New York – August 5, 2020 – Perion Network Ltd. (NASDAQ: PERI), a global technology company that delivers its Synchronized Digital Branding solution across the three main pillars of digital advertising - ad search, social media and display / video advertising – announced today its financial results for the second quarter and six months ended June 30, 2020.

 

(In millions, except per share data)

* Reconciliation of GAAP to Non-GAAP measures follows.

“The financial impact of COVID -19 must be observed with a broader lens,” commented Doron Gerstel, Perion’s CEO. “I am very pleased with the resiliency and agility of our team amidst challenging conditions, finishing the first half of 2020 way better than expected thanks to the revenue flexibility provided by our product diversity across the three main pillars of digital advertising, as well as prudent cost saving initiatives, we deftly mitigated near-term pressure on advertising budgets resulting from the COVID-19 pandemic. This is enabling us to protect operating profits and generate cash flow in 2020 while continuing to build a unique strategic asset in the digital media ecosystem.”

 

“Reductions in ad spending across all sectors and travel and automobile in particular, negatively impacted our Advertising business in the second quarter, but we are now seeing early indicators of recovery,” Gerstel added. “Additionally, we have completed all the necessary operating steps to assure we realize the benefits of our cost savings plan during 2020, which should yield $10 million of annualized savings on a proforma basis. Combined, our business is well prepared to take advantage of the recovery, as it unfolds differently across various industries.”

 

“The pandemic has not interrupted the implementation of our fundamental strategy of driving additional topline growth and profitability through accretive M&A’s,” Gerstel continued. “The integration of CIQ has gone extremely well and is now complete. We are very happy with CIQ’s performance, and are embarking aggressively on the post-implementation phase with the acquisition of Pub Ocean which offers significant and immediate synergies to CIQ and expected to drive incremental revenue and profitability gains during the second half of 2020 and beyond.”

 

 

Financial Comparison for the second quarter of 2020:

 

Customer Acquisition Costs and Media Buy (“CAC”): CAC in the second quarter of 2020 were $36.8 million, or 61% of revenues, as compared to $33.2 million, or 52% of revenues in the second quarter of 2019. The increase as a percentage of revenues is primarily due to the acquisition of CIQ and product mix.

 

 

Short-term Debt, Long-term Debt and Convertible Debt: As of June 30, 2020, total debt was $12.5 million, compared to $16.7 million at December 31, 2019, as a result of an additional paydown of the Company’s credit facility balance.

Conference Call:

Perion will host a conference call to discuss the results today, Wednesday, August 5, 2020 at 8:30 a.m. ET. Details are as follows:

About Perion Network Ltd.

Perion is a global technology company that provides agencies, brands and publishers with innovative solutions that cover the three main pillars of digital advertising. From its data-driven Synchronized Digital Branding platform and high-impact ad formats in the display domain; to its powerful social media platform; to its branded search network, Perion is well-positioned to capitalize on any changes in marketers’ allocation of digital advertising spend. More information about Perion can be found at www.perion.com.

Non-GAAP measures

Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude share-based compensation expenses, retention and acquisition related expenses, restructuring costs, loss from discontinued operations, revaluation of acquisition related contingent consideration, impairment of goodwill, amortization and impairment of acquired intangible assets and the related taxes thereon, non-recurring expenses, foreign exchange gains (losses) associated with ASC-842, as well as certain accounting entries under the business combination accounting rules that require us to recognize a legal performance obligation related to revenue arrangements of an acquired entity based on its fair value at the date of acquisition. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is defined as operating income excluding stock-based compensation expenses, depreciation, restructuring costs, acquisition related items consisting of amortization of intangible assets and goodwill and intangible asset impairments, acquisition related expenses, gains and losses recognized on changes in the fair value of contingent consideration arrangements and certain accounting entries under the business combination accounting rules that require us to recognize a legal performance obligation related to revenue arrangements of an acquired entity based on its fair value at the date of acquisition. 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. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Furthermore, the non-GAAP measures are regularly used internally to understand, manage and evaluate our business and make operating decisions, and we believe that they are useful to investors as a consistent and comparable measure of the ongoing performance of our business. However, 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. Additionally, these non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. A reconciliation between results on a GAAP and non-GAAP basis is provided in the last table of this press release.

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 companies and businesses we acquired and may acquire in the future, risks entailed in integrating the companies and businesses we acquire, including employee retention and customer acceptance; the risk that such transactions will divert management and other resources from the ongoing operations of the business or otherwise disrupt the conduct of those businesses, potential litigation associated with such transactions, and general risks associated with the business of Perion including intense and frequent 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 Perion with the Securities and Exchange Commission from time to time, including its annual report on Form 20-F for the year ended December 31, 2019 filed with the SEC on March 16, 2020. Perion does not assume any obligation to update these forward-looking statements.

Contact Information:

Perion Network Ltd.

Rami Rozen, VP of Investor Relations

+972 (52) 5694441

ramir@perion.com

Source: Perion Network Ltd.