PERION NETWORK LTD.
|
|||
By:
|
/s/ Maoz Sigron
|
||
Name:
|
Maoz Sigron
|
||
Title:
|
Chief Financial Officer
|
|
Three months ended
|
Nine months ended
|
||||||||||||||||||||||
|
September 30,
|
September 30,
|
||||||||||||||||||||||
|
2020
|
2019
|
%
|
2020
|
2019
|
%
|
||||||||||||||||||
Advertising revenues
|
$
|
37.9
|
$
|
21.6
|
+76
|
%
|
$
|
80.3
|
$
|
61.4
|
+31
|
%
|
||||||||||||
Search and other revenues
|
$
|
45.5
|
$
|
44.2
|
+3
|
%
|
$
|
129.5
|
$
|
121.8
|
+6
|
%
|
||||||||||||
Total Revenues
|
$
|
83.4
|
$
|
65.8
|
+27
|
%
|
$
|
209.8
|
$
|
183.2
|
+15
|
%
|
||||||||||||
GAAP Net Income
|
$
|
2.1
|
$
|
2.9
|
-26
|
%
|
$
|
1.2
|
$
|
7.0
|
-83
|
%
|
||||||||||||
Non-GAAP Net Income
|
$
|
5.9
|
$
|
5.0
|
+19
|
%
|
$
|
12.8
|
$
|
12.8
|
+1
|
%
|
||||||||||||
Adjusted EBITDA
|
$
|
8.7
|
$
|
7.6
|
+15
|
%
|
$
|
17.4
|
$
|
20.2
|
-14
|
%
|
||||||||||||
Net cash provided by operating activities
|
$
|
6.6
|
$
|
11.1
|
-41
|
%
|
$
|
9.2
|
$
|
33.5
|
-72
|
%
|
||||||||||||
GAAP Diluted Earnings Per Share
|
$
|
0.08
|
$
|
0.11
|
-27
|
%
|
$
|
0.04
|
$
|
0.27
|
-85
|
%
|
||||||||||||
Non-GAAP Diluted Earnings Per Share
|
$
|
0.21
|
$
|
0.18
|
+17
|
%
|
$
|
0.45
|
$
|
0.49
|
-8
|
%
|
• |
Conference ID: 3939260
|
• |
Dial-in number from within the United States: 1-800-289-0438
|
• |
Dial-in number from Israel: 1-809-212-883
|
• |
Dial-in number (other international): 1-323-794-2423
|
• |
Playback available until Wednesday, November 4, 2020 by calling 1-844-512-2921 (United States) or 1-412-317-6671 (international). Please use PIN code 3939260 for the replay
|
• |
Link to the live webcast accessible at https://www.perion.com/ir-info/
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
Revenues:
|
||||||||||||||||
Advertising
|
$
|
37,891
|
$
|
21,552
|
$
|
80,298
|
$
|
61,436
|
||||||||
Search and other
|
45,522
|
44,225
|
129,509
|
121,757
|
||||||||||||
Total Revenues
|
83,413
|
65,777
|
209,807
|
183,193
|
||||||||||||
Costs and Expenses:
|
||||||||||||||||
Cost of revenues
|
5,292
|
6,819
|
15,938
|
18,653
|
||||||||||||
Customer acquisition costs and media buy
|
49,878
|
34,170
|
122,817
|
94,778
|
||||||||||||
Research and development
|
8,071
|
5,976
|
22,400
|
16,448
|
||||||||||||
Selling and marketing
|
9,448
|
8,649
|
27,368
|
25,641
|
||||||||||||
General and administrative
|
4,239
|
3,562
|
11,759
|
10,039
|
||||||||||||
Depreciation and amortization
|
2,695
|
2,628
|
7,248
|
7,304
|
||||||||||||
Total Costs and Expenses
|
79,623
|
61,804
|
207,530
|
172,863
|
||||||||||||
Income from Operations
|
3,790
|
3,973
|
2,277
|
10,330
|
||||||||||||
Financial expense, net
|
459
|
419
|
1,192
|
2,733
|
||||||||||||
Income before Taxes on income
|
3,331
|
3,554
|
1,085
|
7,597
|
||||||||||||
Taxes on income (benefit)
|
1,203
|
680
|
(138
|
)
|
591
|
|||||||||||
Net Income
|
$
|
2,128
|
$
|
2,874
|
$
|
1,223
|
$
|
7,006
|
||||||||
Net Earnings per Share
|
||||||||||||||||
Basic
|
$
|
0.08
|
$
|
0.11
|
$
|
0.05
|
$
|
0.27
|
||||||||
Diluted
|
$
|
0.08
|
$
|
0.11
|
$
|
0.04
|
$
|
0.27
|
||||||||
Weighted average number of shares
|
||||||||||||||||
Basic
|
26,707,649
|
25,966,097
|
26,600,837
|
25,915,134
|
||||||||||||
Diluted
|
28,336,902
|
26,895,407
|
28,318,091
|
26,054,203
|
|
September 30,
|
December 31,
|
||||||
|
2020
|
2019
|
||||||
|
(Unaudited)
|
(Audited)
|
||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
51,660
|
$
|
38,389
|
||||
Restricted cash
|
1,221
|
1,216
|
||||||
Short-term bank deposits
|
8,300
|
23,234
|
||||||
Accounts receivable, net
|
51,687
|
49,098
|
||||||
Prepaid expenses and other current assets
|
3,155
|
3,170
|
||||||
Total Current Assets
|
116,023
|
115,107
|
||||||
|
||||||||
Long-Term Assets:
|
||||||||
Property and equipment, net
|
7,667
|
10,918
|
||||||
Operating lease right-of-use assets
|
20,065
|
22,429
|
||||||
Goodwill and intangible assets, net
|
178,289
|
128,444
|
||||||
Deferred taxes
|
6,297
|
6,171
|
||||||
Other assets
|
574
|
708
|
||||||
Total Long-Term Assets
|
212,892
|
168,670
|
||||||
Total Assets
|
$
|
328,915
|
$
|
283,777
|
||||
|
||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$
|
48,031
|
$
|
47,681
|
||||
Accrued expenses and other liabilities
|
17,859
|
18,414
|
||||||
Short-term operating lease liability
|
3,913
|
3,667
|
||||||
Short-term loans and current maturities of long-term loans
|
20,833
|
8,333
|
||||||
Deferred revenues
|
4,149
|
4,188
|
||||||
Short-term payment obligation related to acquisitions
|
17,458
|
1,025
|
||||||
Total Current Liabilities
|
112,243
|
83,308
|
||||||
|
||||||||
Long-Term Liabilities:
|
||||||||
Long-term loans, net of current maturities
|
2,083
|
8,333
|
||||||
Payment obligation related to acquisition
|
19,206
|
-
|
||||||
Long-term operating lease liability
|
17,623
|
20,363
|
||||||
Other long-term liabilities
|
6,202
|
6,591
|
||||||
Total Long-Term Liabilities
|
45,114
|
35,287
|
||||||
Total Liabilities
|
157,357
|
118,595
|
||||||
|
||||||||
Shareholders' equity:
|
||||||||
Ordinary shares
|
219
|
213
|
||||||
Additional paid-in capital
|
248,204
|
243,211
|
||||||
Treasury shares at cost
|
(1,002
|
)
|
(1,002
|
)
|
||||
Accumulated other comprehensive gain
|
284
|
130
|
||||||
Accumulated deficit
|
(76,147
|
)
|
(77,370
|
)
|
||||
Total Shareholders' Equity
|
171,558
|
165,182
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
328,915
|
$
|
283,777
|
|
Three months ended
|
Nine months ended
|
||||||||||||||
|
September 30,
|
September 30,
|
||||||||||||||
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
|
||||||||||||||||
Cash flows from operating activities:
|
||||||||||||||||
Net Income
|
$
|
2,128
|
$
|
2,874
|
$
|
1,223
|
$
|
7,006
|
||||||||
Adjustments required to reconcile net income to net cash provided by operating activities:
|
||||||||||||||||
Depreciation and amortization
|
2,695
|
2,628
|
7,248
|
7,304
|
||||||||||||
Stock based compensation expense
|
972
|
678
|
2,913
|
1,601
|
||||||||||||
Foreign currency translation
|
(42
|
)
|
(103
|
)
|
(89
|
)
|
(109
|
)
|
||||||||
Accrued interest, net
|
13
|
-
|
13
|
(203
|
)
|
|||||||||||
Deferred taxes, net
|
(387
|
)
|
(363
|
)
|
(2,339
|
)
|
(1,223
|
)
|
||||||||
Accrued severance pay, net
|
172
|
179
|
205
|
(39
|
)
|
|||||||||||
Fair value revaluation - convertible debt
|
-
|
-
|
-
|
600
|
||||||||||||
Loss from sale of property and equipment
|
4
|
-
|
88
|
-
|
||||||||||||
Net changes in operating assets and liabilities
|
1,037
|
5,254
|
(23
|
)
|
18,600
|
|||||||||||
Net cash provided by operating activities
|
$
|
6,592
|
$
|
11,147
|
$
|
9,239
|
$
|
33,537
|
||||||||
|
||||||||||||||||
Cash flows from investing activities:
|
||||||||||||||||
Purchases of property and equipment
|
(274
|
)
|
(248
|
)
|
(386
|
)
|
(589
|
)
|
||||||||
Short-term deposits, net
|
8,572
|
(10,550
|
)
|
14,934
|
(12,550
|
)
|
||||||||||
Cash paid in connection with acquisitions, net of cash acquired
|
(4,041
|
)
|
-
|
(20,186
|
)
|
(1,200
|
)
|
|||||||||
Obligation in connection with acquisitions
|
(1,002
|
)
|
-
|
1,347
|
-
|
|||||||||||
Net cash provided by (used in) investing activities
|
$
|
3,255
|
$
|
(10,798
|
)
|
$
|
(4,291
|
)
|
$
|
(14,339
|
)
|
|||||
|
||||||||||||||||
Cash flows from financing activities:
|
||||||||||||||||
Exercise of stock options and restricted share units
|
345
|
574
|
2,086
|
703
|
||||||||||||
Payment made in connection with acquisition
|
-
|
-
|
-
|
(1,813
|
)
|
|||||||||||
Proceeds from short-term loans
|
12,500
|
-
|
12,500
|
-
|
||||||||||||
Repayment of convertible debt
|
-
|
-
|
-
|
(15,850
|
)
|
|||||||||||
Repayment of long-term loans
|
(2,083
|
)
|
(2,083
|
)
|
(6,249
|
)
|
(6,249
|
)
|
||||||||
Net cash provided by (used in) financing activities
|
$
|
10,762
|
$
|
(1,509
|
)
|
$
|
8,337
|
$
|
(23,209
|
)
|
||||||
|
||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
65
|
5
|
(9
|
)
|
(97
|
)
|
||||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
20,674
|
(1,155
|
)
|
13,276
|
(4,108
|
)
|
||||||||||
Cash and cash equivalents and restricted cash at beginning of period
|
32,207
|
37,850
|
39,605
|
40,803
|
||||||||||||
Cash and cash equivalents and restricted cash at end of period
|
$
|
52,881
|
$
|
36,695
|
$
|
52,881
|
$
|
36,695
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
GAAP Net Income
|
$
|
2,128
|
$
|
2,874
|
$
|
1,223
|
$
|
7,006
|
||||||||
Share based compensation
|
972
|
678
|
2,913
|
1,601
|
||||||||||||
Amortization of acquired intangible assets
|
1,491
|
1,139
|
3,650
|
3,233
|
||||||||||||
Retention and other related to M&A related expenses
|
1,292
|
339
|
5,011
|
943
|
||||||||||||
Fair value revaluation of convertible debt and related derivative
|
-
|
-
|
-
|
89
|
||||||||||||
Foreign exchange losses associated with ASC-842
|
27
|
205
|
(52
|
)
|
653
|
|||||||||||
Revaluation of acquisition related contingent consideration
|
162
|
-
|
445
|
-
|
||||||||||||
Taxes on the above items
|
(127
|
)
|
(219
|
)
|
(344
|
)
|
(748
|
)
|
||||||||
Non-GAAP Net Income
|
$
|
5,945
|
$
|
5,016
|
$
|
12,846
|
$
|
12,777
|
||||||||
Non-GAAP Net Income
|
$
|
5,945
|
$
|
5,016
|
$
|
12,846
|
$
|
12,777
|
||||||||
Taxes on income
|
1,330
|
899
|
206
|
1,339
|
||||||||||||
Financial expense, net
|
270
|
214
|
799
|
1,991
|
||||||||||||
Depreciation
|
1,204
|
1,489
|
3,598
|
4,071
|
||||||||||||
Adjusted EBITDA
|
$
|
8,749
|
$
|
7,618
|
$
|
17,449
|
$
|
20,178
|
||||||||
Non-GAAP diluted earnings per share
|
$
|
0.21
|
$
|
0.18
|
$
|
0.45
|
$
|
0.49
|
||||||||
Shares used in computing non-GAAP diluted earnings per share
|
28,977,861
|
27,148,738
|
28,864,722
|
26,225,689
|