Perion Network Ltd.
|
|||
By:
|
/s/ Limor Gershoni Levy
|
||
Name:
|
Limor Gershoni Levy
|
||
Title:
|
Corporate Secretary &
|
||
General Counsel
|
Three months ended
|
Six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2016
|
2017
|
2016
|
2017
|
|||||||||||||
Revenues
|
$
|
78.0
|
$
|
69.7
|
$
|
153.8
|
$
|
131.7
|
||||||||
GAAP Net Income (Loss)
|
$
|
0.6
|
$
|
(36.0
|
)
|
$
|
(5.0
|
)
|
$
|
(38.1
|
)
|
|||||
Non-GAAP Net Income
|
$
|
6.8
|
$
|
4.2
|
$
|
13.5
|
$
|
6.9
|
||||||||
Adjusted EBITDA
|
$
|
10.8
|
$
|
7.0
|
$
|
19.5
|
$
|
10.5
|
||||||||
Impairment of Goodwill and Intangible assets
|
$
|
-
|
$
|
43.8
|
$
|
-
|
$
|
43.8
|
||||||||
GAAP Diluted Earnings (Loss) Per Share
|
$
|
0.01
|
$
|
(0.46
|
)
|
$
|
(0.06
|
)
|
$
|
(0.49
|
)
|
|||||
Non-GAAP Diluted Earnings Per Share
|
$
|
0.08
|
$
|
0.05
|
$
|
0.17
|
$
|
0.09
|
· |
Conference ID: 6585658
|
· |
Dial-in number from within the United States: 1-888-857-6930
|
· |
Dial-in number from Israel: 1-80-925-8243
|
· |
Dial-in number (other international): 1-719-325-4893
|
· |
Playback available until August 10, 2017 by calling 1-844-512-2921 (United States) or
|
· |
Link to the live webcast accessible at http://www.perion.com/ir-events
|
Three months ended
|
Six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2016
|
2017
|
2016
|
2017
|
|||||||||||||
Revenues:
|
||||||||||||||||
Search and other
|
$
|
45,531
|
$
|
34,379
|
$
|
90,085
|
$
|
71,967
|
||||||||
Advertising
|
32,472
|
35,309
|
63,707
|
59,697
|
||||||||||||
Total Revenues
|
78,003
|
69,688
|
153,792
|
131,664
|
||||||||||||
Costs and Expenses:
|
||||||||||||||||
Cost of revenues
|
4,121
|
3,406
|
8,214
|
6,915
|
||||||||||||
Customer acquisition costs and media buy
|
34,784
|
33,786
|
69,075
|
63,838
|
||||||||||||
Research and development
|
7,141
|
4,230
|
14,532
|
9,529
|
||||||||||||
Selling and marketing
|
15,577
|
15,785
|
31,636
|
30,795
|
||||||||||||
General and administrative
|
7,651
|
6,013
|
14,852
|
11,188
|
||||||||||||
Depreciation and amortization
|
6,308
|
5,008
|
13,647
|
9,909
|
||||||||||||
Impairment charges
|
-
|
43,847
|
-
|
43,847
|
||||||||||||
Restructuring costs
|
-
|
-
|
728
|
-
|
||||||||||||
Total Costs and Expenses
|
75,582
|
112,075
|
152,684
|
176,021
|
||||||||||||
Income (Loss) from Operations
|
2,421
|
(42,387
|
)
|
1,108
|
(44,357
|
)
|
||||||||||
Financial expense, net
|
2,318
|
1,338
|
5,456
|
3,522
|
||||||||||||
Income (Loss) before Taxes on income
|
103
|
(43,725
|
)
|
(4,348
|
)
|
(47,879
|
)
|
|||||||||
Taxes on income
|
(1,565
|
)
|
(7,709
|
)
|
(3,993
|
)
|
(9,789
|
)
|
||||||||
Net Income (Loss) from continuing operations
|
1,668
|
(36,016
|
)
|
(355
|
)
|
(38,090
|
)
|
|||||||||
Net Loss from discontinued operations
|
(1,083
|
)
|
-
|
(4,668
|
)
|
-
|
||||||||||
Net Income (Loss)
|
$
|
585
|
$
|
(36,016
|
)
|
$
|
(5,023
|
)
|
$
|
(38,090
|
)
|
|||||
Net Earnings (Loss) per Share - Basic and Diluted:
|
||||||||||||||||
Continuing operations
|
$
|
0.02
|
$
|
(0.46
|
)
|
$
|
0.00
|
*)
|
$
|
(0.49
|
)
|
|||||
Discontinued operations
|
$
|
(0.01
|
)
|
$
|
-
|
$
|
(0.06
|
)
|
$
|
-
|
||||||
Weighted average number of shares continuing and discontinued
|
||||||||||||||||
Basic
|
76,324,076
|
77,550,069
|
76,247,269
|
77,548,252
|
||||||||||||
Diluted
|
79,751,099
|
77,550,069
|
76,247,269
|
77,548,252
|
December 31,
|
June 30,
|
|||||||
2016
|
2017
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
23,962
|
$
|
20,925
|
||||
Short-term bank deposit
|
8,414
|
1,503
|
||||||
Accounts receivable, net
|
71,346
|
59,431
|
||||||
Prepaid expenses and other current assets
|
10,036
|
13,553
|
||||||
Total Current Assets
|
113,758
|
95,412
|
||||||
Property and equipment, net
|
14,205
|
16,050
|
||||||
Goodwill and intangible assets, net
|
234,755
|
182,987
|
||||||
Deferred taxes
|
4,117
|
6,811
|
||||||
Other assets
|
1,617
|
1,493
|
||||||
Total Assets
|
$
|
368,452
|
$
|
302,753
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$
|
38,293
|
$
|
31,937
|
||||
Accrued expenses and other liabilities
|
17,466
|
15,434
|
||||||
Short-term loans and current maturities of long-term and convertible debt
|
17,944
|
13,749
|
||||||
Deferred revenues
|
5,354
|
5,245
|
||||||
Payment obligation related to acquisitions
|
7,653
|
7,130
|
||||||
Total Current Liabilities
|
86,710
|
73,495
|
||||||
Long-Term Liabilities:
|
||||||||
Long-term debt, net of current maturities
|
37,928
|
33,984
|
||||||
Convertible debt, net of current maturities
|
21,862
|
16,672
|
||||||
Deferred taxes
|
8,087
|
88
|
||||||
Other long-term liabilities
|
5,721
|
6,743
|
||||||
Total Liabilities
|
160,308
|
130,982
|
||||||
Shareholders' equity:
|
||||||||
Ordinary shares
|
210
|
211
|
||||||
Additional paid-in capital
|
234,831
|
235,966
|
||||||
Treasury shares at cost
|
(1,002
|
)
|
(1,002
|
)
|
||||
Accumulated other comprehensive gain (loss)
|
(265
|
)
|
316
|
|||||
Accumulated deficit
|
(25,630
|
)
|
(63,720
|
)
|
||||
Total Shareholders' Equity
|
208,144
|
171,771
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
368,452
|
$
|
302,753
|
Six months ended June 30,
|
||||||||
2016
|
2017
|
|||||||
Operating activities:
|
||||||||
Net Loss
|
$
|
(5,023
|
)
|
$
|
(38,090
|
)
|
||
Loss from discontinued operations, net
|
(4,668
|
)
|
-
|
|||||
Net Loss from continuing operations
|
(355
|
)
|
(38,090
|
)
|
||||
Adjustments required to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
13,647
|
9,909
|
||||||
Impairment of goodwill and intangible assets
|
-
|
43,847
|
||||||
Stock based compensation expense
|
3,528
|
1,119
|
||||||
Foreign currency translation
|
926
|
10
|
||||||
Accrued interest, net
|
137
|
217
|
||||||
Deferred taxes, net
|
(4,972
|
)
|
(10,752
|
)
|
||||
Change in payment obligation related to acquisition
|
1,207
|
28
|
||||||
Fair value revaluation - convertible debt
|
1,120
|
3,767
|
||||||
Net changes in operating assets and liabilities
|
(3,149
|
)
|
1,716
|
|||||
Net cash provided by continuing operating activities
|
12,089
|
11,771
|
||||||
Net cash used in discontinued activities
|
(4,232
|
)
|
-
|
|||||
Net cash provided by operating activities
|
$
|
7,857
|
$
|
11,771
|
||||
Investing activities:
|
||||||||
Purchases of property and equipment
|
$
|
(904
|
)
|
$
|
(1,265
|
)
|
||
Capitalization of development costs
|
(2,596
|
)
|
(2,781
|
)
|
||||
Short-term deposits, net
|
30,067
|
6,911
|
||||||
Net cash provided by investing activities
|
$
|
26,567
|
$
|
2,865
|
||||
Financing activities:
|
||||||||
Exercise of stock options and restricted share units
|
1
|
1
|
||||||
Payment made in connection with acquisition
|
(6,125
|
)
|
(551
|
)
|
||||
Proceeds from short-term loans
|
10,000
|
-
|
||||||
Proceeds from long-term loans
|
-
|
5,000
|
||||||
Repayment of convertible debt
|
(7,620
|
)
|
(7,901
|
)
|
||||
Repayment of short-term loans
|
(13,000
|
)
|
(7,000
|
)
|
||||
Repayment of long-term loans
|
(3,565
|
)
|
(7,414
|
)
|
||||
Net cash used in financing activities
|
$
|
(20,309
|
)
|
$
|
(17,865
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
31
|
192
|
||||||
Net increase (decrease) in cash and cash equivalents
|
18,378
|
(3,037
|
)
|
|||||
Net cash used in discontinued activities
|
(4,232
|
)
|
-
|
|||||
Cash and cash equivalents at beginning of period
|
17,519
|
23,962
|
||||||
Cash and cash equivalents at end of period
|
$
|
31,665
|
$
|
20,925
|
Three months ended
|
Six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2016
|
2017
|
2016
|
2017
|
|||||||||||||
GAAP Net Income (Loss) from continuing operations
|
$
|
1,668
|
$
|
(36,016
|
)
|
$
|
(355
|
)
|
$
|
(38,090
|
)
|
|||||
Acquisition related expenses
|
-
|
-
|
179
|
-
|
||||||||||||
Valuation adjustment on acquired deferred revenues
|
359
|
-
|
359
|
-
|
||||||||||||
Share based compensation
|
1,670
|
561
|
3,528
|
1,119
|
||||||||||||
Amortization of acquired intangible assets
|
5,178
|
4,059
|
11,623
|
8,111
|
||||||||||||
Restructuring costs
|
-
|
-
|
728
|
-
|
||||||||||||
Impairment of goodwill and intangible assets
|
-
|
43,847
|
-
|
43,847
|
||||||||||||
Fair value revaluation of convertible debt and related derivative
|
(283
|
)
|
(18
|
)
|
556
|
1,413
|
||||||||||
Accretion of payment obligation related to acquisition
|
640
|
(3
|
)
|
1,207
|
27
|
|||||||||||
Taxes on the above items
|
(2,400
|
)
|
(8,251
|
)
|
(4,320
|
)
|
(9,494
|
)
|
||||||||
Non-GAAP Net Income from continuing operations
|
$
|
6,832
|
$
|
4,179
|
$
|
13,505
|
$
|
6,933
|
||||||||
Non-GAAP Net Income from continuing operations
|
$
|
6,832
|
$
|
4,179
|
$
|
13,505
|
$
|
6,933
|
||||||||
Taxes on income
|
835
|
542
|
327
|
(295
|
)
|
|||||||||||
Financial expense, net
|
1,961
|
1,359
|
3,693
|
2,082
|
||||||||||||
Depreciation
|
1,130
|
949
|
2,024
|
1,798
|
||||||||||||
Adjusted EBITDA
|
$
|
10,758
|
$
|
7,029
|
$
|
19,549
|
$
|
10,518
|
||||||||
Non-GAAP diluted earnings per share
|
$
|
0.08
|
$
|
0.05
|
$
|
0.17
|
$
|
0.09
|
||||||||
Shares used in computing non-GAAP diluted earnings per share
|
80,605,055
|
77,989,840
|
77,979,702
|
77,990,009
|