PERION NETWORK LTD. | |||
|
By:
|
/s/ Ophir Yakovian | |
Name: Ophir Yakovian | |||
Title: Chief Financial Officer | |||
Exhibit
|
Description
|
99.1 |
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2016
|
2017
|
2016
|
2017
|
|||||||||||||
Search and other revenues
|
$
|
42.1
|
$
|
33.3
|
$
|
132.2
|
$
|
105.3
|
||||||||
Advertising revenues
|
$
|
32.4
|
$
|
31.7
|
$
|
96.1
|
$
|
91.4
|
||||||||
Total Revenues
|
$
|
74.5
|
$
|
65.0
|
$
|
228.3
|
$
|
196.7
|
||||||||
GAAP Net Income (Loss) from continuing operation
|
$
|
2.9
|
$
|
2.6
|
$
|
2.5
|
$
|
(35.5
|
)
|
|||||||
Non-GAAP Net Income
|
$
|
7.7
|
$
|
4.1
|
$
|
21.2
|
$
|
11.1
|
||||||||
Adjusted EBITDA
|
$
|
12.4
|
$
|
6.5
|
$
|
31.9
|
$
|
17.0
|
||||||||
Impairment of Goodwill and Intangible assets
|
$
|
0.0
|
$
|
0.0
|
$
|
0.0
|
$
|
43.8
|
||||||||
GAAP Diluted Earnings (Loss) Per Share from continuing operation
|
$
|
0.04
|
$
|
0.03
|
$
|
0.03
|
$
|
(0.46
|
)
|
|||||||
Non-GAAP Diluted Earnings Per Share
|
$
|
0.10
|
$
|
0.05
|
$
|
0.26
|
$
|
0.14
|
· |
Conference ID: 8570941
|
· |
Dial-in number from within the United States: 1-888-430-8709
|
· |
Dial-in number from Israel: 1-80-925-8243
|
· |
Dial-in number (other international): 1-719-325-2456
|
· |
Playback available until November 16, 2017 by calling 1-844-512-2921 (United States) or
|
· |
Link to the live webcast accessible at https://www.perion.com/ir-info/
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2016
|
2017
|
2016
|
2017
|
|||||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|||||||||||||
Revenues:
|
||||||||||||||||
Search and other
|
$
|
42,110
|
$
|
33,287
|
$
|
132,195
|
$
|
105,254
|
||||||||
Advertising
|
32,350
|
31,755
|
96,057
|
91,452
|
||||||||||||
Total Revenues
|
74,460
|
65,042
|
228,252
|
196,706
|
||||||||||||
Costs and Expenses:
|
||||||||||||||||
Cost of revenues
|
3,794
|
3,561
|
12,008
|
10,476
|
||||||||||||
Customer acquisition costs and media buy
|
32,990
|
31,955
|
102,065
|
95,793
|
||||||||||||
Research and development
|
5,829
|
4,096
|
20,361
|
13,625
|
||||||||||||
Selling and marketing
|
14,270
|
14,142
|
45,906
|
44,937
|
||||||||||||
General and administrative
|
6,672
|
5,353
|
21,524
|
16,541
|
||||||||||||
Depreciation and amortization
|
6,156
|
3,388
|
19,803
|
13,297
|
||||||||||||
Impairment charges
|
-
|
-
|
-
|
43,847
|
||||||||||||
Restructuring costs
|
-
|
-
|
728
|
-
|
||||||||||||
Total Costs and Expenses
|
69,711
|
62,495
|
222,395
|
238,516
|
||||||||||||
Income (Loss) from Operations
|
4,749
|
2,547
|
5,857
|
(41,810
|
)
|
|||||||||||
Financial expense, net
|
950
|
644
|
6,406
|
4,166
|
||||||||||||
Income (Loss) before Taxes on income
|
3,799
|
1,903
|
(549
|
)
|
(45,976
|
)
|
||||||||||
Taxes on income
|
915
|
(710
|
)
|
(3,078
|
)
|
(10,499
|
)
|
|||||||||
Net Income (loss) from continuing operations
|
2,884
|
2,613
|
2,529
|
(35,477
|
)
|
|||||||||||
Net Loss from discontinued operations
|
2,021
|
-
|
(2,647
|
)
|
-
|
|||||||||||
Net Income (Loss)
|
$
|
4,905
|
$
|
2,613
|
$
|
(118
|
)
|
$
|
(35,477
|
)
|
||||||
Net Earnings (Loss) per Share - Basic and Diluted:
|
||||||||||||||||
Continuing operations
|
$
|
0.04
|
$
|
0.03
|
$
|
0.03
|
*)
|
$
|
(0.46
|
)
|
||||||
Discontinued operations
|
$
|
0.03
|
$
|
-
|
$
|
(0.03
|
)
|
$
|
-
|
|||||||
Weighted average number of shares continuing and discontinued
|
||||||||||||||||
Basic
|
76,573,397
|
77,550,069
|
76,357,173
|
77,548,867
|
||||||||||||
Diluted
|
77,739,340
|
80,381,420
|
76,381,693
|
77,548,867
|
||||||||||||
*) less than $0.01
|
December 31,
|
September 30,
|
|||||||
2016
|
2017
|
|||||||
Audited
|
Unaudited
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
23,962
|
$
|
33,967
|
||||
Short-term bank deposit
|
8,414
|
1,508
|
||||||
Accounts receivable, net
|
71,346
|
45,626
|
||||||
Prepaid expenses and other current assets
|
10,036
|
14,597
|
||||||
Total Current Assets
|
113,758
|
95,698
|
||||||
Property and equipment, net
|
14,205
|
16,968
|
||||||
Goodwill and intangible assets, net
|
234,755
|
180,600
|
||||||
Deferred taxes
|
4,117
|
7,902
|
||||||
Other assets
|
1,617
|
1,391
|
||||||
Total Assets
|
$
|
368,452
|
$
|
302,559
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$
|
38,293
|
$
|
32,692
|
||||
Accrued expenses and other liabilities
|
17,466
|
14,915
|
||||||
Short-term loans and current maturities of long-term and convertible debt
|
17,944
|
13,879
|
||||||
Deferred revenues
|
5,354
|
4,845
|
||||||
Payment obligation related to acquisitions
|
7,653
|
6,163
|
||||||
Total Current Liabilities
|
86,710
|
72,494
|
||||||
Long-Term Liabilities:
|
||||||||
Long-term debt, net of current maturities
|
37,928
|
32,431
|
||||||
Convertible debt, net of current maturities
|
21,862
|
16,003
|
||||||
Deferred taxes
|
8,087
|
66
|
||||||
Other long-term liabilities
|
5,721
|
6,538
|
||||||
Total Liabilities
|
160,308
|
127,532
|
||||||
Shareholders' equity:
|
||||||||
Ordinary shares
|
210
|
211
|
||||||
Additional paid-in capital
|
234,831
|
236,529
|
||||||
Treasury shares at cost
|
(1,002
|
)
|
(1,002
|
)
|
||||
Accumulated other comprehensive gain (loss)
|
(265
|
)
|
396
|
|||||
Accumulated deficit
|
(25,630
|
)
|
(61,107
|
)
|
||||
Total Shareholders' Equity
|
208,144
|
175,027
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
368,452
|
$
|
302,559
|
Nine months ended September 30,
|
||||||||
2016
|
2017
|
|||||||
Unaudited
|
Unaudited
|
|||||||
Operating activities:
|
||||||||
Net Loss
|
$
|
(118
|
)
|
$
|
(35,477
|
)
|
||
Loss from discontinued operations, net
|
(2,647
|
)
|
-
|
|||||
Net Income (Loss) from continuing operations
|
2,529
|
(35,477
|
)
|
|||||
Adjustments required to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
19,803
|
13,297
|
||||||
Impairment of goodwill and intangible assets
|
-
|
43,847
|
||||||
Stock based compensation expense
|
4,985
|
1,667
|
||||||
Foreign currency translation
|
928
|
77
|
||||||
Accrued interest, net
|
306
|
339
|
||||||
Deferred taxes, net
|
(5,342
|
)
|
(11,915
|
)
|
||||
Change in payment obligation related to acquisition
|
1,271
|
61
|
||||||
Fair value revaluation - convertible debt
|
1,588
|
2,768
|
||||||
Net changes in operating assets and liabilities
|
(4,398
|
)
|
14,188
|
|||||
Net cash provided by continuing operating activities
|
21,670
|
28,852
|
||||||
Net cash used in discontinued activities
|
(3,303
|
)
|
-
|
|||||
Net cash provided by operating activities
|
$
|
18,367
|
$
|
28,852
|
||||
Investing activities:
|
||||||||
Purchases of property and equipment
|
$
|
(1,011
|
)
|
$
|
(1,489
|
)
|
||
Capitalization of development costs
|
(3,724
|
)
|
(4,437
|
)
|
||||
Change in restricted cash, net
|
(132
|
)
|
-
|
|||||
Short-term deposits, net
|
34,606
|
6,906
|
||||||
Net cash provided by investing activities
|
$
|
29,739
|
$
|
980
|
||||
Financing activities:
|
||||||||
Exercise of stock options and restricted share units
|
1
|
1
|
||||||
Payment made in connection with acquisition
|
(28,052
|
)
|
(1,551
|
)
|
||||
Proceeds from long-term loans
|
-
|
5,000
|
||||||
Repayment of convertible debt
|
(7,620
|
)
|
(7,901
|
)
|
||||
Repayment of short-term loans
|
(26,000
|
)
|
(7,000
|
)
|
||||
Repayment of long-term loans
|
(6,390
|
)
|
(8,630
|
)
|
||||
Net cash used in financing activities
|
$
|
(42,061
|
)
|
$
|
(20,081
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
14
|
254
|
||||||
Net increase in cash and cash equivalents
|
9,362
|
10,005
|
||||||
Net cash used in discontinued activities
|
(3,303
|
)
|
-
|
|||||
Cash and cash equivalents at beginning of period
|
17,519
|
23,962
|
||||||
Cash and cash equivalents at end of period
|
$
|
23,578
|
$
|
33,967
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2016
|
2017
|
2016
|
2017
|
|||||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|||||||||||||
GAAP Net Income from continuing operations
|
$
|
2,884
|
$
|
2,613
|
$
|
2,529
|
$
|
(35,477
|
)
|
|||||||
Acquisition related expenses
|
-
|
-
|
179
|
-
|
||||||||||||
Valuation adjustment on acquired deferred revenues
|
-
|
-
|
359
|
-
|
||||||||||||
Share based compensation
|
1,457
|
547
|
4,985
|
1,666
|
||||||||||||
Amortization of acquired intangible assets
|
5,178
|
2,497
|
16,801
|
10,608
|
||||||||||||
Restructuring costs
|
-
|
-
|
728
|
-
|
||||||||||||
Impairment of goodwill and intangible assets
|
-
|
-
|
-
|
43,847
|
||||||||||||
Fair value revaluation of convertible debt and related derivative
|
(422
|
)
|
(803
|
)
|
134
|
610
|
||||||||||
Accretion of payment obligation related to acquisition
|
63
|
34
|
1,270
|
61
|
||||||||||||
Taxes on the above items
|
(1,490
|
)
|
(753
|
)
|
(5,810
|
)
|
(10,247
|
)
|
||||||||
Non-GAAP Net Income from continuing operations
|
$
|
7,670
|
$
|
4,135
|
$
|
21,175
|
$
|
11,068
|
||||||||
Non-GAAP Net Income from continuing operations
|
$
|
7,670
|
$
|
4,135
|
$
|
21,175
|
$
|
11,068
|
||||||||
Taxes on income
|
2,405
|
43
|
2,732
|
(252
|
)
|
|||||||||||
Financial expense, net
|
1,309
|
1,413
|
5,002
|
3,495
|
||||||||||||
Depreciation
|
978
|
891
|
3,002
|
2,689
|
||||||||||||
Adjusted EBITDA
|
$
|
12,362
|
$
|
6,482
|
$
|
31,911
|
$
|
17,000
|
||||||||
Non-GAAP diluted earnings per share
|
$
|
0.10
|
$
|
0.05
|
$
|
0.26
|
$
|
0.14
|
||||||||
Shares used in computing non-GAAP diluted earnings per share
|
78,877,949
|
77,819,551
|
79,798,457
|
78,787,155
|