Perion Network Ltd. (NASDAQ: PERI) today announced financial results for
the third quarter and nine months ended September 30, 2013.
Q3 2013 non-GAAP Financial Highlights Include:
-
Quarterly revenues increased 31% year-over-year reaching $21.3 million;
-
EBITDA increased 48% year-over-year to $5.6 million;
-
Net income increased 68% year-over-year, reaching $4.5 million; and
-
Earnings per Share increased 31% year-over-year, reaching $0.34.
First Nine Months 2013 non-GAAP Financial Highlights Include:
-
Year-to-date revenues increased 84% year-over-year and were $73.3
million;
-
EBITDA increased 96% year-over-year reaching $17.8 million;
-
Net income increased 105%, reaching $13.6 million; and
-
Earnings per Share increased 59%, reaching $1.05.
ClientConnect Pro-forma non-GAAP Financial Highlights Include:
On September 16, 2013, Perion announced an agreement to combine with
Conduit’s ClientConnect in an all-stock transaction, scheduled to close
in early January 2014, subject to a vote of Perion’s shareholders and
other closing conditions. Management does not anticipate any issues with
the vote or closing at this time.
Select highlights of ClientConnect’s Pro-forma non-GAAP third quarter
financial performance as provided by Conduit are as follows1:
-
Third quarter revenues increased 58% year-over-year reaching $80.9
million;
-
Third quarter EBITDA increased 48% year-over-year reaching $21.2
million;
-
Third quarter net income increased 44% year-over-year, reaching $19.4
million;
-
Year-to-date revenues increased 62% year-over-year reaching $241.4
million;
-
Year-to-date EBITDA increased 65% year-over-year reaching $79.6
million; and
-
Year-to-date net income increased 63%, reaching $69.6 million.
Josef Mandelbaum, Perion’s CEO, commented: “This was a momentous quarter
for Perion, highlighted by the agreement to combine with Conduit’s
ClientConnect business to create an industry powerhouse. On a
stand-alone basis, we hit the upper range of our revenue guidance and
surpassed our EBITDA and net profit expectations. With our search
diversification strategy now fully implemented, we are already seeing
great progress, and can say with confidence that Q4 will show
significant growth over Q3. From a product standpoint, we launched our
new iPhone and Android app, Molto, and are excited by the great reviews
and ratings Molto has been receiving.”
“The transaction with ClientConnect has not yet closed, however, our
optimism surrounding the combination continues to grow,” continued Mr.
Mandelbaum. “As the new, larger and more profitable Perion, we will be
uniquely positioned to execute our business strategy and become a
preferred partner of app developers, by offering them the best solution
to monetize and distribute their apps across all devices. Furthermore,
this combination will enable us to increase organic investment in our
technology and data platforms, expand faster into mobile and invest in
growth through acquisitions. I fully expect 2014 to be another milestone
year in Perion’s history, and one that will positively shape our future
in the coming years.”
Non-GAAP Financial Comparison for the First Nine Months and Third
Quarter of 2013:
Revenue: In the third quarter of 2013, revenues reached $21.3
million, reflecting a 31% increase compared to the $16.3 million of
revenues in the third quarter of 2012. This increase was attributable to
a 25% year over year increase in search generated revenues, while other
revenues increased 43%. The increase in search revenues was achieved
while continuing to diversify the Company’s search partners, with no
more than 40% of search generated revenues coming directly from any one
of our search partners.
In the first nine months of 2013 revenues were $73.3 million, increasing
84% from the $39.8 million recorded in the same period in 2012. Search
generated revenues increased by 128% and other revenues grew by 25%. The
increase in search generated revenues was due to both organic growth and
the acquisition of SweetPacks in November 2012. Growth in other revenues
was attributable to other advertising revenues.
Gross Profits: As a result of the increase in revenues, in the
third quarter of 2013 gross profit increased as well, and was $20.4
million, or 96% of sales, increasing 34%, compared to $15.2 million, or
94% of sales in the third quarter of 2012. Gross profit in the first
nine months of 2013 was $70.1 million, or 96% of revenues, increasing
88% compared to $37.2 million, or 93% of revenues in the first nine
months of 2012.
Customer Acquisition Costs (“CAC”): In the third quarter of 2013,
CAC was $8.2 million, 40% higher than the $5.8 million spent in the
third quarter of 2012. In the first nine months of 2013, Perion invested
$32.0 million in CAC, increasing 159% compared to the $12.4 million
invested in the first nine months of 2012. The increase in CAC was lower
than initially planned for this period, as the Company was adapting its
acquisition strategy to its new partners and the new industry
environment. Management is in the process of cautiously ramping up this
investment in the fourth quarter, increasing revenues in that quarter
and powering growth into 2014.
EBITDA: In the third quarter of 2013, EBITDA was $5.6 million,
increasing $1.8 million, or 48%, compared to $3.8 million in the third
quarter of 2012, despite the $2.3 million increase in CAC. Perion’s
EBITDA margin increased this quarter to 26%, compared to 23% the same
quarter last year. In the first nine months of 2013 EBITDA was $17.8
million, or 24% of revenues, and nearly double the $9.1 million, or 23%
of revenues, in the first nine months of 2012.
Net Income: In the third quarter of 2013, net income increased
68%, reaching $4.5 million or $0.34 per share, compared to $2.6 million,
or $0.26 per share in the third quarter of 2012. In the first nine
months of 2013, net income was more than double the same period last
year, reaching $13.6 million, or $1.05 per share, compared to $6.7
million, or $0.66 per share, in the first nine months of 2012. The GAAP
Net Loss was $1.7 million, due to one-time, non-deductible,
acquisition-related costs of $3.4 million.
Cash Flow from Operations: Based on U.S. GAAP, in the first nine
months of 2013, cash flow from operations was $12.7 million, compared to
$4.8 million in the first nine months of 2012. Cash flow from operations
in the first nine months of 2013 was due to $2.1 million in GAAP net
income, non-cash amortization, stock based compensation and accretion
expenses of $9.9 million and $0.7 million from change in operating
assets and liabilities.
Financial Outlook
Based on currently available information, Perion is updating its outlook
for fiscal 2013 as follows:
-
Revenue is expected to be in the range of $102 million to $104 million.
-
EBITDA is expected to be in the range of $24 million to $25 million.
-
Non-GAAP Net Income is expected to be in the range of $18 million to
$19 million; and
-
Non-GAAP diluted EPS between $1.38 and $1.45.
“The fourth quarter is shaping up to be a very strong growth quarter for
us, both in terms of revenue and profitability,” concluded Mr.
Mandelbaum. “However, in line with our commitment to the highest
industry standards, we have decided to be even more selective regarding
new business partners. Therefore we are slightly adjusting our full year
guidance. While there are certainly headwinds in the market right now,
we have always been proactive in our support of better policies and in
the long term continue to believe this presents an opportunity for us to
capture market share.”
Perion’s expectation of non-GAAP adjusted net income for the fiscal year
2013 excludes share-based compensation expense, acquisition amortization
and certain other adjustments, and assumes an effective tax rate of 25
percent. For the purpose of calculating diluted EPS and non-GAAP diluted
EPS, the Company assumes approximately 13.1 million weighted-average
diluted ordinary shares outstanding for the fourth quarter and for the
full year.
Conference Call
Perion will host a conference call to discuss the results today,
November 12th at 10 a.m. EST (5 p.m. Israel Time). Details
are as follows:
-
Dial-in number from within the United States: 1-888-438-5448
-
Dial-in number from Israel: 180-924-5906
-
Dial-in number (other international): 1-719-785-1765
-
Playback, available until November 19, 2013 by calling 1-877-870-5176
(United States) or 1-858-384-5517 (international). Pin number for the
replay 3708973.
-
A live webcast is accessible at http://www.perion.com/events-presentations.
About Perion Network Ltd.
Perion Network, Ltd. (NASDAQ: PERI) is a global consumer internet
company that develops applications to make the online experience of its
users simple, safe and enjoyable. Perion’s three main consumer brands
are: Incredimail, Smilebox and SweetIM. Incredimail
is a unified messaging application enabling consumers to manage multiple
email accounts and Facebook messages in one place with an easy-to-use
interface and extensive personalization features, and is available in
over 100 countries in 8 languages; Smilebox
is a leading photo sharing and social expression product and service
that quickly turns life's moments into digital keepsakes for sharing and
connecting with friends and family, in a fun and personal way. SweetIM
is an instant messaging application that enables consumers to
personalize their everyday communications with free, fun and easy to use
content. Perion products have had over 300 million downloads to date
with more than 50 million monthly unique visitors across all of its
brands. Perion also offers and develops a range of products for mobile
phones and tablets to answer its users' increasing mobile demands. For
more information on Perion please visit http://www.perion.com.
Non-GAAP measures
Non-GAAP financial measures consist of GAAP financial measures
adjusted to exclude: Valuation adjustment on acquired deferred product
revenues, amortization of acquired intangible assets, share-based
compensation expenses, acquisition related expenses, accretion of
payment obligation related to acquisition and taxes on amortization of
acquired intangible assets. 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. 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. Our management regularly
uses our supplemental non-GAAP financial measures internally to
understand, manage and evaluate our business and make operating
decisions. These non-GAAP measures are among the primary factors
management uses in planning for and forecasting future periods. Business
combination accounting rules requires us to recognize a legal
performance obligation related to a revenue arrangement of an acquired
entity. The amount assigned to that liability should be based on its
fair value at the date of acquisition. The non-GAAP adjustment is
intended to reflect the full amount of such revenue. We believe this
adjustment is useful to investors as a measure of the ongoing
performance of our business. We believe these non-GAAP financial
measures provide consistent and comparable measures to help investors
understand our current and future operating cash flow performance. These
non-GAAP financial measures may differ materially from the non-GAAP
financial measures used by other companies. Reconciliation between
results on a GAAP and non-GAAP basis is provided in a table immediately
following the Consolidated Statements of Operations.
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 of any closing conditions to the Share Purchase to
be satisfied and the failure of the proposed transaction to be
consummated for any other reason, the failure to realize the anticipated
benefits of the proposed transaction; risks entailed in integrating the
ClientConnect business with Perion’s other businesses, including
employee retention and customer acceptance; the risk that the
transaction will divert management and other resources from the ongoing
operations of the two businesses or otherwise disrupt the conduct of
those businesses, potential litigation associated with the transaction,
and general risks associated with the business of Perion and with the
ClientConnect business, including 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 the Company with the
Securities and Exchange Commission from time to time, including its
annual report on Form 20-F/A for the year ended December 31, 2012.
Perion does not assume any obligation to update these forward-looking
statements.
|
|
1
|
|
For the purposes of comparison, ClientConnect financials for the
third quarter and first nine months of 2012 have been adjusted to
reflect 2013 economic terms.
|
|
|
|
|
|
Source: Perion Network Ltd.
|
PERION NETWORK LTD.
|
NON-GAAP SUMMARY FINANCIAL METRICS
|
U.S. dollars in thousands (except per share data), unaudited
|
|
|
|
|
|
|
|
|
|
|
Quarter ended September 30,
|
|
|
Nine months ended September 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Search
|
|
|
$
|
13,562
|
|
|
$
|
10,861
|
|
|
$
|
52,008
|
|
|
$
|
22,811
|
Product and Other
|
|
|
|
7,722
|
|
|
|
5,413
|
|
|
|
21,281
|
|
|
|
17,024
|
Total revenues
|
|
|
$
|
21,284
|
|
|
$
|
16,274
|
|
|
$
|
73,289
|
|
|
$
|
39,835
|
Gross Profit
|
|
|
$
|
20,423
|
|
|
$
|
15,233
|
|
|
$
|
70,079
|
|
|
$
|
37,219
|
EBITDA
|
|
|
$
|
5,634
|
|
|
$
|
3,801
|
|
|
$
|
17,791
|
|
|
$
|
9,068
|
Net Income
|
|
|
$
|
4,454
|
|
|
$
|
2,649
|
|
|
$
|
13,640
|
|
|
$
|
6,665
|
Diluted EPS
|
|
|
$
|
0.34
|
|
|
$
|
0.26
|
|
|
$
|
1.05
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERION NETWORK LTD.
|
GAAP FINANCIAL STATEMENTS
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
U.S. dollars and number of shares in thousands (except per share
data), (unaudited)
|
|
|
|
|
Quarter ended September 30,
|
|
|
Nine months ended September 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Search
|
|
|
$
|
13,562
|
|
|
|
$
|
10,861
|
|
|
$
|
52,008
|
|
|
$
|
22,811
|
Product and Other
|
|
|
|
7,722
|
|
|
|
|
5,354
|
|
|
|
21,281
|
|
|
|
16,046
|
Total revenues
|
|
|
|
21,284
|
|
|
|
|
16,215
|
|
|
|
73,289
|
|
|
|
38,857
|
Cost of revenues
|
|
|
|
2,721
|
|
|
|
|
1,293
|
|
|
|
8,790
|
|
|
|
3,380
|
Gross profit
|
|
|
|
18,563
|
|
|
|
|
14,922
|
|
|
|
64,499
|
|
|
|
35,477
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net
|
|
|
|
2,928
|
|
|
|
|
2,711
|
|
|
|
9,221
|
|
|
|
7,858
|
Selling and marketing
|
|
|
|
2,761
|
|
|
|
|
2,036
|
|
|
|
8,103
|
|
|
|
5,260
|
Customer acquisition costs
|
|
|
|
8,162
|
|
|
|
|
5,825
|
|
|
|
32,043
|
|
|
|
12,363
|
General and administrative
|
|
|
|
5,573
|
|
|
|
|
1,738
|
|
|
|
9,857
|
|
|
|
5,253
|
Total operating expenses
|
|
|
|
19,424
|
|
|
|
|
12,310
|
|
|
|
59,224
|
|
|
|
30,734
|
Operating income (loss)
|
|
|
|
(861
|
)
|
|
|
|
2,612
|
|
|
|
5,275
|
|
|
|
4,743
|
Financial expense, net
|
|
|
|
483
|
|
|
|
|
58
|
|
|
|
1,284
|
|
|
|
254
|
Income (loss) before taxes on income
|
|
|
|
(1,344
|
)
|
|
|
|
2,554
|
|
|
|
3,991
|
|
|
|
4,489
|
Taxes on income
|
|
|
|
314
|
|
|
|
|
861
|
|
|
|
1,918
|
|
|
|
1,548
|
Net income (loss)
|
|
|
$
|
(1,658
|
)
|
|
|
$
|
1,693
|
|
|
$
|
2,073
|
|
|
$
|
2,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
|
$
|
(0.13
|
)
|
|
|
$
|
0.17
|
|
|
$
|
0.17
|
|
|
$
|
0.30
|
Diluted earnings (loss) per share
|
|
|
$
|
(0.13
|
)
|
|
|
$
|
0.17
|
|
|
$
|
0.16
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted number of shares
|
|
|
|
12,468
|
|
|
|
|
10,003
|
|
|
|
12,277
|
|
|
|
9,968
|
Diluted weighted number of shares
|
|
|
|
12,468
|
|
|
|
|
10,158
|
|
|
|
12,998
|
|
|
|
10,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERION NETWORK LTD.
|
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
|
U.S. dollars and number of shares in thousands (except per share
data), unaudited
|
|
|
|
|
|
|
|
|
|
|
Quarter ended September 30,
|
|
|
Nine months ended September 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
GAAP revenues
|
|
|
$
|
21,284
|
|
|
|
$
|
16,215
|
|
|
$
|
73,289
|
|
|
|
$
|
38,857
|
Valuation adjustment on acquired deferred product revenues
|
|
|
|
-
|
|
|
|
|
59
|
|
|
|
-
|
|
|
|
|
978
|
Non-GAAP revenues
|
|
|
$
|
21,284
|
|
|
|
$
|
16,274
|
|
|
$
|
73,289
|
|
|
|
$
|
39,835
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
|
$
|
18,563
|
|
|
|
$
|
14,922
|
|
|
$
|
64,499
|
|
|
|
$
|
35,477
|
Valuation adjustment on acquired deferred product revenues
|
|
|
|
-
|
|
|
|
|
59
|
|
|
|
-
|
|
|
|
|
978
|
Share based compensation
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
7
|
|
|
|
|
14
|
Amortization of acquired intangible assets
|
|
|
|
1,858
|
|
|
|
|
250
|
|
|
|
5,573
|
|
|
|
|
750
|
Non-GAAP gross profit
|
|
|
$
|
20,423
|
|
|
|
$
|
15,233
|
|
|
$
|
70,079
|
|
|
|
$
|
37,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses
|
|
|
$
|
19,424
|
|
|
|
$
|
12,310
|
|
|
$
|
59,224
|
|
|
|
$
|
30,734
|
Acquisition related expenses
|
|
|
|
3,432
|
|
|
|
|
188
|
|
|
|
3,432
|
|
|
|
|
501
|
Share based compensation
|
|
|
|
357
|
|
|
|
|
246
|
|
|
|
1,081
|
|
|
|
|
775
|
Amortization of acquired intangible assets
|
|
|
|
414
|
|
|
|
|
211
|
|
|
|
1,363
|
|
|
|
|
632
|
Non-GAAP operating expenses
|
|
|
$
|
15,221
|
|
|
|
$
|
11,665
|
|
|
$
|
53,348
|
|
|
|
$
|
28,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss)
|
|
|
$
|
(861
|
)
|
|
|
$
|
2,612
|
|
|
$
|
5,275
|
|
|
|
$
|
4,743
|
Valuation adjustment on acquired deferred product revenues
|
|
|
|
-
|
|
|
|
|
59
|
|
|
|
-
|
|
|
|
|
978
|
Acquisition related expenses
|
|
|
|
3,432
|
|
|
|
|
188
|
|
|
|
3,432
|
|
|
|
|
501
|
Share based compensation
|
|
|
|
359
|
|
|
|
|
248
|
|
|
|
1,088
|
|
|
|
|
789
|
Amortization of acquired intangible assets
|
|
|
|
2,272
|
|
|
|
|
461
|
|
|
|
6,936
|
|
|
|
|
1,380
|
Operating income adjustments
|
|
|
|
6,063
|
|
|
|
|
956
|
|
|
|
11,456
|
|
|
|
|
3,648
|
Non-GAAP operating income
|
|
|
$
|
5,202
|
|
|
|
$
|
3,568
|
|
|
$
|
16,731
|
|
|
|
$
|
8,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
|
$
|
(1,658
|
)
|
|
|
$
|
1,693
|
|
|
$
|
2,073
|
|
|
|
$
|
2,941
|
Operating income adjustments
|
|
|
|
6,063
|
|
|
|
|
956
|
|
|
|
11,456
|
|
|
|
|
3,648
|
Accretion of payment obligation related to acquisitions
|
|
|
|
293
|
|
|
|
|
-
|
|
|
|
843
|
|
|
|
|
76
|
Taxes on amortization of acquired intangible assets
|
|
|
|
(244
|
)
|
|
|
|
-
|
|
|
|
(732
|
)
|
|
|
|
-
|
Non-GAAP net income
|
|
|
$
|
4,454
|
|
|
|
$
|
2,649
|
|
|
$
|
13,640
|
|
|
|
$
|
6,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings (loss) per share
|
|
|
$
|
(0.13
|
)
|
|
|
$
|
0.17
|
|
|
$
|
0.16
|
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted earnings per share
|
|
|
$
|
0.34
|
|
|
|
$
|
0.26
|
|
|
$
|
1.05
|
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing GAAP diluted earnings (loss) per share
|
|
|
|
12,468
|
|
|
|
|
10,158
|
|
|
|
12,998
|
|
|
|
|
10,062
|
Shares used in computing Non-GAAP diluted earnings per share
|
|
|
|
13,123
|
|
|
|
|
10,158
|
|
|
|
12,998
|
|
|
|
|
10,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
|
|
|
$
|
4,454
|
|
|
|
$
|
2,649
|
|
|
$
|
13,640
|
|
|
|
$
|
6,665
|
Income tax expense
|
|
|
|
314
|
|
|
|
|
861
|
|
|
|
1,918
|
|
|
|
|
1,548
|
Taxes on amortization of acquired intangible assets
|
|
|
|
244
|
|
|
|
|
-
|
|
|
|
732
|
|
|
|
|
-
|
Interest expense, net
|
|
|
|
190
|
|
|
|
|
58
|
|
|
|
441
|
|
|
|
|
178
|
Depreciation and amortization
|
|
|
|
432
|
|
|
|
|
233
|
|
|
|
1,060
|
|
|
|
|
677
|
Non-GAAP EBITDA
|
|
|
$
|
5,634
|
|
|
|
$
|
3,801
|
|
|
$
|
17,791
|
|
|
|
$
|
9,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERION NETWORK LTD.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
U.S. dollars in thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
December 31,
|
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
27,276
|
|
|
|
|
$
|
21,762
|
Trade receivables
|
|
|
|
|
|
12,024
|
|
|
|
|
|
10,246
|
Restricted cash
|
|
|
|
|
|
10,260
|
|
|
|
|
|
10,260
|
Other receivables and prepaid expenses
|
|
|
|
|
|
4,249
|
|
|
|
|
|
5,424
|
Total current assets
|
|
|
|
|
|
53,809
|
|
|
|
|
|
47,692
|
LONG-TERM ASSETS:
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
|
|
1,456
|
|
|
|
|
|
1,522
|
Goodwill and other intangible assets, net
|
|
|
|
|
|
67,402
|
|
|
|
|
|
72,730
|
Other assets
|
|
|
|
|
|
1,433
|
|
|
|
|
|
1,215
|
Total long-term assets
|
|
|
|
|
|
70,291
|
|
|
|
|
|
75,467
|
Total assets
|
|
|
|
|
$
|
124,100
|
|
|
|
|
$
|
123,159
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
Current maturities of long-term debt
|
|
|
|
|
$
|
2,300
|
|
|
|
|
$
|
2,300
|
Trade payables
|
|
|
|
|
|
9,322
|
|
|
|
|
|
9,560
|
Deferred revenues
|
|
|
|
|
|
4,800
|
|
|
|
|
|
5,132
|
Payment obligation related to acquisitions
|
|
|
|
|
|
24,484
|
|
|
|
|
|
20,317
|
Accrued expenses and other liabilities
|
|
|
|
|
|
17,177
|
|
|
|
|
|
14,679
|
Total current liabilities
|
|
|
|
|
|
58,083
|
|
|
|
|
|
51,988
|
LONG-TERM LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
|
4,825
|
|
|
|
|
|
6,550
|
Contingent purchase consideration
|
|
|
|
|
|
-
|
|
|
|
|
|
6,078
|
Other long-term liabilities
|
|
|
|
|
|
3,297
|
|
|
|
|
|
3,833
|
Total long-term liabilities
|
|
|
|
|
|
8,122
|
|
|
|
|
|
16,461
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
57,895
|
|
|
|
|
|
54,710
|
Total liabilities and shareholders' equity
|
|
|
|
|
$
|
124,100
|
|
|
|
|
$
|
123,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERION NETWORK LTD.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
U.S. dollars in thousands, (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30,
|
|
|
|
|
|
2013
|
|
|
|
|
2012
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
|
2,073
|
|
|
|
|
|
$
|
2,941
|
|
Adjustments required to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
7,996
|
|
|
|
|
|
|
2,057
|
|
Stock based compensation expense
|
|
|
|
|
|
1,088
|
|
|
|
|
|
|
789
|
|
Accretion of payment obligation related to acquisition
|
|
|
|
|
|
843
|
|
|
|
|
|
|
389
|
|
Net change in operating assets and liabilities
|
|
|
|
|
|
742
|
|
|
|
|
|
|
(1,418
|
)
|
Net cash provided by operating activities
|
|
|
|
|
|
12,742
|
|
|
|
|
|
|
4,758
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
|
|
|
(545
|
)
|
|
|
|
|
|
(447
|
)
|
Other
|
|
|
|
|
|
(171
|
)
|
|
|
|
|
|
-
|
|
Capitalization of software development and content costs
|
|
|
|
|
|
(2,033
|
)
|
|
|
|
|
|
(585
|
)
|
Acquisition of subsidiary
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(6,626
|
)
|
Net cash used in investing activities
|
|
|
|
|
|
(2,749
|
)
|
|
|
|
|
|
(7,658
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
Exercise of share options
|
|
|
|
|
|
-
|
|
|
|
|
|
|
75
|
|
Deferred payment made in connection with acquisition
|
|
|
|
|
|
(2,754
|
)
|
|
|
|
|
|
-
|
|
Proceeds from long-term loans
|
|
|
|
|
|
-
|
|
|
|
|
|
|
10,000
|
|
Payment of long-term loans
|
|
|
|
|
|
(1,725
|
)
|
|
|
|
|
|
(575
|
)
|
Net cash provided by (used in) financing activities
|
|
|
|
|
|
(4,479
|
)
|
|
|
|
|
|
9,500
|
|
Net increase in cash and cash equivalents
|
|
|
|
|
|
5,514
|
|
|
|
|
|
|
6,600
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
|
|
21,762
|
|
|
|
|
|
|
11,260
|
|
Cash and cash equivalents at end of period
|
|
|
|
|
$
|
27,276
|
|
|
|
|
|
$
|
17,860
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash investing activities:
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares in connection with the acquisition of Smilebox
|
|
|
|
|
$
|
-
|
|
|
|
|
|
$
|
337
|
|
Stock-based compensation that was capitalized as part of
capitalization of software development costs
|
|
|
|
|
$
|
25
|
|
|
|
|
|
$
|
25
|
|
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