Synacor Reports Second Quarter 2020 Financial Results

Aug 11, 2020

Company Announces $10 million Cost Reduction Plan

BUFFALO, N.Y.--(BUSINESS WIRE)-- Synacor, Inc. (Nasdaq: SYNC), a leading provider of cloud-based Collaboration and Identity Management software and services serving global enterprises, video, internet and communications providers, and governments, today announced its financial results for the second quarter ended June 30, 2020.

Second Quarter Highlights

  • Second quarter revenue of $18.2 million
  • Second quarter GAAP net loss of $3.2 million and Adjusted EBITDA of $0.5 million
  • Software & Services segment revenue of $10.9 million, up 3%, and adjusted EBITDAmargins expand to 34% from 26% in the prior year
  • Delivered double digit growth rates in Cloud ID and Zimbra Enterprise SaaS, expected to sustain, offset by COVID-19 impact on Advertising and consumer Email
  • Company’s cost reduction plan expected to yield $10 million of annual savings

“Our Software business grew 3% this quarter, driven by double digit growth rates in Cloud ID and Zimbra Enterprise SaaS tempered by lower revenue from maintenance and consumer Email as certain customers proactively reduced costs during the COVID-19 pandemic,” said Himesh Bhise, Synacor’s Chief Executive Officer. “We renewed all Service Provider customer contracts that were up for renewal, added four new Cloud ID customers, booked 197 new and growth Zimbra customers, and expanded our sales pipeline.”

“In addition, we remain focused on driving profitability, and are executing on a cost reduction plan that is expected to deliver $10 million in annual savings without impacting our customer commitments and growth initiatives,” Bhise added. “These actions will significantly improve our EBITDA margins even at COVID-19-impacted levels of revenue, and position us to generate positive operating cash flow starting in Q4.”

Recent Highlights

  • 197 new and expansion customers for Zimbra email and collaboration platform delivered through worldwide channel partners
  • Signed three content streaming networks and one service provider customer to Cloud ID.
  • Active advertising publishers were 129 in Q2, up 34% from the prior year quarter
  • Renewed all Service Provider contracts that were up for renewal in North America - seven Cloud ID contracts, six Zimbra contracts, and five Portal contracts
  • Unallocated corporate G&A declined 23% compared to the year ago quarter as a result of our cost reduction actions

Financial Results:

Revenue

Revenue was $18.2 million, compared to reported revenue of $31.8 million, or $22.2 million when excluding the ATT.net portal business, in the second quarter of 2019. The decline was primarily driven by the COVID-19 impact on our advertising business consistent with the industry-wide decline in media spend.

Revenue in our Software & Services segment totaled $10.9 million, compared with $10.6 million in the second quarter of 2019. Revenue in our Portal & Advertising segment totaled $7.3 million, compared with reported revenue of $21.3 million, or $11.6 million net of the ATT.net portal business, in the prior year.

Net Loss

Net loss was $3.2 million, or $0.08 per share, compared with a net loss of $2.5 million, or $0.06 per share, in the prior year. The current year quarter includes $0.4 million of expenses for legal and professional fees related to our since-terminated merger with Qumu.

Adjusted EBITDA

Adjusted EBITDA was $0.5 million, or 2.5% of revenue, compared with $1.6 million, or 5.1% of revenue, in the second quarter of 2019. Adjusted EBITDA excludes stock-based compensation, other income and expense, asset impairments, restructuring costs, and certain legal and professional fees. The decline was primarily driven by the COVID-19 impact on advertising revenue and margins.

Cash

The Company ended the quarter with $6.0 million in cash and cash equivalents, compared with $8.9 million at the end of the first quarter. The Company continues to have no borrowings on its credit facility and had approximately $5.6 million of availability as of quarter-end. With the cost reduction plan announced today and other actions that the Company has already taken, management believes that beginning with the fourth quarter, Synacor will be cash flow positive on an on-going basis.

Guidance

Due to the continued uncertainty surrounding the duration and pace of recovery from the COVID-19 pandemic, management has decided to continue the suspension of quarterly guidance updates until visibility improves.

Conference Call Details

Synacor will host a conference call today at 5 p.m. ET to discuss its second quarter 2020 financial results. The live webcast of the Company’s earnings conference call can be accessed at https://www.synacor.com/investor-relations/events-and-presentations. To participate, please dial 1-833-235-2655 (toll free) or 1-647-689-4151 (international) and reference conference ID 3077578.

Following the conclusion of the live call, a replay of the webcast will be available on the Investor Relations section of the Company's website for at least 90 days. A telephonic replay of the conference call will also be available from 8 p.m. ET on August 11, 2020 until 11:59 p.m. ET on August 18, 2020 by dialing 1-800-585-8367 or 1-416-621-4642 and using the pin number 3077578.

About Synacor

Synacor (Nasdaq: SYNC) is a cloud-based software and services company serving global video, internet and communications providers, device manufacturers, governments and enterprises. Synacor’s mission is to enable its customers to better engage with their consumers. Its customers use Synacor’s technology platforms and services to scale their businesses and extend their subscriber relationships. Synacor delivers managed portals, advertising solutions, email and collaboration platforms, and cloud-based identity management. www.synacor.com

Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (GAAP).

We report adjusted EBITDA because it is a key measure used by our management and Board of Directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.

For a reconciliation of adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, please refer to the table “Reconciliation of GAAP to Non-GAAP Measures” in this press release.

We report adjusted net loss and adjusted diluted earnings per share because we believe these measures provide investors with additional information to assess our financial performance. These measures should be viewed as supplemental data, rather than substitutes or alternatives to the comparable GAAP measures. For a reconciliation of our GAAP Condensed Consolidated Statements of Operations to our adjusted non-GAAP measures, please refer to the table “Reconciliation of Adjusted Financial Measures” in this press release.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements concerning Synacor’s expected financial performance including, without limitation, the statements and quotations from management, statements regarding the impact of the Company’s cost reduction plan on its future financial results, statements regarding the ability to achieve positive operating cash flow in future periods, and Synacor’s strategic and operational plans. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company’s results could differ materially from the results expressed or implied by the forward-looking statements the Company makes.

The risks and uncertainties referred to above include – but are not limited to – risks associated with: the impact of the COVID-19 pandemic on our business, execution of our plans and strategies; our ability to obtain new customers; our ability to integrate the assets and personnel from acquisitions; expectations regarding consumer taste and user adoption of applications and solutions; developments in internet browser software and search advertising technologies; general economic conditions; expectations regarding the Company’s ability to timely expand the breadth of services and products or introduction of new services and products; consolidation within the cable and telecommunications industries; changes in the competitive dynamics in the market for online search and digital advertising; the risk that security measures could be breached and unauthorized access to subscriber data could be obtained; potential third party intellectual property infringement claims or other legal claims against Synacor; and the price volatility of our common stock.

Further information on these and other factors that could affect the Company’s financial results is included in filings it makes with the Securities and Exchange Commission from time to time, including the section entitled “Risk Factors” in the Company’s most recent Form 10-K filed with the SEC. These documents are available on the SEC Filings section of the Investor Information section of the Company’s website at http://investor.synacor.com/. All information provided in this release and in the attachments is available as of August 11, 2020, and Synacor undertakes no duty to update this information.

Synacor, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

June 30,

2020

 

December 31,

2019

 

 

 

 

 

Assets

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

5,978

 

 

 

$

10,966

 

 

Accounts receivable, net

 

13,493

 

 

 

20,532

 

 

Prepaid expenses and other current assets

 

3,977

 

 

 

2,989

 

 

Total current assets

 

23,448

 

 

 

34,487

 

 

Property and equipment, net

 

12,670

 

 

 

14,948

 

 

Operating lease right-of-use assets

 

4,187

 

 

 

4,765

 

 

Goodwill

 

15,940

 

 

 

15,948

 

 

Intangible assets

 

7,340

 

 

 

8,411

 

 

Other assets

 

933

 

 

 

1,319

 

 

Total Assets

 

$

64,518

 

 

 

$

79,878

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

10,472

 

 

 

$

12,583

 

 

Accrued expenses and other current liabilities

 

3,413

 

 

 

5,878

 

 

Current portion of deferred revenue

 

5,349

 

 

 

6,509

 

 

Current portion of long-term debt and finance leases

 

1,027

 

 

 

2,529

 

 

Current portion of operating lease liabilities

 

2,179

 

 

 

2,165

 

 

Total current liabilities

 

22,440

 

 

 

29,664

 

 

Long-term portion debt and finance leases

 

815

 

 

 

729

 

 

Deferred revenue

 

1,907

 

 

 

2,846

 

 

Long-term portion of operating lease liabilities

 

2,151

 

 

 

2,366

 

 

Deferred income taxes

 

334

 

 

 

275

 

 

Other long-term liabilities

 

348

 

 

 

334

 

 

Total Liabilities

 

27,995

 

 

 

36,214

 

 

Stockholders' Equity:

 

 

 

 

Common stock

 

404

 

 

 

401

 

 

Treasury stock

 

(1,971

)

 

 

(1,931

)

 

Additional paid-in capital

 

147,233

 

 

 

146,460

 

 

Accumulated deficit

 

(108,454

)

 

 

(100,747

)

 

Accumulated other comprehensive loss

 

(689

)

 

 

(519

)

 

Total stockholders’ equity

 

36,523

 

 

 

43,664

 

 

Total Liabilities and Stockholders' Equity

 

$

64,518

 

 

 

$

79,878

 

 

Synacor, Inc.

Condensed Consolidated Statement of Operations

(In thousands except for share and per share data)

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

18,176

 

 

 

$

31,849

 

 

 

$

38,759

 

 

 

$

63,673

 

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

Cost of revenue (1)

 

9,036

 

 

 

17,152

 

 

 

19,765

 

 

 

33,658

 

 

Technology and development (1)(2)

 

2,943

 

 

 

4,577

 

 

 

6,051

 

 

 

9,123

 

 

Sales and marketing (2)

 

3,803

 

 

 

5,550

 

 

 

8,171

 

 

 

11,541

 

 

General and administrative (1)(2)

 

3,274

 

 

 

3,955

 

 

 

7,740

 

 

 

8,420

 

 

Depreciation and amortization

 

2,225

 

 

 

2,567

 

 

 

4,439

 

 

 

5,002

 

 

Total costs and operating expenses

 

21,281

 

 

 

33,801

 

 

 

46,166

 

 

 

67,744

 

 

Loss from operations

 

(3,105

)

 

 

(1,952

)

 

 

(7,407

)

 

 

(4,071

)

 

Other income (expense), net

 

175

 

 

 

(207

)

 

 

342

 

 

 

9

 

 

Interest expense

 

(50

)

 

 

(55

)

 

 

(109

)

 

 

(119

)

 

Loss before income taxes

 

(2,980

)

 

 

(2,214

)

 

 

(7,174

)

 

 

(4,181

)

 

Provision for income taxes

 

202

 

 

 

273

 

 

 

533

 

 

 

550

 

 

Net loss

 

$

(3,182

)

 

 

$

(2,487

)

 

 

$

(7,707

)

 

 

$

(4,731

)

 

Net loss per share:

 

 

 

 

 

 

 

 

Basic

 

$

(0.08

)

 

 

$

(0.06

)

 

 

$

(0.19

)

 

 

$

(0.12

)

 

Diluted

 

$

(0.08

)

 

 

$

(0.06

)

 

 

$

(0.19

)

 

 

$

(0.12

)

 

Weighted average shares used to compute net loss per share:

Basic

 

39,978,861

 

 

 

39,056,381

 

 

 

39,828,300

 

 

 

39,047,561

 

 

Diluted

 

39,978,861

 

 

 

39,056,381

 

 

 

39,828,300

 

 

 

39,047,561

 

 

Notes:

(1) Exclusive of depreciation and amortization shown separately.

(2) Includes stock-based compensation as follows:

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

 

Technology and development

 

$

56

 

 

$

92

 

 

$

113

 

 

$

195

 

Sales and marketing

 

103

 

 

111

 

 

204

 

 

226

 

General and administrative

 

224

 

 

121

 

 

443

 

 

234

 

 

 

$

383

 

 

$

324

 

 

$

760

 

 

$

655

 

Synacor, Inc.

Reconciliation of GAAP to Non-GAAP Measures

(In thousands)

(Unaudited)

 

The following table presents a reconciliation of net loss to adjusted EBITDA for each of the periods indicated:

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted EBITDA:

 

 

 

 

 

 

 

 

Net loss

 

$

(3,182

)

 

 

$

(2,487

)

 

 

$

(7,707

)

 

 

$

(4,731

)

 

Provision for income taxes

 

202

 

 

 

273

 

 

 

533

 

 

 

550

 

 

Interest expense

 

50

 

 

 

55

 

 

 

109

 

 

 

119

 

 

Other (income) expense, net

 

(175

)

 

 

207

 

 

 

(342

)

 

 

(9

)

 

Depreciation and amortization

 

2,765

 

 

 

2,986

 

 

 

5,497

 

 

 

5,473

 

 

Asset impairment

 

 

 

 

 

 

 

 

 

 

226

 

 

Stock-based compensation expense

 

383

 

 

 

324

 

 

 

760

 

 

 

655

 

 

Restructuring costs

 

60

 

 

 

 

 

 

120

 

 

 

 

 

Certain legal and professional services fees

 

352

 

 

 

257

 

 

 

1,798

 

 

 

1,036

 

 

Adjusted EBITDA

 

$

455

 

 

 

$

1,615

 

 

 

$

768

 

 

 

$

3,319

 

 

*

"Certain legal and professional services fees" includes legal fees and other related expenses outside the ordinary course of business, as well as fees and expenses related to merger and acquisition activities.

Synacor, Inc.

 

Condensed Consolidated Statements of Cash Flows

 

(In thousands)

 

(Unaudited)

 

 

 

 

 

 

Six Months Ended June 30,

 

 

2020

 

 

2019

 

 

 

 

 

 

Cash Flows from Operating Activities:

 

 

 

 

Net loss

 

$

(7,707

)

 

 

$

(4,731

)

 

Adjustments to reconcile net loss to net cash and cash equivalents provided by (used in) operating activities:

 

Depreciation and amortization

 

5,512

 

 

 

5,473

 

 

Asset impairment

 

 

 

 

226

 

 

Stock-based compensation expense

 

760

 

 

 

655

 

 

Provision for deferred income taxes

 

59

 

 

 

40

 

 

Change in allowance for doubtful accounts

 

20

 

 

 

34

 

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable, net

 

7,019

 

 

 

3,639

 

 

Prepaid expenses and other assets

 

(618

)

 

 

(23

)

 

Operating lease right-of-use assets and liabilities, net

 

(102

)

 

 

36

 

 

Accounts payable, accrued expenses and other liabilities

 

(4,170

)

 

 

(4,030

)

 

Deferred revenue

 

(1,619

)

 

 

193

 

 

Net cash (used in) provided by operating activities

 

(846

)

 

 

1,512

 

 

Cash Flows from Investing Activities:

 

 

 

 

Purchases of property and equipment

 

(1,972

)

 

 

(2,444

)

 

Net cash used in investing activities

 

(1,972

)

 

 

(2,444

)

 

Cash Flows from Financing Activities:

 

 

 

 

Repayments on long-term debt and finance leases

 

(1,968

)

 

 

(1,585

)

 

Proceeds from exercise of common stock options

 

 

 

 

40

 

 

Purchase of treasury stock and shares received to satisfy minimum tax withholdings

 

(40

)

 

 

(6

)

 

Net cash used in financing activities

 

(2,008

)

 

 

(1,551

)

 

Effect of exchange rate changes on cash and cash equivalents

 

(162

)

 

 

(21

)

 

Net decrease in Cash and Cash equivalents

 

(4,988

)

 

 

(2,504

)

 

Cash and cash equivalents, beginning of period

 

10,966

 

 

 

15,921

 

 

Cash and cash equivalents, end of period

 

$

5,978

 

 

 

$

13,417

 

 

Synacor, Inc.

Segment Results

(In thousands except for percentages)

(Unaudited)

 

The Company has two reportable segments which are determined on the basis of the products and services provided to customers, identified as follows:

 

(i) Software & Services, which includes email / collaboration (Zimbra) and identity management (Cloud ID).

(ii) Portal & Advertising, which includes managed portals and advertising solutions for publishers.

 

The following table presents the key segment financial measures for the periods indicated. Please refer to the Reconciliation of GAAP to Non-GAAP Measures schedule for the reconciliation of Adjusted EBITDA.

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2020

 

 

2019

 

 

% Change

 

2020

 

 

2019

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Revenue:

Software & Services

 

$

10,915

 

 

 

$

10,588

 

 

 

3.1

 

%

 

$

21,977

 

 

 

$

21,746

 

 

 

1.1

 

%

Portal & Advertising

 

7,261

 

 

 

21,261

 

 

 

(65.8

)

%

 

16,782

 

 

 

41,927

 

 

 

(60.0

)

%

Total

 

$

18,176

 

 

 

$

31,849

 

 

 

(42.9

)

%

 

$

38,759

 

 

 

$

63,673

 

 

 

(39.1

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Adjusted EBITDA:

Software & Services

 

$

3,718

 

 

 

$

2,794

 

 

 

33.1

 

%

 

$

7,246

 

 

 

$

5,588

 

 

 

29.7

 

%

Portal & Advertising

 

(403

)

 

 

2,534

 

 

 

(115.9

)

%

 

(644

)

 

 

5,155

 

 

 

(112.5

)

%

Unallocated Corporate Expense

 

(2,860

)

 

 

(3,713

)

 

 

23.0

 

%

 

(5,834

)

 

 

(7,424

)

 

 

21.4

 

%

Total

 

$

455

 

 

 

$

1,615

 

 

 

(71.8

)

%

 

$

768

 

 

 

$

3,319

 

 

 

(76.9

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Adjusted EBITDA margin*

Software & Services

 

34.1

 

%

 

26.4

 

%

 

770 bps

 

33.0

 

%

 

25.7

 

%

 

730 bps

Portal & Advertising

 

(5.6

)

%

 

11.9

 

%

 

-1750 bps

 

(3.8

)

%

 

12.3

 

%

 

-1610 bps

Total

 

2.5

 

%

 

5.1

 

%

 

-260 bps

 

2.0

 

%

 

5.2

 

%

 

-320 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

* Adjusted EBITDA as a percent of revenue

 

The following tables presents a disaggregation of segment revenue for the periods indicated based upon the accounting definition of revenue recognition:

 

(i) Recurring = revenue recognized over time

(ii) Non-recurring = revenue recognized at a point in time

Synacor, Inc.

Segment Results

(In thousands except for percentages)

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2020

 

2019

 

% Change

 

2020

 

2019

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Software & Services Revenue:

Recurring

 

$

8,063

 

 

$

8,388

 

 

(3.9

)

%

 

$

16,393

 

 

$

16,903

 

 

(3.0

)

%

Non-recurring

 

2,852

 

 

2,200

 

 

29.6

 

%

 

5,584

 

 

4,483

 

 

24.6

 

%

Discontinued Products **

 

 

 

 

 

 

%

 

 

 

360

 

 

(100.0

)

%

Total

 

$

10,915

 

 

$

10,588

 

 

3.1

 

%

 

$

21,977

 

 

$

21,746

 

 

1.1

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Portal & Advertising Revenue:

Recurring

 

$

881

 

 

$

1,202

 

 

(26.7

)

%

 

$

2,105

 

 

$

2,708

 

 

(22.3

)

%

Non-recurring

 

6,380

 

 

20,059

 

 

(68.2

)

%

 

14,677

 

 

39,219

 

 

(62.6

)

%

Total

 

$

7,261

 

 

$

21,261

 

 

(65.8

)

%

 

$

16,782

 

 

$

41,927

 

 

(60.0

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue:

Recurring

 

$

8,944

 

 

$

9,590

 

 

(6.7

)

%

 

$

18,498

 

 

$

19,611

 

 

(5.7

)

%

Non-recurring

 

9,232

 

 

22,259

 

 

(58.5

)

%

 

20,261

 

 

43,702

 

 

(53.6

)

%

Discontinued Products **

 

 

 

 

 

 

%

 

 

 

360

 

 

 

%

Total

 

$

18,176

 

 

$

31,849

 

 

(42.9

)

%

 

$

38,759

 

 

$

63,673

 

 

(39.1

)

%

** VAM video product line which was discontinued during Q1 2019.

Synacor, Inc.

Reconciliation of Adjusted Financial Measures

(In thousands except per share amounts)

(Unaudited)

 

 

 

 

 

Three months ended June 30, 2020

 

 

Per GAAP
Statements

 

Asset
Impairment

 

Restructuring
Costs

 

Certain Legal &
Professional Fees

 

Adjusted
Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

18,176

 

 

 

 

 

 

 

 

 

$

18,176

 

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

Cost of revenue (1)

 

9,036

 

 

 

 

 

 

 

 

 

9,036

 

 

Technology and development (1)(2)

 

2,943

 

 

 

 

 

 

 

 

 

2,943

 

 

Sales and marketing (2)

 

3,803

 

 

 

 

 

 

 

 

 

3,803

 

 

General and administrative (1)(2)

 

3,274

 

 

 

 

 

(60

)

 

 

(352

)

 

 

2,862

 

 

Depreciation and amortization

 

2,225

 

 

 

 

 

 

 

 

 

2,225

 

 

Total costs and operating expenses

 

21,281

 

 

 

 

 

(60

)

 

 

(352

)

 

 

20,869

 

 

Loss from operations

 

(3,105

)

 

 

 

 

60

 

 

 

352

 

 

 

(2,693

)

 

Other income, net

 

175

 

 

 

 

 

 

 

 

 

175

 

 

Interest expense

 

(50

)

 

 

 

 

 

 

 

 

(50

)

 

Loss before income taxes

 

(2,980

)

 

 

 

 

60

 

 

 

352

 

 

 

(2,568

)

 

Provision for income taxes (3)

 

202

 

 

 

 

 

 

 

 

 

202

 

 

Net loss

 

$

(3,182

)

 

 

$

 

 

$

60

 

 

 

$

352

 

 

 

$

(2,770

)

 

Diluted EPS

 

$

(0.08

)

 

 

$

0.00

 

 

$

0.00

 

 

 

$

0.01

 

 

 

$

(0.07

)

 

Synacor, Inc.

Reconciliation of Adjusted Financial Measures

(In thousands except per share amounts)

(Unaudited)

 

 

 

 

 

Three months ended June 30, 2019

 

 

Per GAAP
Statements

 

Asset
Impairment

 

Restructuring
Costs

 

Certain Legal &
Professional Fees

 

Adjusted
Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

31,849

 

 

 

 

 

 

 

 

 

$

31,849

 

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

Cost of revenue (1)

 

17,152

 

 

 

 

 

 

 

 

 

$

17,152

 

 

Technology and development (1)(2)

 

4,577

 

 

 

 

 

 

 

 

 

$

4,577

 

 

Sales and marketing (2)

 

5,550

 

 

 

 

 

 

 

 

 

$

5,550

 

 

General and administrative (1)(2)

 

3,955

 

 

 

 

 

 

 

(257

)

 

 

$

3,698

 

 

Depreciation and amortization

 

2,567

 

 

 

 

 

 

 

 

 

2,567

 

 

Total costs and operating expenses

 

33,801

 

 

 

 

 

 

 

(257

)

 

 

33,544

 

 

Loss from operations

 

(1,952

)

 

 

 

 

 

 

257

 

 

 

(1,695

)

 

Other expense, net

 

(207

)

 

 

 

 

 

 

 

 

(207

)

 

Interest expense

 

(55

)

 

 

 

 

 

 

 

 

(55

)

 

Loss before income taxes

 

(2,214

)

 

 

 

 

 

 

257

 

 

 

(1,957

)

 

Provision for income taxes (3)

 

273

 

 

 

 

 

 

 

 

 

273

 

 

Net loss

 

$

(2,487

)

 

 

$

 

 

$

 

 

$

257

 

 

 

$

(2,230

)

 

Diluted EPS

 

$

(0.06

)

 

 

$

 

 

$

0.00

 

 

$

0.01

 

 

 

$

(0.05

)

 

Notes:

(1) Exclusive of depreciation and amortization shown separately.

(2) Includes stock-based compensation

(3) No income tax effects to adjustments presented due to full valuation allowance.

Synacor's management believes that certain non-GAAP measures of Adjusted Net Loss and Adjusted Diluted Earnings per Share provide investors with additional information to assess the Company's financial performance. These measures should be viewed as supplemental data, rather than substitutes or alternatives to the comparable GAAP measures.

Synacor, Inc.

Reconciliation of Adjusted Financial Measures

(In thousands except per share amounts)

(Unaudited)

 

 

 

 

 

Six months ended June 30, 2020

 

 

Per GAAP
Statements

 

Asset
Impairment

 

Restructuring
Costs

 

Certain Legal &
Professional Fees

 

Adjusted
Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

38,759

 

 

 

 

 

 

 

 

 

$

38,759

 

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

Cost of revenue (1)

 

19,765

 

 

 

 

 

 

 

 

 

19,765

 

 

Technology and development (1)(2)

 

6,051

 

 

 

 

 

 

 

 

 

6,051

 

 

Sales and marketing (2)

 

8,171

 

 

 

 

 

 

 

 

 

8,171

 

 

General and administrative (1)(2)

 

7,740

 

 

 

 

 

(120

)

 

 

(1,798

)

 

 

5,822

 

 

Depreciation and amortization

 

4,439

 

 

 

 

 

 

 

 

 

4,439

 

 

Total costs and operating expenses

 

46,166

 

 

 

 

 

(120

)

 

 

(1,798

)

 

 

44,248

 

 

Loss from operations

 

(7,407

)

 

 

 

 

120

 

 

 

1,798

 

 

 

(5,489

)

 

Other income, net

 

342

 

 

 

 

 

 

 

 

 

342

 

 

Interest Expense

 

(109

)

 

 

 

 

 

 

 

 

(109

)

 

Loss before income taxes

 

(7,174

)

 

 

 

 

120

 

 

 

1,798

 

 

 

(5,256

)

 

Provision for income taxes (3)

 

533

 

 

 

 

 

 

 

 

 

533

 

 

Net loss

 

$

(7,707

)

 

 

$

 

 

$

120

 

 

 

$

1,798

 

 

 

$

(5,789

)

 

Diluted EPS

 

$

(0.19

)

 

 

$

 

 

$

 

 

 

$

0.05

 

 

 

$

(0.15

)

 

Synacor, Inc.

Reconciliation of Adjusted Financial Measures

(In thousands except per share amounts)

(Unaudited)

 

 

 

 

 

Six months ended June 30, 2019

 

 

Per GAAP
Statements

 

Asset
Impairment

 

Restructuring
Costs

 

Certain Legal &
Professional Fees

 

Adjusted
Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

63,673

 

 

 

 

 

 

 

 

 

$

63,673

 

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

Cost of revenue (1)

 

33,658

 

 

 

 

 

 

 

 

 

33,658

 

 

Technology and development (1)(2)

 

9,123

 

 

 

 

 

 

 

 

 

9,123

 

 

Sales and marketing (2)

 

11,541

 

 

 

 

 

 

 

 

 

11,541

 

 

General and administrative (1)(2)

 

8,420

 

 

 

(226

)

 

 

 

 

(1,036

)

 

 

7,158

 

 

Depreciation and amortization

 

5,002

 

 

 

 

 

 

 

 

 

5,002

 

 

Total costs and operating expenses

 

67,744

 

 

 

(226

)

 

 

 

 

(1,036

)

 

 

66,482

 

 

Loss from operations

 

(4,071

)

 

 

226

 

 

 

 

 

1,036

 

 

 

(2,809

)

 

Other income, net

 

9

 

 

 

 

 

 

 

 

 

9

 

 

Interest Expense

 

(119

)

 

 

 

 

 

 

 

 

(119

)

 

Loss before income taxes

 

(4,181

)

 

 

226

 

 

 

 

 

1,036

 

 

 

(2,919

)

 

Provision for income taxes (3)

 

550

 

 

 

 

 

 

 

 

 

550

 

 

Net loss

 

$

(4,731

)

 

 

226

 

 

 

$

 

 

$

1,036

 

 

 

$

(3,469

)

 

Diluted EPS

 

$

(0.12

)

 

 

$

0.01

 

 

 

$

 

 

$

0.03

 

 

 

$

(0.09

)

 

 

Notes:

(1) Exclusive of depreciation and amortization shown separately.

(2) Includes stock-based compensation

(3) No income tax effects to adjustments presented due to full valuation allowance.

Synacor's management believes that certain non-GAAP measures of Adjusted Net Loss and Adjusted Diluted Earnings per Share provide investors with additional information to assess the Company's financial performance. These measures should be viewed as supplemental data, rather than substitutes or alternatives to the comparable GAAP measures.

 

FNK IR
Rob Fink
+1.646.809.4048
rob@fnkir.com

Meredith Roth
VP, Marketing & Corporate Communications
Synacor
+1.770.846.1911
mroth@synacor.com

Source: Synacor, Inc.

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