UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 11, 2009
comScore, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 000-1158172 | 54-1955550 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
11950 Democracy Drive
Suite 600
Reston, Virginia 20190
(Address of principal executive offices, including zip code)
Suite 600
Reston, Virginia 20190
(Address of principal executive offices, including zip code)
(703) 438-2000
(Registrant’s telephone number, including area code)
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
Attached hereto as Exhibit 99.1 and incorporated by reference herein is financial information for
comScore, Inc. (the “Company”) for the three month period and full year ended December 31, 2008 as
well as forward-looking statements relating to the first quarter ended March 31, 2009 and full year
ended December 31, 2009 as presented in a press release issued on February 11, 2009.
The information in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and
shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it
be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or
the Exchange Act, regardless of any general incorporation language in such filing.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
(b) On February 11, 2009, the Company determined to initiate a search for a new Chief Financial
Officer (“CFO”). John Green, the Company’s current CFO, principal financial officer and principal
accounting officer, will transition positions within the Company to serve as its Executive Vice
President of Human Capital. As part of the transition, Mr. Green will continue to serve as CFO,
principal financial officer and principal accounting officer, until a new CFO has assumed such
position.
Forward Looking Statements
This Item 5.02 contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without
limitation, the Company’s expectations regarding Mr. Green’s future role with the Company and the
Company’s search for a new CFO. These statements involve risks and uncertainties, including, but
not limited to, the uncertainty associated with the time and cost of the process to hire a new CFO.
For a detailed discussion of other risks, please refer to the Company’s Quarterly Report on Form
10-Q for the period ended September 30, 2008, the Company’s Annual Report on Form 10-K for the
period ended December 31, 2007 and from time to time other filings with the Securities and Exchange
Commission (the “SEC”), which are available on the SEC’s Web site (http://www.sec.gov).
Stockholders of the Company are cautioned not to place undue reliance on the Company’s
forward-looking statements, which speak only as of the date such statements are made. The Company
does not undertake any obligation to publicly update any forward-looking statements to reflect
events, circumstances or new information after the date of this filing, or to reflect the
occurrence of unanticipated events.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. | Description | |
99.1
|
Press Release dated February 11, 2009, announcing fourth quarter and full year 2008 financial results |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| comScore, Inc. |
||||
| By: | /s/ John M. Green | |||
| John M. Green | ||||
| Date: February 11, 2009 | Chief Financial Officer | |||
EXHIBIT INDEX
| Exhibit No. | Description | |
99.1
|
Press Release dated February 11, 2009, announcing fourth quarter and full year 2008 financial results |
Exhibit 99.1
comScore Reports Record Revenue in Fourth Quarter and Full Year 2008
| • | Fourth quarter revenue in 2008 grew 25% versus fourth quarter 2007 to $31.6 million; subscription revenue grew by 32% | ||
| • | Full-year 2008 revenue grew 35% over 2007 to $117.4 million; full year adjusted net income grew by 36% and adjusted EBITDA grew by 43% over 2007 |
RESTON, VA, February 11, 2009 — comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital
world, today announced financial results for its fourth quarter and fiscal year ended December 31,
2008.
Magid Abraham, comScore’s president and chief executive officer said, “We are very pleased to
report record revenue for the fourth quarter of 2008 that is 25 percent higher than fourth quarter
2007, despite a challenging economic environment. Our subscription revenue for the fourth quarter
was strong and increased 32 percent from the same quarter last year, while existing customer
revenue increased 25 percent over fourth quarter 2007. Overall revenue in the fourth quarter was
slightly below the low end of our guidance range, impacted by somewhat lighter project revenue in the
fourth quarter, the negative impact of the stronger U.S. dollar on our international revenue,
and a slower rate of international growth. We believe the lighter than expected project revenue can be attributed primarily
to clients tightening their year-end spending in reaction to the economic slowdown.” Dr. Abraham continued,
“Our results in the fourth quarter for net income (excluding certain
non-recurring benefits for tax and charges for impairments), non-GAAP adjusted net income, and GAAP and
non GAAP EPS were on the high end of our guidance range while adjusted EBITDA was consistent with
our expectations. These financial results reflect continuation of our revenue growth, the
fundamental strength of our business model, and the benefits of cost containment efforts that we
implemented late last year.”
Dr. Abraham added, “Despite the
economic conditions, we added 112 gross new customers, or 30 new customers on a net basis, in the fourth quarter,
which increases our total customer base to 1,166 clients. We are delighted to report that
we recently signed Viacom as the one-hundredth client for Video Metrix, our industry-leading video tracking service.
We also maintained our historical subscription renewal rate in excess of 90 percent on a subscription revenue basis,
with renewals among our medium- and large-sized customers at even higher rates. In 2008, we
continued to broaden our customer base, and we made particularly significant strides in penetrating
the telecom sector. With industry leaders such as Verizon and AT&T now among our top 10 customers,
we believe comScore is well positioned as mobile Internet usage continues its rapid growth.”
“In addition, Brand Metrix, Ad Metrix, and Campaign Metrix, our ad effectiveness measurement
products, all gained important traction in 2008. These services allow publishers and advertisers to quantitatively evaluate the effectiveness of advertising campaigns
and help maximize the return on advertising expenditures. Looking ahead to 2009, we believe that
this line of products will gain further momentum as advertisers seek to maximize the return on
their advertising expenditures in these challenging times.”
Dr. Abraham concluded, “Our focus remains on the long term as we continue to build the leading
global digital marketing intelligence platform. We believe that our strong market position,
financial health and business model have positioned us well for continued long-term success.”
1
Fourth Quarter and Full-year 2008 Financial Highlights and Operating Metrics:
$’s and total shares in millions, except per share data (unaudited)
| Q4 2008 | Q4 2007 | % Change | FY 2008 | FY 2007 | % Change | |||||||||||||||||||
Revenue |
$ | 31.6 | $ | 25.3 | 25 | % | $ | 117.4 | $ | 87.2 | 35 | % | ||||||||||||
GAAP Income before Income Taxes |
$ | 1.1 | $ | 5.0 | -78 | % | $ | 10.3 | $ | 11.8 | -13 | % | ||||||||||||
GAAP Net Income |
$ | 20.4 | $ | 12.7 | 60 | % | $ | 25.2 | $ | 19.3 | 30 | % | ||||||||||||
GAAP EPS (Diluted) |
$ | 0.67 | $ | 0.42 | 60 | % | $ | 0.83 | $ | 0.88 | -6 | % | ||||||||||||
Fully Diluted Shares (M) |
30.3 | 29.9 | 1 | % | 30.2 | 18.4 | 64 | % | ||||||||||||||||
Adjusted EBITDA* |
$ | 6.5 | $ | 6.6 | -1 | % | $ | 25.7 | $ | 18.0 | 43 | % | ||||||||||||
Adjusted EBITDA Margin |
21 | % | 26 | % | -5 | % pts. | 22 | % | 21 | % | 1 | % pts. | ||||||||||||
Non-GAAP Adjusted Net Income * |
$ | 5.5 | $ | 6.4 | -15 | % | $ | 22.1 | $ | 16.3 | 36 | % | ||||||||||||
Non-GAAP EPS (Diluted)* |
$ | 0.18 | $ | 0.21 | -14 | % | $ | 0.73 | $ | 0.71 | 3 | % | ||||||||||||
Cash, Cash Equivalents and Short-term Investments |
$ | 71.5 | $ | 96.8 | -26 | % | ||||||||||||||||||
Long-term Investments |
$ | 3.5 | $ | 7.9 | -54 | % | ||||||||||||||||||
Total Deferred Revenue |
$ | 42.8 | $ | 33.0 | 30 | % | ||||||||||||||||||
Cash Flow from Operations |
$ | 4.0 | $ | 6.6 | -39 | % | $ | 32.3 | $ | 21.2 | 52 | % | ||||||||||||
Free Cash Flow* |
$ | 3.4 | $ | 5.6 | -39 | % | $ | 18.0 | $ | 17.6 | 2 | % | ||||||||||||
Revenue Metrics: |
||||||||||||||||||||||||
Subscription Revenue |
$ | 26.6 | $ | 20.2 | 32 | % | $ | 97.4 | $ | 68.8 | 42 | % | ||||||||||||
Project Revenue |
$ | 5.0 | $ | 5.1 | -2 | % | $ | 20.0 | $ | 18.4 | 9 | % | ||||||||||||
Existing Customers |
$ | 27.3 | $ | 21.8 | 25 | % | $ | 99.4 | $ | 74.5 | 33 | % | ||||||||||||
New Customers |
$ | 4.3 | $ | 3.5 | 23 | % | $ | 18.0 | $ | 12.7 | 42 | % | ||||||||||||
International |
$ | 4.5 | $ | 3.5 | 29 | % | $ | 16.5 | $ | 10.0 | 65 | % | ||||||||||||
Customer Count |
1,166 | 895 | 1,166 | 895 | ||||||||||||||||||||
| * | A complete reconciliation of GAAP to non-GAAP results is set forth in the attachment to this press release. |
Fourth Quarter and Full-Year Financial Summary:
2
| • | Included in GAAP net income for the fourth quarter is an income tax benefit of $20.4 million resulting from the reversal of the company’s valuation allowance previously recorded against certain U.S. deferred tax assets, which consisted principally of net operating loss carryforwards. Also included in GAAP net income for the fourth quarter is a $1.4 million charge ($2.2 million for full year 2008) for impairment of the value of all auction rate securities held by the company bringing the year-end carrying value of the auction rate securities to approximately $2.9 million. Excluding the impact of the tax benefit and impairment charge, net income would have been $1.4 million, or $0.05 per share, at the high end of our previously-announced fourth quarter 2008 guidance. | ||
| • | Excluding the impact of the M: Metrics acquisition and transition-related costs, free cash flow was approximately $5.6 million in the fourth quarter of 2008 and approximately $24.0 million for the full year 2008. |
Financial Outlook
In 2009, comScore anticipates maintaining a high overall renewal rate, increased penetration of
existing customers, further international expansion and expects to benefit from increased focus and
interest in its strong portfolio of Ad Effectiveness products. At the same time, the company
expects to continue to emphasize effective cost management in order to increase
operating leverage in 2009. For the full year of 2009, in a challenging and highly uncertain economic
environment, comScore expects revenue to grow approximately 15 percent over full year 2008.
comScore’s expectations for the first quarter 2009 are outlined in the table
below:
| 1Q09 | ||
Revenue
|
$30.3 - $30.8 million | |
GAAP Net Income
|
$0.2 - $0.5 million | |
GAAP EPS*
|
$0.01 - $0.02 | |
Adjusted EBITDA
|
$3.8 - $4.3 million | |
Non-GAAP Adjusted Net Income
|
$2.6 - $3.1 million | |
Non-GAAP EPS*
|
$0.09 - $0.10 |
| * | Assumes 30.6 million fully diluted shares |
3
A reconciliation of the guidance for first quarter 2009 GAAP net income and EPS to the adjusted
EBITDA, non-GAAP adjusted net income and non-GAAP EPS is set forth in the table accompanying this
release.
Conference Call Information:
Magid Abraham, President and Chief Executive Officer, and John Green, Chief Financial Officer, will
provide commentary on the company’s results in a conference call on Wednesday, February 11, 2009 at
5:00 pm ET.
The conference call and replay can be accessed by telephone and webcast as follows:
Call-in Number: 888-713-4209, Passcode 74553746
(International) +1- 617-213-4863, Passcode 74553746
(International) +1- 617-213-4863, Passcode 74553746
Replay Number: 888-286-8010, Passcode 23975880
(International) +1- 617-801-6888, Passcode 23975880
(International) +1- 617-801-6888, Passcode 23975880
Webcast (live and replay): http://ir.comscore.com/events.cfm
About comScore
comScore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world and preferred
source of digital marketing intelligence. In an independent survey of 800 of the most influential
publishers, advertising agencies and advertisers conducted by William Blair & Company in January
2009, comScore was rated the ‘most preferred online audience measurement service’ by 50% of
respondents, a full 25 points ahead of its nearest competitor. comScore’s capabilities are based on
a massive, global cross-section of approximately 2 million Internet users who have given comScore
permission to confidentially capture their browsing and transaction behavior, including online and
offline purchasing. comScore panelists also participate in survey research that gathers and
integrates their attitudes and intentions. Using its proprietary technology, comScore measures what
matters across a broad spectrum of digital behavior and attitudes, helping clients design more
powerful marketing strategies that deliver superior ROI. With its recent acquisition of M:Metrics,
comScore is also a leading source of data on mobile usage. comScore services are used by more than
1,100 clients, including global leaders such as AOL, Microsoft, Yahoo!, BBC, Carat, Cyworld,
Deutsche Bank, France Telecom, Best Buy, The Newspaper Association of America, Financial Times,
ESPN, Fox Sports, Nestle, Starcom, Universal McCann, the United States Postal Service, the
University of Chicago, Verizon Services Group and ViaMichelin. For more information, please visit
www.comscore.com.
4
Non-GAAP Financial Measures
comScore reports all financial information required in accordance with generally accepted
accounting principles (GAAP). comScore believes, however, that evaluating its ongoing operating
results will be enhanced if it also discloses certain non-GAAP information because it is useful to
understand comScore’s performance, as it excludes non-cash and other special charges that many
investors believe may obscure comScore’s on-going operating results.
comScore also reports non-GAAP EPS (diluted), which uses non-GAAP adjusted net income in lieu of
GAAP net income in calculating earnings per share.
In addition, comScore believes that Adjusted EBITDA is a useful measure for investors to use to
evaluate its operating performance. Adjusted EBITDA comprises non-GAAP net income further adjusted
to exclude the cash tax provision, depreciation and interest income (expenses), net. A
reconciliation of comScore’s GAAP results to these non-GAAP measures is included in the financial
tables accompanying this release.
The company believes that Adjusted EBITDA is an important indicator of the company’s operational
strength and the performance of its business because it provides a link between profitability and
operating cash flow. Adjusted EBITDA is also widely used by investors and analysts as a
supplemental measure to evaluate the overall operating performance of companies in comScore’s
industry. comScore’s management also uses Adjusted EBITDA extensively as a measure of operating
performance because it does not include the impact of items not directly resulting from our core
operations. Moreover, the company’s management uses the measure for planning purposes, to allocate
resources and to evaluate the effectiveness of the company’s business strategies and management’s
performance.
The company believes that excluding non-recurring costs from non-GAAP net income and EPS and from
Adjusted EBITDA provides a meaningful indication to investors of the expected on-going operating
performance of the company. Specifically as it relates to M:Metrics, the exclusion of the
non-recurring costs reflect the expected benefits realized upon the integration of M:Metrics into
comScore.
comScore’s management also uses free cash flow as a non-GAAP measure of the company’s operating
cash flow less cash expenditures for capital spending as a key indicator of the company’s operating
cash flow performance net of capital outlays.
Whenever comScore uses such non-GAAP financial measures, it provides a reconciliation of non-GAAP
financial measures to the most closely applicable GAAP financial measure. The mid-points of the
ranges for projected GAAP net income and non-GAAP adjusted net income are used in the
reconciliation, where applicable. Investors are encouraged to review the related GAAP financial
measures and the reconciliation of these non-GAAP financial measures to their most directly
comparable GAAP financial measure included in the financial tables accompanying this release.
5
Cautionary Statement
This press release contains forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including,
without limitation, comScore’s expectations regarding the continued growth and breadth of its
customer base; the expected strength of comScore’s business and client demand for comScore’s
products, including VideoMetrix and comScore’s ad effectiveness products portfolio; the future
quality of client relationships and resulting renewal rates; comScore’s expectations regarding
expected customer adoption and acceptance of new products and capabilities; comScore’s expectations
regarding continued strengthening of its balance sheet and its position for continued success in
various market segments, including the telecommunications industry; assumptions regarding effective
tax rates; forecasts of future financial performance, including related growth rates and components
thereof; assumptions related to costs and revenue growth for the first quarter and the full year
2009; and assumptions related to the state of the economy and the global market environment. These
statements involve risks and uncertainties that could cause our actual results to differ
materially, including, but not limited to: the early stage of the market for digital marketing
intelligence and the rate of development of such market; comScore’s ability to manage its growth;
the rate of development of the Internet advertising and eCommerce markets; comScore’s ability to
effectively expand sales and marketing; comScore’s reliance on subscription-based revenues;
comScore’s ability to retain existing large customers and obtain new large customers; continued
growth of the Internet as a medium for commerce, content, advertising and communications; inability
to sell additional products and attract new customers; risks related to the domestic and global
economies and the effects they may have on comScore, its industry or its customers; volatility of
quarterly results and analyst expectations; and the ability of comScore to utilize net operating
losses.
For a detailed discussion of these and other risk factors, please refer to comScore’s Quarterly
Report on Form 10-Q for the period ended September 30, 2008, comScore’s Annual Report on Form 10-K
for the period ended December 31, 2007 and from time to time other filings with the Securities and
Exchange Commission (the “SEC”), which are available on the SEC’s Web site
(http://www.sec.gov).
Stockholders of comScore are cautioned not to place undue reliance on our forward-looking
statements, which speak only as of the date such statements are made. comScore does not undertake
any obligation to publicly update any forward-looking statements to reflect events, circumstances
or new information after the date of this press release, or to reflect the occurrence of
unanticipated events.
Contact:
John Green
Chief Financial Officer
John Green
Chief Financial Officer
comScore, Inc.
(703) 438-2325
jgreen@comscore.com
(703) 438-2325
jgreen@comscore.com
6
comScore, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(in thousands, except share and per share data)
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Revenues |
$ | 31,590 | $ | 25,274 | $ | 117,371 | $ | 87,153 | ||||||||
Cost of revenues
(excludes amortization of
intangible assets
resulting from
acquisitions shown below)
(1) |
10,276 | 6,528 | 34,562 | 23,858 | ||||||||||||
Selling and marketing (1) |
10,281 | 8,135 | 39,400 | 28,659 | ||||||||||||
Research and development
(1) |
3,994 | 3,026 | 14,832 | 11,413 | ||||||||||||
General and
administrative (1) |
4,189 | 3,605 | 16,785 | 11,599 | ||||||||||||
Amortization of
intangible assets
resulting from
acquisitions |
329 | 169 | 804 | 966 | ||||||||||||
Total expenses from
operations |
29,069 | 21,463 | 106,383 | 76,495 | ||||||||||||
Income from operations |
2,521 | 3,811 | 10,988 | 10,658 | ||||||||||||
Interest income, net |
322 | 1,206 | 1,900 | 2,627 | ||||||||||||
(Loss) gain from foreign
currency |
(302 | ) | 25 | (321 | ) | (296 | ) | |||||||||
Impairment of marketable
securities |
(1,398 | ) | — | (2,239 | ) | — | ||||||||||
Other |
(37 | ) | — | (37 | ) | — | ||||||||||
Revaluation of preferred
stock warrant liabilities |
— | — | — | (1,195 | ) | |||||||||||
Income before income taxes |
1,106 | 5,042 | 10,291 | 11,794 | ||||||||||||
Income tax benefit |
19,263 | 7,703 | 14,895 | 7,522 | ||||||||||||
Net income |
20,369 | 12,745 | 25,186 | 19,316 | ||||||||||||
Accretion of redeemable
preferred stock |
— | — | — | (1,829 | ) | |||||||||||
Net income available to
common stockholders |
$ | 20,369 | $ | 12,745 | $ | 25,186 | $ | 17,487 | ||||||||
Net income available to
common stockholders per
common share: |
||||||||||||||||
Basic |
$ | 0.70 | $ | 0.45 | $ | 0.88 | $ | 0.99 | ||||||||
Diluted |
$ | 0.67 | $ | 0.42 | $ | 0.83 | $ | 0.88 | ||||||||
Weighted-average number
of shares used in per
share calculation — common stock |
||||||||||||||||
Basic |
29,032,423 | 27,795,936 | 28,691,216 | 16,139,365 | ||||||||||||
Diluted |
30,271,520 | 29,859,926 | 30,232,714 | 18,377,563 | ||||||||||||
| (1) | Amortization of stock-based compensation is included in the line items above as follows |
Cost of revenues |
$251 | $134 | $861 | $279 | ||||||||||||
Selling and marketing |
788 | 500 | 2,611 | 1,009 | ||||||||||||
Research and development |
199 | 117 | 706 | 245 | ||||||||||||
General and administrative |
599 | 440 | 2,296 | 941 |
7
comScore, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(in thousands)
| December 31, | December 31, | |||||||
| 2008 | 2007 | |||||||
| (unaudited) | ||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 34,297 | $ | 68,368 | ||||
Short-term investments |
37,164 | 28,449 | ||||||
Accounts receivable, net of
allowances of $479 and $234,
respectively |
29,947 | 23,446 | ||||||
Prepaid expenses and other current
assets |
1,871 | 1,620 | ||||||
Restricted cash |
— | 1,385 | ||||||
Deferred tax asset |
13,304 | 176 | ||||||
Total current assets |
116,583 | 123,444 | ||||||
Long-term investments |
3,497 | 7,924 | ||||||
Property and equipment, net |
17,697 | 6,867 | ||||||
Other non-current assets |
131 | 168 | ||||||
Long-term deferred tax asset |
13,736 | 7,888 | ||||||
Intangible assets, net |
8,805 | 17 | ||||||
Goodwill |
39,114 | 1,364 | ||||||
Total assets |
$ | 199,563 | $ | 147,672 | ||||
Liabilities and stockholders’ equity
|
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 1,755 | $ | 1,140 | ||||
Accrued expenses |
9,432 | 6,838 | ||||||
Deferred revenues |
42,779 | 33,045 | ||||||
Deferred rent |
1,049 | 154 | ||||||
Capital lease obligations |
977 | 900 | ||||||
Total current liabilities |
55,992 | 42,077 | ||||||
Capital lease obligations, long-term |
— | 977 | ||||||
Long-term deferred rent |
8,691 | 181 | ||||||
Total liabilities |
64,683 | 43,235 | ||||||
Commitments and contingencies |
||||||||
Common stock subject to put |
— | 1,815 | ||||||
Stockholders’ equity: |
||||||||
Common stock |
29 | 28 | ||||||
Treasury stock |
(1,265 | ) | — | |||||
Additional paid-in capital |
192,612 | 183,433 | ||||||
Accumulated other comprehensive
(loss) income |
(842 | ) | 1 | |||||
Accumulated deficit |
(55,654 | ) | (80,840 | ) | ||||
Total stockholders’ equity |
134,880 | 102,622 | ||||||
Total liabilities and stockholders’
equity |
$ | 199,563 | $ | 147,672 | ||||
8
comScore, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(in thousands)
| Year Ended December 31, | ||||||||
| 2008 | 2007 | |||||||
| (unaudited) | ||||||||
Operating activities: |
||||||||
Net Income |
$ | 25,186 | $ | 19,316 | ||||
Adjustments to reconcile net income to net
cash provided by operating activities: |
||||||||
Depreciation |
4,977 | 3,764 | ||||||
Amortization of intangible assets
resulting from acquisition |
798 | 966 | ||||||
Provision for bad debts and sales
allowances |
594 | 142 | ||||||
Stock based compensation |
6,482 | 2,474 | ||||||
Deferred rent |
(126 | ) | — | |||||
Loss on asset disposal |
50 | — | ||||||
Revaluation of preferred stock warrant
liability |
— | 1,195 | ||||||
Amortization of deferred finance costs |
— | 7 | ||||||
Deferred tax benefit |
(15,386 | ) | (8,142 | ) | ||||
Impairment of marketable securities |
2,239 | — | ||||||
Changes in operating assets and
liabilities, net of effect of
acquisition: |
||||||||
Accounts receivable |
(6,581 | ) | (9,186 | ) | ||||
Prepaid expenses and other current
assets |
229 | (486 | ) | |||||
Other non-current assets |
114 | 255 | ||||||
Accounts Payable, accrued expenses
and other liabilities |
(1,838 | ) | 1,065 | |||||
Deferred revenues |
6,124 | 9,841 | ||||||
Deferred rent |
9,397 | — | ||||||
Net cash provided by operating activities |
32,259 | 21,211 | ||||||
Investing activities: |
||||||||
Acquisition, net of cash acquired |
(44,638 | ) | — | |||||
Recovery (payment) of restricted cash |
1,385 | (1,115 | ) | |||||
Purchase of investments |
(92,288 | ) | (56,475 | ) | ||||
Sale and maturity of investments |
86,118 | 30,920 | ||||||
Purchases of property and equipment |
(14,252 | ) | (3,635 | ) | ||||
Net cash used in investing activities |
(63,675 | ) | (30,305 | ) | ||||
Financing activities: |
||||||||
Proceeds from exercise of common stock
options |
1,027 | 972 | ||||||
Repurchase of common stock |
(1,265 | ) | — | |||||
Proceeds from issuance of common stock |
— | 73,116 | ||||||
Principal payments on capital lease
obligations |
(900 | ) | (2,109 | ) | ||||
Net cash (used in) provided by financing
activities |
(1,138 | ) | 71,979 | |||||
Effect of the exchange rate changes on cash |
(1,517 | ) | 451 | |||||
Net (decrease) increase in cash and cash
equivalents |
$ | (34,071 | ) | $ | 63,336 | |||
Cash and cash equivalents at beginning of
year |
$ | 68,368 | $ | 5,032 | ||||
Cash and cash equivalents at end of year |
$ | 34,297 | $ | 68,368 | ||||
9
Reconciliation from Income before income taxes to Non-GAAP Adjusted Net Income and Adjusted EBITDA
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
Income before income taxes |
$ | 1,106 | $ | 5,042 | $ | 10,291 | $ | 11,794 | ||||||||
Valuation Allowance Release |
20,353 | 8,065 | 20,254 | 8,065 | ||||||||||||
Deferred tax provision |
(1,126 | ) | — | (4,873 | ) | — | ||||||||||
Current cash tax provision |
36 | (362 | ) | (486 | ) | (543 | ) | |||||||||
Net income |
$ | 20,369 | $ | 12,745 | $ | 25,186 | $ | 19,316 | ||||||||
Valuation Allowance Release |
(20,353 | ) | (8,065 | ) | (20,254 | ) | (8,065 | ) | ||||||||
Impairment of marketable
securities |
1,398 | — | 2,239 | — | ||||||||||||
Net income excluding
impairment of marketable
securities and benefit from
valuation allowance release |
$ | 1,414 | $ | 4,680 | $ | 7,171 | $ | 11,251 | ||||||||
Amortization of acquired
intangibles |
329 | 169 | 804 | 966 | ||||||||||||
Stock-based compensation |
1,837 | 1,191 | 6,474 | 2,474 | ||||||||||||
Non-recurring costs from
acquisition |
752 | — | 2,788 | — | ||||||||||||
Follow-on public offering
costs |
— | 392 | — | 392 | ||||||||||||
Revaluation of preferred
stock warrant liabilities |
— | — | — | 1,195 | ||||||||||||
Deferred tax provision |
1,126 | — | 4,873 | — | ||||||||||||
Non-GAAP adjusted net income |
$ | 5,458 | $ | 6,432 | $ | 22,110 | $ | 16,278 | ||||||||
Current cash tax provision |
(36 | ) | 362 | 486 | 543 | |||||||||||
Depreciation |
1,382 | 992 | 4,978 | 3,762 | ||||||||||||
Interest (income) expense, net |
(322 | ) | (1,206 | ) | (1,900 | ) | (2,627 | ) | ||||||||
Adjusted EBITDA |
$ | 6,482 | $ | 6,580 | $ | 25,674 | $ | 17,956 | ||||||||
Adjusted EBITDA margin
(%) |
21 | % | 26 | % | 22 | % | 21 | % | ||||||||
EPS (diluted) |
$ | 0.67 | $ | 0.42 | $ | 0.83 | $ | 0.88 | ||||||||
Non-GAAP EPS (diluted) |
$ | 0.18 | $ | 0.21 | $ | 0.73 | $ | 0.71 | ||||||||
10
Reconciliation from GAAP Operating Cash Flow to Free Cash Flow
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Net cash provided by operating activities |
$ | 4,020 | $ | 6,563 | $ | 32,259 | * | $ | 21,211 | |||||||
Purchase of property and equipment |
(665 | ) | (933 | ) | (14,252 | )* | (3,635 | ) | ||||||||
Free cash flow |
$ | 3,355 | $ | 5,630 | $ | 18,007 | $ | 17,576 | ||||||||
| * | Includes approximately $9.3 million in leasehold improvements due to tenant allowances |
11
Reconciliation from Income before income taxes to Non-GAAP Adjusted Net Income and Adjusted EBITDA
(Guidance)
Forecasted amounts for the three months ending March 31 are based on the mid-points of the range of
the guidance provided herein.
| Three Months Ending | ||||||||
| March 31, | ||||||||
| 2009 | 2008 | |||||||
| (Dollars in thousands, except per share data) | ||||||||
| (unaudited) | (unaudited) | |||||||
Income before income taxes |
$ | 623 | $ | 4,209 | ||||
Deferred tax provision |
(224 | ) | (1,613 | ) | ||||
Current cash tax provision |
(37 | ) | (65 | ) | ||||
Net income |
$ | 362 | $ | 2,531 | ||||
Amortization of acquired intangibles |
324 | 7 | ||||||
Stock-based compensation |
1,950 | 1,143 | ||||||
Deferred tax provision |
224 | 1,613 | ||||||
Non-GAAP adjusted net income |
$ | 2,860 | $ | 5,294 | ||||
Current cash tax provision |
37 | 65 | ||||||
Depreciation |
1,479 | 1,035 | ||||||
Interest (income) expense, net |
(326 | ) | (819 | ) | ||||
Adjusted EBITDA |
$ | 4,050 | $ | 5,575 | ||||
Adjusted EBITDA margin (%) |
13 | % | 21 | % | ||||
EPS (diluted) |
$ | 0.01 | $ | 0.08 | ||||
Non-GAAP EPS (diluted) |
$ | 0.09 | $ | 0.18 | ||||
Diluted Shares |
30,600 | 29,998 | ||||||
12