Cision Reports Full Second Quarter 2017 Results; Updates Full Year 2017 Outlook
CHICAGO, Aug. 9, 2017 /PRNewswire/ -- Cision Ltd. (NYSE: CISN), a leading global provider of software and services to public relations and marketing communications professionals, today reported results for the second quarter ended June 30, 2017.
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Highlights of the quarter include:
-- Revenue increased 73% to $157.1 million;
-- Operating income for the second quarter ended June 30, 2017 was $10.4
million, a $24.2 million improvement versus the prior fiscal year's
second quarter operating loss of $13.8 million;
-- Adjusted EBITDA increased 89% to $58.5 million; and
-- Adjusted pro forma net income per diluted share increased by 250% to
$0.14.
"We are pleased to have delivered another solid quarter, our first as a public company - with improved organic revenue growth and continued margin expansion," said Kevin Akeroyd, Cision's Chief Executive Officer. "Over the coming quarters, we will keep our operational focus on delivering best-in-class products and services to our customers, executing on our remaining synergies, and driving toward meeting our 2017 goals and objectives."
Financial Results
-- Revenue for the second quarter ended June 30, 2017 was $157.1 million, a
73% increase over the prior fiscal year's second quarter revenue of
$90.8 million;
-- Net loss for the second quarter ended June 30, 2017 was $19.1 million, a
$1.9 million improvement versus the prior fiscal year's second quarter
net loss of $21.0 million;
-- Fully-diluted pro forma net loss per share for the second quarter ended
June 30, 2017 was $0.23, a $0.03 per share improvement versus the prior
fiscal year's second quarter fully-diluted pro forma net loss per share
of $0.26;
-- Net cash provided by operating activities was $18.1 million for the six
months ended June 30, 2017, a $36.5 million improvement versus the net
cash used in operating activities of $18.4 million for the six months
ended June 30, 2016;
-- Earnings before interest, taxes, depreciation and amortization
("EBITDA") for the second quarter ended June 30, 2017 was $44.6 million,
a $29.6 million improvement versus the prior fiscal year's second
quarter EBITDA of $15.0 million;
-- Adjusted EBITDA for the second quarter ended June 30, 2017 was $58.5
million, a $27.5 million improvement versus the prior fiscal year's
second quarter Adjusted EBITDA of $31.0 million;
-- Adjusted net income for the second quarter ended June 30, 2017 was $11.6
million, an $8.0 million improvement versus the prior fiscal year's
second quarter Adjusted net income of $3.6 million;
-- Adjusted pro forma net income per share for the second quarter ended
June 30, 2017 was $0.14, a $0.10 per share improvement versus the prior
fiscal year's second quarter Adjusted pro forma net income per share of
$0.04;
-- Adjusted net cash provided by operating activities was $38.7 million for
the six months ended June 30, 2017, a $14.7 million improvement versus
the prior fiscal year's six months ended June 30, 2016 adjusted net cash
provided by operating activities of $24.0 million.
Business Statistics and Operational Highlights
-- Cision/PRN US cross-sell bookings of $2.1 million (annual contract
value) during the second quarter, bringing the total cross-sell bookings
within the US to $9.3 million since the completion of the acquisition of
PR Newswire;
-- Cision/Bulletin US cross-sell bookings of $0.8 million (annual contract
value) during the second quarter, bringing the total cross-sell bookings
within the US to $0.8 million since the completion of the acquisition of
Bulletin Intelligence;
-- Significantly enhanced our industry leading Cision Communications
Cloud(TM) platform, with releases that expanded social media monitoring
capabilities, improved management and measurement of multi-channel PR
campaigns, and integrated analytical tools such as Google Analytics and
Adobe;
-- The average number of subscription customers was approximately 36,100
during the second fiscal quarter ended June 30, 2017;
-- The average annualized revenue per subscription customer was
approximately $10,300 during the second fiscal quarter ended June 30,
2017;
-- During the second fiscal quarter ended June 30, 2017, approximately
33,200 customers purchased services from us on a transaction basis;
-- The average revenue per customer that purchased services from us on a
transaction basis was $1,560 during the second fiscal quarter ended June
30, 2017;
-- Americas revenues were $119.7 million for the second fiscal quarter
ended June 30, 2017, an 87% increase over the prior fiscal year's second
quarter Americas revenues of $64.0 million;
-- EMEA revenues were $31.3 million for the second fiscal quarter ended
June 30, 2017, a 20% increase over the prior fiscal year's second
quarter EMEA revenues of $26.0 million; and
-- APAC revenues were $6.1 million for the second fiscal quarter ended June
30, 2017, a 663% increase over the prior fiscal year's second quarter
APAC revenues of $0.8 million.
Fiscal Year 2017 Outlook
Our updated outlook for the full fiscal year ending December 31, 2017 appears below:
-- Revenue of between $636 million and $640 million;
-- Including the acquisition of Bulletin Intelligence and the divestiture
of Vintage, as if both occurred on January 1, 2017, revenue of between
$639 million and $643 million;
-- Adjusted EBITDA of between $224 million and $226 million;
-- Including the acquisition of Bulletin Intelligence and the divestiture
of Vintage, as if they both occurred on January 1, 2017, Adjusted EBITDA
of between $226 million and $228 million;
-- Adjusted net income of between $60 million and $62 million; and
-- Adjusted pro forma net income per share per of between $0.59 and $0.61.
Additionally, for the full fiscal year ending December 31, 2017, Cision expects:
-- Depreciation expense of between $24 million and $26 million;
-- Net interest expense, exclusive of debt extinguishment costs, of between
$116 million and $118 million;
-- Cash interest expense of between $103 million and $105 million, with
second half 2017 cash interest expense of between $40 million and $42
million;
-- Amortization expense of between $114 million and $116 million, with $24
million to $26 million of this amortization expense within cost of
revenue and the remainder in general and administrative costs;
-- Stock-based compensation expense of between $4 million and $5 million;
-- Capital expenditures, inclusive of capitalized software development, of
between $26 million and $28 million; and
-- Adjusted net cash provided by operating activities of between $98
million and $102 million.
The above outlook assumes the following exchange rates with respect to the British Pound, the Euro and the Canadian Dollar for the remainder of the fiscal year 2017:
GBP to USD 1.31
EUR to USD 1.18
CAD to USD 0.79
Additionally, our outlook for the fiscal year 2017 excludes any additional acquisitions, divestitures, or other unanticipated events. See discussion of non-GAAP financial measures at the end of this release.
As previously announced, Cision will hold a conference call to discuss its second quarter 2017 results on August 9, 2017 at 5:00pm EDT. The conference call will be simultaneously webcast on the Investor Relations section of the company's website: http://investors.cision.com
Use of Non-GAAP Financial Measures
Non-GAAP results are presented only as a supplement to our financial statements based on US generally accepted accounting principles (GAAP). Non-GAAP financial information is provided to enhance the reader's understanding of our financial performance, but none of these non-GAAP financial measures are recognized terms under GAAP and non-GAAP measures should not be considered in isolation or as a substitute for financial measures calculated in accordance with GAAP. Reconciliations of the most directly comparable GAAP measures to non-GAAP measures, such as EBITDA, Adjusted EBITDA, Adjusted net income, Adjusted net income per share, and Adjusted net cash provided by operating activities, are provided within the schedules attached to this release. We use non-GAAP measures in our operational and financial decision-making, believing that it is useful to exclude certain items in order to focus on what we deem to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations. As a result, internal management reports used during monthly operating reviews include Adjusted EBITDA, Adjusted net income, Adjusted net income per share, and Adjusted net cash provided by operating activities. We also believe that investors may find non-GAAP financial measures useful for the same reasons, although investors are cautioned that non-GAAP financial measures are not a substitute for GAAP disclosures. This communication also includes certain forward-looking non-GAAP financial measures. Cision is unable to present a reconciliation of this forward-looking non-GAAP financial information because management cannot reliably predict all of the necessary components of such measures. Accordingly, investors are cautioned not to place undue reliance on this information.
Non-GAAP measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies comparable to Cision, many of which present non-GAAP measures when reporting their results. These measures can be useful in evaluating our performance against our peer companies because we believe the measures provide users with valuable insight into key components of GAAP financial disclosures. However, non-GAAP measures have limitations as an analytical tool. Non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies. They are not presentations made in accordance with GAAP, are not measures of financial condition or liquidity, and should not be considered as an alternative to profit or loss for the period determined in accordance with GAAP or operating cash flows determined in accordance with GAAP. As a result, you should not consider such performance measures in isolation from, or as a substitute analysis for, results of operations as determined in accordance with GAAP.
Forward-Looking Statements
This communication contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "anticipate," "intend," "plan," "goal," "seek," "aim," "strive," "believe," "see," "project," "predict," "estimate," "expect," "continue," "strategy," "future," "likely," "may," "might," "should," "will," "would," "target," similar expressions, and variations or negatives of these words. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. A detailed discussion of some of the risks and uncertainties that could cause our actual results and financial condition to differ materially from the forward-looking statements is described under the caption "Risk Factors" in our most recent proxy on Form S-4, along with our other filings with the U.S. Securities and Exchange Commission. Any forward-looking statement made by us in this communication is based only on information currently available to us and speaks only as of the date of this report. We do not assume any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. Please consult our public filings at www.sec.gov or www.Cision.com.
About Cision
Cision Ltd. is a leading global provider of software and services to public relations and marketing communications professionals. Cision's software allows users to identify key influencers, craft and distribute strategic content, and measure meaningful impact. Cision has over 3,000 employees with offices in 15 countries throughout the Americas, EMEA, and APAC. For more information about its award-winning products and services, including the Cision Communications Cloud(TM) visit www.cision.com and follow Cision on Twitter @Cision.
Cision Ltd. and its Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except per share and share amounts)
(Unaudited)
June 30, December 31,
2017 2016
---- ----
Assets
Current assets:
Cash and cash equivalents $337,659 $35,135
Restricted cash 20 627
Accounts receivable, net 100,139 87,605
Prepaid expenses and other current
assets 20,253 16,225
Total current assets 458,071 139,592
Property and equipment, net 55,400 47,947
Other intangible assets, net 497,778 511,210
Goodwill 1,103,558 1,079,518
Other assets 9,401 8,801
----- -----
Total assets $2,124,208 $1,787,068
----------
Liabilities, Mandatorily Redeemable Equity and Stockholders' Equity (Deficit)
Current liabilities:
Current portion of long-term debt $11,358 $11,171
Due to Cision Owner, Convertible
Preferred Equity - 443,102
Accounts payable 14,622 8,723
Accrued compensation and benefits 19,989 26,109
Other accrued expenses 66,086 54,862
Current portion of deferred revenue 129,711 119,600
-------
Total current liabilities 241,766 663,567
Long-term debt, net of current
portion 1,415,265 1,383,877
Deferred revenue, net of current
portion 1,428 961
Deferred tax liability 67,758 83,209
Other liabilities 19,129 14,507
Total liabilities 1,745,346 2,146,121
---------
Series A-1 and Series C-2 mandatorily redeemable stockholders'
equity, 5,498,688 shares authorized, issued and outstanding at
December 31, 2016
- 701
Stockholders' equity (deficit):
Preferred stock, $0.0001 par value,
20,000,000 shares authorized; no
shares issued at June 30, 2017 and
December 31, 2016
- -
Common stock, $0.0001 par value,
480,000,000 shares authorized;
120,512,402 and 28,369,644 issued
and outstanding at June 30, 2017 and
December 31, 2016, respectively
12 3
Additional paid-in capital 769,602 11,448
Accumulated other comprehensive loss (51,308) (73,902)
Accumulated deficit (339,444) (297,303)
Total stockholders' equity (deficit) 378,862 (359,754)
-------
Total liabilities, mandatorily
redeemable equity and stockholders'
equity (deficit) $2,124,208 $1,787,068
----------
Cision Ltd. and its Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except per share and share amounts)
(Unaudited)
Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
2017 2016 2017 2016
---- ---- ---- ----
Revenue $157,131 $90,826 $302,949 $168,530
Cost of revenue 49,218 32,120 94,284 60,657
------ ------ ------ ------
Gross profit 107,913 58,706 208,665 107,873
-------
Operating costs and expenses
Sales and marketing 28,010 18,702 55,300 35,238
Research and development 5,566 3,762 11,018 7,298
General and administrative 41,460 35,977 81,692 54,321
Amortization of intangible assets 22,466 14,046 43,477 25,601
------
Total operating costs and expenses 97,502 72,487 191,487 122,458
------
Operating income (loss) 10,411 (13,781) 17,178 (14,585)
Non operating income (losses)
Foreign exchange gains (losses) (686) 3,552 (2,634) 5,649
Interest and other income, net 224 235 2,273 268
Interest expense (36,328) (20,438) (73,243) (35,820)
Loss on extinguishment of debt - (23,591) - (23,591)
------------------------------
Total non operating loss (36,790) (40,242) (73,604) (53,494)
--------
Loss before income taxes (26,379) (54,023) (56,426) (68,079)
Benefit from income taxes (7,231) (33,057) (14,285) (32,967)
------ ------- ------- -------
Net loss $(19,148) $(20,966) $(42,141) $(35,112)
--------
Other comprehensive income
(loss) -foreign currency
translation adjustments 16,700 (22,095) 22,594 (32,054)
Comprehensive loss $(2,448) $(43,061) $(19,547) $(67,166)
==================
Note: Earnings per share figures below are pro forma for the
merger with Capitol Acquisition Corp III (4) (6)
------------------------------------------------------------
Net loss per share:
Basic $(0.23) $(0.26) $(0.51) $(0.43)
Diluted $(0.23) $(0.26) $(0.51) $(0.43)
Weighted average shares outstanding used in computing per share
amounts:
Basic 82,920,632 82,075,873 82,500,586 82,075,873
Diluted 82,920,632 82,075,873 82,500,586 82,075,873
Cision Ltd. and its Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Six months ended June 30,
-------------------------
2017 2016
---- ----
Cash flows from operating activities
Net loss $(42,141) $(35,112)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Depreciation and
amortization 67,290 47,041
Noncash interest
charges and
amortization of
debt discount and
deferred financing
costs 10,285 26,086
Noncash yield on
Convertible
Preferred Equity
Certificates 2,292 1,302
Payment of original
issuance discount
upon debt
extinguishment - (19,411)
Equity-based
compensation
expense 1,926 2,616
Provision for
doubtful accounts 1,125 1,331
Deferred income
taxes (15,451) (37,765)
Unrealized currency
translation
(gains) losses 2,394 (5,634)
Gain on sale of
business (1,785) -
Other (168) (22)
Changes in
operating assets
and liabilities,
net of effect of
acquisitions and
disposals:
Accounts receivable 4,104 5,732
Prepaid expenses and other current
assets (766) (871)
Other assets 170 (79)
Accounts payable (1,437) 729
Accrued compensation and benefits (10,764) (1,373)
Other accrued expenses (2,144) 3,388
Deferred revenue 2,962 (6,603)
Other liabilities 216 210
---
Net cash provided by (used in)
operating activities 18,108 (18,435)
------ -------
Cash flows from investing activities
Purchases of property and equipment (5,273) (1,182)
Software development costs (7,408) (5,835)
Acquisitions of businesses, net of cash
acquired of $12, 355 and $9,071 (54,992) (805,214)
Proceeds from disposal of business 23,675 3
Change in restricted cash 607 (19)
Net cash used in investing activities (43,391) (812,247)
------- --------
Cash flows from financing activities
Proceeds from revolving credit facility - 33,475
Payment of amounts due (to) from Cision
Owner (1,940) 135,944
Proceeds from term loan facility, net of
debt discount of $1,108 and $105,930 28,892 1,364,070
Repayments of term loan facility (5,650) (700,019)
Payments on capital lease obligations (114) (149)
Proceeds from the consummation of the
Transactions 305,210 -
Net cash provided by financing
activities 326,398 833,321
------- -------
Effect of exchange rate changes on cash
and cash equivalents 1,409 (469)
----- ----
Increase in cash and cash equivalents 302,524 2,170
Cash and cash equivalents
Beginning of period 35,135 30,606
------ ------
End of period $337,659 $32,776
-------- -------
Supplemental non-cash information
Contribution of
Convertible
Preferred Equity
Certificates in
connection with
Transactions $450,455 $ -
Issuance of
Convertible
Preferred Equity
Certificates in
connection with
acquisition - 40,000
Cision Ltd. and its Subsidiaries
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
(in thousands)
(Unaudited)
Three Months Three Months Six Months Six Months
Ended June 30, Ended June 30, Ended June 30, Ended June 30,
2017 2016 2017 2016
---- ---- ---- ----
Net income (loss) $(19,148) $(20,966) $(42,141) $(35,112)
Depreciation and amortization 34,698 25,018 67,290 47,041
Interest expense and loss on extinguishment of
debt 36,328 44,029 73,243 59,411
Provision (benefit) from income taxes (7,231) (33,057) (14,285) (32,967)
EBITDA (1) (6) $44,647 $15,024 $84,107 $38,373
------- ------- ------- -------
Acquisition related costs and expenses 12,048 17,927 20,287 22,691
Stock-based compensation 933 1,303 1,926 2,616
Deferred revenue reduction from purchase
accounting 105 - 105 -
Gain on sale of business - - (1,785) -
Sponsor fees and expenses 144 198 284 326
Unrealized translation loss (gain) 619 (3,484) 2,394 (5,634)
Adjusted EBITDA (2) (6) $58,496 $30,968 $107,318 $58,372
======= ======= ======== =======
Cision Ltd. and its Subsidiaries
Reconciliation of Net Income (Loss) to Adjusted Net Income and Adjusted Pro Forma Net Income per Diluted Share
(in thousands, except per share and share amounts)
(Unaudited)
Three Months Ended Three Months Ended Six Months Ended Six Months Ended
June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016
------------- ------------- ------------- -------------
Net income (loss) $(19,148) $(20,966) $(42,141) $(35,112)
Provision (benefit) from income taxes (7,231) (33,057) (14,285) (32,967)
Acquisition related costs and expenses 12,048 17,927 20,287 22,691
Gain on sale of business - - (1,785) -
Stock-based compensation expense 933 1,303 1,926 2,616
Deferred revenue reduction from purchase accounting 105 - 105 -
Amortization related to acquired intangible assets 28,717 19,277 55,376 35,584
Debt refinancing, CPEC interest and debt extinguishment costs 1,065 24,242 3,979 24,893
Sponsor fees and expenses 144 198 284 326
Unrealized translation loss (gain) 619 (3,484) 2,394 (5,634)
--- ------ ----- ------
Adjusted Income (loss) before income taxes $17,252 $5,440 $26,140 $12,397
Less: Income tax at 33% rate (5,693) (1,795) (8,626) (4,091)
------ ------ ------ ------
Adjusted net income (3) (6) $11,559 $3,645 $17,514 $8,306
======= ====== ======= ======
Pro forma fully-diluted weighted average shares outstanding
(4) (6) 82,921 82,076 82,501 82,076
Adjusted Pro forma Net income per diluted share (4) (6) $0.14 $0.04 $0.21 $0.10
===== ===== ===== =====
Cision Ltd. and its Subsidiaries
Reconciliation of Net Cash Provided by (Used in) Operating Activities to Adjusted Net Cash
Provided by (Used in) Operating Activities
(in thousands)
(Unaudited)
Six Months Ended Six Months Ended
June 30, 2017 June 30, 2016
------------- -------------
Net cash provided
by (used in)
operating
activities $18,108 $(18,435)
Payment of original
issuance discount
upon debt
extinguishment - 19,411
Acquisition related
costs and expenses 20,572 23,016
Adjusted net cash
provided by
operating
activities (5) (6) $38,680 $23,992
======= =======
(1) Cision defines EBITDA as net income (loss), plus depreciation and amortization expense, plus interest expense and loss on extinguishment of debt, plus provision for (or minus benefit from) income taxes.
(2) Cision defines Adjusted EBITDA as net income (loss), plus depreciation and amortization expense, plus interest expense and loss on extinguishment of debt, plus provision for (or minus benefit from) income taxes, further adjusted for the following items: acquisition related costs and expenses, stock-based compensation, deferred revenue reduction from purchase accounting, (gains) losses related to divested businesses or assets, sponsor fees and expenses, and unrealized translation losses (gains). All of the items included in the reconciliation from net income to Adjusted EBITDA are either non-cash items or are items that we consider to be less useful in assessing our operating performance. In the case of the non-cash items, we believe that investors can better assess our operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect our ability to generate free cash flow or invest in our business. For example, by excluding depreciation and amortization from EBITDA, users can compare operating performance without regard to different accounting determinations such as useful life. In the case of the other items, we believe that investors can better assess operating performance if the measures are presented without these items because their financial impact does not reflect ongoing operating performance.
(3) Cision defines Adjusted net income as net income (loss) plus provision for (or minus benefit from) income taxes, further adjusted for acquisition related costs and expenses, (gains) losses related to divested businesses or assets, stock-based compensation, deferred revenue reduction from purchase accounting, amortization related to acquired intangibles, debt refinancing, CPEC interest and debt extinguishment costs, sponsor fees and expenses, and unrealized translation losses (gains), which together, sum to Adjusted net income (loss) before income taxes. Adjusted net income (loss) before income taxes is then taxed at an assumed long term corporate tax rate of 33% to determine Adjusted net income (loss). All of the items included in the reconciliation from net income to Adjusted net income are either non-cash items or are items that we consider to be less useful in assessing our operating performance. In the case of the non-cash items, we believe that investors can better assess our operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect our ability to generate free cash flow or invest in our business. For example, by excluding the amortization related to acquired intangibles, users can compare operating performance without regard to highly variable amortization expenses related to our acquisitions. In the case of the other items, we believe that investors can better assess operating performance if the measures are presented without these items because their financial impact does not reflect ongoing operating performance.
(4) Adjusted pro forma net income per diluted share is defined as Adjusted net income (loss), as defined above, divided by the fully-diluted pro forma weighted average shares outstanding for the period. The fully-diluted pro forma weighted average shares outstanding for the respective period assume that the exchange of shares pursuant to our merger with Capitol Acquisition III had taken effect as of the beginning of such period.
(5) Adjusted net cash provided by (used in) operating activities is defined as net cash provided by (used in) operating activities adjusted for the payment of original issue discount upon debt extinguishment, and acquisition related costs and expenses.
(6) Adjusted net income (loss), Adjusted pro forma net income (loss) per diluted share, EBITDA, Adjusted EBITDA, and Adjusted cash flow provided by (used in) operating activities, are used by many of our investors, research analysts, investment bankers, and lenders to assess our operating performance. For example, a measure similar to Adjusted EBITDA is required by the lenders under our term loan and revolving credit agreements.
Investor Contact:
Jack Pearlstein
Chief Financial Officer
Jack.Pearlstein@Cision.com
Media Contact:
Nick Bell
Vice President, Marketing Communications and Content
nick.bell@cision.com
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SOURCE Cision Ltd.
