comScore Files 10-K for 2017 and Provides Business Update
comScore Files 10-K for 2017 and Provides Business Update
Filing Contains Financial Statements for 2015, 2016 and 2017 and Restated Results for 2013 and 2014
Also Files Quarterly Reports on Form 10-Q for 2017
Company to Seek Relisting on Nasdaq
Focus On Driving Growth in Core Business Lines and Delivering Efficiencies
Will Host Conference Call and Webcast on Monday, March 26 at 8:00 AM ET
RESTON, Va., March 26, 2018 /PRNewswire/ -- comScore, Inc. (OTC: SCOR) announced today that it has filed its Annual Report on Form 10-K for the year ended December 31, 2017, which contains audited Consolidated Financial Statements for the years ended December 31, 2017, 2016 and 2015, and includes unaudited restated results for 2014 and 2013. In addition, the Company filed its Quarterly Reports on Form 10-Q for the quarters ended September 30, June 30 and March 31, 2017 and is now current on its periodic filings with the Securities and Exchange Commission ("SEC") and has begun the process to relist its common stock on the Nasdaq Stock Market.
Bill Livek, comScore's Executive Vice Chairman and President said, "The completion of our restatement process and the filing of current financials is an important step for our company as it allows us to move forward and focus our full attention on delivering on the vast potential of our business. On behalf of the Board, I'd like to thank our investors, customers and employees for their patience during this process, and assure them that, as a result of this process, we are significantly improving our accounting policies and procedures as we also constantly reinforce ethical compliance throughout our organization. With these matters behind us, we are confident that our strong assets, market-leading technologies and excellent team will enable us to deliver improved services to our customers, stay ahead of our competitors and deliver long-term value to our stockholders."
Livek continued, "Over the past several months our Board and management have taken significant steps to reset and refocus our company so we can deliver on our customer-centric promise of making advertising and audiences more valuable for our clients across every screen, platform and device. We have focused on driving growth in our core business lines through product enhancements, implementing cross-platform management - which is a massive opportunity - and relentlessly driving toward improved profitability through efficiency in all facets of our business. While there is much to be done, we are excited about the business enhancements and progress we've made and are encouraged by our path forward -- one that will allow us to deliver industry-leading solutions that our clients need today and into the future."
The Company expects to hold a call to discuss 2018 first quarter results in early May and hold its 2018 Annual Meeting of Stockholders later in the second quarter of this year.
Financial Restatement and Remediation Initiatives
As previously disclosed, in February 2016, the Audit Committee of the comScore Board of Directors commenced an internal investigation, with the assistance of outside advisors, into matters related to the Company's revenue recognition practices, disclosures, internal controls, corporate culture and certain employment practices. As a result of the issues identified in the investigation and management's subsequent review, the Company concluded that it could no longer support the prior accounting for non-monetary contracts recorded by the Company during 2013, 2014 and 2015 and that adjustments to the Company's accounting for certain non-monetary and monetary transactions, certain business and asset acquisitions, deferred tax assets and other accounting matters were required. The Company has also taken actions to strengthen its compliance controls and reinforce a strong corporate culture of ethics and client service.
The Company has now completed its review of substantially all of its accounting policies, significant accounting transactions, related party transactions, and other financial, internal control and disclosure matters. The Form 10-K filed Friday, March 23, 2018 contains the adjustment or restatement of certain previously filed or furnished consolidated financial statements for 2015, 2014 and 2013. It also contains audited Consolidated Financial Statements for 2017, 2016 and 2015 (see Appendix A).
As described in the Form 10-K, the Company's review identified various material weaknesses in internal control, including entity level controls and in certain accounting practices. Certain material weaknesses have been remediated as of December 31, 2017 and others are being remediated through additional work expected to be completed in 2018.
The Company's remediation initiatives include significant changes in how it approaches compliance. When fully implemented and operational, the Company believes these measures will fully remediate the identified deficiencies and strengthen its internal control over financial reporting. These remediation initiatives, as well as the Company's remaining material weaknesses requiring remediation as of December 31, 2017, are detailed in the Form 10-K filed Friday, March 23, 2018.
Conference Call and Webcast
comScore will hold a conference call on Monday, March 26 at 8:00 AM ET to provide a business update. To access the conference call live, dial (866) 547-1509 in the U.S. and (920) 663-6208 for international callers using the passcode: 6736369 or listen via webcast on the Investor Relations section of the company's website at http://ir.comscore.com/events.cfm.
Following the conference call, a replay will be available via webcast at http://ir.comscore.com/events-presentations.
APPENDIX A
COMSCORE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
December 31,
2017 2016
---- ----
Assets
Current assets:
Cash and cash equivalents $37,859 $84,111
Restricted cash 7,266 4,230
Marketable securities - 28,412
Accounts receivable, net of allowance ($2,899 and $8,412 of accounts receivable 82,029 96,230
attributable to related parties)
Prepaid expenses and other current assets ($0 and $2,923 attributable to related 15,168 19,450
parties)
Insurance recoverable on litigation settlements 37,232 -
Total current assets 179,554 232,433
Property and equipment, net 28,893 42,001
Other non-current assets ($0 and $185 attributable to related parties) 7,259 7,176
Deferred tax assets 4,532 5,117
Intangible assets, net 159,777 194,168
Goodwill 642,424 639,897
------- -------
Total assets $1,022,439 $1,120,792
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable ($2,715 and $17 attributable to related parties) $27,889 $7,204
Accrued expenses ($5,857 and $5,141 attributable to related parties) 86,031 52,907
Accrued litigation settlements 27,718 -
Other short-term liabilities 2,998 2,860
Deferred revenue ($2,755 and $4,654 attributable to related parties) 98,367 99,412
Deferred rent 1,239 590
Capital lease obligations 6,248 12,904
Total current liabilities 250,490 175,877
Deferred rent 9,394 9,009
Deferred revenue 2,053 2,733
Deferred tax liabilities 3,641 7,688
Capital lease obligations 2,103 8,003
Accrued litigation settlements 90,800 -
Other long-term liabilities 7,466 12,629
Total liabilities 365,947 215,939
------- -------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value per share; 5,000,000 shares authorized at - -
December 31, 2017 and 2016; no shares issued or outstanding as of December 31, 2017 or 2016
Common stock, $0.001 par value per share; 100,000,000 shares authorized as of 60 60
December 31, 2017 and 2016; 60,053,843 shares issued and 57,289,047 shares o
utstanding as of December 31, 2017 and 59,937,393 shares issued and 57,172,597
shares outstanding as of December 31, 2016, respectively
Additional paid-in capital 1,407,717 1,380,881
Accumulated other comprehensive loss (6,224) (12,420)
Accumulated deficit (609,091) (327,698)
Treasury stock, at cost, 2,764,796 shares as of December 31, 2017 and 2016, respectively (135,970) (135,970)
-------- --------
Total stockholders' equity 656,492 904,853
------- -------
Total liabilities and stockholders' equity $1,022,439 $1,120,792
========== ==========
COMSCORE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
Years Ended December 31,
2017 2016 2015
---- ---- ----
Revenues $403,549 $399,460 $270,803
-------- -------- --------
Cost of revenues 193,605 173,080 111,904
Selling and marketing 130,509 126,311 96,344
Research and development 89,023 86,975 52,718
General and administrative 74,651 97,517 72,493
Investigation and audit related 83,398 46,617 -
Amortization of intangible assets 34,823 31,896 8,608
(Gain) loss on asset dispositions - (33,457) 4,671
Settlement of litigation, net 82,533 2,363 (840)
Restructuring 10,510 - -
------ --- ---
Total expenses from operations 699,052 531,302 345,898
------- ------- -------
Loss from operations (295,503) (131,842) (75,095)
Interest expense, net (661) (478) (1,321)
Other income, net 15,205 12,371 9
Loss from foreign currency transactions (3,151) (1,231) (1,331)
Loss before income taxes (284,110) (121,180) (77,738)
Income tax benefit (provision) 2,717 4,007 (484)
----- ----- ----
Net loss $(281,393) $(117,173) $(78,222)
========= ========= ========
Net loss per common share:
Basic $(4.90) $(2.10) $(2.07)
Diluted (4.90) (2.10) (2.07)
Weighted-average number of shares used in per share
calculation - Common Stock:
Basic 57,485,755 55,728,090 37,879,091
Diluted 57,485,755 55,728,090 37,879,091
-------
Comprehensive loss:
Net loss $(281,393) $(117,173) $(78,222)
Other comprehensive income (loss):
Foreign currency cumulative translation adjustment 6,168 (1,170) (5,775)
Unrealized gain on marketable securities, net 24 169 -
Reclassification of realized loss on the sale of marketable 4 19 -
securities, net
Total comprehensive loss $(275,197) $(118,155) $(83,997)
========= ========= ========
COMSCORE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Years Ended December 31,
2017 2016 2015
---- ---- ----
Operating activities
Net loss $(281,393) $(117,173) $(78,222)
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:
Depreciation 23,339 25,439 22,595
Amortization of intangible assets 34,823 31,896 8,608
Provision for bad debts 983 1,507 3,167
Stock-based compensation 17,314 46,495 46,983
Deferred tax benefit (3,203) (3,997) (121)
(Gain) loss on asset dispositions - (33,457) 4,671
Realized loss on marketable securities 4 19 -
Loss from equity method investment 63 406 -
Loss (gain) on disposition of property and equipment 125 275 (2)
Gain on forgiveness of obligation (4,000) - -
Accrued litigation settlements to be settled in Common Stock 90,800 - -
Non-cash vendor consideration - - 48,253
Changes in operating assets and liabilities, net of effect of
acquisitions:
Accounts receivable 14,529 4,009 1,542
Prepaid expenses and other assets (33,165) (3,928) (863)
Accounts payable, accrued expenses, and other liabilities 85,001 (12,972) (1,057)
Deferred revenue (2,638) 5,962 5,206
Deferred rent 1,013 (393) (1,403)
----- ---- ------
Net cash (used in) provided by operating activities (56,405) (55,912) 59,357
Investing activities
Net cash received (paid) in disposition of assets - 42,980 (2,535)
Acquisitions, net of cash acquired - 37,086 (10,117)
Acquisitions, net of cash acquired (related party) - (27,328) -
Sales of marketable securities 28,436 2,188 -
Purchase of property and equipment (10,182) (7,106) (4,325)
------- ------ ------
Net cash provided by (used in) investing activities 18,254 47,820 (16,977)
Financing activities
Proceeds from the issuance of common stock - - 204,741
Financing proceeds received on subscription receivable (related 11,012 8,954 3,503
party)
Proceeds from the exercise of stock options - 4,139 11,623
Repurchase of common stock (withholding taxes) (1,514) (18,292) (28,160)
Repurchase of common stock (treasury shares) - (27,292) (105,916)
Excess tax benefits from stock-based compensation - - (1,335)
Principal payments on capital lease and software license (17,016) (18,838) (16,622)
arrangements
Stock issuance costs - - (4,368)
Net cash (used in) provided by financing activities (7,518) (51,329) 63,466
Effect of exchange rate changes on cash 2,453 776 (1,875)
----- --- ------
Net (decrease) increase in cash, cash equivalents and restricted cash (43,216) (58,645) 103,971
Cash, cash equivalents and restricted cash at beginning of year 88,341 146,986 43,015
------ ------- ------
Cash, cash equivalents and restricted cash at end of year $45,125 $88,341 $146,986
======= ======= ========
Years Ended December 31,
2017 2016 2015
---- ---- ----
Cash and cash equivalents $37,859 $84,111 $146,986
Restricted cash 7,266 4,230 -
----- ---
Total cash, cash equivalents and restricted cash $45,125 $88,341 $146,986
======= ======= ========
Supplemental cash flow disclosures:
Interest paid $1,691 $1,962 $1,906
Income taxes paid 497 1,717 1,790
Supplemental non-cash investing and financing activities:
Stock issued in connection with acquisition - Rentrak $ - $753,418 $ -
Stock issued in connection with WPP arrangements - - 49,034
Capital lease and software license obligations incurred 191 14,842 22,531
Leasehold improvements acquired through lease incentives - - 372
Accrued capital expenditures 336 3,060 532
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal and state securities laws, including, without limitation, comScore's expectations as to the impact of product enhancements on the success of comScore's business, future stockholder value, improvements in accounting and compliance policies and procedures, expected growth in the business and improvements in profitability, and the timing of the Company's 2018 annual meeting of stockholders and earnings call for the first quarter of 2018. These statements involve risks and uncertainties that could cause our actual results to differ materially from expectations, including, but not limited to, comScore's ability to achieve its expected financial and operational results. For additional discussion of risk factors, please refer to comScore's respective Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and other filings that comScore makes from time to time with the Securities and Exchange Commission (the "SEC"), which are available on the SEC's website (www.sec.gov).
Investors 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 intend or 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: Jim Barron/Robin Weinberg
212-687-8080
press@comscore.com
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SOURCE comScore, Inc.
