CHICAGO, Feb. 28, 2019 /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 fourth quarter and year ended December 31, 2018.
Financial Highlights
Fourth Quarter 2018
- Revenue increased 10.3% to $186.4
million
- Revenue, excluding the impact of purchase accounting, increased
9.8% to $186.4 million
- Operating income increased 198.6% to $20.9 million
- Net loss decreased 66.7% to $11.5
million
- Adjusted EBITDA increased 11.1% to $68.0
million
- Adjusted net income increased 36.7% to $31.4 million
- Adjusted net income per share increased 25.6% to $0.24
Full Year 2018
- Revenue increased 15.6% to $730.4
million
- Revenue, excluding the impact of purchase accounting, increased
15.6% to $731.9 million
- Operating income increased 83.2% to $69.6 million
- Net loss decreased 80.2% to $24.4
million
- Adjusted EBITDA increased 13.2% to $255.2 million
- Adjusted net income increased 88.7% to $110.6 million
- Adjusted net income per share increased 49.2% to $0.86
"We are pleased to have delivered strong financial results for
the fourth quarter, concluding a very successful 2018 for the
company," said Kevin Akeroyd,
Cision's Chief Executive Officer. "We continue to focus our efforts
on delivering best-in-class products and services to our customers,
and driving towards our long-term financial goals and objectives.
Following our acquisitions of Falcon and TrendKite and the
divestiture of our email marketing assets, we enter 2019 better
positioned than ever to deliver unmatched value to the public
relations and marketing communications industry."
Fourth Quarter Business Statistics and Operational
Highlights
- Americas revenues increased 9.6% to $129.4 million
- EMEA revenues increased 10.8% to $48.4
million
- APAC revenues increased 19.4% to $8.6
million
- Non-core revenues declined 38.7% to $1.0
million
- Average pro forma subscription customers increased 4.2% to
approximately 42,300
- Average annualized pro forma revenue per subscription customer,
excluding the impact of currency, decreased 1.3% to approximately
$11,100
- Customers that purchased services from us on a transaction
basis decreased 6.0% to approximately 39,200
- Average quarterly pro forma revenue per customer that purchased
services from us on a transaction basis, excluding the impact of
currency, increased 8.6% to approximately $1,530
- Cross-sell bookings of software, distribution and insights in
the US increased 55.1% to $5.4
million
- Cision Communications Cloud platform customers at
December 31, 2018 were approximately
9,800
- Attribution and data bookings (measured in annual contract
value) were approximately $1.0
million
Recent Acquisitions
On January 3, 2019, we completed
our acquisition of Falcon for approximately €105.2 million
($120.1 million). The purchase
consideration consisted of approximately €54.1 million
($61.7 million) in cash and the
issuance of approximately 5.1 million ordinary shares valued at
€51.1 million ($58.4 million). The
cash portion of the consideration was funded with a combination of
cash on hand and borrowings under our revolving credit
facility.
On January 23, 2019, we completed
our acquisition of TrendKite for approximately $222.4 million. The purchase consideration
consisted of approximately $94.1
million in cash and approximately 10.3 million ordinary
shares valued at $128.3 million. The
cash portion of the consideration was funded with a combination of
cash on hand and incremental borrowings under our
dollar-denominated term loan facility.
Recent Divestiture
On January, 22, 2019, we sold our email marketing assets to a
strategic buyer. The sale of the email marketing assets resulted
from a detailed review of Cision's long-term business strategy and
desire to focus on our industry-leading communications cloud
platform. We divested our email marketing assets for approximately
$49.3 million of cash consideration,
with up to an additional $4.0 million
in cash consideration based upon meeting certain business
performance measures over the next 12 months.
Long-Term Debt
On December 28, 2018, we entered
into an incremental facility amendment to our first lien credit
agreement that increased available borrowings under the revolving
credit facility from $75.0 million to
$100.0 million. As of December 31, 2018, we had no amounts outstanding
under our revolving credit facility and we had approximately
$1,254 million of borrowings
outstanding under our first lien credit facility, consisting of
approximately $972.1 million of
dollar-denominated term loan borrowings and approximately €246.9
million of Euro-denominated borrowings. On January 2, 2019, we borrowed approximately
$40.0 million of dollar borrowings
under our revolving credit facility in connection with the closing
of the Falcon acquisition, which we repaid in full on January 31, 2019. On January 11, 2019, we entered into an incremental
facility amendment to the credit agreement that increased our
dollar-denominated term loan facility by $75.0 million. On January
17, 2019, we borrowed $75.0
million of dollar-denominated borrowings under our term loan
facility in connection with the closing of the TrendKite
acquisition. As of February 27, 2019,
we had approximately $1,329 million
of borrowings outstanding under our first lien credit facility,
consisting of approximately $1,047
million of dollar-denominated term loan borrowings and
approximately €246.9 million of Euro-denominated borrowings.
Subscription and Transaction Customer Trends
All of the figures below exclude our acquisitions of Falcon and
TrendKite, and have been adjusted to exclude the impact of
currency.
|
Q1 2017
|
Q2 2017
|
Q3 2017
|
Q4 2017
|
Q1 2018
|
Q2 2018
|
Q3 2018
|
Q4 2018
|
|
Q4 2018
compared
to Q4 2017
|
Average pro forma
subscription customers
|
39,761
|
40,833
|
40,532
|
40,628
|
40,252
|
41,249
|
41,661
|
42,349
|
|
4.2%
|
Average annualized
pro forma revenue per subscription customer
|
$10,867
|
$10,882
|
$11,101
|
$11,227
|
$11,153
|
$11,186
|
$11,237
|
$11,086
|
|
(1.3%)
|
Pro forma transaction
customers
|
42,869
|
44,451
|
40,829
|
41,670
|
40,216
|
41,172
|
38,152
|
39,173
|
|
(6.0%)
|
Average pro forma
revenue per transaction customer
|
$1,297
|
$1,361
|
$1,286
|
$1,405
|
$1,382
|
$1,454
|
$1,356
|
$1,526
|
|
8.6%
|
Updated Full Year 2019 Outlook
Our updated outlook for the full fiscal year ending December 31, 2019 appears below (all figures in
millions, except share and per share amounts). Additionally,
due to our acquisitions and divestiture in January 2019, we have provided an initial outlook
for our first quarter ending March 31,
2019. These estimates are based on a number of assumptions
that management believes to be reasonable and reflect our
expectations as of the date of this release. Actual results may
differ materially from these estimates as a result of various
factors, and Cision refers you to the cautionary language regarding
"Forward Looking Statements" included in this press release when
considering this information.
|
Prior
2019
|
|
Updated
2019
|
|
Initial Q1
2019
|
|
Q1
2018
|
Revenue
|
$775 -
$785
|
|
$775 -
$785
|
|
$185 -
$190
|
|
$179.3
|
Revenue, excluding
the impact from purchase accounting
|
$782 -
$792
|
|
$782 -
$792
|
|
$187 -
$192
|
|
$180.2
|
Net income
(loss)
|
($5) - $2
|
|
($1) - $4
|
|
($6) -
($2)
|
|
($0.4)
|
Net income (loss) per
share
|
($0.03) -
$0.01
|
|
($0.01) -
$0.02
|
|
($0.04) -
($0.01)
|
|
$0.00
|
Adjusted
EBITDA
|
$270 -
$275
|
|
$270 -
$275
|
|
$61 - $63
|
|
$58.3
|
Adjusted net
income
|
$122 -
$125
|
|
$122 -
$125
|
|
$28 - $30
|
|
$23.1
|
Adjusted net income
per diluted share
|
$0.82 -
$0.84
|
|
$0.82 -
$0.85
|
|
$0.19 -
$0.20
|
|
$0.19
|
Pro-forma fully
diluted weighted average shares outstanding
|
149.8
|
|
148.0
|
|
147.5
|
|
123.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior
2019
|
|
Updated
2019
|
|
Initial Q1
2019
|
|
Q1
2018
|
Depreciation
expense
|
--
|
|
$30 - $33
|
|
$8 - $9
|
|
$7.4
|
Amortization
expense
|
--
|
|
$105 -
$110
|
|
$26 - $27
|
|
$25.9
|
Amortization expense
included in cost of revenue
|
--
|
|
$24 - $26
|
|
$6 - $7
|
|
$5.6
|
Interest
expense
|
--
|
|
$76 - $79
|
|
$19 - $20
|
|
$22.1
|
Debt extinguishment
costs
|
--
|
|
$0 - $0
|
|
$0 - $0
|
|
$2.4
|
Interest expense, net
of debt extinguishment costs
|
--
|
|
$76 - $79
|
|
$19 - $20
|
|
$19.7
|
Cash interest
expense
|
--
|
|
$64 - $66
|
|
$16 - $17
|
|
$18.9
|
Stock-based
compensation
|
--
|
|
$7 - $10
|
|
$2 - $3
|
|
$1.3
|
Capital expenditures,
inclusive of capitalized software development
|
--
|
|
$38 - $42
|
|
$8 - $9
|
|
$8.8
|
The above outlook assumes the inclusion of results from our
acquisitions of Falcon and TrendKite from the date of their
respective acquisitions through the respective periods ending
March 31, 2019 and December 31, 2019, and the inclusion of results
from our e-mail marketing assets from January 1, 2019 through the date of its
divestiture. The updated outlook above assumes LIBOR of
approximately 2.7%, EURIBOR of approximately 0%, and the following
exchange rates with respect to the British Pound, the Euro and the
Canadian Dollar for fiscal year 2019:
GBP to USD
|
1.29
|
EUR to USD
|
1.14
|
CAD to USD
|
0.76
|
Additionally, our outlook for 2019 excludes any additional
acquisitions, divestitures, or other unanticipated events. See our
discussion of non-GAAP financial measures included in this
release.
Conference Call and Webcast
As previously announced, we will hold a conference call and
webcast to review our fourth quarter and full year 2018 financial
results on Thursday, February 28,
2019 at 5:00 pm EST. To hear
the live event, visit the Cision investor website at
http://investors.cision.com, or by dialing 1-877-443-4809
(participant dial in toll free) or 1-412-317-5235 (participant dial
in International). For those accessing the call via Cision's
investor website, we suggest logging in at least 15 minutes prior
to the start of the live event. For those dialing in, participants
should ask to be joined into the Cision Ltd. earnings call. A
replay of the earnings webcast will be available approximately two
hours after the conclusion of the live event on February 28, 2019. To access the webcast
recording / conference replay, visit http://investors.cision.com or
you can dial 1-877-344-7529 (US), 1-412-317-0088 (International),
or 1-855-669-9658 (Canada). The
replay access code for the earnings call is 10129049. The replay
will be available through March 15,
2019. Supplemental materials regarding the conference call
and webcast will be posted to the Cision website at
http://investors.cision.com approximately one hour in advance of
the conference call and webcast.
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, including statements
regarding our future financial and operating performance outlook
for the fiscal year ending December 31,
2019, as well as information relating to the acquisitions of
Falcon.io and TrendKite and our divestiture of certain e-mail
marketing assets and our realization of the expected benefits
therefrom. 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. Accordingly, you should not place
undue reliance on these statements, as actual results may vary
materially. 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
quarterly report on Form 10-Q filed on November 9, 2018 and our annual report on Form
10-K filed on March 13, 2018, 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. (NYSE: CISN) is a leading global provider of earned
media 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 4,500 employees with
offices in 22 countries throughout the Americas, EMEA, and APAC.
For more information about its award-winning products and services,
including the Cision Communications Cloud®, visit www.cision.com
and follow Cision on Twitter @Cision.
Cision Ltd. and
its Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
As of December 31,
2018 and December 31, 2017
|
(in thousands,
except for per share amounts)
|
(Unaudited)
|
|
|
|
|
2018
|
|
2017
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
104,769
|
|
$
148,654
|
|
Accounts receivable,
net
|
120,882
|
|
113,008
|
|
Prepaid expenses and
other current assets
|
22,824
|
|
19,896
|
|
|
Total current
assets
|
248,475
|
|
281,558
|
Property and
equipment, net
|
57,210
|
|
53,578
|
Other intangible
assets, net
|
377,146
|
|
456,291
|
Goodwill
|
1,171,859
|
|
1,136,403
|
Deferred tax
asset
|
4,034
|
|
-
|
Other
assets
|
7,652
|
|
7,528
|
|
|
Total
assets
|
$
1,866,376
|
|
$
1,935,358
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current portion of
long-term debt
|
$
13,210
|
|
$
13,349
|
|
Accounts
payable
|
15,603
|
|
13,327
|
|
Accrued compensation
and benefits
|
29,323
|
|
25,873
|
|
Other accrued
expenses
|
82,507
|
|
73,483
|
|
Current portion of
deferred revenue
|
139,725
|
|
140,351
|
|
|
Total current
liabilities
|
280,368
|
|
266,383
|
Long-term debt, net
of current portion
|
1,205,760
|
|
1,266,121
|
Deferred revenue, net
of current portion
|
1,098
|
|
1,412
|
Deferred tax
liability
|
69,232
|
|
62,617
|
Other
liabilities
|
21,601
|
|
22,456
|
|
|
Total
liabilities
|
$
1,578,059
|
|
$
1,618,989
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred stock,
$0.0001 par value, 20,000,000 shares authorized; no shares issued
and outstanding at December 31, 2018 and 2017
|
-
|
|
-
|
|
Common stock, $0.0001
par value, 480,000,000 shares authorized; 132,716,541 and
122,634,922 shares issued and outstanding at December 31, 2018 and
2017, respectively
|
13
|
|
12
|
|
Additional paid-in
capital
|
797,222
|
|
771,813
|
|
Accumulated other
comprehensive loss
|
(68,941)
|
|
(35,111)
|
|
Accumulated
deficit
|
(439,977)
|
|
(420,345)
|
|
|
Total stockholders'
equity
|
288,317
|
|
316,369
|
|
|
Total
liabilities and stockholders' equity
|
$
1,866,376
|
|
$
1,935,358
|
Cision Ltd. and
its Subsidiaries
|
Condensed
Consolidated Statements of Operations and Comprehensive
Loss
|
(in thousands,
except for per share amounts)
|
(Unaudited)
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenue
|
$
186,369
|
|
$
168,959
|
|
$
730,373
|
|
$
631,637
|
Cost of
revenue
|
66,580
|
|
53,265
|
|
266,792
|
|
200,836
|
|
|
Gross
Profit
|
119,789
|
|
115,694
|
|
463,581
|
|
430,801
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
30,750
|
|
31,519
|
|
116,095
|
|
114,750
|
|
Research and
development
|
7,713
|
|
5,423
|
|
29,995
|
|
22,102
|
|
General and
administrative
|
40,298
|
|
48,940
|
|
167,060
|
|
166,759
|
|
Amortization of
intangible assets
|
20,134
|
|
22,853
|
|
80,815
|
|
89,159
|
|
|
Total operating costs
and expenses
|
98,895
|
|
108,735
|
|
393,965
|
|
392,770
|
|
|
Operating
income
|
20,894
|
|
6,959
|
|
69,616
|
|
38,031
|
|
|
|
|
|
|
|
|
|
|
Non operating income
(expense):
|
|
|
|
|
|
|
|
|
Foreign exchange
gains (losses)
|
3,013
|
|
(3,626)
|
|
13,290
|
|
(5,458)
|
|
Interest and other
income (expense), net
|
(589)
|
|
(318)
|
|
(117)
|
|
2,132
|
|
Interest
expense
|
(18,067)
|
|
(20,160)
|
|
(78,014)
|
|
(116,466)
|
|
Loss on
extinguishment of debt
|
(6,992)
|
|
-
|
|
(9,424)
|
|
(51,872)
|
|
|
Total non operating
loss
|
(22,635)
|
|
(24,104)
|
|
(74,265)
|
|
(171,664)
|
|
|
Loss before income
taxes
|
(1,741)
|
|
(17,145)
|
|
(4,649)
|
|
(133,633)
|
Provision for
(benefit from) income taxes
|
9,729
|
|
17,347
|
|
19,745
|
|
(10,591)
|
|
|
Net loss
|
(11,470)
|
|
(34,492)
|
|
(24,394)
|
|
(123,042)
|
Other comprehensive
income (loss)-foreign currency translation adjustments
|
(12,048)
|
|
2,826
|
|
(32,844)
|
|
38,791
|
|
|
Comprehensive
loss
|
$
(23,518)
|
|
$
(31,666)
|
|
$
(57,238)
|
|
$
(84,251)
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
(0.09)
|
|
$
(0.28)
|
|
$
(0.19)
|
|
$
(1.63)
|
Weighted average
shares outstanding used in computing per share amounts:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
132,714,691
|
|
121,917,531
|
|
128,819,858
|
|
75,696,880
|
Cision Ltd. and
its Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows
|
For the Years
Ended December 31, 2018 and December 31, 2017
|
(in
thousands)
|
(Unaudited)
|
|
|
|
|
|
2018
|
|
2017
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
(24,394)
|
|
$
(123,042)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
133,821
|
|
139,474
|
|
Non-cash interest
charges and amortization of debt discount and deferred financing
costs
|
17,498
|
|
65,554
|
|
Equity-based
compensation expense
|
5,267
|
|
4,138
|
|
Provision for
doubtful accounts
|
4,409
|
|
3,493
|
|
Deferred income
taxes
|
(105)
|
|
(23,278)
|
|
Unrealized currency
translation losses (gains)
|
(13,533)
|
|
5,011
|
|
Gain on sale of
business
|
-
|
|
(1,785)
|
|
Other
|
5,441
|
|
(194)
|
|
Changes in operating
assets and liabilities, net of effects of acquisitions and
disposal:
|
|
|
|
|
|
Accounts
receivable
|
(7,784)
|
|
(6,349)
|
|
|
Prepaid expenses and
other current assets
|
1,682
|
|
1,579
|
|
|
Other
assets
|
742
|
|
737
|
|
|
Accounts
payable
|
728
|
|
(3,831)
|
|
|
Accrued compensation
and benefits
|
3,530
|
|
(6,235)
|
|
|
Other accrued
expenses
|
(3,466)
|
|
4,068
|
|
|
Deferred
revenue
|
1,808
|
|
4,887
|
|
|
Other
liabilities
|
1,484
|
|
4,621
|
|
|
|
Net cash provided by
operating activities
|
127,128
|
|
68,848
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Purchases of property
and equipment
|
(14,629)
|
|
(10,734)
|
Software development
costs
|
(19,804)
|
|
(14,953)
|
Acquisitions of
businesses, net of cash received of $2,711
and $12,355
|
(66,463)
|
|
(78,528)
|
Proceeds from
disposal of business
|
-
|
|
23,675
|
Other
|
|
(24)
|
|
552
|
|
|
|
Net cash used in
investing activities
|
(100,920)
|
|
(79,988)
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from
revolving credit facility
|
-
|
|
5,000
|
Repayment of
revolving credit facility
|
-
|
|
(38,475)
|
Payment of amounts
due to Cision Owner
|
-
|
|
(1,940)
|
Proceeds from term
credit facility, net of debt discount of $10,466
|
-
|
|
1,350,259
|
Repayments of term
credit facility
|
(63,297)
|
|
(1,497,838)
|
Payments on capital
lease obligations
|
-
|
|
(171)
|
Payments of deferred
financing costs
|
(850)
|
|
-
|
Proceeds from merger
and recapitalization
|
-
|
|
305,110
|
Payment of contingent
consideration
|
(2,873)
|
|
–
|
|
|
|
Net cash provided by
(used in) financing activities
|
(67,020)
|
|
121,945
|
Effect of exchange
rate changes on cash and cash equivalents
|
(3,073)
|
|
2,714
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
(43,885)
|
|
113,519
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
Beginning of
year
|
148,654
|
|
35,135
|
End of the
year
|
$ 104,769
|
|
$
148,654
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flows information
|
|
|
|
Cash paid during the
year for:
|
|
|
|
Interest
|
$
69,816
|
|
$
102,400
|
Income
taxes
|
17,538
|
|
10,250
|
Supplemental non-cash
information:
|
|
|
|
Issuance of
securities by Cision Owner in Connection with
acquisitions
|
-
|
|
7,000
|
Non-cash contribution
from Cision Owner in connection with merger
|
-
|
|
451,139
|
Issuance of shares
for acquisition
|
20,143
|
|
|
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 Adjusted
EBITDA, and Adjusted net income per share, 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, and Adjusted net income per share.
Additionally, we believe that the presentation of non-GAAP measures
provides information that is useful to investors as it indicates,
for example, our ability to meet capital expenditures and working
capital requirements and otherwise meet our obligations as they
become due. 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. We are unable to present without unreasonable
efforts a reconciliation of forward-looking non-GAAP financial
information to the corresponding GAAP financial information because
management cannot reliably predict all of the necessary
information. Forward-looking non-GAAP financial information is
based on numerous assumptions, including assumptions with respect
to general business, economic, market, regulatory and financial
conditions and various other factors, all of which are difficult to
predict and many of which are beyond our control. 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.
Cision Ltd. and
its Subsidiaries
|
Reconciliation of
Net Loss to EBITDA and Adjusted EBITDA
|
(in
millions)
|
(Unaudited)
|
|
|
Three Months
Ended
December 31, 2017
|
|
Three Months
Ended
December 31, 2018
|
|
Year Ended
December 31, 2017
|
|
Year Ended
December 31, 2018
|
Net loss
|
$
(34.5)
|
|
$
(11.5)
|
|
$
(123.0)
|
|
$
(24.4)
|
Depreciation and
amortization
|
36.1
|
|
33.6
|
|
139.5
|
|
133.8
|
Interest expense and
loss on extinguishment of debt
|
20.2
|
|
25.1
|
|
168.3
|
|
87.5
|
Provision (benefit) for income
taxes
|
17.3
|
|
9.7
|
|
(10.6)
|
|
19.7
|
EBITDA (1)
|
39.1
|
|
56.9
|
|
174.2
|
|
216.6
|
Acquisition and
offering related costs
|
16.7
|
|
12.7
|
|
42.2
|
|
45.3
|
Stock-based
compensation
|
1.2
|
|
1.6
|
|
4.1
|
|
5.3
|
Deferred revenue
reduction from purchase accounting
|
0.7
|
|
-
|
|
1.5
|
|
1.5
|
Gain on sale of
business
|
-
|
|
-
|
|
(1.8)
|
|
-
|
Sponsor fees and
expenses
|
-
|
|
-
|
|
0.3
|
|
-
|
Unrealized
translation (gain) loss
|
3.5
|
|
(3.2)
|
|
5.0
|
|
(13.5)
|
Adjusted EBITDA
(2)
|
$
61.2
|
|
$
68.0
|
|
$
225.5
|
|
$
255.2
|
Cision Ltd. and
its Subsidiaries
|
Reconciliation of
Net Loss to Adjusted Net Income and Adjusted Net Income per Diluted
Share
|
(in millions,
except for per share and share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended
December 31, 2017
|
|
Three Months
Ended
December 31, 2018
|
|
Year Ended
December 31, 2017
|
|
Year Ended
December 31, 2018
|
Net loss
|
$
(34.5)
|
|
$
(11.5)
|
|
$
(123.0)
|
|
$
(24.4)
|
Provision
(benefit) for income taxes
|
17.3
|
|
9.7
|
|
(10.6)
|
|
19.7
|
Acquisition and
offering related costs
|
16.7
|
|
12.7
|
|
42.2
|
|
45.3
|
Gain on sale of
business
|
-
|
|
-
|
|
(1.8)
|
|
-
|
Stock-based
compensation expense
|
1.2
|
|
1.6
|
|
4.1
|
|
5.3
|
Deferred revenue
reduction from purchase accounting
|
0.7
|
|
-
|
|
1.5
|
|
1.5
|
Amortization related
to acquired intangible assets
|
29.2
|
|
26.0
|
|
113.8
|
|
104.1
|
Non-recurring
interest and loss on extinguishment of debt
|
-
|
|
7.1
|
|
55.9
|
|
11.4
|
Sponsor fees and
expenses
|
-
|
|
-
|
|
0.3
|
|
-
|
Unrealized
translation (gain) loss
|
3.5
|
|
(3.2)
|
|
5.0
|
|
(13.5)
|
Adjusted Income
before income taxes
|
34.1
|
|
42.4
|
|
87.4
|
|
149.4
|
Less: Income tax at a
26% rate for 2018, and a 33% rate for 2017
|
(11.2)
|
|
(11.0)
|
|
(28.8)
|
|
(38.8)
|
Adjusted net income
(3)
|
$
22.9
|
|
$
31.4
|
|
$
58.6
|
|
$
110.6
|
Pro forma
fully-diluted weighted average shares outstanding
|
121,917,531
|
|
132,714,891
|
|
102,035,003
|
|
128,819,858
|
Adjusted net income
per diluted share (4)
|
$0.19
|
|
$0.24
|
|
$0.57
|
|
$0.86
|
Cision Ltd. and
its Subsidiaries
|
Reconciliation of
Net Cash Provided by Operating Activities to Adjusted Net Cash
Provided by
Operating Activities
|
(in
millions)
|
(Unaudited)
|
|
|
Three Months
Ended
December 31, 2017
|
|
Three Months
Ended
December 31, 2018
|
|
Year Ended
December 31, 2017
|
|
Year Ended
December 31, 2018
|
Net cash provided by
operating activities
|
$
30.5
|
|
$
37.3
|
|
$
68.8
|
|
$
127.1
|
Acquisition and
offering related costs
|
16.7
|
|
12.7
|
|
42.2
|
|
45.3
|
Adjusted net cash
provided by operating activities (5)
|
$
47.2
|
|
$
50.0
|
|
$
111.0
|
|
$
172.4
|
|
|
(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 EBITDA, further adjusted for acquisition and
offering related costs, 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
and offering related costs, (gains) losses related to divested
businesses or assets, stock-based compensation, deferred revenue
reduction from purchase accounting, amortization related to
acquired intangibles, non-recurring interest and losses on
extinguishment of debt, 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% for 2017 and periods prior, and 26% for 2018 and
beyond, pursuant to our preliminary analysis with respect to recent
U.S. tax law changes, to determine Adjusted net income. The
enactment of the Tax Cuts and Jobs Act in December 2017 resulted in
a provisional net one-time tax of $11.9 million in the fourth
quarter of 2017 based on a reasonable estimate of the income tax
effects, primarily from a tax on accumulated foreign earnings, the
remeasurement of deferred tax assets and liabilities and new
limitations on the deductibility of interest. Our calculation of
Adjusted net income excludes this provisional net one-time tax. We
continue to finalize the analysis of the tax reform provisions in
2018. 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)
|
Cision defines
Adjusted net income per diluted share as Adjusted net income, 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. Additionally, for purposes of calculating the number
of fully diluted shares outstanding, we have excluded the potential
impact of dilution from outstanding warrants to purchase shares of
our common stock prior to the dates of their conversion, and stock
options and restricted units issued and outstanding pursuant to our
2017 Omnibus Incentive Plan. During the second quarter of fiscal
2018, we issued an aggregate of 6,342,989 ordinary shares
(6,100,209 ordinary shares on May 18, 2018 and 242,780 ordinary
shares on June 4, 2018), in exchange for all of our outstanding
warrants, pursuant to the completion of our warrant exchange
transactions. During the third quarter of 2018, we issued 2,000,000
ordinary shares for the earn-out achieved during the quarter.
Commencing on these respective issuance dates, we included the
issued shares in our fully-diluted pro forma weighted average share
count.
|
|
|
(5)
|
Cision defines
Adjusted net cash provided by operating activities is defined as
net cash provided by operating activities adjusted for acquisition
related costs and expenses.
|
Investor Contact:
Jack
Pearlstein
Chief Financial Officer
Jack.Pearlstein@cision.com
Media Contact:
Jenn Deering
Davis
VP, Communications
Jenn.Deering.Davis@cision.com
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SOURCE Cision Ltd.