Sizmek Inc. (SZMK) SEC Filing 10-Q Quarterly report for the period ending Thursday, June 30, 2016

 

 

For more information contact:

 

JoAnn Horne

Market Street Partners

415/445-3233

 

SIZMEK REPORTS SECOND QUARTER 2016 RESULTS

 

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Q2 Revenue of $48.9 million, a 22% Increase; Core Products Revenue Increases 47%

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Q2 Net Loss Improves 87% to $1.0 million

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Adjusted EBITDA1 Grows 88% to $5.5 million

Austin, TX — August 3,  2016 — Sizmek Inc. (NASDAQ: SZMK), a global ad management company that delivers multiscreen campaigns, today reported financial results for the second quarter ended June 30, 2016. 

Revenues for the three months ended June 30, 2016 increased 22% to $48.9 million compared to $40.2 million the same period of 2015.  Core products revenue, consisting of all products except flash based rich media, grew 47% for the second quarter versus the second quarter of 2015 and comprised 98% of the business.

“We are encouraged by the second consecutive quarter of solid progress on our growth objectives, with a 22% increase in revenue driving significantly improved profitability,” said Neil Nguyen, CEO of Sizmek.  “We are executing on our operating plan with better monetization of our investments along with a strict focus on cost optimization, which is fulfilling our commitment to drive profitable growth across our product portfolio, especially in programmatic, mobile and analytics.”

 

Second quarter highlights include:

 

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Second quarter revenues grew 22% to $48.9 million versus $40.2 million in the same period the prior year.

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Core product revenues, including mobile, video, data driven products and programmatic solutions, grew 47% versus the second quarter of 2015:

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Mobile product revenues (including HTML5 formats) increased 317%;

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Data driven product revenue, including Peer39, dynamic creative optimization, verification and viewability, grew 21%;

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In stream video revenue increased 20%; and

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Programmatic revenue (PBU) grew 138% with self-service representing 18% of the revenues.

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As anticipated, flash based rich media continues to trend out of the business, with revenues declining 89% from the second quarter of 2015 and now contributing less than 2% of  total revenues.

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At June 30, 2016, the Company had $36.8 million of cash and cash equivalents on hand and no long-term debt.

 

Conference Call Details

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Non-GAAP Financial Measures

 

In addition to providing financial measurements based on generally accepted accounting principles in the United States of America (GAAP), the Company has historically provided additional financial measures that are not prepared in accordance with GAAP (non-GAAP). We believe that the inclusion of Adjusted EBITDA as a non-GAAP financial measure in this press release helps investors to gain a meaningful understanding of our past performance and future prospects, consistent with how management measures and forecasts our performance, especially when comparing such results to previous periods or forecasts. Our management uses Adjusted EBITDA as a non-GAAP financial measure, in addition to GAAP financial measures, as the basis for measuring our core operating performance and comparing such performance to that of prior periods and to the performance of our competitors.

 

We use Adjusted EBITDA to measure the operating performance of our business.  This measure is used by management in its financial and operational decision-making. There are limitations associated with reliance on any non-GAAP financial measure because non-GAAP financial measures are specific to our operations and financial performance, which makes comparisons with other companies’ financial results more challenging. By providing both GAAP and non-GAAP financial measures, we believe that investors are able to compare our GAAP results to those of other companies while also gaining a better understanding of our operating performance as evaluated by management.

 

The Company considers Adjusted EBITDA to be an important indicator of the overall performance of the Company because it eliminates the effects of events that are non-cash, or are not expected to recur as they are not part of our ongoing operations.

 

The Company defines “Adjusted EBITDA” as income (loss) from operations, before depreciation and amortization, share-based compensation, merger, integration and other expenses, and restructuring / impairment charges and benefits.  The Company considers Adjusted EBITDA to be an important indicator of the Company’s operational strength and performance and a good measure of the Company’s historical operating trends.

 

Adjusted EBITDA eliminates items that are either not part of our core operations, such as merger, integration and other expenses or do not require a cash outlay, such as share-based compensation and impairment charges.  Adjusted EBITDA also excludes depreciation and amortization expense, which is based on the Company’s estimate of the useful life of tangible and intangible assets.  These estimates could vary from actual performance of the asset, are based on historical costs, and may not be indicative of current or future capital expenditures.

 

Adjusted EBITDA should be considered in addition to, not as a substitute for, the Company’s operating income (loss), as well as other measures of financial performance reported in accordance with GAAP.

 

In accordance with the requirements of the Securities and Exchange Commission, the Company is presenting the most directly comparable GAAP financial measure and reconciling the non-GAAP financial measure to the comparable GAAP measure.

 

About Sizmek

 

Sizmek Inc. (NASDAQ: SZMK) fuels digital advertising campaigns for advertisers and agencies around the world with cutting-edge technology to engage audiences across any screen. For the last 15 years, the online business that is now Sizmek has proudly pioneered industry firsts in digital, including rich media, video and online targeted advertising across several channels. Sizmek’s open ad management stack, Sizmek MDX, delivers the most creative and impactful multiscreen digital campaigns, across mobile, display, rich media, video and social, all powered by an unrivaled data platform. With New York City as a center of operations, Sizmek connects about 19,000 advertisers and 3,700 agencies to audiences, serving more than 1.3 trillion impressions a year.  Sizmek operates on the ground in about 65 countries with a team of approximately 1,000 employees. www.sizmek.com

 

Cautionary Note Regarding Forward-Looking Statements

 

Statements in this release regarding our current expectations, estimates, outlook, guidance and projections about our operations, industry, financial condition, performance, results of operations, and liquidity constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: our ability to further identify, develop and achieve commercial success for new online video and mobile products; continued or accelerating decline in our flash based rich-media business; delays in product offerings; the development and pricing of competing online services and products; consolidation of the digital industry and of digital advertising networks; slower than expected development of the digital advertising market; our ability to protect our proprietary technologies; identifying acquisition and disposition opportunities and integrating our acquisitions with our operations, systems, personnel and technologies; security threats to our computer networks; operating in a variety of foreign jurisdictions; fluctuations in currency exchange rates; adaption to new, changing, and competitive technologies; potential additional impairment of our goodwill and potential impairment of our other long-lived assets; our ability to achieve some or all of the expected benefits of the spin-off and merger transaction; and the other risks and uncertainties that affect our business, including those described in our filings with the Securities and Exchange Commission. In addition, any forward-looking statements represent our estimates only as of the date hereof and should not be relied upon as representing our estimates as of any subsequent date. We disclaim any intention or obligation to update the forward-looking statements to reflect subsequent events or circumstances or update the reasons that actual results could differ materially from those anticipated in the forward-looking statements, except as required by law.

 

 

Sizmek Inc.

Unaudited Consolidated Statements of Operations

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Reconciliation of Net Loss to Adjusted EBITDA

 

Sizmek Inc.

Consolidated Balance Sheets

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Sizmek Inc.

Unaudited Consolidated Statements of Cash Flows

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