comScore, Inc. Reports Fourth Quarter and Full Year 2015 Results

Record Quarterly Revenues and Adjusted EBITDA Performance

$125 Million Stock Buy-Back Program Announced

Merger with Rentrak Completed

Feb 17, 2016, 07:00 ET from comScore, Inc.

RESTON, Va., Feb. 17, 2016 /PRNewswire/ -- comScore, Inc. (NASDAQ: SCOR), today announced financial results for the fourth quarter and full year 2015. 

Fourth Quarter and Full Year 2015
comScore achieved record fourth quarter GAAP revenue of $97.7 million, an increase of 8% compared to the fourth quarter of 2014. GAAP income before income taxes was $6.5 million. GAAP net income was $4.4 million, or $0.11 per diluted share.   Free cash flow for the fourth quarter was $10.7 million, up 68% from the same quarter last year.

Fourth quarter 2015 results and metrics compared to fourth quarter 2014 on a proforma basis* were as follows:

  • Revenue of $97.7 million, up 10%.
  • Adjusted EBITDA of $27.4 million, up 30%.
  • Adjusted EBITDA margin was 28.1% of revenue, up 440 basis points.
  • Non-GAAP net income was $18.9 million, up 19%.

comScore achieved record annual GAAP revenue of 368.8 million, an increase of 12% compared to 2014.  GAAP loss before income taxes was ($5.0) million, GAAP net loss was $(6.8) million or $(0.18) per basic and diluted share.   Free cash flow for the year ended December 31, 2015 was $55.3 million, up 32%.

Full year to date 2015 results and metrics compared to the twelve months ended December 31, 2014 on a proforma basis* were as follows:

  • Revenue of $368.4 million, up 13%.
  • Adjusted EBITDA of $95.0 million, up 25%.
  • Adjusted EBITDA margin was 25.8% of revenue, up 250 basis points.
  • Non-GAAP net income was $69.6 million, up 27%.

* comScore disposed of its Mobile Operator Analytics Division in May. All historical pro forma results and growth rates included in the foregoing reflect adjustments to exclude the Company's Mobile Operator Analytics Divisions as of the beginning of 2014 for the purposes of consistent presentation and are based on management's estimates of the revenue and results of operations for this business. See Reconciliation of Revenue and Income before Income Taxes to non-GAAP Revenue, non-GAAP Income and Adjusted EBITDA set forth in the attachment to this press release.

"I'm very pleased to announce that comScore delivered record revenues, record Adjusted EBITDA and strong net income from operations," said Serge Matta, Chief Executive Officer of comScore. "With the completion of our merger with Rentrak and the introduction of our new Total Home PanelTM, we are moving swiftly and decisively to deliver the cross media solutions and currencies we know our clients need. We continue to see momentum in our audience and advertising solutions, including Media Metrix Multi-Platform and vCE. We kicked off 2016 with an important milestone, announcing Media Ratings Council accreditation for Media Metrix, the first time the MRC has accredited a digital audience measurement service.  Additionally, we are highly optimistic on the future of the new comScore and as such are initiating a new $125 million Stock Buyback Program."

 


Fourth Quarter 2015 Supplemental Financial and Business Information

(dollars in millions)

(unaudited)



Pro Forma 4Q15*


Pro Forma 4Q14*


Change

Total Revenue

$

97.7


$

89.1


9.7

%

Subscription Revenue

$

88.9


$

81.0


9.8

%

Project Revenue

$

8.8


$

8.1


8.6

%

Existing Customer Revenue

$

90.0


$

82.4


9.2

%

New Customer Revenue

$

7.7


$

6.7


14.9

%

International Revenue

$

26.7


$

25.4


5.1

%

US Revenue

$

71.0


$

63.7


11.5

%










Adjusted EBITDA

$

27,400


$

21,077


30.0

%

Customer Count


2,770



2,545


8.8

%










* comScore disposed of its Mobile Operator Analytics Division in May 2015. All historical pro forma results and growth rates included in the foregoing reflect adjustments to exclude the Company's Mobile Operator Analytics Division as of the beginning of 2014 for the purposes of consistent presentation and are based on management's estimates of the revenue and results of operations for this business. See Reconciliation of Revenue and Income before Income Taxes to non-GAAP Revenue, non-GAAP Income and Adjusted EBITDA set forth in the attachment to this press release.

Financial Outlook

comScore's expectations for the first quarter of 2016 are outlined in the table below.




GAAP revenue


$105 million to $111 million



GAAP (loss) / income before income taxes


($1.9) million to $6.5 million



Adjusted EBITDA***


$19.0 million to $23.5 million




Estimated fully-diluted shares


52.0 million




comScore's expectations for full year 2016 are outlined in the table below.




GAAP revenue


$508.0 million to $532.0 million



GAAP (loss) before income taxes


($26.9) million to ($3.5) million



Adjusted EBITDA***


$116.0 million to $132.0 million




Estimated fully-diluted shares


56.2 million




***

Reconciliations of GAAP to non-GAAP measures are set forth in the attachment to this press release.

comScore's revenue expectations for the first quarter and full year 2016 includes anticipated effects of divesting its Digital Analytics division, which closed in January 2016, and completion of its acquisition of Rentrak on January 29, 2016.

Due to the high variability and difficulty in predicting certain items that affect GAAP net income, such as tax rates and stock price, comScore is unable to provide a complete reconciliation of adjusted EBITDA to net income (loss) on a forward-looking basis without unreasonable efforts. However, a reconciliation of forward-looking adjusted EBITDA to GAAP income (loss) before income taxes is set forth in the attachment to this press release.

Conference Call Information
Management will provide commentary on the company's results in a conference call on Wednesday, February 17th at 8:30 a.m. ET.

The conference call and replay can be accessed by telephone and webcast as follows:

Call-in Number: 844-848-8734
(International) 678-562-4248
Pass code - 27649746

Webcast (live and replay): http://ir.comscore.com/events.cfm

About comScore
comScore (NASDAQ:  SCOR) is a leading cross-platform measurement company that precisely measures audiences, brands and consumer behavior everywhere. comScore completed its merger with Rentrak Corporation in January 2016 to create the new model for a dynamic, cross-platform world. Built on precision and innovation, our unmatched data footprint combines proprietary digital, TV and movie intelligence with vast demographic details to quantify consumers' multiscreen behavior at massive scale. This approach helps media companies monetize their complete audiences and allows marketers to reach these audiences more effectively. With more than 3,200 clients and global footprint in more than 75 countries, comScore is delivering the future of measurement. For more information on comScore, please visit comscore.com.

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 charges that many investors believe may obscure comScore's on-going operating results.

For example, comScore uses non-GAAP net income, which excludes stock-based compensation, amortization of acquired intangible assets, impairment of intangible assets, costs from acquisitions, restructurings and other infrequently occurring  items, non-cash deferred tax provision and litigation and related settlement costs. comScore reports non-GAAP EPS (diluted), which uses non-GAAP net income in lieu of GAAP net income in calculating earnings per share. comScore uses adjusted EBITDA, which adjusts net income (loss) for amortization of intangible assets, impairment of intangible assets, stock-based compensation, costs related to acquisitions, restructuring and other infrequently occurring items, settlement of litigation, gains or losses on dispositions, pro forma adjustments to exclude lines of business that have been acquired during the periods presented, current cash tax provision, depreciation, and interest expense (income), net. Adjusted EBITDA margin is the quotient of Adjusted EBITDA divided by total revenue.

The company believes that excluding certain costs from non-GAAP net income, non-GAAP EPS, and adjusted EBITDA provides a meaningful indication to investors of the expected on-going operating performance of the company. Specifically as it relates to acquisitions and restructurings, the exclusion of these costs reflects the expected benefits realized or to be realized upon the integration of acquired entities into comScore, and the realized benefits of the restructurings. In addition, the company believes that adjusting for the pro forma effect of the expected sale of the company's Mobile Operator Analytics Division promotes better comparability of the company's financial statements.

comScore disposed of its Mobile Operator Analytics Division in May 2015. comScore has presented 2014 and 2015 historical non-GAAP pro forma revenue to exclude the Company's Mobile Operator Analytics Division as of the beginning of 2014.  Historical adjusted pro forma EBITDA also excludes the estimated effects of operations related to the Mobile Operator Analytics Division products.  comScore also disposed of its Digital Analytix (or DAx) division in January 2016. Expected non-GAAP pro forma revenue and adjusted pro forma EBITDA do not include any effects of operations related to DAx after December 31, 2015.  In each case, these pro forma presentations are provided for the purposes of consistent presentation and are based on management's estimates of the revenue and results of operations of such products and divisions.

Whenever comScore uses such historical non-GAAP financial measures, it provides a reconciliation of historical non-GAAP financial measures to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measure included in the financial tables accompanying this release. Although the company provides a reconciliation of historical non-GAAP financial measures, due to the high variability and difficulty in predicting certain items that affect net income, such as tax rates and stock price, comScore is unable to provide a complete reconciliation of adjusted EBITDA to net income on a forward-looking basis without unreasonable efforts. However, a reconciliation of forward-looking adjusted EBITDA to GAAP income (loss) before income taxes is set forth in the attachment to this press release.

These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. The use of certain non-GAAP financial measures requires management to make estimates and assumptions regarding amounts of assets and liabilities and the amounts of revenue and expense during the reporting periods. comScore bases its estimates on historical experience and assumptions that it believes are reasonable. Actual results could differ from those estimates.

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 as to the development of new products, particularly in cross-media measurement; comScore's expectations as to adoption of new products and services by customers; expectations regarding continued growth of comScore's customer base; expectations as to comScore's strategy, market position, growth in revenue and margin expansion, impact and financial benefits of certain products; expectations regarding the benefits of and performance on relationships, such as those with Spotify, Google and WPP/Kantar; expectations regarding the strategic and financial benefits of certain strategic transactions and acquisitions; such as the recently completed acquisition of Rentrak Corporation and disposition of comScore's Digital Analytix assets; expectations and forecasts of future financial performance, including related growth rates and components thereof and effects of acquisitions; and assumptions related to growth for the fourth quarter and full year of 2015 and beyond. These statements involve risks and uncertainties that could cause comScore's actual results to differ materially, including, but not limited to: comScore's ability to develop new products, particularly in cross-media measurement; comScore's ability to integrate Rentrak's business with its own; comScore's ability to sell new or additional products and attract new customers; comScore's ability to generate strong revenue and margin growth in future periods; comScore's ability to develop new products; comScore's ability to sell additional subscription-based products to customers; comScore's ability to sell additional products and services to existing customers; and the volatility of quarterly results and expectations.

For a detailed discussion of these and other risk factors, please refer to comScore's Annual Report on Form 10-K for the year ended December 31, 2014 and Quarterly Report on Form 10-Q for the three months ended September 30, 2015 and other filings comScore makes from time to time 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.


comScore, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)




Three Months Ended December 31,


Twelve Months Ended December 31,


2015


2014


2015


2014


(unaudited)


(unaudited)


*

Revenue

$

97,669


$

90,103


$

368,817


$

329,151

Cost of revenue (excludes amortization of intangible assets) (1)

31,893


26,303


116,152


97,467

Selling and marketing (1)

26,238


24,734


101,614


103,525

Research and development (1)

14,035


21,172


63,972


60,364

General and administrative (1)

14,634


19,971


71,675


62,923

Amortization of intangible assets

3,844


1,444


13,748


7,230

Impairment of intangible assets


2,780



9,722

Loss on asset disposition



5,226


Settlement of litigation, net

(90)


(80)


(920)


2,700

Total expenses from operations

90,554


96,324


371,467


343,931

Income (loss) from operations

7,115


(6,221)


(2,650)


(14,780)

Interest and other expense, net

(445)


(358)


(1,626)


(1,247)

(Loss) gain from foreign currency

(212)


556


(741)


809

Income (loss) before income tax (provision) benefit

6,458


(6,023)


(5,017)


(15,218)

Income tax (provision) benefit

(2,069)


3,363


(1,745)


5,315

Net income (loss)

$

4,389


$

(2,660)


$

(6,762)


$

(9,903)

Net income (loss) per common share:


Basic

$

0.11


$

(0.08)


$

(0.18)


$

(0.29)

Diluted

$

0.11


$

(0.08)


$

(0.18)


$

(0.29)

Weighted-average number of shares used in per share calculation - common stock:


Basic

38,963,798


33,649,201


37,879,091


33,689,660

Diluted

39,422,834


33,649,201


37,879,091


33,689,660



(1) Amortization of stock-based compensation is included in the line items above as follows:


Cost of revenue

$

1,015


$

1,336


$

5,449


$

4,007

Selling and marketing

$

3,326


$

1,587


$

11,502


$

10,778

Research and development

$

1,099


$

2,030


$

5,630


$

4,610

General and administrative

$

2,526


$

10,578


$

24,402


$

22,578










* Information derived from the audited Consolidated Financial Statements

 


comScore, Inc.

Condensed Consolidated Balance Sheets

(dollars in thousands)



December 31, 2015


December 31, 2014


(Unaudited)


*

Assets




Current assets:





Cash and cash equivalents

$

146,986


$

43,015

Accounts receivable, net of allowances of $2,360 and $2,079, respectively

88,788


98,185

Prepaid expenses and other current assets

20,799


11,015

Assets held for sale

15,522



5,692

Total current assets

272,095


157,907

Property and equipment, net

45,199


42,365

Other non-current assets

929


1,017

Deferred tax assets

32,486


33,345

Intangible assets, net

103,943


15,793

Goodwill

108,590


103,525

Total assets

$

563,242


$

353,952





Liabilities and Stockholders' Equity




Current liabilities:




Accounts payable

$

5,659


$

3,421

Accrued expenses

28,217


37,212

Deferred revenue

79,802


92,013

Deferred rent

1,418


1,738

Capital lease obligations

16,945


13,353

Liabilities held for sale

9,637



3,873

Total current liabilities

141,678


151,610

Deferred rent

8,594


9,738

Deferred revenue

1,445


2,063

Deferred tax liabilities

533


1,182

Capital lease obligations

16,094


13,072

Other long-term liabilities

1,021



1,022

Total liabilities

169,365



178,687

Commitments and contingencies




Stockholders' equity:




Preferred stock


Common stock

40


36

Additional paid-in capital

613,833


324,176

Accumulated other comprehensive loss

(11,480)


(5,591)

Accumulated deficit

(99,838)


(93,076)

Treasury stock

(108,678)


(50,280)

Total stockholders' equity

393,877


175,265

Total liabilities and stockholders' equity

$

563,242


$

353,952






* Information derived from the audited Consolidated Financial Statements

 


comScore, Inc.

Condensed Consolidated Statements of Cash Flows

(dollars in thousands)



Twelve Months Ended December 31,


2015


2014


(unaudited)


*

Operating activities:




Net loss

$

(6,762)


$

(9,903)

Adjustments to reconcile net loss to net cash provided by operating activities:




Depreciation

21,740


17,983

Amortization of intangible assets

13,748


7,230

Impairment of intangible assets


9,722

Provision for bad debts

2,847


2,576

Stock-based compensation

46,983


41,973

Amortization of deferred rent

(1,747)


(1,414)

Deferred tax provision (benefit)

256


(13,064)

Loss on asset disposition

5,226


75

Nonmonetary (income) loss, net

(8,205)


12

Changes in operating assets and liabilities, net of effect of acquisitions:




Accounts receivable

(5,379)


(16,705)

Prepaid expenses and other assets

(1,252)


(3,101)

Accounts payable, accrued expenses, and other liabilities

(8,287)


4,959

Deferred revenue

370


9,118

Deferred rent

344


36

Net cash provided by operating activities

59,882


49,497

Investing activities:




Acquisitions, net of cash acquired

(10,117)


(3,896)

Purchase of property and equipment

(4,552)


(7,649)

Cash paid for asset disposition

(2,535)


Net cash used in investing activities

(17,204)


(11,545)

Financing activities:




Proceeds from the issuance of common stock

204,741


Proceeds from the exercise of stock options

11,623


108

Repurchase of common stock (withholding taxes)

(27,984)


(15,712)

Repurchase of common stock (treasury shares)

(105,916)


(37,171)

Excess tax benefits from stock-based compensation

512


5,757

Principal payments on capital lease obligations

(16,323)


(12,081)

Equity issuance costs

(3,356)


Net cash provided by (used in) financing activities

63,297


(59,099)

Effect of exchange rate changes on cash

(2,004)


(3,633)

Net increase (decrease) in cash and cash equivalents

103,971


(24,780)

Cash and cash equivalents at beginning of period

43,015


67,795

Cash and cash equivalents at end of period

$

146,986


$

43,015







* Information derived from the audited Consolidated Financial Statements

 


Reconciliation of Revenue and Income before Income Taxes to Non-GAAP Revenue,

Non-GAAP Net Income and Adjusted EBITDA

(dollars in thousands, except per share amounts)



Three Months Ended December 31,


Twelve Months Ended December 31,


2015


2014


2015


2014


(unaudited)


 (unaudited)

Revenue

$

97,669


$

90,103


$

368,817


$

329,151

Adjustment to exclude Mobile Operator Analytics Division


(987)


$

(401)



(4,001)

Non-GAAP Revenue (1)

$

97,669


$

89,116


$

368,416


$

325,150







Income (loss) before income taxes

$

6,458


$

(6,023)


$

(5,017)


$

(15,218)

Deferred tax (provision) benefit

(423)


6,951


(256)


13,064

Current tax provision

(1,646)


(3,588)


(1,489)


(7,749)

Net income (loss)

4,389


(2,660)


(6,762)


(9,903)

Amortization of intangible assets

3,844


1,444


13,748


7,230

Impairment of intangible assets


2,780



9,722

Stock-based compensation

7,966


15,531


46,983


41,973

Costs related to acquisitions, restructuring and other infrequently occurring items

2,797


1,151


9,934


5,584

Settlement of litigation, net

(90)


(80)


(920)


2,700

Loss on asset disposition



5,226


Adjustment to exclude Mobile Operator Analytics Division


1,118


1,631


4,637

Non-cash portion of current tax provision related to excess tax benefits from stock-based compensation

(452)


3,529


(452)


5,757

Deferred tax provision (benefit)

423


(6,951)


256


(13,064)

Non-GAAP net income (1)

18,877


15,862


69,644


54,636

Current tax provision

2,098


59


1,941


1,992

Depreciation

5,980


4,798


21,740


17,983

Interest and other expense, net

445


358


1,626


1,247

Adjusted EBITDA (1)

$

27,400


$

21,077


$

94,951


$

75,858

Adjusted EBITDA margin (%) (1)

28.1%


23.7%


25.8%


23.3%









GAAP EPS (diluted)

$

0.11


$

(0.08)


$

(0.18)


$

(0.29)

Non-GAAP EPS (diluted)

$

0.48


$

0.46


$

1.80


$

1.57









Weighted - average number of shares used in per share calculation - common stock
















GAAP EPS (diluted)

39,422,834


33,649,201


37,879,091


33,689,660

Non-GAAP EPS (diluted)

39,422,834


34,597,347


38,699,175


34,698,175













(1) comScore disposed of its Mobile Operator Analytics Division in May 2015. All pro forma  amounts include adjustments to exclude the Mobile Operator Analytics Division and are based on management's estimates of the revenue and results of operations of the aforementioned division.

 


Reconciliation of GAAP Operating Cash Flow to Free Cash Flow

(dollars in thousands)



Three Months Ended December 31,


Twelve Months Ended December 31,


2015


2014


2015


2014


(unaudited)


(unaudited)




Net cash provided by operating activities

$

12,042


$

7,477


$

59,882


$

49,497

Purchase of property and equipment

(1,334)


(1,087)


(4,552)


(7,649)

Free cash flow

$

10,708


$

6,390


$

55,330


$

41,848











 


Revenue and Reconciliation of Income before Income Taxes to Adjusted EBITDA (Guidance)

(dollars in thousands)

Forecasted amounts for the three and twelve month periods ending March 31, 2016 and  December 31, 2016 are based on  the mid-points of the range of guidance provided herein (1)



Three Months Ended March 31,


Full Year December 31,


2016


2015 (1)


2016


2015 (1)


(unaudited)


(unaudited)




Revenue

$

108,000


$

80,206


$

520,000


$

336,638





Income (loss) before income taxes

2,250


(9,403)


(15,200)


(5,121)

Amortization of intangible assets

9,600


811


46,900


11,931

Stock-based compensation

8,600


21,573


40,700


46,080

Gain on sale of Digital Analytix Division

(33,000)



(34,200)


Costs related to acquisitions and divestitures

15,500


1,405


23,800


7,108

Restructuring and other infrequently occurring items

9,000



16,500


2,826

Settlement of litigation, net


(90)



(920)

Depreciation

8,700


4,159


42,800


18,175

Interest and other expense, net

600


392


2,700


1,626

Adjusted EBITDA

$

21,250


$

18,847


$

124,000


$

81,705

Adjusted EBITDA margin (%)

20%


23%


24%


24%













Estimated Q1 2016 and full year 2016 non-GAAP (Diluted) share count is 52.0 million and 56.2 million, respectively.


(1) The three and twelve month periods ending March 31, and December 31, 2015, respectively have been adjusted to exclude the results of operations from the Mobile Operator Analytics Division and Digital Analytix Division.

 


GAAP pre-tax Reconciliation of Revenue and Adjusted EBITDA to Pro Forma Revenue and Pro Forma Adjusted EBITDA (Guidance)

(dollars in thousands)



Three Months Ended March 31,


2016




2015




(unaudited)




Pro Forma


As Reported (1)


Adjustment to Exclude Digital Analytix Division (2)


Pro Forma


Revenue

$

108,000


$

87,084


$

(6,878)


$

80,206

Adjusted EBITDA

$

21,250


$

21,295


$

(2,448)


$

18,847









Adjusted EBITDA margin (%)

20%


24%


36%


23%














Twelve Months Ended December 31,


2016




2015




(unaudited)



Pro Forma


As Reported (1)


Adjustment to Exclude Digital Analytix Division (2) 


Pro Forma


Revenue

$

520,000


$

368,416


$

(31,778)


$

336,638

Adjusted EBITDA

$

124,000


$

94,951


$

(13,246)


$

81,705









Adjusted EBITDA margin (%)

24%


26%


42%


24%












(1) Pro forma revenue and pro forma Adjusted EBTIDA were adjusted to exclude the company's Mobile Operator Analytics Division as presented for three months ended March 31, 2015 and twelve months ended December 31, 2015, respectively.

(2) Pro forma revenue and pro forma Adjusted EBITDA to exclude the Company's Digital Analytix Division.

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SOURCE comScore, Inc.



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