MCLEAN, Va., May 15, 2014 /PRNewswire/ -- CYREN Ltd.
(NASDAQ: CYRN), a leading provider of integrated cloud-based
security solutions and software-based security technology, today
announced its first quarter 2014 financial results for the period
ending March 31, 2014.
First Quarter 2014 Financial Highlights:
- Revenues in accordance with U.S. Generally Accepted Accounting
Principles (US GAAP) totaled $8.1
million for the first quarter of 2014 compared to
$8.2 million for the sequential
fourth quarter of 2013 and $7.9
million in the first quarter of 2013.
- Non-GAAP revenues totaled $8.1
million for the first quarter of 2014 compared to
$8.4 million for the sequential
fourth quarter of 2013 and $8.1
million in the first quarter of 2013. The difference between
non-GAAP and GAAP revenue is derived from the fact that deferred
revenues consolidated from acquired companies are recorded based on
fair value rather than book value for GAAP purposes.
- GAAP net loss for the first quarter of 2014 was $2.1 million compared to net loss of $7.0 million for the sequential fourth quarter of
2013 and a net loss of $1.3 million
in the first quarter of 2013.
- GAAP loss per basic and diluted share for the first quarter of
2014 was $0.08, compared to a loss of
$0.26 for the sequential fourth
quarter of 2013 and a loss of $0.05
in the first quarter of 2013.
- Non-GAAP net loss for the first quarter 2014 was $1.4 million compared to non-GAAP net loss of
$1.9 million for the sequential
fourth quarter of 2013 and non-GAAP net income of $0.1 million in the first quarter of
2013.
- Non-GAAP loss per basic and diluted share for the first quarter
2014 was $0.05, compared to non-GAAP
loss of $0.07 for the sequential
fourth quarter of 2013 and Non-GAAP earnings per diluted share of
$0.00 in the first quarter of
2013.
- Cash used by operating activities during the quarter was
$2.4 million.
- Cash as of March 31, 2014 was
$2.3 million, compared to
$3.8 million as of December 31, 2013. In April 2014, the company extended its $7.5 million credit facility to April 2015.
"We have made great progress ramping up our new cloud-based
CYREN WebSecurity offering. Since launching the service in
late January, we have added 12 distribution partners across the
globe, including NexTek, a large IT Infrastructure and enterprise
service provider, which is also offering our email SaaS service to
its large network of resellers and small and medium sized
businesses across India," said
Lior Samuelson, CEO and Chairman of
the Board at CYREN. "We are very pleased with the positive feedback
and strong interest that our new offering has garnered among
existing and potential customers and partners, which gives us
confidence in our strategy and growth initiatives."
"Our core detection services business recorded a solid first
quarter performance, marked by several multi-year renewals
including high profile customers in Asia," Samuelson added. "This business
remains very profitable and highly cash generative, supporting our
investments in new products and feature enhancements."
For information regarding the non-GAAP financial measures
discussed in this release, please see "Use of Non-GAAP Financial
Information" and "Reconciliation of Non-GAAP to GAAP Financial
Information."
Business Highlights:
- CYREN received two Stevie® Awards in the first annual
Asia-Pacific Stevie Awards. The recognition follows the company's
recent stream of partnership agreements with software vendors,
service providers and distributors throughout the region. CYREN
WebSecurity was the winner of a Silver Stevie® Award in the "New
Technology Product of the Year" category. Additionally, CYREN
received a Bronze Stevie Award as "Technology Company of the
Year."
- The company published its first annual Security Yearbook, which
offers a comprehensive look back at last year's Internet security
trends. The report also includes a glimpse into upcoming trends for
2014, noting a continued increase in mobile malware, ransomware and
targeted attacks. The CYREN Security Yearbook illustrates the
strength of the company's data capabilities that enable its
partners and end users to remain one step ahead of dangerous
threats.
- Since the beginning of the year, 12 partners have been added
for the CYREN WebSecurity offering globally, including distributors
and resellers in China,
Germany, Russia, India, Israel, the U.S., Ireland, the UK, Italy, Cyprus, Greece and France.
- VCW Security, a leading UK distributor of IT security
products and solutions, became a new CYREN distribution partner.
Under the agreement, VCW Security will offer the CYREN WebSecurity
service via its network of resellers.
- eSafe Solutions, a reseller serving thousands of SMB and
enterprise-sized organizations
throughout Cyprus and Greece, will now offer CYREN
WebSecurity to its large customer base that includes the region's
top academic, banking and government entities.
- MXSweep, a leading European provider of cloud-based security
services based in Ireland, was the
first of the company's beta partners to sign a distribution
agreement. In the first quarter CYREN added a data center in
Ireland to support MXSweep and
other partners in this geography.
- Weskom, a leading Italian IT solutions distributor, became a
new CYREN distribution partner. Under the agreement, Weskom will
offer CYREN WebSecurity both directly and through a network of more
than 10 resellers across Italy.
- Pallas, a German managed security provider, expanded its
partnership with CYREN to also offer its customers CYREN
WebSecurity as a private-labeled service. The new reseller
agreement expands upon Pallas' partnership with the company that
began more than seven years ago through its deployment of security
technologies.
- TTAsia, a leading online messaging reputation and security
services provider headquartered in Hong
Kong became a new CYREN distribution partner. TTAsia will
incorporate CYREN WebSecurity and CYREN Embedded Anti-Virus
technology into its Sentry Email Defense Service (EDS) offered
throughout China.
Business
Outlook
Based on current expectations, the company is reiterating its
financial outlook for the full year 2014. CYREN anticipates
that its core detection business will remain steady, with low
single digit revenue growth during 2014 and that its recently
launched CYREN WebSecurity offering will be incremental to this
growth. The company plans to continue to invest the cash flow from
its core business into its new strategy.
The above outlook is as of the date of this release, and the
company undertakes no obligation to update its estimates in the
future.
Use of Non-GAAP Measures
Non-GAAP financial measures consist of GAAP financial measures
adjusted to exclude: stock-based compensation expenses,
amortization and impairment of acquired intangible assets,
executive termination costs, deferred taxes, acquisition related
costs, and adjustments to earn-out obligations. The purpose of such
adjustments is to give an indication of the company's performance
exclusive of non-cash charges and other items that are considered
by management to be outside of the company's core operating
results. The company's non-GAAP financial measures are not meant to
be considered in isolation or as a substitute for comparable GAAP
measures, and should be read only in conjunction with the company's
consolidated financial statements prepared in accordance with GAAP.
Company management regularly uses supplemental non-GAAP financial
measures internally to understand, manage and evaluate the business
and make operating decisions.
These non-GAAP measures are among the primary factors management
uses in planning for and forecasting future periods. The company
believes this adjustment is useful to investors as a measure of the
ongoing performance of the business. The company believes these
non-GAAP financial measures provide consistent and comparable
measures to help investors understand the company's current and
future operating cash flow performance. These non-GAAP financial
measures may differ materially from the non-GAAP financial measures
used by other companies. Reconciliation between results on a GAAP
and non-GAAP basis is provided in a table immediately following the
Consolidated Statements of Income. The presentation of this
non-GAAP financial information is not intended to be considered in
isolation or as a substitute for the financial information prepared
and presented in accordance with GAAP. Management uses both GAAP
and non-GAAP measures when evaluating the business internally and
therefore felt it important to make these non-GAAP adjustments
available to investors.
Financial Results Conference Call
The company has scheduled a conference call later today,
May 15, 2014, at 10:00 a.m. ET to discuss its first quarter 2014
results.
To participate, please call one of the following
teleconferencing numbers by dialing in at least 10 minutes before
the conference call commences. If you are unable to connect using
the toll-free numbers, please try the international dial-in
number.
US Dial-in Number: 1-877-407-8289
Israel Dial-in Number: 1-80-940-6247
International Dial-in Number: 1-201-689-8341
at:
10:00 a.m. Eastern
Time, 5:00 p.m. Israel
Time
The call will be simultaneously webcast live on the investor
relations section of CYREN's website at
http://www.cyren.com/ir.html.
For those unable to listen to the live call, a webcast replay of
the call will be available from the day after the call in the
investor relations section of CYREN's corporate website.
About CYREN
CYREN is a leading provider of cloud-based
security solutions that deliver powerful protection through global
data intelligence. Regardless of the device or its location,
CYREN's easily deployed web, email, and anti-malware products
deliver uncompromising protection in both embedded and Security as
a Service (SecaaS) deployments. Organizations rely on CYREN's
cloud-based threat detection and proactive security analytics to
provide up-to-date spam classifications, URL categorization and
malware detection services. The CYREN GlobalView™ Cloud Platform
leverages Recurrent Pattern Detection™ technologies to protect more
than 550 million users in 190 countries. CYREN is traded on the
NASDAQ Capital Market and the Tel Aviv Stock Exchange (TASE) under
the trading symbol "CYRN." Visit the GlobalView Security Center or
go to www.CYREN.com.
Blog: blog.cyren.com
Facebook: www.facebook.com/CyrenWeb
LinkedIn: www.linkedin.com/company/cyren
Twitter: twitter.com/CyrenWeb
This press release contains forward-looking statements,
including projections about our business, within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. For example, statements in the
future tense, and statements including words such as "expect,"
"plan," "estimate," "anticipate," or "believe" are forward-looking
statements. These statements are based on information available to
us at the time of the press release; we assume no obligation to
update any of them. The statements in this press release are not
guarantees of future performance and actual results could differ
materially from our current expectations as a result of numerous
factors, including business conditions and growth or deterioration
in the internet security market, technological developments,
products offered by competitors, availability of qualified staff,
and technological difficulties and resource constraints encountered
in developing new products, as well as those risks described in the
company's Annual Reports on Form 20-F and reports on Form 6-K,
which are available through www.sec.gov.
U.S. Investor Contact
Monica Gould
The Blueshirt
Group
+1 212 871
3927
monica@blueshirtgroup.com
Israel Investor Contact
Iris
Lubitch
EffectiveIR
+972 54
2528007
iris@EffectiveIR.co.il
Company Contact:
Mike
Myshrall, Interim
CFO
CYREN
703.760.3320
mike.myshrall@CYREN.com
Media Contact
Matthew Zintel
Zintel Public
Relations
+1 281 444
1590
matthew.zintel@zintelpr.com
CYRN-F
CYREN
LTD.
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands
of U.S. dollars, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
March
31
|
|
2014
|
|
2013
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
Revenues
|
$
8,090
|
|
$
7,925
|
|
|
|
|
Cost of
revenues
|
2,022
|
|
1,778
|
|
|
|
|
Gross
profit
|
6,068
|
|
6,147
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development, net
|
2,900
|
|
2,264
|
|
|
|
|
Sales and
marketing
|
2,992
|
|
2,765
|
|
|
|
|
General and
administrative
|
2,267
|
|
2,215
|
|
|
|
|
Total operating
expenses
|
8,159
|
|
7,244
|
|
|
|
|
Operating
loss
|
(2,091)
|
|
(1,097)
|
|
|
|
|
Other
income
|
200
|
|
-
|
|
|
|
|
Financial
expense, net
|
(296)
|
|
(185)
|
|
|
|
|
Net loss before
taxes
|
(2,187)
|
|
(1,282)
|
|
|
|
|
Tax
benefit
|
45
|
|
23
|
|
|
|
|
Net
loss
|
|
|
|
$
(2,142)
|
|
$
(1,259)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share -
basic
|
$
(0.08)
|
|
$
(0.05)
|
|
|
|
|
Loss per share -
diluted
|
$
(0.08)
|
|
$
(0.05)
|
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
|
Basic
|
26,519
|
|
25,934
|
|
|
|
|
Diluted
|
26,519
|
|
25,934
|
CYREN
LTD.
|
|
|
|
|
RECONCILIATION OF
SELECTED GAAP MEASURES TO NON GAAP MEASURES
|
(in thousands
of U.S. dollars, except per share amounts)
|
|
|
|
|
|
Three months
ended
|
March
31
|
|
2014
|
|
2013
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
GAAP operating
loss
|
$
(2,091)
|
|
$
(1,097)
|
Stock-based
compensation (1)
|
304
|
|
314
|
Other acquisition
related costs (2)
|
-
|
|
142
|
Amortization of
intangible assets (3)
|
424
|
|
436
|
Adjustment to
earn-out liabilities (4)
|
-
|
|
(3)
|
Executive
terminations (6)
|
139
|
|
165
|
Adjustment to
deferred revenues (7)
|
52
|
|
196
|
Re organization
expenses (9)
|
75
|
|
-
|
|
|
|
|
Non-GAAP operating
profit
|
$
(1,097)
|
|
$
153
|
|
|
|
|
GAAP net
loss
|
$
(2,142)
|
|
$
(1,259)
|
Stock-based
compensation (1)
|
304
|
|
314
|
Other acquisition
related costs (2)
|
-
|
|
142
|
Amortization of
intangible assets (3)
|
424
|
|
436
|
Adjustment to
earn-out liabilities (4)
|
93
|
|
170
|
Income taxes
(5)
|
(101)
|
|
(92)
|
Executive
terminations (6)
|
139
|
|
165
|
Adjustment to
deferred revenues (7)
|
52
|
|
196
|
Settlement agreements
(8)
|
(200)
|
|
-
|
Reorganization
expenses (9)
|
75
|
|
-
|
|
|
|
|
Non-GAAP net income
(loss)
|
$
(1,356)
|
|
$
72
|
|
|
|
|
GAAP loss per share
(dilluted)
|
(0.08)
|
|
(0.05)
|
Stock-based
compensation (1)
|
0.01
|
|
0.01
|
Other acquisition
related costs (2)
|
0.00
|
|
0.00
|
Amortization of
intangible assets (3)
|
0.02
|
|
0.02
|
Adjustment to
earn-out liabilities (4)
|
0.00
|
|
0.01
|
Income taxes
(5)
|
(0.00)
|
|
(0.01)
|
Executive
terminations (6)
|
0.01
|
|
0.01
|
Adjustment to
deferred revenues (7)
|
0.00
|
|
0.01
|
Settlement agreements
(8)
|
(0.01)
|
|
0.00
|
Reorganization
expenses (9)
|
0.00
|
|
0.00
|
|
|
|
|
Non-GAAP earnings
(loss) per share (dilluted)
|
(0.05)
|
|
0.00
|
|
|
|
|
Numbers of shares
used in computing non-GAAP earnings per share (diluted)
|
26,519
|
|
25,934
|
CYREN
LTD.
|
|
RECONCILIATION OF
SELECTED GAAP MEASURES TO NON GAAP MEASURES
|
(in thousands of U.S.
dollars, except per share amounts)
|
|
|
Three months
ended
|
|
March
31
|
|
2014
|
|
2013
|
|
Unaudited
|
|
Unaudited
|
|
(1) Stock-based
compensation
|
|
|
|
Cost of
revenues
|
$
12
|
|
$
12
|
Research and
development
|
73
|
|
58
|
Sales and
marketing
|
72
|
|
59
|
General and
administrative
|
147
|
|
185
|
|
|
|
|
|
$
304
|
|
$
314
|
(2) Other
acquisition related costs
|
|
|
|
General and
administrative
|
$
-
|
|
$
142
|
|
|
|
|
|
$
-
|
|
$
142
|
(3) Amortization
of intangible assets
|
|
|
|
Cost of
revenues
|
$
197
|
|
$
188
|
Sales and
marketing
|
227
|
|
248
|
|
|
|
|
|
$
424
|
|
$
436
|
(4) Adjustment to
earn-out liabilities
|
|
|
|
General and
administrative
|
$
-
|
|
$
(3)
|
Financial expenses,
net
|
93
|
|
173
|
|
|
|
|
|
$
93
|
|
$
170
|
(5) Income
taxes
|
|
|
|
Deferred tax asset -
tax benefit
|
$
(101)
|
|
$
(92)
|
|
|
|
|
|
$
(101)
|
|
$
(92)
|
(6) Executive
terminations
|
|
|
|
General and
administrative
|
$
139
|
|
$
165
|
|
|
|
|
|
$
139
|
|
$
165
|
(7) Adjustment to
deferred revenues
|
|
|
|
Revenues
|
$
52
|
|
$
196
|
|
|
|
|
|
$
52
|
|
$
196
|
(8) Settlement
agreements
|
|
|
|
Financial expenses,
net
|
$
(200)
|
|
$
-
|
|
|
|
|
|
$
(200)
|
|
$
-
|
|
|
|
|
(9) Reorganization
expenses
|
|
|
|
General and
administrative
|
$
75
|
|
$
-
|
|
|
|
|
|
$
75
|
|
$
-
|
CYREN
LTD.
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in thousands of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
March
31
|
|
December
31
|
|
2014
|
|
2013
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
Assets
|
|
|
|
Current Assets:
|
|
|
|
Cash and cash
equivalents
|
$
2,327
|
|
$
3,757
|
Trade receivables,
net
|
5,939
|
|
5,178
|
Deferred tax
assets
|
48
|
|
48
|
Prepaid expenses and
other receivables
|
1,765
|
|
1,988
|
Total current
assets
|
10,079
|
|
10,971
|
|
|
|
|
Lease
deposits
|
72
|
|
74
|
Severance pay
fund
|
687
|
|
819
|
Property and
equipment, net
|
2,835
|
|
2,674
|
Goodwill and
intangible assets, net
|
36,008
|
|
36,395
|
Total long-term
assets
|
39,602
|
|
39,962
|
Total
assets
|
$
49,681
|
|
$
50,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
Current Liabilities:
|
|
|
|
Credit
line
|
$
4,297
|
|
$
3,245
|
Trade
payables
|
1,164
|
|
859
|
Employees and payroll
accruals
|
2,296
|
|
3,102
|
Accrued expenses and
other liabilities
|
979
|
|
1,366
|
Earn-out
consideration
|
1,430
|
|
1,428
|
Deferred
revenues
|
4,877
|
|
4,499
|
Total current
liabilities
|
15,043
|
|
14,499
|
|
|
|
|
Deferred
revenues
|
1,469
|
|
1,646
|
Deferred tax
liability
|
2,652
|
|
2,749
|
Earn-out
consideration
|
2,955
|
|
2,857
|
Accrued severance
pay
|
765
|
|
873
|
Total long-term
liabilities
|
7,841
|
|
8,125
|
|
|
|
|
Shareholders'
equity
|
26,797
|
|
28,309
|
Total liabilities and
shareholders' equity
|
$
49,681
|
|
$
50,933
|
CYREN
LTD.
|
|
|
|
|
CONDENSED
CONSOLIDATED CASH FLOW DATA
|
(in thousands of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
March
31
|
|
2014
|
|
2013
|
Cash flows from
operating activities:
|
Unaudited
|
|
Unaudited
|
|
|
|
|
Net loss
|
$
(2,142)
|
|
$
(1,259)
|
|
|
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation
|
321
|
|
219
|
Stock based
compensation
|
304
|
|
330
|
Amortization of
intangible assets
|
424
|
|
389
|
Accrued interest,
accretion of discount and exchange rate differences on credit
line
|
52
|
|
-
|
Accretion and change
in fair value of earn-out liabilities, net
|
93
|
|
170
|
|
|
|
|
Changes in assets and
liabilities:
|
|
|
|
Trade
receivables
|
(741)
|
|
(383)
|
Deferred
taxes
|
(101)
|
|
(92)
|
Prepaid expenses and
other receivables
|
225
|
|
(853)
|
Trade
payables
|
168
|
|
(386)
|
Employees and payroll
accruals, accrued expenses and other liabilities
|
(1,216)
|
|
(578)
|
Deferred
revenues
|
202
|
|
2,279
|
Accrued severance
pay, net
|
24
|
|
13
|
Net cash used in
operating activities
|
(2,387)
|
|
(151)
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Change in long-term
lease deposits
|
2
|
|
2
|
Purchase of property
and equipment
|
(346)
|
|
(581)
|
Net cash used in
investing activities
|
(344)
|
|
(579)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from credit
line
|
1,000
|
|
-
|
Proceeds from options
exercised
|
295
|
|
486
|
Net cash provided
by financing activities
|
1,295
|
|
486
|
Effect of exchange
rate changes on cash and cash equivalents
|
6
|
|
(20)
|
Decrease in cash
and cash equivalents
|
(1,436)
|
|
(244)
|
Cash and cash
equivalents at the beginning of the period
|
3,757
|
|
5,137
|
Cash and cash
equivalents at the end of the period
|
$
2,327
|
|
$
4,873
|
SOURCE CYREN