CHICAGO, Nov. 7, 2018 /PRNewswire/ -- Cision Ltd.
(NYSE: CISN), a leading global provider of software and services to
public relations and marketing communications professionals, today
reported financial results for the quarter ended September 30, 2018.
All data presented below is compared to the third quarter of
2017, unless otherwise noted.
Third Quarter 2018 Financial Highlights
- Revenue increased 11.0% to $177.2
million
- Revenue, excluding the impact from purchase accounting,
increased 10.7% to $177.5
million
- Operating income increased 2.4% to $14.2
million
- Net loss decreased 87.0% to $6.0
million
- Adjusted EBITDA increased 9.9% to $62.7
million
- Adjusted net income increased 47.0% to $26.6 million
- Adjusted net income per share increased 33.3% to $0.20
"We are pleased to have delivered another solid quarter of
financial results," 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, executing our strategic and operational plans,
and driving toward our long-term financial goals. This focus
resulted in third quarter pro forma organic revenue growth of 2.1%
after adjusting for non-core revenues and the impact of currency,
an approximate 160 basis-point increase from the prior year's third
fiscal quarter."
Third Quarter Business Statistics and Operational
Highlights
- Americas revenues increased 8.8% to $122.6 million
- EMEA revenues increased 15.6% to $46.6
million
- APAC revenues increased 19.8% to $8.1
million
- Non-core revenues declined 41.2% to $1.0
million
- Average pro forma subscription customers increased 2.8% to
approximately 41,700
- Average annualized pro forma revenue per subscription customer,
excluding the impact of currency, increased 1.2% to approximately
$11,200
- Customers that purchased services from us on a transaction
basis decreased 6.6% to approximately 38,200
- Average pro forma revenue per customer per quarter that
purchased services from us on a transaction basis, excluding the
impact of currency, increased 5.4% to approximately $1,400
- Cross-sell bookings of software, distribution and insights in
the United States increased 130.3%
to $2.2 million
- Cision Communication Cloud ® platform customers at September 30, 2018 were approximately 9,400
Long-Term Debt
As of September 30, 2018, we had
approximately $974.7 million of
outstanding dollar-denominated term loans and approximately €247.5
million of outstanding Euro-denominated term loans. In addition to
the $3.3 million in quarterly
amortization payments during the third quarter, we further reduced
our outstanding dollar-denominated term loan by $10.0 million through a voluntary prepayment
pursuant to the terms of our 2017 First Lien Credit Facility.
On October 22, 2018, we
completed a repricing of our First Lien Credit Facility. The
repricing reduced the interest rate on revolving borrowings and USD
borrowings from LIBOR plus 3.25% to LIBOR plus 2.75%, and reduced
the interest rate on EUR borrowings from EURIBOR plus 3.50% to
EURIBOR plus 3.00%. We estimate that the 50 basis point reduction
on USD and EUR borrowings will reduce our annual cash interest
costs by approximately $6.3 million.
"We are pleased to have concluded this repricing transaction on
such beneficial terms," said Jack
Pearlstein, Cision's Chief Financial Officer. "The repricing
will provide us with incremental annual cash interest savings and
represents another step in our ongoing effort to reduce interest
expense, drive increased cash flow and, by extension, drive
incremental value for our shareholders."
Subscription and Transaction Customer Trends
Our average pro forma subscription customers, average annualized
pro forma revenue per subscription customer, pro forma number of
customers that purchased services from us on a transaction basis,
and average pro forma revenue per customer that purchased services
from us on a transaction basis appear below for the most recent
five fiscal quarters. All of the figures below have been adjusted
to exclude the impact of currency.
|
Q3 2017
|
Q4 2017
|
Q1 2018
|
Q2 2018
|
Q3 2018
|
Q3 2018
compared to
Q3 2017
|
|
|
|
|
|
|
|
Average pro forma
subscription customers
|
40,532
|
40,628
|
40,252
|
41,249
|
41,661
|
2.8%
|
|
|
|
|
|
|
|
Average annualized
pro forma revenue per subscription customer
|
$11,101
|
$11,227
|
$11,153
|
$11,186
|
$11,237
|
1.2%
|
|
|
|
|
|
|
|
Pro forma transaction
customers
|
40,829
|
41,670
|
40,216
|
41,172
|
38,152
|
(6.6%)
|
|
|
|
|
|
|
|
Average pro forma
revenue per transaction customer
|
$1,286
|
$1,405
|
$1,382
|
$1,454
|
$1,356
|
5.4%
|
Updated Full Year 2018 Outlook
Our updated outlook for the full year ending December 31, 2018 appears below (all figures in
millions, except per share amounts). These estimates are based on a
number of assumptions that management believes to be reasonable and
reflect the Company's expectations as of the date of this release.
Actual results may differ materially from these estimates as a
result of various factors, and the Company refers you to the
cautionary language regarding "Forward Looking Statements" included
in this press release when considering this information.
|
Previous
|
|
Updated
|
Revenue
|
$722 -
$730
|
|
$724 -
$728
|
Revenue, excluding
the impact from purchase accounting
|
$724 -
$732
|
|
$725 -
$729
|
Net income
|
($6) - $6
|
|
($12.0) -
($8.0)
|
Adjusted
EBITDA
|
$249 -
$253
|
|
$250 -
$253
|
Adjusted net
income
|
$106 -
$109
|
|
$106 -
$109
|
Adjusted net income
per diluted share
|
$0.83 -
$0.85
|
|
$0.83 -
$0.85
|
Pro-forma fully
diluted weighted average shares outstanding
|
128.3
|
|
128.8
|
Additionally, for the full year ending December 31, 2018, we expect (all figures in
millions):
|
Previous
|
|
Updated
|
Depreciation
expense
|
$30 - $32
|
|
$30 - $32
|
Amortization
expense
|
$105 -
$107
|
|
$104 -
$106
|
Amortization expense
included in cost of revenue
|
$23 - $24
|
|
$23 - $24
|
Interest
expense
|
$78 - $80
|
|
$77 - $79
|
Debt extinguishment
costs
|
$4 - $5
|
|
$4 - $5
|
Interest expense, net
of debt extinguishment costs
|
$74 - $76
|
|
$73 - $75
|
Cash interest
expense
|
$64 - $66
|
|
$64 - $66
|
Stock-based
compensation
|
$4 - $5
|
|
$4 - $5
|
Capital expenditures,
inclusive of capitalized software development
|
$34 - $36
|
|
$33 - $35
|
The updated outlook above assumes three-month LIBOR of
approximately 2.5% and three-month EURIBOR of approximately 0.0%.
The above outlook also incorporates a change from the prior quarter
with respect to our exchange rate assumptions for the fourth
quarter of 2018. This change in our exchange rate assumption for
the British Pound, the Euro and the Canadian Dollar reduced our
revenue outlook for the fourth quarter of 2018 by approximately
$1.0 million, reduced our Adjusted
EBITDA outlook for the fourth quarter of 2018 by approximately
$0.4 million, and reduced our
Adjusted net income per diluted share outlook for the fourth
quarter of 2018 by $0.01. On
September 13, 2018, we issued
2,000,000 earn-out shares to Canyon Holdings (Cayman), L.P.
("Cision Owner") as consideration for our merger with Capitol
Acquisition Corp. III. This issuance increased our weighted average
shares outstanding during the third quarter of 2018 by
approximately 390,000 shares and will increase our weighted average
shares outstanding for the fourth quarter of 2018 by 2,000,000
shares. This share issuance does not reduce our Adjusted net income
per diluted share for the third quarter of 2018 and reduces our
Adjusted net income per diluted share outlook for the full year
2018 by approximately $0.01.
Excluding the impact of the change in our exchange rate assumptions
and our issuance of 2,000,000 earn-out shares to Cision Owner, our
updated revenue outlook, including the impact from purchase
accounting would have been $726
million to $730 million, our
updated Adjusted EBITDA outlook would have been $251 million to $253
million, and our updated Adjusted net income per diluted
share outlook would have been $0.84
to $0.86. Our previous and updated
assumptions for the British Pound, the Euro and the Canadian Dollar
appear below:
|
Previous
|
|
Updated
|
GBP to USD
|
1.30
|
|
1.28
|
EUR to USD
|
1.16
|
|
1.14
|
CAD to USD
|
0.77
|
|
0.76
|
We plan to adopt Accounting Standards Codification Topic 606
("ASC 606") on a modified retrospective basis, effective
December 31, 2018. We are in the
process of determining the potential impact of adopting this new
standard, which could have a significant impact on our fourth
quarter and full year 2018 financial results. Additionally, our
outlook for 2018 excludes the impact of any future acquisitions,
divestitures, voluntary prepayments of our 2017 First Lien Credit
Facility, future refinancings or repricings of our 2017 First Lien
Credit Facility, the adoption of ASC 606 or other unanticipated
events. See discussion of non-GAAP financial measures below in this
release.
Third Quarter 2018 Conference Call Details
As previously announced, we will hold a conference call to
review our third quarter 2018 financial results on Wednesday, November 7th at 5:00 pm EST. To hear the live event, visit the
Cision investor website at http://investors.cision.com, or dial
1-877-443-4809 (participant dial in toll free) or 1-412-317-5235
(participant dial in International). The conference call will be
simultaneously webcast on the Investor Relations section of our
website: http://investors.cision.com
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. 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
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
release. 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 4,000 employees with offices in 19 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 September
30, 2018 and December 31, 2017
|
(in
thousands, except per share and share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
84,192
|
|
$
148,654
|
|
Accounts receivable,
net
|
113,821
|
|
113,008
|
|
Prepaid expenses and
other current assets
|
21,426
|
|
19,896
|
|
|
|
|
|
Total current
assets
|
219,439
|
|
281,558
|
Property and
equipment, net
|
54,032
|
|
53,578
|
Other intangible
assets, net
|
406,515
|
|
456,291
|
Goodwill
|
|
|
1,179,597
|
|
1,136,403
|
Other
assets
|
|
6,429
|
|
7,528
|
|
|
|
|
|
Total
assets
|
$
1,866,012
|
|
$
1,935,358
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current portion of
long-term debt
|
$
13,251
|
|
$
13,349
|
|
Accounts
payable
|
12,560
|
|
13,327
|
|
Accrued compensation
and benefits
|
25,718
|
|
25,873
|
|
Other accrued
expenses
|
75,128
|
|
73,483
|
|
Current portion of
deferred revenue
|
140,493
|
|
140,351
|
|
|
|
|
|
Total current
liabilities
|
267,150
|
|
266,383
|
Long-term debt, net
of current portion
|
1,206,313
|
|
1,266,121
|
Deferred revenue, net
of current portion
|
1,258
|
|
1,412
|
Deferred tax
liability
|
65,068
|
|
62,617
|
Other
liabilities
|
20,778
|
|
22,456
|
|
|
|
|
|
Total
liabilities
|
1,560,567
|
|
1,618,989
|
Stockholders'
equity:
|
|
|
|
|
Preferred stock,
$0.0001 par value, 20,000,000 shares authorized; no shares
issued and outstanding at September 30,
2018 and December 31, 2017
|
-
|
|
-
|
|
Common stock, $0.0001
par value, 480,000,000 shares authorized; 132,713,555 and
122,634,922 shares issued and
outstanding at September 30, 2018 and December 31, 2017,
respectively
|
13
|
|
12
|
|
Additional paid-in
capital
|
795,668
|
|
771,813
|
|
Accumulated other
comprehensive loss
|
(55,907)
|
|
(35,111)
|
|
Accumulated
deficit
|
(434,329)
|
|
(420,345)
|
|
|
|
|
|
Total stockholders'
equity
|
305,445
|
|
316,369
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$
1,866,012
|
|
$
1,935,358
|
Cision Ltd. and
its Subsidiaries
|
Condensed
Consolidated Statements of Operations and Comprehensive
Loss
|
(in
thousands, except per share and share amounts)
|
(Unaudited)
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenue
|
$
177,236
|
|
$
159,729
|
|
$
544,004
|
|
$
462,678
|
Cost of
revenue
|
69,177
|
|
53,287
|
|
200,212
|
|
147,571
|
|
|
Gross
profit
|
108,059
|
|
106,442
|
|
343,792
|
|
315,107
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
27,367
|
|
27,931
|
|
85,345
|
|
83,231
|
|
Research and
development
|
7,292
|
|
5,661
|
|
22,282
|
|
16,679
|
|
General and
administrative
|
39,002
|
|
36,127
|
|
126,762
|
|
117,819
|
|
Amortization of
intangible assets
|
20,167
|
|
22,829
|
|
60,681
|
|
66,306
|
|
|
Total operating costs
and expenses
|
93,828
|
|
92,548
|
|
295,070
|
|
284,035
|
|
|
Operating
income
|
14,231
|
|
13,894
|
|
48,722
|
|
31,072
|
|
|
|
|
|
|
|
|
|
|
Non operating income
(expense):
|
|
|
|
|
|
|
|
|
Foreign exchange
gains (losses)
|
2,196
|
|
802
|
|
10,277
|
|
(1,832)
|
|
Interest and other
income, net
|
380
|
|
177
|
|
472
|
|
2,450
|
|
Interest
expense
|
(19,785)
|
|
(23,063)
|
|
(59,947)
|
|
(96,306)
|
|
Loss on
extinguishment of debt
|
-
|
|
(51,872)
|
|
(2,432)
|
|
(51,872)
|
|
|
Total non operating
loss
|
(17,209)
|
|
(73,956)
|
|
(51,630)
|
|
(147,560)
|
|
|
Loss before income
taxes
|
(2,978)
|
|
(60,062)
|
|
(2,908)
|
|
(116,488)
|
Provision for
(benefit from) income taxes
|
3,070
|
|
(13,653)
|
|
10,016
|
|
(27,938)
|
|
|
Net loss
|
(6,048)
|
|
(46,409)
|
|
(12,924)
|
|
(88,550)
|
Other comprehensive
income (loss) - foreign currency
translation adjustments
|
(2,479)
|
|
13,371
|
|
(20,796)
|
|
35,965
|
|
|
Comprehensive
loss
|
$
(8,527)
|
|
$
(33,038)
|
|
$
(33,720)
|
|
$
(52,585)
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
Basic and
Diluted
|
$
(0.05)
|
|
$
(0.38)
|
|
$
(0.10)
|
|
$
(1.47)
|
Weighted average
shares outstanding used in
computing per share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
Diluted
|
131,104,859
|
|
120,584,316
|
|
127,507,314
|
|
60,120,689
|
Cision Ltd. and
its Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows
|
For the Nine
Months Ended September 30, 2018 and September 30,
2017
|
(in
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
(12,924)
|
|
$
(88,550)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
100,186
|
|
103,392
|
|
Non-cash interest
charges and amortization of debt discount and deferred financing
costs
|
10,158
|
|
62,824
|
|
Equity-based
compensation expense
|
3,713
|
|
2,944
|
|
Provision for
doubtful accounts
|
3,972
|
|
2,247
|
|
Deferred income
taxes
|
3,437
|
|
(29,970)
|
|
Unrealized currency
translation losses (gains)
|
(10,338)
|
|
1,551
|
|
Gain on sale of
business
|
-
|
|
(1,785)
|
|
Other
|
86
|
|
(171)
|
|
Changes in operating
assets and liabilities, net of effects of acquisitions and
disposal:
|
|
|
-
|
|
|
Accounts
receivable
|
967
|
|
7,018
|
|
|
Prepaid expenses and
other current assets
|
(1,133)
|
|
1,072
|
|
|
Other
assets
|
(726)
|
|
113
|
|
|
Accounts
payable
|
(1,721)
|
|
(2,110)
|
|
|
Accrued compensation
and benefits
|
(321)
|
|
(10,207)
|
|
|
Other accrued
expenses
|
(7,320)
|
|
(4,123)
|
|
|
Deferred
revenue
|
1,767
|
|
(3,593)
|
|
|
Other
liabilities
|
(14)
|
|
(2,310)
|
|
|
|
Net cash provided by
operating activities
|
89,789
|
|
38,342
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Purchases of property
and equipment
|
(10,325)
|
|
(7,746)
|
Software development
costs
|
(12,026)
|
|
(11,365)
|
Acquisitions of
businesses, net of cash received of $2,711 and $12,355
|
(66,463)
|
|
(54,992)
|
Proceeds from
disposal of business
|
-
|
|
23,675
|
Change in restricted
cash
|
5
|
|
607
|
|
|
|
Net cash used in
investing activities
|
(88,809)
|
|
(49,821)
|
|
|
|
|
|
|
|
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 $10,091
|
-
|
|
1,275,634
|
Repayments of term
credit facility
|
(59,989)
|
|
(1,494,501)
|
Payments on capital
lease obligations
|
-
|
|
(171)
|
Payments of deferred
financing costs
|
(294)
|
|
-
|
Proceeds from merger
and recapitalization
|
-
|
|
305,210
|
Payment of contingent
consideration
|
(2,873)
|
|
-
|
|
|
|
Net cash provided by
(used in) financing activities
|
(63,156)
|
|
50,757
|
Effect of exchange
rate changes on cash and cash equivalents
|
(2,286)
|
|
2,319
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
(64,462)
|
|
41,597
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
Beginning of
period
|
148,654
|
|
35,135
|
End of the
period
|
$
84,192
|
|
$
76,732
|
|
|
|
|
|
|
|
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 U.S. 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, Adjusted net income per diluted share and
organic revenue growth. We define organic revenue growth as the
change in our total revenue excluding non-core revenues, calculated
on a constant currency basis after giving pro forma effect to all
acquisitions as though they occurred at the beginning of the
applicable period. Additionally, we believe that the presentation
of non-GAAP measures provides information that is useful to
investors, research analysts, investment banks and lenders under
our 2017 First Lien Credit Facility 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
September 30, 2018
|
|
Three Months Ended
September 30, 2017
|
|
Change
|
|
Nine Months
Ended September 30, 2018
|
|
Nine Months
Ended September 30, 2017
|
|
Change
|
Net loss
|
$
(6.0)
|
|
$
(46.4)
|
|
$
40.4
|
|
$
(12.9)
|
|
$
(88.6)
|
|
$
75.6
|
Depreciation and
amortization
|
33.3
|
|
36.1
|
|
(2.8)
|
|
100.2
|
|
103.4
|
|
(3.2)
|
Interest expense and
loss on extinguishment of debt
|
19.8
|
|
74.9
|
|
(55.1)
|
|
62.4
|
|
148.2
|
|
(85.8)
|
Provision for
(benefit from) income taxes
|
3.1
|
|
(13.7)
|
|
16.7
|
|
10.0
|
|
(27.9)
|
|
38.0
|
EBITDA (1)
|
50.1
|
|
51.0
|
|
(0.9)
|
|
159.6
|
|
135.1
|
|
24.5
|
Acquisition and
offering related costs
|
12.8
|
|
5.2
|
|
7.6
|
|
32.6
|
|
25.5
|
|
7.1
|
Gain on sale of
business
|
-
|
|
-
|
|
-
|
|
-
|
|
(1.8)
|
|
1.8
|
Stock-based
compensation
|
1.5
|
|
1.0
|
|
0.5
|
|
3.7
|
|
2.9
|
|
0.8
|
Deferred revenue
reduction from purchase accounting
|
0.3
|
|
0.6
|
|
(0.4)
|
|
1.5
|
|
0.8
|
|
0.7
|
Sponsor fees and
expenses
|
-
|
|
-
|
|
-
|
|
-
|
|
0.3
|
|
(0.3)
|
Unrealized
translation (gain) loss
|
(2.1)
|
|
(0.8)
|
|
(1.2)
|
|
(10.3)
|
|
1.6
|
|
(11.9)
|
Adjusted EBITDA
(2)
|
$
62.7
|
|
$
57.0
|
|
$
5.7
|
|
$
187.1
|
|
$
164.4
|
|
$
22.8
|
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 amounts)
|
(Unaudited)
|
|
|
Three Months Ended
September 30, 2018
|
|
Three Months Ended
September 30, 2017
|
|
Change
|
|
Nine Months Ended
September 30, 2018
|
|
Nine Months Ended
September 30, 2017
|
|
Change
|
Net loss
|
$
(6.0)
|
|
$
(46.4)
|
|
$
40.4
|
|
$
(12.9)
|
|
$
(88.6)
|
|
$
75.6
|
Provision for
(benefit from) income taxes
|
3.1
|
|
(13.7)
|
|
16.7
|
|
10.0
|
|
(27.9)
|
|
38.0
|
Acquisition and
offering related costs
|
12.8
|
|
5.2
|
|
7.6
|
|
32.6
|
|
25.5
|
|
7.1
|
Gain on sale of
business
|
-
|
|
-
|
|
-
|
|
-
|
|
(1.8)
|
|
1.8
|
Stock-based
compensation expense
|
1.5
|
|
1.0
|
|
0.5
|
|
3.7
|
|
2.9
|
|
0.8
|
Deferred revenue
reduction from purchase accounting
|
0.3
|
|
0.6
|
|
(0.4)
|
|
1.5
|
|
0.8
|
|
0.7
|
Amortization related
to acquired intangible assets
|
26.0
|
|
29.2
|
|
(3.1)
|
|
78.1
|
|
84.5
|
|
(6.4)
|
Non-recurring
interest and loss on extinguishment of debt
|
0.4
|
|
51.9
|
|
(51.5)
|
|
4.3
|
|
55.9
|
|
(51.6)
|
Sponsor fees and
expenses
|
-
|
|
-
|
|
-
|
|
-
|
|
0.3
|
|
(0.3)
|
Unrealized
translation (gain) loss
|
(2.1)
|
|
(0.8)
|
|
(1.2)
|
|
(10.3)
|
|
1.6
|
|
(11.9)
|
Adjusted Income
before income taxes
|
36.0
|
|
27.0
|
|
9.0
|
|
106.9
|
|
53.2
|
|
53.8
|
Less: Income tax at a
26% rate for 2018, and a 33% rate for 2017
|
(9.4)
|
|
(8.9)
|
|
(0.4)
|
|
(27.8)
|
|
(17.5)
|
|
(10.3)
|
Adjusted net income
(3)
|
$
26.6
|
|
$
18.1
|
|
$
8.5
|
|
$
79.1
|
|
$
35.6
|
|
$
43.5
|
Pro forma
fully-diluted weighted average shares outstanding
|
131,105
|
|
120,584
|
|
10,521
|
|
127,507
|
|
95,335
|
|
32,172
|
Adjusted net income
per diluted share (4)
|
$0.20
|
|
$0.15
|
|
$0.05
|
|
$0.62
|
|
$0.37
|
|
$0.24
|
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
September 30,
2018
|
|
Three Months
Ended
September 30,
2017
|
|
Change
|
|
Nine Months
Ended
September 30,
2018
|
|
Nine Months
Ended
September 30,
2017
|
|
Change
|
Net cash provided by
operating activities
|
$
26.2
|
|
$
20.2
|
|
$
5.9
|
|
$
89.8
|
|
$
38.3
|
|
$
51.4
|
Acquisition and
offering related costs
|
12.8
|
|
5.2
|
|
7.6
|
|
32.6
|
|
25.5
|
|
7.1
|
Adjusted net cash
provided by operating activities (5)
|
$
39.0
|
|
$
25.5
|
|
$
13.5
|
|
$
122.4
|
|
$
63.9
|
|
$
58.5
|
|
|
(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 Corp. 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. Using our average share price of $16.46 for
the three months ended September 30, 2018, our fully-diluted
pro forma weighted average shares outstanding for the three months
ended September 30, 2018 would have been approximately
131.7 million had we incorporated the dilutive effects of the stock
options and restricted units.
|
|
|
(5)
|
Cision defines
Adjusted net cash provided by operating activities as net cash
provided by operating activities adjusted for acquisition and
offering related costs.
|
Investor Contact:
Jack
Pearlstein
Chief Financial Officer
Jack.Pearlstein@cision.com
Media Contact:
Nick
Bell
Vice President, Marketing Communications and Content
CisionPR@cision.com
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