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| 8-K - FORM 8-K RE 2012-Q4 EARNINGS - Support.com, Inc. | form8k.htm |
EXHIBIT 99.1
Support.com Reports Fourth Quarter and 2012 Financial Results
REDWOOD CITY, CA – February 13, 2013 - Support.com, Inc. (NASDAQ: SPRT), a leading provider of cloud-based technology services and software designed to create new revenue streams and improve customer experience, today reported unaudited financial results for its fourth quarter ended December 31, 2012.
Q4 Financial Summary
For the fourth quarter of 2012, total revenue was $18.9 million compared to $15.0 million in the fourth quarter of 2011 and $18.2 million in the third quarter of 2012.
On a GAAP basis, income from continuing operations for the fourth quarter of 2012 was $1.2 million, or $0.02 per share, compared to a loss of $4.2 million, or $(0.09) per share, in the fourth quarter of 2011 and income of $298,000, or $0.01 per share, in the third quarter of 2012.
Non-GAAP income from continuing operations for the fourth quarter of 2012 was $2.9 million, or $0.06 per share, compared to a loss of $2.8 million, or $(0.06) per share, in the fourth quarter of 2011 and income of $1.8 million, or $0.04 per share, in the third quarter of 2012.
At December 31, 2012 cash, cash equivalents and investments were $56.3 million compared to $51.6 million at September 30, 2012.
2012 Financial Summary
Total revenue for 2012 was $72.0 million compared to $53.8 million in 2011.
On a GAAP basis, loss from continuing operations for 2012 was $5.5 million, or $(0.11) per share, compared to a loss of $18.5 million, or $(0.38) per share, in 2011.
Non-GAAP income from continuing operations for 2012 was $935,000, or $0.02 per share, compared to a loss of $12.5 million, or $(0.26) per share, in 2011.
Non-GAAP results exclude stock-based compensation expense, amortization of intangible assets and other, restructuring and impairment charges, acquisition expense, other non-recurring items and tax expense associated with acquired goodwill. These items impacted results from continuing operations by $1.7 million in the fourth quarter of 2012, $1.4 million in the fourth quarter of 2011 and $1.5 million in the third quarter of 2012. On an annual basis, these items impacted results from continuing operations by $6.5 million in 2012 and $6.0 million in 2011. A reconciliation of GAAP to non-GAAP results is presented in the tables below.
“We finished 2012 strong, with record revenue, profitability and cash generation,” said Josh Pickus, President and CEO. “In 2013, our focus will be on maintaining and enhancing operating performance, building out new initiatives in SaaS and SMB, and extending our market leadership.”
Recent Company Highlights
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Revenue growth of 34% year over year
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Full year 2012 non-GAAP profitability
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2012 net increase in cash, cash equivalents and investments of $3.3 million
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First SaaS customer US Tech Support in production
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SMB partnerships with AppDirect and OnForce
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Tablet SKU gains traction in retail
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New version of SUPERAntiSpyware® released; enterprise license customers added
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Conference Call
Support.com will host a conference call discussing the Company's fourth quarter and full year 2012 results on Wednesday, February 13, 2013 starting at 4:30 p.m. ET (1:30 p.m. PT). The live call may be accessed by dialing (877) 388-8486 (domestic) or (408) 427-3864 (international) and referencing passcode 88124558. A live audio webcast and replay of the call will be available at the Investor Relations section of Support.com's website at http://www.support.com/investors/events.
About Support.com
Support.com, Inc. (NASDAQ: SPRT) is a leading provider of cloud-based technology services and software. We help leading brands create new revenue streams and deepen customer loyalty through programs that enhance their customers' technology experience. Our solution includes a comprehensive Service Delivery Platform, mobile and desktop apps, a scalable workforce of technology specialists and proven expertise in program design and execution. Our partners include many of the nation's leading communications providers, retailers and technology companies. For more information, please visit us at: http://www.support.com.
Support.com, Inc. is an Equal Opportunity Employer. For more information, visit http://www.support.com/about/careers.
Copyright © 2013 Support.com, Inc. All rights reserved. Support.com and SUPERAntiSpyware are trademarks or registered trademarks of Support.com, Inc. in the U.S. and other countries.
Note on Forward-Looking Statements
Statements made in this document that are not historical facts are "forward-looking statements" and accordingly involve risks and uncertainties that could cause actual results to differ materially from those described herein. Forward-looking statements include, for example, all statements relating to projected financial performance (including without limitation statements involving projections of revenue, margin, income (loss), earnings (loss) per share, cash usage or generation, capital structure, and other financial items); the plans and objectives of management for future operations, partnerships, products, services or investments; and future performance in economic and other terms. The potential risks and uncertainties that could cause results to differ materially include, among others, our ability to retain and grow major partnerships, our ability to market and sell software and services to consumers and small businesses, our ability to market and sell our service delivery platform on a SaaS basis, our ability to maintain and grow revenue, our ability to scale and manage our workforce and our ability to control expenses and achieve desired margins. These and other risks are detailed in Support.com's reports filed with the Securities and Exchange Commission, including without limitation its latest Annual Report on Form 10-K and its latest quarterly report on Form 10-Q, copies of which may be obtained from www.sec.gov. Support.com does not intend to update this information to reflect future events or circumstances, and disclaims any obligation to do so except as may be required by law.
Disclosure Regarding Non-GAAP Financial Measures
Support.com has excluded stock-based compensation expense, amortization of intangible assets and other, restructuring and impairment charges, acquisition expense, other non-recurring items and tax expense associated with acquired goodwill from its GAAP results in order to determine the non-GAAP financial measures of income (loss) from continuing operations and income (loss) from continuing operations per share referenced in this document. We believe that the non-GAAP measures, when viewed in addition to and not in lieu of our reported GAAP results, assist investors in understanding our results of operations.
A. Stock-based compensation expense. Management excludes stock-based compensation expense when evaluating its operating performance because such expense does not require cash settlement and because such expense is not used by management to assess the performance of the Company's business. Stock-based compensation expense was $1.6 million in the fourth quarter of 2012, compared to $957,000 in the fourth quarter of 2011 and $911,000 in the third quarter of 2012.
B. Amortization of intangible assets and other. Management excludes acquisition-related intangible asset amortization and related charges when evaluating its operating performance because the Company does not acquire businesses on a predictable cycle and excluding such charges enables more consistent evaluation of the Company's operating performance. Management also excludes such charges because they represent non-cash expenses. Amortization of intangible assets and other was $368,000 in the fourth quarter of 2012, compared to $330,000 in the fourth quarter of 2011 and $397,000 in the third quarter of 2012.
C. Restructuring and impairment charges. Management excludes restructuring and impairment charges when evaluating its operating performance because the Company does not undertake restructurings on a predicable basis and excluding such charges enables more consistent evaluation of the Company's operating performance. Restructuring and impairment charges were zero in the fourth quarter of 2012, compared to zero in the fourth quarter of 2011 and $72,000 in the third quarter of 2012.
D. Acquisition expense. Management excludes acquisition expense such as legal fees and advisor fees when evaluating its operating performance because the Company does not acquire businesses on a predictable cycle and excluding such expense enables more consistent evaluation of the Company's operating performance. Acquisition expense was zero in the fourth quarter of 2012, compared to $5,000 in the fourth quarter of 2011 and $1,000 in the third quarter of 2012.
E. Other non-recurring items. Management excludes non-recurring items, that generally do not require cash settlement, when evaluating its operating performance because the Company does not incur such expenses or obtain such benefits on a predictable basis and exclusion of such expenses or benefits enables more consistent evaluation of the Company’s operating performance. Other non-recurring items resulted in a benefit of $293,000 in the fourth quarter of 2012, compared to zero in the fourth quarter of 2011 and an expense of $86,000 in the third quarter of 2012.
F. Tax expense associated with acquired goodwill. The Company is required to record a deferred tax liability and the related tax expense that results from the amortization for income tax purposes of acquired goodwill. Management excludes tax expense associated with acquired goodwill when evaluating its operating performance because the Company does not acquire businesses on a predictable cycle and excluding such expense enables more consistent evaluation of the Company's operating performance. Tax expense associated with acquired goodwill was $88,000 in the fourth quarter of 2012, compared to $67,000 in the fourth quarter of 2011 and $69,000 in the third quarter of 2012.
The Company believes that non-GAAP measures have significant limitations in that they do not reflect all of the amounts associated with the Company's financial results as determined in accordance with GAAP and that these measures should only be used to evaluate the Company's financial results in conjunction with the corresponding GAAP measures. In addition, the exclusion of the items indicated above from the non-GAAP financial measures presented does not indicate an expectation by management that such items will not be incurred in subsequent periods.
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SUPPORT.COM, INC.
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GAAP CONDENSED CONSOLIDATED BALANCE SHEETS
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(in thousands)
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(unaudited)
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December 31,
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September 30,
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December 31,
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2012
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(1) | 2012 | 2011 | (2) | ||||||||||||||||
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Assets
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Current assets:
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Cash, cash equivalents and short-term investments
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$ | 56,350 | $ | 51,587 | $ | 51,902 | ||||||||||||||
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Accounts receivable, net
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9,689 | 9,785 | 10,284 | |||||||||||||||||
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Prepaid expenses and other current assets
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1,359 | 1,565 | 1,068 | |||||||||||||||||
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Total current assets
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67,398 | 62,937 | 63,254 | |||||||||||||||||
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Long-term investment
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- | - | 1,111 | |||||||||||||||||
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Property and equipment, net
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591 | 670 | 461 | |||||||||||||||||
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Purchased technology, net
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62 | 82 | 144 | |||||||||||||||||
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Goodwill
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14,240 | 14,240 | 13,621 | |||||||||||||||||
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Intangible assets, net
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4,775 | 5,126 | 5,670 | |||||||||||||||||
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Other assets
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1,193 | 940 | 735 | |||||||||||||||||
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Total assets
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$ | 88,259 | $ | 83,995 | $ | 84,996 | ||||||||||||||
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Liabilities and Stockholders' Equity
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Current liabilities:
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Accounts payable and accrued compensation
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$ | 2,053 | $ | 3,011 | $ | 2,872 | ||||||||||||||
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Other accrued liabilities
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3,969 | 4,477 | 4,491 | |||||||||||||||||
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Short-term deferred revenue
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6,618 | 5,971 | 4,723 | |||||||||||||||||
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Total current liabilities
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12,640 | 13,459 | 12,086 | |||||||||||||||||
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Long-term deferred revenue
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35 | 139 | 489 | |||||||||||||||||
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Other long-term liabilities
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1,421 | 1,422 | 1,086 | |||||||||||||||||
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Total liabilities
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14,096 | 15,020 | 13,661 | |||||||||||||||||
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Stockholders' equity:
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Common stock
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5 | 5 | 5 | |||||||||||||||||
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Additional paid-in-capital
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242,032 | 237,984 | 233,977 | |||||||||||||||||
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Accumulated other comprehensive loss
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(1,501 | ) | (1,343 | ) | (1,698 | ) | ||||||||||||||
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Accumulated deficit
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(166,373 | ) | (167,671 | ) | (160,949 | ) | ||||||||||||||
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Total stockholders' equity
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74,163 | 68,975 | 71,335 | |||||||||||||||||
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Total liabilities and stockholders' equity
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$ | 88,259 | $ | 83,995 | $ | 84,996 | ||||||||||||||
Note 1: Amounts are subject to completion of managements and its independent registered public accounting firm's customary closing and review procedures.
Note 2: Derived from audited consolidated financial statements for the year ended December 31, 2011.
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SUPPORT.COM, INC.
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GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(in thousands, except per share amounts)
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(unaudited)
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Three Months Ended
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Year Ended December 31,
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December 31, 2012
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(3) |
September 30, 2012
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December 31, 2011
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2012 | (3) | 2011 | (2) | |||||||||||||||||||||||||
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Revenue:
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Services
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$ | 15,344 | $ | 14,769 | $ | 11,124 | $ | 57,622 | $ | 37,248 | ||||||||||||||||||||||
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Software and other
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3,533 | 3,407 | 3,880 | 14,332 | 16,591 | |||||||||||||||||||||||||||
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Total revenue
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18,877 | 18,176 | 15,004 | 71,954 | 53,839 | |||||||||||||||||||||||||||
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Cost of revenue:
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Cost of services (4)
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8,648 | 8,815 | 8,585 | 37,343 | 29,919 | |||||||||||||||||||||||||||
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Cost of software and other (4)
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278 | 312 | 449 | 1,421 | 1,744 | |||||||||||||||||||||||||||
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Total cost of revenue
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8,926 | 9,127 | 9,034 | 38,764 | 31,663 | |||||||||||||||||||||||||||
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Gross profit
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9,951 | 9,049 | 5,970 | 33,190 | 22,176 | |||||||||||||||||||||||||||
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Operating expenses:
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Amortization of intangible assets and other
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368 | 397 | 330 | 1,522 | 866 | |||||||||||||||||||||||||||
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Research and development (4)
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1,652 | 1,643 | 1,599 | 6,773 | 6,057 | |||||||||||||||||||||||||||
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Sales and marketing (4)
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3,377 | 3,789 | 5,509 | 18,285 | 21,791 | |||||||||||||||||||||||||||
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General and administrative (4)
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3,572 | 2,897 | 2,705 | 12,234 | 12,005 | |||||||||||||||||||||||||||
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Total operating expenses
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8,969 | 8,726 | 10,143 | 38,814 | 40,719 | |||||||||||||||||||||||||||
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Income (loss) from operations
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982 | 323 | (4,173 | ) | (5,624 | ) | (18,543 | ) | ||||||||||||||||||||||||
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Interest income and other, net
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71 | 93 | 83 | 297 | 455 | |||||||||||||||||||||||||||
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Income (loss) from continuing operations, before income taxes
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1,053 | 416 | (4,090 | ) | (5,327 | ) | (18,088 | ) | ||||||||||||||||||||||||
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Income tax provision (benefit)
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(145 | ) | 118 | 106 | 208 | 401 | ||||||||||||||||||||||||||
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Income (loss) from continuing operations, after income taxes
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1,198 | 298 | (4,196 | ) | (5,535 | ) | (18,489 | ) | ||||||||||||||||||||||||
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Income (loss) from discontinued operations, net of income taxes
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101 | (7 | ) | (153 | ) | 111 | (151 | ) | ||||||||||||||||||||||||
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Net income (loss)
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$ | 1,299 | $ | 291 | $ | (4,349 | ) | $ | (5,424 | ) | $ | (18,640 | ) | |||||||||||||||||||
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Income (loss) from continuing operations, after income taxes
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Basic
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$ | 0.02 | $ | 0.01 | $ | (0.09 | ) | $ | (0.11 | ) | $ | (0.38 | ) | |||||||||||||||||||
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Diluted
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$ | 0.02 | $ | 0.01 | $ | (0.09 | ) | $ | (0.11 | ) | $ | (0.38 | ) | |||||||||||||||||||
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Income (loss) from discontinued operations, net of income taxes
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Basic
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$ | 0.00 | $ | (0.00 | ) | $ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | |||||||||||||||||||
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Diluted
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$ | 0.00 | $ | (0.00 | ) | $ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | |||||||||||||||||||
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Shares used in computing per share amounts:
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Basic
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49,475 | 48,707 | 48,351 | 48,798 | 48,288 | |||||||||||||||||||||||||||
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Diluted
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51,872 | 50,326 | 48,351 | 48,798 | 48,288 | |||||||||||||||||||||||||||
Note 3: Amounts are subject to completion of managements and its independent registered public accounting firm's customary closing and review procedures.
Note 4: Includes stock-based compensation expense, restructuring and impairment charges, acquisition expense and other non-recurring items, as follows:
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Three Months Ended
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Year Ended December 31,
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December 31, 2012
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September 30, 2012
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December 31, 2011
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2012
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2011
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Cost of revenue:
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Cost of services
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$ | 83 | $ | 86 | $ | 75 | $ | 353 | $ | 337 | ||||||||||
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Cost of software and other
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2 | 3 | 16 | 26 | 29 | |||||||||||||||
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Operating expenses:
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Research and development
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199 | 252 | 271 | 1,019 | 816 | |||||||||||||||
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Sales and marketing
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111 | 94 | 138 | 623 | 896 | |||||||||||||||
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General and administrative
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1,191 | 635 | 462 | 2,926 | 2,703 | |||||||||||||||
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Total
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$ | 1,586 | $ | 1,070 | $ | 962 | $ | 4,947 | $ | 4,781 | ||||||||||
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SUPPORT.COM, INC.
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RECONCILIATION OF GAAP FINANCIAL RESULTS TO NON-GAAP FINANCIAL MEASURES
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(in thousands, except per share amounts)
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(unaudited)
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Three Months Ended
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Year Ended December 31,
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December 31, 2012
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September 30, 2012
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December 31, 2011
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2012
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2011
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GAAP cost of revenue
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$ | 8,926 | $ | 9,127 | $ | 9,034 | $ | 38,764 | $ | 31,663 | ||||||||||
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Stock-based compensation expense (Cost of revenue portion only)
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(85 | ) | (89 | ) | (91 | ) | (380 | ) | (274 | ) | ||||||||||
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Restructuring and impairment charges (Cost of revenue portion only)
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- | - | - | 1 | (93 | ) | ||||||||||||||
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Non-GAAP cost of revenue
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$ | 8,841 | $ | 9,038 | $ | 8,943 | $ | 38,385 | $ | 31,296 | ||||||||||
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GAAP operating expenses
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$ | 8,969 | $ | 8,726 | $ | 10,143 | $ | 38,814 | $ | 40,719 | ||||||||||
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Stock-based compensation expense (Excl. cost of revenue portion)
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(1,501 | ) | (822 | ) | (866 | ) | (4,145 | ) | (3,494 | ) | ||||||||||
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Amortization of intangible assets and other
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(368 | ) | (397 | ) | (330 | ) | (1,522 | ) | (866 | ) | ||||||||||
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Restructuring and impairment charges (Excl. cost of revenue portion)
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- | (72 | ) | - | (244 | ) | (377 | ) | ||||||||||||
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Acquisition expense
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- | (1 | ) | (5 | ) | (36 | ) | (543 | ) | |||||||||||
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Other non-recurring items
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- | (86 | ) | - | (143 | ) | - | |||||||||||||
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Non-GAAP operating expenses
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$ | 7,100 | $ | 7,348 | $ | 8,942 | $ | 32,724 | $ | 35,439 | ||||||||||
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GAAP income tax provision (benefit)
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$ | (145 | ) | $ | 118 | $ | 106 | $ | 208 | $ | 401 | |||||||||
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Tax expense associated with acquired goodwill
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(88 | ) | (69 | ) | (67 | ) | (294 | ) | (337 | ) | ||||||||||
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Other non-recurring items
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293 | - | - | 293 | - | |||||||||||||||
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Non-GAAP income tax provision (benefit)
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$ | 60 | $ | 49 | $ | 39 | $ | 207 | $ | 64 | ||||||||||
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GAAP income (loss) from continuing operations, after income taxes
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$ | 1,198 | $ | 298 | $ | (4,196 | ) | $ | (5,535 | ) | $ | (18,489 | ) | |||||||
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Stock-based compensation expense
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1,586 | 911 | 957 | 4,525 | 3,768 | |||||||||||||||
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Amortization of intangible assets and other
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368 | 397 | 330 | 1,522 | 866 | |||||||||||||||
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Restructuring and impairment charges
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- | 72 | - | 243 | 470 | |||||||||||||||
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Acquisition expense
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- | 1 | 5 | 36 | 543 | |||||||||||||||
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Other non-recurring items
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(293 | ) | 86 | - | (150 | ) | - | |||||||||||||
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Tax expense associated with acquired goodwill
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88 | 69 | 67 | 294 | 337 | |||||||||||||||
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Total impact of Non-GAAP exclusions
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1,749 | 1,536 | 1,359 | 6,470 | 5,984 | |||||||||||||||
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Non-GAAP income (loss) from continuing operations, after income taxes
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$ | 2,947 | $ | 1,834 | $ | (2,837 | ) | $ | 935 | $ | (12,505 | ) | ||||||||
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Income (loss) from continuing operations, after income taxes
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Basic - GAAP
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$ | 0.02 | $ | 0.01 | $ | (0.09 | ) | $ | (0.11 | ) | $ | (0.38 | ) | |||||||
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Basic - Non-GAAP
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$ | 0.06 | $ | 0.04 | $ | (0.06 | ) | $ | 0.02 | $ | (0.26 | ) | ||||||||
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Diluted - GAAP
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$ | 0.02 | $ | 0.01 | $ | (0.09 | ) | $ | (0.11 | ) | $ | (0.38 | ) | |||||||
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Diluted - Non-GAAP
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$ | 0.06 | $ | 0.04 | $ | (0.06 | ) | $ | 0.02 | $ | (0.26 | ) | ||||||||
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Shares used in computing per share amounts (GAAP)
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Basic
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49,475 | 48,707 | 48,351 | 48,798 | 48,288 | |||||||||||||||
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Diluted
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51,872 | 50,326 | 48,351 | 48,798 | 48,288 | |||||||||||||||
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Shares used in computing per share amounts (Non-GAAP)
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Basic
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49,475 | 48,707 | 48,351 | 48,798 | 48,288 | |||||||||||||||
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Diluted
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51,872 | 50,326 | 48,351 | 50,273 | 48,288 | |||||||||||||||
The adjustments above reconcile the Companys GAAP financial results to the non-GAAP financial measures used by the Company. The Companys non-GAAP financial measures exclude stock-based compensation expense, amortization of intangible assets and other, restructuring and impairment charges, acquisition expense, other non-recurring items and tax expense associated with acquired goodwill. The Company believes that presentation of these non-GAAP items provides meaningful supplemental information to investors, when viewed in conjunction with, and not in lieu of, the Companys GAAP results. However, the non-GAAP financial measures have not been prepared under a comprehensive set of accounting rules or principles. Non-GAAP information should not be considered in isolation from, or as a substitute for, information prepared in accordance with GAAP. Moreover, there are material limitations associated with the use of non-GAAP financial measures. See the text of this press release for more information on non-GAAP financial measures.
2012 Amounts are subject to completion of managements and its independent registered public accounting firm's customary closing and review procedures.
Contact Information:
Investor Contact
Carolyn Bass and Jacob Moelter
Market Street Partners
(415) 445-3235
sprt@marketstreetpartners.com
Media Contact
Seth Geisler
Martin Levy Public Relations, Inc.
(858) 610-9860
seth@martinlevypr.com