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8-K - 8-K - YuMe Inca13-19155_28k.htm

Exhibit 99.1

 

 

YUME REPORTS SECOND QUARTER 2013 FINANCIAL RESULTS

 

Redwood City, Calif. — August 28, 2013 — YuMe, Inc. (NYSE: YUME), a leading provider of digital video brand advertising solutions, today announced its financial results for the second quarter ended June 30, 2013. Financial highlights include:

 

·                  Revenue of $34.3 million, an increase of 36% from the second quarter of 2012 (Q2 2012);

·                  Gross margin of 46%, unchanged from Q2 2012;

·                  Adjusted EBITDA(1) of $0.7 million, compared to $1.6 million in Q2 2012;

·                  Net loss of $1.1 million, or a $0.23 net loss per share, compared to net income of $0.1 million, or $0.00 net income per share, in Q2 2012.

 

“We continue to see our focus on enabling TV brand advertisers to reach their audience with digital video drive strong quarterly results,” said Jayant Kadambi, chief executive officer of YuMe, Inc. “Our software and data sciences platform approach delivers improved brand results at scale across the fragmented, multi-screen world of professionally-produced digital video. We believe this positions us well to be the perfect digital complement to TV campaigns and to drive continued strong financial performance for our stockholders.”

 

Customer highlights for the quarter include:

 

·                  301 advertising customers, an increase of 26% from 239 in Q2 2012;

·                  Average revenue per advertising customer of $112,000, an increase of 7% year-over-year.

 

Customer highlights for the twelve month period ended June 30, 2013, include:

·                  526 advertising customers, up 30% from 405 for the twelve month period ended June 30, 2012;

·                  Average revenue per advertising customer of $247,000, up 14% from $217,000 for the twelve month period ended June 30, 2012.

 

Business Outlook:

 

Today, the Company is providing the following estimates for its key financial measures for the third quarter and full year 2013:

 

 

 

Q3 2013

 

FY 2013

 

Revenue

 

$34.1 - $35.1 million

 

$154.5 - $157.5 million

 

Adjusted EBITDA(1)

 

$ (2.5) - $ (1.5) million

 

$3.0 - $6.0 million

 

 

Conference Call and Webcast Information:

 

Senior management will host a conference call today at 4:30 p.m. ET to discuss the Company’s results and outlook. The event can be accessed by dialing (877) 941-1427 or (480) 629-9664 (conference ID: 4637043). A replay will be available through Wednesday, September 4 at (800) 406-7325 or (303) 590-3030 (conference ID: 4637043). The live and archived Webcast of the conference call will also be available at http://investors.yume.com.

 


(1)  Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude income tax (expense) benefit, interest, depreciation and amortization, and stock-based compensation. We believe that adjusted EBITDA provides useful information to investors in understanding and evaluating our operating results in the same manner as management and the board of directors. This non-GAAP information is not necessarily comparable to non-GAAP information of other companies. Non-GAAP information should not be viewed as a substitute for, or superior to, net income (loss) prepared in accordance with GAAP as a measure of our profitability or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made.

 

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About YuMe

 

YuMe, Inc. is a leading provider of digital video brand advertising solutions. Its proprietary data-science driven technologies and large audience footprint drive inventory monetization and enable advertisers to reach targeted, brand receptive audiences across a wide range of Internet-connected devices. Designed to serve the specific needs of brand advertising, YuMe’s technology platform simplifies the complexities associated with delivering effective digital video advertising campaigns in today’s highly-fragmented market. YuMe is headquartered in Redwood City, CA with European headquarters in London and nine additional offices worldwide. For more information, visit YuMe.com/pr, follow @YuMeVideo and like YuMe on Facebook. Current YuMe logos can be found at www.yume.com/news/logos.

 

YuMe is a trademark of YuMe. All other brands, products or service names are or may be trademarks or service marks of their respective owners.

 

Forward-Looking Statements

 

This press release contains forward-looking statements, including those in management quotations and under the caption “Business Outlook.” In some cases, you can identify forward-looking statements by the words “may,” “will,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future.  All statements other than statements of historical fact are statements that could be forward-looking statements, including, but not limited to, statements about our growth strategy; our operating results, including revenue, gross margin, net loss and adjusted EBITDA; and market trends, including overall opportunities for digital media advertising and shifting advertising budgets. These forward-looking statements are subject to risks, uncertainties, assumptions and other factors that could cause actual results and the timing of events to differ materially from future results expressed or implied by such forward-looking statements.  Factors that could cause or contribute to such differences include our history of net losses and limited operating history, which make it difficult to evaluate our prospects, our fluctuating quarterly operating results, and our dependence on a limited number of customers in a highly competitive industry.  These and other risk factors are discussed under “Risk Factors” in our Prospectus filed with the U.S. Securities and Exchange Commission (the “SEC”) related to our initial public offering of common stock, and in our future filings and reports with the SEC, including our Form 10-Q for the quarter ended June 30, 2013. The forward-looking statements in this press release are based on information available to YuMe as of the date hereof, and YuMe assumes no obligation to update any forward-looking statements.

 

Non-GAAP Financial Measures

 

To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), we report adjusted EBITDA, which is a non-GAAP financial measure. Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude income tax (expense) benefit, interest, depreciation and amortization, and stock-based compensation. We believe that adjusted EBITDA provides useful information to investors in understanding and evaluating our operating results in the same manner as management and the board of directors. This non-GAAP information is not necessarily comparable to non-GAAP information of other companies. Non-GAAP information should not be viewed as a substitute for, or superior to, net income (loss) prepared in accordance with GAAP as a measure of our profitability or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made.

 

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We have included adjusted EBITDA in this release because it is a key measure used by us and the board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that adjusted EBITDA provides useful information in understanding and evaluating our operating results in the same manner as our management and board of directors.

 

The non-GAAP financial measures included in this press release have been reconciled to the closest corresponding GAAP measure in the table following the financial statements attached to this press release. With respect to expectations under “Business Outlook” section above, reconciliation of adjusted EBITDA guidance to the closest corresponding GAAP measure is not accurately quantifiable on a forward-looking basis due to the high variability, complexity and low visibility with respect to charges excluded from these non-GAAP measures. In particular, the measures and effects of stock-based compensation expense specific to equity compensation awards are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and unpredictable impact on our future GAAP financial results.

 

###

 

Investor Relations

Gary J. Fuges, CFA

ir@yume.com

650-503-7875

 

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YuMe, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

Pro Forma

 

 

 

December 31,

 

June 30,

 

June 30,

 

 

 

2012

 

2013

 

2013(1)

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

27,909

 

$

24,153

 

$

67,050

 

Accounts receivable, net

 

48,067

 

42,557

 

42,557

 

Prepaid expenses and other current assets

 

1,355

 

1,889

 

1,889

 

Total current assets

 

77,331

 

68,599

 

114,496

 

 

 

 

 

 

 

 

 

Property, equipment and software, net

 

5,551

 

5,806

 

5,806

 

Goodwill

 

3,902

 

3,902

 

3,902

 

Intangible assets, net

 

2,847

 

2,440

 

2,440

 

Restricted cash

 

292

 

292

 

292

 

Deposits and other assets

 

691

 

2,166

 

405

 

Total assets

 

$

90,614

 

$

83,205

 

$

124,341

 

 

 

 

 

 

 

 

 

Liabilities, convertible preferred stock, and stockholders’ deficit

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

6,893

 

$

4,341

 

$

4,341

 

Accrued publisher costs

 

12,475

 

10,282

 

10,282

 

Accrued liabilities

 

7,219

 

8,029

 

8,029

 

Deferred revenue, current

 

528

 

225

 

225

 

Notes payable, current

 

185

 

62

 

62

 

Capital leases, current

 

631

 

610

 

610

 

Total current liabilities

 

27,931

 

23,549

 

23,549

 

 

 

 

 

 

 

 

 

Capital leases, noncurrent

 

380

 

92

 

92

 

Other liabilities

 

178

 

165

 

165

 

Deferred tax liability

 

962

 

877

 

877

 

Warrant liability

 

301

 

461

 

 

Total liabilities

 

29,752

 

25,144

 

24,683

 

 

 

 

 

 

 

 

 

Convertible preferred stock

 

76,191

 

76,191

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit:

 

 

 

 

 

 

 

Common stock

 

29

 

29

 

136

 

Additional paid-in-capital

 

6,758

 

8,323

 

125,968

 

Accumulated other comprehensive loss

 

(118

)

(53

)

(53

)

Accumulated deficit

 

(21,998

)

(26,429

)

(26,393

)

Total stockholders’ deficit

 

(15,329

)

(18,130

)

99,658

 

Total liabilities, convertible preferred stock, and stockholders’ deficit

 

$

90,614

 

$

83,205

 

$

124,341

 

 


(1) On August 12, 2013, the Company closed its initial public offering (“IPO”) of common stock in which it sold 5,125,000 shares of common stock and received $40.3 million of net proceeds after deducting underwriting discount, commissions and offering costs of approximately $5.8 million. Upon the closing of the IPO, all of the Company’s outstanding convertible preferred stock (“preferred stock”) automatically converted into 21,840,537 shares of common stock. In addition, the outstanding warrants to purchase  preferred stock automatically converted into warrants to purchase 53,983 shares of common stock, and the warrants to  purchase preferred stock liability of $0.5 million, which includes a $0.04 million adjustment for the change in fair value through August 12, 2013, was reclassified to additional paid-in capital. The pro forma stockholders’ equity, as set forth on the pro forma June 30, 2013 condensed consolidated balance sheet, has been adjusted to reflect: (i) conversion of the Company’s convertible preferred stock, (ii) conversion of the Company’s warrants to purchase convertible preferred stock into warrants to purchase common stock, and the reclassification of such warrants from preferred stock liability to additional paid-in capital, (iii) the sale and issuance of 5,125,000 shares of common stock, and (iv) the receipt of net proceeds upon the closing of the IPO.

 

The Company believes that the pro forma condensed consolidated balance sheet provides material information to investors, as the conversion of the Company’s preferred stock to common stock, conversion of the warrants to purchase convertible preferred stock to common stock warrants and the closing of the IPO occurred on August 12, 2013, and therefore the disclosure of the pro forma condensed consolidated balance sheet provides measures of equity that are comparable to what will be reported by YuMe in its condensed consolidated financial statements for the periods subsequent to and including August 12, 2013.

 

4



 

 

YuMe, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Revenue

 

$

34,320

 

$

25,196

 

$

60,932

 

$

45,265

 

Cost of revenue (1)

 

18,658

 

13,652

 

33,211

 

25,141

 

Gross profit

 

15,662

 

11,544

 

27,721

 

20,124

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Sales and marketing (1)

 

10,893

 

7,958

 

21,110

 

15,060

 

Research and development (1)

 

917

 

523

 

1,917

 

1,175

 

General and administrative (1)

 

4,730

 

2,747

 

8,668

 

5,096

 

Total operating expenses

 

16,540

 

11,228

 

31,695

 

21,331

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

(878

)

316

 

(3,974

)

(1,207

)

Interest and other expense

 

 

 

 

 

 

 

 

 

Interest expense

 

(13

)

(31

)

(32

)

(65

)

Other expense, net

 

(134

)

(8

)

(326

)

(8

)

Total interest and other expense

 

(147

)

(39

)

(358

)

(73

)

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

(1,025

)

277

 

(4,332

)

(1,280

)

Income tax expense

 

(68

)

(150

)

(99

)

(85

)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(1,093

)

$

127

 

$

(4,431

)

$

(1,365

)

Net income (loss) attributable to common shareholders

 

$

(1,093

)

$

 

$

(4,431

)

$

(1,365

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.23

)

$

0.00

 

$

(0.92

)

$

(0.29

)

Diluted

 

$

(0.23

)

$

0.00

 

$

(0.92

)

$

(0.29

)

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

Basic

 

4,854

 

4,749

 

4,841

 

4,638

 

Diluted

 

4,854

 

5,579

 

4,841

 

4,638

 

 


(1)    Stock-based compensation included above:

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Cost of revenue

 

$

31

 

$

48

 

$

61

 

$

73

 

Sales and marketing

 

342

 

400

 

683

 

694

 

Research and development

 

67

 

22

 

137

 

39

 

General and administrative

 

251

 

125

 

455

 

218

 

Total employee stock-based compensation

 

$

691

 

$

595

 

$

1,336

 

$

1,024

 

 

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YuMe, Inc.

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

(In thousands)

(Unaudited)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Net income (loss)

 

$

(1,093

)

$

127

 

$

(4,431

)

$

(1,365

)

Adjustments:

 

 

 

 

 

 

 

 

 

Interest expense

 

13

 

31

 

32

 

65

 

Income tax expense

 

68

 

150

 

99

 

85

 

Depreciation and amortization expense

 

1,024

 

693

 

2,050

 

1,327

 

Stock-based compensation expense

 

691

 

595

 

1,336

 

1,024

 

Total adjustments

 

1,796

 

1,469

 

3,517

 

2,501

 

Adjusted EBITDA

 

$

703

 

$

1,596

 

$

(914

)

$

1,136

 

 

YuMe, Inc.

PRO FORMA NET LOSS AND NET LOSS PER SHARE

(In thousands, except share and per share data)

(Unaudited)

 

 

 

 

Three months

 

 

 

Ended June 30,

 

 

 

2013(1)

 

Net loss

 

$

(1,093

)

Adjustments:

 

 

 

Mark-to-market income

 

36

 

Total net adjustments

 

36

 

Pro forma net loss attributable to common stockholders

 

$

(1,057

)

Pro forma net loss per share attributable to common stockholders:

 

 

 

Basic and diluted

 

$

(0.03

)

Pro forma weighted average number of shares of common stock outstanding:

 

 

 

Basic and diluted

 

31,874

 

 


(1) The pro forma net loss attributable to common stockholders and pro forma net loss per share attributable to common stockholders for the three months ended June 30, 2013 has been adjusted to reflect, as of April 1, 2013: (i) the completion of the Company’s IPO, (ii) conversion of all outstanding shares of the Company’s convertible preferred stock into an aggregate of 21,840,537 shares of common stock, and (iii) conversion of the Company’s warrants to purchase preferred stock into warrants to purchase 53,983 shares of common stock. Pro forma net loss attributable to common stockholders and pro forma net loss per share attributable to common stockholders in the table above includes a $0.04 million adjustment for the change in fair value through August 12, 2013 upon conversion of the warrants to purchase preferred stock to warrants into purchase common stock.

 

The Company believes that the pro forma net loss attributable to common stockholders and pro forma net loss per share attributable to common stockholders provides material information to investors, as the conversion of its preferred stock to common stock, conversion of the warrants to purchase preferred stock to common stock warrants and the closing of the IPO occurred on August 12, 2013, and therefore the disclosure of the pro forma net loss attributable to common stockholders and pro forma net loss per share attributable to common stockholders provides measures of net loss and net loss per share that are comparable to what will be reported by the Company in its condensed consolidated financial statements for the periods subsequent to and including August 12, 2013.

 

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