COMSCORE, INC. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - May 15, 2015

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Exhibit 99.1
Unaudited Pro Forma Financial Information
On May 11, 2015, comScore, Inc. (the “Company” or “comScore”) completed the sale of certain assets related to its mobile operator analytics business CSWS to K2HS Analytix, LLC, a Delaware limited liability company (“Buyer”), in exchange for Buyer’s assumption of certain liabilities of the Company (such transaction, the “Disposition”). The mobile operator analytics business assets include the Company’s Subscriber Analytix line of products as well as the technology and intellectual property underlying those products and the accounts receivable associated with those products.
The following unaudited pro forma consolidated financial statements have been prepared to give effect to the completed Disposition:
•
The unaudited pro forma consolidated balance sheet at March 31, 2015 gives effect to the Disposition as if it had occurred on March 31, 2015. The unaudited pro forma consolidated balance sheet is derived from the unaudited financial statements of comScore at March 31, 2015.
•
The unaudited pro forma consolidated statements of operations for the year ended December 31, 2014 and for the three months ended March 31, 2015 gives effect to the Disposition as if it had occurred on January 1, 2014. The unaudited pro forma consolidated statements of operations are derived from the Company’s audited historical financial statements for the year ended December 31, 2014 and unaudited historical financial statements for the three months ended March 31, 2015.
The unaudited pro forma consolidated financial statements should be read in conjunction with the historical consolidated financial statements and related notes of comScore and the section entitled Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in (i) comScore’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed on February 20, 2015 and (ii) comScore’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed on May 5, 2015. The unaudited pro forma consolidated financial statements are not intended to represent or be indicative of the consolidated results of operations or financial condition of comScore that would have been reported had the Disposition been completed as of the dates presented, and should not be construed as representative of the future consolidated results of operations or financial condition of the Company.




















COMSCORE, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2015
(In thousands)

 
 
comScore, Inc.
 
Mobile Operator Analytics Business
 
 
 
Pro Forma
Assets
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
40,854

 
$
(1,998
)
 
(a)
 
$
38,856

Accounts receivable, net
 
83,502

 
—

 
 
 
$
83,502

Prepaid expenses and other current assets
 
13,551

 
—

 
 
 
$
13,551

Deferred tax assets
 
19,718

 
—

 
 
 
$
19,718

Assets held for sale
 
5,602

 
(5,602
)
 
(b)
 
$
—

Total current assets
 
163,227

 
(7,600
)
 
 
 
155,627

Property and equipment, net
 
45,370

 
—

 
 
 
45,370

Other non-current assets
 
969

 
—

 
 
 
969

Long-term deferred tax assets
 
12,683

 
—

 
 
 
12,683

Intangible assets, net
 
13,797

 
—

 
 
 
13,797

Goodwill
 
101,290

 
—

 
 
 
101,290

Total assets
 
$
337,336

 
$
(7,600
)
 
 
 
$
329,736

Liabilities and Equity
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
Accounts payable
 
$
6,232

 
$
637

 
(c)
 
$
6,869

Accrued expenses
 
26,059

 
—

 
 
 
$
26,059

Deferred revenues
 
90,535

 
—

 
 
 
$
90,535

Deferred rent
 
1,645

 
—

 
 
 
$
1,645

Capital lease obligations
 
14,239

 
—

 
 
 
$
14,239

Current liabilities held for sale
 
4,150

 
(4,150
)
 
(c)
 
$
—

Total current liabilities
 
142,860

 
(3,513
)
 
 
 
139,347

Deferred rent, long-term
 
9,433

 
—

 
 
 
9,433

Deferred revenue, long-term
 
1,126

 
—

 
 
 
1,126

Deferred tax liabilities, long-term
 
1,058

 
—

 
 
 
1,058

Capital lease obligations, long-term
 
13,023

 
—

 
 
 
13,023

Other long-term liabilities
 
751

 
—

 
 
 
751

Total liabilities
 
168,251

 
(3,513
)
 
 
 
164,738

Commitments and contingencies
 
 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
 
 
 
Common stock
 
36

 
—

 
 
 
36

Additional paid-in capital
 
333,442

 
—

 
 
 
333,442

Accumulated other comprehensive income
 
(9,956
)
 
—

 
 
 
(9,956
)
Accumulated deficit
 
(100,401
)
 
(4,087
)
 
(d)
 
(104,488
)
Treasury Stock
 
(54,036
)
 
—

 
 
 
(54,036
)
Total stockholders’ equity
 
169,085

 
(4,087
)
 
 
 
164,998

Total liabilities and stockholders’ equity
 
$
337,336

 
$
(7,600
)
 
 
 
$
329,736

 
 
 
 
 
 
 
 
 





COMSCORE, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2014
(In thousands)

 
 
comScore, Inc.
 
Mobile Operator Analytics Business
 
Pro Forma
Revenues
 
$
329,151

 
$
4,001

(e)
$
325,150

 
 
 
 
 
 
 
Cost of revenues (excludes amortization of intangible assets resulting from acquisitions shown below)
 
97,467

 
5,375

(e)
92,092

Selling and marketing
 
103,525

 
2,262

(e)
101,263

Research and development
 
60,364

 
1,517

(e)
58,847

General and administrative
 
62,923

 
65

(e)
62,858

Amortization of intangible assets
 
7,230

 
1,293

(e)
5,937

Impairment of intangible assets
 
9,722

 
9,722

(e)
—

Settlement of litigation
 
2,700

 
—

 
2,700

Total expenses from operations
 
343,931

 
20,234

 
323,697

 
 
 
 
 
 
 
(Loss) income from operations
 
(14,780
)
 
(16,233
)
 
1,453

Interest and other expense, net
 
(1,247
)
 
(6
)
(e)
(1,241
)
Gain (loss) from foreign currency transactions
 
809

 
(99
)
(e)
908

 
 
 
 
 
 
 
(Loss) income before income tax provision
 
(15,218
)
 
(16,338
)
 
1,120

Income tax benefit (provision)
 
5,315

 
5,735

(f)
(420
)
 
 
 
 
 
 
 
Net (loss) income
 
$
(9,903
)
 
$
(10,603
)
 
$
700

 
 
 
 
 
 
 
Net (loss) income per common share:
 
 
 
 
 
 
Basic
 
(0.29
)
 
 
 
0.02

Diluted
 
(0.29
)
 
 
 
0.02

Weighted-average number of shares used in per
 
 
 
 
 
 
share calculation - common stock:
 
 
 
 
 
 
Basic
 
33,689,660

 
 
 
33,689,660

Diluted
 
33,689,660

 
 
 
34,698,175















COMSCORE, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 2015
(In thousands)

 
 
comScore, Inc.
 
Mobile Operator Analytics Business
 
Pro Forma
Revenues
 
$
87,329

 
$
245

(e)
$
87,084

 
 
 
 
 
 
 
Cost of revenues (excludes amortization of intangible assets resulting from acquisitions shown below)
 
24,892

 
734

(e)
24,158

Selling and marketing
 
27,331

 
354

(e)
26,977

Research and development
 
18,006

 
234

(e)
17,772

General and administrative
 
25,001

 
—

 
25,001

Amortization of intangible assets
 
1,379

 
—

 
1,379

Settlement of litigation
 
(90
)
 
—

 
(90
)
Total expenses from operations
 
96,519

 
1,322

 
95,197

 
 
 
 
 
 
 
Loss from operations
 
(9,190
)
 
(1,077
)
 
(8,113
)
Interest and other expense, net
 
(392
)
 
—

 
(392
)
Loss from foreign currency transactions
 
(72
)
 
(94
)
(e)
22

 
 
 
 
 
 
 
Loss before income tax provision
 
(9,654
)
 
(1,171
)
 
(8,483
)
Income tax benefit
 
2,329

 
406

(f)
1,923

 
 
 
 
 
 
 
Net loss
 
$
(7,325
)
 
$
(765
)
 
$
(6,560
)
 
 
 
 
 
 
 
Net loss per common share:
 
 
 
 
 
 
Basic
 
(0.22
)
 
 
 
(0.19
)
Diluted
 
(0.22
)
 
 
 
(0.19
)
Weighted-average number of shares used in per
 
 
 
 
 
 
share calculation - common stock:
 
 
 
 
 
 
Basic
 
33,793,582

 
 
 
33,793,582

Diluted
 
33,793,582

 
 
 
33,793,582




















NOTES TO THE UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS OF
COMSCORE INC.

Note 1. Basis of Pro Forma Presentation
The unaudited pro forma consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for the purposes of inclusion in comScore’s Form 8-K prepared and filed in connection with the Disposition.
Certain information and certain disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures provided herein are adequate to make the information presented not misleading.
The following unaudited pro forma consolidated financial statements have been prepared to give effect to the completed Disposition:
•
The unaudited pro forma consolidated balance sheet at March 31, 2015 gives effect to the Disposition as if it had occurred on March 31, 2015. The unaudited pro forma consolidated balance sheet is derived from the unaudited financial statements of comScore at March 31, 2015.
•
The unaudited pro forma consolidated statements of operations for the year ended December 31, 2014 and for the three months ended March 31, 2015 gives effect to the Disposition as if it had occurred on January 1, 2014. The unaudited pro forma consolidated statements of operations are derived from the Company’s audited historical financial statements for the year ended December 31, 2014 and unaudited historical financial statements for the three months ended March 31, 2015.
The unaudited pro forma consolidated financial statements should be read in conjunction with the historical consolidated financial statements and related notes of comScore and the section entitled Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in (i) comScore’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed on February 20, 2015 and (ii) comScore’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed on May 5, 2015. The unaudited pro forma consolidated financial statements are not intended to represent or be indicative of the consolidated results of operations or financial condition of comScore that would have been reported had the Disposition been completed as of the dates presented, and should not be construed as representative of the future consolidated results of operations or financial condition of the Company.

 
Note 2. Pro Forma Adjustments
The specific pro forma adjustments included in the unaudited pro forma consolidated financial statements are as follows:
 
 
(a)
Represents cash consideration provided to Buyer.
 
(b)
Represents the net book value of assets sold to Buyer.
 
(c)
Represents the Company's liabilities assumed by the Buyer, including liabilities that will not accompany sale.
 
(d)
Represents the Company's anticipated loss on disposition.
 
(e)
Represents the results of operations of the Company's mobile operator analytics business.
 
(f)
Represents income tax expense calculated utilizing a statutory tax rate of 35%.





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