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| 8-K - CURRENT REPORT - Support.com, Inc. | sprt_8k.htm |
Exhibit 99.1
Support.com Reports Fourth Quarter and 2019 Financial
Results
SUNNYVALE, CA / ACCESSWIRE / March 18, 2020 /
Support.com, Inc. (NASDAQ:SPRT), a full-spectrum leader in
outsourced call center, direct-to-consumer and small-business
technical support solutions, today reported unaudited financial
results for its fourth quarter and year ended December 31,
2019.
Financial Summary
For the
fourth quarter of 2019, total revenue was $13.3 million, a decrease
of $4.2 million compared to revenues of $17.5 million in the fourth
quarter of 2018 and a decrease of $1.9 million from total revenue
of $15.2 million in the third quarter of 2019. Revenues for the
full year 2019 were $63.3 million, a decrease of 9 percent against
revenues of $69.5 million in 2018. The overall decreases in revenue
reflect lower billable hours with one of our major customers
although somewhat offset by new subscriber growth. The reduction in
billable hours substantially reduced the overall headcount and
related employee expenses including benefits, cost of recruiting,
hiring, and training.
We
recorded net income of $0.2 million for the fourth quarter of 2019,
or $0.01 per share, compared to net income of $0.4 million, or
$0.02 per share in the fourth quarter of 2018 and net income of
$1.6 million, or $0.8 per share, in the third quarter of 2019. For
the full year 2019, we recorded net income of $3.8 million, or
$0.20 per share, as compared with a net loss of $(9.1) million, or
$(0.48) per share for 2018. The 2018 amounts include a $10 million
one-time legal settlement with the FTC.
Key
changes in our net income from included the following:
●
Gross profit
increased by $0.6 million in the fourth quarter of 2019 compared to
the same period in 2018, but was down $1.0 million compared to the
third quarter of 2019. Year-over-year, gross profit increased by
$4.5 million which reflects lower recruiting and training costs and
other operating efficiencies offset by higher labor
costs.
●
Our gross profit
margin in the fourth quarter of 2019 increased by 9.8 percentage
points compared with the same quarter of 2018 and was down 3.1
percentage points relative to the third quarter of 2019. The
increase from the year-ago period reflects lower recruiting and
training costs and other operating efficiencies offset by higher
labor costs.
●
Operating expenses
in the fourth quarter of 2019 of $3.7 million increased by $0.8
million over the year-ago quarter and increased by $0.4 million
over the third quarter of 2019. For the full year 2019, operating
expenses decreased by $8.5 million from 2018 levels with this
decline primarily attributable to the $10 million one-time legal
settlement charge reflected in 2018, offset by increased
engineering and IT charges in 2019.
Balance Sheet Information
At
December 31, 2019, cash, cash equivalents, and short-term
investments were $26.4 million, down from the $49.6 million of a
year-ago. This decrease was primarily attributable to the
aforementioned $10 million legal-settlement payment to the FTC and
the $19 million special distribution to shareholders in
2019.
Total
assets as of December 31, 2019, were $38.0 million and total
shareholders' equity was $33.2 million.
Support.com
will not host a conference call discussing the Company's fourth
quarter results. For more information, please visit the Investor
Relations section of the Support.com website at Support.com/about-us/investor-relations/.
Annual Meeting of Shareholders
The
Annual Meeting of the Shareholders of Support.com, Inc. will be
held on June 5, 2020 at 1200 Crossman Ave., Suite 210, Sunnyvale,
California at 8:00 a.m. PT. The Board of Directors has determined
the close of business on April 9, 2020 as the record date for
determination of the shareholders entitled to vote at the Annual
Meeting.
About Support.com
Support.com,
Inc. (NASDAQ: SPRT) is a full-spectrum leader in outsourced call
center and direct-to-consumer and small business technical support
solutions. With more than 20 years of providing high quality
technical support services to consumers and small businesses
through white-labeled partnerships or direct solutions, Support.com
has the expertise, tools and software solutions to troubleshoot and
maintain all the devices in the connected home and business. The
company's skilled U.S.-based live agents and rich self-support
tools troubleshoot more than 10,000 technical support issues
consumers and small businesses face on an ongoing basis.
Support.com delivers high quality, turnkey technical support
solutions and digital support experiences that enable customers to
get the most out of their technology. For more information, please
visit www.support.com.
Support.com,
Inc. is an Equal Opportunity Employer. For more information, visit
http://www.support.com/about-us/careers.
©
2019 Support.com, Inc. All rights reserved. Support.com and the
Support.com logo are trademarks or registered trademarks of
Support.com, Inc. in the United States and other countries. All
other marks are the property of their respective
owners.
Safe Harbor Statement
This
announcement contains forward-looking statements (including within
the meaning of Section 21E of the United States Securities Exchange
Act of 1934, as amended, and Section 27A of the United States
Securities Act of 1933, as amended) concerning Support.com. These
statements include, but are not limited to, statements that address
our expected future business and financial performance and other
statements identified by words such as "will," "expect," "believe,"
"anticipate," "estimate," "should," "intend," "plan," "potential,"
"predict" "project," "aim," and similar words, phrases or
expressions. These forward-looking statements are based on current
expectations and beliefs of the management of Support.com, as well
as assumptions made by, and information currently available to,
suchmanagement, current market trends and market conditions and
involve risks and uncertainties, many of which are outside the
Company's and management's control, and which may cause actual
results to differ materially from those contained in
forward-looking statements. Accordingly, you should not place undue
reliance on such statements. Forward-looking statements include,
but are not limited to, all statements relating to expected
financial performance (including without limitation statements
involving growthand projections of revenue, margin, profitability,
income (loss) from continuing operations, income (loss) per share
from continuing operations, cash usage or generation, cash balance
as of any future date, capital structure and other financial
items); the plans and objectives of management for future
operations, customer relationships, products, services or
investments; personnel matters; and future performance in economic
and other terms. Such forward-looking statements are based on
current expectations that involve a number of uncertainties and
risks that may cause actual events or results to differ materially
from those indicated by such forward-looking statements, including,
among others, our ability to retain and grow major programs, our
ability to expand and diversify our customer base, our ability to
maintain and grow revenue, any acquisitions we may make, including
integrating acquired companies with our existing businesses and our
ability to achieve the benefits, growth prospects and synergies
expected by such acquisitions, our ability to successfully develop
new products and services, our ability to manage our workforce, our
ability to operate in markets that are subject to extensive
regulations, such as support for home security systems, our ability
to control expenses and achieve desired margins, our ability to
maintain or improve gross margin, our dependence on a small number
of customers and partners, our ability to attract, train and retain
talented employees, potential intellectual property, class action
or other litigation, fluctuations in government laws and
regulations, our ability to utilize and realize the value of our
net operating loss carryforwards and how they could be
substantially limited or permanently impaired, given our current
market capitalization and cash position, our ability to execute the
cost reduction program involving the planned actions on the
expected schedule, our ability to achieve the cost savings expected
in connection with the cost reduction plan, the ultimate effect of
any such cost reductions on our financial results, any expenses or
reputational damage associated with resolving customer warranty
and/or indemnification claims; and our ability to manage the
effects of the cost reduction plan on our workforce and other
operations. Our filings with the SEC, which may be obtained for
free at the SEC's website at http://www.sec.gov,
discuss some of the important risk factors that may affect our
business, results of operations and financial condition. Actual
results may vary from the estimates provided. We undertake no
intent or obligation to publicly update or revise any of the
estimates and other forward-looking statements made in this
announcement, whether as a result of new information, future events
or otherwise, except as required by law.
|
SUPPORT.COM, INC.
|
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GAAP CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||
|
(in thousands)
|
||||||
|
(unaudited)
|
|
|
Dec 31,
(1)
|
December 31,
(2)
|
|
|
2019
|
2018
|
|
|
|
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash, cash
equivalents and short-term investments
|
$26,414
|
$49,649
|
|
Accounts
receivable, net
|
9,398
|
12,292
|
|
Prepaid expenses
and other current assets
|
728
|
999
|
|
Total
current assets
|
36,540
|
62,940
|
|
Property and
equipment, net
|
533
|
703
|
|
Intangible assets,
net
|
250
|
250
|
|
Other
assets
|
717
|
707
|
|
|
|
|
|
Total
assets
|
$38,040
|
$64,600
|
|
|
|
|
|
Liabilities
and Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable
and accrued compensation
|
$1,887
|
$3,791
|
|
Other accrued
liabilities
|
1,001
|
978
|
|
Acrued legal
settlement
|
-
|
10,000
|
|
Short-term deferred
revenue
|
1,193
|
1,135
|
|
Total
current liabilities
|
4,081
|
15,904
|
|
Long-term deferred
revenue
|
-
|
-
|
|
Other long-term
liabilities
|
792
|
800
|
|
Total
liabilities
|
4,873
|
16,704
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common
stock
|
2
|
2
|
|
Additional
paid-in-capital
|
250,092
|
268,794
|
|
Treasury
stock
|
(5,297)
|
(5,297)
|
|
Accumulated other
comprehensive loss
|
(2,380)
|
(2,507)
|
|
Accumulated
deficit
|
(209,250)
|
(213,096)
|
|
Total
stockholders' equity
|
33,167
|
47,896
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$38,040
|
$64,600
|
Note 1: Amounts are subject to completion of
management’s customary closing and review
procedures.
Note 2: Derived from audited consolidated financial
statements for the year ended December 31,
2018.
|
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)
|
|
|
Three
Months Ended
|
Twelve
Months Ended
|
|||
|
|
Dec 31,
2019
|
Sept 30,
2019
|
Dec 31,
2018
|
Dec 31,
2019
|
Dec 31,
2018
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
Services
|
$12,847
|
$14,327
|
$16,297
|
$59,545
|
$64,476
|
|
Software and
other
|
478
|
922
|
1,245
|
3,788
|
5,073
|
|
Total
revenue
|
13,325
|
15,249
|
17,542
|
63,333
|
69,549
|
|
|
|
|
|
|
|
|
Cost
of revenue:
|
|
|
|
|
|
|
Cost of
services
|
9,649
|
10,582
|
14,411
|
46,714
|
57,396
|
|
Cost of software
and other
|
32
|
26
|
56
|
151
|
208
|
|
Total
cost of revenue
|
9,681
|
10,608
|
14,467
|
46,865
|
57,604
|
|
Gross
profit
|
3,644
|
4,641
|
3,075
|
16,468
|
11,945
|
|
Operating
expenses:
|
|
|
|
|
|
|
Engineering and
IT
|
1,282
|
1,132
|
698
|
4,078
|
2,780
|
|
Sales and
marketing
|
445
|
485
|
440
|
1,760
|
1,823
|
|
General and
administrative
|
2,008
|
1,685
|
1,785
|
7,679
|
7,408
|
|
Legal
Settlement
|
-
|
-
|
-
|
-
|
10,000
|
|
Total
operating expenses
|
3,735
|
3,302
|
2,923
|
13,517
|
22,011
|
|
|
|
|
|
|
|
|
Income
(loss) from operations
|
(91)
|
1,339
|
152
|
2,951
|
(10,066)
|
|
|
|
|
|
|
|
|
Interest income and
other, net
|
232
|
265
|
289
|
1,049
|
965
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
141
|
1,604
|
441
|
4,000
|
(9,101)
|
|
|
|
|
|
|
|
|
Income
tax provision (benefit)
|
(16)
|
11
|
23
|
154
|
(1)
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
$157
|
$1,593
|
$418
|
$3,846
|
$(9,100)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings (loss) per share
|
|
|
|
|
|
|
Basic
|
$0.01
|
$0.08
|
$0.02
|
$0.20
|
$(0.48)
|
|
Diluted
|
$0.01
|
$0.08
|
$0.02
|
$0.20
|
$(0.48)
|
|
|
|
|
|
|
|
|
Shares
used in computing per share amounts
|
|
|
|
|
|
|
Basic
|
19,048
|
19,011
|
18,923
|
18,977
|
18,826
|
|
Diluted
|
19,093
|
19,045
|
18,983
|
19,026
|
18,826
|
Investor Contact
Investor
Relations, Support.com
+1
(650) 556-8574
IR@support.com