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8-K - CURRENT REPORT - Support.com, Inc. | sprt_8k.htm |
Exhibit 99.1
Support.com Reports Second Quarter 2020 Financial
Results
Sunnyvale, CA – August 6, 2020 –
Support.com, Inc. (NASDAQ: SPRT), a full-spectrum leader in virtual call
center services and direct-to-consumer technical support
solutions, today reported unaudited financial results for
its second quarter ended June 30, 2020.
Q2 2020 Financial Summary
For the
second quarter of 2020, total revenue was $11.0 million, a
decrease of $5.7 million or 34 percent compared to revenues of
$16.7 million in the second quarter of 2019 and down $0.9
million or 8 percent compared to revenues of
$11.9 million in the second quarter of 2020.
We
recorded net income of $0.6 million or $0.03 per share in the
second quarter of 2020 compared to net income of $0.7 million,
or $0.03 per share, in the second quarter of 2019 and net income of
$0.4 million, or $0.02 per share, in the first quarter of
2020.
Key
changes in our net income included the following:
●
Gross profit of
$3.9 million in the second quarter of 2020 was relatively flat with
the same period in 2019, but decreased by $0.4 million
compared to the first quarter of 2020.
●
Our gross profit
margin increased by 11 percentage points to 35% compared with
the same quarter of 2019 and remained relatively flat when compared
to the first quarter of 2020. The increase over the prior year
amounts reflects the reduction in recruiting and training costs and
other variable components of the lower revenues as well as the
other operating efficiencies.
●
Operating expenses
were $3.4 million in the second quarter of both 2020 and 2019 and
were $0.5 million lower than the $3.9 million of operating expenses
in the first quarter of 2020.
●
The lower operating
expenses in the second quarter of 2020 as compared with the prior
quarter is due to lower marketing spending as well as lower public
company related spending in general and administrative
expenses.
Balance Sheet Information
At
June 30, 2020, cash, cash equivalents and short-term
investments were $29.7 million as compared with $43.2 million
at June 30, 2019 and $26.4 million at December 31, 2019. The
year-over-year decrease was primarily attributable to the
previously discussed $10.0 million legal-settlement payment in the
second quarter of 2019 and the $19.1 million special distribution
to shareholders in the fourth quarter of 2019.
Total
assets as of June 30, 2020 were $39.7 million and
total shareholders’ equity was
$34.2 million.
Support.com
will not host a conference call discussing the Company’s
second quarter results. For more information, please visit the
Investor Relations section of the Support.com website at
Support.com/about-us/investor-relations/.
About Support.com
Support.com, Inc. (NASDAQ: SPRT) is a full-spectrum leader in
virtual call center services 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.
©
2020 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,
such management, 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 growth and 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. Many of the foregoing
risks and uncertainties are, and will be, exacerbated by the
COVID-19 pandemic and any worsening of the global business and
economic environment as a result. 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.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands)
|
(unaudited)
|
|
June
30,
|
December
31,
|
|
2020
(1)
|
2019
(2)
|
|
|
|
Assets
|
|
|
Current
assets:
|
|
|
Cash, cash
equivalents and short-term investments
|
$29,694
|
$26,414
|
Accounts
receivable, net
|
7,249
|
9,398
|
Prepaid expenses
and other current assets
|
583
|
728
|
Total
current assets
|
37,526
|
36,540
|
Property and
equipment, net
|
1,218
|
533
|
Intangible assets,
net
|
250
|
250
|
Other
assets
|
748
|
717
|
|
|
|
Total
assets
|
$39,742
|
$38,040
|
|
|
|
Liabilities
and Stockholders' Equity
|
|
|
Current
liabilities:
|
|
|
Accounts payable
and accrued compensation
|
$2,904
|
$1,887
|
Other accrued
liabilities
|
821
|
1,001
|
Short-term deferred
revenue
|
1,026
|
1,193
|
Total
current liabilities
|
4,751
|
4,081
|
Other long-term
liabilities
|
779
|
792
|
Total
liabilities
|
5,530
|
4,873
|
|
|
|
Stockholders'
equity:
|
|
|
Common
stock
|
2
|
2
|
Additional
paid-in-capital
|
250,341
|
250,092
|
Treasury
stock
|
(5,297)
|
(5,297)
|
Accumulated other
comprehensive loss
|
(2,565)
|
(2,380)
|
Accumulated
deficit
|
(208,269)
|
(209,250)
|
Total
stockholders' equity
|
34,212
|
33,167
|
|
|
|
Total
liabilities and stockholders' equity
|
$39,742
|
$38,040
|
|
|
|
|
|
|
|
|
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,
2019.
|
|||
|
|
|
|
|
|
SUPPORT.COM, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands, except per share amounts)
|
(unaudited)
|
|
Three
Months Ended
|
Six Months
Ended
|
|||
|
June 30, 2020
(1)
|
March 31,
2020
|
June 30,
2019
|
June 30,
2020
|
June 30,
2019
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
Services
|
$10,606
|
$11,511
|
$15,508
|
$22,117
|
$32,372
|
Software and
other
|
428
|
438
|
1,188
|
866
|
2,388
|
Total
revenue
|
11,034
|
11,949
|
16,696
|
22,983
|
34,760
|
|
|
|
|
|
|
Cost
of revenue:
|
|
|
|
|
|
Cost of
services
|
7,136
|
7,685
|
12,686
|
14,821
|
26,484
|
Cost of software
and other
|
36
|
29
|
38
|
65
|
92
|
Total
cost of revenue
|
7,172
|
7,714
|
12,724
|
14,886
|
26,576
|
Gross
profit
|
3,862
|
4,235
|
3,972
|
8,097
|
8,184
|
Operating
expenses:
|
|
|
|
|
|
Engineering and
IT
|
968
|
1,040
|
915
|
2,008
|
1,664
|
Sales and
marketing
|
517
|
813
|
438
|
1,330
|
830
|
General and
administrative
|
1,904
|
2,053
|
2,090
|
3,957
|
3,986
|
Total
operating expenses
|
3,389
|
3,906
|
3,443
|
7,295
|
6,480
|
|
|
|
|
|
|
Income
from operations
|
473
|
329
|
529
|
802
|
1,704
|
|
|
|
|
|
|
Interest income and
other, net
|
173
|
84
|
255
|
257
|
551
|
|
|
|
|
|
|
Income
before income taxes
|
646
|
413
|
784
|
1,059
|
2,255
|
|
|
|
|
|
|
Income
tax provision
|
29
|
49
|
131
|
78
|
159
|
|
|
|
|
|
|
Net
income
|
$617
|
$364
|
$653
|
$981
|
$2,096
|
|
|
|
|
|
|
Net
earnings per share
|
|
|
|
|
|
Basic
|
$0.03
|
$0.02
|
$0.03
|
$0.05
|
$0.11
|
Diluted
|
$0.03
|
$0.02
|
$0.03
|
$0.05
|
$0.11
|
|
|
|
|
|
|
Shares
used in computing per share amounts
|
|
|
|
|
|
Basic
|
19,054
|
19,054
|
18,962
|
19,060
|
18,959
|
Diluted
|
19,352
|
19,233
|
19,018
|
19,336
|
19,010
|
Investor Contact
Investor
Relations, Support.com
+1
(650) 556-8574
IR@support.com