Synacor Reports Solid First Quarter Results

Synacor Reports Solid First Quarter Results

  *Quarterly revenue of $29.1 million vs. $30.7 million in prior year
  *Quarterly adjusted EBITDA of $1.8 million, 10th consecutive quarter of
    positive results

BUFFALO, N.Y., May 7, 2013 (GLOBE NEWSWIRE) -- Synacor, Inc. (Nasdaq:SYNC),
leading provider of next-gen startpages, award-winning TV Everywhere
solutions, and cloud-based Identity Management (IDM) services across multiple
devices for cable, satellite, telecom and consumer electronics companies,
today announced its financial results for the first quarter of 2013.

"We are pleased that we delivered on our expectations for the first quarter,"
said Synacor CEO Ron Frankel. "I am excited about both our customer and
product pipelines. From a new customer perspective, our pipeline has never
been stronger, and we are beginning to invest in the requisite resources to
win and deliver. We are also strengthening our positioning in the mobile space
with new products we will be launching throughout this year and next. We
remain confident in the long-term prospects for the company as we transition
through 2013."

Q1 2013 Financial Results

Revenue: For the first quarter of 2013, total revenue was $29.1 million,
compared to $30.7 million in the first quarter of 2012. Search and display
advertising revenue was $24.1 million, compared to $25.8 million in the first
quarter of 2012. Subscription-based revenue was $5.1 million, compared to $4.9
million in the first quarter of 2012.

Net Income: For the first quarter of 2013, net income was $0.0 million,
compared to $1.2 million in the first quarter of 2012. Diluted earnings per
share, or EPS, was breakeven. Net income includes stock-based compensation
expense of $0.6 million, or $0.02 per share, in the first quarter of 2013, as
compared to $0.6 million, or $0.02 per share, in the first quarter of 2012.
The diluted EPS calculation for the first quarter of 2013 is based on 28.2
million weighted average fully diluted common shares outstanding. The diluted
EPS calculation for the first quarter of 2012 was based on 26.8 million
shares.

Adjusted EBITDA: For the first quarter of 2013, adjusted EBITDA, which
excludes stock-based compensation expense, was $1.8 million, or 6% of revenue,
compared to $3.0 million, or 10% of revenue, in the first quarter of 2012.

Key Business Metrics: For the first quarter of 2013, Synacor averaged 20.3
million unique visitors per month, compared to 21.3 million unique visitors in
the first quarter of 2012. Search queries were 212 million for the first
quarter of 2013, compared to 271 million in the first quarter of 2012.
Advertising impressions grew 35% to 11.5 billion, compared to 8.5 billion in
the first quarter of 2012.

Cash: For the first quarter of 2013, Synacor used $0.7 million in cash from
operating activities, compared to generating $0.8 million in the first quarter
of 2012. The company ended the first quarter of 2013 with $40.2 million in
cash and cash equivalents, compared to $33.1 million at the end of the first
quarter of 2012.

"With a strong balance sheet, Synacor is uniquely positioned to capitalize on
our exciting new products and our rich customer pipeline," said Synacor CFO
Bill Stuart. "We continue to build upon the foundation we have established and
we continue to position Synacor for the long-term."

Business Outlook

Based on information available as of May 7, 2013, the company is providing
financial guidance for the second quarter and fiscal 2013 as follows:

  *Q2 2013 Guidance: Revenue for the second quarter of 2013 is projected to
    be in the range of $26.5 million to $27.5 million. For the second quarter
    of 2013, the company expects to report adjusted EBITDA of $0.8 million to
    $1.2 million.
  *Fiscal 2013 Guidance: Revenue for the full year of 2013 is projected to be
    in the range of $122.0 million to $126.0 million. For the full year of
    2013, the company expects to report adjusted EBITDA of $8.0 million to
    $10.0 million.

Conference Call Details

Synacor will host a conference call today at 5 p.m. ET to discuss the first
quarter financial results with the investment community. The live webcast of
Synacor's earnings conference call can be accessed
http://investor.synacor.com/events.cfm. To participate, please login
approximately ten minutes prior to the webcast. For those without access to
the Internet, the call may be accessed toll-free via phone at (877) 837-3911,
with conference ID 48715303, or callers outside the U.S. may dial (253)
237-1167. Following completion of the call, a recorded webcast replay will be
available on Synacor's website through May 21, 2013. To listen to the
telephone replay, call toll-free (855) 859-2056, or callers outside the U.S.
may dial (404) 537-3406. The conference ID is 48715303.

About Synacor

Synacor's white-label platform enables cable, satellite, telecom and consumer
electronics companies to deliver TV Everywhere, digital entertainment,
cloud-based services and apps to their end-consumers across multiple devices,
strengthening those relationships while monetizing the engagement. Synacor
(Nasdaq:SYNC), is headquartered in Buffalo, NY. For more information, visit
synacor.com. Integrate. Authenticate. Engage.

Non-GAAP Financial Measures

The company uses certain non-GAAP financial measures in this release.
Generally, a non-GAAP financial measure is a numerical measure of a company's
performance, financial position or cash flows that either excludes or includes
amounts that are not normally excluded or included in the most directly
comparable measure calculated and presented in accordance with generally
accepted accounting principles (GAAP).

We report adjusted EBITDA because it is a key measure used by our management
and 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 to investors and
others in understanding and evaluating our operating results in the same
manner as our management and board of directors.

For a reconciliation of adjusted EBITDA to net income, the most directly
comparable financial measure calculated and presented in accordance with GAAP,
please refer to the table "Reconciliation of GAAP to Non-GAAP Measures" in
this press release.

Safe Harbor Statement

"Safe Harbor" statement under the Private Securities Litigation Reform Act of
1995: This press release contains forward-looking statements concerning
Synacor's expected financial performance (including, without limitation,
statements and information in the Business Outlook section and the quotations
from management), as well as Synacor's strategic and operational plans. The
achievement or success of the matters covered by such forward-looking
statements involves risks, uncertainties and assumptions. If any such risks or
uncertainties materialize or if any of the assumptions prove incorrect, the
company's results could differ materially from the results expressed or
implied by the forward-looking statements the company makes.

The risks and uncertainties referred to above include - but are not limited to
- risks associated with: execution of our plans and strategies; the loss of a
significant customer; expectations regarding consumer taste and user adoption
of applications and solutions; developments in Internet browser software and
search advertising technologies; general economic conditions; expectations
regarding the company's ability to timely expand the breadth of services and
products orintroduction of new services and products; consolidation within
the cable and telecommunications industries; changes in the competitive
dynamics in the market for online search and display advertising;the risk
that security measures could be breached and unauthorized access to subscriber
data could be obtained; potential third party intellectual property
infringement claims; and the price volatility of our common stock.

Further information on these and other factors that could affect the company's
financial results is included in filings it makes with the Securities and
Exchange Commission from time to time, including the section entitled "Risk
Factors" in the company's most recent Form 10-K filed with the SEC on March
26, 2013. These documents are available on the SEC Filings section of the
Investor Information section of the company's website
athttp://investor.synacor.com/. All information provided in this release and
in the attachments is available as of May 7, 2013, and Synacor undertakes no
duty to update this information.

The Synacor logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=11609


Synacor, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
                                               As of        As of
                                               December 31, March 31,
                                               2012         2013
Assets                                                      
Current assets:                                             
Cash and cash equivalents                      $41,944    $40,156
Accounts receivable, net                       15,624      14,548
Deferred income taxes                          1,999       1,987
Prepaid expenses and other current assets      1,831       2,140
Total current assets                           61,398      58,831
Property and equipment, net                     11,043      11,083
Deferred income taxes, non-current              2,527       2,527
Other long-term assets                          543         503
Goodwill                                        819         819
Total Assets                                    $76,330    $73,763
                                                           
Liabilities and Stockholders' Equity                        
Current liabilities:                                        
Accounts payable                               $14,204    $12,673
Accrued expenses and other current liabilities 7,328       6,180
Current portion of capital lease obligations   2,127       1,989
Total current liabilities                      23,659      20,842
Long-term portion of capital lease obligation   1,712       1,246
Other long-term liabilities                     148         164
Total Liabilities                               25,519      22,252
                                                           
Stockholders' Equity:                                       
Common stock                                   275         276
Treasury stock                                 (569)       (569)
Additional paid-in capital                     99,449      100,115
Accumulated deficit                            (48,338)    (48,311)
Accumulated other comprehensive income         (6)         --
Total stockholders' equity                      50,811      51,511
Total liabilities and stockholders' equity      $76,330    $73,763


Synacor, Inc.
Condensed Consolidated Statements of Operations
(In thousands except share and per share amounts)
(Unaudited)
                                                                 
                                                      Three months ended
                                                      March 31,
                                                      2012        2013
                                                                 
Revenue                                                $30,670   $29,143
Costs and operating expenses:                                     
Cost of revenue (1)                                   16,764     15,764
Research and development (1)(2)                       6,288      6,865
Sales and marketing (2)                               2,377      2,130
General and administrative (1)(2)                     2,840      3,144
Depreciation                                          781        1,130
Total costs and operating expenses                    29,050     29,033
Income from operations                                 1,620      110
Other expense                                          --         (7)
Interest expense                                       (47)       (58)
Income before income taxes                             1,573      45
Provision for income taxes                             399        18
Net income                                             $1,174    $27
Net income per share:                                             
Basic                                                 $0.07     $--
Diluted                                               $0.04     $--
Weighted average shares used to compute net income per            
share:
Basic                                                 16,603,579 27,236,186
Diluted                                               26,778,455 28,233,297
                                                                 
Notes:                                                            
(1) Exclusive of depreciation shown separately.
(2) Includes stock-based compensation as follows:
                                                      Three months ended
                                                      March 31,
                                                      2012        2013
Research and development                              $107      $261
Sales and marketing                                   74         76
General and administrative                            377        225
                                                      $558      $562


Synacor, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
                                                                   
                                                          Three months ended
                                                          March 31,
                                                          2012      2013
Cash Flows from Operating Activities:                               
Net income                                                 $1,174  $27
Adjustments to reconcile net income to net cash provided            
by (used in) operating activities:
Depreciation                                              781      1,130
Stock-based compensation expense                          558      562
Deferred income taxes                                      395      12
Change in assets and liabilities net of effect of                   
acquisition:
Accounts receivable, net                                  (781)    1,076
Prepaid expenses and other current assets                 (534)    (309)
Other long-term assets                                    123      40
Accounts payable                                          236      (1,427)
Accrued expenses and other current liabilities            (1,232)  (1,873)
Other long-term liabilities                               33       16
Net cash provided by (used in) operating activities       753      (746)
                                                                   
Cash Flows from Investing Activities:                               
Purchases of property and equipment                        (879)    (544)
Cash paid for business acquisition                         (600)    --
Net cash used in investing activities                     (1,479)  (544)
                                                                   
Cash Flows from Financing Activities:                               
Repayment on bank financing                               (125)    --
Repayments on capital lease obligations                   (402)    (604)
Proceeds from exercise of common stock options            559      100
Proceeds from initial public offering                      25,364   --
Initial public offering costs                              (2,475)  --
Net cash provided by (used in) financing activities       22,921   (504)
Effect of exchange rate changes on cash and cash           --       6
equivalents
Net Increase (Decrease) in Cash and Cash Equivalents       22,195   (1,788)
Cash and Cash Equivalents at beginning of period           10,925   41,944
Cash and Cash Equivalents at end of period                 $33,120 $40,156


Synacor, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(In thousands)
(Unaudited)
                                                            
The following table presents a reconciliation of net income to adjusted EBITDA
for each of the periods indicated:
                                                            
                                           Three months ended
                                           March 31,
                                           2012              2013
                                                            
Reconciliation of Adjusted EBITDA:                           
Net income                                 $1,174          $27
Provision for income taxes                 399              18
Interest expense                           47               58
Other expense                             --               7
Depreciation                               781              1,130
Stock-based compensation                   558              562
Adjusted EBITDA                            $2,959          $1,802


Synacor, Inc.
Key Business Metrics
(Unaudited)
                                                       
                                    Three months ended
                                    March 31,
                                    2012                2013
                                                       
Key Business Metrics:                                    
Unique Visitors (1)                   21,293,075         20,260,966
Search Queries (2)                    270,777,789        211,644,797
Advertising Impressions (3)           8,485,227,382      11,483,034,070
                                                       
Notes:                                                  
(1) Reflects the number of unique visitors to our customers' websites computed
on an average monthly basis during the applicable period, as measured by
comScore.
(2) Reflects the total number of search queries during the applicable period,
as reported by Google.
(3) Reflects the total number of advertising impressions during the applicable
period, as reported by DoubleClick and other partners.

CONTACT: Investor Contact:
         Denise Garcia, SVP
         ICR
         ir@synacor.com
         716-362-3309
        
         Press Contact:
         Meredith Roth, VP, Corporate Communications
         mroth@synacor.com
         646-380-5141

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