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Support.com Reports Second Quarter 2015 Financial ResultsSupport.com, Inc. (NASDAQ: SPRT), makers of cloud-based Nexus® software for Support Interaction Optimization (SIO) and a leading provider of tech support and turnkey support center services, today reported unaudited financial results for its second quarter ended June 30, 2015. "We are continuing to see results from our focus on growing and diversifying our services programs," said CEO Elizabeth Cholawsky. "During Q2 we welcomed Staples back as a Support.com customer and began several initiatives with new and current customers, including working with DISH on their home automation efforts and the expansion of our Xfinity Home program with Comcast. We are also making progress with Nexus, adding customers, increasing usage and enhancing the functionality to include more developer tools and self-service. Customer feedback has also shown strong demand for using Nexus to solve challenging self-service issues, and we plan on bringing these capabilities to the market later this year." Q2 2015 Financial Summary For the second quarter of 2015, total revenue was $20.6 million compared to $20.2 million in the second quarter of 2014 and $23.2 million in the first quarter of 2015. On a non-GAAP basis, loss from continuing operations for the second quarter of 2015 was $(1.6) million, or $(0.03) per share, compared to income of $478,000, or $0.01 per share in the second quarter of 2014 and a loss of $(1.4) million, or $(0.03) per share, in the first quarter of 2015. On a GAAP basis, loss from continuing operations for the second quarter of 2015 was $(15.6) million, or $(0.29) per share, compared to $(649,000), or $(0.01) per share, in the second quarter of 2014 and $(2.5) million or $(0.05) per share, in the first quarter of 2015. Loss from continuing operations for the second quarter of 2015 included a non-cash goodwill impairment charge of $14.2 million and an associated tax benefit of $1.3 million. Non-GAAP income (loss) from continuing operations excludes stock-based compensation expense, amortization of intangible assets and other, restructuring and impairment charges, acquisition expense, other non-recurring items, charges for uncertain tax positions and tax expense (benefit) associated with acquired goodwill. Collectively, these items impacted income (loss) from continuing operations by $14 million in the second quarter of 2015, $1.1 million in the second quarter of 2014 and $1.1 million in the first quarter of 2015. A reconciliation of GAAP to non-GAAP results is presented in the tables below. Balance Sheet Information At June 30, 2015 cash, cash equivalents and investments were $71.8 million, compared to $73.0 million at March 31, 2015. Recent Company Highlights
Support.com will host a conference call discussing the Company's second quarter 2015 results on Wednesday, July 29, 2015 starting at 4:30 p.m. ET (1:30 p.m. PT). The live call may be accessed by dialing (855) 296-9613 (domestic) or (920) 663-6269 (international) and referencing passcode 83623445. A live audio webcast and replay of the call will be available at the Investor Relations section of the Support.com website at http://corp.support.com/about-us/investor-relations/investor-webinars-events. About Support.com Support.com, Inc. (NASDAQ:SPRT) is the leading provider of cloud-based software (Nexus®) and services to deliver next-generation technical support. Support.com helps leading brands in software, electronics, communications, retail, Internet of Things (IoT) and other connected technology industries deepen their customer relationships. Customers want technology that works the way it's intended. By using Support.com software and services, companies can deliver a fantastic customer experience, leading to happier customers, a stronger brand and growing revenues. For more information, please visit www.support.com or follow us @support_com. Support.com, Inc. is an Equal Opportunity Employer. For more information, visit http://corp.support.com/about-us/careers. © 2015 Support.com, Inc. All rights reserved. Support.com, the Support.com logo and Nexus are trademarks or registered trademarks of Support.com, Inc. in the United States and other countries. All other trademarks are the property of their respective owners. Safe Harbor Statement This release contains "forward-looking statements" as defined under the U.S. federal securities laws, including the Private Securities Litigation Reform Act of 1995, and is subject to the safe harbors created by such laws. Forward-looking statements include, for example, all statements relating to expected financial performance (including without limitation statements involving growth and projections of revenue, margin, income (loss) from continuing operations, income (loss) per share from continuing operations, cash usage or generation, cash balance, 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 including, among others, our ability to retain and grow major programs, our ability to expand and diversify our customer base, our ability to market and sell our Nexus "Software-as-a-Service" offering, our ability to maintain and grow revenue, 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, and our ability to control expenses and achieve desired margins. These and other risks may be detailed from time to time in Support.com's periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its latest Annual Report on Form 10-K and its latest Quarterly Report on Form 10-Q, copies of which may be obtained from www.sec.gov. Support.com assumes no obligation to update its forward-looking statements. Disclosure Regarding Non-GAAP Financial Measures Support.com excludes stock-based compensation expense, amortization of intangible assets and other, restructuring and impairment charges, acquisition expense, other non-recurring items, charges for uncertain tax positions and tax expense (benefit) associated with acquired goodwill from its GAAP results in order to determine the non-GAAP financial measures of income (loss) from continuing operations and income (loss) from continuing operations per share, as described in A through G below. We believe that the non-GAAP measure, when viewed in addition to and not in lieu of our reported GAAP results, assists investors in understanding our results of operations. A. Stock-based compensation expense. Management excludes stock-based compensation expense when evaluating its performance from period to period because such expenses do not require cash settlement and because such expenses are not used by management to assess the performance of the Company's business. Stock-based compensation expense was $783,000 in the second quarter of 2015, compared to $633,000 in the second quarter of 2014 and $711,000 in the first quarter of 2015. B. Amortization of intangible assets and other. The Company does not acquire businesses on a predictable cycle; therefore management excludes acquisition-related intangible asset amortization and related charges when evaluating its operating performance. Amortization of intangible assets and other was $267,000 in the second quarter of 2015, compared to $273,000 in the second quarter of 2014 and $268,000 in the first quarter of 2015. C. Restructuring and impairment charges. Management excludes restructuring and impairment charges when evaluating its operating performance because the Company does not incur such charges on a predictable basis and exclusion of such charges enables more consistent evaluation of the Company's operating performance. Goodwill impairment charge was $14.2 million in the second quarter of 2015, compared to zero in the second quarter of 2014 and the first quarter of 2015. D. Acquisition expense. The Company does not acquire businesses on a predictable cycle; therefore management excludes acquisition expenses such as legal fees and advisory fees when evaluating ongoing operating performance. Acquisition expense was zero in the second quarter of 2015, the second quarter of 2014 and the first quarter of 2015. E. Other non-recurring items. Management excludes non-recurring items, which generally do not require cash settlement, when evaluating its operating performance because the Company does not incur such expenses or obtain such benefits on a predictable basis and exclusion of such expenses or benefits enables more consistent evaluation of the Company's operating performance. Other non-recurring items resulted in no expense or benefit in the second quarter of 2015, expense of $150,000 in the second quarter of 2014 and no expense or benefit the first quarter of 2015. F. Charges for uncertain tax positions. The Company excludes charges for uncertain tax positions because excluding such charges enables more consistent evaluation of the Company's operating performance. Charges for uncertain tax positions were zero in the second quarter of 2015, the second quarter of 2014 and the first quarter of 2015. G. Tax expense (benefit) associated with acquired goodwill. The Company does not amortize goodwill in its consolidated financial statements. Goodwill created through Asset Purchase Agreement transactions is amortizable for tax purposes and a deferred tax liability is recorded as the tax deduction is realized. The deferred tax liability will not be reversed unless and until the goodwill is disposed of or impaired. The Company excludes the tax expense (benefit) associated with acquired goodwill when evaluating its operating performance because the Company does not acquire businesses on a predictable cycle and excluding such expense (benefit) enables more consistent evaluation of the Company's operating performance. Tax expense (benefit) associated with acquired goodwill was benefit of $1.3 million in the second quarter of 2015, compared to expense of $71,000 in the second quarter of 2014 and the first quarter of 2015. The Company believes that non-GAAP measures have significant limitations in that they do not reflect all of the amounts associated with the Company's financial results as determined in accordance with GAAP and that these measures should only be used to evaluate the Company's financial results in conjunction with the corresponding GAAP measures. In addition, the exclusion of the items indicated above from the non-GAAP financial measures presented does not indicate an expectation by management that such items will not be incurred in subsequent periods.
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