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:
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| • | 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. |
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| • | 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:
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| | (a) | Represents cash consideration provided to Buyer. |
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| | |
| | (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. |
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| | |
| | (d) | Represents the Company's anticipated loss on disposition. |
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| | (e) | Represents the results of operations of the Company's mobile operator analytics business. |
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| | (f) | Represents income tax expense calculated utilizing a statutory tax rate of 35%. |
