cogint Announces Third Quarter 2016 Financial and Operating Results
Data and analytics company shows continued quarter-over-quarter revenue growth, driven by ongoing innovation and scale.
Business Highlights
-
Consolidated revenue increased to
$52.2 million for the third quarter 2016 (a 27% increase over second quarter 2016) from$1.0 million for the third quarter 2015. -
Information Services and Performance Marketing segments contributed
$14.8 million and$37.4 million in revenue during the quarter, respectively. -
Net loss of
$9.7 million for the third quarter 2016, compared to$4.8 million for third quarter 2015, primarily due to noncash share-based compensation expenses and a one-time write-off of intangible assets. -
Adjusted EBITDA increased to
$3.2 million for the third quarter 2016 from negative$2.2 million for the third quarter 2015. -
On
September 26, 2016 , the trading of the Company’s common stock commenced on theNASDAQ Global Market , under the new symbol “COGT,” pursuant to the Company’s voluntary transition from the NYSE MKT. - Within our Information Services segment:
- Ongoing evolution of our leading-edge, investigative solution, idiCORE™, including enhanced search functionality and accuracy.
- Greater than 400% CAGR in idiCORE online transactions for third quarter 2016.
- Continued ingestion and integration of key foundational data sets into idiCORE, including the addition of billions of motor vehicle records.
- Increasing adoption of consumer reengagement solutions by advertising clients.
- Comprehensive database includes holistic views of greater than 95% of U.S. population, including unique data assets of over 120 million self-reported profiles, including 150 million unique email addresses, across 63 million households.
- 80% of consumer interactions are from mobile, with over 700,000 daily survey respondents and 5 million compiled responses daily.
- Within our Performance Marketing segment:
-
Continued scale in our
Career & Education and Mobile App verticals with focus on the “Gig Economy,” providing recruitment solutions for industry-leading technology platforms in areas such as ride hailing, delivery and home services. -
Career & Education vertical experienced triple-digit quarterly growth to$2.6 million from second quarter 2016, demonstrating extraordinary market opportunity. -
Mobile App vertical grew 44% to
$4.6 million compared to$3.2 million in second quarter 2016. -
Increase in revenue from third-party media channels, from
$1.0 million to$1.6 million , from second to third quarter 2016, reaffirming our planned initiatives to increase the platform’s scale through custom audience development and vertical-specific marketing programs. - Strong trending in our Health vertical, leveraging our massive database of self-reported consumer information, allowing for custom audience targeting and the ability to design efficient and scalable campaigns.
“We are pleased to report a record quarter in revenue, continuing the
trend of quarter-over-quarter growth in revenue and adjusted EBITDA,”
said
Financial Highlights
Total revenue was
Use of Non-GAAP Financial Measures
Management evaluates the financial performance of our business on a variety of key indicators, including adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure equal to net loss, the most directly comparable financial measure based on US GAAP, plus net loss from discontinued operations, interest expense, income tax (benefit) expenses, depreciation and amortization, share-based payments, and other adjustments, as noted in the table below.
Conference Call
About cogint™
At cogint, we believe that time is your most valuable asset. Through powerful analytics, we transform data into intelligence, in a fast and efficient manner, so that our clients can spend their time on what matters most – running their organizations with confidence. Through leading-edge, proprietary technology and a massive data repository, our data and analytical solutions harness the power of data fusion, uncovering the relevance of disparate data points and converting them into comprehensive and insightful views of people, businesses, assets and their interrelationships. We empower clients across markets and industries to better execute all aspects of their business, from managing risk, conducting investigations, identifying fraud and abuse, and collecting debts, to identifying and acquiring new customers. At cogint, we are dedicated to making the world a safer place, to reducing the cost of doing business, and to enhancing the consumer experience.
RELATED LINKS: http://www.cogint.com
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements," as that term
is defined under the Private Securities Litigation Reform Act of 1995
(PSLRA), which statements may be identified by words such as "expects,"
"plans," "projects," "will," "may," "anticipate," "believes," "should,"
"intends," "estimates," and other words of similar meaning. Such forward
looking statements include statements about planned initiatives to
increase the platform of third-party media channels through custom
audience development and vertical-specific marketing programs, trending
in adoption of new solutions, across all product lines and full year
2016 revenue estimates for 2016. Readers are cautioned not to place
undue reliance on these forward-looking statements, which are based on
our expectations as of the date of this press release and speak only as
of the date of this press release and are advised to consider the
factors listed above together with the additional factors under the
heading "Forward-Looking Statements" and "Risk Factors" in the Company's
Annual Report on Form 10-K, as may be supplemented or amended by the
Company's Quarterly Reports on Form 10-Q and other
|
COGINT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share data) (unaudited) |
||||||||
| September 30, 2016 | December 31, 2015 | |||||||
|
ASSETS: |
||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 10,395 | $ | 13,462 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $984 and | ||||||||
| $318 at September 30, 2016 and December 31, 2015, respectively | 28,465 | 21,224 | ||||||
| Prepaid expenses and other current assets | 3,298 | 2,931 | ||||||
| Total current assets | 42,158 | 37,617 | ||||||
| Property and equipment, net | 1,471 | 1,062 | ||||||
| Intangible assets, net | 99,419 | 87,445 | ||||||
| Goodwill | 166,083 | 161,753 | ||||||
| Other non-current assets | 1,864 | 1,315 | ||||||
| Total assets | $ | 310,995 | $ | 289,192 | ||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY: |
||||||||
| Current liabilities: | ||||||||
| Trade accounts payable | $ | 16,187 | $ | 8,863 | ||||
| Accrued expenses and other current liabilities | 9,564 | 9,160 | ||||||
| Deferred revenue | 407 | 783 | ||||||
| Current portion of long-term debt | 2,250 | 2,250 | ||||||
| Total current liabilities | 28,408 | 21,056 | ||||||
| Promissory notes payable to certain shareholders, net | 10,457 | 9,618 | ||||||
| Long-term debt, net | 37,188 | 39,050 | ||||||
| Contingent consideration payable in stock | 10,000 | - | ||||||
| Deferred tax liabilities | 2,568 | 13,573 | ||||||
| Total liabilities | 88,621 | 83,297 | ||||||
| Shareholders' equity: | ||||||||
| Convertible Series A preferred stock—$0.0001 par value 10,000,000 shares | ||||||||
| authorized; 0 and 4,871,802 shares issued and outstanding at September | ||||||||
| 30, 2016 and December 31, 2015, respectively | - | - | ||||||
| Convertible Series B preferred stock—$0.0001 par value 10,000,000 shares | ||||||||
| authorized; 0 and 450,962 shares issued and outstanding at September 30, | ||||||||
| 2016 and December 31, 2015, respectively | - | - | ||||||
| Common stock—$0.0005 par value 200,000,000 shares authorized; 50,724,856 | ||||||||
| and 15,709,786 shares issued at September 30, 2016 and December 31, | ||||||||
| 2015, respectively; and 50,663,171 and 15,709,786 shares outstanding at | ||||||||
| September 30, 2016 and December 31, 2015, respectively | 25 | 8 | ||||||
| Treasury stock, at cost, 61,685 and 0 shares at September 30, 2016 and | ||||||||
| December 31, 2015, respectively | (305 | ) | - | |||||
| Additional paid-in capital | 331,499 | 291,032 | ||||||
| Accumulated deficit | (108,845 | ) | (85,145 | ) | ||||
| Total shareholders’ equity | 222,374 | 205,895 | ||||||
| Total liabilities and shareholders’ equity | $ | 310,995 | $ | 289,192 | ||||
|
COGINT, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Amounts in thousands, except share data) (unaudited) |
||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenue | $ | 52,176 | $ | 1,002 | $ | 132,643 | $ | 3,254 | ||||||||
|
Cost of revenues (exclusive of depreciation and amortization) |
39,658 | 766 | 97,709 | 1,744 | ||||||||||||
| Gross profit | 12,518 | 236 | 34,934 | 1,510 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing expenses | 3,699 | 524 | 10,004 | 1,529 | ||||||||||||
| General and administrative expenses | 17,669 | 4,178 | 44,203 | 9,650 | ||||||||||||
| Depreciation and amortization | 3,507 | 57 | 9,112 | 133 | ||||||||||||
| Loss from operations | (12,357 | ) | (4,523 | ) | (28,385 | ) | (9,802 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense, net | (1,880 | ) | (3 | ) | (5,561 | ) | (3 | ) | ||||||||
| Other expenses, net | - | - | (1,273 | ) | - | |||||||||||
| Total other expense | (1,880 | ) | (3 | ) | (6,834 | ) | (3 | ) | ||||||||
| Loss from continuing operations before income taxes | (14,237 | ) | (4,526 | ) | (35,219 | ) | (9,805 | ) | ||||||||
| Income taxes | (4,493 | ) | (124 | ) | (11,519 | ) | 141 | |||||||||
| Net loss from continuing operations | (9,744 | ) | (4,402 | ) | (23,700 | ) | (9,946 | ) | ||||||||
| Discontinued operations: | ||||||||||||||||
| Pretax loss from operations of discontinued operations | - | 26 | - | (1,236 | ) | |||||||||||
| Pretax loss on disposal of discontinued operations | - | 376 | - | (41,095 | ) | |||||||||||
| Income taxes | - | - | - | 127 | ||||||||||||
| Net loss from discontinued operations | - | 402 | - | (42,458 | ) | |||||||||||
| Less: Non-controlling interests | - | 789 | - | (508 | ) | |||||||||||
|
Net loss from discontinued operations attributable
to cogint |
- | (387 | ) | - | (41,950 | ) | ||||||||||
| Net loss attributable to cogint | $ | (9,744 | ) | $ | (4,789 | ) | $ | (23,700 | ) | $ | (51,896 | ) | ||||
| Loss per share | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
| Continuing operations | $ | (0.19 | ) | $ | (0.29 | ) | $ | (0.56 | ) | $ | (0.82 | ) | ||||
| Discontinued operations | - | (0.03 | ) | - | (3.45 | ) | ||||||||||
| $ | (0.19 | ) | $ | (0.32 | ) | $ | (0.56 | ) | $ | (4.27 | ) | |||||
| Weighted average number of shares outstanding - | ||||||||||||||||
| Basic and diluted | 50,654,690 | 15,034,224 | 42,100,504 | 12,167,469 | ||||||||||||
| Comprehensive loss: | ||||||||||||||||
| Net loss attributable to cogint | $ | (9,744 | ) | $ | (4,789 | ) | $ | (23,700 | ) | $ | (51,896 | ) | ||||
| Realized foreign currency translation adjustment | - | 130 | - | - | ||||||||||||
| Net comprehensive loss | $ | (9,744 | ) | $ | (4,659 | ) | $ | (23,700 | ) | $ | (51,896 | ) | ||||
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COGINT, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands, except share data) (unaudited) |
||||||||
| Nine Months Ended September 30, | ||||||||
| 2016 | 2015 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (23,700 | ) | $ | (51,896 | ) | ||
| Less: Loss from discontinued operations, net of tax | - | (41,950 | ) | |||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 9,112 | 133 | ||||||
| Non-cash interest expenses and related amortization | 1,839 | - | ||||||
| Share-based payments | 21,941 | 3,652 | ||||||
| Non-cash loss on exchange of warrants | 1,273 | - | ||||||
| Write-off of Purchased IP and capitalized litigation costs | 4,055 | - | ||||||
| Provision (recovery) for bad debts | 666 | (37 | ) | |||||
| Deferred income tax (benefit) expenses | (11,561 | ) | 370 | |||||
| Changes in assets and liabilities of continuing operations, net of the effects of acquisitions: | ||||||||
| Accounts receivable | (3,301 | ) | (278 | ) | ||||
| Prepaid expenses and other current assets | 545 | (601 | ) | |||||
| Other non-current assets | (549 | ) | - | |||||
| Trade accounts payable | 5,027 | 316 | ||||||
| Accrued expenses and other current liabilities | (533 | ) | (20 | ) | ||||
| Amounts due to related parties | - | (46 | ) | |||||
| Deferred revenue | (428 | ) | (14 | ) | ||||
| Net cash provided by (used in) operating activities from continuing operations | 4,386 | (6,471 | ) | |||||
| Net cash used in operating activities from discontinued operations | - | (337 | ) | |||||
| Net cash provided by (used in) operating activities | 4,386 | (6,808 | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | (722 | ) | (626 | ) | ||||
| Purchase of intangible assets | - | (250 | ) | |||||
| Capitalized costs included in intangible assets | (7,980 | ) | (2,082 | ) | ||||
| Proceeds from reverse acquisition | - | 3,569 | ||||||
| Acquisition, net of cash acquired | (50 | ) | - | |||||
| Deposits as collateral | (750 | ) | - | |||||
| Net cash (used in) provided by investing activities from continuing operations | (9,502 | ) | 611 | |||||
| Net cash used in investing activities from discontinued operations | - | (121 | ) | |||||
| Net cash (used in) provided by investing activities | (9,502 | ) | 490 | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of shares, net of issuance costs | 4,724 | 9,400 | ||||||
| Debt costs | (682 | ) | - | |||||
| Repayments of long-term debt | (1,688 | ) | - | |||||
| Taxes paid related to net share settlement of vesting of restricted stock units | (305 | ) | - | |||||
| Net cash provided by financing activities | 2,049 | 9,400 | ||||||
| Net (decrease) increase in cash and cash equivalents | $ | (3,067 | ) | $ | 3,082 | |||
| Cash and cash equivalents at beginning of period | 13,462 | 5,996 | ||||||
| Cash and cash equivalents at end of period | $ | 10,395 | $ | 9,078 | ||||
| SUPPLEMENTAL DISCLOSURE INFORMATION | ||||||||
| Cash paid for interest | $ | 3,795 | $ | 3 | ||||
| Cash paid for income taxes | $ | - | $ | - | ||||
| Share-based compensation expenses capitalized in intangible assets | $ | 868 | $ | 239 | ||||
| Issuance of common stock to a vendor for services rendered | $ | 146 | $ | - | ||||
| Fair value of acquisition consideration | $ | 21,206 | $ | - | ||||
| Warrants issued in relation to the term loan | $ | 492 | $ | - | ||||
Use and Reconciliation of Non-GAAP Financial Measures
Management evaluates the financial performance of our business on a variety of key indicators, including adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure equal to net loss, the most directly comparable financial measure based on US GAAP, plus net loss from discontinued operations, interest expense, income tax (benefit) expenses, depreciation and amortization, share-based payments, and other adjustments, as noted in the table below.
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (In thousands) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Net loss attributable to cogint | $ | (9,744 | ) | $ | (4,789 | ) | $ | (23,700 | ) | $ | (51,896 | ) | ||||
|
Net loss from discontinued operations attributable to cogint |
- | 387 | - | 41,950 | ||||||||||||
| Interest expense, net | 1,880 | 3 | 5,561 | 3 | ||||||||||||
| Income tax (benefit) expenses | (4,493 | ) | (124 | ) | (11,519 | ) | 141 | |||||||||
| Depreciation and amortization | 3,507 | 57 | 9,112 | 133 | ||||||||||||
| Share-based payments | 7,318 | 1,681 | 21,941 | 3,652 | ||||||||||||
| Non-cash loss on exchange of warrants | - | - | 1,273 | - | ||||||||||||
| Write-off of Purchased IP and capitalized litigation costs | 4,055 | - | 4,055 | - | ||||||||||||
| Acquisition-related costs | (146 | ) | 77 | 431 | 377 | |||||||||||
| Non-recurring legal and litigation costs | 779 | 503 | 1,493 | 1,248 | ||||||||||||
| Adjusted EBITDA | $ | 3,156 | $ | (2,205 | ) | $ | 8,647 | $ | (4,392 | ) | ||||||
We present adjusted EBITDA as a supplemental measure of our operating performance because we believe it provides useful information to our investors as it eliminates the impact of certain items that we do not consider indicative of our cash operations and ongoing operating performance. In addition, we use it as an integral part of our internal reporting to measure the performance of our reportable segments, evaluate the performance of our senior management and measure the operating strength of our business.
Adjusted EBITDA is a measure frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies similar to ours and is an indicator of the operational strength of our business. Adjusted EBITDA eliminates the uneven effect across all reportable segments of considerable amounts of non-cash depreciation and amortization and the non-cash effect of share-based payments.
Adjusted EBITDA is not intended to be a performance measure that should be regarded as an alternative to, or more meaningful than, either operating income or net income as indicators of operating performance or to cash flows from operating activities as a measure of liquidity. The way we measure adjusted EBITDA may not be comparable to similarly titled measures presented by other companies, and may not be identical to corresponding measures used in our various agreements.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161103006284/en/
Source:
Cogint, Inc.
Media and Investor Relations Contact:
Jordyn
Kopin, 646-356-8469
Director, Investor Relations
JKopin@cogint.com