Support.com Reports Fourth Quarter and 2012 Financial Results

(GlobeNewswire Via Acquire Media NewsEdge) REDWOOD CITY, Calif., Feb. 13, 2013 (GLOBE NEWSWIRE) -- Support.com, Inc. (Nasdaq:SPRT), a leading provider of cloud-based technology services and software designed to create new revenue streams and improve customer experience, today reported unaudited financial results for its fourth quarter ended December 31, 2012.

Q4 Financial Summary For the fourth quarter of 2012, total revenue was $18.9 million compared to $15.0 million in the fourth quarter of 2011 and $18.2 million in the third quarter of 2012.

On a GAAP basis, income from continuing operations for the fourth quarter of 2012 was $1.2 million, or $0.02 per share, compared to a loss of $4.2 million, or $(0.09) per share, in the fourth quarter of 2011 and income of $298,000, or $0.01 per share, in the third quarter of 2012.

Non-GAAP income from continuing operations for the fourth quarter of 2012 was $2.9 million, or $0.06 per share, compared to a loss of $2.8 million, or $(0.06) per share, in the fourth quarter of 2011 and income of $1.8 million, or $0.04 per share, in the third quarter of 2012.

At December 31, 2012 cash, cash equivalents and investments were $56.3 million compared to $51.6 million at September 30, 2012.

2012 Financial Summary Total revenue for 2012 was $72.0 million compared to $53.8 million in 2011.

On a GAAP basis, loss from continuing operations for 2012 was $5.5 million, or $(0.11) per share, compared to a loss of $18.5 million, or $(0.38) per share, in 2011.

Non-GAAP income from continuing operations for 2012 was $935,000, or $0.02 per share, compared to a loss of $12.5 million, or $(0.26) per share, in 2011.

Non-GAAP results exclude stock-based compensation expense, amortization of intangible assets and other, restructuring and impairment charges, acquisition expense, other non-recurring items and tax expense associated with acquired goodwill. These items impacted results from continuing operations by $1.7 million in the fourth quarter of 2012, $1.4 million in the fourth quarter of 2011 and $1.5 million in the third quarter of 2012. On an annual basis, these items impacted results from continuing operations by $6.5 million in 2012 and $6.0 million in 2011. A reconciliation of GAAP to non-GAAP results is presented in the tables below.

"We finished 2012 strong, with record revenue, profitability and cash generation," said Josh Pickus, President and CEO. "In 2013, our focus will be on maintaining and enhancing operating performance, building out new initiatives in SaaS and SMB, and extending our market leadership." Recent Company Highlights Revenue growth of 34% year over year Full year 2012 non-GAAP profitability 2012 net increase in cash, cash equivalents and investments of $3.3 million First SaaS customer US Tech Support in production SMB partnerships with AppDirect and OnForce Tablet SKU gains traction in retail New version of SUPERAntiSpyware® released; enterprise license customers addedConference Call Support.com will host a conference call discussing the Company's fourth quarter and full year 2012 results on Wednesday, February 13, 2013 starting at 4:30 p.m. ET (1:30 p.m. PT). The live call may be accessed by dialing (877) 388-8486 (domestic) or (408) 427-3864 (international) and referencing passcode 88124558. A live audio webcast and replay of the call will be available at the Investor Relations section of Support.com's website at http://www.support.com/investors/events.

About Support.com Support.com, Inc. (Nasdaq:SPRT) is a leading provider of cloud-based technology services and software. We help leading brands create new revenue streams and deepen customer loyalty through programs that enhance their customers' technology experience. Our solution includes a comprehensive Service Delivery Platform, mobile and desktop apps, a scalable workforce of technology specialists and proven expertise in program design and execution. Our partners include many of the nation's leading communications providers, retailers and technology companies. For more information, please visit us at: http://www.support.com.

Support.com, Inc. is an Equal Opportunity Employer. For more information, visit http://www.support.com/about/careers.

The Support.com, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/ pkgid=11893 Copyright © 2013 Support.com, Inc. All rights reserved. Support.com and SUPERAntiSpyware are trademarks or registered trademarks of Support.com, Inc. in the U.S. and other countries.

Note on Forward-Looking Statements Statements made in this document that are not historical facts are "forward-looking statements" and accordingly involve risks and uncertainties that could cause actual results to differ materially from those described herein. Forward-looking statements include, for example, all statements relating to projected financial performance (including without limitation statements involving projections of revenue, margin, income (loss), earnings (loss) per share, cash usage or generation, capital structure, and other financial items); the plans and objectives of management for future operations, partnerships, products, services or investments; and future performance in economic and other terms. The potential risks and uncertainties that could cause results to differ materially include, among others, our ability to retain and grow major partnerships, our ability to market and sell software and services to consumers and small businesses, our ability to market and sell our service delivery platform on a SaaS basis, our ability to maintain and grow revenue, our ability to scale and manage our workforce and our ability to control expenses and achieve desired margins. These and other risks are detailed in Support.com's reports filed with the Securities and Exchange Commission, including without limitation 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 does not intend to update this information to reflect future events or circumstances, and disclaims any obligation to do so except as may be required by law.

Disclosure Regarding Non-GAAP Financial Measures Support.com has excluded stock-based compensation expense, amortization of intangible assets and other, restructuring and impairment charges, acquisition expense, other non-recurring items and tax expense 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 referenced in this document. We believe that the non-GAAP measures, when viewed in addition to and not in lieu of our reported GAAP results, assist investors in understanding our results of operations.

A. Stock-based compensation expense. Management excludes stock-based compensation expense when evaluating its operating performance because such expense does not require cash settlement and because such expense is not used by management to assess the performance of the Company's business. Stock-based compensation expense was $1.6 million in the fourth quarter of 2012, compared to $957,000 in the fourth quarter of 2011 and $911,000 in the third quarter of 2012.

B. Amortization of intangible assets and other. Management excludes acquisition-related intangible asset amortization and related charges when evaluating its operating performance because the Company does not acquire businesses on a predictable cycle and excluding such charges enables more consistent evaluation of the Company's operating performance. Management also excludes such charges because they represent non-cash expenses. Amortization of intangible assets and other was $368,000 in the fourth quarter of 2012, compared to $330,000 in the fourth quarter of 2011 and $397,000 in the third quarter of 2012.

C. Restructuring and impairment charges. Management excludes restructuring and impairment charges when evaluating its operating performance because the Company does not undertake restructurings on a predicable basis and excluding such charges enables more consistent evaluation of the Company's operating performance. Restructuring and impairment charges were zero in the fourth quarter of 2012, compared to zero in the fourth quarter of 2011 and $72,000 in the third quarter of 2012.

D. Acquisition expense. Management excludes acquisition expense such as legal fees and advisor fees when evaluating its operating performance because the Company does not acquire businesses on a predictable cycle and excluding such expense enables more consistent evaluation of the Company's operating performance. Acquisition expense was zero in the fourth quarter of 2012, compared to $5,000 in the fourth quarter of 2011 and $1,000 in the third quarter of 2012.

E. Other non-recurring items. Management excludes non-recurring items, that 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 a benefit of $293,000 in the fourth quarter of 2012, compared to zero in the fourth quarter of 2011 and an expense of $86,000 in the third quarter of 2012.

F. Tax expense associated with acquired goodwill. The Company is required to record a deferred tax liability and the related tax expense that results from the amortization for income tax purposes of acquired goodwill. Management excludes tax expense associated with acquired goodwill when evaluating its operating performance because the Company does not acquire businesses on a predictable cycle and excluding such expense enables more consistent evaluation of the Company's operating performance. Tax expense associated with acquired goodwill was $88,000 in the fourth quarter of 2012, compared to $67,000 in the fourth quarter of 2011 and $69,000 in the third quarter of 2012.

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.

SUPPORT.COM, INC.GAAP CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands)(unaudited)   December 31,  September 30,  December 31, 2012 (1)20122011 (2) Assets Current assets: Cash, cash equivalents and short-term investments $ 56,350 $ 51,587 $ 51,902 Accounts receivable, net 9,689 9,785 10,284 Prepaid expenses and other current assets 1,359 1,565 1,068Total current assets 67,398 62,937 63,254 Long-term investment -- -- 1,111 Property and equipment, net 591 670 461 Purchased technology, net 62 82 144 Goodwill 14,240 14,240 13,621 Intangible assets, net 4,775 5,126 5,670 Other assets 1,193 940 735 Total assets $ 88,259 $ 83,995 $ 84,996 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued compensation $ 2,053 $ 3,011 $ 2,872 Other accrued liabilities 3,969 4,477 4,491 Short-term deferred revenue 6,618 5,971 4,723Total current liabilities 12,640 13,459 12,086 Long-term deferred revenue 35 139 489 Other long-term liabilities 1,421 1,422 1,086Total liabilities 14,096 15,020 13,661 Stockholders' equity: Common stock 5 5 5 Additional paid-in-capital 242,032 237,984 233,977 Accumulated other comprehensive loss (1,501) (1,343) (1,698) Accumulated deficit (166,373) (167,671) (160,949)Total stockholders' equity 74,163 68,975 71,335 Total liabilities and stockholders' equity $ 88,259 $ 83,995 $ 84,996 Note 1: Amounts are subject to completion of management's and its independent registered public accounting firm's customary closing and review procedures.

Note 2: Derived from audited consolidated financial statements for the year ended December 31, 2011.

SUPPORT.COM, INC.GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share amounts)(unaudited)   Three Months Ended  Year Ended December 31,   December 31, 2012 (3)  September 30, 2012  December 31, 2011 2012 (3) 2011 (2) Revenue: Services $ 15,344 $ 14,769 $ 11,124 $ 57,622 $ 37,248 Software and other 3,533 3,407 3,880 14,332 16,591Total revenue 18,877 18,176 15,004 71,954 53,839 Cost of revenue: Cost of services (4) 8,648 8,815 8,585 37,343 29,919 Cost of software and other (4) 278 312 449 1,421 1,744Total cost of revenue 8,926 9,127 9,034 38,764 31,663 Gross profit 9,951 9,049 5,970 33,190 22,176 Operating expenses: Amortization of intangible assets and other 368 397 330 1,522 866 Research and development (4) 1,652 1,643 1,599 6,773 6,057 Sales and marketing (4) 3,377 3,789 5,509 18,285 21,791 General and administrative (4) 3,572 2,897 2,705 12,234 12,005Total operating expenses 8,969 8,726 10,143 38,814 40,719 Income (loss) from operations 982 323 (4,173) (5,624) (18,543) Interest income and other, net 71 93 83 297 455 Income (loss) from continuing operations, before income taxes 1,053 416 (4,090) (5,327) (18,088) Income tax provision (benefit) (145) 118 106 208 401 Income (loss) from continuing operations, after income taxes 1,198 298 (4,196) (5,535) (18,489) Income (loss) from discontinued operations, net of income taxes 101 (7) (153) 111 (151) Net income (loss) $ 1,299 $ 291 $ (4,349) $ (5,424) $ (18,640) Income (loss) from continuing operations, after income taxes Basic $ 0.02 $ 0.01 $ (0.09) $ (0.11) $ (0.38) Diluted $ 0.02 $ 0.01 $ (0.09) $ (0.11) $ (0.38) Income (loss) from discontinued operations, net of income taxes Basic $ 0.00 $ (0.00) $ (0.00) $ 0.00 $ (0.00) Diluted $ 0.00 $ (0.00) $ (0.00) $ 0.00 $ (0.00) Shares used in computing per share amounts: Basic 49,475 48,707 48,351 48,798 48,288 Diluted 51,872 50,326 48,351 48,798 48,288 Note 3: Amounts are subject to completion of management's and its independent registered public accounting firm's customary closing and review procedures.

Note 4: Includes stock-based compensation expense, restructuring and impairment charges, acquisition expense and other non-recurring items, as follows:   Three Months Ended  Year Ended December 31, December 31, 2012 September 30, 2012  December 31, 2011 2012 2011 Cost of revenue: Cost of services $ 83 $ 86 $ 75 $ 353 $ 337 Cost of software and other 2 3 16 26 29Operating expenses: Research and development 199 252 271 1,019 816 Sales and marketing 111 94 138 623 896 General and administrative 1,191 635 462 2,926 2,703 Total $ 1,586 $ 1,070 $ 962 $ 4,947 $ 4,781   SUPPORT.COM, INC. RECONCILIATION OF GAAP FINANCIAL RESULTS TO NON-GAAP FINANCIAL MEASURES  (in thousands, except per share amounts) (unaudited)   Three Months Ended  Year Ended December 31,   December 31, 2012  September 30, 2012  December 31, 2011 20122011 GAAP cost of revenue $ 8,926 $ 9,127 $ 9,034 $ 38,764 $ 31,663 Stock-based compensation expense (Cost of revenue portion only) (85) (89) (91) (380) (274) Restructuring and impairment charges (Cost of revenue portion only) -- -- -- 1 (93)Non-GAAP cost of revenue $ 8,841 $ 9,038 $ 8,943 $ 38,385 $ 31,296 GAAP operating expenses $ 8,969 $ 8,726 $ 10,143 $ 38,814 $ 40,719 Stock-based compensation expense (Excl. cost of revenue portion) (1,501) (822) (866) (4,145) (3,494) Amortization of intangible assets and other (368) (397) (330) (1,522) (866) Restructuring and impairment charges (Excl. cost of revenue portion) -- (72) -- (244) (377) Acquisition expense -- (1) (5) (36) (543) Other non-recurring items -- (86) -- (143) --Non-GAAP operating expenses $ 7,100 $ 7,348 $ 8,942 $ 32,724 $ 35,439 GAAP income tax provision (benefit) $ (145) $ 118 $ 106 $ 208 $ 401 Tax expense associated with acquired goodwill (88) (69) (67) (294) (337) Other non-recurring items 293 -- -- 293 --Non-GAAP income tax provision (benefit) $ 60 $ 49 $ 39 $ 207 $ 64 GAAP income (loss) from continuing operations, after income taxes $ 1,198 $ 298 $ (4,196) $ (5,535) $ (18,489) Stock-based compensation expense 1,586 911 957 4,525 3,768 Amortization of intangible assets and other 368 397 330 1,522 866 Restructuring and impairment charges -- 72 -- 243 470 Acquisition expense -- 1 5 36 543 Other non-recurring items (293) 86 -- (150) -- Tax expense associated with acquired goodwill 88 69 67 294 337 Total impact of Non-GAAP exclusions 1,749 1,536 1,359 6,470 5,984Non-GAAP income (loss) from continuing operations, after income taxes $ 2,947 $ 1,834 $ (2,837) $ 935 $ (12,505) Income (loss) from continuing operations, after income taxes Basic - GAAP $ 0.02 $ 0.01 $ (0.09) $ (0.11) $ (0.38) Basic - Non-GAAP $ 0.06 $ 0.04 $ (0.06) $ 0.02 $ (0.26) Diluted - GAAP $ 0.02 $ 0.01 $ (0.09) $ (0.11) $ (0.38) Diluted - Non-GAAP $ 0.06 $ 0.04 $ (0.06) $ 0.02 $ (0.26)Shares used in computing per share amounts (GAAP) Basic 49,475 48,707 48,351 48,798 48,288 Diluted 51,872 50,326 48,351 48,798 48,288Shares used in computing per share amounts (Non-GAAP) Basic 49,475 48,707 48,351 48,798 48,288 Diluted 51,872 50,326 48,351 50,273 48,288 The adjustments above reconcile the Company's GAAP financial results to the non-GAAP financial measures used by the Company. The Company's non-GAAP financial measures exclude stock-based compensation expense, amortization of intangible assets and other, restructuring and impairment charges, acquisition expense, other non-recurring items and tax expense associated with acquired goodwill. The Company believes that presentation of these non-GAAP items provides meaningful supplemental information to investors, when viewed in conjunction with, and not in lieu of, the Company's GAAP results. However, the non-GAAP financial measures have not been prepared under a comprehensive set of accounting rules or principles. Non-GAAP information should not be considered in isolation from, or as a substitute for, information prepared in accordance with GAAP. Moreover, there are material limitations associated with the use of non-GAAP financial measures. See the text of this press release for more information on non-GAAP financial measures.

2012 Amounts are subject to completion of management's and its independent registered public accounting firm's customary closing and review procedures.

CONTACT: Investor Contact Carolyn Bass and Jacob Moelter Market Street Partners (415) 445-3235 sprt@marketstreetpartners.com Media Contact Seth Geisler Martin Levy Public Relations, Inc.

(858) 610-9860 seth@martinlevypr.com Source: Support.com 2013 GlobeNewswire, Inc.

[ Back To Technology News's Homepage ]