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Commtouch Reports Fourth Quarter And Full Year 2012 Results

Stocks in this article: CTCH

This press release contains forward-looking statements, including projections about our business, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. For example, statements in the future tense, and statements including words such as "expect," "plan," "estimate," "anticipate," or "believe" are forward-looking statements. These statements are based on information available to us at the time of the release; we assume no obligation to update any of them. The statements in this release, including the company's expectations that i) it will meet its 2013 revenue and profit forecasts, ii) its new service offerings will impact those forecasts in the positive manner indicated, and iii) the result of integration and efficiency activities will be to positively impact the financial performance of the business during the second half of 2013, are not guarantees of future performance and actual results could differ materially from our current expectations as a result of numerous factors, including business conditions and growth or deterioration in the Internet market, commerce and the general economy, both domestic as well as international; fewer than expected new-partner relationships; competitive factors, including pricing pressures; technological developments, and products offered by competitors; the ability of our OEM partners to successfully penetrate markets with products integrated with Commtouch technology; a slower than expected acceptance rate for our newer product offerings; availability of qualified staff; and technological difficulties and resource constraints encountered in developing new products, as well as those risks described in the text of this press release and the company's Annual Reports on Form 20-F and reports on Form 6-K, which are available through http://www.sec.gov.


                              COMMTOUCH SOFTWARE LTD.

                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                   (In US$ thousands, except per share amounts)

                         Three months ended            Twelve months ended
                            December 31                    December 31
                        ---------------------         ----------------------
                       2012             2011         2012              2011
                      ------           ------       ------            ------
                     Unaudited        Unaudited    Unaudited         Unaudited

     Revenues           $6,785           $5,950      $23,910           $23,016

     Cost of
     revenues            1,367            1,124        4,350             4,091
                       -------          -------      -------           -------
     Gross profit        5,418            4,826       19,560            18,925
                       -------          -------      -------           -------
     Operating
     expenses:

     Research and
     development         2,185            1,444        6,281             5,410

     Sales and
     marketing           1,866            1,639        5,860             5,486

     General and
     administrative      2,374            1,615        6,639             4,721
                       -------          -------      -------           -------
     Total operating
     expenses            6,425            4,698       18,780            15,617
                       -------          -------      -------           -------
     Operating
     profit (loss)      (1,007)             128          780             3,308

     Financial
     income
     (expenses), net       (70)             (23)          80               (27)
                       -------          -------      -------           -------
     Income (loss)
     before taxes       (1,077)             105          860             3,281

     Tax Benefit,
     net                   530            1,170          625             1,317
                       -------          -------      -------           -------
     Net income
     (loss)
     attributable to
     ordinary
     shareholders        ($547)          $1,275       $1,485            $4,598
                       =======          =======      =======           =======

     Basic earnings
     per share          ($0.02)           $0.05        $0.06             $0.19
                       =======          =======      =======           =======
     Diluted
     earnings per
     share              ($0.02)           $0.05        $0.06             $0.19
                       =======          =======      =======           =======
     Weighted
     average number
     of shares
     outstanding:
     Basic              25,357           23,854       24,610            23,620
                       =======          =======      =======           =======
     Diluted            25,598           24,828       25,140            24,654
                       =======          =======      =======           =======

                              COMMTOUCH SOFTWARE LTD.

           RECONCILIATION OF SELECTED GAAP MEASURES TO NON GAAP MEASURES

                   (In US$ thousands, except per share amounts)

                         Three months ended            Twelve months ended
                            December 31                    December 31
                        --------------------          ---------------------
                       2012             2011         2012              2011
                      ------           ------       ------            ------
                     Unaudited        Unaudited    Unaudited         Unaudited

     GAAP operating
     profit (loss)     ($1,007)            $128         $780            $3,308
     Stock-based
     compensation(1)       191              365        1,289             1,230
     Other
     acquisition
     related costs(2)      400                -          777                53
     Amortization of
     intangible
     assets (3)            286              628          589             1,003
     Executive
     terminations(4)       115              343          115               343
     Adjustment to
     deferred
     revenues (5)          227                -          227                 -
     Adjustment to
     earnout
     obligation (6)        (19)             200          (19)              396
                       -------          -------      -------           -------
     Non-GAAP
     operating
     profit               $193           $1,664       $3,758            $6,333
                       =======          =======      =======           =======
    
     GAAP net income     ($547)          $1,275       $1,485            $4,598
     Stock-based
     compensation
     (1)                   191              365        1,289             1,230
     Other
     acquisition
     related costs
     (2)                   400                -          777                53
     Amortization of
     intangible
     assets (3)            286              628          589             1,003
     Executive
     terminations
     (4)                   115              343          115               343
     Adjustment to
     deferred
     revenues (5)          227                -          227                 -
     Adjustment to
     earnout
     obligation (6)        204              240          232               541
     Income taxes
     (7)                  (607)          (1,198)        (806)           (1,385)
                       -------          -------      -------           -------
     Non-GAAP net
     income               $269           $1,653       $3,908            $6,383
                       =======          =======      =======           =======
    
     GAAP earnings
     per share          ($0.02)           $0.05        $0.06             $0.19
     Stock-based
     compensation(1)      0.01             0.01         0.05              0.05
     Other
     acquisition
     related costs(2)    0.016                -        0.031             0.002
     Amortization of
     intangible
     assets (3)          0.011            0.025        0.023             0.041
     Executive
     terminations(4)     0.004            0.014        0.005             0.014
     Adjustment to
     earnout
     obligation (5)      0.008            0.010        0.009             0.022
     Income taxes(6)    (0.024)          (0.048)      (0.032)           (0.056)
                       -------          -------      -------           -------
     Non-GAAP
     earnings per
     share               $0.01            $0.07        $0.16             $0.26
                       =======          =======      =======           =======
     Numbers of
     shares used in
     computing
     Non-GAAP
     earnings per
     share (diluted)    25,598           24,828       25,140            24,654
                       =======          =======      =======           =======
     (1) Stock-based
     compensation
     ------------
     Cost of
     revenues              $26               $7          $53               $24
     Research and
     development             9               76          231               294
     Sales and
     marketing             (69)              83          200               355
     General and
     administrative        225              199          805               557
                       -------          -------      -------           -------
                          $191             $365       $1,289            $1,230
                       =======          =======      =======           =======
     (2) Other
     acquisition
     related costs
     -------------
     General and
     administrative        400                -          777                53
                       -------          -------      -------           -------
                          $400                -         $777               $53
                       =======          =======      =======           =======
   
     (3)Amortization of
     intangible
     assets
     -------------
     Cost of
     revenues             $128              $48         $272              $195
     Sales and
     marketing             158              580          317               808
                       -------          -------      -------           -------
                          $286             $628         $589            $1,003
                       =======          =======      =======           =======
     (4) Executive
     terminations
     -------------
     Research and
     development             -              $82            -               $82
     General and
     administrative        115              261          115               261
                       -------          -------      -------           -------
                          $115             $343         $115              $343
                       =======          =======      =======           =======
     (5) Adjustment
     to deferred
     revenues
     -------------
     Revenues              227                -          227                 -
                       -------          -------      -------           -------
                          $227                -         $227                 -
                       =======          =======      =======           =======
     (6) Adjustment
     to earnout
     obligation
     -------------
     General and
     administrative       ($19)            $200          (19)             $396
     Financial
     expenses
     (income), net         223               40          251               145
                       -------          -------      -------           -------
                          $204             $240         $232              $541
                       =======          =======      =======           =======
     (7) Income
     taxes
     ------------
     Deferred tax
     asset - tax
     benefit              (607)          (1,198)        (806)           (1,385)
                       -------          -------      -------           -------
                         ($607)         ($1,198)       ($806)          ($1,385)
                       =======          =======      =======           =======

                         COMMTOUCH SOFTWARE LTD.

                  CONDENSED CONSOLIDATED BALANCE SHEETS

                                  December 31            December 31
                                  -----------            -----------
                                     2012                   2011
                                    ------                 ------
                                   Unaudited               Audited
                                           In US$ thousands

     Assets:
     Current Assets:
     Cash and cash equivalents         $5,137                $20,868
     Trade receivables, net             5,996                  2,838
     Deferred income taxes              2,239                  1,996
     Prepaid expenses and other
     accounts receivable                1,503                    463
                                      -------                -------
         Total current assets          14,875                 26,165
                                      -------                -------
     Long-term lease deposits              57                     40
     Severance pay fund                   756                  1,031
     Property and equipment, net        1,608                    885
     Deferred income taxes              3,348                  2,889
     Intangible assets, net            37,479                  7,297
     Investment in affiliate            1,403                  1,227
                                      -------                -------
             Total assets              59,526                 39,534
                                      =======                =======
     Liabilities and
     Shareholders' Equity
     Current Liabilities:
     Accounts payable                     958                    551
     Employees and payroll
     accruals                           2,280                  1,215
     Accrued expenses and other
     liabilities                        1,388                    628
     Deferred revenues                  4,535                  3,058
     Other short-term liabilities       4,247                  3,372
                                      -------                -------
      Total current liabilities        13,408                  8,824
                                      -------                -------
     Long-term deferred revenues          492                    694
     Long-term deferred tax             3,330                      -
     Other Long term liabilities        6,659                      -
     Accrued severance pay                915                  1,192
                                      -------                -------
          Total liabilities            11,396                  1,886
                                      -------                -------
     Shareholders' equity              34,722                 28,824
                                      -------                -------
        Total liabilities and
         shareholders' equity         $59,526                $39,534
                                      =======                =======

                              COMMTOUCH SOFTWARE LTD.

                       CONDENSED CONSOLIDATED CASH FLOW DATA

                                (In US$ thousands)

                         Three months ended            Twelve months ended
                            December 31                    December 31
                        --------------------          ---------------------
                       2012             2011         2012              2011
                      ------           ------       ------            ------
                    Unaudited        Unaudited    Unaudited         Unaudited
     Cash flow from
     operating
     activities

     Net income
     (loss)             ($547)          $1,275       $1,485            $4,598

     Adjustments:
     ------------
     Depreciation         129              131          561               545
     Compensation
     related to
     options issued
     to employees
     and consultants      191              365        1,289             1,213
     Amortization of
     intangible
     assets               284              629          588             1,005

     Changes in
     assets and
     liabilities:
     ------------
     Decrease
     (Increase) in
     trade
     receivables         (704)              598      (2,194)               130
     Decrease in
     deferred taxes      (608)           (1,198)       (807)            (1,385)
     Decrease
     (Increase) in
     prepaid
     expenses and
     other
     receivables          143                55        (541)               (79)
     Increase in
     accounts
     payable              259               194         297                 17
     Increase
     (decrease) in
     employees and
     payroll
     accruals,
     accrued
     expenses and
     other
     liabilities       (1,022)              419        (860)               981
     Increase
     (decrease) in
     deferred
     revenues             299              (301)       (163)              (390)
     Increase
     (decrease) in
     accrued
     severance pay,
     net                   21                59          (2)                66
                       -------          -------      -------           -------
     Net cash (used
     in) provided by
     operating
     activities        (1,555)            2,226        (347)             6,701

     Cash from
     investing
     activities

     Payments for
     business
     acquisitions,
     net of cash
     acquired         (10,243)                -     (10,243)                 -
     Change in
     long-term lease
     deposits             (12)                3         (17)                 1
     Investment in
     an affiliate
     company             (176)                -      (3,576)                 -
     Purchase of
     property and
     equipment           (176)             (104)       (805)              (526)
                       -------          -------      -------            -------
     Net cash used
     in investing
     activities       (10,607)             (101)    (14,641)              (525)

     Cash flows from
     financing
     activities

     Buyback of
     shares              (279)                -      (1,720)                 -
     Proceeds from
     options and
     warrants
     exercised            157             1,097         890              1,260
                       -------          -------      -------           -------
     Net cash (used
     in) provided by
     financing
     activities          (122)            1,097        (830)             1,260

     Effect of
     exchange rate
     changes on cash       87                 -          87                  -

     Increase
     (decrease) in
     cash and cash
     equivalents      (12,284)            3,222     (15,818)             7,436
     Cash and cash
     equivalents at
     the beginning
     of the period     17,334            17,646      20,868             13,432
                       -------          -------      -------           -------
     Cash and cash
     equivalents at
     the end of the
     period            $5,137           $20,868      $5,137            $20,868
                       =======          =======      =======           =======

Company Contact: Brian Briggs, Chief Financial Officer Commtouch +1-703-760-3444 brian.briggs@commtouch.com Israel   Investor Relations Contact: Iris Lubitch EffectiveIR +972-54-252-8007 Iris@EffectiveIR.co.il U.S.  Investor Contact: Christopher Chu     Grayling     +1-646-284-9400     commtouch@grayling.com Commtouch Media Contact: Matthew Zintel Zintel Public Relations +1-281-444-1590 matthew.zintel@zintelpr.com

SOURCE Commtouch

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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