Cyren Announces Fourth Quarter and Full Year 2020 Financial Results

McLean, VA, 02/22/2021 / 16:01, EST/EDT - EQS Newswire - Cyren Ltd MCLEAN, VA / ACCESSWIRE / February 22, 2021 / Cyren (NASDAQ:CYRN) today announced its fourth quarter and full year 2020 financial results for the period ending December 31, 2020. During the fourth quarter, Cyren reported quarterly revenues of $8.4 million, compared to $9.5 million during the fourth quarter of 2019. For the full year ended 2020, revenues were $36.4 million compared to $38.4 million in the prior year. Revenues for the fourth quarter included a one-time reduction of $0.7 million as a result of a multi-year customer contract that was restructured. The Company's next generation email security product, Cyren Inbox Security, continued to gain traction among enterprises using Microsoft 365, with Q4 revenues increasing 140% over Q3 2020. "2020 was a year of transition for Cyren as we focused on the execution of a new strategy," said Brett Jackson, CEO of Cyren. "Our teams accomplished our key objectives enhancing our core products, improving customer satisfaction and bringing new product to market. The highlight was the development and launch of our next generation, cloud-based email security product, Cyren Inbox Security. This new product provides Cyren with a significant growth engine into the enterprise market. We plan to continue investing in this opportunity to build market share and grow revenues. We believe that fourth quarter revenue growth is indicative of the potential opportunity we see." Fourth Quarter and Full Year 2020 Financial Highlights: For information regarding the non-GAAP financial measures discussed in this release, please see "Use of Non-GAAP Financial Measures" and "Reconciliation of Selected GAAP Measures to Non-GAAP Measures." Registered Direct Offering: Subsequent to the end of the quarter, Cyren announced a registered direct offering with a select group of accredited institutional investors for the purchase of 12 million ordinary shares priced at $1.15 per share, generating gross proceeds of $13.8 million and net proceeds of $12.5 million. The transaction was completed on February 16, 2021 and therefore the proceeds of the transaction are not included in the cash balance on the balance sheet as of December 31, 2020. Financial Results Conference Call: The company will host a conference call at 4:30 p.m. Eastern Time on Monday, February 22, 2021 to discuss fourth quarter and full year 2020 results. U.S. Dial-in Number: 1-877-407-0312 Israel Dial-in Number: 1-80-940-6247 International Dial-in Number: 1-201-389-0899 The call will be simultaneously webcast live on the investor relations section of Cyren's website at https://ir.cyren.com, or by using the link: https://www.webcast-eqs.com/cyren20210222/en. For those unable to participate in the live conference call, a replay will be available until March 8, 2021. To access the replay, the U.S. dial in number is 1-877-660-6853 and the non-U.S. dial in number is 1-201-612-7415. Callers will be prompted for replay conference ID number 13716472. An archived version of the webcast will also be available on the investor relations section of the company's website at https://ir.cyren.com/events. About Cyren: More than 1.3 billion users around the world rely on Cyren's cloud security solutions to protect them against cyber-attacks every day. Powered by the world's largest security cloud, Cyren (NASDAQ: CYRN) delivers fast time-to-protection with embedded threat detection, threat intelligence and email security solutions. Learn more at www.cyren.com. Blog: http://blog.cyren.com LinkedIn: www.linkedin.com/company/cyren Twitter: www.twitter.com/CyrenInc Use of Non-GAAP Financial Measures: Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: stock-based compensation expenses, amortization of acquired intangible assets, and deferred taxes related to acquisitions, adjustments to earn-out obligations, and capitalization of technology. The purpose of such adjustments is to give an indication of the company's performance exclusive of non-cash charges and other items that are considered by management to be outside of the company's core operating results. The company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. Company management regularly uses supplemental non-GAAP financial measures internally to understand, manage and evaluate the business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. The company believes this adjustment is useful to investors as a measure of the ongoing performance of the business. The company believes these non-GAAP financial measures provide consistent and comparable measures to help investors understand the company's current and future operating cash flow performance. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table immediately following the Consolidated Statements of Income. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when evaluating the business internally and therefore felt it important to make these non-GAAP adjustments available to investors. This press release contains forward-looking statements 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 at the time of the press release and the company assumes no obligation to update any of them. The statements in this press release are not guarantees of future performance and actual results could differ materially from current expectations as a result of numerous factors, including business conditions and growth or deterioration in the internet security market, technological developments, products offered by competitors, availability of qualified staff, and technological difficulties and resource constraints encountered in developing new products, as well as those risks described in the company's publicly filed reports, which are available through www.sec.gov. Company Contact Kenneth Tarpey, CFO Cyren +1.703.760.3320 CYREN LTD. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands of U.S. dollars, except per share amounts) Three months ended Twelve months ended December 31 December 31 2020 2019 2020 2019 Unaudited Unaudited Unaudited Unaudited Revenues $ 8,444 $ 9,529 $ 36,388 $ 38,391 Cost of revenues 3,618 4,056 14,786 15,557 Gross profit 4,826 5,473 21,602 22,834 Operating expenses: Research and development, net 3,819 3,811 16,083 15,801 Sales and marketing 2,555 3,352 11,678 13,825 General and administrative 2,591 3,563 9,583 10,877 Total operating expenses 8,965 10,726 37,344 40,503 Operating loss (4,139 ) (5,253 ) (15,742 ) (17,669 ) Other income (expense), net (4 ) 4 5 266 Financial expenses, net (890 ) (85 ) (1,647 ) (727 ) Loss before taxes (5,033 ) (5,334 ) (17,384 ) (18,130 ) Tax benefit (provision) 27 (5 ) 121 112 Loss $ (5,006) $ (5,339) $ (17,263) $ (18,018) Loss per share - basic and diluted $ (0.08 ) $ (0.09 ) $ (0.29 ) $ (0.33 ) Weighted average number of shares outstanding: Basic and Diluted 60,994 57,473 60,327 55,167 CYREN LTD. RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (in thousands of U.S. dollars, except per share amounts) Three months ended Twelve months ended December 31 December 31 2020 2019 2020 2019 Unaudited Unaudited Unaudited Unaudited GAAP gross profit $ 4,826 $ 5,473 $ 21,602 $ 22,834 GAAP gross margin 57 % 57 % 59 % 59 % Plus: Stock-based compensation expense 20 143 105 241 Amortization of intangible assets 672 888 2,370 3,252 Non-GAAP gross profit 5,518 6,504 24,077 26,327 Non-GAAP gross margin 65 % 68 % 66 % 69 % GAAP operating loss (4,139 ) (5,253 ) (15,742 ) (17,669 ) Plus: Stock-based compensation expense 515 1,358 2,391 2,360 Amortization of intangible assets 752 1,019 2,823 3,755 Expense (Capitalization) of technology (372 ) (1,230 ) (1,439 ) (3,740 ) Settlement of litigation, net - 1,078 - 1,078 Non-GAAP operating loss (3,244 ) (3,028 ) (11,967 ) (14,216 ) GAAP loss (5,006 ) (5,339 ) (17,263 ) (18,018 ) Plus: Stock-based compensation expense 515 1,358 2,391 2,360 Amortization of intangible assets 752 1,019 2,823 3,755 Adjustment to earn-out liabilities - - - - Amortization of deferred tax assets (54 ) (129 ) (198 ) (299 ) Gain from an earn-out liability settlement - - - (256 ) Settlement of litigation, net - 1,078 - 1,078 Expense (Capitalization) of technology (380 ) (1,254 ) (1,506 ) (3,881 ) Non-GAAP loss $ (4,173 ) $ (3,267 ) $ (13,753 ) $ (15,261 ) Numerator for non-GAAP EPS calculation $ (4,173 ) $ (3,267 ) $ (13,753 ) $ (15,261 ) Non-GAAP loss per share $ (0.07 ) $ (0.06 ) $ (0.23 ) $ (0.28 ) GAAP weighted-average shares used to compute loss per share 60,994 57,473 60,327 55,167 CYREN LTD. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands of U.S. dollars) December 31 December 31 2020 2019 Unaudited Unaudited Assets Current Assets: Cash and cash equivalents $ 9,296 $ 11,551 Trade receivables, net 960 2,187 Deferred commissions 980 948 Prepaid expenses and other receivables 779 819 Total current assets 12,015 15,505 Long-term deferred commissions 1,125 1,580 Long-term lease deposits and prepaids 937 767 Operating lease right-of-use assets 10,900 8,695 Severance pay fund 745 659 Property and equipment, net 3,948 4,410 Intangible assets, net 7,797 8,966 Goodwill 21,476 20,246 Total long-term assets 46,928 45,323 Total assets $ 58,943 $ 60,828 Liabilities and Shareholders' Equity Current Liabilities: Trade payables $ 799 $ 1,184 Convertible notes 10,000 - Employees and payroll accruals 3,813 3,427 Accrued expenses and other liabilities 1,420 1,145 Operating lease liabilities 1,983 1,946 Deferred revenues 6,934 7,208 Total current liabilities 24,949 14,910 Deferred revenues 644 1,956 Convertible notes - 10,000 Convertible Debentures 9,248 - Long-term operating lease liabilities 9,866 7,174 Deferred tax liability, net 655 796 Accrued severance pay 838 811 Other liabilities 706 470 Total long-term liabilities 21,957 21,207 Shareholders' equity 12,037 24,711 Total liabilities and shareholders' equity $ 58,943 $ 60,828 CYREN LTD. CONDENSED CONSOLIDATED CASH FLOW DATA (in thousands of U.S. dollars) Three months ended Twelve months ended December 31 December 31 2020 2019 2020 2019 Cash flows from operating activities: Unaudited Unaudited Unaudited Unaudited Loss $ (5,006 ) $ (5,339 ) (17,263 ) $ (18,018 ) Adjustments to reconcile loss to net cash provided by (used in) operating activities: (Gain) / loss on disposal of property and equipment 2 (1 ) 14 - Depreciation 540 526 2,349 1,946 Stock-based compensation 515 1,358 2,391 2,360 Amortization of intangible assets 752 1,019 2,823 3,755 Amortization of deferred commissions 336 2,108 1,517 1,199 Amortization of operating lease right-of-use assets 649 280 2,157 1,331 Interest on convertible notes 139 144 575 568 Interest and amortization of debt issuance costs on Convertible Debentures 201 - 601 - Other income related to the earn-out consideration - - - (257 ) Deferred taxes, net (13 ) (140 ) (184 ) (322 ) Changes in assets and liabilities: Trade receivables 1,425 1,339 1,299 1,535 Prepaid expenses and other receivables 513 436 57 (171 ) Deferred commissions (195 ) (2,062 ) (1,095 ) (961 ) Change in long-term lease deposits (27 ) 20 (116 ) 45 Trade payables (110 ) (495 ) (399 ) (759 ) Employees and payroll accruals, accrued expenses and other liabilities 239 (843 ) 149 (1,028 ) Deferred revenues (2,890 ) (3,065 ) (1,856 ) 2,932 Accrued severance pay, net (24 ) (15 ) (60 ) 58 Operating lease liabilities (61 ) (171 ) (1,606 ) (1,246 ) Other long-term liabilities 53 277 237 151 Net cash used in operating activities (2,962 ) (4,624 ) (8,410 ) (6,882 ) Cash flows from investing activities: Capitalization of technology (382 ) (1,234 ) (1,482 ) (3,696 ) Proceeds from sale of property and equipment - 2 6 3 Purchase of property and equipment (223 ) (211 ) (1,766 ) (1,470 ) Net cash used in investing activities (605 ) (1,443 ) (3,242 ) (5,163 ) Cash flows from financing activities: Proceeds from rights offering, net - 7,967 9,442 7,967 Proceeds from Convertible Debenture, net of debt issuance costs - - - - Payment of earn-out liability - - - (2,680 ) Proceeds from options exercised - - - 743 Net cash provided by financing activities - 7,967 9,442 6,030 Effect of exchange rate changes on cash 11 110 (3 ) (14 ) Increase (decrease) in cash, cash equivalents and restricted cash (3,556) 2,010 (2,213) (6,029) Cash, cash equivalents and restricted cash at the beginning of the period 13,470 10,117 12,127 18,156 Cash, cash equivalents and restricted cash at the end of the period $ 9,914 $ 12,127 $ 9,914 $ 12,127 Reconciliation of cash, cash equivalents and restricted cash as shown in the consolidated statements of cash flow: Cash and cash equivalents $ 9,296 $ 11,551 $ 9,296 $ 11,551 Restricted cash included in long-term restricted lease deposits 618 576 618 576 Total cash, cash equivalents and restricted cash $ 9,914 $ 12,127 $ 9,914 $ 12,127 SOURCE: Cyren Attachment File: Q4_2020_CYRN_Tables__Financials_Summary_2.20.2021 02/22/2021 EQS Newswire / EQS Group AG

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