Company Quick10K Filing
Quick10K
Cision
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$11.61 148 $1,720
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
8-K 2019-08-08 Earnings, Exhibits
8-K 2019-07-16 Officers, Other Events, Exhibits
8-K 2019-02-28 Earnings, Exhibits
8-K 2019-01-25 Officers
8-K 2019-01-25 Officers
8-K 2019-01-23 Earnings, Sale of Shares, Regulation FD, Exhibits
8-K 2019-01-23 Earnings, Sale of Shares, Regulation FD, Exhibits
8-K 2019-01-11 Enter Agreement, Off-BS Arrangement, Officers, Exhibits
8-K 2018-12-28 Off-BS Arrangement, Sale of Shares, Regulation FD, Exhibits
8-K 2018-11-07 Earnings, Exhibits
8-K 2018-10-30 Officers, Exhibits
8-K 2018-09-12 Sale of Shares, Other Events, Exhibits
8-K 2018-08-08 Earnings, Exhibits
8-K 2018-07-30 Officers
8-K 2018-06-26 Shareholder Vote
8-K 2018-06-14 Other Events, Exhibits
8-K 2018-05-18 Enter Agreement, Shareholder Rights, Shareholder Vote, Other Events, Exhibits
8-K 2018-05-14 Other Events, Exhibits
8-K 2018-04-17 Other Events, Exhibits
8-K 2018-03-20 Other Events, Exhibits
8-K 2018-03-08 Earnings, Exhibits
8-K 2018-01-29 Earnings, Exhibits
8-K 2018-01-08 Enter Agreement, Other Events, Exhibits
BSMX Banco Santander 10,720
SF Stifel Financial 4,170
PDM Piedmont Office Realty Trust 2,600
MXL Maxlinear 1,780
RCKY Rocky Brands 185
CTIC CTI Biopharma 53
JFKKU 8i Enterprises Acquisition Corp 50
IFCN IMH Financial 0
OIBR OI 0
AHL Aspen Insurance Holdings 0
CISN 2019-06-30
Part I. - Financial Information
Item 1. - Financial Statements
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. - Quantitative and Qualitative Disclosures About Market Risk
Item 4. - Controls and Procedures
Part II. - Other Information
Item 1. - Legal Proceedings
Item 1A. - Risk Factors
Item 2. - Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. - Defaults Upon Senior Securities
Item 4. - Mine Safety Disclosures
Item 5. - Other Information
Item 6. - Exhibits
EX-31.1 cisn-20190630ex3118762b0.htm
EX-31.2 cisn-20190630ex312444749.htm
EX-32.1 cisn-20190630ex3214f296e.htm
EX-32.2 cisn-20190630ex322ba4f77.htm

Cision Earnings 2019-06-30

CISN 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

false--12-31Q220190001701040Large Accelerated Filer00-0000000132716541148351227000000001701040us-gaap:CommonStockMember2019-04-012019-06-300001701040us-gaap:CommonStockMember2018-04-012018-06-300001701040us-gaap:RetainedEarningsMember2019-06-300001701040us-gaap:AdditionalPaidInCapitalMember2019-06-300001701040us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-300001701040us-gaap:RetainedEarningsMember2019-03-310001701040us-gaap:AdditionalPaidInCapitalMember2019-03-310001701040us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-03-3100017010402019-03-310001701040us-gaap:RetainedEarningsMember2018-12-310001701040us-gaap:AdditionalPaidInCapitalMember2018-12-310001701040us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310001701040us-gaap:RetainedEarningsMember2018-06-300001701040us-gaap:AdditionalPaidInCapitalMember2018-06-300001701040us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-06-300001701040us-gaap:AdditionalPaidInCapitalMember2018-03-310001701040us-gaap:RetainedEarningsMember2017-12-310001701040us-gaap:AdditionalPaidInCapitalMember2017-12-310001701040us-gaap:AccumulatedOtherComprehensiveIncomeMember2017-12-310001701040us-gaap:CommonStockMember2019-06-300001701040us-gaap:CommonStockMember2019-03-310001701040us-gaap:CommonStockMember2018-12-310001701040us-gaap:CommonStockMember2018-06-300001701040us-gaap:CommonStockMember2018-03-310001701040us-gaap:CommonStockMember2017-12-3100017010402018-01-012018-12-310001701040cisn:OmnibusIncentivePlan2017Member2017-12-310001701040us-gaap:RestrictedStockUnitsRSUMember2019-06-300001701040us-gaap:RestrictedStockUnitsRSUMember2018-12-310001701040us-gaap:RestrictedStockUnitsRSUMember2019-01-012019-06-300001701040us-gaap:SellingAndMarketingExpenseMember2019-04-012019-06-300001701040us-gaap:ResearchAndDevelopmentExpenseMember2019-04-012019-06-300001701040us-gaap:GeneralAndAdministrativeExpenseMember2019-04-012019-06-300001701040us-gaap:CostOfSalesMember2019-04-012019-06-300001701040us-gaap:SellingAndMarketingExpenseMember2019-01-012019-06-300001701040us-gaap:ResearchAndDevelopmentExpenseMember2019-01-012019-06-300001701040us-gaap:GeneralAndAdministrativeExpenseMember2019-01-012019-06-300001701040us-gaap:CostOfSalesMember2019-01-012019-06-300001701040us-gaap:SellingAndMarketingExpenseMember2018-04-012018-06-300001701040us-gaap:ResearchAndDevelopmentExpenseMember2018-04-012018-06-300001701040us-gaap:GeneralAndAdministrativeExpenseMember2018-04-012018-06-300001701040us-gaap:CostOfSalesMember2018-04-012018-06-300001701040us-gaap:SellingAndMarketingExpenseMember2018-01-012018-06-300001701040us-gaap:ResearchAndDevelopmentExpenseMember2018-01-012018-06-300001701040us-gaap:GeneralAndAdministrativeExpenseMember2018-01-012018-06-300001701040us-gaap:CostOfSalesMember2018-01-012018-06-300001701040cisn:Prime1Member2019-01-012019-06-300001701040us-gaap:NonUsMember2019-04-012019-06-300001701040us-gaap:EMEAMember2019-04-012019-06-300001701040srt:AsiaPacificMember2019-04-012019-06-300001701040country:US2019-04-012019-06-300001701040us-gaap:NonUsMember2019-01-012019-06-300001701040us-gaap:EMEAMember2019-01-012019-06-300001701040srt:AsiaPacificMember2019-01-012019-06-300001701040country:US2019-01-012019-06-300001701040us-gaap:NonUsMember2018-04-012018-06-300001701040us-gaap:EMEAMember2018-04-012018-06-300001701040srt:AsiaPacificMember2018-04-012018-06-300001701040country:US2018-04-012018-06-300001701040us-gaap:NonUsMember2018-01-012018-06-300001701040us-gaap:EMEAMember2018-01-012018-06-300001701040srt:AsiaPacificMember2018-01-012018-06-300001701040country:US2018-01-012018-06-300001701040cisn:FirstLienCreditFacility2017Member2017-01-012017-12-310001701040cisn:FalconMemberus-gaap:RevolvingCreditFacilityMember2019-01-032019-01-030001701040cisn:IContactMember2019-01-222019-01-220001701040us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-04-012019-06-300001701040us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-03-310001701040us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-04-012018-06-300001701040us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-01-012018-03-310001701040us-gaap:AccountingStandardsUpdate201602Member2019-01-010001701040us-gaap:NonUsMember2019-06-300001701040us-gaap:EMEAMember2019-06-300001701040srt:AsiaPacificMember2019-06-300001701040country:US2019-06-300001701040us-gaap:NonUsMember2018-12-310001701040us-gaap:EMEAMember2018-12-310001701040srt:AsiaPacificMember2018-12-310001701040country:US2018-12-310001701040us-gaap:RetainedEarningsMember2018-03-310001701040us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-03-3100017010402018-03-310001701040us-gaap:RetainedEarningsMember2019-04-012019-06-300001701040us-gaap:RetainedEarningsMember2019-01-012019-03-310001701040us-gaap:RetainedEarningsMember2018-04-012018-06-300001701040us-gaap:RetainedEarningsMember2018-01-012018-03-310001701040cisn:FirstLienCreditFacility2017Memberus-gaap:FairValueInputsLevel2Member2019-06-300001701040cisn:FirstLienCreditFacility2017Memberus-gaap:FairValueInputsLevel2Member2018-12-310001701040cisn:FirstLienCreditFacility2017Member2018-12-270001701040cisn:TwoThousandSeventeenRevolvingCreditFacilityMembercisn:TwoThousandSeventeenStandbyLettersOfCreditMember2017-08-040001701040cisn:TwoThousandSeventeenRevolvingCreditFacilityMember2017-08-040001701040cisn:TwoThousandSeventeenFirstLienEuroTermCreditFacilityMember2017-08-040001701040cisn:TwoThousandSeventeenFirstLienDollarTermCreditFacilityMember2017-08-040001701040cisn:TwoThousandSeventeenRevolvingCreditFacilityMember2019-04-012019-06-300001701040cisn:TwoThousandSeventeenFirstLienDollarTermCreditFacilityMember2019-01-012019-06-300001701040cisn:TwoThousandSeventeenRevolvingCreditFacilityMember2018-10-222018-10-220001701040cisn:FirstLienCreditFacility2017Member2018-10-222018-10-220001701040cisn:TwoThousandSeventeenRevolvingCreditFacilityMember2018-02-082018-02-080001701040cisn:FirstLienCreditFacility2017Member2018-02-082018-02-080001701040cisn:TwoThousandSeventeenFirstLienEuroTermCreditFacilityMember2019-06-300001701040cisn:TwoThousandSeventeenFirstLienDollarTermCreditFacilityMember2019-06-300001701040cisn:TwoThousandSeventeenFirstLienEuroTermCreditFacilityMember2017-12-310001701040cisn:TwoThousandSeventeenFirstLienDollarTermCreditFacilityMember2017-12-142017-12-140001701040cisn:FirstLienCreditFacility2017Member2019-01-012019-06-300001701040cisn:TwoThousandSeventeenFirstLienTermCreditFacilityMembercisn:TwoThousandSeventeenStandbyLettersOfCreditMember2019-06-300001701040cisn:FirstLienCreditFacility2017Member2019-06-300001701040cisn:FirstLienCreditFacility2017Member2018-12-310001701040cisn:TwoThousandSeventeenRevolvingCreditFacilityMembercisn:TwoThousandSeventeenStandbyLettersOfCreditMember2019-06-300001701040cisn:FalconMember2019-01-012019-06-3000017010402019-01-112019-01-110001701040us-gaap:TradeNamesMember2019-06-302019-06-300001701040us-gaap:TechnologyBasedIntangibleAssetsMember2019-06-302019-06-300001701040us-gaap:CustomerRelationshipsMember2019-06-302019-06-300001701040us-gaap:ScenarioPlanMember2019-01-012019-12-310001701040us-gaap:OtherLiabilitiesMember2018-12-310001701040cisn:OtherAccruedExpensesMember2018-12-310001701040cisn:TwoThousandSeventeenFirstLienEuroTermCreditFacilityMember2017-01-012017-12-310001701040cisn:TwoThousandSeventeenFirstLienDollarTermCreditFacilityMember2017-01-012017-12-310001701040cisn:TwoThousandSeventeenFirstLienDollarTermCreditFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMember2017-08-042017-08-040001701040cisn:TwoThousandSeventeenFirstLienDollarTermCreditFacilityMemberus-gaap:BaseRateMember2017-08-042017-08-040001701040cisn:FalconEquityConsiderationsMember2019-01-0300017010402017-12-3100017010402018-06-300001701040cisn:TrendkiteMemberus-gaap:TrademarksMember2019-01-230001701040cisn:TrendkiteMemberus-gaap:TechnologyBasedIntangibleAssetsMember2019-01-230001701040cisn:TrendkiteMemberus-gaap:CustomerRelationshipsMember2019-01-230001701040cisn:FalconMemberus-gaap:TrademarksMember2019-01-030001701040cisn:FalconMemberus-gaap:TechnologyBasedIntangibleAssetsMember2019-01-030001701040cisn:FalconMemberus-gaap:CustomerRelationshipsMember2019-01-030001701040cisn:Prime1Memberus-gaap:TrademarksMember2018-01-230001701040cisn:Prime1Memberus-gaap:TechnologyBasedIntangibleAssetsMember2018-01-230001701040cisn:Prime1Memberus-gaap:CustomerRelationshipsMember2018-01-230001701040cisn:PrimeFalconAndTrendkiteMember2019-04-012019-06-300001701040cisn:PrimeFalconAndTrendkiteMember2019-01-012019-06-300001701040cisn:PrimeFalconAndTrendkiteMember2018-04-012018-06-300001701040cisn:PrimeFalconAndTrendkiteMember2018-01-012018-06-300001701040cisn:IContactMember2019-01-012019-06-300001701040cisn:TrendkiteMembercisn:EquityConsiderationMember2019-01-230001701040cisn:TrendkiteMembercisn:CashConsiderationMember2019-01-2300017010402019-01-230001701040cisn:FalconMembercisn:CashConsiderationMember2019-01-030001701040cisn:TrendkiteMember2018-01-012018-12-310001701040cisn:FalconMember2018-01-012018-12-310001701040cisn:Prime1Member2018-01-012018-06-300001701040cisn:Prime1Member2019-06-300001701040cisn:PrimeAndFalconAndTrendkiteMember2019-01-012019-06-300001701040cisn:TrendkiteMember2019-01-232019-01-230001701040cisn:FalconMember2019-01-032019-01-030001701040us-gaap:AdditionalPaidInCapitalMember2019-04-012019-06-300001701040us-gaap:AdditionalPaidInCapitalMember2019-01-012019-03-3100017010402019-01-012019-03-310001701040us-gaap:AdditionalPaidInCapitalMember2018-04-012018-06-300001701040us-gaap:AdditionalPaidInCapitalMember2018-01-012018-03-3100017010402018-01-012018-03-310001701040cisn:FalconMemberus-gaap:EmployeeSeveranceMember2019-01-0300017010402019-08-050001701040us-gaap:CommonStockMember2019-01-012019-03-310001701040us-gaap:CommonStockMember2018-01-012018-03-310001701040cisn:FirstLienCreditFacility2017Member2018-12-280001701040cisn:FirstLienCreditFacility2017Member2017-08-0400017010402019-04-012019-06-3000017010402018-04-012018-06-300001701040us-gaap:TradeNamesMember2019-06-300001701040us-gaap:TechnologyBasedIntangibleAssetsMember2019-06-300001701040us-gaap:CustomerRelationshipsMember2019-06-3000017010402019-06-300001701040us-gaap:TradeNamesMember2018-12-310001701040us-gaap:TechnologyBasedIntangibleAssetsMember2018-12-310001701040us-gaap:CustomerRelationshipsMember2018-12-3100017010402018-12-3100017010402018-12-172018-12-1700017010402018-01-012018-06-300001701040cisn:TrendkiteMember2019-01-230001701040cisn:FalconMember2019-01-030001701040cisn:Prime1Member2018-01-230001701040cisn:TrendkiteMember2019-01-012019-06-300001701040cisn:Prime1Member2018-01-232018-01-230001701040cisn:TrendkiteMember2018-10-012019-06-300001701040cisn:FalconMember2018-10-012019-06-300001701040cisn:Prime1Member2017-01-012018-06-3000017010402019-01-012019-06-3000017010402018-10-222018-10-2200017010402018-02-082018-02-080001701040cisn:IContactMember2019-01-22iso4217:USDxbrli:purexbrli:sharescisn:employeeiso4217:EURiso4217:USDxbrli:shares

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to

Commission File Number: 001-38140

Cision Ltd.

(Exact name of registrant as specified in its charter)

Cayman Islands

 

N/A

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

130 East Randolph Street, 7th Floor

Chicago, Illinois 60601

(Address of principal executive offices)

(Zip code)

(866) 639-5087

(Registrant’s telephone number, including area code)

Not Applicable.

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No ⌧

Securities registered pursuant to Section 12(d) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Ordinary shares, par value $0.0001 per share

CISN

New York Stock Exchange

The number of ordinary shares, par value $0.0001 per share, of the registrant outstanding at August 5, 2019 was 148,384,467.

Table of Contents

CISION LTD. AND ITS SUBSIDIARIES

INDEX

PART I. – FINANCIAL INFORMATION

3

Item 1. – Financial Statements

3

Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations

26

Item 3. – Quantitative and Qualitative Disclosures About Market Risk

42

Item 4. – Controls and Procedures

42

PART II. – OTHER INFORMATION

44

Item 1. – Legal Proceedings

44

Item 1A. – Risk Factors

44

Item 2. – Unregistered Sales of Equity Securities and Use of Proceeds

44

Item 3. – Defaults Upon Senior Securities

44

Item 4. – Mine Safety Disclosures

44

Item 5. – Other Information

44

Item 6. – Exhibits

44

SIGNATURES

45

2

Table of Contents

PART I. – FINANCIAL INFORMATION

Item 1. – Financial Statements

Cision Ltd. and its Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except per share and share amounts)

(Unaudited)

    

June 30, 2019

    

December 31, 2018

Assets

 

  

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

$

74,401

$

104,769

Accounts receivable, net

 

137,111

 

120,882

Prepaid expenses and other current assets

 

36,606

 

22,824

Total current assets

 

248,118

 

248,475

Property and equipment, net

 

62,131

 

57,210

Other intangible assets, net

 

404,205

 

377,146

Goodwill

 

1,425,008

 

1,171,859

Operating lease right-of-use assets

61,841

Deferred tax asset

 

4,171

 

4,034

Other assets

 

10,018

 

7,652

Total assets

$

2,215,492

$

1,866,376

Liabilities and Stockholders’ Equity

 

  

 

  

Current liabilities:

 

  

 

  

Current portion of long-term debt

$

13,996

$

13,210

Accounts payable

 

12,878

 

15,603

Accrued compensation and benefits

 

34,610

 

29,323

Operating lease liabilities

14,214

Other accrued expenses

 

60,314

 

82,507

Current portion of deferred revenue

 

170,738

 

139,725

Total current liabilities

 

306,750

 

280,368

Long-term debt, net of current portion

 

1,274,267

 

1,205,760

Deferred revenue, net of current portion

 

1,038

 

1,098

Operating lease liabilities, net of current portion

62,972

Deferred tax liability

 

74,564

 

69,232

Other liabilities

 

10,359

 

21,601

Total liabilities

 

1,729,950

 

1,578,059

Commitments and contingencies (Note 10)

 

  

 

  

Stockholders’ equity:

 

  

 

  

Preferred stock, $0.0001 par value, 20,000,000 shares authorized; no shares issued and outstanding at June 30, 2019 and December 31, 2018

 

 

Common stock, $0.0001 par value, 480,000,000 shares authorized; 148,351,227 and 132,716,541 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively

 

15

 

13

Additional paid-in capital

 

984,663

 

797,222

Accumulated other comprehensive loss

 

(63,035)

 

(68,941)

Accumulated deficit

 

(436,101)

 

(439,977)

Total stockholders’ equity

 

485,542

 

288,317

Total liabilities and stockholders’ equity

$

2,215,492

$

1,866,376

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Table of Contents

Cision Ltd. and its Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except share and per share amounts)

(Unaudited)

Three months ended

Six months ended

June 30, 

June 30, 

    

2019

    

2018

    

2019

    

2018

Revenue

$

190,496

$

187,475

$

376,300

$

366,768

Cost of revenue

 

68,779

 

66,757

 

134,832

 

131,035

Gross profit

 

121,717

 

120,718

 

241,468

 

235,733

Operating costs and expenses

 

  

 

  

 

  

 

  

Sales and marketing

 

32,429

 

28,419

 

65,662

 

58,127

Research and development

 

7,325

 

8,290

 

15,868

 

14,990

General and administrative

 

45,511

 

41,538

 

97,476

 

87,760

Amortization of intangible assets

 

18,863

 

20,264

 

37,674

 

40,514

Total operating costs and expenses

 

104,128

 

98,511

 

216,680

 

201,391

Operating income

 

17,589

 

22,207

 

24,788

 

34,342

Non operating income (expense):

 

  

 

  

 

  

 

  

Foreign exchange gains (losses)

 

(5,226)

 

15,964

 

(2,144)

 

8,081

Interest and other income, net

 

244

 

348

 

561

 

92

Gain on sale of business

28,144

Interest expense

 

(18,910)

 

(20,474)

 

(38,183)

 

(40,162)

Loss on extinguishment of debt

 

 

 

(355)

 

(2,432)

Total non operating loss

 

(23,892)

 

(4,162)

 

(11,977)

 

(34,421)

Income (loss) before income taxes

 

(6,303)

 

18,045

 

12,811

 

(79)

Provision for income taxes

 

1,455

 

24,628

 

8,935

 

6,946

Net income (loss)

$

(7,758)

$

(6,583)

$

3,876

$

(7,025)

Other comprehensive income (loss) - foreign currency translation adjustments

 

(945)

 

(25,392)

 

5,906

 

(18,317)

Comprehensive income (loss)

$

(8,703)

$

(31,975)

$

9,782

$

(25,342)

Net income (loss) per share:

 

  

 

  

 

  

 

  

Basic

$

(0.05)

$

(0.05)

$

0.03

$

(0.06)

Diluted

$

(0.05)

$

(0.05)

$

0.03

$

(0.06)

Weighted-average shares outstanding used in computing per share amounts:

 

  

 

  

 

  

 

  

Basic

148,070,969

127,392,151

146,749,612

125,678,727

Diluted

148,070,969

127,392,151

146,833,535

125,678,727

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Table of Contents

Cision Ltd. and its Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(in thousands, except share and per share amounts)

(Unaudited)

Share Capital

Additional
Paid-in

Accumulated Other

Accumulated

Total
Stockholders’

    

Shares

    

$

    

Capital

    

Comprehensive Loss

    

Deficit

    

Equity (Deficit)

Balances at December 31, 2017

122,634,922

$

12

$

771,813

$

(35,111)

$

(420,345)

$

316,369

Adoption of new accounting standards

(986)

4,762

3,776

Issuance of shares for acquisition

1,735,269

20,144

20,144

Vesting of RSU’s

375

Equity-based compensation expense

1,341

1,341

Net loss

(442)

(442)

Foreign currency translation adjustments

7,075

7,075

Balances at March 31, 2018

124,370,566

 

$

12

 

$

793,298

 

$

(29,022)

 

$

(416,025)

 

$

348,263

Conversion of warrants to common stock

6,342,989

1

(1)

Equity-based compensation expense

868

868

Net loss

(6,583)

(6,583)

Foreign currency translation adjustments

(25,392)

(25,392)

Balances at June 30, 2018

130,713,555

 

$

13

$

794,165

 

$

(54,414)

 

$

(422,608)

 

$

317,156

Share Capital

Additional
Paid-in

Accumulated Other

Accumulated

Total
Stockholders’

    

Shares

    

$

    

Capital

    

Comprehensive Loss

    

Deficit

    

Equity (Deficit)

Balances at December 31, 2018

132,716,541

$

13

$

797,222

$

(68,941)

$

(439,977)

$

288,317

Issuance of shares for acquisitions

15,591,186

2

182,246

182,248

Vesting of RSU’s

375

Exercise of stock options

20,625

264

264

Equity-based compensation expense

2,081

2,081

Net income

11,634

11,634

Foreign currency translation adjustments

6,851

6,851

Balances at March 31, 2019

148,328,727

 

$

15

 

$

981,813

 

$

(62,090)

 

$

(428,343)

 

$

491,395

Exercise of stock options

22,500

288

288

Equity-based compensation expense

2,562

2,562

Net loss

(7,758)

(7,758)

Foreign currency translation adjustments

(945)

(945)

Balances at June 30, 2019

148,351,227

 

$

15

$

984,663

 

$

(63,035)

 

$

(436,101)

 

$

485,542

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Table of Contents

Cision Ltd. and its Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

Six months ended June 30, 

    

2019

    

2018

Cash flows from operating activities

 

  

 

  

Net income (loss)

$

3,876

$

(7,025)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

Depreciation and amortization

 

62,256

 

66,878

Non-cash interest charges and amortization of debt discount and deferred financing costs

 

5,146

 

7,301

Equity-based compensation expense

 

4,643

 

2,209

Provision for doubtful accounts

 

2,186

 

3,015

Deferred income taxes

 

122

 

2,549

Unrealized foreign currency (gains) losses

 

1,840

 

(8,249)

Gain on sale of business

 

(28,144)

 

Payment of contingent consideration

(4,296)

Other

 

 

87

Changes in operating assets and liabilities, net of effects of acquisitions and disposal:

 

  

 

Accounts receivable

 

(5,022)

 

277

Prepaid expenses and other current assets

 

(4,683)

 

(2,982)

Operating lease right-of-use assets

8,184

Other assets

 

(1,698)

 

(168)

Accounts payable

 

(5,119)

 

1,877

Accrued compensation and benefits

 

1,822

 

(3,347)

Other accrued expenses

 

(19,675)

 

(7,097)

Deferred revenue

 

18,438

 

8,743

Operating lease liabilities

(8,153)

Other liabilities

 

1,115

 

(435)

Net cash provided by operating activities

 

32,838

 

63,633

Cash flows from investing activities

 

  

 

  

Purchases of property and equipment

 

(7,308)

 

(6,860)

Software development costs

 

(14,843)

 

(8,197)

Acquisitions of businesses, net of cash and restricted cash acquired of $6,068 and $2,711

 

(148,541)

 

(62,713)

Proceeds from disposal of business

 

44,865

 

Other

 

20

 

5

Net cash used in investing activities

 

(125,807)

 

(77,765)

Cash flows from financing activities

 

  

 

  

Proceeds from revolving credit facility

 

40,000

 

Repayment of revolving credit facility

 

(40,000)

 

Proceeds from term credit facility, net of debt discount of $1,013

 

73,987

 

Repayments of term credit facility

 

(6,996)

 

(46,676)

Payments of deferred financing costs

 

(1,619)

 

(294)

Proceeds from the exercise of stock options

552

Payment of contingent consideration

 

(3,695)

 

(2,873)

Net cash provided by (used in) financing activities

 

62,229

 

(49,843)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

372

 

(1,712)

Decrease in cash, cash equivalents, and restricted cash

 

(30,368)

 

(65,687)

Cash, cash equivalents, and restricted cash

 

  

 

  

Beginning of period

 

104,769

 

148,654

End of period

$

74,401

$

82,967

Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets

Cash and cash equivalents

$

74,401

$

82,967

Restricted cash, included in prepaid expenses and other current assets

Total cash, cash equivalents, and restricted cash

$

74,401

$

82,967

Supplemental disclosure of cash flows information

 

  

 

  

Issuance of shares for acquisitions

 

182,248

 

20,143

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Table of Contents

Notes to Condensed Consolidated Financial Statements

1. Organization

Cision Ltd., a Cayman Islands company and its subsidiaries (collectively, “Cision”, or the “Company”), is a leading provider of cloud-based software, media intelligence and distribution services, and other related professional services to the marketing and public relations industry. Communications professionals use the Company’s products and services to identify and connect with media influencers, manage industry relationships, create and distribute content, monitor media coverage, perform advanced analytics and measure the effectiveness of their campaigns. The Company has primary offices in Chicago, Illinois, Beltsville, Maryland, Ann Arbor, Michigan, New York, New York, Cleveland, Ohio, Austin, Texas, and Albuquerque, New Mexico with additional offices in the United States, as well as Australia, Brazil, Bulgaria, Canada, China, Denmark, France, Germany, Hong Kong, Hungary, India, Indonesia, Malaysia, Mexico, Portugal, Singapore, South Korea, Sweden, Taiwan, the United Kingdom, and Vietnam.

As described in the Company’s 2018 consolidated financial statements included in its Annual Report on Form 10-K, on March 19, 2017, the Company entered into a definitive agreement with Capitol Acquisition Corp. III (NASDAQ: CLAC; “Capitol”), a public investment vehicle, whereby the parties agreed to merge, resulting in the Company becoming a publicly listed company. This merger closed on June 29, 2017.

2. Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair statement have been included. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated balance sheet as of December 31, 2018 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP. Operating results for the six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 or any other period. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC on March 1, 2019.

Certain prior period amounts have been adjusted to conform with the adoption of Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606 or the “new revenue standard”) during the fourth quarter of 2018, effective as of January 1, 2018.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. On an on-going basis, the Company evaluates its estimates, including, but not limited to, those related to the allowance for doubtful accounts, software development costs, useful lives of property, equipment and internal use software, intangible assets and goodwill, contingent liabilities, and fair value of equity-based awards and income taxes. The Company bases its estimates on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities as well as the reported amounts of revenues and expenses during the period. Actual results could differ from these estimates.

Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value pursuant to a fair value hierarchy based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable

7

Table of Contents

Notes to Condensed Consolidated Financial Statements (continued)

inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The fair value hierarchy consists of the following three levels:

Level 1          Inputs are quoted prices in active markets for identical assets or liabilities.

Level 2          Inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.

Level 3          Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

Revenue Recognition

The Company accounts for revenue contracts with customers by applying the requirements of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (Topic 606), which includes the following steps:

Identification of the contract, or contracts with a customer.
Identification of the performance obligations in the contract.
Determination of the transaction price.
Allocation of the transaction price to the performance obligations in the contract.
Recognition of the revenue when, or as, the Company satisfies a performance obligation.

The Company derives its revenue from access to its cloud based technology platform and related media management and analysis services sold on a subscription basis. Revenue is also derived from the distribution of press releases on both a subscription basis and separately from non-subscription arrangements. Dependent on the nature of the distribution contract with the customer, the Company recognizes revenue ratably over the term of the subscription contract, or on a per-transaction basis when the press releases are made available to the public.

Subscription services include access to the Company’s software platform and associated hosting services, content and content updates, customer support and media management and analysis services. Subscription services are recognized ratably over the contractual period that the services are delivered, beginning on the date in which such service is made available to the customer. Subscription agreements are typically one year in length and are non-cancelable, though customers have the right to terminate their agreements if the Company materially breaches its obligations under the agreement. Software subscription agreements do not provide customers the right to take possession of the software at any time. The Company does not charge customers an upfront fee for use of the platform and implementation activities are insignificant and not subject to a separate fee. In certain cases, the Company charges annual membership fees which are recognized ratably over the one-year membership period.

The Company accounts for a contract when both parties have approved the contract and are committed to perform their respective obligations, each party’s rights can be identified and payment terms can be identified, the contract has commercial substance and it is probable that the Company will collect substantially all of the consideration. Revenue is recognized when, or as, performance obligations are satisfied by transferring control of the promised service to a customer. The transaction price for subscription arrangements and services is generally fixed at contract inception. The Company’s standard payment terms are generally net 30 days. For transaction-based services, which predominantly comprise press release distributions, customers are invoiced in the month the release is made available to the public.

8

Table of Contents

Notes to Condensed Consolidated Financial Statements (continued)

In the event that a customer arrangement contains multiple services, the Company determines whether such goods or services are distinct performance obligations that should be accounted for separately in the arrangement. When arrangements contain multiple performance obligations, further evaluation is usually not required given such performance obligations are generally recognized over time using the same measure of progress and thus, are accounted for as a single performance obligation. Otherwise, when allocating the transaction price in the arrangement, the Company uses the estimated standalone selling price of each distinct performance obligation. In order to estimate the standalone selling prices, the Company relies on the price charged for stand-alone sales, expected cost plus margin and adjusted market assessment approaches. Revenue is then recognized over the pattern of performance as each obligation is satisfied as discussed above.

As of June 30, 2019, the Company’s remaining performance obligations were $171.8 million, approximately 99.4% of which is expected to be recognized as revenue over the next twelve months and the remainder thereafter. During the six months ended June 30, 2019, the Company recognized $101.3 million in revenue that was recorded as deferred revenue as of December 31, 2018.

Recent Accounting Pronouncements

New Accounting Pronouncements Adopted

We adopted ASU No. 2016-02, Leases (Topic 842), as of January 1, 2019, using the effective date method for the modified retrospective approach. Comparative periods were not restated. In addition, the Company elected the package of practical expedients permitted under the transaction guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. The Company also elected the practical expedients pertaining to short-term lease exemptions at transition and going forward. For office leases beginning in 2019 and later, the Company accounts for lease components (components of a contract for which the Company economically benefits from their use and is not highly interrelated with other right of use assets underlying the contract such as base rent) separately from the non-lease components (e.g., common-area maintenance costs). For datacenter leases beginning in 2019 and later, the Company elected the practical expedient to combine its lease and non-lease components that meet the defined criteria and will account for the lease component under Topic 842.

Topic 842 includes multiple changes with one of the most significant impacts being the addition of a right-of-use (“ROU”) asset and a lease liability to the balance sheet for operating leases. A ROU asset represents the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. An additional change under Topic 842 is the lease term evaluation. Under Topic 842, a leasee shall extend the lease term beyond the original contract term if the company is reasonably certain to exercise their renewal option.

Upon adoption of the new standard, the Company recognized total ROU assets of approximately $73.2 million, total lease liabilities of approximately $85.3 million, and corresponding adjustments to prepaid expenses of $(0.2) million, deferred rent included in other accrued expenses of $1.8 million, and deferred rent included in other liabilities of $10.5 million on the consolidated balance sheets as of as of January 1, 2019. The standard did not materially impact our consolidated net earnings and had no impact on cash flows. The adoption of the new standard also resulted in significant additional disclosures regarding the Company’s leasing activities, as discussed in Note 5.

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which will allow a reclassification from accumulated other comprehensive income to retained earnings for the tax effects resulting from “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the “Act”) that are stranded in accumulated other comprehensive income. This ASU also requires certain disclosures about stranded tax effects; however, it does not change the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations. This ASU is effective on January 1, 2019, with early adoption permitted. It must be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Act is recognized. The Company adopted ASU

9

Table of Contents

Notes to Condensed Consolidated Financial Statements (continued)

2018-02 during the six months ended June 30, 2019 and it did not have a material impact on the Company’s condensed consolidated financial statements.

Recent Accounting Pronouncements Not Yet Effective

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), which modifies the disclosure requirements related to fair value measurements. The ASU eliminates the requirement to disclosure and amount and reasons for transfers between Level 1 and Level 2 fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. Entities will now be required to disclose the changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2019, and early adoption is permitted. The Company is in the process of evaluating the impact of this standard on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits- Defined Benefit Plans – General (Subtopic 715-20), which modifies the disclosure requirements for defined benefit pensions and other postretirement plans. The ASU adds and removes disclosure requirements from the current standard in an effort to improve the effectiveness of retirement benefit disclosures. The ASU is effective for fiscal years ended after December 15, 2020, and early adoption is permitted. The Company is in the process of evaluating the impact of this standard on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), which clarifies the accounting for costs of implementing a cloud computing service arrangement. The ASU requires companies to capitalize the implementation costs associated with cloud computing service arrangements, regardless as to whether the contract contains a license. The ASU is effective for annual periods in 2020, including interim periods. The Company is in the process of evaluating the impact of this standard on its consolidated financial statements.

3. Business Combinations and Dispositions

Purchase of Prime

On January 23, 2018, the Company completed its acquisition of PRIME Research (“Prime”). The purchase price was approximately €75.7 million ($94.1 million) and consisted of approximately €53.1 million ($65.4 million) in cash consideration, the issuance of approximately 1.7 million shares of common stock valued at €16.4 million ($20.1 million), and up to €6.2 million ($8.6 million) of deferred payments due within 18 months. The Company has the discretion to pay up to €2.5 million ($3.1 million) of the deferred payments with common stock. The acquisition of Prime expanded the Company’s comprehensive data-driven offerings that help communications professionals identify influencers, craft meaningful campaigns, and attribute business value to those efforts. At the date of the acquisition, Prime had over 700 employees with offices in Brazil, China, Germany, India, Switzerland, the United Kingdom, and the United States.

Total acquisition costs related to the Prime acquisition were $5.4 million of which $2.3 million were incurred during the six months ended June 30, 2018 and the rest were incurred in 2017. Total acquisition costs were included in general and administrative expense in the condensed consolidated statements of operations and comprehensive loss. The acquisition was accounted for under the purchase method of accounting. The operating results are included in the accompanying condensed consolidated financial statements from January 23, 2018.

The purchase price has been allocated to the assets acquired and liabilities assumed based on fair values as of the acquisition date.

The following table summarizes the allocation of the purchase price by the Company to the fair value of the assets and liabilities of Prime. The identifiable intangible assets include the trade name, customer relationships and purchased

10

Table of Contents

Notes to Condensed Consolidated Financial Statements (continued)

technology and are being amortized over three to eleven years on an accelerated basis. The Company completed the purchase price allocation in January 2019.

(in thousands)

    

  

Cash and cash equivalents

$

2,711

Accounts receivable, net

 

8,186

Prepaid and other assets

 

1,320

Property, equipment and software, net

 

1,207

Trade name

 

1,436

Customer relationships

 

17,903

Purchased technology

 

9,881

Goodwill

 

57,465

Total assets acquired

 

100,109

Accounts payable, accrued liabilities, and other liabilities

 

(5,627)

Deferred revenue

 

(426)

Total liabilities assumed

 

(6,053)

Net assets acquired

$

94,056

Approximately $39.6 million of goodwill is deductible for tax purposes. The excess of the purchase price over the total net identifiable assets has been recorded as goodwill which is primarily attributable to synergies expected from the expanded technology and service capabilities from the integrated business as well as the value of the assembled workforce in accordance with GAAP.

Other 2018 Acquisition

During the third quarter of 2018, the Company purchased certain immaterial technology and development assets to expand its products and services offerings, and the results of this acquisition have been included in the consolidated results from the acquisition date. The estimate of fair value for the assets acquired and liabilities assumed was based upon a preliminary calculation and valuation and is subject to change as additional information related to estimates during the measurement period is obtained (up to one year from the acquisition date). The primary areas of those preliminary estimates relate to certain identifiable intangible assets and goodwill.

Purchase of Falcon

On January 3, 2019, the Company completed its acquisition of Falcon.io (“Falcon”). The purchase price was approximately €103.4 million ($119.0 million) and consisted of approximately €53.6 million ($61.7 million) in cash consideration, the issuance of approximately 5.1 million ordinary shares valued at €49.8 million ($57.3 million), and up to €5.2 million ($6.0 million) of deferred payments due within 12 months in cash of €2.4 million ($2.8 million) and ordinary shares of €2.8 million ($3.2 million). The cash portion of the consideration was funded with a combination of cash on hand and borrowings under the Company’s Revolving Credit Facility. The Company drew approximately $40.0 million under its Revolving Credit Facility in connection with the closing of the Falcon acquisition, all of which was repaid during the six months ended June 30, 2019. The acquisition of Falcon solidifies the Company’s market leadership in driving the future of earned media management, moving beyond the tactical nature of PR point solutions. At the date of the acquisition, Falcon had over 250 employees with offices in Denmark, Germany, Hungary, Australia, Bulgaria, and the United States.

Total acquisition costs related to the Falcon acquisition were $2.4 million of which $0.4 million were incurred during the year ended December 31, 2018 and are included in general and administrative expense in the condensed consolidated statements of operations and comprehensive income. The acquisition was accounted for under the purchase method of accounting. The operating results are included in the accompanying condensed consolidated financial statements from January 3, 2019.

11

Table of Contents

Notes to Condensed Consolidated Financial Statements (continued)

The purchase price has been preliminarily allocated to the assets acquired and liabilities assumed based on estimated fair values as of the acquisition date.

The following table summarizes the preliminary allocation of the purchase price by the Company to the fair value of the assets and liabilities of Falcon. The amounts related to taxes and intangible assets shown below are preliminary and subject to adjustment as additional information is obtained about the facts and circumstances that existed at the date of acquisition. The identifiable intangible assets include the trade name, customer relationships and purchased technology and are being amortized over three to seven years on an accelerated basis. The Company expects to complete the purchase price allocation on or before January 3, 2020.

(in thousands)

    

Cash and cash equivalents

 

$

3,492

Accounts receivable, net

5,575

Prepaid and other assets

1,113

Property, equipment and software, net

204

Trade name

483

Customer relationships

33,825

Purchased technology

4,940

Goodwill

87,674

Total assets acquired

137,306

Accounts payable and accrued liabilities

(7,641)

Deferred revenue

(7,627)

Deferred taxes

(3,048)

Total liabilities assumed

(18,316)

Net assets acquired

 

$

118,990

Goodwill is not deductible for tax purposes. The preliminary purchase price is subject to customary post-closing adjustments. The excess of the purchase price over the total net identifiable assets has been recorded as goodwill which is primarily attributable to synergies expected from the expanded technology and service capabilities from the integrated business as well as the value of the assembled workforce in accordance with GAAP.

Purchase of TrendKite

On January 23, 2019, the Company completed its acquisition of TrendKite. The purchase price was approximately $219.0 million and consisted of approximately $94.1 million in cash consideration, the issuance of approximately 10.3 million ordinary shares valued at $124.9 million, and up to $3.2 million of deferred payments due in 12 months in cash of approximately $1.3 million and ordinary shares of approximately $1.9 million. The cash portion of the consideration was funded with a combination of cash on hand and additional borrowing under the First Lien Dollar Credit Facility, as disclosed in Note 6. The acquisition of TrendKite will enhance the ability of the Company’s customer base to demonstrate and measure the business impact of their earned media. At the date of acquisition, TrendKite had over 200 employees with offices in the United States and the United Kingdom.

Total acquisition costs related to the TrendKite acquisition were $3.8 million of which $0.9 million were incurred during the year ended December 31, 2018 and are included in general and administrative expense in the condensed consolidated statements of operations and comprehensive income. The acquisition was accounted for under the purchase method of accounting. The operating results are included in the accompanying condensed consolidated financial statements from January 23, 2019.

The purchase price has been preliminarily allocated to the assets acquired and liabilities assumed based on estimated fair values as of the acquisition date.

12

Table of Contents

Notes to Condensed Consolidated Financial Statements (continued)

The following table summarizes the preliminary allocation of the purchase price by the Company to the fair value of the assets and liabilities of TrendKite. The amounts related to taxes and intangible assets shown below are preliminary and subject to adjustment as additional information is obtained about the facts and circumstances that existed at the date of acquisition. The identifiable intangible assets include the trade name, customer relationships and purchased technology and are being amortized over three to eleven years on an accelerated basis. The Company expects to complete the purchase price allocation on or before January 23, 2020.

(in thousands)

    

Cash and cash equivalents

 

$

1,976

Accounts receivable, net

7,714

Prepaid and other assets

1,676

Property, equipment and software, net

820

Trade name

380

Customer relationships

31,930

Purchased technology

4,915

Goodwill

185,108

Total assets acquired

234,519

Accounts payable and accrued liabilities

(4,611)

Deferred revenue

(8,924)

Deferred taxes

(2,025)

Total liabilities assumed

(15,560)

Net assets acquired

 

$

218,959

Goodwill is not deductible for tax purposes. The preliminary purchase price is subject to customary post-closing adjustments. The excess of the purchase price over the total net identifiable assets has been recorded as goodwill which is primarily attributable to synergies expected from the expanded technology and service capabilities from the integrated business as well as the value of the assembled workforce in accordance with GAAP.

Sale of iContact

On January 22, 2019, the Company sold its email marketing business for approximately $49.3 million of cash consideration, net of working capital adjustments, with up to an additional $4.0 million in cash based upon meeting certain business performance measures over the next 12 months. The fair value of the contingent consideration was $1.9 million based on the net present value of future cash flows using internal models. The Company used the proceeds to pay down the Revolving Credit Facility.

Supplemental Unaudited Pro Forma Information

The acquired entities of Prime, Falcon and TrendKite together contributed revenue of $22.8 million and $12.9 million for the three months ended June 30, 2019 and 2018, respectively and $44.6 million and $22.2 million for the six months ended June 30, 2019 and 2018, respectively. Net income or loss from these acquisitions for the same period is impracticable to determine due to the extent of integration activities.

The unaudited pro forma information below gives effect to the acquisition of Prime as if it had occurred as of January 1, 2017 and Falcon and TrendKite as if they had occurred as of January 1, 2018. The pro forma results exclude the other acquisition in 2018 discussed above, as it was deemed not material.

13

Table of Contents

Notes to Condensed Consolidated Financial Statements (continued)

The pro forma results presented below show the impact of the acquisitions and related costs as well as the increase in interest expense related to acquisition-related debt.

Three months ended June 30, 

Six months ended June 30, 

(in thousands, except per share data)

    

2019

    

2018

    

2019

    

2018

Revenue

$

194,251

$

200,651

$

384,836

$

394,126

Net income (loss)

(6,222)

(13,035)

9,181

(19,646)

Net income (loss) per share - basic

(0.04)

(0.09)

0.06

(0.14)

Net income (loss) per share - diluted

(0.04)

(0.09)

0.06

(0.14)

4. Goodwill and Intangibles

Changes in the carrying amounts of goodwill since December 31, 2018 consisted of the following:

(in thousands)

    

Balance as of December 31, 2018

$

1,171,859

Acquisition of Falcon

87,674

Acquisition of TrendKite

185,108

Sale of iContact

(21,289)

Effects of foreign currency

 

1,656

Balance as of June 30, 2019

$

1,425,008

Definite-lived intangible assets consisted of the following at June 30, 2019 and December 31, 2018:

June 30, 2019

    

Gross

    

Foreign

    

    

Net

Carrying

Currency

Accumulated

Carrying

(in thousands)

    

Amount

    

Translation

    

Amortization

    

Amount

Trade names and brand

$

370,873

$

(6,640)

$

(133,323)

$

230,910

Customer relationships

 

357,958

 

(18,962)

 

(193,609)

 

145,387

Purchased technology

 

138,746

 

(7,277)

 

(103,561)

 

27,908

Balances at June 30, 2019

$

867,577

$

(32,879)

$

(430,493)

$

404,205

December 31, 2018

    

Gross

    

Foreign

    

    

Net

Carrying

Currency

Accumulated

Carrying

(in thousands)

    

Amount

    

Translation

    

Amortization

    

Amount

Trade names and brand

$

372,010

$

(8,143)

$

(115,954)

$

247,913

Customer relationships

 

321,862

 

(18,967)

 

(203,031)

 

99,864

Purchased technology

 

145,951

 

(7,408)

 

(109,174)

 

29,369

Balances at December 31, 2018

$

839,823

$

(34,518)

$

(428,159)

$

377,146

Weighted-average useful life at June 30, 2019

    

Years

Trade names and brand

 

11.3

Customer relationships

 

6.4

Purchased technology

 

3.0

14

Table of Contents

Notes to Condensed Consolidated Financial Statements (continued)

Future expected amortization of intangible assets at June 30, 2019 is as follows:

(in thousands)

    

Remainder of 2019

$

48,525

2020

84,891

2021

 

66,530

2022

 

48,544

2023

 

35,311

Thereafter

 

120,404

$

404,205

5. Leases

The Company has various non-cancelable operating leases, primarily related to office real estate and datacenters, that expire through 2035 and generally contain renewal options for up to five years. Under ASC 842, the lease term includes options to extend or terminate the lease when the Company is reasonably certain that it will exercise the option. The Company will monitor events or changes in circumstances that impact the timing or amount of future lease payments and will adjust the lease liability and corresponding ROU asset as necessary. For office leases beginning in 2019 and later, the Company accounts for lease components (components of a contract for which the Company economically benefits from their use and is not highly interrelated with other right of use assets underlying the contract such as base rent) separately from the non-lease components (e.g., common-area maintenance costs). For datacenter leases beginning in 2019 and later, the Company elected the practical expedient to combine its lease and non-lease components that meet the defined criteria and will account for the lease component under Topic 842. The Company has no significant financing leases. Lastly, the Company has not entered into any future office space leases that will create significant rights and obligations for the Company.

At inception of a contract, the Company determines if the contract contains a lease based on requirements of ASC 842. If a lease with a term greater than 1 year is identified, the Company will add a ROU asset and lease liability to the balance sheet. The Company has elected the practical expedient and expenses all leases with a contract term of 1 year or less. The Company recognizes a lease liability based on the net present value of total lease payments which utilizes an implicit discount rate based on the Company’s collateralized borrowing rate placed on a yield curve. The incremental borrowing rate for a lease is the rate of interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. To derive the ROU asset, the Company makes required adjustments, such as indirect costs and prepaid or deferred balances, to the lease liability. We recognize operating lease expense on a straight-line basis over the term of the lease within operating expenses and cost of revenue.

Three months ended

Six months ended

Lease Cost (in thousands)

    

June 30, 2019

    

June 30, 2019

Operating lease cost

 

$

3,791

 

$

9,557

Short-term lease cost

1,053

1,665

Variable lease cost

3,011

4,127

Sublease income

(255)

(436)

Total lease cost

 

$

7,600

 

$

14,913

15

Table of Contents

Notes to Condensed Consolidated Financial Statements (continued)

Operating leases (thousands)

    

Classification

    

June 30, 2019

 

 

Operating right-of-use assets

 

Operating right-of-use assets

 

$

61,841

Operating lease liabilities (current)

 

Operating lease liabilities (current)

14,214

Operating lease liabilities (net of current portion)

 

Operating lease liabilities (net of current portion)

62,972

Total operating lease liabilities

 

$

77,186

Weighted average remaining lease term

6.9 years

Weighted average discount rate

5.2

%

The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2019 (in thousands):

Remainder of 2019

    

$

9,214

2020

17,206

2021

14,572

2022

12,579

2023

8,529

Thereafter

32,834

Total lease payments

94,934

Less: imputed interest

(17,748)

Present value of lease liabilities

 

$

77,186

As previously disclosed in our 2018 Form 10-K and under the previous lease accounting standard, future minimum lease payments under non-cancelable operating leases as of December 31, 2018 were as follows (in thousands):

2019

    

$

16,288

2020

15,682

2021

13,416

2022

12,494

2023

8,806

Thereafter

27,773

Total future minimum payments

 

$

94,459

Six months ended

    

June 30, 2019

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases

 

$

9,019

ROU assets obtained in exchange for new operating lease liabilities

Operating leases

 

$

(5,719)

16

Table of Contents

Notes to Condensed Consolidated Financial Statements (continued)

6. Debt

Debt consisted of the following at June 30, 2019 and December 31, 2018:

June 30, 2019

(in thousands)

    

Short-Term

    

Long-Term

    

Total

2017 First Lien Credit Facility

$

13,996

$

1,307,246

$

1,321,242

Unamortized debt discount and issuance costs

 

 

(32,979)

 

(32,979)

Balances at June 30, 2019

$

13,996

$

1,274,267

$

1,288,263

December 31, 2018

(in thousands)

    

Short-Term

    

Long-Term

    

Total

2017 First Lien Credit Facility

$

13,210

$

1,241,253

$

1,254,463

Unamortized debt discount and issuance costs

 

 

(35,493)

 

(35,493)

Balances at December 31, 2018

$

13,210

$

1,205,760

$

1,218,970

2017 First Lien Credit Facility

On August 4, 2017, the Company entered into a refinancing amendment and incremental facility amendment (the “2017 First Lien Credit Facility”) to the 2016 First Lien Credit Facility, with Deutsche Bank AG, New York Branch, as administrative agent and collateral agent, and a syndicate of commercial lenders. The 2017 First Lien Credit Facility provided for a tranche of refinancing term loans which refinanced the term loans under the 2016 First Lien Credit Facility in full and provided for additional term loans of $131.2 million. Upon effectiveness of the 2017 First Lien Credit Facility, the 2017 First Lien Credit Facility consists of:

(i)a revolving credit facility, which permits borrowings and letters of credit of up to $75.0 million (the “2017 Revolving Credit Facility”), of which up to $25.0 million may be used or issued as standby and trade letters of credit;
(ii)a $960.0 million Dollar-denominated term credit facility (the “2017 First Lien Dollar Term Credit Facility”); and
(iii)a 250.0 million Euro-denominated term credit facility (the “2017 First Lien Euro Term Credit Facility”) and, together with the 2017 First Lien Dollar Term Credit Facility, the “2017 First Lien Term Credit Facility” and collectively with the 2017 Revolving Credit Facility, the “2017 First Lien Credit Facility”).

The Company used the proceeds from the 2017 First Lien Term Credit Facility to repay all amounts then outstanding under the 2016 First Lien Credit Facility, all amounts outstanding under the 2016 Second Lien Credit Facility, pay all related fees and expenses, and retained remaining cash for general corporate purposes. The Company terminated the 2016 Second Lien Credit Facility in connection with establishing the 2017 First Lien Credit Facility.

On December 14, 2017, the Company amended the 2017 First Lien Credit Facility to borrow an additional $75.0 million of 2017 First Lien Dollar Term Credit Facility. The Company used the money for its acquisition of Prime Research Group.