News for 'CYDE' - (CyberDefender Corporation Announces Third Quarter 2011 Financial Results)
LOS ANGELES, Nov 10, 2011 (GlobeNewswire via COMTEX) -- CyberDefender(R)
Corporation (Nasdaq:CYDE), a leading provider of direct-to-consumer remote
technical support services, Internet security software! and utilities, today
announced financial results for the third quarter ended September 30, 2011.
Third Quarter 2011 Highlights
-- Cost of revenue declined 30% year-over-year, 33% sequentially
-- Gross profit increased 11% year-over-year, 16% sequentially
-- Gross sales renewals increased 11% year-over-year
-- Company secured $5.2 million in financing
Management Change
The Board of Directors reached an agreement in principle to appoint Greg Thomas
as its chief executive officer and is engaged with Mr. Thomas to execute a
formal employment agreement by November 15, 2011. Gary Guseinov, the Company's
former chairman and chief executive officer, resigned effective August 1, 2011.
Kevin Harris, the Company's chief financial officer, has been appointed interim
chief executive officer.
Mr. Thomas has served as an independent advisor to the Board of Direc tors and
the Company since May 2011. He brings to CyberDefender more than 20 years of
industry expertise in growing and managing highly successful direct-to-consumer
marketing companies.
"Our third quarter was dedicated to the implementation of our strategic plan,
and I am excited to report our efforts yielded meaningful improvements to a
number of key metrics," said Mr. Thomas. "Our company plan for stability, growth
and profitability includes comprehensive efforts across front-end customer
acquisition, product portfolio, call center efficiency, collections, and our
eCommerce platform. We are committed to providing best-of-breed products and
services to our customers while achieving sustainable profitability and building
a solid foundation so that we may capitalize on the opportunity ahead of us."
"Meeting our goals for profitability will require perseverance, determination
and commitment and this will not be accomplished overn! ight. I am, however,
confident we have the right plan and the right team in place," concluded Mr.
Thomas.
Results for the Quarter Ended September 30, 2011
GAAP revenue for the third quarter of 2011 was $11.8 million, compared to $12.7
million reported in the same quarter of 2010. Gross sales for the third quarter
of 2011 were $13.8 million compared to $18.6 million reported in the same
quarter of 2010. The Company defines gross sales (a non-GAAP measure) as GAAP
revenues before returns and before deferring revenue for GAAP purposes (the
Company's use of non-GAAP measures and reconciliation to GAAP is explained
below).
Cost of revenue for the third quarter of 2011 was $4.1 million compared to $5.8
million for the third quarter of 2010.
Gross profit for the third quarter of 2011 was $7.7 million compared to $6.9
million in the third quarter of 2010.
Gross margins in the third quarter of 2011 increased to 65% of ! net revenue
compared to 54% in the same quarter of 2010.
Dur ing the third quarter, the Company raised an aggregate of $5.2 million in
financing. The company closed $3.2 million of the aggregate during the third
quarter, and will recognize the remaining $2 million during the fourth quarter.
The financing is described in a Form 8-K filed with the Securities and Exchange
Commission on October 4, 2011.
"As we continue to explore opportunities to improve the capitalization of the
company, we believe that the additional financing raised during the third
quarter will permit the Company to continue to execute on its strategic
repositioning plan," said Interim Chief Executive Officer and Chief Financial
Officer Kevin Harris.
The Company ended the quarter with deferred revenue of $18.5 million and
unrestricted cash of $1.5 million.
Results for the Nine Months Ended September 30, 2011
GAAP revenue for the nine months ended September 30, 2011 was $39.9 million,
compared to $32.0 million r! eported during the same period of 2010. Gross sales
(a non-GAAP measure) for the nine months ended September 30, 2011 was $50.9
million, compared to $42.8 million reported during the same period of 2010.
Cost of revenue for the first nine months of 2011 was $17.3 million, compared to
$13.0 million reported during the same period of 2010.
Gross profit for the first nine months of 2011 was $22.6 million, compared to
$18.9 million reported during the same period of 2010.
2011 Guidance
For the full year 2011, the Company expects gross sales in the range of $63 to
$65 million.
Non-GAAP Financial Measures
Gross sales are a non-GAAP measure that the Company uses in assessing its
operating performance. We define gross sales as total sales before refunds and
uncollectible receivables/cancels and before deferring revenue for GAAP
purposes. We use this non-GAAP financial measure frequently because we believe
it gives! a better indication of our operating performance and the profitabilit y
of our marketing initiatives. We include this non-GAAP financial measure in our
earnings announcements in order to provide transparency to our investors and
enable investors to better understand our operating performance. However, gross
sales alone should not be used to assess our financial performance or to
formulate investment decisions.
The following is a reconciliation of gross sales to net GAAP revenue for the
three and nine months ended September 30, 2011 and September 30, 2010.
Three Months Ended September Nine Months Ended September
! 30, 30,
----------------------------- -----------------------------
2011 &nb! sp; 2010 &n bsp; 2011 2010
------------ ------------ ------------ ------------
Gross Sales $ 13,820,120 $ 18,559,760 $ 50,917,727 $ 42,801,971
Less: Refunds (1,433,312) (2,455,713) (5,603,873)&! nbsp; (5,411,358)
Less: Uncollected EZ pay (729,714) (1,276,108) (2,639,899) (2,070,470)
Less: Change in deferred
revenue 129,455 ! (2,081,836) (2,79 0,917) (3,384,124)
------------ ------------ ------------ ------------
Net revenue $ 11,786,549 $ 12,746,103 $ 39,883,038 $ 31,936,019
============ ============ ============ ============
Conference Call Information
The Company will host a conference call to discuss third quarter 2011 results
today, Thursday, November 10, 2011 at 1:30 pm PT/4:30 pm ET.
To access the live conference call, dial (877) 407-9210 (toll free) and give the
company name, "CyberDefender." Participants are asked to call the assigned
number approximately 10 minutes before the conference call begins. For those
unable to participate in the live conference call, a replay of the conference
call will be available (starting two hours after the call) by dialing (877)
660-6853 and entering the following account #: 286 and conference ID #: 382231.
International callers may access the replay by calling (201) 612-7415 and
entering the above pass code.
To listen to the live webcast, logon using the link provided in the events
section of the Company's website: www.cyberdefendercorp.com. An instant replay
of the conference call will be ! available over the Internet at the same web
address.
About C yberDefender
CyberDefender is a leading provider of remote technical support services,
Internet security software and utilities directly to the consumer market.
CyberDefender's team of highly trained technicians and sales agents provide
customers with efficient, round the clock remote PC repair services. The company
markets antispyware/antivirus software, PC optimization software and online
backup services. By combining remote live technical support and the
aforementioned software products, CyberDefender offers a complete Internet
security solution to consumers.
CyberDefender directly markets its products and services to consumers through
television and radio via its MyCleanPC(R), MaxMySpeed(R) and DoubleMySpeed(R)
brands. CyberDefender products are fully compatible with Microsoft Windows(R)
XP, Vista(R), and 7 Operating systems. All products are available at
www.cyberdefender.com. Investor relations information is available atwww.cyberdefendercorp.com.
The CyberDefender Corporation logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=7874
Forward Looking Statements
Statements in this public announcement that are not statements of historical or
current fact, including any statement regarding future growth and profitability,
and future revenue targets, constitute "forward-looking statements" under
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The forward looking statements
include statements concerning the Company's future business and financial
prospects including, but not limited to, the Company's ability to execute on its
strategic repositioning plan and its ability to achieve profitability. . The
forward-looking statements involve known and unknown risks, uncertainties and
other unknown factors that could cause CyberDefender's actual results to bematerially different from the historical results or from any future results
expressed or implied by such forward-looking statements. Factors that could
cause CyberDefender's results to be materially different from the
forward-looking statements include whether CyberDefender will be able to find
financing as required and whether CyberDefender's revenues eventually will
exceed its expenses. The forward-looking statements also are subject generally
to other risks and uncertainties that are described from time to time in
CyberDefender's reports and registration statements filed with the Securities
and Exchange Commission, which are available for review at www.sec.gov.
CYBERDEFENDER CORPORATION
CONDENSED BALANCE SHEETS &! nbsp;
(UNAUDITED)
September 30, December 31,
&n! bsp; 2011 &n bsp; 2010
------------- ------------
ASSETS
Current assets
! ; Cash $ 1,546,221 $ 2,649,061
Restricted cash 2,255,074 3,079,394
Accounts receivable 1,688,276 2,385,920
Deferred financing costs,
current &nbs! p; &n bsp; 124,241 103,484
Prepaid expenses 174,225 195,258
Deferred charges, current 335,174 1,147,764
------------- ------------
Total current assets 6,123,211 9,560,881
Property and equipment, net ! 1,508,744 1,742,675
Deferred financing costs, net
of current portion -- 6,377
Deferred charges, net of
current portion &nb! sp;41,467 402,772
Other assets 288,225 269,314
------------- ------------
Total assets $ 7,961,647 $ 11,982,019
============= ============
LIABILITI! ES AND STOCKHOLDERS'
DEFICIT
Current liabilities:
Accounts payable $ 5,794,6! 69 $ 6,275,896
Accounts payable and a ccrued
expenses -- related party 3,140,890 1,447,257
Accrued expenses 1,887,959 1,788,435
Deferred revenue, current 13,707,888 11,342,211
Convertible notes payable --
relat! ed party, net of
discount 10,458,924 --
Capital lease obligations,
current ! ; 129,552 137,435
&nb sp; ------------- ------------
Total current liabilities 35,119,882 20,991,234
Deferred rent 804,777 466,920
Deferred revenue, less current
portion &nbs! p; 4,841,681 4,116,442
Convertible notes payable --
related party 150,000 9,825,056
Convertible notes payable, net
of discount ! 1,554,059 --
Capital lease obligations, less
current portion 78,856 168,572
------------- ------------
Total liabilities 42,549,255 35,568,224
&nbs! p; ------------- ------------
Commitments and contingencies
Stockholders' deficit:
Preferred stock, par value !
$0.001; 10,000,000 shares
authorized; no shares issued
and outstanding at September
30, 2011 and December 31,
2010, respectively ! -- --
Common stock, par value $0.001;
100,000,000 shares authorized;
27,916,440 and 27,327,702
shares issued and outstanding &nb! sp; & nbsp;
at September 30, 2011 and
December 31, 2010,
respectively 28,115 27,328
Treasury stock at par value, &nbs! p;
199,287 shares (199) --
Additional paid-in capital 67,511,341 60,926,037
Accumulated deficit (102,126,865) (84,539,570)
------------- ------------
! ; Total stockholders' deficit (34,587,608) (23,586,205)
------------- ------------
Total liabilities and
stockholders' deficit $ 7,961,647 $ 11,982,019
============= ============
CYBERDEFENDER CORPORATION CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
&nb! sp; For the Three Months &nbs p; For the Nine Months
Ended Ended
----------------------------- ------------------------------
&nbs! p; September 30,
September 30, September 30, September 30,
2011 2010 &nbs! p; 2011&nbs p; 2010
------------- -------------- -------------- --------------
Net revenue:
Services ! $ 7,345,340 $ 7,928,021 $ 25,882,764 $ 17,592,282
Software and other 4,441,209 4,818,082 14,000,275 14,343,737
------------- -------------- -------------- --------------
Total net revenue 11,786,549 12,746,103 39,883,039 31,936,019
Cost of revenue: ;
Services 3,935,382 5,616,316 16,588,621 12,348,299
Software and other 152,132 217,581 727,271 &! nbsp; 654,449
------------- -------------- -------------- --------------
Total cost of revenue 4,087,514 5,833,897 17,315,892 13,002,748
------------- -------------- -------------- --------------
Gross profit &n! bsp; 7,699,035 &nb sp; 6,912,206 22,567,147 18,933,271
Operating expenses:
Media and marketing &nb! sp;
services 5,145,098 5,954,673 17,074,771 16,038,652
Media and marketing
services -- related &nbs! p; &n bsp;
party 175,534 6,500,634 861,766 18,623,694
Product development 571,289 742,207 2,334,051 2,457,726
Selling, general and &! nbsp;
administrative 4,610,523 4,252,866 15,574,806 11,402,399
Depreciation and &! nbsp; ;
amortization 111,353 51,867 316,709 127,012
------------- -------------- -------------- --------------
Total operating expenses 10,613,797 17,502,247 36,162,103 48,649,483
&nb! sp; ------------- -------------- -------------- --------------
Loss from operations (2,914,762) (10,590,041) (13,594,956) (29,716,212)
Interest expense --
related party &! nbsp; (1,866,870) (279, 382) (3,620,971) (556,080)
Interest expense, net (255,318) (11,897) (268,651) (945,116)
Loss on securities
modifications ! -- -- (102,717) --
------------- -------------- -------------- --------------
Net loss $ (5,036,950) $ (10,881,320) $ (17,587,295) $ (31,217,408)
============= ===========! === ============== ==============
Basic and fully diluted
net loss per share $ (0.18) $ (0.40) $ (0.63) $ (1.18)
============= ============== ==============&n! bsp; ==============
Weighted average shares
outstanding:
&nb! sp;Basic and fully diluted &n bsp;27,745,673 27,027,189 27,832,353 26,408,814
============= ============== ============== ==============
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: CyberDefender Corporation
By Staff
CONTACT: CONTACT: Investor Relations:
(213) 689-8631 x 401
IR@CyberDefender.com
&nbs! p; IR Site: www.CyberDefenderCorp.com
(C) Copyright 2010 GlobeNewswire, Inc. All rights reserved.
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INDUSTRY KEYWORD: Computer Software and Services
SUBJECT CODE: SOFTWARE
EARNINGS
WEBCAST
CONFERENCE CALL
Earnings Releases and Operating Results
Calenda! r of Events
News 
Market Data 
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