UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549  
________________________________________
FORM 8-K
 ________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 12, 2014
________________________________________ 
Synacor, Inc.
(Exact name of registrant as specified in its charter)
________________________________________ 

					
Delaware	 	001-33843	 	16-1542712	
(State or other jurisdiction
of incorporation)	 	(Commission
File Number)	 	(IRS Employer
Identification No.)	
40 La Riviere Drive, Suite 300, Buffalo, New York
(Address of principal executive offices)	 	14202	
	 	(Zip Code)	
Registrant’s telephone number, including area code: (716) 853-1362
________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

		
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

		
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

		
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

		
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

	

 

		
Item 2.02.	Results of Operations and Financial Condition.	
On August 12, 2014 , Synacor, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2014. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

	
		
Item 9.01.	Financial Statements and Exhibits.	
(d) Exhibits.

						
Exhibit No.	  	Description	 	 	 	
99.1	  	Press release issued by Synacor, Inc. dated August 12, 2014	

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	
			
 	Synacor, Inc.	
Date: August 12, 2014	 By:	/s/ W ILLIAM  J. S TUART	
 	 	William J. Stuart	
 	 	Chief Financial Officer and Secretary	

Synacor Reports Second Quarter 2014 Results

BUFFALO, N.Y., August 12, 2014 (GLOBE NEWSWIRE) - Synacor Inc. (NASDAQ: SYNC), the leading provider of next-gen start experiences, award-winning TV Everywhere solutions and cloud-based Identity Management (IDM) services, across multiple devices for cable, satellite, telecom and consumer electronics companies in the U.S. and abroad, today announced its financial results for the second quarter of 2014.
“Our second quarter results delivered on our expectations. We continue to remain focused on increasing revenue and managing our costs, and are committed to returning Synacor to growth," said Synacor CFO Bill Stuart. "We are excited about our new CEO and member of our Board of Directors, Himesh Bhise, who joined Synacor on Monday, August 4th. Himesh's experience with cross-platform technology, content and mobile, and his track record successfully managing rapid-growth businesses make him the right leader for Synacor at this time of significant opportunity.”

Q2 2014 Financial Results

Revenue : For the second quarter of 2014, total revenue was $24.2 million, compared to $26.7 million in the second quarter of 2013. Search and display advertising revenue was $18.5 million, compared to $21.4 million in the second quarter of 2013. Subscription-based revenue was $5.7 million, compared to $5.3 million in the second quarter of 2013.

Net Income/Loss : For the second quarter of 2014, net loss was $1.9 million, including a $1.0 million pretax gain from the sale of a domain name no longer used in Synacor’s business, compared to net loss of $0.6 million in the second quarter of 2013. Earnings per share, or EPS, was a loss of $0.07. Net loss includes stock-based compensation expense of $0.8 million, or $0.03 per share, in the second quarter of 2014, as compared to $0.6 million, or $0.02 per share, in the second quarter of 2013. The EPS calculation for the second quarter of 2014 is based on 27.4 million weighted average common shares outstanding. The EPS calculation for the second quarter of 2013 was based on 27.3 million weighted average common shares outstanding.

Adjusted EBITDA : For the second quarter of 2014, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which excludes stock-based compensation expense and the $1.0 million pretax gain from the sale of the domain name, was ($1.2) million compared to $1.0 million in the second quarter of 2013.

Key Business Metrics : For the second quarter of 2014, Synacor averaged 17.9 million unique visitors per month, compared to 19.7 million in the second quarter of 2013. Search queries were 130 million for the second quarter of 2014, compared to 177 million in the second quarter of 2013. Advertising impressions were 8.9 billion, compared to 10.3 billion in the second quarter of 2013.
    
Cash : For the second quarter of 2014, Synacor used $4.6 million in cash in operating activities, compared to generating $0.5 million in the second quarter of 2013. The company ended the second quarter of 2014 with $25.7 million in cash and cash equivalents, compared to $37.7 million at the end of the second quarter of 2013.

Business Outlook

Based on information available as of August 12, 2014, the company is providing financial guidance for the third quarter and fiscal 2014 as follows:

•	Q3 2014 Guidance : Revenue for the third quarter of 2014 is projected to be in the range of $25.0 million to $26.0 million. For the third quarter of 2014, the company expects to report adjusted EBITDA of ($0.5) million to $0.5 million.	
		
•	Fiscal 2014 Guidance : Revenue for the full year of 2014 is projected to be in the range of $100.0 million to $103.0 million. For the full year of 2014, the company expects to report adjusted EBITDA of ($2.5) million to ($1.0) million, excluding the $1.0 million pretax gain from the sale of the domain name.	

Conference Call Details

Synacor will host a conference call today at 5 p.m. ET to discuss the second quarter 2014 financial results with the investment community. The live webcast of Synacor's earnings conference call can be accessed at http://investor.synacor.com/events.cfm . To participate, please login approximately ten minutes prior to the webcast. For those without access to the Internet, the call may be accessed toll-free via phone at (877) 837-3911, with conference ID 79343808, or callers outside the U.S. may dial (253) 237-1167. Following completion of the call, a recorded webcast replay will be available on Synacor's website through August 30, 2014. To listen to the telephone replay, call toll-free (855) 859-2056, or callers outside the U.S. may dial (404) 537-3406. The conference ID is 79343808.

About Synacor

Synacor’s white-label platform enables cable, satellite, telecom and consumer electronics companies to deliver TV Everywhere, digital entertainment, cloud-based services and apps to their end-consumers across multiple devices, strengthening those relationships while monetizing the engagement. In addition, Synacor offers digital ad inventory for brands wanting a customized, targeted, programmatic means of reaching their audiences . Synacor (NASDAQ:SYNC), is headquartered in Buffalo, NY, with tech hubs in Toronto, Ottawa and Boston, and ad sales offices in New York, Detroit and Los Angeles. For more information, visit synacor.com .

Non-GAAP Financial Measures

The company uses certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (GAAP).

We report adjusted EBITDA because it is a key measure used by our management and Board of Directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.

For a reconciliation of adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, please refer to the table “Reconciliation of GAAP to Non-GAAP Measures” in this press release.

Safe Harbor Statement

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements concerning Synacor's expected financial performance (including, without limitation, statements and information in the Business Outlook section and the quotations from management), as well as Synacor's strategic and operational plans. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions.  If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the company's results could differ materially from the results expressed or implied by the forward-looking statements the company makes.

The risks and uncertainties referred to above include - but are not limited to - risks associated with: execution of our plans and strategies; the loss of a significant customer; our ability to obtain new customers; expectations regarding consumer taste and user adoption of applications and solutions; developments in Internet browser software and search advertising technologies; the transition of responsibilities to our newly-appointed chief executive officer; general economic conditions; expectations regarding the company's ability to timely expand the breadth of services and products or introduction of new services and products; consolidation within the cable and telecommunications industries; changes in the competitive dynamics in the market for online search and display advertising; the risk that security measures could be breached and unauthorized access to subscriber data could be obtained; potential third party intellectual property infringement claims; and the price volatility of our common stock.

Further information on these and other factors that could affect the company's financial results is included in filings it makes with the Securities and Exchange Commission from time to time, including the section entitled "Risk Factors" in the company's most recent Form 10-Q filed with the SEC on May 15, 2014. These documents are available on the SEC Filings section of the

Investor Information section of the company's website at  http://investor.synacor.com/ . All information provided in this release and in the attachments is available as of August 12, 2014, and Synacor undertakes no duty to update this information.

Contacts

Investor Contact:
Denise Garcia, MD
ICR
ir@synacor.com
716-362-3309

Press Contact:
Meredith Roth, VP, Corporate Communications
Synacor
mroth@synacor.com
646-380-5141

The Synacor logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=11609

Synacor, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

								
 	As of
December 31,	 	As of
June 30,	
 	2013	 	2014	
Assets	 	 	 	
Current assets:	 	 	 	
  Cash and cash equivalents	$	36,397		  	$	25,664		
  Accounts receivable, net	14,569		  	17,769		
  Preferred expenses and other current assets	1,691		  	1,794		
  Deferred income taxes	314		  	1,151		
           Total current assets	52,971		  	46,378		
Property and equipment, net	14,085		  	15,100		
Deferred income taxes, non-current	4,455		  	4,969		
Other long-term assets	348		  	182		
Goodwill	1,565		  	1,565		
Convertible promissory note	1,000		 	1,000		
Investment in equity interest	365		 	320		
Total Assets	$	74,789		  	$	69,514		
Liabilities and Stockholders' Equity	 	 	 	
Current liabilities:	 	 	 	
  Accounts payable	$	13,573		 	$	10,715		
  Accrued expenses and other current liabilities	5,177		 	6,375		
  Current portion of capital lease obligations	1,946		 	1,532		
           Total current liabilities	20,696		 	18,622		
Long-term portion of capital lease obligation	885		 	1,256		
Other long-term liabilities	977		 	304		
Total Liabilities	22,558		 	20,182		
Stockholders' Equity:		 		
  Common stock	277		 	279		
  Treasury stock	(569	)	 	(1,138	)	
  Additional paid-in capital	102,226		 	103,809		
  Accumulated deficit	(49,705	)	 	(53,629	)	
  Accumulated other comprehensive income	2		 	11		
           Total stockholders’ equity	52,231		 	49,332		
Total Liabilities and Stockholders' Equity	$	74,789		 	$	69,514		

Synacor, Inc.
Condensed Consolidated Statements of Operations
(In thousands except share and per share amounts)
(Unaudited)

																
 	Three months ended
June 30,	 	Six months ended
June 30,	
 	2013	 	2014	 	2012	 	2013	
Revenue	$	26,708		 	$	24,191		 	$	55,851		 	$	49,439		
Costs and operating expenses:	 	 	 	 	 	 	 	
          Cost of revenue (1)	14,017		 	13,146		 	29,781		 	27,022		
          Research and development (1)(2)	7,336		 	7,120		 	14,201		 	14,612		
          Sales and marketing (2)	2,147		 	2,457		 	4,277		 	4,594		
          General and administrative (1)(2)	2,957		 	3,499		 	6,101		 	6,598		
          Depreciation	1,138		 	1,117		 	2,268		 	2,175		
          Gain on sale of domain	—		 	(1,000	)	 	—		 	(1,000	)	
                    Total costs and operating expenses	27,595		 	26,339		 	56,628		 	54,001		
	 	 	 	 	 	 	 	
Loss from operations	(887	)	 	(2,148	)	 	(777	)	 	(4,562	)	
		 		 		 		
Other (expense) income	(8	)	 	6		 	(15	)	 	14		
Interest expense	(43	)	 	(23	)	 	(101	)	 	(111	)	
Loss before income taxes and equity interest	(938	)	 	(2,165	)	 	(893	)	 	(4,659	)	
Benefit for income taxes	(204	)	 	(641	)	 	(186	)	 	(1,325	)	
Loss on equity interest	—		 	(344	)	 	—		 	(590	)	
Net loss	(734	)	 	(1,868	)	 	(707	)	 	(3,924	)	
Net loss attributable to noncontrolling interests	97		 	—		 	97		 	—		
Net loss attributable to Synacor, Inc.	$	(637	)	 	$	(1,868	)	 	$	(610	)	 	$	(3,924	)	
 	 	 	 	 	 	 	 	
Net loss per share attributable to Synacor, Inc.:	 	 	 	 	 	 	 	
          Basic	$	(0.02	)	 	$	(0.07	)	 	$	(0.02	)	 	$	(0.14	)	
          Diluted	$	(0.02	)	 	$	(0.07	)	 	$	(0.02	)	 	$	(0.14	)	
 	 	 	 	 	 	 	 	
Weighted average shares used to compute net loss per share:	 	 	 	 	 	 	 	
          Basic	27,311,892		 	27,360,588		 	27,273,671		 	27,397,695		
          Diluted	27,311,892		 	27,360,588		 	27,273,671		 	27,397,695		
Notes:
		
(1)	Exclusive of depreciation shown separately.	
		
(2)	Includes stock-based compensation as follows:	

																
	Three months ended	 	Six months ended	
	June 30,	 	June 30,	
	2013	 	2014	 	2013	 	2014	
     Research and development	$	281		 	$	375		 	$	542		 	$	702		
     Sales and marketing	76		 	125		 	152		 	233		
     General and administrative	260		 	347		 	485		 	593		
	$	617		 	$	847		 	$	1,179		 	$	1,528		

Synacor, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

								
 	Six months ended
June 30,	
 	2013	 	2014	
Cash Flows from Operating Activities:	 	 	 	
Net loss	$	(707	)	 	$	(3,924	)	
Adjustments to reconcile net loss to net cash used in operating activities:			 			
Depreciation	2,268		 	2,175		
Stock-based compensation expense	1,179		 	1,528		
Gain on sale of domain	—		 	(1,000	)	
Provision for deferred income taxes	(198	)	 	(1,351	)	
Loss in equity investment	—		 	590		
Change in assets and liabilities net of effect of acquisition:			 			
Accounts receivable, net	278		 	(2,200	)	
Prepaid expenses and other current assets	(105	)	 	(103	)	
Other long-term assets	(17	)	 	166		
Accounts payable	(1,657	)	 	(2,179	)	
Accrued expenses and other current liabilities	(1,269	)	 	703		
Other long-term liabilities	29		 	(178	)	
Net cash used in operating activities	(199	)	 	(5,773	)	
Cash Flows from Investing Activities:			 			
Purchases of property and equipment	(2,502	)	 	(2,796	)	
Investment in equity interest	—		 	(545	)	
Cash paid for business acquisition	(500	)	 	—		
Net cash used in investing activities	(3,002	)	 	(3,341	)	
Cash Flows from Financing Activities:			 			
     Repayments on capital lease obligations	(1,139	)	 	(1,117	)	
     Proceeds from exercise of common stock options	131		 	59		
     Purchase of treasury stock	—		 	(562	)	
Net cash used in financing activities	(1,008	)	 	(1,620	)	
     Effect of exchange rate changes on cash and cash equivalents	7		 	1		
     Net decrease in Cash and Cash Equivalents	(4,202	)	 	(10,733	)	
     Cash and Cash Equivalents at beginning of period	41,944		 	36,397		
     Cash and Cash Equivalents at end of period	$	37,742		 	$	25,664		

Synacor, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(In thousands)
(Unaudited)
The following table presents a reconciliation of net loss to adjusted EBITDA for each of the periods indicated:

																
 	Three months ended
June 30,	 	Six months ended
June 30,	
 	2013	 	2014	 	2013	 	2014	
Reconciliation of Adjusted EBITDA:		 		 		 		
  Net loss attributable to Synacor, Inc.	$	(637	)	 	$	(1,868	)	 	$	(610	)	 	$	(3,924	)	
  Provision for income taxes	(204	)	 	(641	)	 	(186	)	 	(1,325	)	
  Interest expense	43		 	23		 	101		 	111		
  Other	8		 	(6	)	 	15		 	(14	)	
  Depreciation	1,138		 	1,117		 	2,268		 	2,175		
  Stock-based compensation	617		 	847		 	1,179		 	1,528		
  Loss on equity interest	—		 	344		 	—		 	590		
  Gain on sale of domain	—		 	(1,000	)	 	—		 	(1,000	)	
    Adjusted EBITDA	$	965		 	$	(1,184	)	 	$	2,767		 	$	(1,859	)	

Synacor, Inc.
Key Business Metrics
(Unaudited)

								
 	Three months ended
June 30,	 	Six months ended
June 30,	
 	2013	 	2014	 	2013	 	2014	
Key Business Metrics:	 	  	 	 	 	 	 	
Unique Visitors (1)	19,686,182	 	17,932,647	 	19,973,574	 	18,810,423	
Search Queries (2)	177,025,185	 	129,546,784	 	388,669,982	 	283,370,361	
Advertising Impressions (3)	10,292,927,243	 	8,897,558,466	 	21,775,961,313	 	17,484,367,947	
Notes:
		
(1)	Reflects the number of unique visitors to our customers' websites computed on an average monthly basis during the applicable period, as measured by comScore.	
		
(2)	Reflects the total number of search queries during the applicable period, as reported by Google.	
		
(3)	Reflects the total number of advertising impressions during the applicable period, as reported by DoubleClick and other partners.