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): April 30, 2015

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	 	14202	
(Address of principal executive offices)	 	(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:
 
 	¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
 	¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
 	¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
 	¨	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 April 30, 2015, Synacor, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2015. 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 April 30, 2015	

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: April 30, 2015				By:		/s/ W ILLIAM J. S TUART	
						William J. Stuart	
						Chief Financial Officer and Secretary	

Exhibit 99.1
Synacor Beats Revenue and Adjusted EBITDA Outlook for Q1 2015
Delivers 6% Year over Year Revenue Growth
 
 	•	 	Q1 2015 revenue of $26.7 million, exceeds guidance range of $24.0 - $26.0 million	
 
 	•	 	Q1 2015 adjusted EBITDA of $1.3 million, exceeds guidance range of $0.0 to $1.0 million	
 
 	•	 	Adjusted EBITDA of $1.3 million in Q1 2015 up from a year ago loss of $0.7 million in Q1 2014	
BUFFALO, N.Y., April 30, 2015 (GLOBE NEWSWIRE) - Synacor Inc. (NASDAQ: SYNC), the trusted technology development, multiplatform services and revenue partner for video, internet and communications providers, and device manufacturers, today announced its financial results for the first quarter ended March 31, 2015.
“We continue to execute well against our strategy,” said Synacor CEO Himesh Bhise. “We are pleased to report first quarter financial results that exceeded our expectations with sustained year over year growth. We continue to diversify into attractive growth markets—our advertising business continues to perform well, we are growing our fee-based subscription revenues, and building compelling advanced video solutions.”
Q1 2015 Financial Results
Revenue : For the first quarter of 2015, total revenue was $26.7 million, an increase of 6% compared to $25.2 million in the first quarter of 2014. Search and display advertising revenue was $20.6 million, an increase of 4% compared to $19.9 million in the first quarter of 2014. Subscription-based revenue was $6.1 million, a 14% increase compared to $5.3 million in the first quarter of 2014.
For the first quarter of 2015, Synacor averaged 22.0 million multiplatform unique visitors per month, compared to 21.3 million in the first quarter of 2014.
Adjusted EBITDA : For the first quarter of 2015, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which excludes stock-based compensation expense, was $1.3 million, or 5% of revenue, compared to a loss of $0.7 million in the first quarter of 2014.
Net Income : For the first quarter of 2015, net loss was $1.1 million, compared to net loss of $2.1 million in the first quarter of 2014. Earnings per share, or EPS, was a loss of $0.04. The net loss includes stock-based compensation expense of $0.7 million, or $0.03 per share, in the first quarter of 2015, as compared to $0.7 million, or $0.02 per share, in the first quarter of 2014. The EPS calculations for the first quarter of 2015 are based on 27.4 million weighted average common shares outstanding. The EPS calculations for the first quarter of 2014 are based on 27.4 million weighted average common shares outstanding.
Cash : The company ended the first quarter of 2015 with $26.8 million in cash and cash equivalents, compared to $25.6 million at the end of the prior quarter. Cash generated by operating activities was $2.2 million for the first quarter of 2015, compared to $1.2 million used in operating activities in the same period of the prior year.
Business Outlook
Bhise continued, “We’re building on these Q1 results and are focused on continuing our progress in Q2 and throughout the year. We’re improving our products, growing monetization, and are a stronger partner to our customers.”
Based on information available as of April 30, 2015, the company is providing financial guidance for the second quarter and fiscal 2015 as follows:
 
 	•	 	Q2 2015 Guidance : Revenue for the second quarter of 2015 is projected to be in the range of $24.0 million to $25.5 million. For the second quarter of 2015, the company expects to report adjusted EBITDA of $0.2 million to $1.2 million.	
 
 	•	 	Fiscal 2015 Guidance : Revenue for the full year of 2015 is projected to be in the range of $97.0 million to $102.0 million. For the full year of 2015, the company expects to report adjusted EBITDA of $2.0 million to $4.0 million.	
Conference Call Details
Synacor will host a conference call today at 5 p.m. ET to discuss the first quarter 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 19318004, 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 May 7, 2015. 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 19318004.
About Synacor
Synacor (NASDAQ: SYNC) is the trusted technology development, multiplatform services and revenue partner for video, internet and communications providers, and device manufacturers. We deliver modern, multiscreen experiences and advertising to their consumers that require scale, actionable data and sophisticated implementation. www.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; 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-K, as amended, filed with the SEC. 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 April 30, 2015, and Synacor undertakes no duty to update this information.
Contacts
Investor Contact:
Denise Garcia, Managing Director
ICR
ir@synacor.com
716-362-3309

Press Contact:
Meredith Roth, VP, Corporate Communications
Synacor
mroth@synacor.com
716-362-3880
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
March 31,	 	
	  			 			
 	  	2014	 	 	2015	 	
Assets	  				 				
Current assets:	  				 				
Cash and cash equivalents	  	$	25,600	  	 	$	26,750	  	
Accounts receivable, net	  	 	20,479	  	 	 	19,276	  	
Prepaid expenses and other current assets	  	 	2,292	  	 	 	2,315	  	
Deferred income taxes	  	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	
Total current assets		 	48,371	  		 	48,341	  	
Property and equipment, net		 	15,128	  		 	14,528	  	
Deferred income taxes, non-current		 	—  	  		 	—  	  	
Other long-term assets		 	101	  		 	74	  	
Goodwill		 	1,565	  		 	1,565	  	
Convertible promissory note		 	1,000	  		 	1,000	  	
Investment in equity interest		 	73	  		 	41	  	
	  	 	 	 	 	 	 	 	
Total Assets		$	66,238	  		$	65,549	  	

Liabilities and Stockholders’ Equity									
Current liabilities:									
Accounts payable		$	12,545	  		$	13,490	  	
Accrued expenses and other current liabilities		 	8,403	  		 	7,150	  	
Current portion of capital lease obligations		 	1,150	  		 	1,101	  	
	  	 	 	 	 	 	 	 	
Total current liabilities		 	22,098	  		 	21,741	  	
Long-term portion of capital lease obligation		 	1,383	  		 	1,436	  	
Other long-term liabilities		 	275	  		 	227	  	
	  	 	 	 	 	 	 	 	
Total Liabilities		 	23,756	  		 	23,404	  	
Stockholders’ Equity:									
Common stock		 	279	  		 	279	  	
Treasury stock		 	(1,142	) 		 	(1,197	) 	
Additional paid-in capital		 	105,961	  		 	106,761	  	
Accumulated deficit		 	(62,636	) 		 	(63,709	) 	
Accumulated other comprehensive income		 	20	  		 	11	  	
	  	 	 	 	 	 	 	 	
Total stockholders’ equity		 	42,482	  		 	42,145	  	
	  	 	 	 	 	 	 	 	
Total Liabilities and Stockholders’ Equity		$	66,238	  		$	65,549	  	

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

 	  	Three Months Ended
March 31,	 	
	  			
 	  	2014	 	 	2015	 	
			
Revenue	  	$	25,248	  	 	$	26,730	  	
Costs and operating expenses:	  				 				
Cost of revenue (1)	  	 	13,876	  	 	 	14,403	  	
Technology and development (1)(2)	  	 	7,492	  	 	 	4,866	  	
Sales and marketing (2)	  	 	2,137	  	 	 	3,562	  	
General and administrative (1)(2)	  	 	3,099	  	 	 	3,374	  	
Depreciation	  	 	1,058	  	 	 	1,496	  	
	  	 	 	 	 	 	 	 	
Total costs and operating expenses		 	27,662	  		 	27,701	  	

Income (loss) from operations		 	(2,414	) 		 	(971	) 	
			
Other expense		 	8	  		 	(16	) 	
Interest expense		 	(88	) 		 	(50	) 	
	  	 	 	 	 	 	 	 	
Income (loss) before income taxes and equity interest		 	(2,494	) 		 	(1,037	) 	
Provision (benefit) for income taxes		 	(684	) 		 	4	  	
Loss on equity interest		 	(246	) 		 	(32	) 	
	  	 	 	 	 	 	 	 	
Net income (loss)		$	(2,056	) 		$	(1,073	) 	

Net income (loss) per share:									
Basic		$	(0.07	) 		$	(0.04	) 	
	  	 	 	 	 	 	 	 	
Diluted		$	(0.07	) 		$	(0.04	) 	

Weighted average shares used to compute net income (loss) per share:									
Basic		 	27,434,374	  		 	27,407,137	  	
	  	 	 	 	 	 	 	 	
Diluted		 	27,434,374	  		 	27,407,137	  	

Notes:									
			
(1)    Exclusive of depreciation shown separately.									
(2)    Includes stock-based compensation as follows:									
		
 	  	Three Months Ended
March 31,	 	
	  			
 	  	2014	 	 	2015	 	
Technology and development	  	$	327	  	 	$	217	  	
Sales and marketing	  	 	108	  	 	 	241	  	
General and administrative	  	 	246	  	 	 	284	  	
	  	 	 	 	 	 	 	 	
		$	681	  		$	742	  	

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

 	  	For the Three Months Ended
March 31,	 	
	  			
 	  	2014	 	 	2015	 	
Cash Flows from Operating Activities:	  				 				
Net loss	  	$	(2,056	) 	 	$	(1,073	) 	
Adjustments to reconcile net loss to net cash provided (used) in operating activities:	  				 				
Depreciation	  	 	1,058	  	 	 	1,496	  	
Stock-based compensation expense	  	 	681	  	 	 	742	  	
Provision for deferred income taxes	  	 	(709	) 	 	 	—  	  	
Loss in equity investment	  	 	246	  	 	 	32	  	
Change in assets and liabilities net of effect of acquisition:	  				 				
Accounts receivable, net	  	 	(25	) 	 	 	1,203	  	
Prepaid expenses and other current assets	  	 	(577	) 	 	 	(23	) 	
Other long-term assets	  	 	101	  	 	 	27	  	
Accounts payable	  	 	1,292	  	 	 	995	  	
Accrued expenses and other current liabilities	  	 	(979	) 	 	 	(1,186	) 	
Other long-term liabilities	  	 	(198	) 	 	 	(48	) 	
	  	 	 	 	 	 	 	 	
Net cash provided (used) in operating activities		 	(1,166	) 		 	2,165	  	
	  	 	 	 	 	 	 	 	
Cash Flows from Investing Activities:									
Purchases of property and equipment		 	(1,519	) 		 	(600	) 	
Investment in equity interest		 	(245	) 		 	—  	  	
	  	 	 	 	 	 	 	 	
Net cash used in investing activities		 	(1,764	) 		 	(600	) 	
	  	 	 	 	 	 	 	 	
Cash Flows from Financing Activities:									
Repayments on capital lease obligations		 	(485	) 		 	(392	) 	
Proceeds from exercise of common stock options		 	26	  		 	5	  	
Purchase of treasury stock		 	(56	) 		 	—  	  	
	  	 	 	 	 	 	 	 	
Net cash used in financing activities		 	(515	) 		 	(387	) 	
	  	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash and cash equivalents		 	8	  		 	(28	) 	
	  	 	 	 	 	 	 	 	
Net decrease in cash and cash equivalents		 	(3,437	) 		 	1,150	  	
Cash and cash equivalents - beginning of year		 	36,397	  		 	25,600	  	
	  	 	 	 	 	 	 	 	
Cash and cash equivalents - end of year		$	32,960	  		$	26,750	  	

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

 	  	Three Months Ended
March 31,	 	
	  			
 	  	2014	 	 	2015	 	
Reconciliation of Adjusted EBITDA:	  				 				
Net income (loss)	  	$	(2,056	) 	 	$	(1,073	) 	
Provision (benefit) for income taxes	  	 	(684	) 	 	 	4	  	
Interest expense	  	 	88	  	 	 	50	  	
Other (income) expense	  	 	(8	) 	 	 	16	  	
Depreciation	  	 	1,058	  	 	 	1,496	  	
Stock-based compensation	  	 	681	  	 	 	742	  	
Loss on equity interest	  	 	246	  	 	 	32	  	
	  	 	 	 	 	 	 	 	
Adjusted EBITDA		$	(675	) 		$	1,267