Cision Reports Second Quarter 2018 Financial Results; Provides Updated Full Year 2018 Outlook

CHICAGO, Aug. 2018 - /PRNewswire/ -- Cision Ltd. (NYSE: CISN), a leading global provider of software and services to public relations and marketing communications professionals, today reported financial results for the quarter ended June 30, 2018. All data presented below is compared to the second quarter of 2017, unless otherwise noted. Second Quarter 2018 Financial Highlights Revenue increased 19.3% to $187.5 million Revenue, excluding the impact from purchase accounting, increased 19.4% to $187.8 million Operating income increased 114.5% to $22.3 million Net loss decreased 66.2% to $6.5 million Adjusted EBITDA increased 13.1% to $66.2 million Adjusted net income increased 153.4% to $29.4 million Adjusted net income per share increased 64.3% to $0.23 "We are pleased to have delivered another solid quarter of financial results," said Kevin Akeroyd, Cision's Chief Executive Officer. "We continue to focus our efforts on delivering best-in-class products and services to our customers, executing our strategic and operational plans, and driving toward our long-term financial goals. This focus resulted in second quarter pro forma organic revenue growth of 2.5% after adjusting for non-core revenues and the impact of currency, an approximate 50 basis-point increase from the first quarter." Second Quarter Business Statistics and Operational Highlights Americas revenues increased 6.0% to $126.9 million EMEA revenues increased 65.7% to $51.9 million APAC revenues increased 42.6% to $8.6 million Non-core revenues declined 54.7% to $1.0 million Average pro forma subscription customers, including PRIME Research, increased 1.0% to approximately 41,200 Average annualized pro forma revenue per subscription customer, including PRIME Research and excluding the impact of currency, increased 2.8% to approximately $11,200 Customers that purchased services from us on a transaction basis, including PRIME Research, decreased 6.7% to approximately 41,200 Average pro forma revenue per customer that purchased services from us on a transaction basis, including PRIME Research and excluding the impact of currency, increased 6.2% to approximately $1,465 Cross-sell bookings of software, distribution and insights in the United States increased 72.5% to approximately $3.0 million Cision Communications Cloud® platform customers at June 30, 2018 were approximately 8,300 Long-Term Debt As of June 30, 2018, we had approximately $987.2 million of outstanding dollar-denominated term loans and approximately ?248.1 million of outstanding Euro-denominated term loans. During the second quarter, we reduced our outstanding dollar-denominated term loan by making an aggregate of $40.0 million of voluntary prepayments pursuant to the terms of our 2017 First Lien Credit Facility, comprised of a $30.0 million voluntary prepayment on April 30, 2018 and a $10.0 million voluntary prepayment on June 29, 2018. Subscription and Transaction Customer Trends Our average pro forma subscription customers, average annualized pro forma revenue per subscription customer, number of customers that purchased services from us on a transaction basis, and average pro forma revenue per customer that purchased services from us on a transaction basis appear in the table below for the most recent six fiscal quarters. All of the figures below include PRIME Research and all dollar figures have been adjusted to exclude the impact of changes in foreign currency. Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q2 2018 compared to Q2 2017 Average pro forma subscription customers 39,761 40,833 40,532 40,628 40,252 41,249 1.0% Average annualized pro forma revenue per subscription customer $10,911 $10,925 $11,144 $11,272 $11,200 $11,225 2.8% Pro forma transaction customers 42,588 44,131 40,829 41,670 40,216 41,172 (6.7%) Average pro forma revenue per transaction customer $1,314 $1,380 $1,296 $1,416 $1,392 $1,465 6.2% Updated Full Year 2018 Outlook Our updated outlook for the full year ending December 31, 2018 appears below (all figures in millions, except per share amounts). These estimates are based on a number of assumptions that management believes to be reasonable and reflect the Company's expectations as of the date of this release. Actual results may differ materially from these estimates as a result of various factors, and the Company refers you to the cautionary language regarding "Forward Looking Statements" included in this press release when considering this information. Previous Updated Revenue $722 - $732 $722 - $730 Revenue, excluding the impact from purchase accounting $724 - $734 $724 - $732 Net income $8 - $10 ($6) - $6 Adjusted EBITDA $250 - $256 $249 - $253 Adjusted net income $107 - $111 $106 - $109 Adjusted net income per diluted share $0.84 - $0.86 $0.83 - $0.85 Pro-forma fully diluted weighted average shares outstanding 128.3 128.3 Additionally, for the full year ending December 31, 2018, we expect (all figures in millions): Previous Updated Depreciation expense $31 - $33 $30 - $32 Amortization expense $106 - $110 $105 - $107 Amortization expense included in cost of revenue $23 - $25 $23 - $24 Interest expense $79 - $82 $78 - $80 Debt extinguishment costs $2 - $3 $4 - $5 Interest expense, net of debt extinguishment costs $77 - $79 $74 - $76 Cash interest expense $64 - $66 $64 - $66 Stock-based compensation $5 - $6 $4 - $5 Capital expenditures, inclusive of capitalized software development $32 - $36 $34 - $36 The updated outlook above assumes three-month LIBOR of approximately 2.3% and three-month EURIBOR of approximately 0.0%. The above outlook also incorporates a change from the prior quarter with respect to our exchange rate assumptions for the second half of 2018. This change in our exchange rate assumptions for the British Pound, the Euro, the Canadian Dollar and other currencies reduced our revenue outlook for 2018 by approximately $5.7 million and reduced our updated Adjusted EBITDA outlook for 2018 by approximately $1.7 million. Additionally, we anticipate that the acquisition of certain ShareIQ assets will increase costs by approximately $1.0 million in the second half of 2018. The change in our exchange rate assumptions combined with the increased costs from ShareIQ reduced our updated Adjusted net income per diluted share outlook for 2018 by $0.02. Excluding the impact of the change in our exchange rate assumptions and our acquisition of certain ShareIQ assets, our updated revenue outlook, including the impact from purchase accounting would have been $728 million to $736 million, our updated Adjusted EBITDA outlook would have been $252 million to $256 million, and our updated Adjusted net income per diluted share outlook would have been $0.85 to $0.87. Our previous and updated assumptions for the British Pound, the Euro and the Canadian Dollar appear below: Previous Updated GBP to USD 1.35 1.30 EUR to USD 1.20 1.16 CAD to USD 0.79 0.77 Our outlook for 2018 excludes the impact of any future acquisitions, divestitures, additional voluntary prepayments of our 2017 First Lien Credit Facility, refinancings or repricings of our 2017 First Lien Credit Facility or other unanticipated events. See discussion of non-GAAP financial measures below in this release. Second Quarter 2018 Conference Call Details As previously announced, we will hold a conference call to review our second quarter 2018 financial results via conference call on Wednesday, August 8th at 5:00 pm EDT. To hear the live event, visit the Cision investor website at http://investors.cision.com, or dial 1-877-443-4809 (participant dial-in toll free) or 1-412-317-5235 (participant dial-in International). The conference call will be simultaneously webcast on the Investor Relations section of our website: http://investors.cision.com Forward-Looking Statements This communication contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "anticipate," "intend," "plan," "goal," "seek," "aim," "strive," "believe," "see," "project," "predict," "estimate," "expect," "continue," "strategy," "future," "likely," "may," "might," "should," "will," "would," "target," similar expressions, and variations or negatives of these words. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Accordingly, you should not place undue reliance on these statements, as actual results may vary materially. A detailed discussion of some of the risks and uncertainties that could cause our actual results and financial condition to differ materially from the forward-looking statements is described under the caption "Risk Factors" in our most recent annual report on Form 10-K filed on March 13, 2018, along with our other filings with the U.S. Securities and Exchange Commission. Any forward-looking statement made by us in this communication is based only on information currently available to us and speaks only as of the date of this release. We do not assume any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. Please consult our public filings at www.sec.gov or www.cision.com. About Cision Cision Ltd. (NYSE: CISN) is a leading global provider of earned media software and services to public relations and marketing communications professionals. Cision's software allows users to identify key influencers, craft and distribute strategic content, and measure meaningful impact. Cision has over 4,000 employees with offices in 19 countries throughout the Americas, EMEA, and APAC. For more information about its award-winning products and services, including the Cision Communications Cloud®, visit www.cision.com and follow Cision on Twitter @Cision. Cision Ltd. and its Subsidiaries Condensed Consolidated Balance Sheets As of June 30, 2018 and December 31, 2017 (in thousands, except per share and share amounts) (Unaudited) 2018 2017 Assets Current assets: Cash and cash equivalents $      82,967 $    148,654 Accounts receivable, net 115,896 113,008 Prepaid expenses and other current assets 23,504 19,896 Total current assets 222,367 281,558 Property and equipment, net 53,874 53,578 Other intangible assets, net 430,228 456,291 Goodwill 1,180,072 1,136,403 Other assets 5,871 7,528 Total assets $ 1,892,412 $ 1,935,358 Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $      13,269 $      13,349 Accounts payable 15,928 13,327 Accrued compensation and benefits 22,809 25,873 Other accrued expenses 74,602 73,483 Current portion of deferred revenue 148,005 140,351 Total current liabilities 274,613 266,383 Long-term debt, net of current portion 1,218,581 1,266,121 Deferred revenue, net of current portion 1,298 1,412 Deferred tax liability 64,180 62,617 Other liabilities 21,271 22,456 Total liabilities 1,579,943 1,618,989 Stockholders' equity: Preferred stock, $0.0001 par value, 20,000,000 shares authorized; no shares issued and outstanding at June 30, 2018 and December 31, 2017 - - Common stock, $0.0001 par value, 480,000,000 shares authorized; 130,713,555 and 122,634,922 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively 13 12 Additional paid-in capital 794,165 771,813 Accumulated other comprehensive loss (53,428) (35,111) Accumulated deficit (428,281) (420,345) Total stockholders' equity 312,469 316,369  Total liabilities and stockholders' equity $ 1,892,412 $ 1,935,358 Cision Ltd. and its Subsidiaries Condensed Consolidated Statements of Operations and Comprehensive Loss  (in thousands, except per share and share amounts) (Unaudited) Three months ended June 30,  Six months ended June 30,  2018 2017 2018 2017 Revenue $       187,475 $    157,131 $       366,768 $    302,949 Cost of revenue 66,757 49,218 131,035 94,284 Gross profit 120,718 107,913 235,733 208,665 Operating costs and expenses: Sales and marketing 28,299 28,010 57,978 55,300 Research and development 8,290 5,566 14,990 11,018 General and administrative 41,538 41,460 87,760 81,692 Amortization of intangible assets 20,264 22,466 40,514 43,477 Total operating costs and expenses 98,391 97,502 201,242 191,487 Operating income 22,327 10,411 34,491 17,178 Non operating income (expense): Foreign exchange gain (losses) 15,964 (686) 8,081 (2,634) Interest and other income, net 348 224 92 2,273 Interest expense (20,474) (36,328) (40,162) (73,243) Loss on extinguishment of debt - - (2,432) - Total non operating loss (4,162) (36,790) (34,421) (73,604) Income (loss) before income taxes 18,165 (26,379) 70 (56,426) Provision for (benefit from) income taxes 24,628 (7,231) 6,946 (14,285) Net loss $        (6,463) $   (19,148) $        (6,876) $   (42,141) Other comprehensive income (loss) - foreign currency translation adjustments (25,392) 16,700 (18,317) 22,594 Comprehensive loss $      (31,855) $     (2,448) $      (25,193) $   (19,547) Net loss per share: Basic and diluted $          (0.05) $       (0.63) $          (0.05) $       (1.43) Weighted average shares outstanding used in computing per share amounts: Basic and diluted 127,392,151 30,394,760 125,678,727 29,387,796 Cision Ltd. and its Subsidiaries Condensed Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2018 and June 30, 2017 (in thousands) (Unaudited) 2018 2017 Cash flows from operating activities Net loss $   (6,876) $   (42,141) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 66,878 67,290 Non-cash interest charges and amortization of debt discount and deferred financing costs 7,301 12,577 Equity-based compensation expense 2,210 1,926 Provision for doubtful accounts 3,015 1,125 Deferred income taxes 2,549 (15,451) Unrealized currency translation losses (gains) (8,249) 2,394 Gain on sale of business - (1,785) Other 86 (168) Changes in operating assets and liabilities, net of effects of acquisitions and disposal: Accounts receivable 277 4,104 Prepaid expenses and other current assets  (3,131) (766) Other assets  (168) 170 Accounts payable 1,877 (1,437) Accrued compensation and benefits (3,347) (10,764) Other accrued expenses (7,097) 481 Deferred revenue 8,743 2,537 Other liabilities (435) (1,984) Net cash provided by operating activities 63,633 18,108 Cash flows from investing activities Purchases of property and equipment (6,860) (5,273) Software development costs (8,197) (7,408) Acquisitions of businesses, net of cash received of $2,711 and $12,355 (62,713) (54,992) Proceeds from disposal of business - 23,675 Change in restricted cash 5 607 Net cash used in investing activities (77,765) (43,391) Cash flows from financing activities Payment of amounts due to Cision Owner - (1,940) Proceeds from term credit facility, net of debt discount of $1,108 - 28,892 Repayments of term credit facility (46,676) (5,650) Payments on capital lease obligations - (114) Payments of deferred financing costs (294) - Proceeds from merger and recapitalization - 305,210 Payment of contingent consideration (2,873) – Net cash provided by (used in) financing activities (49,843) 326,398 Effect of exchange rate changes on cash and cash equivalents (1,712) 1,409 Increase (decrease) in cash and cash equivalents (65,687) 302,524 Cash and cash equivalents Beginning of period 148,654 35,135 End of the period $  82,967 $  337,659 Supplemental non-cash information Issuance of securities by Cision Owner in Connection with acquisitions $           - $      7,000 Non-cash contribution from Cision Owner in connection with merger - 451,139 Issuance of shares for acquisition 20,143 - Use of Non-GAAP Financial Measures Non-GAAP results are presented only as a supplement to our financial statements based on U.S. generally accepted accounting principles (GAAP). Non-GAAP financial information is provided to enhance the reader's understanding of our financial performance, but none of these non-GAAP financial measures are recognized terms under GAAP, and non-GAAP measures should not be considered in isolation or as a substitute for financial measures calculated in accordance with GAAP. Reconciliations of the most directly comparable GAAP measures to non-GAAP measures, such as Adjusted EBITDA and Adjusted net income per share, are provided within the schedules attached to this release. We use non-GAAP measures in our operational and financial decision-making, believing that it is useful to exclude certain items in order to focus on what we deem to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations. As a result, internal management reports used during monthly operating reviews include Adjusted EBITDA, Adjusted net income per diluted share and organic revenue growth. We define organic revenue growth as the change in our total revenue excluding non-core revenues, calculated on a constant currency basis after giving pro forma effect to all acquisitions as though they occurred at the beginning of the applicable period. Additionally, we believe that the presentation of non-GAAP measures provides information that is useful to investors, research analysts, investment banks and lenders under our 2017 First Lien Credit Facility as it indicates, for example, our ability to meet capital expenditures and working capital requirements and otherwise meet our obligations as they become due. Investors are cautioned that non-GAAP financial measures are not a substitute for GAAP disclosures. This communication also includes certain forward-looking non-GAAP financial measures. We are unable to present without unreasonable efforts a reconciliation of forward-looking non-GAAP financial information to the corresponding GAAP financial information because management cannot reliably predict all of the necessary information. Forward-looking non-GAAP financial information is based on numerous assumptions, including assumptions with respect to general business, economic, market, regulatory and financial conditions and various other factors, all of which are difficult to predict and many of which are beyond our control. Accordingly, investors are cautioned not to place undue reliance on this information. Non-GAAP measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies comparable to Cision, many of which present non-GAAP measures when reporting their results. These measures can be useful in evaluating our performance against our peer companies because we believe the measures provide users with valuable insight into key components of GAAP financial disclosures. However, non-GAAP measures have limitations as an analytical tool. Non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies. They are not presentations made in accordance with GAAP, are not measures of financial condition or liquidity, and should not be considered as an alternative to profit or loss for the period determined in accordance with GAAP or operating cash flows determined in accordance with GAAP. As a result, you should not consider such performance measures in isolation from, or as a substitute analysis for, results of operations as determined in accordance with GAAP. Cision Ltd. and its Subsidiaries Reconciliation of Net Loss to EBITDA and Adjusted EBITDA (in millions) (Unaudited) Three Months Ended June 30, 2018 Three Months Ended June 30, 2017 Change Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Change Net loss $             (6.5) $           (19.1) $            12.7 $             (6.9) $           (42.1) $            35.3 Depreciation and amortization 33.6 34.7 (1.1) 66.9 67.3 (0.4) Interest expense and loss on extinguishment of debt 20.5 36.3 (15.9) 42.6 73.2 (30.6) Provision for (benefit from) income taxes 24.6 (7.2) 31.9 6.9 (14.3) 21.2 EBITDA (1) 72.2 44.6 27.6 109.5 84.1 25.4 Acquisition and offering related costs 8.9 12.0 (3.1) 19.8 20.3 (0.5) Gain on sale of business - - - - (1.8) 1.8 Stock-based compensation 0.9 0.9 (0.1) 2.2 1.9 0.3 Deferred revenue reduction from purchase accounting 0.3 0.1 0.2 1.2 0.1 1.1 Sponsor fees and expenses - 0.1 (0.1) - 0.3 (0.3) Unrealized translation (gain) loss (16.1) 0.6 (16.7) (8.2) 2.4 (10.6) Adjusted EBITDA (2) $            66.2 $            58.5 $              7.7 $          124.4 $          107.3 $            17.1 Cision Ltd. and its Subsidiaries Reconciliation of Net Loss to Adjusted Net Income and Adjusted Net Income per Diluted Share (in millions, except for per share amounts) (Unaudited) Three Months Ended June 30, 2018 Three Months Ended June 30, 2017 Change Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Change Net loss $             (6.5)

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