Fluent(US:FLNT)2020-08-10 20:46PART I - FINANCIAL INFORMATION This section presents the company's unaudited financial statements and management's analysis of financial performance ITEM 1. FINANCIAL STATEMENTS. This section provides the company's unaudited consolidated financial statements and comprehensive explanatory notes Consolidated Balance Sheets Presents the company's financial position, detailing assets, liabilities, and shareholders' equity at specific points in time | ASSETS (in thousands of USD) | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Cash and cash equivalents | $20,218 | $18,679 | | Accounts receivable, net | $55,304 | $60,915 | | Total current assets | $77,518 | $81,515 | | Total assets | $308,401 | $317,093 | | LIABILITIES AND SHAREHOLDERS' EQUITY (in thousands of USD) | | | | Accounts payable | $11,601 | $21,574 | | Accrued expenses and other current liabilities | $21,027 | $20,358 | | Deferred revenue | $2,468 | $1,140 | | Current portion of long-term debt | $9,677 | $6,873 | | Total current liabilities | $47,052 | $52,227 | | Total liabilities | $94,586 | $106,156 | | Total shareholders' equity | $213,815 | $210,937 | | Total liabilities and shareholders' equity | $308,401 | $317,093 | Consolidated Statements of Operations Details the company's revenues, expenses, and net income over specific reporting periods | Metric (in thousands of USD, except per share data) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $71,509 | $70,560 | $150,443 | $137,121 | | Total costs and expenses | $69,724 | $68,078 | $146,718 | $131,851 | | Income from operations | $1,785 | $2,482 | $3,725 | $5,270 | | Interest expense, net | $(1,333) | $(1,767) | $(2,865) | $(3,545) | | Income before income taxes | $452 | $715 | $860 | $1,725 | | Net income | $452 | $715 | $860 | $1,760 | | Basic income per share | $0.01 | $0.01 | $0.01 | $0.02 | | Diluted income per share | $0.01 | $0.01 | $0.01 | $0.02 | Consolidated Statements of Changes in Shareholders' Equity Outlines changes in equity components, including common stock, treasury stock, and accumulated deficit, over a period | Metric | Balance at December 31, 2019 | Balance at June 30, 2020 | | :--- | :--- | :--- | | Common Stock (Shares) | 78,642,078 | 79,908,985 | | Common Stock (Amount in thousands of USD) | $39 | $40 | | Treasury Stock (Shares) | 2,768,399 | 3,616,398 | | Treasury Stock (Amount in thousands of USD) | $(8,184) | $(9,930) | | Additional Paid-in Capital (in thousands of USD) | $406,198 | $409,961 | | Accumulated Deficit (in thousands of USD) | $(187,116) | $(186,256) | | Total Shareholders' Equity (in thousands of USD) | $210,937 | $213,815 | - For the six months ended June 30, 2020, common stock increased due to vesting of 1.6 million restricted stock units, while treasury stock increased by 190.3 thousand shares withheld for statutory taxes and 657.7 thousand shares repurchased6466 Consolidated Statements of Cash Flows Reports cash inflows and outflows from operating, investing, and financing activities over a period | Cash Flow Activity (in thousands of USD) | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $9,832 | $13,113 | | Net cash used in investing activities | $(2,674) | $(2,872) | | Net cash used in financing activities | $(5,619) | $(6,174) | | Net increase in cash, cash equivalents and restricted cash | $1,539 | $4,067 | | Cash, cash equivalents and restricted cash at end of period | $21,698 | $23,316 | Notes to Consolidated Financial Statements Provides detailed explanations and disclosures supporting the consolidated financial statements 1. Summary of significant accounting policies Describes the key accounting principles and methods used in preparing the financial statements - The financial statements are prepared in accordance with US GAAP and SEC interim reporting rules, reflecting normal recurring adjustments. The Company consolidates Variable Interest Entities (VIEs) where it is the primary beneficiary, including Winopoly, LLC since April 1, 2020232425 - Revenue is recognized when control of goods or services is transferred, typically for data records or conversions. Deferred revenue was $2.5 million as of June 30, 2020, up from $1.1 million at December 31, 2019. Unbilled revenue, included in accounts receivable, was $23.1 million as of June 30, 2020, down from $29.1 million at December 31, 2019293031 - The Company is evaluating the impact of ASU No. 2016-13, 'Financial Instruments—Credit Losses,' effective for periods beginning after December 15, 202228 - Management makes estimates and assumptions for financial reporting, including for doubtful accounts, intangible assets, goodwill, purchase accounting, and income tax provisions. The COVID-19 pandemic led to a goodwill impairment for the 'All Other' reporting unit but no other adjustments to assets or liabilities for the three and six months ended June 30, 20203435 2. Income per share Presents the calculation of basic and diluted earnings per share for various periods | Metric (in thousands of USD, except per share and share data) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Net income | $452 | $715 | $860 | $1,760 | | Basic weighted average shares outstanding | 78,510,383 | 79,388,383 | 78,557,331 | 79,297,599 | | Diluted weighted average shares outstanding | 78,666,776 | 81,132,304 | 78,905,792 | 80,443,530 | | Basic income per share | $0.01 | $0.01 | $0.01 | $0.02 | | Diluted income per share | $0.01 | $0.01 | $0.01 | $0.02 | - Potentially dilutive securities, including restricted stock units, stock options, and warrants, were excluded from diluted EPS calculations if their effects would have been anti-dilutive3637 3. Intangible assets, net Details the composition and changes in the company's intangible assets, net of amortization | Intangible Asset Type (Net in thousands of USD) | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Software developed for internal use | $3,235 | $2,871 | | Acquired proprietary technology | $3,617 | $4,145 | | Customer relationships | $15,875 | $17,890 | | Trade names | $