comScore Gets Cash in Deal With Stockholder Starboard
comScore, stalled since irregularities were found in its financial statements two years ago, says it has gotten new financing from shareholder Starboard Value.
With the additional cash, the company said it plans to focus this year on growth products and delivering cross-platform measurement while improving profitability.
comScore said it will issue $150 million in convertible notes to Starboard in exchange for $85 million in cash and $65 million in outstanding comScore common stock. It is also granting Starboard an option to acquire up to $50 million in additional convertible notes.
The company also said it intends to conduct a convertible notes rights offering of up to $150 million to all stockholders with $100 million backstopped by Starboard.
"comScore has made significant progress on a number of fronts and we are entering 2018 with renewed confidence. Notwithstanding the distractions of the last two years, we are in a strong marketplace position and are excited about our future,” said Sue Riley, chairman of comScore’s board. “Our focus now will be on delivering cross-platform measurement, while increasing profitability across the business by driving efficiencies and prioritizing our highest growth products."
Since the accounting issues were disclosed, the company has gone through a couple of CEOs and spent millions on a painstaking re-audit process that has kept the company from mounting a challenge to Nielsen in the media measurement business.
"We are pleased to have reached this financing agreement with comScore that should provide the Company the capital and flexibility it needs as it works to complete the audit process and return focus to improving the operations and profitability of the business,” added Peter Feld, managing member of Starboard.
Because of the accounting issues, comScore has not been able to release financial results, which has led to the company being delisted from the NASDAQ stock exchange.
On Tuesday, the company provided some financial metrics for 2016 and 2017.
The company said that for 2016 it had a net loss of between $115 million and $125 million on revenues of between $397 million and $403 million.
For the first nine months of 2017, the company lost between $191 million and $208 million on revenues of between $300 million and $310 million.
Audit costs were between as much as $60 million in 2017 and $48 million in 2016. Legal settlements cost between $80 million and $84 million in 2017.
The company will take a charge to earnings of between $10 million and $12 million in the fourth quarter of 2017 related to reductions in workforce announced in December 2017.
"The preliminary financial results we are disclosing today show that the Company needs to continue to improve profitability and we have already taken strong steps towards achieving this,” said Bill Livek, president and executive vice chairman. “We are projecting that the workforce reductions we announced as part of a reorganization of our business at the end of last year and other changes we are making internally will reduce annual expenses by over $20 million. We are now focused on re-igniting growth in our most profitable product lines."
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.