AVG Reports Fourth Quarter and Fiscal Year 2012 Financial Results

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Thursday, February 21st 2013
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Revenue Grows 31 Percent in Fiscal Year 2012; Reports 2012 GAAP diluted EPS of $0.84 and Non-GAAP diluted EPS of $1.40; Provides Strong Fiscal Year 2013 Outlook

AMSTERDAM, Feb. 21, 2013 /PRNewswire/ -- AVG Technologies N.V. (NYSE: AVG) today reported results for the fourth quarter and fiscal year ended December 31, 2012.

Revenue for the fourth quarter of 2012 was $95.2 million, compared with $74.3 million in the fourth quarter of 2011, an increase of 28 percent.  Net income for the fourth quarter of 2012 was $4.9 million, or $0.09 per diluted share, based on 54.5 million weighted-average diluted shares outstanding.  This compares with a net loss of $0.03 per diluted ordinary share in the equivalent period last year based on 36 million diluted ordinary shares.  Net cash flow provided by operations was $41.2 million in the fourth quarter, an increase of over 100 percent compared with $20.2 million for the same period last year.

User numbers were 146 million at December 31, 2012, an increase of 38 million or 35 percent compared with the prior year.  Non-GAAP adjusted net income for the fourth quarter was $17.3 million or $0.32 per diluted share.  This compares with non-GAAP adjusted net income of $10.9 million, or $0.21 per diluted share, for the same period of the prior year.1  Unlevered free cash flow was $36.5 million for the quarter, compared with $24.4 million for the prior year.

"Our strong fourth quarter reflects the successful release of AVG's 2013 product editions in September.  The subscription software business delivered 18 percent growth in the fourth quarter and deferred revenues grew $19 million which helps to position us for predictable software growth in 2013," said JR Smith, CEO of AVG Technologies.  "Platform revenue continued to contribute meaningfully and we took significant steps on our strategy to diversify this revenue stream by signing important new search contracts with Google and Yahoo!.  We had 100 percent growth in operating cash flow in the quarter to over $40 million reflecting a 43 percent cash margin - driven by our strong operational efficiency and cost optimization, underpinned by our cost- efficient online business model."

For the fiscal year 2012 revenue was $356.0 million, compared with $272.4 million in 2011, an increase of 31 percent.  Net income for fiscal year 2012 was $45.8 million, or $0.84 per diluted share, based on 54.3 million weighted-average diluted shares outstanding, compared with net income of $100.4 million, or $1.69 per diluted ordinary share based on 39.0 million weighted-average diluted ordinary shares outstanding for fiscal year 2011.  Fiscal year 2011 included a tax benefit of $56.3 million.

Non-GAAP adjusted net income for 2012 was $76.2 million, or $1.40 per diluted share.  This compares to non-GAAP adjusted net income of $56.5 million, or $1.11 per diluted share, for the prior year.  Non-GAAP results for fiscal 2012 exclude $16.2 million in share-based compensation expense, $8.2 million in acquisition amortization, and $7.2 million in rationalization and other charges, offset by a $1.3 million adjustment to normalize to a tax rate of 14 percent.  This compared with $6.4 million in share-based compensation expense, $4.5 million in acquisition amortization, and $3.7 million in acquisition related charges, offset by a $56.5 million adjustment to normalize to a tax rate of 14 percent, in 2011.