CYREN : Reports Fourth Quarter and Full Year 2013 Results

McLean, VA - February 24, 2013 - CYREN (NASDAQ: CYRN), a leading provider of integrated cloud-based security solutions and software-based security technology, today announced its fourth quarter and full year 2013 financial results for the period ending December 31, 2013.

In addition, the company, previously operating as Commtouch, announced that its common shares will commence trading on NASDAQ and the Tel Aviv Stock Exchange (TASE) under the name CYREN Ltd. with the symbol "CYRN" today. The new CUSIP (Committee of Uniform Security Identification Procedures) number will be M26895108.

Fourth Quarter & Full Year 2013 Financial Highlights:

• Revenues in accordance with U.S. Generally Accepted Accounting Principles (US GAAP) totaled $8.2 million for the fourth quarter of 2013 compared to $8.0 million for the sequential third quarter of 2013 and $6.8 million in the fourth quarter of 2012. Full year 2013 revenues totaled $32.2 million, an increase of 35% as compared to $23.9 million in 2012.

• Non-GAAP revenues totaled $8.4 million for the fourth quarter of 2013 compared to $8.1 million for the sequential third quarter of 2013 and $7.0 million in the fourth quarter of 2012. Full year 2013 non-GAAP revenues totaled $32.8 million, an increase of 36% as compared to $24.1 million in 2012. The difference between non-GAAP and GAAP revenue is derived from the fact that deferred revenues consolidated from acquired companies are recorded based on fair value rather than book value for GAAP purposes.

• GAAP net loss for the fourth quarter of 2013 was $7.0 million compared to net loss of $0.9 million for the sequential third quarter of 2013 and a net loss of $0.5 million in the fourth quarter of 2012. Full year 2013 GAAP net loss totaled $9.9 million compared to GAAP net income of $1.5 million in 2012. Full year 2013 results include: an adjustment to deferred tax benefit of $5.3 million; an acquisition related earn out adjustment of $3.3 million; an investment impairment of $1.3 million; and acquisition expenses and related integration, severance and streamlining expenses of $0.6 million.

• GAAP loss per basic share for the fourth quarter of 2013 was $0.26, compared to a loss of $0.03 for the sequential third quarter of 2013 and a loss of $0.02 in the fourth quarter of 2012. Full year 2013 GAAP loss per basic share was $0.38 compared to GAAP earnings per diluted share of $0.06 in 2012. Full year 2013 results include the aforementioned adjustments and expenses.

• Non-GAAP net loss for the fourth quarter 2013 was $1.9 million compared to non-GAAP net income of $0.3 million for the sequential third quarter of 2013 and non-GAAP net income of $0.3 million in the fourth quarter of 2012.  Full year 2013 non-GAAP net loss totaled $1.4 million compared to non-GAAP net income of $3.9 million in 2012.

• Non-GAAP loss per basic share for the fourth quarter 2013 was $0.07, compared to non-GAAP earnings per diluted share of $0.01 for the sequential third quarter of 2013 and $0.01 in the fourth quarter of 2012. Full year 2013 non-GAAP loss per basic share was $0.05 compared to non-GAAP net income per diluted share of $0.16 in 2012.

• Cash used by operating activities during the quarter was $0.2 million.

• Cash as of December 31, 2013 was $3.8 million, compared to $4.0 million as of September 30, 2013.
  
  

"We delivered a solid fourth quarter performance driven by strong demand for our cloud-based detection services globally," said Lior Samuelson, chief executive officer at CYREN. "In addition, we completed a major step in our transformation to a complete cloud-based Security-as-a-Service provider with the official launch of our CYREN WebSecurity offering and announced our first distribution partner."

"Our core detection business remains very profitable and enables us to invest in new products to expand our market opportunity and enhance our top line growth rate," Mr. Samuelson added. "We plan to continue leveraging our core assets to further expand our cloud-based service offering over the next 18 to 24 months."

"We are pleased with our financial performance in the quarter, said Brian Briggs, chief financial officer at CYREN. Our continued streamlining efforts yielded another substantial improvement in the company's cost structure in the fourth quarter and we significantly lowered our cash burn.   These efforts have strengthened our financial position and will enable us to focus on executing on our strategy."

For information regarding the non-GAAP financial measures discussed in this release, please see "Use of Non-GAAP Financial Information" and "Reconciliation of Non-GAAP to GAAP Financial Information."

Business Highlights:

• CYREN launched its new cloud-based CYREN WebSecurity solutions built on the company's market-leading security detection services. Delivering the low cost and high utility of cloud-based applications, CYREN WebSecurity is ideally suited to address explosive growth in demand for Security as a Service (SECaaS) solutions fueled by the BYOD trend, an increasingly mobile workforce, and the management and accessibility of information assets beyond the boundaries of traditionally secured network perimeters.

• The company announced the first distribution agreement for its recently launched CYREN WebSecurity offering.  This partnership with Certsys, a leading Russian IT security provider, allows them to distribute CYREN's cloud-based web security offering on a private label basis.

• The company announced CYREN Security Center, which gives the industry online insight to the latest global trends in Internet security.  The Security Center includes reviews of the previous week's malware and spam levels, common Web categories of sites that have been hacked, distribution of global zombies, and a spam topics cloud showing the main active spam campaigns on a daily basis.

• Lior Samuelson, Chairman of the Board, expanded his role with the company to chief executive officer.  Mr. Samuelson has a long-term relationship with CYREN as well as an extensive career including serving as chairman, CEO and board member of multiple companies in technology, telecom, financial services and management consulting.

• Eva Edwards Markowitz joined CYREN as vice president of human resources.  Ms. Markowitz brings nearly two decades of leadership experience building and overseeing human resources teams. 

• CYREN partnered with U-Mail to offer its users strong protection against spam and viruses. U-Mail is one of the latest providers to join the large group of partners and customers that use CYREN services to protect their own business and that of their customers.