Synacor tweaks board amid Qumu merger

BUFFALO, N.Y. – Synacor, Inc. (Nasdaq: SYNC), a cloud-based software and services company serving global video, internet and communications providers, device manufacturers, governments and enterprises, today announced its financial results for the fourth quarter and year-ended December 31, 2019.

Fourth Quarter and Full Year Financial Results:
Revenue
For the fourth quarter of 2019, revenue was $26.8 million, in line with the Company's financial guidance, compared to $39.4 million in the fourth quarter of 2018. The decrease was primarily due to the loss of the AT&T portal contract in Q3'19, which contributed $12.1 million in revenue in Q4'18.

Software & Services revenue totaled $11.6 million in the fourth quarter of 2019, compared with $12.4 million in the fourth quarter of 2018. The fourth quarter of 2018 included $0.4 million in revenue from a discontinued product and $0.3 million in non-recurring services revenue. Portal & Advertising revenue totaled $15.2 million in the fourth quarter of 2019, compared with $27.0 million in the year-ago period. The decline was due to the loss of the AT&T portal contract in Q3'19. For fiscal year 2019, total revenue was $121.8 million, compared to $143.9 in fiscal year 2018. Software & Services revenue was $44.5 million compared to $48.7 million in the prior year. The decline was primarily related to discontinued product and non-recurring services revenue which contributed $1.2 million and $2.5 million respectively in 2018. Portal & Advertising revenue was $77.4 million, compared to $95.2 million in fiscal 2018. The decline was primarily due to the loss of the AT&T portal contract in Q3'19. Net Loss

For the fourth quarter of 2019, net loss was $0.6 million, or ($0.01 per share), compared with a net loss of $0.4 million, or ($0.01 per share), in the fourth quarter of 2018. Net loss for fiscal year 2019 was $9.0 million, or ($0.23 per share), compared to a net loss of $7.6 million, or ($0.19 per share) in fiscal year 2018.

Cash
The Company ended the fourth quarter of 2019 with $11.0 million in cash and cash equivalents, compared with $15.2 million at the end of the third quarter of 2019 and $15.9 million at December 31, 2018, due primarily to a one-time adjustment related to the wind-down of ATT.net.

Board Transition in Anticipation of Qumu Merger
Synacor had previously announced that pursuant to the merger agreement, the Board of Directors of the combined software-focused Synacor and Qumu company will consist of seven directors - three directors to be appointed by Synacor, two directors to be appointed by Qumu, Synacor CEO Himesh Bhise, and a new, seventh independent director with software and SaaS experience to serve as Chairperson.

Today, the Synacor Board named Lisa Donohue, Marwan Fawaz, and Kevin Rendino, and the Qumu Board named Mary Chowning and Neil Cox, as the directors who will join Himesh Bhise, following the closing of the proposed merger with Qumu to serve on the reconstituted board of the combined company.

The Board has engaged Heidrick & Struggles, a prominent executive search firm, to identify and evaluate candidates to serve as the combined company's seventh Director and new Chairperson.

Synacor also announced today that Jordan Levy has resigned as Chairman of the Board, and is stepping down from the Board of Directors effective immediately. Kevin Rendino has been appointed Interim Chairman. In addition, Gary Ginsberg and Scott Murphy have notified the Board that they will complete their current terms as independent directors and will not stand for re-election at the 2020 Annual Meeting. Effective at the time of the 2020 Annual Meeting, the size of Synacor's Board of Directors will be reduced from nine to seven members. Andrew Kau and Michael Montgomery have notified the Board that they intend to resign from their positions immediately prior to the closing of the proposed merger to allow the two Qumu appointees (Mary Chowning and Neil Cox) to join the Synacor Board.

Synacor