comScore Reveals Losses, Shareholder Funding Deal

comScore has received new funds from shareholder New York hedge fund Starboard Value, and says it will focus on growth products and deliver cross-platform measurement while improving profitability. The firm has also put figures on huge audit and legal costs for the last two troubled years.

Last year, Starboard acquired a 4.8% stake in comScore, with the aim of forcing the company to schedule its first Annual General Meeting in two years. This followed a troubled period, which saw comScore shares initially plunge 35% one day in March 2016, following the revelation that an audit had been set up to examine accounting irregularities. The company then reported in the audit that its previous three years' financial statements 'should no longer be relied upon'. Since this time, three CEOs have departed; and in December, the firm reported plans to cut 175 jobs, 'following management's determination to reduce staffing levels and exit certain geographic regions, in order to decrease global costs'.

Today it was announced that comScore is issuing Starboard with $150m in convertible notes in exchange for $85m in cash and $65m in outstanding comScore common stock. In addition, the company is giving Starboard the option to acquire up to $50m in additional convertible notes, and also intends to conduct a convertible notes rights offering of up to $150m to all stockholders. Having reviewed financing alternatives from various sources, comScore's Board said it has determined that these financing arrangements give the company 'financial and strategic flexibility', while providing shareholders with the opportunity to participate in future financing.

The company has also announced that it is making 'substantial progress' towards finalizing the audit of its financial statements for 2015, 2016 and 2017, which is expected be completed by the end of March 2018. In a preliminary statement, comScore said the for the first nine months of 2017, it had lost between $191m and $208m on revenues of between $300m and $310m; and audit costs had been as much as $60m in 2017 and $48m in 2016, with legal settlements costing between $80m and $84m. Bill Livek (pictured), President and EVP, said that the firm is projecting that the workforce reductions announced as part of a reorganization of the business at the end of last year and other changes it is making internally will reduce annual expenses by over $20m. 'We are now focused on re-igniting growth in our most profitable product lines', he added.

Web site: www.comscore.com .