2020 Q4 Form 10-Q Financial Statement

#000176404620000088 Filed on October 29, 2020

View on sec.gov

Income Statement

Concept 2020 Q4 2020 Q3 2019 Q3
Revenue $455.6M $284.4M $243.0M
YoY Change 78.66% 17.02%
Cost Of Revenue $134.1M $93.55M $87.10M
YoY Change 62.55% 7.41%
Gross Profit $321.5M $190.8M $155.9M
YoY Change 86.38% 22.39%
Gross Profit Margin 70.57% 67.1% 64.16%
Selling, General & Admin $186.1M $131.5M $96.02M
YoY Change 100.97% 36.98%
% of Gross Profit 57.88% 68.93% 61.59%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $127.0M $2.918M $2.281M
YoY Change 129.66% 27.93%
% of Gross Profit 39.5% 1.53% 1.46%
Operating Expenses $244.2M $297.0M $207.2M
YoY Change 67.03% 43.38% 103477.0%
Operating Profit -$9.621M -$12.66M -$3.555M
YoY Change -41.45% 256.23%
Interest Expense -$39.60M $20.24M $23.37M
YoY Change -37.93% -13.37% 3238.43%
% of Operating Profit
Other Income/Expense, Net
YoY Change
Pretax Income -$10.10M -$177.7M $12.48M
YoY Change -87.41% -1524.14% 2395.0%
Income Tax -$16.50M $4.325M $1.644M
% Of Pretax Income 13.18%
Net Earnings -$13.73M -$182.0M $10.83M
YoY Change -83.81% -1780.23% 2607.75%
Net Earnings / Revenue -3.01% -64.0% 4.46%
Basic Earnings Per Share -$0.02 -$0.47 $0.04
Diluted Earnings Per Share -$0.05 -$0.47 $0.03
COMMON SHARES
Basic Shares Outstanding 606.0M shares 387.8M shares 305.4M shares
Diluted Shares Outstanding 387.8M shares 328.9M shares

Balance Sheet

Concept 2020 Q4 2020 Q3 2019 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $258.0M $601.0M $89.00M
YoY Change 239.47% 575.28% 2125.0%
Cash & Equivalents $257.7M $601.1M $88.81M
Short-Term Investments
Other Short-Term Assets $79.15M $18.67M $46.00M
YoY Change 573.62% -59.41%
Inventory
Prepaid Expenses $58.27M $49.24M
Receivables $737.7M $238.6M $227.0M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $1.148B $944.3M $361.0M
YoY Change 132.74% 161.57% 8925.0%
LONG-TERM ASSETS
Property, Plant & Equipment $36.27M $23.62M $112.0M
YoY Change 101.01% -78.91%
Goodwill $6.043B $1.818B
YoY Change 355.03%
Intangibles $7.370B $2.217B
YoY Change 303.05%
Long-Term Investments
YoY Change
Other Assets $31.33M $21.84M $39.00M
YoY Change 68.17% -44.01%
Total Long-Term Assets $13.64B $4.206B $3.289B
YoY Change 313.64% 27.89% 375.98%
TOTAL ASSETS
Total Short-Term Assets $1.148B $944.3M $361.0M
Total Long-Term Assets $13.64B $4.206B $3.289B
Total Assets $14.79B $5.151B $3.650B
YoY Change 290.11% 41.12% 425.18%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $82.04M $19.90M $28.00M
YoY Change 210.07% -28.94%
Accrued Expenses $752.0M $279.0M $186.0M
YoY Change 315.47% 50.0%
Deferred Revenue $707.3M $326.1M $330.8M
YoY Change 73.65% -1.42%
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $28.60M $12.60M $15.00M
YoY Change 217.78% -16.0%
Total Short-Term Liabilities $1.423B $662.7M $560.0M
YoY Change 118.6% 18.34%
LONG-TERM LIABILITIES
Long-Term Debt $3.458B $1.911B $1.305B
YoY Change 112.32% 46.44%
Other Long-Term Liabilities $49.45M $19.99M $373.0M
YoY Change 161.74% -94.64% 1454.17%
Total Long-Term Liabilities $3.507B $1.931B $1.678B
YoY Change 112.89% 15.08% 6891.67%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.423B $662.7M $560.0M
Total Long-Term Liabilities $3.507B $1.931B $1.678B
Total Liabilities $5.756B $2.792B $2.278B
YoY Change 136.78% 22.58% 9391.67%
SHAREHOLDERS EQUITY
Retained Earnings -$1.251B -$965.3M
YoY Change 48.34%
Common Stock $9.989B $3.329B
YoY Change 352.3%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares 6.326M shares 0.000 shares
Shareholders Equity $9.035B $2.022B $1.373B
YoY Change
Total Liabilities & Shareholders Equity $14.79B $5.151B $3.650B
YoY Change 290.11% 41.12% 425.18%

Cashflow Statement

Concept 2020 Q4 2020 Q3 2019 Q3
OPERATING ACTIVITIES
Net Income -$13.73M -$182.0M $10.83M
YoY Change -83.81% -1780.23% 2607.75%
Depreciation, Depletion And Amortization $127.0M $2.918M $2.281M
YoY Change 129.66% 27.93%
Cash From Operating Activities $135.5M $20.40M $69.60M
YoY Change 2556.86% -70.69% -14020.0%
INVESTING ACTIVITIES
Capital Expenditures -$29.10M -$26.00M -$21.40M
YoY Change 11.07% 21.5%
Acquisitions
YoY Change
Other Investing Activities -$1.997B $0.00 $0.00
YoY Change 2819.44% -100.0%
Cash From Investing Activities -$2.026B -$26.00M -$21.40M
YoY Change 2041.65% 21.5% -96.9%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 1.557B -6.200M -3.700M
YoY Change 1862.8% 67.57% -100.53%
NET CHANGE
Cash From Operating Activities 135.5M 20.40M 69.60M
Cash From Investing Activities -2.026B -26.00M -21.40M
Cash From Financing Activities 1.557B -6.200M -3.700M
Net Change In Cash -334.0M -11.80M 44.50M
YoY Change 3174.51% -126.52% 1012.5%
FREE CASH FLOW
Cash From Operating Activities $135.5M $20.40M $69.60M
Capital Expenditures -$29.10M -$26.00M -$21.40M
Free Cash Flow $164.6M $46.40M $91.00M
YoY Change 425.88% -49.01%

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Background and Nature of Operations<div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Clarivate Plc (“Clarivate,” “us,” “we,” “our,” or the “Company”), is a public limited company organized under the laws of Jersey, Channel Islands. We were initially registered on January 7, 2019, and at our 2020 annual general meeting, our shareholders approved a change of our corporate name from “Clarivate Analytics Plc” to “Clarivate Plc”. Pursuant to the definitive agreement entered into to effect a merger between Camelot Holdings (Jersey) Limited ("Jersey") and Churchill Capital Corp, a Delaware corporation, ("Churchill") (the “2019 Transaction”), the Company was formed for the purposes of completing the 2019 Transaction and related transitions and carrying on the business of Jersey, and its subsidiaries.</span></div><div style="margin-bottom:6pt;margin-top:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company is a provider of proprietary and comprehensive content, analytics, professional services and workflow solutions that enables users across government and academic institutions, life science companies and research and development (“R&amp;D”) intensive corporations to discover, protect and commercialize their innovations. Our Science Product Group consists of our Web of Science and Life Science Product Lines. Both Product Lines provide curated, high-value, structured information that is delivered and embedded into the workflows of our customers, which include research intensive corporations, life science organizations and universities world-wide. Our Intellectual Property ("IP") Product Group consists of our Derwent, CompuMark and MarkMonitor Product Lines. These Product Lines help manage customers' end-to-end portfolios of intellectual property from patents to trademarks to corporate website domains.</span></div><div style="margin-bottom:6pt;margin-top:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">In January 2019, we entered into an Agreement and Plan of Merger (as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated February 26, 2019, and Amendment No. 2 to the Agreement and Plan of Merger, dated March 29, 2019, collectively, the “Merger Agreement”) by and among Churchill, Jersey, CCC Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Clarivate (“Delaware Merger Sub”), Camelot Merger Sub (Jersey) Limited, a private limited company organized under the laws of Jersey, Channel Islands and wholly owned subsidiary of Clarivate (“Jersey Merger Sub”), and the Company, which, among other things, provided for (i) Jersey Merger Sub to be merged with and into Jersey with Jersey being the surviving company in the merger (the “Jersey Merger”) and (ii) Delaware Merger Sub to be merged with and into Churchill with Churchill being the surviving corporation in the merger (the “Delaware Merger”), and together with the Jersey Merger, the “Mergers”.</span></div><div style="margin-bottom:9pt;margin-top:6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:115%">On May 13, 2019, the 2019 Transaction was consummated, and Clarivate became the sole managing member of Jersey, operating and controlling all of the business and affairs of Jersey, through Jersey and its subsidiaries. Following the consummation of the 2019 Transaction on May 13, 2019, the Company’s ordinary shares and warrants began trading on the New York Stock Exchange. All of the Company’s public warrants have subsequently been redeemed. See Note 15 — "Shareholders' Equity" for further information regarding the redemption of the Company’s public warrants.</span></div><div style="margin-bottom:6pt;margin-top:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The 2019 Transaction was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Under this method of accounting Churchill was treated as the "acquired" company for financial reporting purposes. This determination was primarily based on post 2019 Transaction relative voting rights, composition of the governing board, size of the two entities pre-merger, and intent of the 2019 Transaction. Accordingly, for accounting purposes, the 2019 Transaction was treated as the equivalent of the Company issuing stock for the net assets of Churchill. The net assets of Churchill, were stated at historical cost, with no goodwill or other intangible assets resulting from the 2019 Transaction. Reported amounts from operations included herein prior to the 2019 Transaction are those of Jersey.</span></div><div style="margin-bottom:6pt;margin-top:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">In February 2020, the Company consummated a public offering of 27,600,000 ordinary shares at $20.25 per share. After this offering, Onex Corporation and Baring Private Equity Asia Limited ("BPEA") continued to beneficially own approximately 38.3% of the Company’s ordinary shares, down from approximately 70.8% of the ordinary shares beneficially owned by Onex Corporation and BPEA immediately after the closing of our merger with Churchill Capital Corp in 2019.</span></div><div style="margin-bottom:6pt;margin-top:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">In June 2020, the Company consummated a public offering of 50,400,000 of our ordinary shares at a share price of $22.50 per share. Of the 50,400,000 ordinary shares, 14,000,000 were ordinary shares offered by Clarivate and 36,400,000 were ordinary shares offered by selling shareholders. The Company received approximately $304,030 in net proceeds from the sale of its ordinary shares, after deducting underwriting discounts and estimated offering </span></div><div style="margin-bottom:6pt;margin-top:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">expenses payable. We used the net proceeds, in conjunction with the new $1,600,000 incremental term loan facility available to Clarivate on October 1, 2020, and cash on the balance sheet to fund the repayment of CPA Global's parent company outstanding debt $2,052,926 of outstanding debt. The Company did not receive any proceeds from the sale of ordinary shares by the selling shareholders. Immediately after the offering, Onex Corporation and Baring owned approximately 18.4% and 7.2%, respectively, of the Company's ordinary shares, down from an aggregate of 38.3% owned subsequent to the February 2020 offering.</span></div><div style="margin-bottom:6pt;margin-top:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On October 1, 2020, the Company completed its previously announced acquisition of CPA Global. See Note 22 — "Subsequent Events" for additional information regarding the CPA Global acquisition. </span></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Risks and Uncertainties</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">In March 2020, the World Health Organization characterized COVID-19 as a pandemic. The rapid spread of COVID-19 and the continuously evolving responses to combat it have had an increasingly negative impact on the global economy. In view of the rapidly changing business environment, market volatility and heightened degree of uncertainty resulting from COVID-19, we are currently unable to fully determine its future impact on our business. However, we continue to assess the potential effect on our financial position, results of operations, and cash flows. If the global pandemic continues to evolve into a prolonged crisis, the effects could have an adverse impact on the Company's results of operations, financial condition and cash flows.</span></div>
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