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UPDATE 1-Perion Network ups estimates on Smilebox consolidation
August 8, 2012 / 4:45 PM / 5 years ago

UPDATE 1-Perion Network ups estimates on Smilebox consolidation

* Q2 EPS $0.18 vs $0.19; revenue up 53 pct to $12.3 mln

* Raises 2012 revenue estimate to $50-$52 mln

* Raises 2012 net profit outlook to $7.5-$8.5 mln

* CEO says seeking more acquisitions

* Nasdaq shares up 4.5 percent

By Steven Scheer

JERUSALEM, Aug 8 (Reuters) - Internet and media company Perion Network raised its 2012 estimates after second-quarter revenue jumped more than 50 percent from sales and advertising helped by the consolidation of its 2011 purchase of Smilebox.

“We’ll grow 35 to 40 percent this year,” Josef Mandelbaum, Perion’s chief executive, told Reuters.

Israel-based Perion forecast 2012 revenue of $50-$52 million and net profit of $7.5-$8.5 million, up from previous estimates of $48-$50 million in revenue and net profit of $7-$8 million. It recorded revenue of $37 million and net income of $8.3 million in 2011.

“We currently expect a better than 50 percent increase in revenues in the second half of this year compared to the second-half of last year,” said Mandelbaum, a former executive at American Greetings.

Perion changed its name from IncrediMail in late 2011 after its $31 million largely cash Smilebox purchase. Mandelbaum said the company - which has an installed base of 19 million - intends to continue expanding its revenue streams, mainly through more acquisitions of companies with single products such as Smilebox, which allows users to make and email photo cards, scrapbooks and collages.

More than 280 million IncrediMail e-mails and invitations are sent by its 10.7 million active users each month.

Perion just released an iPad app for Smilebox and plans an I email app for iPads and other tablets later this year.

“My personal goal, and I believe it’s doable, is we can be a multi-$100 million company in a few years,” Mandelbaum said.

He said although the company had $16 million of cash, it could still make a purchase up to $35 million by also using equity.

Perion earned 18 cents a share in the second quarter compared with 19 cents a year earlier as Smilebox was still dilutive, although Mandelbaum said the loss was narrowing. Revenue rose 53 percent to $12.3 million.

Its Nasdaq-listed shares were up 4.5 percent at $5.35 in morning trade after its Tel Aviv shares closed 3.4 percent higher.

Perion makes its money from search based advertising from revenue sharing with Google and from the popular “freemium” model for its products in which the basic version is free but more features require payment.

Some 30-35 percent of Perion’s advertising revenue comes from North America, with 50 percent from Europe.

As emerging markets continue to grow faster than the West, revenue from advertising in such Latin American and Asian countries were outpacing those in the U.S. and Europe, Mandelbaum said.

He noted it was too early to provide an outlook for 2013 but added: “I expect growth to continue in a significant way in both revenue and profit.”

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