Amber Road Announces Second Quarter 2014 Financial Results

Total revenue of $15.8 million increases 32% year-over-year

EAST RUTHERFORD, N.J.--()--Amber Road, Inc. (NYSE: AMBR), a leading provider of global trade management (GTM) solutions, today announced its financial results for the quarter ended June 30, 2014.

Jim Preuninger, Chief Executive Officer of Amber Road, stated, “We are pleased with our performance in the second quarter, with revenue increasing 32% year-over-year. Our results reflect increasing demand for global trade management solutions, our highly differentiated offering, and the response to our sales and marketing investments to drive awareness and adoption. Our well-diversified performance across our target markets proves that our opportunity is large, and that we are executing well around the world to capitalize on it.”

Second Quarter 2014 Financial Highlights

Revenue

  • Total revenue was $15.8 million, an increase of 32% from the comparable period in 2013.
  • Subscription revenue was $10.6 million, an increase of 23% from the comparable period in 2013.
  • Professional Services revenue was $5.2 million, an increase of 58% from the comparable period in 2013.

Operating Loss

  • GAAP operating loss was $(2.0) million, compared to GAAP operating loss of $(5.3) million in the comparable period in 2013.
  • Non-GAAP adjusted operating loss which excludes stock-based compensation, puttable stock compensation, and changes in the fair value of contingent consideration liability was $(1.8) million, compared to non-GAAP adjusted operating loss of $(1.5) million in the comparable period in 2013, which excludes stock-based compensation, restricted stock expense, and warrant expense.

Net Loss attributable to common stockholders

  • GAAP net loss attributable to common stockholders was $(2.2) million, compared to $(6.6) million for the comparable period in 2013.
  • GAAP basic and diluted net loss per common share was $(0.09), compared to $(1.79) for the comparable period in 2013, based on 25.2 million and 3.7 million basic and diluted weighted average common shares outstanding, respectively.
  • Non-GAAP adjusted net loss was $(2.0) million, compared to $(1.5) million in the comparable period in 2013.
  • Non-GAAP adjusted net loss per common share was $(0.08), compared to $(0.41) for the comparable period in 2013, based on 25.2 million and 3.7 million basic and diluted weighted average common shares outstanding, respectively.

Adjusted EBITDA

  • Adjusted EBITDA was $(0.6) million, in both the three months ended June 30, 2014 and 2013.

Balance Sheet

  • Cash and cash equivalents at June 30, 2014 totaled $41.3 million, compared with $5.1 million at December 31, 2013.
  • Cash used in operating activities was $(8.9) million for the first six months of 2014, compared to $(3.2) million in the comparable period in 2013.

A reconciliation of GAAP operating and net loss to Non-GAAP adjusted operating and net loss and of GAAP net loss to Adjusted EBITDA has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Second Quarter 2014 and Recent Business Highlights

  • Announced that Azelis, a top global specialty chemicals distributor, signed a worldwide contract with Amber Road for an automated restricted party screening solution. Amber Road’s solution is to be integrated with Azelis’ ERP system, with a planned rollout to 33 countries in stages starting with an Azelis entity in Belgium. Azelis chose the Amber Road restricted party screening solution, in large part because of its deep trade content, ease of use and comprehensive functionality.
  • Announced that CEO Jim Preuninger received the EY Entrepreneur Of The Year™ 2014 Award in the Technology category in New Jersey. The award recognizes outstanding entrepreneurs who demonstrate excellence and extraordinary success in such areas as innovation, financial performance, and personal commitment to their businesses and communities.

Business Outlook

Based on information available as of August 7, 2014, Amber Road is issuing guidance for the third quarter and full year 2014 as indicated below:

Third Quarter 2014:

  • Total revenue is expected to be in the range of $15.9 million to $16.1 million.
  • Non-GAAP adjusted operating loss is expected to be in the range of ($2.0) million to ($2.3) million.
  • Non-GAAP adjusted net loss per common share is expected to be in the range of ($0.10) to ($0.11). This assumes 25.4 million basic shares outstanding.

Full Year 2014:

  • Total revenue is expected to be in the range of $63.0 million to $63.6 million.
  • Non-GAAP adjusted operating loss is expected to be in the range of ($5.9) million to ($6.5) million.
  • Non-GAAP adjusted net loss per common share is expected to be in the range of ($0.29) to ($0.32). This assumes 25.4 million basic shares outstanding.

Expectations of non-GAAP adjusted loss from operations and non-GAAP adjusted loss per common share for the third quarter exclude stock-based compensation, puttable stock compensation and changes in the fair value of contingent consideration liability. Expectations of non-GAAP adjusted loss from operations and non-GAAP adjusted loss per common share for the full year 2014 exclude stock-based compensation, restricted stock expense, compensation expense related to loan forgiveness, puttable stock compensation, changes in the fair value of contingent consideration liability and warrant expense.

Conference Call Information

Amber Road will host a conference call on Thursday, August 7, 2014 at 5:00 p.m. Eastern Time (ET) to discuss the company’s second quarter financial results and its business outlook. To access this call, dial 888-287-5563 (domestic) or 719-325-2454 (international). The conference ID is 2505382.

Additionally, a live webcast of the conference call will be available in the “Investor Relations” section of the Company’s web site at www.AmberRoad.com.

Following the conference call, a replay will be available at 877-870-5176 (domestic) or 858-384-5517 (international). The replay pass code is 2665595. An archived webcast of this conference call will also be available in the “Investor Relations” section of the Company’s web site at www.AmberRoad.com.

About Amber Road

Amber Road’s (NYSE: AMBR) mission is to dramatically change the way companies conduct global trade. As a leading provider of cloud based global trade management (GTM) solutions, we automate import and export processes to enable goods to flow across international borders in the most efficient, compliant and profitable way. Our solution combines enterprise-class software, trade content sourced from government agencies and transportation providers in 139 countries, and a global supply chain network connecting our customers with their trading partners, including suppliers, freight forwarders, customs brokers and transportation carriers. We deliver our GTM solution using a Software-as-a-Service (SaaS) model and leverage a highly flexible technology framework to quickly and efficiently meet our customers’ unique requirements around the world. For more information, please visit www.AmberRoad.com, email Solutions@AmberRoad.com or call 201-935-8588.

Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, Amber Road has provided within this press release non-GAAP adjusted operating and net loss and adjusted EBITDA, financial measures that are not calculated in accordance with generally accepted accounting principles, or GAAP. Provided below is a reconciliation of GAAP operating and net loss to non-GAAP adjusted operating and net loss, and net loss to adjusted EBITDA. EBITDA consists of net loss plus depreciation and amortization, interest expense (income) and income tax expense. Adjusted EBITDA consists of EBITDA plus stock-based compensation, restricted stock expense, puttable stock compensation, warrant expense, changes in the fair value of contingent consideration liability, compensation expense related to loan forgiveness as well as the change in fair value of warrant liability. Amber Road has included these non-GAAP measures in this press release because it assists in comparing performance on a consistent basis across reporting periods, as it removes from operating results the impact of the company’s capital structure. Amber Road believes these non-GAAP measures are useful to an investor in evaluating its operating performance because they are often used by the financial community to measure a company’s operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of performance exclusive of its capital structure and the method by which assets were acquired.

Amber Road’s use of these non-GAAP measures has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of its results as reported under GAAP. Some of these limitations are:

  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and these non-GAAP measures do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
  • these non-GAAP measures do not reflect changes in, or cash requirements for, working capital needs;
  • these non-GAAP measures do not reflect the potentially dilutive impact of equity-based compensation;
  • these non-GAAP measures do not reflect interest or tax payments that may represent a reduction in cash available; and
  • other companies, including companies in Amber Road’s industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these and other limitations, you should consider these non-GAAP measures together with other GAAP-based financial performance measures, including various cash flow metrics, net loss and other GAAP results. A reconciliation of GAAP operating and net loss to non-GAAP adjusted operating and net loss, and adjusted EBITDA has been provided in the financial statement tables included in this press release.

Cautionary Language Concerning Forward-Looking Statements

This press release contains forward-looking statements. These statements identify substantial risks and uncertainties and relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” and similar expressions, whether in the negative or affirmative. These statements are only predictions and may be inaccurate. Actual events or results may differ materially. In evaluating these statements, you should specifically consider various factors, including the risks outlined in our filings with the Securities and Exchange Commission (SEC), including, without limitation, our periodic and current SEC reports. These factors may cause our actual results to differ materially from any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, our future results, levels of activity, performance or achievements may differ from our expectations. Other than as required by law, we do not undertake to update any of the forward-looking statements after the date of this press release, even though our situation may change in the future.

           
 

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

 
June 30,
2014
December 31,
2013
Assets
Cash and cash equivalents $ 41,306,332 $ 5,147,735
Accounts receivable, net 12,848,674 11,017,671
Unbilled receivables 194,093 144,067
Deferred commissions 3,124,101 2,983,400
Prepaid expenses and other current assets 1,622,879 869,108
Deferred offering costs   2,786,376  
Total current assets 59,096,079 22,948,357
Property and equipment, net 13,404,130 13,102,380
Goodwill 24,476,157 24,476,157
Other intangibles, net 1,106,280 1,201,034
Deferred commissions 6,935,245 7,066,512
Deposits and other assets 1,114,560   1,302,681  
Total assets $ 106,132,451   $ 70,097,121  
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Current installments of obligations under capital leases $ 1,237,547 $ 1,022,176
Accounts payable 1,229,152 2,568,161
Accrued expenses 6,692,501 9,081,554
Deferred revenue 24,778,956   26,115,001  
Total current liabilities 33,938,156 38,786,892
Capital lease obligations, less current portion 2,309,072 2,068,308
Deferred revenue, less current portion 2,592,077 4,641,631
Revolving credit facility 6,978,525
Other noncurrent liabilities 2,345,441   3,981,889  
Total liabilities 41,184,746   56,457,245  
Commitments and contingencies        
Total redeemable convertible preferred stock and puttable common stock   76,921,359  
Stockholders’ equity (deficit):
Common stock, $0.001 par value at June 30, 2014, no par value at December 31, 2013. Authorized, 100,000,000 and 38,100,100 shares at June 30, 2014 and December 31, 2013, respectively; issued and outstanding 25,217,036 and 5,005,911 shares at June 30, 2014 and December 31, 2013, respectively 25,217 15,221,195
Additional paid-in-capital 170,002,349
Accumulated other comprehensive income (533,752 ) (485,917 )
Accumulated deficit (104,546,109 ) (78,016,761 )
Total stockholders’ equity (deficit) 64,947,705   (63,281,483 )
Total liabilities and stockholders’ equity (deficit) $ 106,132,451   $ 70,097,121  
 

             
 

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

 
Three Months Ended
June 30,
Six Months Ended
June 30,
2014     2013 2014     2013
Revenue:
Subscription $ 10,630,709 $ 8,668,142 $ 21,140,478 $ 17,415,329
Professional services 5,178,236   3,273,244   9,657,475   6,119,121  
Total revenue 15,808,945   11,941,386   30,797,953   23,534,450  
Cost of revenue (1):
Cost of subscription revenue 3,651,853 3,184,923 6,996,581 6,190,122
Cost of professional services revenue 3,342,566   2,340,002   6,242,890   4,356,433  
Total cost of revenue 6,994,419   5,524,925   13,239,471   10,546,555  
Gross profit 8,814,526   6,416,461   17,558,482   12,987,895  
Operating expenses (1):
Sales and marketing 5,114,468 4,091,874 9,962,492 7,765,128
Research and development 2,379,144 1,833,111 4,567,618 3,774,251
General and administrative 3,299,735 2,624,834 8,051,871 4,882,686
Restricted stock expense   3,182,357   18,683,277   6,712,211  
Total operating expenses 10,793,347   11,732,176   41,265,258   23,134,276  
Loss from operations (1,978,821 ) (5,315,715 ) (23,706,776 ) (10,146,381 )
Interest income 91 17,861 304 18,028
Interest expense (55,917 ) (18,745 ) (168,894 ) (24,193 )
Loss before income taxes (2,034,647 ) (5,316,599 ) (23,875,366 ) (10,152,546 )
Income tax expense 150,537   41,325   249,549   242,568  
Net loss (2,185,184 ) (5,357,924 ) (24,124,915 ) (10,395,114 )
Accretion of redeemable convertible preferred stock and puttable common stock   (1,212,764 ) (2,416,505 ) (2,425,528 )
Net loss attributable to common stockholders $ (2,185,184 ) $ (6,570,688 ) $ (26,541,420 ) $ (12,820,642 )
 
Net loss per common share:
Basic and diluted $ (0.09 ) $ (1.79 ) $ (1.69 ) $ (3.42 )
 
Weighted-average common shares outstanding:
Basic and diluted 25,212,460 3,675,212 15,741,835 3,745,832
(1) Includes stock-based compensation as follows:
        Three Months Ended
June 30,
      Six Months Ended
June 30,
2014     2013 2014     2013
Cost of subscription revenue $ 15,188 $ 17,896 $ 35,513 $ 34,026
Cost of professional services revenue 6,116 11,566 12,074 16,126
Sales and marketing 19,852 17,541 42,037 30,533
Research and development 29,250 7,486 59,846 13,951
General and administrative 95,384   38,436   189,854   75,098
$ 165,790   $ 92,925   $ 339,324   $ 169,734
 

       
 

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 
Six Months Ended
June 30,
2014     2013
Cash flows from operating activities:
Net loss $ (24,124,915 ) $ (10,395,114 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 2,345,420 1,628,596
Bad debt expense 5,394 30,000
Stock-based compensation 339,324 169,734
Loss on asset impairment 11,964 30,261
Restricted stock non-cash compensation 18,683,277 6,712,211
Compensation related to puttable common stock 27,382
Increase in fair value of contingent consideration liability 97,423
Non-cash interest expense related to debt 9,217
Change in fair value of warrant liability 1,244,635 1,059,581
Changes in operating assets and liabilities:
Accounts receivable (1,818,325 ) (437,663 )
Unbilled receivables (53,139 ) 54,224
Prepaid expenses and other current assets (792,789 ) (2,433,463 )
Accounts payable (539,624 ) 57,530
Accrued expenses (958,316 ) 752,511
Other liabilities (7,874 ) (39,658 )
Deferred revenue (3,384,445 ) (406,700 )
Net cash used in operating activities (8,924,608 ) (3,208,733 )
Cash flows from investing activities:
Capital expenditures (456,652 ) (574,056 )
Addition of capitalized software development costs (1,052,851 ) (1,314,881 )
Cash received (paid) for deposits 150,128 (35,549 )
Decrease in restricted cash 56,409    
Net cash used in investing activities (1,302,966 ) (1,924,486 )
Cash flows from financing activities:
Proceeds from revolving line of credit 3,028,525
Payments on revolving line of credit (6,978,525 )
Debt financing costs 35,953
Repayments on capital lease obligations (557,593 ) (113,952 )
Proceeds from the exercise of stock options 339,183 26,000
Proceeds from the exercise of common stock warrant 40,452
Payment of offering costs (4,258,955 )
Proceeds from initial public offering, net of underwriting discounts and commissions 57,824,899    
Net cash provided by financing activities 46,445,414   2,940,573  
Effect of exchange rate on cash and cash equivalents (59,243 ) (106,702 )
Net increase (decrease) in cash and cash equivalents 36,158,597 (2,299,348 )
Cash and cash equivalents at beginning of year 5,147,735   4,279,821  
Cash and cash equivalents at end of year $ 41,306,332   $ 1,980,473  
 

             
 

Reconciliation of Net Loss to Adjusted EBITDA

(unaudited)

 
Three Months Ended
June 30,
Six Months Ended
June 30,
2014     2013 2014     2013
Net loss $ (2,185,184 ) $ (5,357,924 ) $ (24,124,915 ) $ (10,395,114 )
Depreciation and amortization 1,215,928 832,346 2,345,420 1,628,596
Interest expense 55,917 18,745 168,894 24,193
Interest income (91 ) (17,861 ) (304 ) (18,028 )
Income tax expense 150,537   41,325   249,549   242,568  
EBITDA (762,893 ) (4,483,369 ) (21,361,356 ) (8,517,785 )
Stock based compensation 165,790 92,925 339,324 169,734
Restricted stock expense 3,182,357 18,683,277 6,712,211
Compensation expense related to loan forgiveness 927,093
Puttable stock compensation 13,691 27,382
Increase in fair value of contingent consideration liability 15,859 97,423
Warrant expense   562,947   1,244,635   1,059,581  
Adjusted EBITDA $ (567,553 ) $ (645,140 ) $ (42,222 ) $ (576,259 )
 
 

Reconciliation of Net Loss to Non-GAAP Adjusted Net Loss

(unaudited)

             
Three Months Ended
June 30,
Six Months Ended
June 30,
2014     2013 2014     2013
Net loss $ (2,185,184 ) $ (5,357,924 ) $ (24,124,915 ) $ (10,395,114 )
Stock based compensation 165,790 92,925 339,324 169,734
Restricted stock expense 3,182,357 18,683,277 6,712,211
Compensation expense related to loan forgiveness 927,093
Puttable stock compensation 13,691 27,382
Increase in fair value of contingent consideration liability 15,859 97,423
Warrant expense   562,947   1,244,635   1,059,581  
Non-GAAP adjusted net loss $ (1,989,844 ) $ (1,519,695 ) $ (2,805,781 ) $ (2,453,588 )
 
Adjusted non-GAAP net loss per common share:
Basic and diluted $ (0.08 ) $ (0.41 ) $ (0.11 ) $ (0.66 )
 
Weighted-average common shares outstanding:
GAAP weighted average number of common shares outstanding - basic and diluted 25,212,460 3,675,212 15,741,835 3,745,832
Additional weighted average shares giving effect to initial public offering and conversion of preferred stock at the beginning of the period     9,351,280    
Non-GAAP weighted average number of common shares outstanding - basic and diluted 25,212,460   3,675,212   25,093,115   3,745,832  
 

             

Reconciliation of Loss from Operations to Non-GAAP Adjusted Loss from Operations

(unaudited)

 
Three Months Ended
June 30,
Six Months Ended
June 30,
2014     2013 2014     2013
Loss from operations $ (1,978,821 ) $ (5,315,715 ) $ (23,706,776 ) $ (10,146,381 )
Stock based compensation 165,790 92,925 339,324 169,734
Restricted stock expense 3,182,357 18,683,277 6,712,211
Compensation expense related to loan forgiveness 927,093
Puttable stock compensation 13,691 27,382
Increase in fair value of contingent consideration liability 15,859 97,423
Warrant expense   562,947   1,244,635   1,059,581  
Non-GAAP adjusted loss from operations $ (1,783,481 ) $ (1,477,486 ) $ (2,387,642 ) $ (2,204,855 )
 

Contacts

Investor Relations Contact:
ICR
Staci Mortenson, 201-804-6170
InvestorRelations@AmberRoad.com
or
Amber Road Contacts:
Annika Helmrich, 201-806-3656 (US & Canada)
AnnikaHelmrich@AmberRoad.com
or
Martijn van Gils, +31 (0) 207997790 (Europe & Asia)
MartijnvanGils@AmberRoad.com

Release Summary

Amber Road Announces Second Quarter 2014 Financial Results Total revenue of $15.8 million increases 32% year-over-year

Contacts

Investor Relations Contact:
ICR
Staci Mortenson, 201-804-6170
InvestorRelations@AmberRoad.com
or
Amber Road Contacts:
Annika Helmrich, 201-806-3656 (US & Canada)
AnnikaHelmrich@AmberRoad.com
or
Martijn van Gils, +31 (0) 207997790 (Europe & Asia)
MartijnvanGils@AmberRoad.com