Amber Road Announces Second Quarter 2017 Financial Results

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 second quarter ended June 30, 2017.

Jim Preuninger, Chief Executive Officer of Amber Road, stated, “We are pleased with the results and the momentum we are achieving in the subscription portion of our business, new bookings being written globally, and the pipeline development for very large opportunities. Much of our success is derived from an expanding software and trade content footprint that allows us to compete for larger deals. We are gaining efficiencies through our Quick Start programs and other means to implement customers much faster and at a lower cost, and we are focused on translating these savings into expanded subscription revenue over time. Due to these efforts, combined with the timing of some project kick-offs, we now expect our services revenue growth to be in the low single digit range for 2017. Because we can effectively manage the business for both subscription growth and profit, we are raising our bottom line guidance for the full year.”

Second Quarter 2017 Financial Highlights

Revenue

  • Total revenue was $19.7 million, an increase compared to $18.1 million for the comparable period of 2016.
  • Subscription revenue was $14.7 million, an increase compared to $12.8 million for the comparable period of 2016.
  • Professional services revenue was $5.0 million compared to $5.3 million for the comparable period of 2016.

Operating Loss

  • GAAP operating loss was $(3.7) million, compared to $(4.4) million for the comparable period of 2016.
  • Non-GAAP adjusted operating loss(1) was $(2.5) million, compared to $(2.7) million for the comparable period of 2016.

Net Loss

  • GAAP net loss was $(4.5) million, compared to $(4.7) million for the comparable period of 2016.
  • GAAP basic and diluted net loss per common share was $(0.16), compared to $(0.18) for the comparable period of 2016, based on 27.4 million and 26.6 million basic and diluted weighted average common shares outstanding, respectively.
  • Non-GAAP adjusted net loss(1) was $(3.3) million, compared to $(3.0) million for the comparable period of 2016.
  • Non-GAAP adjusted net loss per common share was $(0.12), compared to $(0.11) for the comparable period of 2016, based on 27.4 million and 26.6 million basic and diluted weighted average common shares outstanding, respectively.

Adjusted EBITDA

  • Adjusted EBITDA was $(1.0) million for the three months ended June 30, 2017 and $(1.1) million for the comparable period of 2016.

Balance Sheet and Cash Flow

  • Cash and cash equivalents at June 30, 2017 totaled $11.1 million, compared to $15.4 million at December 31, 2016.
  • Cash used in operating activities was $(1.1) million for the six months ended June 30, 2017, compared to cash provided by operating activities of $0.6 million for the six months ended June 30, 2016.

A reconciliation of GAAP operating loss and net loss to Non-GAAP adjusted operating loss and net loss, of GAAP net loss to Adjusted EBITDA and of GAAP total revenue to Non-GAAP total revenue 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 2017 Business Highlights

  • Announced that the Renault-Nissan Alliance is partnering with Amber Road to help it optimize its European preferential trade processes. The Alliance will use Amber Road’s Trade Automation solution to ensure compliance with free trade agreements and maximize its utilization of preferential duties.
  • Significantly increased the global coverage of the Free Trade Agreement (FTA) Management solution, with the addition of 89 global trade agreements, bringing the total to over 120. FTA identification and qualification in Amber Road’s solution is powered by its Global Knowledge® database of global trade content, which contains the rules of origin, product classifications, and duties and taxes for the major trade agreements.
  • Added advanced Politically Exposed Persons (PEPs) lists to its Global Knowledge® database. In addition to being the industry’s most comprehensive database of government regulations and international business rules, Amber Road’s Global Knowledge helps automate Restricted Party Screening (RPS) processes to quickly vet customers, suppliers and other trading partners against 570+ restricted party lists sourced from government institutions worldwide.

Business Outlook

Based on information available as of August 3, 2017, Amber Road is issuing guidance for the third quarter and full year 2017. Refer to the reconciliation of GAAP guidance to non-GAAP guidance tables at the end of this release for details on non-GAAP adjustments.

Third Quarter 2017:

  • Total revenue is expected to be in the range of $20.0 million to $20.6 million.
  • Non-GAAP adjusted operating loss(1) is expected to be in the range of $(2.3) million to $(1.7) million.
  • Non-GAAP adjusted net loss per common share is expected to be in the range of $(0.10) to $(0.08). This assumes 28.0 million basic and diluted shares outstanding.

Full Year 2017:

  • Total revenue is expected to be in the range of $79.0 million to $81.0 million.
  • Non-GAAP adjusted operating loss(1) is expected to be in the range of $(8.8) million to $(6.8) million.
  • Non-GAAP adjusted net loss per common share is expected to be in the range of $(0.39) to $(0.32). This assumes 28.3 million basic and diluted shares outstanding.

Endnotes:

(1) For 2017, non-GAAP adjusted operating loss and adjusted net loss excludes stock-based compensation and change in fair value of contingent consideration liability. For 2016, non-GAAP adjusted operating loss and adjusted net loss excludes stock-based compensation, change in fair value of contingent consideration liability, purchase accounting deferred revenue adjustment, acquisition compensation costs and acquisition related costs.

Conference Call Information

Amber Road will host a conference call on Thursday, August 3, 2017 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)-244-2417 (domestic) or (719) 325-4845 (international). The conference ID is 8183654. 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 until August 10, 2017 at (844)-512-2921 (domestic) or (412)-317-6671 (international). The replay pass code is 8183654. 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 transform the way companies conduct global trade. As a leading provider of cloud-based global trade management (GTM) software, trade content and training, we help companies all over the world create value through their global supply chain by improving margins, achieving greater agility and lowering risk. We do this by creating a digital model of the global supply chain that enables collaboration between buyers, sellers and logistics companies. We replace manual and outdated processes with comprehensive automation for global trade activities, including sourcing, supplier management, production tracking, transportation management, supply chain visibility, import and export compliance, and duty management. We provide rich data analytics to uncover areas for optimization and deliver a platform that is responsive and flexible to adapt to the ever-changing nature of global trade.

Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, Amber Road has provided non-GAAP financial measures and non-GAAP guidance within this press release including non-GAAP adjusted operating and net loss, adjusted EBITDA and non-GAAP total revenue, 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, net loss to adjusted EBITDA and GAAP total revenue to Non-GAAP total revenue. 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, changes in the fair value of contingent consideration liability, purchase accounting adjustment to deferred revenue, acquisition compensation costs and acquisition related costs. Non-GAAP total revenue is defined as GAAP total revenue before purchase accounting adjustments as a result of an acquisition. 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, and GAAP total revenue to non-GAAP total revenue, 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 within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only our current expectations and beliefs, and therefore, contain risks and uncertainties about future events or our future financial performance, including, but not limited to, achieving revenue from bookings, closing business from the sales pipeline, new customer deployments and maintaining these relationships, the ability to reduce operating losses and use of cash, and attaining profitability. 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 annual, 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 Sheet

(Unaudited)

 
  June 30,
2017
  December 31,
2016
Assets
Current assets:
Cash and cash equivalents $ 11,082,872 $ 15,408,133
Accounts receivable, net 13,744,687 19,661,156
Unbilled receivables 961,844 314,328
Deferred commissions 4,349,955 4,420,632
Prepaid expenses and other current assets 1,738,192   1,719,612  
Total current assets 31,877,550 41,523,861
Property and equipment, net 9,856,574 9,978,255
Goodwill 43,788,695 43,907,017
Other intangibles, net 5,527,393 6,148,820
Deferred commissions 7,312,227 8,046,664
Deposits and other assets 1,141,314   884,471  
Total assets $ 99,503,753   $ 110,489,088  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 2,289,869 $ 2,724,591
Accrued expenses 8,659,207 14,127,304
Current portion of capital lease obligations 1,286,365 1,155,964
Deferred revenue 35,834,778 34,464,264
Current portion of term loan, net of discount 714,391   593,336  
Total current liabilities 48,784,610 53,065,459
Capital lease obligations, less current portion 1,684,668 1,276,700
Deferred revenue, less current portion 2,025,985 2,135,620
Term loan, net of discount, less current portion 13,196,587 13,614,514
Revolving credit facility 6,250,000 6,000,000
Other noncurrent liabilities 1,643,114   1,825,317  
Total liabilities 73,584,964   77,917,610  
Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized; issued and outstanding 27,157,250 and 26,926,268 shares at June 30, 2017 and December 31, 2016, respectively 27,157 26,926
Additional paid-in capital 191,364,311 188,811,896
Accumulated other comprehensive loss (1,611,460 ) (1,336,792 )
Accumulated deficit (163,861,219 ) (154,930,552 )
Total stockholders’ equity 25,918,789   32,571,478  
Total liabilities and stockholders’ equity $ 99,503,753   $ 110,489,088  
 

 

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Operations

(Unaudited)

 
    Three Months Ended
June 30,
    Six Months Ended
June 30,
2017   2016 2017   2016
Revenue:
Subscription $ 14,686,744 $ 12,840,208 $ 28,588,052 $ 25,279,192
Professional services 4,988,541   5,298,732   9,641,789   9,824,420  
Total revenue 19,675,285   18,138,940   38,229,841   35,103,612  
Cost of revenue (1):
Cost of subscription revenue 5,783,131 4,973,849 11,163,159 10,023,724
Cost of professional services revenue 4,126,958   4,058,867   8,148,704   8,026,568  
Total cost of revenue 9,910,089   9,032,716   19,311,863   18,050,292  
Gross profit 9,765,196   9,106,224   18,917,978   17,053,320  
Operating expenses (1):
Sales and marketing 5,688,937 5,985,149 11,492,323 11,480,690
Research and development 3,835,729 3,999,649 7,371,144 7,887,645
General and administrative 3,923,928   3,547,907   7,730,635   7,546,543  
Total operating expenses 13,448,594   13,532,705   26,594,102   26,914,878  
Loss from operations (3,683,398 ) (4,426,481 ) (7,676,124 ) (9,861,558 )
Interest income 521 29,420 1,326 51,048
Interest expense (244,183 ) (221,793 ) (479,351 ) (422,173 )
Loss before income taxes (3,927,060 ) (4,618,854 ) (8,154,149 ) (10,232,683 )
Income tax expense 590,411   121,531   776,518   193,885  
Net loss $ (4,517,471 ) $ (4,740,385 ) $ (8,930,667 ) $ (10,426,568 )
 
Net loss per common share:
Basic and diluted $ (0.16 ) $ (0.18 ) $ (0.33 ) $ (0.39 )
Weighted-average common shares outstanding:
Basic and diluted 27,418,487   26,576,290   27,329,183   26,508,316  
 
                     
 
 
(1) Includes stock-based compensation as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
2017 2016 2017 2016
Cost of subscription revenue $ 174,660 $ 211,238 $ 377,932 $ 418,949
Cost of professional services revenue 132,008 127,521 251,772 249,213
Sales and marketing 248,682 234,489 459,400 436,733
Research and development 302,222 276,541 585,860 542,556
General and administrative 371,091   553,925   779,334   1,104,784
$ 1,228,663   $ 1,403,714   $ 2,454,298   $ 2,752,235
 

 

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Cash Flows

(Unaudited)

 
  Six Months Ended
June 30,
2017   2016
Cash flows from operating activities:
Net loss $ (8,930,667 ) $ (10,426,568 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization 3,008,155 3,334,061
Bad debt expense 478,519 173,426
Stock-based compensation 2,454,298 2,752,235
Acquisition related deferred compensation 567,954
Changes in fair value of contingent consideration liability 18,525 469
Accretion of debt discount 20,079 31,457
Changes in operating assets and liabilities:
Accounts receivable and unbilled receivables 4,802,249 5,037,522
Prepaid expenses and other assets 737,378 (675,686 )
Accounts payable (515,904 ) (115,646 )
Accrued expenses (1,867,288 ) 779,676
Settlement of contingent accrued compensation related to former ecVision founder (2,366,469 )
Other liabilities (184,101 ) (1,966,098 )
Deferred revenue 1,256,536   1,140,974  
Net cash (used in) provided by operating activities (1,088,690 ) 633,776  
Cash flows from investing activities:
Capital expenditures (55,579 ) (92,097 )
Addition of capitalized software development costs (839,409 ) (1,403,920 )
Addition of intangible assets (275,000 )
Cash paid for deposits (169,140 ) (139,118 )
Decrease (increase) in restricted cash (259 ) 113,094  
Net cash used in investing activities (1,064,387 ) (1,797,041 )
Cash flows from financing activities:
Proceeds from revolving line of credit 12,250,000 8,750,000
Payments on revolving line of credit (12,000,000 ) (8,250,000 )
Payments on term loan (281,250 ) (187,500 )
Debt financing costs (35,701 )
Repayments on capital lease obligations (845,967 ) (809,182 )
Proceeds from the exercise of stock options 98,348 398,381
Contingent consideration related to ecVision acquisition (1,308,531 )  
Net cash used in financing activities (2,123,101 ) (98,301 )
Effect of exchange rate on cash and cash equivalents (49,083 ) (487,667 )
Net decrease in cash and cash equivalents (4,325,261 ) (1,749,233 )
Cash and cash equivalents at beginning of period 15,408,133   17,854,523  
Cash and cash equivalents at end of period $ 11,082,872   $ 16,105,290  
 
Supplemental disclosures of cash flow information:
Cash paid for interest $ 453,666 $ 390,716
Non-cash property and equipment acquired under capital lease 1,384,336
Non-cash property and equipment purchases in accounts payable 11,603 16,691
 

 

Reconciliation of Net Loss to Adjusted EBITDA

(Unaudited)

 
    Three Months Ended
June 30,
    Six Months Ended
June 30,
2017   2016 2017   2016
Net loss $ (4,517,471 ) $ (4,740,385 ) $ (8,930,667 ) $ (10,426,568 )
Depreciation and amortization expense 1,454,941 1,650,899 3,008,155 3,334,061
Interest expense 244,183 221,793 479,351 422,173
Interest income (521 ) (29,420 ) (1,326 ) (51,048 )
Income tax expense 590,411   121,531   776,518   193,885  
EBITDA (2,228,457 ) (2,775,582 ) (4,667,969 ) (6,527,497 )
Stock-based compensation 1,228,663 1,403,714 2,454,298 2,752,235
Change in fair value of contingent consideration liability 20,469 18,525 469
Purchase accounting deferred revenue adjustment 69,095
Acquisition compensation costs 283,977 567,954
Acquisition related costs       5,420  
Adjusted EBITDA $ (999,794 ) $ (1,067,422 ) $ (2,195,146 ) $ (3,132,324 )

Reconciliation of Net Loss to Non-GAAP Adjusted Net Loss

(Unaudited)

 
    Three Months Ended
June 30,
    Six Months Ended
June 30,
2017   2016 2017   2016
Net loss $ (4,517,471 ) $ (4,740,385 ) $ (8,930,667 ) $ (10,426,568 )
Stock-based compensation 1,228,663 1,403,714 2,454,298 2,752,235
Change in fair value of contingent consideration liability 20,469 18,525 469
Purchase accounting deferred revenue adjustment 69,095
Acquisition compensation costs 283,977 567,954
Acquisition related costs       5,420  
Non-GAAP adjusted net loss $ (3,288,808 ) $ (3,032,225 ) $ (6,457,844 ) $ (7,031,395 )
 
Adjusted non-GAAP net loss per common share:
Basic and diluted $ (0.12 ) $ (0.11 ) $ (0.24 ) $ (0.27 )
 
Weighted-average common shares outstanding:
GAAP weighted average number of common shares outstanding - basic and diluted 27,418,487   26,576,290   27,329,183   26,508,316  

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

(Unaudited)

 
    Three Months Ended
June 30,
    Six Months Ended
June 30,
2017   2016 2017   2016
Loss from operations $ (3,683,398 ) $ (4,426,481 ) $ (7,676,124 ) $ (9,861,558 )
Stock-based compensation 1,228,663 1,403,714 2,454,298 2,752,235
Change in fair value of contingent consideration liability 20,469 18,525 469
Purchase accounting deferred revenue adjustment 69,095
Acquisition compensation costs 283,977 567,954
Acquisition related costs       5,420  
Non-GAAP adjusted loss from operations $ (2,454,735 ) $ (2,718,321 ) $ (5,203,301 ) $ (6,466,385 )
 

Based on information available as of August 3, 2017, the following tables show 2017 GAAP guidance reconciled to non-GAAP guidance for the third quarter and full year 2017 as indicated below (numbers in millions, except per share data):

 

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

(Unaudited)

 
    Third Quarter 2017     Full Year 2017
Low   High Low   High
Loss from operations $ (3.8 ) $ (3.2 ) $ (14.1 ) $ (12.1 )
Stock-based compensation 1.5   1.5   5.3   5.3  
Non-GAAP adjusted loss from operations $ (2.3 ) $ (1.7 ) $ (8.8 ) $ (6.8 )
 

Reconciliation of Net Loss per Share to Non-GAAP Adjusted Net Loss per Share Guidance (1)

(Unaudited)

 
    Third Quarter 2017     Full Year 2017
Low   High Low   High
Net loss per share, basic and diluted $ (0.15 ) $ (0.13 ) $ (0.58 ) $ (0.51 )
Stock-based compensation 0.05   0.05   0.19   0.19  
Non-GAAP adjusted net loss per share, basic and diluted $ (0.10 ) $ (0.08 ) $ (0.39 ) $ (0.32 )
 
(1) This assumes weighted average shares outstanding - basic and diluted 28.0   28.0   28.3   28.3  

Contacts

Investor Relations Contact
ICR
Staci Mortenson, 201-806-3663
InvestorRelations@AmberRoad.com
or
Amber Road Contacts
Annika Helmrich (US & Canada), +1 201-806-3656
AnnikaHelmrich@AmberRoad.com
or
Martijn van Gils (Europe & Asia), +31 858769534
MartijnvanGils@AmberRoad.com

#Hashtags

$Cashtags

Contacts

Investor Relations Contact
ICR
Staci Mortenson, 201-806-3663
InvestorRelations@AmberRoad.com
or
Amber Road Contacts
Annika Helmrich (US & Canada), +1 201-806-3656
AnnikaHelmrich@AmberRoad.com
or
Martijn van Gils (Europe & Asia), +31 858769534
MartijnvanGils@AmberRoad.com