Delaware | 001-35940 | 56-2257867 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Exhibit Number | Exhibit Description |
99.1 | Press Release, dated August 4, 2016, “ChannelAdvisor Announces Second Quarter 2016 Financial Results.” |
CHANNELADVISOR CORPORATION | |||
By: | /s/ Mark E. Cook | ||
Date: | August 4, 2016 | Mark E. Cook | |
Chief Financial Officer |
Exhibit Number | Exhibit Description |
99.1 | Press Release, dated August 4, 2016, “ChannelAdvisor Announces Second Quarter 2016 Financial Results.” |
• | Total revenue of $27.1 million for the second quarter of 2016 increased 12.1 percent compared with total revenue of $24.2 million for the second quarter of 2015. |
• | GAAP net loss was $(6.7) million compared with a net loss of $(6.5) million in the second quarter of 2015. GAAP net loss per share was $(0.26), based on 25.5 million weighted average shares outstanding, compared with a net loss per share of $(0.26), based on 25.0 million weighted average shares outstanding in the year-ago period. |
• | Non-GAAP net loss, which excludes the impact of non-cash stock-based compensation in both 2016 and 2015 and one-time severance and related costs in 2015, was $(2.8) million for the second quarter of 2016 compared with non-GAAP net loss of $(2.6) million for the second quarter of 2015. |
• | Adjusted EBITDA, a non-GAAP measure, was $(0.9) million for the second quarter of 2016 compared with $(0.4) million for the second quarter of 2015. Adjusted EBITDA excludes depreciation, amortization, income tax (benefit) expense, interest, stock-based compensation expense and severance costs noted above. |
• | Cash at quarter end totaled $62.4 million, compared with $61.7 million at the end of the first quarter. |
• | Average revenue per customer, calculated on a trailing twelve-month basis, increased 16 percent to $37,000 for the twelve months ended June 30, 2016, compared with $32,022 for the twelve months ended June 30, 2015. Total customer count was 2,878 at the end of the second quarter of 2016, compared with 2,937 customers at the end of the second quarter of 2015. |
• | Fixed subscription fees were 77 percent of total revenue and variable subscription fees were 23 percent of total revenue for the second quarter of 2016. This compares to 78 percent and 22 percent, respectively, for the second quarter of 2015. |
• | Added new top-tier customers including Art.com, Cornerstone Brands, Design Toscano, Dorel Juvenile, Fila and Reynolds Consumer Products. |
• | Named Melissa Sargeant Chief Marketing Officer. |
• | Announced support for Instagram dynamic ads. |
• | Total revenue between $27.0 million and $27.4 million. |
• | Adjusted EBITDA between $(1.5) million and $(0.5) million. |
• | Stock-based compensation expense between $3.1 million and $3.5 million. |
• | 25.6 million weighted average shares outstanding. |
• | Total revenue between $112.0 million and $113.5 million. |
• | Adjusted EBITDA between $1.5 million and $3.0 million. |
• | Stock-based compensation expense between $13.4 million and $14.0 million. |
• | 25.5 million weighted average shares outstanding. |
What: | ChannelAdvisor Second Quarter 2016 Financial Results Conference Call |
When: | Thursday, August 4, 2016 |
Time: | 4:30 p.m. ET |
Live Call: | (855) 638-4821, Passcode 52452640 Domestic |
(704) 288-0612, Passcode 52452640 International | |
Webcast: | http://ir.channeladvisor.com (live and replay) |
June 30, 2016 | December 31, 2015 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 62,370 | $ | 60,474 | |||
Accounts receivable, net of allowance of $819 and $785 as of June 30, 2016 and December 31, 2015, respectively | 18,089 | 18,949 | |||||
Prepaid expenses and other current assets | 6,745 | 9,356 | |||||
Total current assets | 87,204 | 88,779 | |||||
Property and equipment, net | 13,873 | 16,696 | |||||
Goodwill | 21,632 | 21,632 | |||||
Intangible assets, net | 2,953 | 3,246 | |||||
Other assets | 737 | 603 | |||||
Total assets | $ | 126,399 | $ | 130,956 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 4,148 | $ | 2,435 | |||
Accrued expenses | 8,396 | 9,908 | |||||
Deferred revenue | 23,777 | 19,835 | |||||
Other current liabilities | 3,669 | 4,188 | |||||
Total current liabilities | 39,990 | 36,366 | |||||
Long-term capital leases, net of current portion | 323 | 2,031 | |||||
Lease incentive obligation | 4,645 | 5,084 | |||||
Other long-term liabilities | 3,054 | 3,551 | |||||
Total liabilities | 48,012 | 47,032 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding as of June 30, 2016 and December 31, 2015 | — | — | |||||
Common stock, $0.001 par value, 100,000,000 shares authorized, 25,571,272 and 25,230,958 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively | 26 | 25 | |||||
Additional paid-in capital | 246,214 | 240,360 | |||||
Accumulated other comprehensive loss | (995 | ) | (893 | ) | |||
Accumulated deficit | (166,858 | ) | (155,568 | ) | |||
Total stockholders’ equity | 78,387 | 83,924 | |||||
Total liabilities and stockholders’ equity | $ | 126,399 | $ | 130,956 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue | $ | 27,098 | $ | 24,182 | $ | 53,445 | $ | 46,772 | |||||||
Cost of revenue (1) (2) | 6,863 | 6,401 | 13,776 | 12,817 | |||||||||||
Gross profit | 20,235 | 17,781 | 39,669 | 33,955 | |||||||||||
Operating expenses (1) (2): | |||||||||||||||
Sales and marketing | 15,743 | 13,992 | 29,240 | 29,776 | |||||||||||
Research and development | 4,410 | 4,172 | 8,565 | 8,303 | |||||||||||
General and administrative | 6,822 | 6,212 | 13,243 | 11,527 | |||||||||||
Total operating expenses | 26,975 | 24,376 | 51,048 | 49,606 | |||||||||||
Loss from operations | (6,740 | ) | (6,595 | ) | (11,379 | ) | (15,651 | ) | |||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (1 | ) | (38 | ) | (22 | ) | (82 | ) | |||||||
Other income (expense), net | (8 | ) | 120 | 47 | 126 | ||||||||||
Total other income (expense) | (9 | ) | 82 | 25 | 44 | ||||||||||
Loss before income taxes | (6,749 | ) | (6,513 | ) | (11,354 | ) | (15,607 | ) | |||||||
Income tax (benefit) expense | (22 | ) | 11 | (64 | ) | (127 | ) | ||||||||
Net loss | $ | (6,727 | ) | $ | (6,524 | ) | $ | (11,290 | ) | $ | (15,480 | ) | |||
Net loss per share: | |||||||||||||||
Basic and diluted | $ | (0.26 | ) | $ | (0.26 | ) | $ | (0.44 | ) | $ | (0.62 | ) | |||
Weighted average common shares outstanding: | |||||||||||||||
Basic and diluted | 25,520,847 | 25,017,823 | 25,406,626 | 24,974,378 | |||||||||||
(1) Includes stock-based compensation as follows: | |||||||||||||||
Cost of revenue | $ | 342 | $ | 276 | $ | 611 | $ | 539 | |||||||
Sales and marketing | 1,369 | 1,452 | 2,490 | 2,614 | |||||||||||
Research and development | 546 | 514 | 989 | 898 | |||||||||||
General and administrative | 1,660 | 1,044 | 3,252 | 2,125 | |||||||||||
$ | 3,917 | $ | 3,286 | $ | 7,342 | $ | 6,176 | ||||||||
(2) Includes depreciation and amortization as follows: | |||||||||||||||
Cost of revenue | $ | 1,145 | $ | 1,152 | $ | 2,388 | $ | 2,200 | |||||||
Sales and marketing | 280 | 301 | 587 | 579 | |||||||||||
Research and development | 112 | 117 | 234 | 222 | |||||||||||
General and administrative | 423 | 519 | 846 | 1,021 | |||||||||||
$ | 1,960 | $ | 2,089 | $ | 4,055 | $ | 4,022 |
Six Months Ended June 30, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (11,290 | ) | $ | (15,480 | ) | |
Adjustments to reconcile net loss to cash and cash equivalents provided by (used in) operating activities: | |||||||
Depreciation and amortization | 4,055 | 4,022 | |||||
Bad debt expense | 395 | 785 | |||||
Stock-based compensation expense | 7,342 | 6,176 | |||||
Other items, net | (530 | ) | (80 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | (5 | ) | (2,228 | ) | |||
Prepaid expenses and other assets | 2,232 | (1,891 | ) | ||||
Accounts payable and accrued expenses | (358 | ) | 757 | ||||
Deferred revenue | 4,321 | 2,042 | |||||
Cash and cash equivalents provided by (used in) operating activities | 6,162 | (5,897 | ) | ||||
Cash flows from investing activities | |||||||
Purchases of property and equipment | (732 | ) | (2,745 | ) | |||
Payment of internal-use software development costs | (151 | ) | (92 | ) | |||
Cash and cash equivalents used in investing activities | (883 | ) | (2,837 | ) | |||
Cash flows from financing activities | |||||||
Repayment of capital leases | (1,463 | ) | (353 | ) | |||
Proceeds from exercise of stock options | 417 | 307 | |||||
Payment of contingent consideration | (236 | ) | — | ||||
Payment of statutory tax withholding related to net-share settlement of restricted stock units | (1,904 | ) | (562 | ) | |||
Cash and cash equivalents used in financing activities | (3,186 | ) | (608 | ) | |||
Effect of currency exchange rate changes on cash and cash equivalents | (197 | ) | (1,313 | ) | |||
Net increase (decrease) in cash and cash equivalents | 1,896 | (10,655 | ) | ||||
Cash and cash equivalents, beginning of period | 60,474 | 68,366 | |||||
Cash and cash equivalents, end of period | $ | 62,370 | $ | 57,711 |
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Gross profit (GAAP) | $ | 20,235 | $ | 17,781 | $ | 39,669 | $ | 33,955 | |||||||
Plus: Stock-based compensation | 342 | 276 | 611 | 539 | |||||||||||
Gross profit (Non-GAAP) | $ | 20,577 | $ | 18,057 | $ | 40,280 | $ | 34,494 | |||||||
Gross margin (Non-GAAP) | 75.9 | % | 74.7 | % | 75.4 | % | 73.7 | % |
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Operating expenses (GAAP) | $ | 26,975 | $ | 24,376 | $ | 51,048 | $ | 49,606 | |||||||
Less: Stock-based compensation | 3,575 | 3,010 | 6,731 | 5,637 | |||||||||||
Less: One-time severance and related costs | — | 656 | — | 656 | |||||||||||
Operating expenses (Non-GAAP) | $ | 23,400 | $ | 20,710 | $ | 44,317 | $ | 43,313 |
Reconciliation of GAAP Loss from Operations to Non-GAAP Loss from Operations | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Loss from operations (GAAP) | $ | (6,740 | ) | $ | (6,595 | ) | $ | (11,379 | ) | $ | (15,651 | ) | |||
Plus: Stock-based compensation | 3,917 | 3,286 | 7,342 | 6,176 | |||||||||||
Plus: One-time severance and related costs | — | 656 | — | 656 | |||||||||||
Loss from operations (Non-GAAP) | $ | (2,823 | ) | $ | (2,653 | ) | $ | (4,037 | ) | $ | (8,819 | ) | |||
Operating margin (Non-GAAP) | (10.4 | )% | (11.0 | )% | (7.6 | )% | (18.9 | )% |
Reconciliation of GAAP Net Loss to Non-GAAP Net Loss | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net loss (GAAP) | $ | (6,727 | ) | $ | (6,524 | ) | $ | (11,290 | ) | $ | (15,480 | ) | |||
Plus: Stock-based compensation | 3,917 | 3,286 | 7,342 | 6,176 | |||||||||||
Plus: One-time severance and related costs | — | 656 | — | 656 | |||||||||||
Net loss (Non-GAAP) | $ | (2,810 | ) | $ | (2,582 | ) | $ | (3,948 | ) | $ | (8,648 | ) |
Reconciliation of Net Loss to Adjusted EBITDA | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net loss | $ | (6,727 | ) | $ | (6,524 | ) | $ | (11,290 | ) | $ | (15,480 | ) | |||
Adjustments: | |||||||||||||||
Interest expense, net | 1 | 38 | 22 | 82 | |||||||||||
Income tax (benefit) expense | (22 | ) | 11 | (64 | ) | (127 | ) | ||||||||
Depreciation and amortization expense | 1,960 | 2,089 | 4,055 | 4,022 | |||||||||||
Total adjustments | 1,939 | 2,138 | 4,013 | 3,977 | |||||||||||
EBITDA | (4,788 | ) | (4,386 | ) | (7,277 | ) | (11,503 | ) | |||||||
Stock-based compensation expense | 3,917 | 3,286 | 7,342 | 6,176 | |||||||||||
One-time severance and related costs | — | 656 | — | 656 | |||||||||||
Adjusted EBITDA | $ | (871 | ) | $ | (444 | ) | $ | 65 | $ | (4,671 | ) |
Adjusted EBITDA Guidance Reconciliation | |||||||||||||||
(unaudited; in millions) | |||||||||||||||
Third Quarter 2016 | Full Year 2016 | ||||||||||||||
Low | High | Low | High | ||||||||||||
Net loss (estimate) | $ | (7.0 | ) | $ | (5.6 | ) | $ | (20.3 | ) | $ | (18.2 | ) | |||
Adjustments (estimates): | |||||||||||||||
Interest (income) expense, net | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||
Income tax (benefit) expense | 0.0 | 0.0 | (0.1 | ) | (0.1 | ) | |||||||||
Depreciation and amortization expense | 2.0 | 2.0 | 7.9 | 7.9 | |||||||||||
Total adjustments | 2.0 | 2.0 | 7.8 | 7.8 | |||||||||||
EBITDA | (5.0 | ) | (3.6 | ) | (12.5 | ) | (10.4 | ) | |||||||
Stock-based compensation expense (estimate) | 3.5 | 3.1 | 14.0 | 13.4 | |||||||||||
Adjusted EBITDA guidance | $ | (1.5 | ) | $ | (0.5 | ) | $ | 1.5 | $ | 3.0 |