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 November 3, 2016, “ChannelAdvisor Announces Third Quarter 2016 Financial Results.” |
CHANNELADVISOR CORPORATION | |||
By: | /s/ Mark E. Cook | ||
Date: | November 3, 2016 | Mark E. Cook | |
Chief Financial Officer |
Exhibit Number | Exhibit Description |
99.1 | Press Release, dated November 3, 2016, “ChannelAdvisor Announces Third Quarter 2016 Financial Results.” |
• | Total revenue of $28.0 million for the third quarter of 2016 increased 15 percent compared with total revenue of $24.4 million for the third quarter of 2015. |
• | GAAP net loss was $(2.6) million compared with a net loss of $(4.8) million in the third quarter of 2015. GAAP net loss per share was $(0.10), based on 25.7 million weighted average shares outstanding, compared with a net loss per share of $(0.19) in the year-ago period, based on 25.1 million weighted average shares then outstanding. |
• | Non-GAAP net income (loss), which excludes the impact of non-cash stock-based compensation, was $0.3 million for the third quarter of 2016 compared with $(1.7) million for the third quarter of 2015. |
• | Adjusted EBITDA, a non-GAAP measure, was $2.2 million for the third quarter of 2016 compared with $0.7 million for the third quarter of 2015. Adjusted EBITDA excludes depreciation, amortization, income tax (benefit) expense, interest and stock-based compensation expense. |
• | Cash at quarter end totaled $64.7 million, compared with $62.4 million at the end of the second quarter of 2016. |
• | Average revenue per customer, calculated on a trailing twelve-month basis, increased 17 percent to $38,400 for the twelve months ended September 30, 2016, compared with $32,748 for the twelve months ended September 30, 2015. Total customer count was 2,880 at the end of the third quarter of 2016, compared with 2,910 customers at the end of the third quarter of 2015. |
• | Fixed subscription fees were 80 percent of total revenue and variable subscription fees were 20 percent of total revenue in each of the third quarters of 2016 and 2015. |
• | Added new top-tier customers including Guangzhou Zewan, JVCKENWOOD USA Corporation, Lamps Plus, Microsoft Store, The Hillman Group and United Sports Brands. |
• | Announced major platform enhancements including support for eBay Promoted Listings, a new Algorithmic Repricer for Amazon and Jet and an Optimization Dashboard for Amazon. |
• | Named Amy Robertson vice president and chief people officer. |
• | Appointed Joe Cowan to Board of Directors. |
• | Recognized as a winner of the Best Places to Work Award by Triangle Business Journal. |
• | Total revenue between $31.7 million and $32.1 million. |
• | Adjusted EBITDA between $2.6 million and $3.0 million. |
• | Stock-based compensation expense between $2.8 million and $3.2 million. |
• | 25.9 million weighted average shares outstanding. |
• | Total revenue between $113.1 million and $113.5 million. |
• | Adjusted EBITDA between $4.8 million and $5.2 million. |
• | Stock-based compensation expense between $13.0 million and $13.4 million. |
• | 25.6 million weighted average shares outstanding. |
What: | ChannelAdvisor Third Quarter 2016 Financial Results Conference Call |
When: | Thursday, November 3, 2016 |
Time: | 4:30 p.m. ET |
Live Call: | (855) 638-4821, Passcode 99043017 Domestic |
(704) 288-0612, Passcode 99043017 International | |
Webcast: | http://ir.channeladvisor.com (live and replay) |
September 30, 2016 | December 31, 2015 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 64,731 | $ | 60,474 | |||
Accounts receivable, net of allowance of $416 and $785 as of September 30, 2016 and December 31, 2015, respectively | 15,282 | 18,949 | |||||
Prepaid expenses and other current assets | 7,108 | 9,356 | |||||
Total current assets | 87,121 | 88,779 | |||||
Property and equipment, net | 14,352 | 16,696 | |||||
Goodwill | 21,632 | 21,632 | |||||
Intangible assets, net | 2,806 | 3,246 | |||||
Other assets | 760 | 603 | |||||
Total assets | $ | 126,671 | $ | 130,956 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,393 | $ | 2,435 | |||
Accrued expenses | 8,696 | 9,908 | |||||
Deferred revenue | 23,413 | 19,835 | |||||
Other current liabilities | 4,272 | 4,188 | |||||
Total current liabilities | 38,774 | 36,366 | |||||
Long-term capital leases, net of current portion | 1,515 | 2,031 | |||||
Lease incentive obligation | 4,425 | 5,084 | |||||
Other long-term liabilities | 3,111 | 3,551 | |||||
Total liabilities | 47,825 | 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 September 30, 2016 and December 31, 2015 | — | — | |||||
Common stock, $0.001 par value, 100,000,000 shares authorized, 25,783,626 and 25,230,958 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | 26 | 25 | |||||
Additional paid-in capital | 249,303 | 240,360 | |||||
Accumulated other comprehensive loss | (1,073 | ) | (893 | ) | |||
Accumulated deficit | (169,410 | ) | (155,568 | ) | |||
Total stockholders’ equity | 78,846 | 83,924 | |||||
Total liabilities and stockholders’ equity | $ | 126,671 | $ | 130,956 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue | $ | 27,992 | $ | 24,379 | $ | 81,437 | $ | 71,151 | |||||||
Cost of revenue (1) (2) | 6,811 | 6,290 | 20,587 | 19,107 | |||||||||||
Gross profit | 21,181 | 18,089 | 60,850 | 52,044 | |||||||||||
Operating expenses (1) (2): | |||||||||||||||
Sales and marketing | 13,824 | 12,339 | 43,064 | 42,115 | |||||||||||
Research and development | 4,512 | 4,010 | 13,077 | 12,313 | |||||||||||
General and administrative | 5,525 | 6,484 | 18,768 | 18,011 | |||||||||||
Total operating expenses | 23,861 | 22,833 | 74,909 | 72,439 | |||||||||||
Loss from operations | (2,680 | ) | (4,744 | ) | (14,059 | ) | (20,395 | ) | |||||||
Other income (expense): | |||||||||||||||
Interest expense, net | 11 | (60 | ) | (11 | ) | (142 | ) | ||||||||
Other income (expense), net | 90 | 14 | 137 | 140 | |||||||||||
Total other income (expense) | 101 | (46 | ) | 126 | (2 | ) | |||||||||
Loss before income taxes | (2,579 | ) | (4,790 | ) | (13,933 | ) | (20,397 | ) | |||||||
Income tax (benefit) expense | (27 | ) | 1 | (91 | ) | (126 | ) | ||||||||
Net loss | $ | (2,552 | ) | $ | (4,791 | ) | $ | (13,842 | ) | $ | (20,271 | ) | |||
Net loss per share: | |||||||||||||||
Basic and diluted | $ | (0.10 | ) | $ | (0.19 | ) | $ | (0.54 | ) | $ | (0.81 | ) | |||
Weighted average common shares outstanding: | |||||||||||||||
Basic and diluted | 25,723,749 | 25,110,212 | 25,513,105 | 25,020,154 | |||||||||||
(1) Includes stock-based compensation as follows: | |||||||||||||||
Cost of revenue | $ | 330 | $ | 238 | $ | 941 | $ | 777 | |||||||
Sales and marketing | 1,161 | 1,208 | 3,651 | 3,822 | |||||||||||
Research and development | 496 | 397 | 1,485 | 1,295 | |||||||||||
General and administrative | 878 | 1,254 | 4,130 | 3,379 | |||||||||||
$ | 2,865 | $ | 3,097 | $ | 10,207 | $ | 9,273 | ||||||||
(2) Includes depreciation and amortization as follows: | |||||||||||||||
Cost of revenue | $ | 1,109 | $ | 1,336 | $ | 3,497 | $ | 3,536 | |||||||
Sales and marketing | 266 | 334 | 853 | 913 | |||||||||||
Research and development | 111 | 136 | 345 | 358 | |||||||||||
General and administrative | 420 | 535 | 1,266 | 1,556 | |||||||||||
$ | 1,906 | $ | 2,341 | $ | 5,961 | $ | 6,363 |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (13,842 | ) | $ | (20,271 | ) | |
Adjustments to reconcile net loss to cash and cash equivalents provided by (used in) operating activities: | |||||||
Depreciation and amortization | 5,961 | 6,363 | |||||
Bad debt expense | 246 | 1,253 | |||||
Stock-based compensation expense | 10,207 | 9,273 | |||||
Other items, net | (769 | ) | (150 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | 2,820 | (4,170 | ) | ||||
Prepaid expenses and other assets | 1,832 | (2,071 | ) | ||||
Accounts payable and accrued expenses | (1,251 | ) | 1,924 | ||||
Deferred revenue | 4,162 | 3,045 | |||||
Cash and cash equivalents provided by (used in) operating activities | 9,366 | (4,804 | ) | ||||
Cash flows from investing activities | |||||||
Purchases of property and equipment | (920 | ) | (3,472 | ) | |||
Payment of internal-use software development costs | (195 | ) | (129 | ) | |||
Cash and cash equivalents used in investing activities | (1,115 | ) | (3,601 | ) | |||
Cash flows from financing activities | |||||||
Repayment of capital leases | (2,079 | ) | (1,592 | ) | |||
Proceeds from exercise of stock options | 821 | 490 | |||||
Payment of contingent consideration | (338 | ) | — | ||||
Payment of statutory tax withholding related to net-share settlement of restricted stock units | (2,085 | ) | (588 | ) | |||
Cash and cash equivalents used in financing activities | (3,681 | ) | (1,690 | ) | |||
Effect of currency exchange rate changes on cash and cash equivalents | (313 | ) | 713 | ||||
Net increase (decrease) in cash and cash equivalents | 4,257 | (9,382 | ) | ||||
Cash and cash equivalents, beginning of period | 60,474 | 68,366 | |||||
Cash and cash equivalents, end of period | $ | 64,731 | $ | 58,984 |
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Gross profit (GAAP) | $ | 21,181 | $ | 18,089 | $ | 60,850 | $ | 52,044 | |||||||
Plus: Stock-based compensation expense | 330 | 238 | 941 | 777 | |||||||||||
Gross profit (Non-GAAP) | $ | 21,511 | $ | 18,327 | $ | 61,791 | $ | 52,821 | |||||||
Gross margin (Non-GAAP) | 76.8 | % | 75.2 | % | 75.9 | % | 74.2 | % |
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Operating expenses (GAAP) | $ | 23,861 | $ | 22,833 | $ | 74,909 | $ | 72,439 | |||||||
Less: Stock-based compensation expense | 2,535 | 2,859 | 9,266 | 8,496 | |||||||||||
Less: One-time severance and related costs | — | — | — | 656 | |||||||||||
Operating expenses (Non-GAAP) | $ | 21,326 | $ | 19,974 | $ | 65,643 | $ | 63,287 |
Reconciliation of GAAP Loss from Operations to Non-GAAP Income (Loss) from Operations | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Loss from operations (GAAP) | $ | (2,680 | ) | $ | (4,744 | ) | $ | (14,059 | ) | $ | (20,395 | ) | |||
Plus: Stock-based compensation expense | 2,865 | 3,097 | 10,207 | 9,273 | |||||||||||
Plus: One-time severance and related costs | — | — | — | 656 | |||||||||||
Income (loss) from operations (Non-GAAP) | $ | 185 | $ | (1,647 | ) | $ | (3,852 | ) | $ | (10,466 | ) | ||||
Operating margin (Non-GAAP) | 0.7 | % | (6.8 | )% | (4.7 | )% | (14.7 | )% |
Reconciliation of GAAP Net Loss to Non-GAAP Net Income (Loss) | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net loss (GAAP) | $ | (2,552 | ) | $ | (4,791 | ) | $ | (13,842 | ) | $ | (20,271 | ) | |||
Plus: Stock-based compensation expense | 2,865 | 3,097 | 10,207 | 9,273 | |||||||||||
Plus: One-time severance and related costs | — | — | — | 656 | |||||||||||
Net income (loss) (Non-GAAP) | $ | 313 | $ | (1,694 | ) | $ | (3,635 | ) | $ | (10,342 | ) |
Reconciliation of Net Loss to Adjusted EBITDA | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net loss | $ | (2,552 | ) | $ | (4,791 | ) | $ | (13,842 | ) | $ | (20,271 | ) | |||
Adjustments: | |||||||||||||||
Interest expense, net | (11 | ) | 60 | 11 | 142 | ||||||||||
Income tax (benefit) expense | (27 | ) | 1 | (91 | ) | (126 | ) | ||||||||
Depreciation and amortization expense | 1,906 | 2,341 | 5,961 | 6,363 | |||||||||||
Total adjustments | 1,868 | 2,402 | 5,881 | 6,379 | |||||||||||
EBITDA | (684 | ) | (2,389 | ) | (7,961 | ) | (13,892 | ) | |||||||
Stock-based compensation expense | 2,865 | 3,097 | 10,207 | 9,273 | |||||||||||
One-time severance and related costs | — | — | — | 656 | |||||||||||
Adjusted EBITDA | $ | 2,181 | $ | 708 | $ | 2,246 | $ | (3,963 | ) |
Free Cash Flow Reconciliation | |||||||
(unaudited; in thousands) | |||||||
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Cash provided by (used in) operating activities | $ | 9,366 | $ | (4,804 | ) | ||
Less: Purchases of property and equipment | (920 | ) | (3,472 | ) | |||
Free cash flow | $ | 8,446 | $ | (8,276 | ) |
Adjusted EBITDA Guidance Reconciliation | |||||||||||||||
(unaudited; in millions) | |||||||||||||||
Fourth Quarter 2016 | Full Year 2016 | ||||||||||||||
Low | High | Low | High | ||||||||||||
Net loss (estimate) | $ | (2.6 | ) | $ | (1.8 | ) | $ | (16.4 | ) | $ | (15.6 | ) | |||
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 | (0.6 | ) | 0.2 | (8.6 | ) | (7.8 | ) | ||||||||
Stock-based compensation expense (estimate) | 3.2 | 2.8 | 13.4 | 13.0 | |||||||||||
Adjusted EBITDA guidance | $ | 2.6 | $ | 3.0 | $ | 4.8 | $ | 5.2 |