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 February 9, 2017 “ChannelAdvisor Announces Fourth Quarter and Full Year 2016 Financial Results.” |
CHANNELADVISOR CORPORATION | |||
By: | /s/ Mark E. Cook | ||
Date: | February 9, 2017 | Mark E. Cook | |
Chief Financial Officer |
Exhibit Number | Exhibit Description |
99.1 | Press Release, dated February 9, 2017 “ChannelAdvisor Announces Fourth Quarter and Full Year 2016 Financial Results.” |
• | Total revenue of $31.8 million for the fourth quarter of 2016 increased 8 percent compared with total revenue of $29.4 million in the fourth quarter of 2015. |
• | GAAP net income was $5.8 million in the fourth quarter of 2016 compared with net loss of $(0.7) million in the fourth quarter of 2015. GAAP net income per share was $0.23, based on 25.9 million weighted average shares outstanding, compared with net loss per share of $(0.03), based on 25.2 million weighted average shares outstanding in the year-ago period. |
• | Non-GAAP net income, which excludes non-cash stock-based compensation expense in both 2016 and 2015, costs associated with our headquarters relocation in 2015 and one-time severance and related costs in 2015, was $8.9 million for the fourth quarter of 2016 compared with non-GAAP net income of $3.0 million for the fourth quarter of 2015. |
• | Adjusted EBITDA, a non-GAAP measure, was $5.2 million for the fourth quarter of 2016 compared with $5.4 million for the fourth quarter of 2015. Adjusted EBITDA excludes depreciation, amortization, income tax (benefit) expense, interest expense, stock-based compensation expense and the headquarters relocation and severance and costs described above. |
• | Cash at quarter end totaled $65.4 million, compared with $64.7 million at the end of the third quarter of 2016. |
• | Total revenue of $113.2 million for the year increased 13 percent compared with total revenue of $100.6 million in 2015. |
• | GAAP net loss was $(8.0) million in 2016 compared with a net loss of $(21.0) million in 2015. GAAP net loss per share was $(0.31), based on 25.6 million weighted average shares outstanding in 2016, compared with a net loss per share of $(0.84), based on 25.1 million weighted average shares outstanding in 2015. |
• | Non-GAAP net income was $5.3 million in 2016 compared with a non-GAAP net loss of $(7.3) million in 2015. |
• | Adjusted EBITDA was $7.4 million in 2016 compared with $1.4 million in 2015. |
• | Average revenue per customer, calculated on a trailing twelve-month basis, increased 14 percent to $39,339 at the end of the fourth quarter, compared with $34,513 at the end of the fourth quarter of 2015. Total customer count was 2,875 at the end of the fourth quarter, compared with 2,898 customers at the end of the fourth quarter of 2015. |
• | Fixed subscription fees were 71 percent of total revenue and variable subscription fees were 29 percent of total revenue for the fourth quarter of 2016. This compares to 69 percent and 31 percent, respectively, for the fourth quarter of 2015. |
• | Fixed subscription fees were 76 percent of total revenue and variable subscription fees were 24 percent of total revenue for 2016 and 2015. |
• | Processed $8.1 billion in total gross merchandise value in 2016, an increase of 19 percent from 2015. |
• | Added new top-tier customers including Adrianna Papell, LLC, BISSELL, Bitburger Braugruppe GmbH, GSK Consumer Healthcare and Mizuno USA, Inc. |
• | Named Bing Elite Agency Partner, and the only company to be awarded Elite status as both a Technology and Agency Partner. |
• | Announced Catalyst 2017 will be held March 6-8, 2017 at the Music City Center in Nashville, TN and Catalyst Europe 2017 will be held May 16, 2017 at The Principal in Manchester, UK. |
• | Total revenue between $27.3 million and $27.7 million. |
• | Adjusted EBITDA between $(2.6) million and $(1.6) million. |
• | Stock-based compensation expense between $3.1 million and $3.5 million. |
• | 26.1 million weighted average shares outstanding. |
• | Total revenue between $123.0 million and $124.5 million. |
• | Adjusted EBITDA between $5.0 million and $8.0 million. |
• | Stock-based compensation expense between $13.8 million and $14.8 million. |
• | 26.5 million weighted average shares outstanding. |
What: | ChannelAdvisor Fourth Quarter and Full Year 2016 Financial Results Conference Call |
When: | Thursday, February 9, 2017 |
Time: | 4:30 p.m. ET |
Live Call: | (855) 638-4821, Passcode 49213706, Domestic |
(704) 288-0612, Passcode 49213706, International | |
Webcast: | http://ir.channeladvisor.com (live and replay) |
December 31, | |||||||
2016 | 2015 | ||||||
Assets | (unaudited) | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 65,420 | $ | 60,474 | |||
Accounts receivable, net of allowance of $594 and $785 as of December 31, 2016 and 2015, respectively | 19,445 | 18,949 | |||||
Prepaid expenses and other current assets | 10,972 | 9,356 | |||||
Total current assets | 95,837 | 88,779 | |||||
Property and equipment, net | 13,252 | 16,696 | |||||
Goodwill | 21,632 | 21,632 | |||||
Intangible assets, net | 2,660 | 3,246 | |||||
Long-term deferred tax assets, net | 5,244 | — | |||||
Other assets | 533 | 603 | |||||
Total assets | $ | 139,158 | $ | 130,956 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 4,709 | $ | 2,435 | |||
Accrued expenses | 11,067 | 9,908 | |||||
Deferred revenue | 23,474 | 19,835 | |||||
Other current liabilities | 4,450 | 4,188 | |||||
Total current liabilities | 43,700 | 36,366 | |||||
Long-term capital leases, net of current portion | 1,262 | 2,031 | |||||
Lease incentive obligation | 4,206 | 5,084 | |||||
Other long-term liabilities | 2,993 | 3,551 | |||||
Total liabilities | 52,161 | 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 December 31, 2016 and 2015, respectively | — | — | |||||
Common stock, $0.001 par value, 100,000,000 shares authorized, 25,955,759 and 25,230,958 shares issued and outstanding as of December 31, 2016 and 2015, respectively | 26 | 25 | |||||
Additional paid-in capital | 252,158 | 240,360 | |||||
Accumulated other comprehensive loss | (1,612 | ) | (893 | ) | |||
Accumulated deficit | (163,575 | ) | (155,568 | ) | |||
Total stockholders’ equity | 86,997 | 83,924 | |||||
Total liabilities and stockholders’ equity | $ | 139,158 | $ | 130,956 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(unaudited) | (unaudited) | (unaudited) | |||||||||||||
Revenue | $ | 31,763 | $ | 29,434 | $ | 113,200 | $ | 100,585 | |||||||
Cost of revenue (1) (2) | 7,033 | 6,727 | 27,620 | 25,834 | |||||||||||
Gross profit | 24,730 | 22,707 | 85,580 | 74,751 | |||||||||||
Operating expenses (1) (2): | |||||||||||||||
Sales and marketing | 13,538 | 11,655 | 56,602 | 53,770 | |||||||||||
Research and development | 4,659 | 4,253 | 17,736 | 16,566 | |||||||||||
General and administrative | 6,311 | 7,597 | 25,079 | 25,608 | |||||||||||
Total operating expenses | 24,508 | 23,505 | 99,417 | 95,944 | |||||||||||
Income (loss) from operations | 222 | (798 | ) | (13,837 | ) | (21,193 | ) | ||||||||
Other income (expense): | |||||||||||||||
Interest income (expense), net | 10 | (42 | ) | (1 | ) | (184 | ) | ||||||||
Other income, net | 36 | 101 | 173 | 241 | |||||||||||
Total other income (expense) | 46 | 59 | 172 | 57 | |||||||||||
Income (loss) before income taxes | 268 | (739 | ) | (13,665 | ) | (21,136 | ) | ||||||||
Income tax benefit | (5,567 | ) | (59 | ) | (5,658 | ) | (185 | ) | |||||||
Net income (loss) | $ | 5,835 | $ | (680 | ) | $ | (8,007 | ) | $ | (20,951 | ) | ||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | 0.23 | $ | (0.03 | ) | $ | (0.31 | ) | $ | (0.84 | ) | ||||
Diluted | $ | 0.21 | $ | (0.03 | ) | $ | (0.31 | ) | $ | (0.84 | ) | ||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 25,878,260 | 25,188,595 | 25,604,893 | 25,062,610 | |||||||||||
Diluted | 27,577,027 | 25,188,595 | 25,604,893 | 25,062,610 | |||||||||||
(1) Includes stock-based compensation as follows: | |||||||||||||||
Cost of revenue | $ | 318 | $ | 215 | $ | 1,259 | $ | 992 | |||||||
Sales and marketing | 1,124 | 599 | 4,775 | 4,421 | |||||||||||
Research and development | 477 | 394 | 1,962 | 1,689 | |||||||||||
General and administrative | 1,136 | 1,356 | 5,266 | 4,735 | |||||||||||
$ | 3,055 | $ | 2,564 | $ | 13,262 | $ | 11,837 | ||||||||
(2) Includes depreciation and amortization as follows: | |||||||||||||||
Cost of revenue | $ | 1,135 | $ | 1,450 | $ | 4,632 | $ | 4,986 | |||||||
Sales and marketing | 283 | 351 | 1,136 | 1,264 | |||||||||||
Research and development | 113 | 148 | 458 | 506 | |||||||||||
General and administrative | 346 | 481 | 1,612 | 2,037 | |||||||||||
$ | 1,877 | $ | 2,430 | $ | 7,838 | $ | 8,793 |
Year Ended December 31, | |||||||
2016 | 2015 | ||||||
(unaudited) | |||||||
Cash flows from operating activities | |||||||
Net loss | $ | (8,007 | ) | $ | (20,951 | ) | |
Adjustments to reconcile net loss to net cash and cash equivalents provided by (used in) operating activities: | |||||||
Depreciation and amortization | 7,838 | 8,793 | |||||
Bad debt expense | 528 | 1,236 | |||||
Non-cash stock-based compensation expense | 13,262 | 11,837 | |||||
Deferred income taxes | (5,649 | ) | (244 | ) | |||
Other items, net | (875 | ) | (85 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | (1,885 | ) | (5,833 | ) | |||
Prepaid expenses and other assets | (2,014 | ) | (2,921 | ) | |||
Accounts payable and accrued expenses | 3,697 | 3,608 | |||||
Deferred revenue | 4,676 | 3,101 | |||||
Net cash and cash equivalents provided by (used in) operating activities | 11,571 | (1,459 | ) | ||||
Cash flows from investing activities | |||||||
Purchases of property and equipment | (1,755 | ) | (4,062 | ) | |||
Payment of internal-use software development costs | (208 | ) | (190 | ) | |||
Net cash and cash equivalents used in investing activities | (1,963 | ) | (4,252 | ) | |||
Cash flows from financing activities | |||||||
Repayment of capital leases | (2,096 | ) | (1,745 | ) | |||
Proceeds from exercise of stock options | 930 | 892 | |||||
Payment of contingent consideration | (338 | ) | — | ||||
Payment of statutory tax withholding related to net-share settlement of restricted stock units | (2,394 | ) | (739 | ) | |||
Net cash and cash equivalents used in financing activities | (3,898 | ) | (1,592 | ) | |||
Effect of currency exchange rate changes on cash and cash equivalents | (764 | ) | (589 | ) | |||
Net increase (decrease) in cash and cash equivalents | 4,946 | (7,892 | ) | ||||
Cash and cash equivalents, beginning of year | 60,474 | 68,366 | |||||
Cash and cash equivalents, end of year | $ | 65,420 | $ | 60,474 |
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Gross profit (GAAP) | $ | 24,730 | $ | 22,707 | $ | 85,580 | $ | 74,751 | |||||||
Plus: Stock-based compensation expense | 318 | 215 | 1,259 | 992 | |||||||||||
Gross profit (Non-GAAP) | $ | 25,048 | $ | 22,922 | $ | 86,839 | $ | 75,743 | |||||||
Gross margin (Non-GAAP) | 78.9 | % | 77.9 | % | 76.7 | % | 75.3 | % |
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Operating expenses (GAAP) | $ | 24,508 | $ | 23,505 | $ | 99,417 | $ | 95,944 | |||||||
Less: Stock-based compensation expense | 2,737 | 2,349 | 12,003 | 10,845 | |||||||||||
Less: Headquarters relocation and related costs | — | 1,109 | — | 1,109 | |||||||||||
Less: One-time severance and related costs | — | — | — | 656 | |||||||||||
Operating expenses (Non-GAAP) | $ | 21,771 | $ | 20,047 | $ | 87,414 | $ | 83,334 |
Reconciliation of GAAP Income (Loss) from Operations to Non-GAAP Income (Loss) from Operations | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Income (loss) from operations (GAAP) | $ | 222 | $ | (798 | ) | $ | (13,837 | ) | $ | (21,193 | ) | ||||
Plus: Stock-based compensation expense | 3,055 | 2,564 | 13,262 | 11,837 | |||||||||||
Plus: Headquarters relocation and related costs | — | 1,109 | — | 1,109 | |||||||||||
Plus: One-time severance and related costs | — | — | — | 656 | |||||||||||
Income (loss) from operations (Non-GAAP) | $ | 3,277 | $ | 2,875 | $ | (575 | ) | $ | (7,591 | ) | |||||
Operating margin (Non-GAAP) | 10.3 | % | 9.8 | % | (0.5 | )% | (7.5 | )% |
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss) | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income (loss) (GAAP) | $ | 5,835 | $ | (680 | ) | $ | (8,007 | ) | $ | (20,951 | ) | ||||
Plus: Stock-based compensation expense | 3,055 | 2,564 | 13,262 | 11,837 | |||||||||||
Plus: Headquarters relocation and related costs | — | 1,109 | — | 1,109 | |||||||||||
Plus: One-time severance and related costs | — | — | — | 656 | |||||||||||
Net income (loss) (Non-GAAP) | $ | 8,890 | $ | 2,993 | $ | 5,255 | $ | (7,349 | ) |
Reconciliation of Net Income (Loss) to Adjusted EBITDA | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income (loss) | $ | 5,835 | $ | (680 | ) | $ | (8,007 | ) | $ | (20,951 | ) | ||||
Adjustments: | |||||||||||||||
Interest (income) expense, net | (10 | ) | 42 | 1 | 184 | ||||||||||
Income tax benefit | (5,567 | ) | (59 | ) | (5,658 | ) | (185 | ) | |||||||
Depreciation and amortization expense | 1,877 | 2,430 | 7,838 | 8,793 | |||||||||||
Total adjustments | (3,700 | ) | 2,413 | 2,181 | 8,792 | ||||||||||
EBITDA | 2,135 | 1,733 | (5,826 | ) | (12,159 | ) | |||||||||
Stock-based compensation expense | 3,055 | 2,564 | 13,262 | 11,837 | |||||||||||
Headquarters relocation and related costs | — | 1,109 | — | 1,109 | |||||||||||
One-time severance and related costs | — | — | — | 656 | |||||||||||
Adjusted EBITDA | $ | 5,190 | $ | 5,406 | $ | 7,436 | $ | 1,443 |
Free Cash Flow Reconciliation | |||||||
(unaudited; in thousands) | |||||||
Year Ended December 31, | |||||||
2016 | 2015 | ||||||
Cash provided by (used in) operating activities | $ | 11,571 | $ | (1,459 | ) | ||
Less: Purchases of property and equipment | (1,755 | ) | (4,062 | ) | |||
Free cash flow | $ | 9,816 | $ | (5,521 | ) |
Adjusted EBITDA Guidance Reconciliation | |||||||||||||||
(unaudited; in millions) | |||||||||||||||
First Quarter 2017 | Full Year 2017 | ||||||||||||||
Low | High | Low | High | ||||||||||||
Net loss (estimate) | $ | (7.9 | ) | $ | (6.5 | ) | $ | (16.5 | ) | $ | (12.3 | ) | |||
Adjustments (estimates): | |||||||||||||||
Interest (income) expense, net | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||
Income tax (benefit) expense | 0.0 | 0.0 | 0.2 | 0.1 | |||||||||||
Depreciation and amortization expense | 1.8 | 1.8 | 6.5 | 6.4 | |||||||||||
Total adjustments | 1.8 | 1.8 | 6.7 | 6.5 | |||||||||||
EBITDA | (6.1 | ) | (4.7 | ) | (9.8 | ) | (5.8 | ) | |||||||
Stock-based compensation expense (estimate) | 3.5 | 3.1 | 14.8 | 13.8 | |||||||||||
Adjusted EBITDA guidance | $ | (2.6 | ) | $ | (1.6 | ) | $ | 5.0 | $ | 8.0 |