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 3, 2017, “ChannelAdvisor Announces Second Quarter 2017 Financial Results.” |
CHANNELADVISOR CORPORATION | |||
By: | /s/ Mark E. Cook | ||
Date: | August 3, 2017 | Mark E. Cook | |
Chief Financial Officer |
Exhibit Number | Exhibit Description |
99.1 | Press Release, dated August 3, 2017, “ChannelAdvisor Announces Second Quarter 2017 Financial Results.” |
• | Total revenue of $30.0 million for the second quarter of 2017 increased 11 percent compared with total revenue of $27.1 million for the second quarter of 2016. |
• | GAAP net loss was $(4.0) million compared with GAAP net loss of $(6.7) million in the second quarter of 2016. GAAP net loss per share was $(0.15), based on 26.4 million weighted average shares outstanding, compared with a GAAP net loss per share of $(0.26) in the year-ago period, based on 25.5 million weighted average shares then outstanding. |
• | Non-GAAP net loss, which excludes the impact of non-cash stock-based compensation, was $(0.6) million for the second quarter of 2017 compared with $(2.8) million for the second quarter of 2016. |
• | Adjusted EBITDA, a non-GAAP measure, was $1.1 million for the second quarter of 2017 compared with $(0.9) million for the second quarter of 2016. Adjusted EBITDA excludes depreciation, amortization, income tax expense (benefit), interest, and stock-based compensation expense. |
• | Cash and cash equivalents at quarter-end totaled $57.9 million, compared with $63.4 million at the end of the first quarter of 2017. |
• | Average revenue per customer, calculated on a trailing twelve-month basis, increased 11 percent to $41,029 for the twelve months ended June 30, 2017, compared with $37,000 for the twelve months ended June 30, 2016. Total customer count was 2,906 at the end of the second quarter of 2017, compared with 2,878 customers at the end of the second quarter of 2016. These metrics do not include approximately 50 net new customers acquired with our acquisition of HubLogix Commerce Corp. during the second quarter of 2017. |
• | Fixed subscription fees were 75 percent of total revenue and variable subscription fees were 25 percent of total revenue for the second quarter of 2017. This compares to 77 percent and 23 percent, respectively, for the second quarter of 2016. |
• | Added new top-tier customers including Fossil Group, HP APAC, VTech, and a top ten global beauty company. |
• | Acquired HubLogix Commerce Corp. to expand drop-ship and fulfillment capabilities. |
• | Announced a new strategic partnership with eBay to jointly implement programs to help enable growth for eBay and ChannelAdvisor clients. |
• | Hosted Catalyst UK on May 16 in Manchester, UK with keynotes by Mary Portas, Julie Deane and speakers from eBay and Google. |
• | Total revenue between $29.7 million and $30.1 million. |
• | Adjusted EBITDA between $(300) thousand and $100 thousand. |
• | Stock-based compensation expense between $3.2 million and $3.6 million. |
• | 26.5 million weighted average shares outstanding. |
• | Total revenue between $123.0 million and $124.5 million. |
• | Adjusted EBITDA between $5.0 million and $7.0 million. |
• | Stock-based compensation expense between $12.8 million and $13.3 million. |
• | 26.4 million weighted average shares outstanding. |
What: | ChannelAdvisor Second Quarter 2017 Financial Results Conference Call |
When: | Thursday, August 3, 2017 |
Time: | 4:30 p.m. ET |
Live Call: | (855) 638-4821, Passcode 55992828, Domestic |
(704) 288-0612, Passcode 55992828, International | |
Webcast: | http://ir.channeladvisor.com (live and replay) |
June 30, 2017 | December 31, 2016 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 57,879 | $ | 65,420 | |||
Accounts receivable, net of allowance of $362 and $594 as of June 30, 2017 and December 31, 2016, respectively | 21,779 | 19,445 | |||||
Prepaid expenses and other current assets | 9,752 | 10,972 | |||||
Total current assets | 89,410 | 95,837 | |||||
Property and equipment, net | 11,782 | 13,252 | |||||
Goodwill | 23,486 | 21,632 | |||||
Intangible assets, net | 2,821 | 2,660 | |||||
Long-term deferred tax assets, net | 5,423 | 5,244 | |||||
Other assets | 694 | 533 | |||||
Total assets | $ | 133,616 | $ | 139,158 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,598 | $ | 4,709 | |||
Accrued expenses | 11,315 | 11,067 | |||||
Deferred revenue | 25,974 | 23,474 | |||||
Other current liabilities | 5,564 | 4,450 | |||||
Total current liabilities | 45,451 | 43,700 | |||||
Long-term capital leases, net of current portion | 1,047 | 1,262 | |||||
Lease incentive obligation | 3,767 | 4,206 | |||||
Other long-term liabilities | 3,723 | 2,993 | |||||
Total liabilities | 53,988 | 52,161 | |||||
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, 2017 and December 31, 2016 | — | — | |||||
Common stock, $0.001 par value, 100,000,000 shares authorized, 26,430,495 and 25,955,759 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively | 26 | 26 | |||||
Additional paid-in capital | 256,295 | 252,158 | |||||
Accumulated other comprehensive loss | (1,077 | ) | (1,612 | ) | |||
Accumulated deficit | (175,616 | ) | (163,575 | ) | |||
Total stockholders’ equity | 79,628 | 86,997 | |||||
Total liabilities and stockholders’ equity | $ | 133,616 | $ | 139,158 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | $ | 30,004 | $ | 27,098 | $ | 58,333 | $ | 53,445 | |||||||
Cost of revenue (1) (2) | 6,520 | 6,863 | 13,362 | 13,776 | |||||||||||
Gross profit | 23,484 | 20,235 | 44,971 | 39,669 | |||||||||||
Operating expenses (1) (2): | |||||||||||||||
Sales and marketing | 15,627 | 15,743 | 31,666 | 29,240 | |||||||||||
Research and development | 5,147 | 4,410 | 10,118 | 8,565 | |||||||||||
General and administrative | 6,678 | 6,822 | 15,208 | 13,243 | |||||||||||
Total operating expenses | 27,452 | 26,975 | 56,992 | 51,048 | |||||||||||
Loss from operations | (3,968 | ) | (6,740 | ) | (12,021 | ) | (11,379 | ) | |||||||
Other income (expense): | |||||||||||||||
Interest income (expense), net | 54 | (1 | ) | 82 | (22 | ) | |||||||||
Other income (expense), net | 13 | (8 | ) | 70 | 47 | ||||||||||
Total other income (expense) | 67 | (9 | ) | 152 | 25 | ||||||||||
Loss before income taxes | (3,901 | ) | (6,749 | ) | (11,869 | ) | (11,354 | ) | |||||||
Income tax expense (benefit) | 84 | (22 | ) | 172 | (64 | ) | |||||||||
Net loss | $ | (3,985 | ) | $ | (6,727 | ) | $ | (12,041 | ) | $ | (11,290 | ) | |||
Net loss per share: | |||||||||||||||
Basic and diluted | $ | (0.15 | ) | $ | (0.26 | ) | $ | (0.46 | ) | $ | (0.44 | ) | |||
Weighted average common shares outstanding: | |||||||||||||||
Basic and diluted | 26,380,031 | 25,520,847 | 26,219,348 | 25,406,626 | |||||||||||
(1) Includes stock-based compensation as follows: | |||||||||||||||
Cost of revenue | $ | 197 | $ | 342 | $ | 494 | $ | 611 | |||||||
Sales and marketing | 1,214 | 1,369 | 1,990 | 2,490 | |||||||||||
Research and development | 503 | 546 | 1,071 | 989 | |||||||||||
General and administrative | 1,454 | 1,660 | 2,737 | 3,252 | |||||||||||
$ | 3,368 | $ | 3,917 | $ | 6,292 | $ | 7,342 | ||||||||
(2) Includes depreciation and amortization as follows: | |||||||||||||||
Cost of revenue | $ | 1,066 | $ | 1,145 | $ | 2,125 | $ | 2,388 | |||||||
Sales and marketing | 256 | 280 | 529 | 587 | |||||||||||
Research and development | 111 | 112 | 222 | 234 | |||||||||||
General and administrative | 270 | 423 | 560 | 846 | |||||||||||
$ | 1,703 | $ | 1,960 | $ | 3,436 | $ | 4,055 |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (12,041 | ) | $ | (11,290 | ) | |
Adjustments to reconcile net loss to cash and cash equivalents (used in) provided by operating activities: | |||||||
Depreciation and amortization | 3,436 | 4,055 | |||||
Bad debt expense | 113 | 395 | |||||
Stock-based compensation expense | 6,292 | 7,342 | |||||
Other items, net | (279 | ) | (530 | ) | |||
Changes in assets and liabilities, net of effects from acquisition: | |||||||
Accounts receivable | (2,157 | ) | (5 | ) | |||
Prepaid expenses and other assets | 1,193 | 2,232 | |||||
Accounts payable and accrued expenses | 276 | (358 | ) | ||||
Deferred revenue | 3,070 | 4,321 | |||||
Cash and cash equivalents (used in) provided by operating activities | (97 | ) | 6,162 | ||||
Cash flows from investing activities | |||||||
Purchases of property and equipment | (543 | ) | (732 | ) | |||
Payment of internal-use software development costs | (159 | ) | (151 | ) | |||
Acquisition, net of cash acquired | (2,177 | ) | — | ||||
Cash and cash equivalents used in investing activities | (2,879 | ) | (883 | ) | |||
Cash flows from financing activities | |||||||
Repayment of capital leases | (2,439 | ) | (1,463 | ) | |||
Proceeds from exercise of stock options | 339 | 417 | |||||
Payment of contingent consideration | — | (236 | ) | ||||
Payment of statutory tax withholding related to net-share settlement of restricted stock units | (2,494 | ) | (1,904 | ) | |||
Cash and cash equivalents used in financing activities | (4,594 | ) | (3,186 | ) | |||
Effect of currency exchange rate changes on cash and cash equivalents | 29 | (197 | ) | ||||
Net (decrease) increase in cash and cash equivalents | (7,541 | ) | 1,896 | ||||
Cash and cash equivalents, beginning of period | 65,420 | 60,474 | |||||
Cash and cash equivalents, end of period | $ | 57,879 | $ | 62,370 |
Reconciliation of GAAP Gross Profit and GAAP Gross Margin to Non-GAAP Gross Profit and Non-GAAP Gross Margin | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | $ | 30,004 | $ | 27,098 | $ | 58,333 | $ | 53,445 | |||||||
Gross profit (GAAP) | $ | 23,484 | $ | 20,235 | $ | 44,971 | $ | 39,669 | |||||||
Plus: Stock-based compensation expense | 197 | 342 | 494 | 611 | |||||||||||
Gross profit (Non-GAAP) | $ | 23,681 | $ | 20,577 | $ | 45,465 | $ | 40,280 | |||||||
Gross margin (GAAP) | 78.3 | % | 74.7 | % | 77.1 | % | 74.2 | % | |||||||
Gross margin (Non-GAAP) | 78.9 | % | 75.9 | % | 77.9 | % | 75.4 | % |
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Operating expenses (GAAP) | $ | 27,452 | $ | 26,975 | $ | 56,992 | $ | 51,048 | |||||||
Less: Stock-based compensation expense | 3,171 | 3,575 | 5,798 | 6,731 | |||||||||||
Less: One-time charge for VDAs related to sales taxes | — | — | 2,539 | — | |||||||||||
Operating expenses (Non-GAAP) | $ | 24,281 | $ | 23,400 | $ | 48,655 | $ | 44,317 |
Reconciliation of GAAP Loss from Operations and GAAP Operating Margin to Non-GAAP Loss from Operations and Non-GAAP Operating Margin | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | $ | 30,004 | $ | 27,098 | $ | 58,333 | $ | 53,445 | |||||||
Loss from operations (GAAP) | $ | (3,968 | ) | $ | (6,740 | ) | $ | (12,021 | ) | $ | (11,379 | ) | |||
Plus: Stock-based compensation expense | 3,368 | 3,917 | 6,292 | 7,342 | |||||||||||
Plus: One-time charge for VDAs related to sales taxes | — | — | 2,539 | — | |||||||||||
Loss from operations (Non-GAAP) | $ | (600 | ) | $ | (2,823 | ) | $ | (3,190 | ) | $ | (4,037 | ) | |||
Operating margin (GAAP) | (13.2 | )% | (24.9 | )% | (20.6 | )% | (21.3 | )% | |||||||
Operating margin (Non-GAAP) | (2.0 | )% | (10.4 | )% | (5.5 | )% | (7.6 | )% |
Reconciliation of GAAP Net Loss to Non-GAAP Net Loss | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net loss (GAAP) | $ | (3,985 | ) | $ | (6,727 | ) | $ | (12,041 | ) | $ | (11,290 | ) | |||
Plus: Stock-based compensation expense | 3,368 | 3,917 | 6,292 | 7,342 | |||||||||||
Plus: One-time charge for VDAs related to sales taxes | — | — | 2,539 | — | |||||||||||
Net loss (Non-GAAP) | $ | (617 | ) | $ | (2,810 | ) | $ | (3,210 | ) | $ | (3,948 | ) |
Reconciliation of Net Loss to Adjusted EBITDA | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net loss | $ | (3,985 | ) | $ | (6,727 | ) | $ | (12,041 | ) | $ | (11,290 | ) | |||
Adjustments: | |||||||||||||||
Interest (income) expense, net | (54 | ) | 1 | (82 | ) | 22 | |||||||||
Income tax expense (benefit) | 84 | (22 | ) | 172 | (64 | ) | |||||||||
Depreciation and amortization expense | 1,703 | 1,960 | 3,436 | 4,055 | |||||||||||
Total adjustments | 1,733 | 1,939 | 3,526 | 4,013 | |||||||||||
EBITDA | (2,252 | ) | (4,788 | ) | (8,515 | ) | (7,277 | ) | |||||||
Stock-based compensation expense | 3,368 | 3,917 | 6,292 | 7,342 | |||||||||||
One-time charge for VDAs related to sales taxes | — | — | 2,539 | — | |||||||||||
Adjusted EBITDA | $ | 1,116 | $ | (871 | ) | $ | 316 | $ | 65 |
Free Cash Flow Reconciliation | |||||||
(unaudited; in thousands) | |||||||
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
Cash (used in) provided by operating activities | $ | (97 | ) | $ | 6,162 | ||
Less: Purchases of property and equipment | (543 | ) | (732 | ) | |||
Free cash flow | $ | (640 | ) | $ | 5,430 |
Adjusted EBITDA Guidance Reconciliation | |||||||||||||||
(unaudited; in millions) | |||||||||||||||
Third Quarter 2017 | Full Year 2017 | ||||||||||||||
Low | High | Low | High | ||||||||||||
Net loss (estimate) | $ | (5.5 | ) | $ | (4.7 | ) | $ | (17.5 | ) | $ | (15.0 | ) | |||
Adjustments (estimates): | |||||||||||||||
Interest (income) expense, net | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||
Income tax (benefit) expense | 0.0 | 0.0 | 0.2 | 0.2 | |||||||||||
Depreciation and amortization expense | 1.6 | 1.6 | 6.5 | 6.5 | |||||||||||
Total adjustments | 1.6 | 1.6 | 6.7 | 6.7 | |||||||||||
EBITDA | (3.9 | ) | (3.1 | ) | (10.8 | ) | (8.3 | ) | |||||||
Stock-based compensation expense (estimate) | 3.6 | 3.2 | 13.3 | 12.8 | |||||||||||
One-time charge for VDAs related to sales taxes | 0.0 | 0.0 | 2.5 | 2.5 | |||||||||||
Adjusted EBITDA guidance | $ | (0.3 | ) | $ | 0.1 | $ | 5.0 | $ | 7.0 |