Delaware | ||||
(State or Other Jurisdiction of Incorporation) | ||||
001-33554 | 76-0168604 | |||
(Commission File Number) | (IRS Employer Identification No.) |
3100 Main Street, Suite 900 Houston TX | 77002 | |||||||
(Address of Principal Executive Offices) | (Zip Code) | |||||||
Registrant’s telephone number, including area code | (713) 335-5151 | |||||||
(Former Name or Former Address, if Changed Since Last Report) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
PROS HOLDINGS, INC. | ||
Date: February 12, 2013 | ||
/s/ Charles H. Murphy Charles H. Murphy | ||
Chief Financial Officer and Executive Vice President |
• | Record fourth quarter revenue of $32.7 million, exceeding the high end of guidance, an increase of 25% over the fourth quarter of 2011. |
• | Record 2012 revenue of $117.8 million, exceeding the high end of guidance, an increase of 22% over 2011. |
• | GAAP operating income of $2.3 million for the fourth quarter, exceeding the high end of guidance, and $8.2 million for 2012. |
• | Non-GAAP operating income for the fourth quarter was $4.9 million, exceeding the high end of guidance, and $17.8 million for 2012. |
• | GAAP earnings per share for the fourth quarter of $0.05, and non-GAAP earnings per share of $0.11. GAAP net income for the full year 2012 of $0.17 per share, and non-GAAP net income of $0.42 per share. |
• | Signed new customers across several industries in the fourth quarter, such as American Standard, Guardian Analytics, O'Reilly Automotive, Oman Air, Panduit, Stramit Building Products, and Volvo Group Trucks, among others. These companies joined those who selected PROS earlier in the year, including ARUP Laboratories, Ecolab, Hewlett Packard, Kimberly Clark Professional, Nexidia, Sichuan Airlines, TE Connectivity, and Zimmer among others. |
• | Filed six new patents, introduced Rebate Optimizer as a new product, and released new versions of our big data applications for pricing and sales effectiveness. |
• | Announced participation in Microsoft Dynamics ISV Partnership Program to provide Microsoft Dynamics CRM customers with actionable, real-time customer insights that can improve sales performance. |
• | Achieved new product certifications from SAP for integration of PROS solutions into SAP ERP and SAP CRM, providing the most complete and seamless integration experience in SAP. Approximately two-thirds of PROS new B2B customers signed in 2012 run SAP, and more than half of PROS B2B customers overall run SAP. |
• | Increased annual headcount by 31% to approximately 700 people, reflecting investments made across the company in support of our long-term growth. |
• | Total revenue for the first quarter of 2013 in the range of $32.7 million to $33.3 million |
• | GAAP income from operations of $0.3 million to $0.9 million and GAAP earnings per share of $0.05 to $0.06 for the first quarter of 2013. GAAP earnings per share includes a tax benefit of approximately $1.1 million related to the 2012 R&E tax credit recorded in the first quarter |
• | Non-GAAP income from operations of $3.4 million to $4.0 million, which excludes estimated non-cash share-based compensation charges of approximately $3.1 million for the first quarter of 2013 |
• | Non-GAAP earnings per share, which includes the full impact of the 2012 R&E tax credit recorded in the first quarter, is expected to be $0.12 to $0.14 for the first quarter of 2013. Excluding the 2012 R&E tax credit, non-GAAP earnings per share is expected to be $0.08 to $0.10 for the first quarter of 2013. On a non-GAAP basis there will be essentially no tax provision in the quarter |
• | Estimated weighted average of 29.0 million diluted shares outstanding for the first quarter of 2013 |
December 31, | |||||||
2012 | 2011 | ||||||
Assets: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 83,558 | $ | 68,457 | |||
Accounts and unbilled receivables, net of allowance of $760 and $1,130, respectively | 38,801 | 33,864 | |||||
Prepaid and other current assets | 5,067 | 8,353 | |||||
Total current assets | 127,426 | 110,674 | |||||
Restricted cash | 329 | 329 | |||||
Property and equipment, net | 12,788 | 4,703 | |||||
Other long term assets, net | 5,936 | 5,553 | |||||
Total assets | $ | 146,479 | $ | 121,259 | |||
Liabilities and Stockholders’ Equity: | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 3,775 | $ | 4,915 | |||
Accrued liabilities | 3,258 | 1,541 | |||||
Accrued payroll and other employee benefits | 7,669 | 4,790 | |||||
Deferred revenue | 39,774 | 33,094 | |||||
Total current liabilities | 54,476 | 44,340 | |||||
Long-term deferred revenue | 2,007 | 2,850 | |||||
Long-term accrued liabilities | 1,327 | 126 | |||||
Total liabilities | 57,810 | 47,316 | |||||
Stockholders' equity: | |||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized none issued | — | — | |||||
Common stock, $0.001 par value, 75,000,000 shares authorized; 31,966,432 and 31,432,430 shares issued, respectively; 27,548,847 and 27,014,845 shares outstanding, respectively | 32 | 31 | |||||
Additional paid-in capital | 87,693 | 77,934 | |||||
Treasury stock, 4,417,585 common shares, at cost | (13,938 | ) | (13,938 | ) | |||
Accumulated other comprehensive loss | (11 | ) | (11 | ) | |||
Retained earnings | 14,893 | 9,927 | |||||
Total stockholders’ equity | 88,669 | 73,943 | |||||
Total liabilities and stockholders’ equity | $ | 146,479 | $ | 121,259 |
For the Three Months Ended December 31, | For the Year Ended December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenue: | |||||||||||||||
License and implementation | $ | 22,190 | $ | 17,540 | $ | 77,656 | $ | 62,975 | |||||||
Maintenance and support | 10,533 | 8,700 | 40,135 | 33,664 | |||||||||||
Total revenue | 32,723 | 26,240 | 117,791 | 96,639 | |||||||||||
Cost of revenue: | |||||||||||||||
License and implementation | 7,740 | 5,406 | 25,830 | 19,627 | |||||||||||
Maintenance and support | 1,938 | 1,744 | 7,955 | 6,675 | |||||||||||
Total cost of revenue | 9,678 | 7,150 | 33,785 | 26,302 | |||||||||||
Gross profit | 23,045 | 19,090 | 84,006 | 70,337 | |||||||||||
Operating expenses: | |||||||||||||||
Selling, marketing, general and administrative | 13,691 | 9,571 | 48,215 | 35,891 | |||||||||||
Research and development | 7,093 | 6,719 | 27,611 | 25,671 | |||||||||||
Income from operations | 2,261 | 2,800 | 8,180 | 8,775 | |||||||||||
Other (expense) income, net | (42 | ) | (108 | ) | (163 | ) | (141 | ) | |||||||
Income before income tax provision | 2,219 | 2,692 | 8,017 | 8,634 | |||||||||||
Income tax provision | 795 | 571 | 3,051 | 2,284 | |||||||||||
Net income | $ | 1,424 | $ | 2,121 | $ | 4,966 | $ | 6,350 | |||||||
Net earnings per share: | |||||||||||||||
Basic | $ | 0.05 | $ | 0.08 | $ | 0.18 | $ | 0.24 | |||||||
Diluted | $ | 0.05 | $ | 0.08 | $ | 0.17 | $ | 0.23 | |||||||
Weighted average number of shares: | |||||||||||||||
Basic | 27,494,076 | 26,974,685 | 27,365,731 | 26,831,530 | |||||||||||
Diluted | 28,715,202 | 28,035,591 | 28,419,956 | 27,761,958 |
For the Year Ended December 31, | |||||||
2012 | 2011 | ||||||
Operating activities: | |||||||
Net income | $ | 4,966 | $ | 6,350 | |||
Adjustments to reconcile net income to net | |||||||
cash provided by operating activities: | |||||||
Depreciation and amortization | 2,286 | 1,609 | |||||
Share-based compensation | 9,645 | 6,832 | |||||
Excess tax benefits on share-based compensation | (1,686 | ) | (1,379 | ) | |||
Tax benefit from share-based compensation | 1,573 | 1,320 | |||||
Deferred income tax, net | 962 | 315 | |||||
Provision for doubtful accounts | (326 | ) | 178 | ||||
Changes in operating assets and liabilities: | |||||||
Accounts and unbilled receivables | (4,609 | ) | (6,656 | ) | |||
Prepaid expenses and other assets | 2,215 | (2,971 | ) | ||||
Accounts payable | (790 | ) | 2,579 | ||||
Accrued liabilities | 1,700 | (392 | ) | ||||
Accrued payroll and other employee benefits | 2,879 | 405 | |||||
Deferred revenue | 5,837 | 6,053 | |||||
Net cash provided by operating activities | 24,652 | 14,243 | |||||
Investing activities: | |||||||
Purchases of property and equipment, and capitalized internal-use software development costs | (9,527 | ) | (3,002 | ) | |||
Increase in restricted cash | — | (36 | ) | ||||
Increase in short-term investment | — | 73 | |||||
Net cash used in investing activities | (9,527 | ) | (2,965 | ) | |||
Financing activities: | |||||||
Exercise of stock options | 1,354 | 1,874 | |||||
Excess tax benefits on share-based compensation | 1,686 | 1,379 | |||||
Tax withholding related to net share settlement of restricted stock units | (2,814 | ) | (1,919 | ) | |||
Debt issuance costs related to credit facility | (250 | ) | — | ||||
Net cash (used in) provided by financing activities | (24 | ) | 1,334 | ||||
Net increase in cash and cash equivalents | 15,101 | 12,612 | |||||
Cash and cash equivalents: | |||||||
Beginning of period | 68,457 | 55,845 | |||||
End of period | $ | 83,558 | $ | 68,457 |
For the Three Months | Quarter over | For the Year | Year over | |||||||||||||||||||||
Ended December 31, | Quarter | Ended December 31, | Year | |||||||||||||||||||||
2012 | 2011 | % change | 2012 | 2011 | % change | |||||||||||||||||||
GAAP gross profit | $ | 23,045 | $ | 19,090 | 20.7% | $ | 84,006 | $ | 70,337 | 19.4% | ||||||||||||||
Non-GAAP adjustment: | ||||||||||||||||||||||||
GAAP share-based compensation | 486 | 307 | 1,451 | 1,201 | ||||||||||||||||||||
Non-GAAP gross profit | $ | 23,531 | $ | 19,397 | 21.3% | $ | 85,457 | $ | 71,538 | 19.5% | ||||||||||||||
Non-GAAP gross margin | 71.9 | % | 73.9% | 72.5 | % | 74.0 | % | |||||||||||||||||
GAAP selling, marketing, general and administrative | $ | 13,691 | $ | 9,571 | 43.0% | $ | 48,215 | $ | 35,891 | 34.3% | ||||||||||||||
Non-GAAP adjustment: | ||||||||||||||||||||||||
GAAP share-based compensation | 1,707 | 1,067 | 6,273 | 4,038 | ||||||||||||||||||||
Non- GAAP selling, marketing, general and administrative | $ | 11,984 | $ | 8,504 | 40.9% | $ | 41,942 | $ | 31,853 | 31.7% | ||||||||||||||
GAAP research and development | $ | 7,093 | $ | 6,719 | 5.6% | $ | 27,611 | $ | 25,671 | 7.6% | ||||||||||||||
Non-GAAP adjustment: | ||||||||||||||||||||||||
GAAP share-based compensation | 490 | 450 | 1,921 | 1,593 | ||||||||||||||||||||
Non- GAAP research and development | $ | 6,603 | $ | 6,269 | 5.3% | $ | 25,690 | $ | 24,078 | 6.7% | ||||||||||||||
Income from operations | $ | 2,261 | $ | 2,800 | (19.3)% | $ | 8,180 | $ | 8,775 | (6.8)% | ||||||||||||||
Non-GAAP adjustment: | ||||||||||||||||||||||||
GAAP share-based compensation | 2,683 | 1,824 | 9,645 | 6,832 | ||||||||||||||||||||
Non-GAAP income from operations | $ | 4,944 | $ | 4,624 | 6.9% | $ | 17,825 | $ | 15,607 | 14.2% | ||||||||||||||
Non-GAAP income from operations % of total revenue | 15.1 | % | 17.6 | % | 15.1 | % | 16.1 | % | ||||||||||||||||
GAAP net income | $ | 1,424 | $ | 2,121 | (32.9)% | $ | 4,966 | $ | 6,350 | (21.8)% | ||||||||||||||
Non-GAAP adjustment: | ||||||||||||||||||||||||
GAAP share-based compensation | 2,683 | 1,824 | 9,645 | 6,832 | ||||||||||||||||||||
Tax impact related to non-GAAP adjustments | (857 | ) | (741 | ) | (2,696 | ) | (2,436 | ) | ||||||||||||||||
Non-GAAP net income | $ | 3,250 | $ | 3,204 | 1.4% | $ | 11,915 | $ | 10,746 | 10.9% | ||||||||||||||
Non-GAAP diluted earnings per share | $ | 0.11 | $ | 0.11 | $ | 0.42 | $ | 0.39 | ||||||||||||||||
Shares used in computing non-GAAP earnings per share | 28,715 | 28,036 | 28,420 | 27,762 | ||||||||||||||||||||
Detail of non-GAAP share-based compensation expense: | ||||||||||||||||||||||||
Cost of revenue | $ | 486 | $ | 307 | $ | 1,451 | $ | 1,201 | ||||||||||||||||
Selling, marketing, general and administrative | 1,707 | 1,067 | 6,273 | 4,038 | ||||||||||||||||||||
Research and development | 490 | 450 | 1,921 | 1,593 | ||||||||||||||||||||
Total share-based compensation expense | $ | 2,683 | $ | 1,824 | $ | 9,645 | $ | 6,832 | ||||||||||||||||