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: May 2, 2013 | ||
/s/ Charles H. Murphy Charles H. Murphy | ||
Chief Financial Officer and Executive Vice President |
• | Record first quarter revenue of $33.6 million, exceeding the high end of guidance, an increase of 24% over the first quarter of 2012. |
• | GAAP operating income of $0.7 million for the first quarter. |
• | Non-GAAP operating income for the first quarter was $4.1 million, exceeding the high end of guidance. |
• | GAAP earnings per share for the first quarter of $0.06, and non-GAAP earnings per share of $0.15. |
• | Continued to scale across a diverse range of industries with new customers such as Alliance Laundry Systems, Gates Corporation, Great Lakes Cheese, LATAM Airlines, and Sterling Infosystems among others. PROS serves customers in more than 30 sub-industries. |
• | Announced OEM agreement with SAP, enabling PROS to offer SAP HANA® as a real-time analytics engine embedded in PROS big data applications. The planned integration of PROS and SAP HANA will provide customers with additional flexibility, speed and data science capabilities for optimizing pricing and sales. |
• | Extended PROS product leadership position with four newly filed data science patents that center on turning big data into predictive and prescriptive insights for sales and pricing effectiveness. |
• | Experienced record attendance at PROS Outperform big data conference in New York, where guests heard many examples of the tangible value PROS big data solutions provide from customers such as American Standard, Arrow Electronics, Ecolab, Depuy Synthes Spine (a Johnson & Johnson company), and Panduit. |
• | Total revenue for the second quarter of 2013 in the range of $34.8 million to $35.4 million |
• | GAAP income from operations of $0.3 million and GAAP earnings per share at break even for the second quarter of 2013 |
• | Non-GAAP income from operations of $3.9 million to $4.5 million and non-GAAP earnings per share of $0.09 to $0.11 for the second quarter of 2013. which excludes estimated non-cash share-based compensation charges of approximately $4.2 million for the second quarter of 2013 |
• | GAAP and non-GAAP estimated tax rate of approximately 48% and 27%, respectively, for the second quarter of 2013 |
• | Estimated weighted average of 29.8 million diluted shares outstanding for the second quarter of 2013 |
March 31, 2013 | December 31, 2012 | ||||||
Assets: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 82,462 | $ | 83,558 | |||
Accounts and unbilled receivables, net of allowance of $700 and $760, respectively | 42,742 | 38,801 | |||||
Prepaid and other current assets | 6,199 | 5,067 | |||||
Total current assets | 131,403 | 127,426 | |||||
Restricted cash | 329 | 329 | |||||
Property and equipment, net | 14,709 | 12,788 | |||||
Other long term assets, net | 5,955 | 5,936 | |||||
Total assets | $ | 152,396 | $ | 146,479 | |||
Liabilities and Stockholders’ Equity: | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 5,743 | $ | 3,775 | |||
Accrued liabilities | 4,418 | 3,258 | |||||
Accrued payroll and other employee benefits | 3,123 | 7,669 | |||||
Deferred revenue | 42,097 | 39,774 | |||||
Total current liabilities | 55,381 | 54,476 | |||||
Long-term deferred revenue | 2,432 | 2,007 | |||||
Other Long-term liabilities | 1,327 | 1,327 | |||||
Total liabilities | 59,140 | 57,810 | |||||
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; 32,332,136 and 31,966,432 shares issued, respectively; 27,914,551 and 27,548,847 shares outstanding, respectively | 32 | 32 | |||||
Additional paid-in capital | 90,544 | 87,693 | |||||
Treasury stock, 4,417,585 common shares, at cost | (13,938 | ) | (13,938 | ) | |||
Retained earnings | 16,618 | 14,882 | |||||
Total stockholders’ equity | 93,256 | 88,669 | |||||
Total liabilities and stockholders’ equity | $ | 152,396 | $ | 146,479 |
For the three months ended March 31, | |||||||
2013 | 2012 | ||||||
Revenue: | |||||||
License and implementation | $ | 22,592 | $ | 17,796 | |||
Maintenance and support | 11,034 | 9,225 | |||||
Total revenue | 33,626 | 27,021 | |||||
Cost of revenue: | |||||||
License and implementation | 8,471 | 6,003 | |||||
Maintenance and support | 2,082 | 1,935 | |||||
Total cost of revenue | 10,553 | 7,938 | |||||
Gross profit | 23,073 | 19,083 | |||||
Operating expenses: | |||||||
Selling, marketing, general and administrative | 14,288 | 10,256 | |||||
Research and development | 8,096 | 6,697 | |||||
Income from operations | 689 | 2,130 | |||||
Other (expense) income, net | (103 | ) | 22 | ||||
Income before income tax provision | 586 | 2,152 | |||||
Income tax (benefit) provision | (1,148 | ) | 961 | ||||
Net income | $ | 1,734 | $ | 1,191 | |||
Net earnings per share: | |||||||
Basic | $ | 0.06 | $ | 0.04 | |||
Diluted | $ | 0.06 | $ | 0.04 | |||
Weighted average number of shares: | |||||||
Basic | 27,757,397 | 27,166,973 | |||||
Diluted | 29,365,342 | 28,284,044 |
For the three months ended March 31, | |||||||
2013 | 2012 | ||||||
Operating activities: | |||||||
Net income | $ | 1,734 | $ | 1,191 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 967 | 427 | |||||
Share-based compensation | 3,420 | 2,032 | |||||
Excess tax benefits on share-based compensation | — | (1,395 | ) | ||||
Tax benefit from share-based compensation | (10 | ) | 1,358 | ||||
Provision for doubtful accounts | (60 | ) | (220 | ) | |||
Changes in operating assets and liabilities: | |||||||
Accounts and unbilled receivables | (3,877 | ) | 6,219 | ||||
Prepaid expenses and other assets | (1,162 | ) | (318 | ) | |||
Accounts payable | 1,070 | (183 | ) | ||||
Accrued liabilities | 980 | (226 | ) | ||||
Accrued payroll and other employee benefits | (4,549 | ) | (3,059 | ) | |||
Deferred revenue | 2,748 | (2,402 | ) | ||||
Net cash provided by operating activities | 1,261 | 3,424 | |||||
Investing activities: | |||||||
Purchases of property and equipment | (948 | ) | (684 | ) | |||
Capitalized internal-use software development costs | (796 | ) | (347 | ) | |||
Net cash used in investing activities | (1,744 | ) | (1,031 | ) | |||
Financing activities: | |||||||
Exercise of stock options | 1,409 | 488 | |||||
Excess tax benefits on share-based compensation | — | 1,395 | |||||
Tax withholding related to net share settlement of restricted stock units | (2,022 | ) | (1,820 | ) | |||
Net cash (used in) provided by financing activities | (613 | ) | 63 | ||||
Net (decrease) increase in cash and cash equivalents | (1,096 | ) | 2,456 | ||||
Cash and cash equivalents: | |||||||
Beginning of period | 83,558 | 68,457 | |||||
End of period | $ | 82,462 | $ | 70,913 |
For the three months ended March 31, | Quarter over Quarter | |||||||||||||
2013 | 2012 | % change | ||||||||||||
GAAP gross profit | $ | 23,073 | $ | 19,083 | 20.9% | |||||||||
Non-GAAP adjustment: | ||||||||||||||
GAAP share-based compensation | 462 | 329 | ||||||||||||
Non-GAAP gross profit | $ | 23,535 | $ | 19,412 | 21.2% | |||||||||
Non-GAAP gross margin | 70.0 | % | 71.8% | |||||||||||
GAAP selling, marketing, general and administrative | $ | 14,288 | $ | 10,256 | 39.3% | |||||||||
Non-GAAP adjustment: | ||||||||||||||
GAAP share-based compensation | 2,222 | 1,268 | ||||||||||||
Non- GAAP selling, marketing, general and administrative | $ | 12,066 | $ | 8,988 | 34.2% | |||||||||
GAAP research and development | $ | 8,096 | $ | 6,697 | 20.9% | |||||||||
Non-GAAP adjustment: | ||||||||||||||
GAAP share-based compensation | 736 | 435 | ||||||||||||
Non- GAAP research and development | $ | 7,360 | $ | 6,262 | 17.5% | |||||||||
Income from operations | $ | 689 | $ | 2,130 | (67.7)% | |||||||||
Non-GAAP adjustment: | ||||||||||||||
GAAP share-based compensation | 3,420 | 2,032 | ||||||||||||
Non-GAAP income from operations | $ | 4,109 | $ | 4,162 | (1.3)% | |||||||||
Non-GAAP income from operations % of total revenue | 12.2 | % | 15.4 | % | ||||||||||
GAAP net income | $ | 1,734 | $ | 1,191 | 45.6% | |||||||||
Non-GAAP adjustment: | ||||||||||||||
GAAP share-based compensation | 3,420 | 2,032 | ||||||||||||
Tax impact related to non-GAAP adjustments | (833 | ) | (503 | ) | ||||||||||
Non-GAAP net income | $ | 4,321 | $ | 2,720 | 58.9% | |||||||||
Non-GAAP diluted earnings per share | $ | 0.15 | $ | 0.10 | ||||||||||
Shares used in computing non-GAAP earnings per share | 29,365 | 28,284 | ||||||||||||
Detail of non-GAAP share-based compensation expense: | ||||||||||||||
Cost of revenue | $ | 462 | $ | 329 | ||||||||||
Selling, marketing, general and administrative | 2,222 | 1,268 | ||||||||||||
Research and development | 736 | 435 | ||||||||||||
Total share-based compensation expense | $ | 3,420 | $ | 2,032 |