FORM 8-K |
Delaware | 001-37461 | 26-4247032 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
8281 Greensboro Drive Tysons, Virginia | 22102 | |
(Address of principal executive offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |
99.1 | Press Release dated March 15, 2017 |
Alarm.com Holdings, Inc. | ||
Dated: March 15, 2017 | ||
By: | /s/ Stephen Trundle | |
Stephen Trundle | ||
President and Chief Executive Officer |
Exhibit No. | Description | |
99.1 | Press Release dated March 15, 2017. |
• | SaaS and license revenue grew to $46.9 million, up 21% year over year. |
• | Total revenue grew to $69.8 million, up 23% year over year. |
• | GAAP net income was $3.0 million, or $0.06 per diluted share. |
• | Non-GAAP adjusted EBITDA increased to $14.3 million, up 47% year over year. |
• | Non-GAAP adjusted net income increased to $9.1 million, or $0.19 per diluted share. |
• | SaaS and license revenue grew to $173.5 million, up 23% year over year. |
• | Total revenue grew to $261.1 million, up 25% year over year. |
• | GAAP net income was $10.2 million, or $0.21 per diluted share. |
• | Non-GAAP adjusted EBITDA increased to $49.0 million, up 43% year over year. |
• | Non-GAAP adjusted net income increased to $31.1 million, or $0.65 per diluted share. |
• | Total cash and cash equivalents were $140.6 million as of December 31, 2016 compared to $128.4 million as of December 31, 2015. |
• | For the year ended December 31, 2016, cash flows from operations were $17.5 million compared to $27.1 million for the year ended December 31, 2015. |
• | Icontrol: On March 8, 2017, Alarm.com completed its previously announced acquisition of two business units, Connect and Piper, from Icontrol Networks, Inc. Connect provides an interactive security and home automation platform for several service providers including ADT Pulse®. Piper designs, produces and sells an all-in-one video and home automation hub. The addition of new technology infrastructure, talent, key |
• | ObjectVideo Acquisition: In January 2017, Alarm.com acquired substantially all of ObjectVideo, Inc’s. business, including the company’s products, technology portfolio and personnel. ObjectVideo is a pioneer in the fields of video analytics and computer vision, with technology that extracts meaning and intelligence from video streams in real-time to enable object tracking, pattern recognition and activity identification. The business, now called ObjectVideo Labs, is a leader in providing advanced research and engineering services for federal government customers. The capabilities and expertise of the ObjectVideo Labs team are expected to help accelerate Alarm.com’s research and development of video services and video analytics applications. |
• | Launched Insights Engine: Alarm.com announced broad availability of the Insights Engine in 2016. Driven by proprietary machine learning capabilities, the Insights Engine automatically detects and alerts subscribers about unexpected activity around their property. This proactive safeguard creates high-value engagement with the system to enhance the subscriber experience. |
• | Expanded 4G LTE Cellular Gateway Development: Alarm.com extended its leadership position in cellular communications in 2016 with the expanded deployment of 4G LTE cellular gateway modules. Alarm.com’s service provider partners now have five security panel options for deploying services with the best in class network life and connection speeds offered by 4G LTE cellular communications. |
• | Enhanced Commercial Services: Smarter Business Security from Alarm.com provides a single solution for intelligently securing, automating and managing individual or multiple business properties. The 2016 addition of new commercial-grade security panels and locks to the Alarm.com device ecosystem enables a fully integrated security, automation, energy management, access and video solution that is tailored for the small and medium sized business. The Alarm.com platform enables unique, value-add capabilities such as actionable business insights that provide visibility into customer traffic trends, employee performance and unexpected activity in a facility. |
• | Business Intelligence: Business Intelligence is a value-added service from Alarm.com that generates actionable insights for service providers to maximize the value of existing and new accounts. Based on deep analysis of historical and real-time information generated by billions of data points, Alarm.com can identify account attributes and characteristics associated with high subscriber engagement which can be used to lower attrition. Business Intelligence insights were introduced to help service providers create and maintain high-value accounts. |
• | Award Winning Technology and Work Environment: Alarm.com was recognized for innovation and product leadership throughout 2016. For the second consecutive year, Alarm.com was honored as a Top Workplace for its high employee engagement, quality work environment and focus on innovation. The Alarm.com Academy was recognized with a Most Valuable Product Award from Security Sales and Integration magazine for its industry-leading dealer training programs, and Alarm.com’s Partner Services Platform received an Innovation Award from the Electronic Security Expo. |
• | SaaS and license revenue is expected to be in the range of $49.3 million to $49.5 million. |
• | SaaS and license revenue is expected to be in the range of $231 million to $232.5 million. |
• | Total revenue is expected to be in the range of $322 million to $325.5 million, which includes anticipated hardware and other revenue for the year in the range of $91 million to $93 million. |
• | Adjusted EBITDA is expected to be in the range of $65 million to $66 million. |
• | Non-GAAP adjusted net income is expected to be in the range of $36 million to $37 million. |
• | Based on an expected 49.4 million weighted average shares outstanding (diluted), non-GAAP adjusted net income is expected to be in the range of $0.73 to $0.75 per diluted share. |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2014 | |||||||||||||||
Revenue: | |||||||||||||||||||
SaaS and license revenue | $ | 46,888 | $ | 38,689 | $ | 173,540 | $ | 140,936 | $ | 111,515 | |||||||||
Hardware and other revenue | 22,906 | 18,232 | 87,566 | 67,952 | 55,797 | ||||||||||||||
Total revenue | 69,794 | 56,921 | 261,106 | 208,888 | 167,312 | ||||||||||||||
Cost of revenue: | |||||||||||||||||||
Cost of SaaS and license revenue | 8,450 | 6,628 | 30,229 | 25,722 | 23,007 | ||||||||||||||
Cost of hardware and other revenue | 18,265 | 13,481 | 69,151 | 51,652 | 44,172 | ||||||||||||||
Total cost of revenue | 26,715 | 20,109 | 99,380 | 77,374 | 67,179 | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Sales and marketing | 9,448 | 7,835 | 38,980 | 32,240 | 25,836 | ||||||||||||||
General and administrative | 15,802 | 9,477 | 57,926 | 35,473 | 26,113 | ||||||||||||||
Research and development | 12,048 | 13,335 | 44,272 | 40,002 | 23,193 | ||||||||||||||
Amortization and depreciation | 1,627 | 1,438 | 6,490 | 5,808 | 3,991 | ||||||||||||||
Total operating expenses | 38,925 | 32,085 | 147,668 | 113,523 | 79,133 | ||||||||||||||
Operating income | 4,154 | 4,727 | 14,058 | 17,991 | 21,000 | ||||||||||||||
Interest expense | (53 | ) | (50 | ) | (190 | ) | (178 | ) | (196 | ) | |||||||||
Other income / (expense), net | 175 | (286 | ) | 513 | (348 | ) | (485 | ) | |||||||||||
Income before income taxes | 4,276 | 4,391 | 14,381 | 17,465 | 20,319 | ||||||||||||||
Provision for income taxes | 1,300 | 1,116 | 4,227 | 5,697 | 6,817 | ||||||||||||||
Net income | 2,976 | 3,275 | 10,154 | 11,768 | 13,502 | ||||||||||||||
Dividends paid to participating securities | — | — | — | (18,987 | ) | — | |||||||||||||
Income allocated to participating securities | (2 | ) | (8 | ) | (12 | ) | — | (12,939 | ) | ||||||||||
Net income / (loss) attributable to common stockholders | $ | 2,974 | $ | 3,267 | $ | 10,142 | $ | (7,219 | ) | $ | 563 | ||||||||
Per share information attributable to common stockholders: | |||||||||||||||||||
Net income / (loss) per share: | |||||||||||||||||||
Basic | $ | 0.06 | $ | 0.07 | $ | 0.22 | $ | (0.30 | ) | $ | 0.25 | ||||||||
Diluted | $ | 0.06 | $ | 0.07 | $ | 0.21 | $ | (0.30 | ) | $ | 0.14 | ||||||||
Weighted average common shares outstanding: | |||||||||||||||||||
Basic | 46,018,630 | 45,468,451 | 45,716,757 | 24,108,362 | 2,276,694 | ||||||||||||||
Diluted | 48,025,847 | 47,353,327 | 47,875,522 | 24,108,362 | 3,890,121 | ||||||||||||||
Cash dividends declared per share | $ | — | $ | — | $ | — | $ | 0.36 | $ | — | |||||||||
Stock-based compensation expense included in operating expenses: | |||||||||||||||||||
Sales and marketing | $ | 114 | $ | 112 | $ | 536 | $ | 372 | $ | 338 | |||||||||
General and administrative | 523 | 180 | 1,430 | 2,486 | 1,862 | ||||||||||||||
Research and development | 484 | 377 | 2,035 | 1,266 | 1,067 | ||||||||||||||
Total stock-based compensation expense | $ | 1,121 | $ | 669 | $ | 4,001 | $ | 4,124 | $ | 3,267 | |||||||||
December 31, | |||||||
2016 | 2015 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 140,634 | $ | 128,358 | |||
Accounts receivable, net | 29,810 | 21,348 | |||||
Inventory | 10,543 | 6,474 | |||||
Other current assets | 9,197 | 4,870 | |||||
Total current assets | 190,184 | 161,050 | |||||
Property and equipment, net | 20,180 | 15,446 | |||||
Intangible assets, net | 4,568 | 6,318 | |||||
Goodwill | 24,723 | 24,723 | |||||
Deferred tax assets | 16,752 | 11,915 | |||||
Other assets | 4,838 | 6,643 | |||||
Total Assets | $ | 261,245 | $ | 226,095 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable, accrued expenses and other current liabilities | $ | 28,300 | $ | 19,276 | |||
Accrued compensation | 8,814 | 7,514 | |||||
Deferred revenue | 2,585 | 2,289 | |||||
Total current liabilities | 39,699 | 29,079 | |||||
Deferred revenue | 10,040 | 9,701 | |||||
Long-term debt | 6,700 | 6,700 | |||||
Other liabilities | 13,557 | 10,484 | |||||
Total Liabilities | 69,996 | 55,964 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity | |||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2016 and 2015 | — | — | |||||
Common stock, $0.01 par value, 300,000,000 shares authorized; 46,172,318 and 45,581,662 shares issued; and 46,142,483 and 45,485,294 shares outstanding as of December 31, 2016 and 2015 | 461 | 455 | |||||
Additional paid-in capital | 308,697 | 297,781 | |||||
Treasury stock (35,523 shares at cost of $1.20 per share) | — | (42 | ) | ||||
Accumulated other comprehensive income | — | — | |||||
Accumulated deficit | (117,909 | ) | (128,063 | ) | |||
Total Stockholders’ Equity | 191,249 | 170,131 | |||||
Total Liabilities and Stockholders’ Equity | $ | 261,245 | $ | 226,095 |
Year ended December 31, | |||||||||||
Cash flows from operating activities: | 2016 | 2015 | 2014 | ||||||||
Net income | $ | 10,154 | $ | 11,768 | $ | 13,502 | |||||
Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
Provision for doubtful accounts | 648 | 276 | 1,371 | ||||||||
Reserve for product returns | 2,071 | 1,559 | 1,863 | ||||||||
Amortization on patents and tooling | 786 | 391 | 201 | ||||||||
Amortization and depreciation | 6,490 | 5,808 | 3,991 | ||||||||
Amortization of debt issuance costs | 103 | 108 | 70 | ||||||||
Deferred income taxes | (4,837 | ) | (3,552 | ) | (1,735 | ) | |||||
Change in fair value of contingent liability | (230 | ) | (470 | ) | — | ||||||
Undistributed losses from equity investees | 81 | 681 | 514 | ||||||||
Stock-based compensation | 4,001 | 3,347 | 3,267 | ||||||||
Impairment of cost method investment | — | — | 200 | ||||||||
Other, net | — | — | 129 | ||||||||
Changes in operating assets and liabilities (net of business acquisitions): | |||||||||||
Accounts receivable | (11,181 | ) | (5,910 | ) | (3,898 | ) | |||||
Inventory | (4,068 | ) | 378 | (4,334 | ) | ||||||
Other assets | (837 | ) | (2,725 | ) | (1,136 | ) | |||||
Accounts payable, accrued expenses and other current liabilities | 10,458 | 5,966 | 444 | ||||||||
Deferred revenue | 636 | 1,081 | 1,234 | ||||||||
Other liabilities | 3,225 | 8,431 | (48 | ) | |||||||
Cash flows from operating activities | 17,500 | 27,137 | 15,635 | ||||||||
Cash flows used in investing activities: | |||||||||||
Business acquisitions, net of cash acquired | — | (5,632 | ) | (3,186 | ) | ||||||
Additions to property and equipment | (9,055 | ) | (10,347 | ) | (6,892 | ) | |||||
Investment in cost and equity method investees | (139 | ) | (247 | ) | — | ||||||
Distribution from cost method investee | — | — | 2,545 | ||||||||
Issuances of notes receivable | (3,073 | ) | (406 | ) | (755 | ) | |||||
Repayments of notes receivable | 2,441 | — | — | ||||||||
Purchases of licenses to patents | (1,600 | ) | (1,000 | ) | — | ||||||
Disposition of marketable securities | — | — | 2,000 | ||||||||
Cash flows used in investing activities | (11,426 | ) | (17,632 | ) | (6,288 | ) | |||||
Cash flows from / (used in) financing activities: | |||||||||||
Proceeds from issuance of common stock from initial public offering, net of underwriting discount and commission | — | 97,976 | — | ||||||||
Proceeds from issuance of debt, net of debt issuance costs | — | — | 6,376 | ||||||||
Repayments of term loan | — | — | (7,500 | ) | |||||||
Payments of debt issuance costs | (131 | ) | — | — | |||||||
Payments for long-term business acquisition liabilities | (417 | ) | (417 | ) | — | ||||||
Dividends paid to common stockholders | — | (1,013 | ) | — | |||||||
Dividends paid to employees for unvested shares | — | (57 | ) | — | |||||||
Dividends paid to redeemable convertible preferred stockholders | — | (18,930 | ) | — | |||||||
Payments of offering costs | — | (2,632 | ) | (2,399 | ) | ||||||
Repurchases of common stock | (11 | ) | (1 | ) | (7 | ) | |||||
Proceeds from early exercise of stock-based awards | — | 129 | 1,548 | ||||||||
Issuances of common stock from equity based plans | 1,661 | 344 | 554 | ||||||||
Tax windfall benefit from stock-based awards | 5,100 | 882 | 1,070 | ||||||||
Cash flows from / (used in) financing activities | 6,202 | 76,281 | (358 | ) | |||||||
Net increase in cash and cash equivalents | 12,276 | 85,786 | 8,989 | ||||||||
Cash and cash equivalents at beginning of the period | 128,358 | 42,572 | 33,583 | ||||||||
Cash and cash equivalents at end of the period | $ | 140,634 | $ | 128,358 | $ | 42,572 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2014 | |||||||||||||||
Adjusted EBITDA: | |||||||||||||||||||
Net income | $ | 2,976 | $ | 3,275 | $ | 10,154 | $ | 11,768 | $ | 13,502 | |||||||||
Adjustments: | |||||||||||||||||||
Interest expense and other income / (expense), net | (122 | ) | 336 | (323 | ) | 526 | 681 | ||||||||||||
Provision for income taxes | 1,300 | 1,116 | 4,227 | 5,697 | 6,817 | ||||||||||||||
Amortization and depreciation | 1,627 | 1,438 | 6,490 | 5,808 | 3,991 | ||||||||||||||
Stock-based compensation expense | 1,121 | 669 | 4,001 | 4,124 | 3,267 | ||||||||||||||
Acquisition-related expense | 5,301 | 100 | 11,098 | 100 | — | ||||||||||||||
Litigation expense | 2,108 | 2,834 | 13,387 | 6,347 | 63 | ||||||||||||||
Total adjustments | 11,335 | 6,493 | 38,880 | 22,602 | 14,819 | ||||||||||||||
Adjusted EBITDA | $ | 14,311 | $ | 9,768 | $ | 49,034 | $ | 34,370 | $ | 28,321 | |||||||||
Adjusted net income: | |||||||||||||||||||
Net income, as reported | $ | 2,976 | $ | 3,275 | $ | 10,154 | $ | 11,768 | $ | 13,502 | |||||||||
Adjustments: | |||||||||||||||||||
Other income / (expense), net | (175 | ) | 286 | (513 | ) | 348 | 485 | ||||||||||||
Amortization | 382 | 561 | 1,750 | 2,151 | 1,568 | ||||||||||||||
Stock-based compensation expense | 1,121 | 669 | 4,001 | 4,124 | 3,267 | ||||||||||||||
Acquisition-related expense | 5,301 | 100 | 11,098 | 100 | — | ||||||||||||||
Litigation expense | 2,108 | 2,834 | 13,387 | 6,347 | 63 | ||||||||||||||
Income tax1 | (2,656 | ) | (1,130 | ) | (8,739 | ) | (4,261 | ) | (1,803 | ) | |||||||||
Non-GAAP adjusted net income | $ | 9,057 | $ | 6,595 | $ | 31,138 | $ | 20,577 | $ | 17,082 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2014 | |||||||||||||||
Adjusted net income attributable to common stockholders: | |||||||||||||||||||
Net income (loss) attributable to common stockholders, as reported | $ | 2,974 | $ | 3,267 | $ | 10,142 | $ | (7,219 | ) | $ | 563 | ||||||||
Adjustments: | |||||||||||||||||||
Dividends paid to participating securities | — | — | — | 18,987 | — | ||||||||||||||
Other income / (expense), net | (175 | ) | 286 | (513 | ) | 348 | 485 | ||||||||||||
Amortization expense | 382 | 561 | 1,750 | 2,151 | 1,568 | ||||||||||||||
Stock-based compensation expense | 1,121 | 669 | 4,001 | 4,124 | 3,267 | ||||||||||||||
Acquisition-related expense | 5,301 | 100 | 11,098 | 100 | — | ||||||||||||||
Litigation expense | 2,108 | 2,834 | 13,387 | 6,347 | 63 | ||||||||||||||
Income tax1 | (2,656 | ) | (1,130 | ) | (8,739 | ) | (4,261 | ) | (1,803 | ) | |||||||||
Less: Income allocated to participating securities | — | — | — | (13,511 | ) | — | |||||||||||||
Non-GAAP adjusted net income attributable to common stockholders | $ | 9,055 | $ | 6,587 | $ | 31,126 | $ | 7,066 | $ | 4,143 | |||||||||
Adjusted net income per share: | |||||||||||||||||||
Net income (loss) per share - basic, as reported | $ | 0.06 | $ | 0.07 | $ | 0.22 | $ | (0.30 | ) | $ | 0.25 | ||||||||
Adjustments: | |||||||||||||||||||
Dividends paid to participating securities | — | — | — | 0.79 | — | ||||||||||||||
Other income / (expense), net | — | 0.01 | (0.01 | ) | 0.01 | 0.21 | |||||||||||||
Amortization expense | 0.01 | 0.01 | 0.04 | 0.09 | 0.69 | ||||||||||||||
Stock-based compensation expense | 0.02 | 0.01 | 0.09 | 0.17 | 1.43 | ||||||||||||||
Acquisition-related expense | 0.12 | — | 0.24 | — | — | ||||||||||||||
Litigation expense | 0.05 | 0.06 | 0.29 | 0.26 | 0.03 | ||||||||||||||
Income tax1 | (0.06 | ) | (0.02 | ) | (0.19 | ) | (0.18 | ) | (0.79 | ) | |||||||||
Less: Income allocated to participating securities | — | — | — | (0.56 | ) | — | |||||||||||||
Non-GAAP adjusted net income per share - basic | $ | 0.20 | $ | 0.14 | $ | 0.68 | $ | 0.28 | $ | 1.82 | |||||||||
Non-GAAP adjusted net income per share - diluted | $ | 0.19 | $ | 0.14 | $ | 0.65 | $ | 0.27 | $ | 1.07 | |||||||||
Weighted average common shares outstanding: | |||||||||||||||||||
Basic, as reported | 46,018,630 | 45,468,451 | 45,716,757 | 24,108,362 | 2,276,694 | ||||||||||||||
Diluted, as reported | 48,025,847 | 47,353,327 | 47,875,522 | 24,108,362 | 3,890,121 | ||||||||||||||
Dilutive shares | — | — | — | 1,770,412 | — | ||||||||||||||
Non-GAAP weighted average common shares outstanding - diluted | 48,025,847 | 47,353,327 | 47,875,522 | 25,878,774 | 3,890,121 |