Delaware | 001-35940 | 56-2257867 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Exhibit Number | Exhibit Description |
99.1 |
CHANNELADVISOR CORPORATION | |||
By: | /s/ Mark E. Cook | ||
Date: | May 10, 2018 | Mark E. Cook | |
Chief Financial Officer |
• | Total revenue was $31.4 million for the first quarter of 2018, an increase of 11 percent compared with total revenue of $28.3 million for the first quarter of 2017. |
• | GAAP net loss was $(3.2) million in the first quarter of 2018 compared with GAAP net loss of $(8.1) million in the first quarter of 2017. GAAP net loss per share was $(0.12) in the first quarter of 2018, based on 26.7 million weighted average shares outstanding, compared with GAAP net loss per share of $(0.31) in the year-ago period, based on 26.1 million weighted average shares then outstanding. |
• | Non-GAAP net loss, which excludes non-cash stock-based compensation in 2018 and 2017 and a one-time charge in 2017 in connection with entering into voluntary disclosure agreements ("VDAs") related to sales tax obligations, was $(0.4) million for the first quarter of 2018 compared with a non-GAAP net loss of $(2.6) million for the first quarter of 2017. |
• | Adjusted EBITDA, a non-GAAP measure, was $1.0 million for the first quarter of 2018 compared with $(0.8) million for the first quarter of 2017. Adjusted EBITDA excludes depreciation, amortization, income tax expense, interest income (expense), stock-based compensation expense and the one-time charge for VDAs related to sales taxes described above. |
• | Cash and cash equivalents at quarter-end totaled $54.7 million, compared with $53.4 million at the end of the fourth quarter of 2017. |
• | Average revenue per customer, calculated on a trailing twelve-month basis, increased 10 percent to $43,920 for the twelve months ended March 31, 2018, compared with $40,051 for the twelve months ended March 31, 2017. |
• | Fixed subscription fees were 76 percent of total revenue and variable subscription fees were 24 percent of total revenue for the first quarter of 2018. This compares to 78 percent and 22 percent, respectively, for the first quarter of 2017. |
• | Added 15 net new customers during the first quarter of 2018, including new top-tier customer Henweit (HK) Information Technology Co., Ltd., bringing the total customer count at the end of the period to 2,855. |
• | Significantly expanded relationships with Plow & Hearth, Joules, and N Brown Group. |
• | Hosted Catalyst Americas 2018 April 17-19th in San Diego with keynotes by executives from Uber, Retail Prophet, Recode, L2, UnMarketing, and ChannelAdvisor, as well as speakers from Amazon, eBay, FedEx, Dyson, Pitney Bowes, and Shopify, among others. |
• | Announced new platform capabilities to help customers have more control over key marketing, selling and fulfilling practices in their businesses. The latest ChannelAdvisor solutions help position retailers and branded manufacturers to unify and control information on a multichannel e-commerce solution, allowing them greater levels of automation. |
• | Hosted Catalyst Europe 2018 on May 9th in London with keynotes by executives from eBay UK, Amazon EU, Google, and ChannelAdvisor. |
• | Total revenue between $31.2 million and $31.6 million. |
• | Adjusted EBITDA between $(1.3) million and $(0.9) million. |
• | Stock-based compensation expense between $2.5 million and $2.9 million. |
• | Weighted average shares outstanding of 27.2 million. |
• | Total revenue between $129.5 million and $131.5 million. |
• | Adjusted EBITDA between $7.2 million and $9.2 million. |
• | Stock-based compensation expense between $11.2 million and $12.2 million. |
• | Weighted average shares outstanding of 27.1 million. |
What: | ChannelAdvisor First Quarter 2018 Financial Results Conference Call |
When: | Thursday, May 10, 2018 |
Time: | 8:00 a.m. ET |
Live Call: | (855) 638-4821, Passcode 1498797, Domestic |
(704) 288-0612, Passcode 1498797, International | |
Webcast: | http://ir.channeladvisor.com (live and replay) |
March 31, 2018 | December 31, 2017 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 54,749 | $ | 53,422 | |||
Accounts receivable, net of allowance of $566 and $609 as of March 31, 2018 and December 31, 2017, respectively | 20,885 | 27,452 | |||||
Prepaid expenses and other current assets | 17,217 | 16,462 | |||||
Total current assets | 92,851 | 97,336 | |||||
Property and equipment, net | 10,019 | 10,877 | |||||
Goodwill | 23,486 | 23,486 | |||||
Intangible assets, net | 2,350 | 2,503 | |||||
Deferred contract costs, net of current portion | 8,163 | — | |||||
Long-term deferred tax assets, net | 5,144 | 5,550 | |||||
Other assets | 1,375 | 759 | |||||
Total assets | $ | 143,388 | $ | 140,511 | |||
Liabilities and stockholders' equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 3,980 | $ | 7,243 | |||
Accrued expenses | 13,800 | 12,611 | |||||
Deferred revenue | 26,991 | 27,143 | |||||
Other current liabilities | 4,820 | 4,477 | |||||
Total current liabilities | 49,591 | 51,474 | |||||
Long-term capital leases, net of current portion | 302 | 641 | |||||
Lease incentive obligation | 3,109 | 3,328 | |||||
Other long-term liabilities | 3,093 | 3,157 | |||||
Total liabilities | 56,095 | 58,600 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding as of March 31, 2018 and December 31, 2017 | — | — | |||||
Common stock, $0.001 par value, 100,000,000 shares authorized, 27,083,887 and 26,601,626 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively | 27 | 27 | |||||
Additional paid-in capital | 263,734 | 262,805 | |||||
Accumulated other comprehensive loss | (680 | ) | (789 | ) | |||
Accumulated deficit | (175,788 | ) | (180,132 | ) | |||
Total stockholders' equity | 87,293 | 81,911 | |||||
Total liabilities and stockholders' equity | $ | 143,388 | $ | 140,511 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Revenue | $ | 31,445 | $ | 28,329 | |||
Cost of revenue (1) (2) (3) | 7,353 | 7,696 | |||||
Gross profit | 24,092 | 20,633 | |||||
Operating expenses (1) (2): | |||||||
Sales and marketing (3) | 14,890 | 15,185 | |||||
Research and development | 5,902 | 4,971 | |||||
General and administrative | 6,451 | 8,530 | |||||
Total operating expenses | 27,243 | 28,686 | |||||
Loss from operations | (3,151 | ) | (8,053 | ) | |||
Other income (expense): | |||||||
Interest income (expense), net | 125 | 28 | |||||
Other income (expense), net | (19 | ) | 57 | ||||
Total other income (expense) | 106 | 85 | |||||
Loss before income taxes | (3,045 | ) | (7,968 | ) | |||
Income tax expense | 112 | 88 | |||||
Net loss | $ | (3,157 | ) | $ | (8,056 | ) | |
Net loss per share: | |||||||
Basic and diluted | $ | (0.12 | ) | $ | (0.31 | ) | |
Weighted average common shares outstanding: | |||||||
Basic and diluted | 26,739,331 | 26,056,881 | |||||
(1) Includes stock-based compensation as follows: | |||||||
Cost of revenue (3) | $ | 217 | $ | 327 | |||
Sales and marketing (3) | 752 | 746 | |||||
Research and development | 649 | 568 | |||||
General and administrative | 1,115 | 1,283 | |||||
$ | 2,733 | $ | 2,924 | ||||
(2) Includes depreciation and amortization as follows: | |||||||
Cost of revenue (3) | $ | 877 | $ | 1,084 | |||
Sales and marketing (3) | 220 | 248 | |||||
Research and development | 98 | 111 | |||||
General and administrative | 285 | 290 | |||||
$ | 1,480 | $ | 1,733 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (3,157 | ) | $ | (8,056 | ) | |
Adjustments to reconcile net loss to cash and cash equivalents provided by operating activities: | |||||||
Depreciation and amortization | 1,480 | 1,733 | |||||
Bad debt expense | 189 | (5 | ) | ||||
Stock-based compensation expense | 2,733 | 2,924 | |||||
Deferred income taxes | 105 | 66 | |||||
Other items, net | (219 | ) | (221 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | 6,587 | 1,661 | |||||
Prepaid expenses and other assets | 1,195 | 2,348 | |||||
Deferred contract costs | (1,942 | ) | — | ||||
Accounts payable and accrued expenses | (3,660 | ) | (1,200 | ) | |||
Deferred revenue | (1,339 | ) | 1,101 | ||||
Cash and cash equivalents provided by operating activities | 1,972 | 351 | |||||
Cash flows from investing activities | |||||||
Purchases of property and equipment | (338 | ) | (360 | ) | |||
Payment of internal-use software development costs | (124 | ) | (57 | ) | |||
Cash and cash equivalents used in investing activities | (462 | ) | (417 | ) | |||
Cash flows from financing activities | |||||||
Repayment of capital leases | (330 | ) | (587 | ) | |||
Proceeds from exercise of stock options | 159 | 186 | |||||
Payment of statutory tax withholding related to net-share settlement of restricted stock units | (14 | ) | (1,677 | ) | |||
Cash and cash equivalents used in financing activities | (185 | ) | (2,078 | ) | |||
Effect of currency exchange rate changes on cash and cash equivalents | 2 | 110 | |||||
Net increase (decrease) in cash and cash equivalents | 1,327 | (2,034 | ) | ||||
Cash and cash equivalents, beginning of period | 53,422 | 65,420 | |||||
Cash and cash equivalents, end of period | $ | 54,749 | $ | 63,386 |
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 March 31, | |||||||
2018 | 2017 | ||||||
Revenue | $ | 31,445 | $ | 28,329 | |||
Gross profit (GAAP) | $ | 24,092 | $ | 20,633 | |||
Plus: Stock-based compensation expense | 217 | 327 | |||||
Gross profit (Non-GAAP) | $ | 24,309 | $ | 20,960 | |||
Gross margin (GAAP) | 76.6 | % | 72.8 | % | |||
Gross margin (Non-GAAP) | 77.3 | % | 74.0 | % |
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses | |||||||
(unaudited; in thousands) | |||||||
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Operating expenses (GAAP) | $ | 27,243 | $ | 28,686 | |||
Less: Stock-based compensation expense | 2,516 | 2,597 | |||||
Less: One-time charge for VDAs related to sales taxes | — | 2,539 | |||||
Operating expenses (Non-GAAP) | $ | 24,727 | $ | 23,550 |
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 March 31, | |||||||
2018 | 2017 | ||||||
Revenue | $ | 31,445 | $ | 28,329 | |||
Loss from operations (GAAP) | $ | (3,151 | ) | $ | (8,053 | ) | |
Plus: Stock-based compensation expense | 2,733 | 2,924 | |||||
Plus: One-time charge for VDAs related to sales taxes | — | 2,539 | |||||
Loss from operations (Non-GAAP) | $ | (418 | ) | $ | (2,590 | ) | |
Operating margin (GAAP) | (10.0 | )% | (28.4 | )% | |||
Operating margin (Non-GAAP) | (1.3 | )% | (9.1 | )% |
Reconciliation of GAAP Net Loss to Non-GAAP Net Loss | |||||||
(unaudited; in thousands) | |||||||
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Net loss (GAAP) | $ | (3,157 | ) | $ | (8,056 | ) | |
Plus: Stock-based compensation expense | 2,733 | 2,924 | |||||
Plus: One-time charge for VDAs related to sales taxes | — | 2,539 | |||||
Net loss (Non-GAAP) | $ | (424 | ) | $ | (2,593 | ) |
Reconciliation of Net Loss to Adjusted EBITDA | |||||||
(unaudited; in thousands) | |||||||
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Net loss | $ | (3,157 | ) | $ | (8,056 | ) | |
Adjustments: | |||||||
Interest (income) expense, net | (125 | ) | (28 | ) | |||
Income tax expense | 112 | 88 | |||||
Depreciation and amortization expense | 1,480 | 1,733 | |||||
Total adjustments | 1,467 | 1,793 | |||||
EBITDA | (1,690 | ) | (6,263 | ) | |||
Stock-based compensation expense | 2,733 | 2,924 | |||||
One-time charge for VDAs related to sales taxes | — | 2,539 | |||||
Adjusted EBITDA | $ | 1,043 | $ | (800 | ) |
Free Cash Flow Reconciliation | |||||||
(unaudited; in thousands) | |||||||
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Cash provided by operating activities | $ | 1,972 | $ | 351 | |||
Less: Purchases of property and equipment | (338 | ) | (360 | ) | |||
Free cash flow | $ | 1,634 | $ | (9 | ) |
Adjusted EBITDA Guidance Reconciliation | |||||||||||||||
(unaudited; in millions) | |||||||||||||||
Second Quarter 2018 | Full Year 2018 | ||||||||||||||
Low | High | Low | High | ||||||||||||
Net loss (estimate) | $ | (6.3 | ) | $ | (5.2 | ) | $ | (12.3 | ) | $ | (8.8 | ) | |||
Adjustments (estimates): | |||||||||||||||
Interest (income) expense, net | 0.0 | (0.1 | ) | (0.2 | ) | (0.4 | ) | ||||||||
Income tax (benefit) expense | 0.2 | 0.1 | 0.6 | 0.5 | |||||||||||
Depreciation and amortization expense | 1.9 | 1.8 | 6.9 | 6.7 | |||||||||||
Total adjustments | 2.1 | 1.8 | 7.3 | 6.8 | |||||||||||
EBITDA | (4.2 | ) | (3.4 | ) | (5.0 | ) | (2.0 | ) | |||||||
Stock-based compensation expense (estimate) | 2.9 | 2.5 | 12.2 | 11.2 | |||||||||||
Adjusted EBITDA guidance | $ | (1.3 | ) | $ | (0.9 | ) | $ | 7.2 | $ | 9.2 |