EX-99.1 2 d131568dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

Imprivata Announces Fourth Quarter 2015 Financial Results, Revenue Growth of 18%

Highlights

 

    Revenue of $34.2 million

 

    Adjusted EBITDA loss of $1.3 million

 

    Cash Flow from Operations of $1.5 million

 

    Net loss per share: $0.15 GAAP; $0.09 non-GAAP

Lexington, Mass. — (BUSINESS WIRE) — February 16, 2016 — Imprivata® (NYSE: IMPR), the healthcare IT security company, today announced financial results for three and twelve months ended December 31, 2015. Revenues for the three months ended December 31, 2015 were $34.2 million, an increase of 18% from revenues of $29.0 million for the same period in 2014. Revenues for the twelve months ended December 31, 2015 were $119.1 million, an increase of 23% from revenues of $97.0 million for the same period in 2014.

“Our fourth quarter revenue growth was driven by strong demand from multiple products, as we are solving more security and identity problems in healthcare,” said Omar Hussain, President and CEO of Imprivata. “For the year, we added a record number of new healthcare customers, bringing our total to over 1,500 worldwide. Additionally, because of our unwavering focus on customer experience, we maintained our healthcare retention rate at over 97%.”

“We have become the vendor of choice in healthcare IT security, which was reflected in the cross-selling across our product platform in the fourth quarter. We are excited about 2016 as we continue to build momentum with our multi-product platform strategy, and we will continue to innovate and expand our market opportunity. For example, at HIMSS we will announce our expansion of Imprivata Confirm ID to a strong authentication platform, replacing usernames and passwords with two factor authentication for not only EPCS, but also for remote access, medical devices and other clinical workflows.

Financial Results

Net loss for the three months ended December 31, 2015 was $3.7 million, or $(0.15) per basic and diluted share attributable to common stockholders, as compared to a net loss of $1.7 million, or $(0.07) per basic and diluted share attributable to common stockholders for the same period in 2014. Net loss for the twelve months ended December 31, 2015 was $23.1 million, or $(0.94) per basic and diluted share attributable to common stockholders, as compared to a net loss of $16.7 million, or $(1.37) per basic and diluted share attributable to common stockholders for the same period in 2014.

Adjusted EBITDA(1) for the three months ended December 31, 2015 was a loss of $1.3 million, as compared to a loss of $34,000 for the same period in 2014. Non-GAAP net loss (2) for the three months ended December 31, 2015 was $2.2 million, or $(0.09) per basic and diluted share, as compared to non-

 


GAAP net loss of $1.0 million, or $(0.04) per basic and diluted share, for the same period in 2014. Adjusted EBITDA for the twelve months ended December 31, 2015 was a loss of $12.4 million, as compared to a loss of $11.5 million for the same period in 2014. Non-GAAP net loss (2) for the twelve months ended December 31, 2015 was $16.8 million, or $(0.69) per basic and diluted share, as compared to non-GAAP net loss of $15.0 million, or $(1.08) per basic and diluted share, for the same period in 2014. A reconciliation of GAAP to these non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

 

(1) Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization adjusted for foreign currency gains (losses), stock based-compensation, transaction costs associated with business acquisitions, shelf registration and offering costs and the impact of the fair value revaluation on our contingent liability.

 

(2) Non-GAAP net income (loss) and non-GAAP net income (loss) per share excludes amortization of purchased intangible assets, stock-based compensation, transaction costs associated with business acquisitions, shelf registration and offering costs and the impact of the fair value revaluation on our contingent liability.

First Quarter and Full-Year 2016 Financial Outlook

 

     First
Quarter
     Full-Year
2016
 

Revenues

   $ 28.5-30m       $ 136-140m   

Adjusted EBITDA loss

   $ (7.9)-(7.0)m       $ (11.6)-(10.3)m   

GAAP Loss Per Share

   $ (0.41)-(0.37)       $ (0.86)-(0.81)   

Non-GAAP Loss Per Share

   $ (0.36)-(0.32)       $ (0.63)-(0.58)   

Weighted Average Shares Outstanding

     25.1m         25.2m   

Conference Call and Webcast Information

Imprivata management will host a conference call at 5:30 pm Eastern Time on Tuesday, February 16, 2016 to discuss the Company’s quarter ended December 31, 2015 results, its business outlook and other matters. The conference call will be accessible by dialing 877-407-8037, or for international callers, 201-689-8037, and referencing “the Imprivata 4Q15 earnings call”. A live webcast of the conference call will also be available on the investor relations section of the Company’s website at http://investor.imprivata.com/. Imprivata intends to use the investor relations portion of its website as well as social media as a means of disclosing material non-public information and for complying with disclosure obligations under Regulation FD.

An audio replay of the conference call will be available approximately one hour after conclusion of the call and will be accessible through March 1, 2016. The replay can be accessed by dialing 877-660-6853, or 201-612-7415 for international callers, and providing conference ID 13629767.

About Imprivata

Imprivata® (NYSE: IMPR), the healthcare IT security company, provides healthcare organizations globally with a security and identity platform that delivers authentication management, fast access to patient information, secure communications, and positive patient identification. Imprivata enables care


providers to securely and efficiently access, communicate, and transact patient health information to address critical compliance and security challenges while improving productivity and the patient experience. For more information, please visit www.imprivata.com.

Investor Relations:

Jeff Bray, CFA, 781-761-1417

Director of Investor Relations

jbray@imprivata.com

Media Contact:

John Hallock, 781-761-1921

Corporate Communications

jhallock@imprivata.com

All Imprivata products are trademarks of Imprivata, Inc. in the USA and other countries. All other product or company names mentioned are the property of their respective owners.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the anticipated opportunity and trends for growth in our healthcare customer base, backlog and our overall business, our market opportunity, our expectations regarding sales of our products, our goal to maintain market leadership and our expected financial results for first quarter 2016 and beyond. All statements other than statements of historical fact contained in this press release are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “could,” “increases,” “improves,” “reduces,” “implements,” “results,” “addresses,” or the negative of these terms or other comparable terminology. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Imprivata’s control. Imprivata’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, our ability to successfully develop and introduce new solutions and products for existing solutions; our ability to attract new customers and retain and increase sales to existing customers; developments in the healthcare industry or regulatory environment; seasonal variations in the purchasing patterns of our customers; longer sales cycles associated with more complex deals in our healthcare business; slower growth in the non-core areas of our business; the lengthy and unpredictable sales cycles for new customers; our ability to successfully integrate HT Systems and other businesses and assets that we may acquire; our ability to market and sell any acquired products from HT Systems and future acquisitions; our ability to maintain successful relationships with our channel partners and technology alliance partners; our dependency on sole source suppliers and a contract manufacturer for hardware components of our Imprivata OneSign and Imprivata PatientSecure solutions; our ability to manage our growth effectively; our ability to respond to competitive pressures; potential liability related to privacy and security of protected health information; our ability to protect our intellectual property rights, and the other risks detailed in Imprivata’s risk factors discussed in filings with the U.S. Securities and Exchange Commission (“SEC”), including but not limited to Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 11, 2015, as well as other documents that may be filed by Imprivata from time to time with the SEC. The forward-looking statements included in this press release represent Imprivata’s views as of the date of this press release. Imprivata undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.


Non-GAAP Financial Measures

Imprivata has provided in this release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. This information includes Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net income (loss) per share. These non-GAAP financial measures are not in accordance with, or an alternative for, GAAP and may be different from similar non-GAAP financial measures used by other companies. Imprivata believes that the use of these non-GAAP financial measures provides supplementary information for investors to use in evaluating operating performance and in comparing its financial measures with other companies in Imprivata’s industry, many of which present similar non-GAAP financial measures. Adjusted EBITDA (EBITDA adjusted for foreign currency gains (losses), stock based-compensation, transaction costs associated with business acquisitions, transaction costs associated with shelf registration and offering costs and the impact of the fair value revaluation on our contingent liability), non-GAAP net income (loss) and non-GAAP net income (loss) per share exclude amortization expense associated with our purchased intangible assets, stock-based compensation, transaction costs associated with business acquisitions, transaction costs associated with shelf registration and offering costs and the impact of the re-measurement to fair value of our contingent liability. Non-GAAP financial measures that Imprivata uses may differ from measures that other companies may use. These non-GAAP financial measures disclosed by Imprivata are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP, and should be viewed in conjunction with, GAAP financial measures. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.


Imprivata, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

     As of December 31,  
     2015     2014  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 51,712      $ 78,524   

Accounts receivable, net of allowances

     36,629        25,335   

Prepaid expenses and other current assets

     4,431        3,516   
  

 

 

   

 

 

 

Total current assets

     92,772        107,375   

Property and equipment, net

     7,901        7,640   

Goodwill

     14,380        1,560   

Intangible assets, net

     5,681        1,499   

Other assets

     23        105   
  

 

 

   

 

 

 

Total assets

   $ 120,757      $ 118,179   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 6,997      $ 2,498   

Accrued expenses and other current liabilities

     11,567        10,565   

Current portion of capital lease obligations and long-term debt

     442        625   

Current portion of other long-term liabilities

     240        288   

Current portion of deferred revenue

     43,929        33,120   

Current portion of contingent purchase price liability

     818        152   
  

 

 

   

 

 

 

Total current liabilities

     63,993        47,248   

Deferred revenue, net of current portion

     5,430        4,021   

Deferred tax liability

     662        —     

Capital lease obligations, long-term debt and royalty obligations, net of current portion

     209        619   

Other long-term liabilities, net of current portion

     1,850        1,535   

Contingent purchase price liability, net of current portion

     —          480   
  

 

 

   

 

 

 

Total liabilities

     72,144        53,903   

Stockholders’ equity:

    

Undesignated preferred stock

     —          —     

Common stock

     25        24   

Additional paid-in capital

     179,357        171,903   

Accumulated other comprehensive loss

     (151     (100

Accumulated deficit

     (130,618     (107,551
  

 

 

   

 

 

 

Total stockholders’ equity

     48,613        64,276   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 120,757      $ 118,179   
  

 

 

   

 

 

 


Imprivata, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

     Three Months Ended     Twelve Months Ended  
     December 31,     December 31,  
     2015     2014     2015     2014  

Revenue

        

Product

   $ 19,919      $ 16,532      $ 64,937      $ 52,164   

Maintenance and services

     14,315        12,496        54,183        44,815   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     34,234        29,028        119,120        96,979   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenue

        

Product

     4,923        3,388        16,876        12,310   

Maintenance and services

     5,500        4,732        21,181        17,678   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenue

     10,423        8,120        38,057        29,988   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     23,811        20,908        81,063        66,991   

Operating expenses

        

Research and development

     8,392        6,529        31,600        25,781   

Sales and marketing

     14,424        12,239        52,400        45,003   

General and administrative

     4,669        3,566        18,725        12,052   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     27,485        22,334        102,725        82,836   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (3,674     (1,426     (21,662     (15,845

Other income (expense)

        

Foreign currency exchange loss

     (45     (169     (527     (576

Interest and other income (expense), net

     (10     (18     (40     (146
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (3,729     (1,613     (22,229     (16,567

Income taxes

     (1     50        838        169   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (3,728   $ (1,663   $ (23,067   $ (16,736

Accretion of redeemable convertible preferred stock

     —          —          —          (2,442
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to common shareholders

   $ (3,728   $ (1,663   $ (23,067   $ (19,178
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share attributable to common stockholders

        

Basic and diluted

   $ (0.15   $ (0.07   $ (0.94   $ (1.37
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding used in computing net loss per share attributable to common stockholders

        

Basic and diluted

     24,994        23,730        24,419        13,950   
  

 

 

   

 

 

   

 

 

   

 

 

 


Imprivata, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

     Twelve Months Ended  
     December 31,  
     2015     2014  

Cash flows from operating activities:

    

Net loss

   $ (23,067   $ (16,736

Adjustments to reconcile net loss to net cash used in operating activities:

    

Depreciation and amortization expense

     3,761        3,075   

Provision for doubtful accounts

     17        99   

Stock-based compensation

     4,155        1,612   

Loss on disposal of fixed assets

     19        75   

Change in value of contingent purchase price liability

     197        (376

Deferred income taxes

     662        —     

Changes in operating assets and liabilities:

    

Accounts receivable

     (6,015     (5,680

Prepaid expenses and other current assets

     (821     (600

Deferred revenue

     9,759        8,567   

Accounts payable

     4,461        (1,010

Accrued expenses and other current liabilities

     635        2,689   

Other liabilities

     267        185   
  

 

 

   

 

 

 

Net cash used in operating activities

     (5,970     (8,100
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of property and equipment

     (2,866     (3,187

Purchases of intangible assets

     (1,519     —     

Acquisition of business

     (18,955     —     
  

 

 

   

 

 

 

Net cash used in investing activities

     (23,340     (3,187
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from initial public offering, net of underwriting discounts and commissions

     —          80,213   

Deferred offering costs

     —          (3,405

Payment of contingent liability

     (11     —     

Repayments for capital lease obligations, long-term debt and other

     (620     (674

Proceeds from employee stock purchase plan

     1,219        —     

Proceeds from exercise of stock options

     1,999        476   
  

 

 

   

 

 

 

Net cash provided by financing activities

     2,587        76,610   
  

 

 

   

 

 

 

Effect of exchange rates on cash and cash equivalents

     (89     (83
  

 

 

   

 

 

 

Net (decrease) increase in cash and cash equivalents

     (26,812     65,240   

Cash and cash equivalents, beginning of year

     78,524        13,284   
  

 

 

   

 

 

 

Cash and cash equivalents, end of year

   $ 51,712      $ 78,524   
  

 

 

   

 

 

 


Imprivata, Inc.

Non-GAAP Financial Measures

(in thousands, except per share amounts)

(unaudited)

Reconciliation of GAAP Net Loss to Adjusted EBITDA

 

     December 31,     Year Ended December 31,  

(in thousands, except per share amounts)

   2015     2014     2015     2014  

GAAP net (loss) income

   $ (3,728   $ (1,663   $ (23,067   $ (16,736

Adjustments to reconcile to Adjusted EBITDA:

        

Income tax expense

     (1     50        838        169   

Depreciation and amortization

     1,050        834        3,761        3,075   

Other (expense) income, net

     54        187        567        722   

Stock-based compensation

     1,159        486        4,155        1,612   

Change in fair value of contingent liability

     126        72        197        (376

Acquisition costs

     —          —          709        —     

Shelf registration and offering costs

     —          —          490        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ (1,340   $ (34   $ (12,350   $ (11,534
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of GAAP Net Loss to Non-GAAP Net Loss and Non-GAAP Net Loss Per Share (a)

 

     December 31,     Year Ended December 31,  
     2015     2014     2015     2014  

GAAP net loss

   $ (3,728   $ (1,663   $ (23,067   $ (16,736

Adjustments to reconcile to Non-GAAP net income:

        

Amortization of purchased intangible assets

     235        116        746        501   

Stock-based compensation

     1,159        486        4,155        1,612   

Change in fair value of contingent liability

     126        72        197        (376

Acquisition costs

     —          —          709        —     

Shelf Registration and offering costs

     —          —          490        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss

   $ (2,208   $ (989   $ (16,770   $ (14,999
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss per share

        

Basic and diluted

   $ (0.09   $ (0.04   $ (0.69   $ (1.08
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding used in computing non-GAAP net loss per share

        

Basic and diluted

     24,994        23,730        24,419        13,950   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) The Company reconciles non-GAAP net loss per share beginning with GAAP net loss instead of GAAP net loss attributable to common stockholders in order to eliminate the effect of the accretion of preferred stock on the calculation.


Imprivata, Inc.

Supplemental Financial Information

(in thousands)

(unaudited)

Share-based compensation included in cost of revenues and operating expenses related to the awards of stock options and the employee stock purchase plan are as follows:

 

     Three Months ended      Twelve Months ended  
     December 31,      December 31,  

(in thousands)

   2015      2014      2015      2014  

Cost of maintenance and professional services

   $ 113       $ 44       $ 386       $ 138   

Research and development

     322         147         1,216         500   

Sales and marketing

     293         174         1,069         532   

General and administrative

     431         121         1,484         442   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 1,159       $ 486       $ 4,155       $ 1,612