EX-99.1 2 bnft-ex991_6.htm EX-99.1 bnft-ex991_6.htm

 

Exhibit 99.1

Benefitfocus, Inc.

843-981-8898

pr@benefitfocus.com

 

Investor Relations:

Doug Kuckelman

843-790-7460

ir@benefitfocus.com   

 

 

 

Benefitfocus Announces Fourth Quarter and Full Year 2021 Financial Results 

 

Exceeded high end of the Revenue guidance range

Delivered Record Adjusted EBITDA for the full year 2021

Completed Strongest Ever Open Enrollment Season with Record Customer Satisfaction Rating

Announces Investor Day on May 10, 2022

 

 

Charleston, S.C. – March 1, 2022 – Benefitfocus, Inc. (NASDAQ: BNFT), an industry-leading cloud-based benefits administration technology company that simplifies benefits administration for employers, health plans and brokers, today announces its fourth quarter and full year 2021 financial results:  

 

 

Financial Highlights for the Fourth Quarter and Full Year 2021:

 

•

Fourth quarter 2021 revenue of $75.1 million was above the high end of the guidance range of $66 to $72 million.  

 

•

GAAP net income available to common stockholders was $1.2 million, compared to $1.3 million in the fourth quarter of 2020.  Adjusted EBITDA of $18.0 million during the fourth quarter was above the mid point of our guidance range of $13 to $19 million.  Adjusted EBITDA for the full year was $49.0 million, a record for Benefitfocus, compared to $44.0 million for the full year 2020.

 

•

GAAP diluted earnings per share was $0.04 in the fourth quarter of 2021 and non-GAAP diluted earnings per share was $0.24, above the high end of the guidance range of $0.15 per share.

 

•

Cash flow from operations of $6.2 and free cash flow of $2.1 million during the fourth quarter of 2021. Cash flow from operations and free cash flow for the full year 2021 was $33.5 and $23.8 million, respectively.

 

Operational Highlights for the Fourth Quarter:

 

•

Delivered the strongest open enrollment season in the company’s history, as evidenced by customer satisfaction score increasing to 95% this year, demonstrating the company’s commitment to service excellence.

 

•

Closed the acquisition of Tango Health, expanding Benefitfocus’s Affordable Care Act (ACA) compliance and reporting capabilities for employers,  which provides a path to revenue growth opportunities in the long term with both new and existing customers with a broader, best-in-class product offering.

 

•

Added COVID-19 Vaccination Tracking Features to Help Employers Comply with Government Mandates and Refine Return-to-Work Policies

 

 

“ We successfully completed the strongest open enrollment season in company history, providing another example of our ability to execute against our commitments,” said Matt Levin, president and chief executive officer. “I am confident the work underway to strengthen our core, grow with intent and increase our operational efficiency is driving results. We are encouraged by the multiple green shoots we are seeing across our delivery and go-to-market activities and are confident that the transformation we have undertaken will put us on the path to sustainable growth.”

 

 

“We had another strong quarter generating financial results at or better than our guidance ranges for this quarter,” said Alpana Wegner, chief financial officer. “We have been able to expand our annual EBITDA margin year over year across our business, as we continue to work on improving our topline. Importantly, we generated approximately $24 million of free cash flow for the full year 2021, representing an increase of 20% year-over-year and ending the year with approximately $68 million in cash and marketable securities.”

 

 

Fourth Quarter 2021 Financial Highlights

Revenue

 

•

Total revenue was $75.1 million, down approximately 1% compared to the fourth quarter of 2020.

 

•

Software services was $63.8 million, up 2% compared to the fourth quarter of 2020. Software services is comprised of subscription and platform revenue.

 

o

Subscription revenue was $44.0 million, down 2% compared to the fourth quarter of 2020.

 

o

Platform revenue was $19.8 million, up 14% compared to the fourth quarter of 2020.

 

•

Professional services revenue was $11.3 million, down 19% compared to the fourth quarter of 2020.

Net Income

 

•

GAAP net income available to common stockholders was $1.2 million, compared to $1.3 million in the fourth quarter of 2020. GAAP net income per share was $0.04, based on 33.4 million basic and 34.0 million diluted weighted average common shares outstanding, compared to $0.04 for the fourth quarter of 2020, based on 32.3 million basic and 33.5 million diluted weighted average common shares outstanding.

Non-GAAP Net Income, Adjusted EBITDA and Free Cash Flow

 

•

Non-GAAP net income available to common stockholders was $8.3 million compared to $6.1 million in the fourth quarter of 2020. Non-GAAP net income per share was $0.25 based on 33.4 million basic and $0.24 based on 34.6 million diluted weighted average common shares outstanding, compared to $0.19 in the fourth quarter of 2020, based on 32.3 million basic and $0.18 based on 34.6 million diluted weighted average common shares outstanding.

 

•

Adjusted EBITDA was $18.0 million, compared to $20.2 million in the fourth quarter of 2020.

 

•

Free cash flow was $2.1 million, compared to $13.4 million in the fourth quarter of 2020.

See important disclosures about non-GAAP measures, and a reconciliation of them to GAAP, below.

 

Full Year 2021 Financial Highlights

Revenue

Total revenue was $263.1 million, down 2% compared to the full year 2020.

Software services was $218.3 million, 2% higher compared to the full year 2020. Software services is comprised of subscription and platform revenue.

Subscription revenue was $178.8 million, a decrease of 1% compared to the full year 2020.

Platform revenue was $39.6 million, an increase of 13% compared to the full year 2020.

Professional services revenue was $44.8 million, down 16% compared to the full year 2020.

 

Net Loss

GAAP net loss was ($32.2) million, compared to GAAP net loss of ($24.3) million in the full year 2020. GAAP net loss per share was ($1.17), based on ($38.6) million net loss available to common stockholders and 33.1 million basic and diluted weighted average common shares outstanding, compared to ($0.87) for the full year 2020, based on ($28.0) million net loss available to common stockholders and 32.3 million basic and diluted weighted average common shares outstanding.

Non-GAAP Income (Net Loss), Adjusted EBITDA and Free Cash Flow

Non-GAAP net income was $4.2 million, compared to non-GAAP net loss of ($6.8) million in the full year 2020. Non-GAAP net loss per share was ($0.07), based on ($2.2) million non-GAAP net loss available to common stockholders and 33.1 million basic and diluted weighted average common shares outstanding, compared to ($0.32) for the full year 2020, based on ($10.5) million net loss available to common stockholders and 32.3 million basic and diluted weighted average common shares outstanding.

Adjusted EBITDA was $49.0 million, compared to $44.0 million for the full year 2020.

Free cash flow was $23.8 million, compared to $19.9 million for the full year 2020.

See important disclosures about non-GAAP measures, and a reconciliation of them to GAAP, below.

Balance Sheet

Cash and cash equivalents and marketable securities at December 31, 2021 totaled $68.1 million, compared to $94.5 million at the end of the third quarter of 2021, primarily reflecting the Tango Health acquisition, which closed within the quarter.  As of December 31, 2021, our debt to Adjusted EBITDA ratio improved to 4.2x from 7.0x as of December 31, 2020, as a result of the company’s de-levering efforts.

The full $50.0 million line of credit remains available to the company.

Business Outlook

“As we progress through the current year, we anticipate a return to revenue growth near the end of 2022,” said  Alpana Wegner, chief financial officer. “We look forward to providing you with further details on our full mid and long-term financial projections during our Investor Day on May 10, 2022.”  

Benefitfocus is providing guidance for the first quarter and full year 2022 as indicated below.

First Quarter 2022

 

•

Total revenue is expected to be in the range of $59 million to $61 million.

 

•

Adjusted EBITDA is expected to be in the range of $7 million to $9 million.

 

•

Non-GAAP net lossavailable to common stockholders is expected to be between ($5.0) million and ($3.0) million, or between ($0.15) and ($0.09) per share based on 33.5 million basic and diluted weighted average shares outstanding.

Full Year 2022

 

•

Total revenue is expected to be in the range of $252 million to $258 million.

 

•

Adjusted EBITDA is expected to be in the range of $44 million to $50 million.

 

•

Free cash flow is expected to be in the range of $18 million to $24 million.

Adjusted EBITDA and free cash flow guidance excludes the impact of restructuring and impairment charges.

Management has not reconciled forward-looking non-GAAP net loss, adjusted EBITDA or free cash flow to their most directly comparable GAAP measure of GAAP net loss or GAAP operating cash flows. This is because we cannot predict with reasonable certainty the ultimate outcome of the various necessary GAAP components of such reconciliations, including,

 

for example, those related to compensation, acquisition transactions and integration, or others that may arise during the year, without unreasonable effort. These components and other factors could materially impact the amount of future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts. See below for additional important disclosures regarding our non-GAAP financial measures.

Conference Call Details:

In conjunction with this announcement, Benefitfocus will host a conference call to discuss the company’s financial results and business outlook on Tuesday, March 1, 2022, at 5:00 p.m. ET. To access this call, dial (877) 407-9208 (domestic) or +1 (201) 493-6784 (international). A live webcast of the conference call will be available on the Investor Relations page of the company’s website at http://investor.benefitfocus.com/. After the conference call, a replay will be available until March 8, 2022 at 11:59 p.m. ET and can be accessed by dialing (844) 512-2921 (domestic) or +1 (412) 317-6671 (international) with passcode 13726841.

About Benefitfocus

Benefitfocus (NASDAQ: BNFT) is a cloud-based benefits administration technology company committed to helping our customers, and the people they serve, get the most out of their health care and benefit programs.  Through exceptional service and innovative SaaS solutions, we aim to be the safest set of hands for our customers helping to simplify the complexity of benefits administration while delivering an experience that engages people and unlocks the potential for better health and improved outcomes.  Our mission is simple: to improve lives with benefits. 

 

Non-GAAP Financial Measures

The company uses certain non-GAAP financial measures in this release, including non-GAAP gross profit, operating income/loss, net loss/income, net loss/income per common share, adjusted EBITDA and free cash flow. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance or financial position that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. 

Non-GAAP gross profit, operating income/loss, net loss/income and net loss/income per common share exclude stock-based compensation expenses, amortization of acquisition-related intangible assets, transaction and acquisition-related costs expensed, expense related to the impairment of goodwill, intangible assets and long-lived assets, gain or loss on extinguishment of debt, and costs not core to our business. We define adjusted EBITDA as net loss before net interest, taxes, and depreciation and amortization expense, adjusted to eliminate stock-based compensation expense, expense related to the impairment of goodwill, intangible assets and long-lived assets, transaction and acquisition-related costs expensed, restructuring costs, gain or loss on extinguishment of debt, costs not core to our business and, now, loss on settlement of lawsuits.  The revision to our definition of adjusted EBITDA had no impact on our reported adjusted EBITDA in prior periods. We define free cash flow as cash provided by or used in operating activities less capital expenditures, adjusted to eliminate cash paid for restructuring costs. Please note that other companies might define their non-GAAP financial measures differently than we do.

Management presents these non-GAAP financial measures in this release because it considers them to be important supplemental measures of performance. Management uses these non-GAAP financial measures for planning purposes, including analysis of the company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management believes that these non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company's financial and operational performance. Management also intends to provide these non-GAAP financial measures as part of the company’s future earnings discussions and, therefore, their inclusion should provide consistency in the company’s financial reporting.

Non-GAAP financial measures have limitations as an analytical tool. Investors are encouraged to review the reconciliation of the non-GAAP measures to their most directly comparable GAAP measures provided in this release, including in the accompanying tables.

 

Safe Harbor Statement

Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements. Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include: our need to achieve consistent GAAP profitability; fluctuations in our financial results; our ability to maintain our culture and recruit, integrate and retain qualified personnel, including on our board of directors; our ability to compete effectively and implement our growth strategy; market developments and opportunities; the need to innovate and provide useful products and services; risks related to changing healthcare and other applicable regulations; the immature and volatile nature of the market for our products and services; privacy; security and other risks associated with our business; management of growth; volatility and uncertainty in the global economy and financial markets in light of the evolving COVID-19 pandemic and tensions in Ukraine; and the other risk factors set forth from time to time in our SEC filings, copies of which are available free of charge within the Investor Relations section of the Benefitfocus website at http://investor.benefitfocus.com/sec-filings or upon request from our Investor Relations Department. Benefitfocus assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

 

Source: Benefitfocus, Inc.

 


 

 

Benefitfocus, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31,

 

 

 

 

2021

 

 

2020

 

 

Assets

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

31,001

 

 

$

90,706

 

 

Marketable securities

 

 

37,049

 

 

 

95,085

 

 

Accounts receivable, net

 

 

16,491

 

 

 

22,240

 

 

Contract, prepaid and other current assets

 

 

27,615

 

 

 

21,354

 

 

Total current assets

 

 

112,156

 

 

 

229,385

 

 

Property and equipment, net

 

 

27,202

 

 

 

29,701

 

 

Financing lease right-of-use assets

 

 

56,474

 

 

 

68,670

 

 

Operating lease right-of-use assets

 

 

774

 

 

 

1,107

 

 

Intangible assets, net

 

 

21,134

 

 

 

10,393

 

 

Goodwill

 

 

34,237

 

 

 

12,857

 

 

Deferred contract costs and other non-current assets

 

 

8,864

 

 

 

10,259

 

 

Total assets

 

$

260,841

 

 

$

362,372

 

 

Liabilities, redeemable preferred stock and stockholders' deficit

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

10,565

 

 

$

2,160

 

 

Accrued expenses

 

 

9,451

 

 

 

6,262

 

 

Accrued compensation and benefits

 

 

16,411

 

 

 

19,129

 

 

Deferred revenue, current portion

 

 

27,756

 

 

 

27,782

 

 

Lease liabilities and financing obligations, current portion

 

 

7,378

 

 

 

5,959

 

 

Contingent consideration

 

 

675

 

 

 

–

 

 

Total current liabilities

 

 

72,236

 

 

 

61,292

 

 

Deferred revenue, net of current portion

 

 

2,377

 

 

 

4,422

 

 

Convertible senior notes

 

 

107,281

 

 

 

184,308

 

 

Lease liabilities and financing obligations, net of current portion

 

 

75,758

 

 

 

79,282

 

 

Other non-current liabilities

 

 

313

 

 

 

2,470

 

 

Total liabilities

 

 

257,965

 

 

 

331,774

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Redeemable preferred stock:

 

 

 

 

 

 

 

 

 

Series A preferred stock, par value $0.001, 5,000,000 shares

  authorized, 1,777,778 and 1,777,778 shares issued and outstanding

  at December 31, 2021 and 2020, respectively, liquidation preference

  $45 per share as of December 31, 2021 and 2020, respectively

 

 

79,193

 

 

 

79,193

 

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

 

Common stock, par value $0.001, 95,000,000 and 50,000,000 shares

   authorized, 33,460,545 and 32,327,439 shares issued and outstanding

   at December 31, 2021 and 2020, respectively

 

 

33

 

 

 

32

 

 

Additional paid-in capital

 

 

431,874

 

 

 

427,431

 

 

Accumulated deficit

 

 

(508,224

)

 

 

(476,058

)

 

Total stockholders' deficit

 

 

(76,317

)

 

 

(48,595

)

 

Total liabilities, redeemable preferred stock and stockholders' deficit

 

$

260,841

 

 

$

362,372

 

 

 

 


 

 

Benefitfocus, Inc.

 

Consolidated Statements of Operations and Comprehensive Loss

 

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Revenue

 

$

75,104

 

 

$

76,230

 

 

$

263,097

 

 

$

268,141

 

Cost of revenue (1)(2)

 

 

34,843

 

 

 

34,966

 

 

 

122,713

 

 

 

129,388

 

Gross profit

 

 

40,261

 

 

 

41,264

 

 

 

140,384

 

 

 

138,753

 

Operating expenses:(1)(2)(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

11,904

 

 

 

12,347

 

 

 

46,385

 

 

 

52,210

 

Research and development

 

 

11,699

 

 

 

11,923

 

 

 

44,696

 

 

 

46,175

 

General and administrative

 

 

11,294

 

 

 

8,400

 

 

 

50,886

 

 

 

37,720

 

Restructuring costs

 

 

–

 

 

 

–

 

 

 

4,127

 

 

 

5,616

 

Total operating expenses

 

 

34,897

 

 

 

32,670

 

 

 

146,094

 

 

 

141,721

 

Income (loss) from operations

 

 

5,364

 

 

 

8,594

 

 

 

(5,710

)

 

 

(2,968

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

33

 

 

 

69

 

 

 

196

 

 

 

632

 

Interest expense

 

 

(3,997

)

 

 

(5,547

)

 

 

(20,754

)

 

 

(23,071

)

(Loss) gain on repurchase of convertible senior notes

 

 

–

 

 

 

–

 

 

 

(7,520

)

 

 

1,138

 

Other expense

 

 

(1,480

)

 

 

(14

)

 

 

(1,338

)

 

 

(6

)

Total other expense, net

 

 

(5,444

)

 

 

(5,492

)

 

 

(29,416

)

 

 

(21,307

)

(Loss) income before income taxes

 

 

(80

)

 

 

3,102

 

 

 

(35,126

)

 

 

(24,275

)

Income tax (benefit) expense

 

 

(3,085

)

 

 

5

 

 

 

(2,960

)

 

 

22

 

Net income (loss)

 

 

3,005

 

 

 

3,097

 

 

 

(32,166

)

 

 

(24,297

)

Preferred dividends

 

 

(1,600

)

 

 

(1,600

)

 

 

(6,400

)

 

 

(3,662

)

Undistributed earnings allocated to preferred stockholders

 

 

(193

)

 

 

(212

)

 

 

–

 

 

 

–

 

Net income (loss) available to common stockholders

 

$

1,212

 

 

$

1,285

 

 

$

(38,566

)

 

$

(27,959

)

Comprehensive income (loss)

 

$

3,005

 

 

$

3,097

 

 

$

(32,166

)

 

$

(24,297

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.04

 

 

$

0.04

 

 

$

(1.17

)

 

$

(0.87

)

Diluted

 

$

0.04

 

 

$

0.04

 

 

$

(1.17

)

 

$

(0.87

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

33,432,666

 

 

 

32,312,246

 

 

 

33,092,896

 

 

 

32,318,201

 

Diluted

 

 

33,953,682

 

 

 

33,512,904

 

 

 

33,092,896

 

 

 

32,318,201

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Stock-based compensation included in above line items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

606

 

 

$

1,099

 

 

$

2,081

 

 

$

3,703

 

Sales and marketing

 

 

406

 

 

 

841

 

 

 

2,876

 

 

 

3,081

 

Research and development

 

 

434

 

 

 

838

 

 

 

1,644

 

 

 

2,555

 

General and administrative

 

 

1,965

 

 

 

900

 

 

 

7,304

 

 

 

5,198

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) Amortization of acquired intangible assets included in above line items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

471

 

 

$

330

 

 

$

1,476

 

 

$

1,291

 

Sales and marketing

 

 

105

 

 

 

75

 

 

 

336

 

 

 

331

 

Research and development

 

 

159

 

 

 

118

 

 

 

495

 

 

 

460

 

General and administrative

 

 

69

 

 

 

46

 

 

 

202

 

 

 

192

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3) Transaction and acquisition-related costs expensed included in above line items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

$

437

 

 

$

25

 

 

$

677

 

 

$

450

 

 

 

 

Benefitfocus, Inc.

 

Consolidated Statements of Cash Flows

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

2021

 

 

 

2020

 

 

 

2019

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(32,166

)

 

$

(24,297

)

 

$

(45,515

)

Adjustments to reconcile net loss to net cash and cash equivalents

   used in operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

25,581

 

 

 

25,014

 

 

 

22,351

 

Stock-based compensation expense

 

 

13,905

 

 

 

14,537

 

 

 

19,572

 

Deferred income tax benefit

 

 

(3,067

)

 

 

–

 

 

 

–

 

Accretion of interest on convertible senior notes

 

 

10,234

 

 

 

11,656

 

 

 

11,256

 

Interest accrual on finance lease liabilities

 

 

3,292

 

 

 

97

 

 

 

33

 

Rent expense less than payments

 

 

(63

)

 

 

(32

)

 

 

(16

)

Non-cash accretion income from investments

 

 

930

 

 

 

143

 

 

 

–

 

Impairment or loss on disposal of right-of-use assets and property and equipment

 

 

4,171

 

 

 

918

 

 

 

9

 

Loss (gain) on extinguishment of debt

 

 

7,520

 

 

 

(1,138

)

 

 

–

 

Provision for doubtful accounts

 

 

–

 

 

 

43

 

 

 

111

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

8,615

 

 

 

11,412

 

 

 

(11,875

)

Accrued interest on investments

 

 

59

 

 

 

(102

)

 

 

–

 

Contract, prepaid and other current assets

 

 

(5,106

)

 

 

169

 

 

 

(3,642

)

Deferred costs and other non-current assets

 

 

1,466

 

 

 

743

 

 

 

2,893

 

Accounts payable and accrued expenses

 

 

11,226

 

 

 

(11,468

)

 

 

426

 

Accrued compensation and benefits

 

 

(2,788

)

 

 

3,884

 

 

 

161

 

Deferred revenue

 

 

(7,920

)

 

 

(6,304

)

 

 

(14,047

)

Other non-current liabilities

 

 

(2,387

)

 

 

2,376

 

 

 

(92

)

Net cash and cash equivalents provided by (used in) operating activities

 

 

33,502

 

 

 

27,651

 

 

 

(18,375

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of investments held-to-maturity

 

 

(91,361

)

 

 

(104,125

)

 

 

–

 

Maturities of investments held-to-maturity

 

 

103,410

 

 

 

9,000

 

 

 

–

 

Sales of investments held-to-maturity

 

 

44,997

 

 

 

–

 

 

 

–

 

Business combination, net of cash acquired

 

 

(28,175

)

 

 

–

 

 

 

(20,914

)

Purchases of property and equipment

 

 

(11,776

)

 

 

(13,085

)

 

 

(13,248

)

Net cash and cash equivalents provided by (used in) investing activities

 

 

17,095

 

 

 

(108,210

)

 

 

(34,162

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

Draws on revolving line of credit

 

 

–

 

 

 

10,000

 

 

 

–

 

Payments on revolving line of credit

 

 

–

 

 

 

(10,000

)

 

 

–

 

Repurchase of convertible senior notes

 

 

(98,678

)

 

 

(14,619

)

 

 

–

 

Payments of debt issuance costs

 

 

–

 

 

 

(154

)

 

 

(357

)

Cancellation of convertible senior notes capped call hedge

 

 

98

 

 

 

26

 

 

 

–

 

Proceeds from issuance of preferred stock, net of issuance costs

 

 

–

 

 

 

79,192

 

 

 

–

 

Payment of preferred dividends

 

 

(6,400

)

 

 

(3,662

)

 

 

–

 

Repurchase of common stock

 

 

–

 

 

 

(9,667

)

 

 

–

 

Proceeds from exercises of stock options and ESPP

 

 

407

 

 

 

585

 

 

 

453

 

Payments on financing obligations

 

 

(604

)

 

 

(1,212

)

 

 

(1,627

)

Payments of principal on finance lease liabilities

 

 

(5,125

)

 

 

(10,200

)

 

 

(5,884

)

Net cash and cash equivalents (used in) provided by financing activities

 

 

(110,302

)

 

 

40,289

 

 

 

(7,415

)

Net decrease in cash and cash equivalents

 

 

(59,705

)

 

 

(40,270

)

 

 

(59,952

)

Cash and cash equivalents, beginning of year

 

 

90,706

 

 

 

130,976

 

 

 

190,928

 

Cash and cash equivalents, end of year

 

$

31,001

 

 

$

90,706

 

 

$

130,976

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment purchases in accounts

   payable and accrued expenses

 

$

63

 

 

$

142

 

 

$

154

 

Post contract support purchased with financing obligations

 

$

-

 

 

$

-

 

 

$

1,287

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes paid

 

$

62

 

 

$

22

 

 

$

28

 

Interest paid

 

$

10,580

 

 

$

11,408

 

 

$

12,374

 

 


 

 

Benefitfocus, Inc.

 

Reconciliation of GAAP to Non-GAAP Measures

 

(unaudited, dollars in thousands except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

 

Year Ended

December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Reconciliation from Gross Profit to Non-GAAP Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

40,261

 

 

$

41,264

 

 

$

140,384

 

 

$

138,753

 

Amortization of acquired intangible assets

 

 

471

 

 

 

330

 

 

 

1,476

 

 

 

1,291

 

Stock-based compensation expense

 

 

606

 

 

 

1,099

 

 

 

2,081

 

 

 

3,703

 

Impairment of long-lived assets

 

 

56

 

 

 

468

 

 

 

56

 

 

 

468

 

Total net adjustments

 

 

1,133

 

 

 

1,897

 

 

 

3,613

 

 

 

5,462

 

Non-GAAP gross profit

 

$

41,394

 

 

$

43,161

 

 

$

143,997

 

 

$

144,215

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Operating Income (Loss) to Non-GAAP Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

5,364

 

 

$

8,594

 

 

$

(5,710

)

 

$

(2,968

)

Amortization of acquired intangible assets

 

 

804

 

 

 

569

 

 

 

2,509

 

 

 

2,274

 

Stock-based compensation expense

 

 

3,411

 

 

 

3,678

 

 

 

13,905

 

 

 

14,537

 

Transaction and acquisition-related costs expensed

 

 

437

 

 

 

25

 

 

 

677

 

 

 

450

 

Impairment of long-lived assets

 

 

97

 

 

 

916

 

 

 

4,100

 

 

 

916

 

Costs not core to our business

 

 

1,757

 

 

 

457

 

 

 

5,897

 

 

 

457

 

Total net adjustments

 

 

6,506

 

 

 

5,645

 

 

 

27,088

 

 

 

18,634

 

Non-GAAP operating income

 

$

11,870

 

 

$

14,239

 

 

$

21,378

 

 

$

15,666

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Net Income (Loss) to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

3,005

 

 

$

3,097

 

 

$

(32,166

)

 

$

(24,297

)

Depreciation

 

 

3,273

 

 

 

3,789

 

 

 

13,955

 

 

 

15,285

 

Amortization of software development costs

 

 

2,528

 

 

 

2,177

 

 

 

9,117

 

 

 

7,455

 

Amortization of acquired intangible assets

 

 

804

 

 

 

569

 

 

 

2,509

 

 

 

2,274

 

Interest income

 

 

(33

)

 

 

(69

)

 

 

(196

)

 

 

(632

)

Interest expense

 

 

3,997

 

 

 

5,547

 

 

 

20,754

 

 

 

23,071

 

Income tax (benefit) expense

 

 

(3,085

)

 

 

5

 

 

 

(2,960

)

 

 

22

 

Stock-based compensation expense

 

 

3,411

 

 

 

3,678

 

 

 

13,905

 

 

 

14,537

 

Transaction and acquisition-related costs expensed

 

 

437

 

 

 

25

 

 

 

677

 

 

 

450

 

Restructuring costs

 

 

—

 

 

 

—

 

 

 

4,127

 

 

 

5,616

 

Impairment of long-lived assets

 

 

97

 

 

 

916

 

 

 

4,100

 

 

 

916

 

Loss (gain) on repurchase of convertible senior notes

 

 

—

 

 

 

—

 

 

 

7,520

 

 

 

(1,138

)

Loss on settlement of lawsuit

 

 

1,760

 

 

 

—

 

 

 

1,760

 

 

 

—

 

Costs not core to our business

 

 

1,757

 

 

 

457

 

 

 

5,897

 

 

 

457

 

Total net adjustments

 

 

14,946

 

 

 

17,094

 

 

 

81,165

 

 

 

68,313

 

Adjusted EBITDA

 

$

17,951

 

 

$

20,191

 

 

$

48,999

 

 

$

44,016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Net Income (Loss) to Non-GAAP Net Income (Loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

3,005

 

 

$

3,097

 

 

$

(32,166

)

 

$

(24,297

)

Amortization of acquired intangible assets

 

 

804

 

 

 

569

 

 

 

2,509

 

 

 

2,274

 

Stock-based compensation expense

 

 

3,411

 

 

 

3,678

 

 

 

13,905

 

 

 

14,537

 

Transaction and acquisition-related costs expensed

 

 

437

 

 

 

25

 

 

 

677

 

 

 

450

 

Impairment of long-lived assets

 

 

97

 

 

 

916

 

 

 

4,100

 

 

 

916

 

Loss (gain) on repurchase of convertible senior notes

 

 

—

 

 

 

—

 

 

 

7,520

 

 

 

(1,138

)

Loss on settlement of lawsuit

 

 

1,760

 

 

 

—

 

 

 

1,760

 

 

 

—

 

Costs not core to our business

 

 

1,757

 

 

 

457

 

 

 

5,897

 

 

 

457

 

Total net adjustments

 

 

8,266

 

 

 

5,645

 

 

 

36,368

 

 

 

17,496

 

Non-GAAP net income (loss)

 

$

11,271

 

 

$

8,742

 

 

$

4,202

 

 

$

(6,801

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Non-GAAP Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income (loss)

 

$

11,271

 

 

$

8,742

 

 

$

4,202

 

 

$

(6,801

)

Preferred dividends

 

 

(1,600

)

 

 

(1,600

)

 

 

(6,400

)

 

 

(3,662

)

Undistributed earnings allocated to preferred stockholders

 

 

(1,330

)

 

 

(1,012

)

 

 

—

 

 

 

—

 

 

Non-GAAP net income (loss) available to common stockholders

 

$

8,341

 

 

$

6,130

 

 

$

(2,198

)

 

$

(10,463

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

 

 

33,432,666

 

 

 

32,312,246

 

 

 

33,092,896

 

 

 

32,318,201

 

Weighted average shares outstanding - diluted

 

 

34,614,578

 

 

 

34,556,833

 

 

 

33,092,896

 

 

 

32,318,201

 

Shares used in computing non-GAAP

    net income (loss) per share - basic

 

 

33,432,666

 

 

 

32,312,246

 

 

 

33,092,896

 

 

 

32,318,201

 

Shares used in computing non-GAAP

    net income (loss) per share - diluted

 

 

34,614,578

 

 

 

34,556,833

 

 

 

33,092,896

 

 

 

32,318,201

 

Non-GAAP net income (loss) per common share - basic

 

$

0.25

 

 

$

0.19

 

 

$

(0.07

)

 

$

(0.32

)

Non-GAAP net income (loss) per common share - diluted

 

$

0.24

 

 

$

0.18

 

 

$

(0.07

)

 

$

(0.32

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Cash Flows from Operations to Free Cash Flow:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash and cash equivalents provided by operating activities

 

$

6,206

 

 

$

16,577

 

 

$

33,502

 

 

$

27,651

 

Purchases of property and equipment

 

 

(4,322

)

 

 

(3,346

)

 

 

(11,776

)

 

 

(13,085

)

Cash paid for restructuring costs

 

 

224

 

 

 

141

 

 

 

2,110

 

 

 

5,342

 

Total net adjustments

 

 

(4,098

)

 

 

(3,205

)

 

 

(9,666

)

 

 

(7,743

)

Free Cash Flow

 

$

2,108

 

 

$

13,372

 

 

$

23,836

 

 

$

19,908