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: | August 9, 2018 | Mark E. Cook | |
Chief Financial Officer |
• | Total revenue was $32.7 million for the second quarter of 2018, an increase of 9 percent compared with total revenue of $30.0 million for the second quarter of 2017. |
• | GAAP net loss was $(2.8) million for the second quarter of 2018 compared with GAAP net loss of
$(4.0) million for the second quarter of 2017. GAAP net loss per share was $(0.10) for the second quarter of 2018, based on 27.2 million weighted average shares outstanding, compared with GAAP net loss per share of $(0.15) for the year-ago period, based on 26.4 million weighted average shares then outstanding. |
• | Non-GAAP net loss, which excludes non-cash stock-based compensation, was $(0.4) million for the second quarter of 2018 compared with a non-GAAP net loss of $(0.6) million for the second quarter of 2017. |
• | Adjusted EBITDA, a non-GAAP measure, was $1.1 million for both the second quarters of 2018 and 2017. Adjusted EBITDA for both the second quarters of 2018 and 2017 excludes depreciation, amortization, income tax expense, interest income (expense) and stock-based compensation expense. |
• | Cash and cash equivalents as of June 30, 2018 totaled $50.9 million, compared with $53.4 million as of December 31, 2017. |
• | Average revenue per customer, calculated on a trailing twelve-month basis, increased 10 percent to $45,029 for the twelve months ended June 30, 2018, compared with $41,029 for the twelve months ended June 30, 2017. Total customer count was 2,829 at the end of the second quarter of 2018, compared with 2,906 customers at the end of the second quarter of 2017. |
• | Fixed subscription fees were 76 percent of total revenue and variable subscription fees were 24 percent of total revenue for the second quarter of 2018. This compares to 75 percent and 25 percent, respectively, for the second quarter of 2017. |
• | Added new customers during the second quarter of 2018, including Keurig, Lenovo and Mondelez International and significantly expanded relationship with Xerox. |
• | In August, ChannelAdvisor announced an expanded strategic alliance with Google to support its new program, Shopping Actions. With the addition of Shopping Actions support to ChannelAdvisor’s suite of Google retail solutions, brands and retailers can now leverage the ChannelAdvisor platform to list, manage, promote and sell their products across Google’s surfaces. |
• | Total revenue between $31.4 million and $31.8 million. |
• | Adjusted EBITDA between $0.5 million and $0.9 million. |
• | Stock-based compensation expense between $3.0 million and $3.4 million. |
• | Weighted average shares outstanding of 27.3 million. |
• | Total revenue between $130.5 million and $131.5 million. |
• | Adjusted EBITDA between $7.8 million and $8.8 million. |
• | Stock-based compensation expense between $11.1 million and $11.6 million. |
• | Weighted average shares outstanding of 27.2 million. |
What: | ChannelAdvisor Second Quarter 2018 Financial Results Conference Call |
When: | Thursday, August 9, 2018 |
Time: | 4:30 p.m. ET |
Live Call: | (855) 638-4821, Passcode 3092579, Domestic |
(704) 288-0612, Passcode 3092579, International | |
Webcast: | http://ir.channeladvisor.com (live and replay) |
June 30, 2018 | December 31, 2017 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 50,912 | $ | 53,422 | |||
Accounts receivable, net of allowance of $607 and $609 as of June 30, 2018 and December 31, 2017, respectively | 21,210 | 27,452 | |||||
Prepaid expenses and other current assets | 14,384 | 16,462 | |||||
Total current assets | 86,506 | 97,336 | |||||
Property and equipment, net | 12,871 | 10,877 | |||||
Goodwill | 23,486 | 23,486 | |||||
Intangible assets, net | 2,198 | 2,503 | |||||
Deferred contract costs, net of current portion | 9,235 | — | |||||
Long-term deferred tax assets, net | 4,792 | 5,550 | |||||
Other assets | 1,342 | 759 | |||||
Total assets | $ | 140,430 | $ | 140,511 | |||
Liabilities and stockholders' equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 4,892 | $ | 7,243 | |||
Accrued expenses | 12,022 | 12,611 | |||||
Deferred revenue | 26,023 | 27,143 | |||||
Other current liabilities | 4,410 | 4,477 | |||||
Total current liabilities | 47,347 | 51,474 | |||||
Long-term capital leases, net of current portion | 1,555 | 641 | |||||
Lease incentive obligation | 2,541 | 3,328 | |||||
Other long-term liabilities | 2,561 | 3,157 | |||||
Total liabilities | 54,004 | 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 June 30, 2018 and December 31, 2017 | — | — | |||||
Common stock, $0.001 par value, 100,000,000 shares authorized, 27,278,649 and 26,601,626 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 27 | 27 | |||||
Additional paid-in capital | 266,222 | 262,805 | |||||
Accumulated other comprehensive loss | (1,271 | ) | (789 | ) | |||
Accumulated deficit | (178,552 | ) | (180,132 | ) | |||
Total stockholders' equity | 86,426 | 81,911 | |||||
Total liabilities and stockholders' equity | $ | 140,430 | $ | 140,511 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | $ | 32,660 | $ | 30,004 | $ | 64,105 | $ | 58,333 | |||||||
Cost of revenue (1) (2) (3) | 6,975 | 7,144 | 14,328 | 14,840 | |||||||||||
Gross profit | 25,685 | 22,860 | 49,777 | 43,493 | |||||||||||
Operating expenses (1) (2): | |||||||||||||||
Sales and marketing (3) | 15,974 | 15,003 | 30,864 | 30,188 | |||||||||||
Research and development | 5,737 | 5,147 | 11,639 | 10,118 | |||||||||||
General and administrative | 6,708 | 6,678 | 13,159 | 15,208 | |||||||||||
Total operating expenses | 28,419 | 26,828 | 55,662 | 55,514 | |||||||||||
Loss from operations | (2,734 | ) | (3,968 | ) | (5,885 | ) | (12,021 | ) | |||||||
Other income (expense): | |||||||||||||||
Interest income (expense), net | 106 | 54 | 231 | 82 | |||||||||||
Other income (expense), net | (1 | ) | 13 | (20 | ) | 70 | |||||||||
Total other income (expense) | 105 | 67 | 211 | 152 | |||||||||||
Loss before income taxes | (2,629 | ) | (3,901 | ) | (5,674 | ) | (11,869 | ) | |||||||
Income tax expense | 135 | 84 | 247 | 172 | |||||||||||
Net loss | $ | (2,764 | ) | $ | (3,985 | ) | $ | (5,921 | ) | $ | (12,041 | ) | |||
Net loss per share: | |||||||||||||||
Basic and diluted | $ | (0.10 | ) | $ | (0.15 | ) | $ | (0.22 | ) | $ | (0.46 | ) | |||
Weighted average common shares outstanding: | |||||||||||||||
Basic and diluted | 27,180,435 | 26,380,031 | 26,961,102 | 26,219,348 | |||||||||||
(1) Includes stock-based compensation as follows: | |||||||||||||||
Cost of revenue (3) | $ | 92 | $ | 239 | $ | 309 | $ | 566 | |||||||
Sales and marketing (3) | 728 | 1,172 | 1,480 | 1,918 | |||||||||||
Research and development | 355 | 503 | 1,004 | 1,071 | |||||||||||
General and administrative | 1,141 | 1,454 | 2,256 | 2,737 | |||||||||||
$ | 2,316 | $ | 3,368 | $ | 5,049 | $ | 6,292 | ||||||||
(2) Includes depreciation and amortization as follows: | |||||||||||||||
Cost of revenue (3) | $ | 875 | $ | 1,066 | $ | 1,752 | $ | 2,150 | |||||||
Sales and marketing (3) | 214 | 256 | 434 | 504 | |||||||||||
Research and development | 90 | 111 | 188 | 222 | |||||||||||
General and administrative | 300 | 270 | 585 | 560 | |||||||||||
$ | 1,479 | $ | 1,703 | $ | 2,959 | $ | 3,436 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (5,921 | ) | $ | (12,041 | ) | |
Adjustments to reconcile net loss to cash and cash equivalents provided by (used in) operating activities: | |||||||
Depreciation and amortization | 2,959 | 3,436 | |||||
Bad debt expense | 532 | 113 | |||||
Stock-based compensation expense | 5,049 | 6,292 | |||||
Deferred income taxes | 190 | 155 | |||||
Other items, net | (390 | ) | (434 | ) | |||
Changes in assets and liabilities, net of effects from acquisition: | |||||||
Accounts receivable | 5,550 | (2,157 | ) | ||||
Prepaid expenses and other assets | 4,373 | 1,193 | |||||
Deferred contract costs | (3,586 | ) | — | ||||
Accounts payable and accrued expenses | (5,398 | ) | 276 | ||||
Deferred revenue | (2,326 | ) | 3,070 | ||||
Cash and cash equivalents provided by (used in) operating activities | 1,032 | (97 | ) | ||||
Cash flows from investing activities | |||||||
Purchases of property and equipment | (656 | ) | (543 | ) | |||
Payment of internal-use software development costs | (290 | ) | (159 | ) | |||
Acquisition, net of cash acquired | — | (2,177 | ) | ||||
Cash and cash equivalents used in investing activities | (946 | ) | (2,879 | ) | |||
Cash flows from financing activities | |||||||
Repayment of capital leases | (1,837 | ) | (2,439 | ) | |||
Proceeds from exercise of stock options | 1,004 | 339 | |||||
Payment of statutory tax withholding related to net-share settlement of restricted stock units | (1,569 | ) | (2,494 | ) | |||
Cash and cash equivalents used in financing activities | (2,402 | ) | (4,594 | ) | |||
Effect of currency exchange rate changes on cash and cash equivalents | (194 | ) | 29 | ||||
Net decrease in cash and cash equivalents | (2,510 | ) | (7,541 | ) | |||
Cash and cash equivalents, beginning of period | 53,422 | 65,420 | |||||
Cash and cash equivalents, end of period | $ | 50,912 | $ | 57,879 |
Reconciliation of GAAP Gross Profit and GAAP Gross Margin to Non-GAAP Gross Profit and Non-GAAP Gross Margin | |||||||||||||||
(unaudited; dollars in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | $ | 32,660 | $ | 30,004 | $ | 64,105 | $ | 58,333 | |||||||
Gross profit (GAAP) | $ | 25,685 | $ | 22,860 | $ | 49,777 | $ | 43,493 | |||||||
Plus: Stock-based compensation expense included within cost of revenue | 92 | 239 | 309 | 566 | |||||||||||
Gross profit (Non-GAAP) | $ | 25,777 | $ | 23,099 | $ | 50,086 | $ | 44,059 | |||||||
Gross margin (GAAP) | 78.6 | % | 76.2 | % | 77.6 | % | 74.6 | % | |||||||
Gross margin (Non-GAAP) | 78.9 | % | 77.0 | % | 78.1 | % | 75.5 | % |
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Operating expenses (GAAP) | $ | 28,419 | $ | 26,828 | $ | 55,662 | $ | 55,514 | |||||||
Less: Stock-based compensation expense included within operating expenses | 2,224 | 3,129 | 4,740 | 5,726 | |||||||||||
Less: One-time charge for VDAs related to sales taxes | — | — | — | 2,539 | |||||||||||
Operating expenses (Non-GAAP) | $ | 26,195 | $ | 23,699 | $ | 50,922 | $ | 47,249 |
Reconciliation of GAAP Loss from Operations and GAAP Operating Margin to Non-GAAP Loss from Operations and Non-GAAP Operating Margin | |||||||||||||||
(unaudited; dollars in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | $ | 32,660 | $ | 30,004 | $ | 64,105 | $ | 58,333 | |||||||
Loss from operations (GAAP) | $ | (2,734 | ) | $ | (3,968 | ) | $ | (5,885 | ) | $ | (12,021 | ) | |||
Plus: Stock-based compensation expense | 2,316 | 3,368 | 5,049 | 6,292 | |||||||||||
Plus: One-time charge for VDAs related to sales taxes | — | — | — | 2,539 | |||||||||||
Loss from operations (Non-GAAP) | $ | (418 | ) | $ | (600 | ) | $ | (836 | ) | $ | (3,190 | ) | |||
Operating margin (GAAP) | (8.4 | )% | (13.2 | )% | (9.2 | )% | (20.6 | )% | |||||||
Operating margin (Non-GAAP) | (1.3 | )% | (2.0 | )% | (1.3 | )% | (5.5 | )% |
Reconciliation of GAAP Net Loss to Non-GAAP Net Loss | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net loss (GAAP) | $ | (2,764 | ) | $ | (3,985 | ) | $ | (5,921 | ) | $ | (12,041 | ) | |||
Plus: Stock-based compensation expense | 2,316 | 3,368 | 5,049 | 6,292 | |||||||||||
Plus: One-time charge for VDAs related to sales taxes | — | — | — | 2,539 | |||||||||||
Net loss (Non-GAAP) | $ | (448 | ) | $ | (617 | ) | $ | (872 | ) | $ | (3,210 | ) |
Reconciliation of Net Loss to Adjusted EBITDA | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net loss | $ | (2,764 | ) | $ | (3,985 | ) | $ | (5,921 | ) | $ | (12,041 | ) | |||
Adjustments: | |||||||||||||||
Interest (income) expense, net | (106 | ) | (54 | ) | (231 | ) | (82 | ) | |||||||
Income tax expense | 135 | 84 | 247 | 172 | |||||||||||
Depreciation and amortization expense | 1,479 | 1,703 | 2,959 | 3,436 | |||||||||||
Total adjustments | 1,508 | 1,733 | 2,975 | 3,526 | |||||||||||
EBITDA | (1,256 | ) | (2,252 | ) | (2,946 | ) | (8,515 | ) | |||||||
Stock-based compensation expense | 2,316 | 3,368 | 5,049 | 6,292 | |||||||||||
One-time charge for VDAs related to sales taxes | — | — | — | 2,539 | |||||||||||
Adjusted EBITDA | $ | 1,060 | $ | 1,116 | $ | 2,103 | $ | 316 |
Free Cash Flow Reconciliation | |||||||
(unaudited; in thousands) | |||||||
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Cash provided by operating activities | $ | 1,032 | $ | (97 | ) | ||
Less: Purchases of property and equipment | (656 | ) | (543 | ) | |||
Free cash flow | $ | 376 | $ | (640 | ) |
Adjusted EBITDA Guidance Reconciliation | |||||||||||||||
(unaudited; in millions) | |||||||||||||||
Third Quarter 2018 | Full Year 2018 | ||||||||||||||
Low | High | Low | High | ||||||||||||
Net loss (estimate) | $ | (4.7 | ) | $ | (3.6 | ) | $ | (10.2 | ) | $ | (8.4 | ) | |||
Adjustments (estimates): | |||||||||||||||
Interest (income) expense, net | 0.0 | (0.1 | ) | (0.3 | ) | (0.4 | ) | ||||||||
Income tax (benefit) expense | 0.2 | 0.1 | 0.6 | 0.5 | |||||||||||
Depreciation and amortization expense | 1.6 | 1.5 | 6.1 | 6.0 | |||||||||||
Total adjustments | 1.8 | 1.5 | 6.4 | 6.1 | |||||||||||
EBITDA | (2.9 | ) | (2.1 | ) | (3.8 | ) | (2.3 | ) | |||||||
Stock-based compensation expense (estimate) | 3.4 | 3.0 | 11.6 | 11.1 | |||||||||||
Adjusted EBITDA guidance | $ | 0.5 | $ | 0.9 | $ | 7.8 | $ | 8.8 |