AMBR Amber Road, Inc.

Total revenue of $16.4 million increases 23% year-over-year

Amber Road, Inc. (NYSE: AMBR), a leading provider of global trade management (GTM) solutions, today announced its financial results for the quarter ended September 30, 2014.

Jim Preuninger, Chief Executive Officer of Amber Road, stated, “I am pleased with our third quarter results. We witnessed demand across all of our market segments as multi-national companies, both large and small, are facing mounting complexity and escalating costs related to global trade. We will continue to execute on our growth strategies to drive awareness and adoption of our highly differentiated offering across our large and growing market, and we are well positioned for long term success.”

Third Quarter 2014 Financial Highlights

Revenue

• Total revenue was $16.4 million, an increase of 23% from the comparable period in 2013.
• Subscription revenue was $11.4 million, an increase of 16% from the comparable period in 2013.
• Professional Services revenue was $5.0 million, an increase of 40% from the comparable period in 2013.

Operating Loss

• GAAP operating loss was $(2.0) million, compared to $(3.3) million in the comparable period in 2013.
• Non-GAAP adjusted operating income (loss) which excludes stock-based compensation, puttable stock compensation, changes in the fair value of contingent consideration liability and severance costs was $0.1 million, compared to $(0.7) million in the comparable period in 2013, which excludes stock-based compensation, restricted stock expense, puttable stock compensation, change in fair value of contingent consideration liability and warrant expense.

Net Loss attributable to common stockholders

• GAAP net loss attributable to common stockholders was $(2.2) million, compared to $(4.7) million for the comparable period in 2013.
• GAAP basic and diluted net loss per common share was $(0.09), compared to $(1.25) for the comparable period in 2013, based on 25.3 million and 3.8 million basic and diluted weighted average common shares outstanding, respectively.
• Non-GAAP adjusted net loss was $(0.1) million, compared to $(0.9) million in the comparable period in 2013.
• Non-GAAP adjusted net loss per common share was $0.00, compared to $(0.24) for the comparable period in 2013, based on 25.3 million and 3.8 million basic and diluted weighted average common shares outstanding, respectively.

Adjusted EBITDA

• Adjusted EBITDA was $1.4 million for the three months ended September 30, 2014 and $0.2 million in the comparable period in 2013.

Balance Sheet

• Cash and cash equivalents at September 30, 2014 totaled $40.6 million, compared with $5.1 million at December 31, 2013.
• Cash used in operating activities was $(9.1) million for the first nine months of 2014, compared to $(2.9) million in the comparable period in 2013.

A reconciliation of GAAP operating and net loss to Non-GAAP adjusted operating income (loss) and net loss and of GAAP net loss to Adjusted EBITDA 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.”

Third Quarter 2014 and Recent Business Highlights

• Announced that the Acteon Group, a leading global integrated subsea services provider, has chosen Amber Road to automate and standardize restricted party screening across all of its worldwide branded services. Previously, the individual Acteon branded services tracked and managed their trading partners independently and mostly manually. But with increasingly complex regulations and sanctions being imposed by multiple authorities around the world, the need for a reliable, automated solution to track regulations, evaluate trading partners, and ensure a standardized compliancy process for the entire group became acute.
• Announced its proprietary Global Knowledge® Update Process achieved ISO 9001:2008 recertification. The ISO 9001:2008 is an internationally recognized set of standards for quality management systems developed and published by the International Organization for Standardization (ISO). To achieve recertification, Amber Road demonstrated its quality management system for its Global Knowledge® Update Process as consistently providing global trade content that meets customer and applicable statutory and regulatory requirements; enhances customer satisfaction; and includes continuous process improvement strategies.

Business Outlook

Based on information available as of November 6, 2014, Amber Road is issuing guidance for the fourth quarter and full year 2014 as indicated below:

Fourth Quarter 2014:

• Total revenue is expected to be in the range of $16.4 million to $16.8 million.
• Non-GAAP adjusted operating loss is expected to be in the range of ($1.4) million to ($1.9) million.
• Non-GAAP adjusted net loss per common share is expected to be in the range of ($0.07) to ($0.09). This assumes 25.3 million basic shares outstanding.

Full Year 2014:

• Total revenue is expected to be in the range of $63.6 million to $64.0 million.
• Non-GAAP adjusted operating loss is expected to be in the range of ($3.7) million to ($4.2) million.
• Non-GAAP adjusted net loss per common share is expected to be in the range of ($0.18) to ($0.20). This assumes 25.3 million basic shares outstanding.

Expectations of non-GAAP adjusted loss from operations and non-GAAP adjusted loss per common share for the fourth quarter exclude stock-based compensation, puttable stock compensation and changes in the fair value of contingent consideration liability. Expectations of non-GAAP adjusted loss from operations and non-GAAP adjusted loss per common share for the full year 2014 exclude stock-based compensation, restricted stock expense, compensation expense related to loan forgiveness, puttable stock compensation, changes in the fair value of contingent consideration liability, warrant expense and severance costs.

Conference Call Information

Amber Road will host a conference call on Thursday, November 6, 2014 at 5:00 p.m. Eastern Time (ET) to discuss the company’s third quarter financial results and its business outlook. To access this call, dial 888-337-8198 (domestic) or 719-325-2215 (international). The conference ID is 7388277.

Additionally, a live webcast of the conference call will be available in the “Investor Relations” section of the Company’s web site at www.AmberRoad.com.

Following the conference call, a replay will be available at 877-870-5176 (domestic) or 858-384-5517 (international) from November 6, 2014, 8:00pm EST to November 13, 2014, 11:59pm EST. The replay pass code is 7388277. An archived webcast of this conference call will also be available in the “Investor Relations” section of the Company’s web site at www.AmberRoad.com.

About Amber Road

Amber Road’s (NYSE: AMBR) mission is to dramatically change the way companies conduct global trade. As a leading provider of cloud based global trade management (GTM) solutions, we automate import and export processes to enable goods to flow across international borders in the most efficient, compliant and profitable way. Our solution combines enterprise-class software, trade content sourced from government agencies and transportation providers in 139 countries, and a global supply chain network connecting our customers with their trading partners, including suppliers, freight forwarders, customs brokers and transportation carriers. We deliver our GTM solution using a Software-as-a-Service (SaaS) model and leverage a highly flexible technology framework to quickly and efficiently meet our customers’ unique requirements around the world. For more information, please visit www.AmberRoad.com, email Solutions@AmberRoad.com or call 201-935-8588.

Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, Amber Road has provided within this press release non-GAAP adjusted operating and net loss and adjusted EBITDA, financial measures that are not calculated in accordance with generally accepted accounting principles, or GAAP. Provided below is a reconciliation of GAAP operating and net loss to non-GAAP adjusted operating and net loss, and net loss to adjusted EBITDA. EBITDA consists of net loss plus depreciation and amortization, interest expense (income) and income tax expense. Adjusted EBITDA consists of EBITDA plus stock-based compensation, restricted stock expense, compensation expense related to loan forgiveness, puttable stock compensation, changes in the fair value of contingent consideration liability, warrant expense and severance costs. Amber Road has included these non-GAAP measures in this press release because it assists in comparing performance on a consistent basis across reporting periods, as it removes from operating results the impact of the company’s capital structure. Amber Road believes these non-GAAP measures are useful to an investor in evaluating its operating performance because they are often used by the financial community to measure a company’s operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of performance exclusive of its capital structure and the method by which assets were acquired.

Amber Road’s use of these non-GAAP measures has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of its results as reported under GAAP. Some of these limitations are:

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and these non-GAAP measures do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
• these non-GAAP measures do not reflect changes in, or cash requirements for, working capital needs;
• these non-GAAP measures do not reflect the potentially dilutive impact of equity-based compensation;
• these non-GAAP measures do not reflect interest or tax payments that may represent a reduction in cash available; and
• other companies, including companies in Amber Road’s industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these and other limitations, you should consider these non-GAAP measures together with other GAAP-based financial performance measures, including various cash flow metrics, net loss and other GAAP results. A reconciliation of GAAP operating and net loss to non-GAAP adjusted operating and net loss, and adjusted EBITDA has been provided in the financial statement tables included in this press release.

Cautionary Language Concerning Forward-Looking Statements

This press release contains forward-looking statements. These statements identify substantial risks and uncertainties and relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” and similar expressions, whether in the negative or affirmative. These statements are only predictions and may be inaccurate. Actual events or results may differ materially. In evaluating these statements, you should specifically consider various factors, including the risks outlined in our filings with the Securities and Exchange Commission (SEC), including, without limitation, our periodic and current SEC reports. These factors may cause our actual results to differ materially from any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, our future results, levels of activity, performance or achievements may differ from our expectations. Other than as required by law, we do not undertake to update any of the forward-looking statements after the date of this press release, even though our situation may change in the future.

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

            September 30, December 31, 2014 2013 Assets

Cash and cash equivalents

$ 40,572,930 $ 5,147,735 Accounts receivable, net 12,727,913 11,017,671 Unbilled receivables 258,195 144,067 Deferred commissions 3,128,933 2,983,400 Prepaid expenses and other current assets 1,673,601 869,108 Deferred offering costs —   2,786,376   Total current assets 58,361,572 22,948,357 Property and equipment, net 13,069,412 13,102,380 Goodwill 24,476,157 24,476,157 Other intangibles, net 1,058,903 1,201,034 Deferred commissions 6,538,518 7,066,512 Deposits and other assets 1,127,151   1,302,681   Total assets $ 104,631,713   $ 70,097,121   Liabilities and Stockholders’ Equity (Deficit) Current liabilities: Current installments of obligations under capital leases $ 1,293,314 $ 1,022,176 Accounts payable 883,874 2,568,161 Accrued expenses 6,655,256 9,081,554 Deferred revenue 25,438,165   26,115,001   Total current liabilities 34,270,609 38,786,892 Capital lease obligations, less current portion 2,224,363 2,068,308 Deferred revenue, less current portion 1,639,421 4,641,631 Revolving credit facility — 6,978,525 Other noncurrent liabilities 2,311,531   3,981,889   Total liabilities 40,445,924   56,457,245   Commitments and contingencies         Total redeemable convertible preferred stock and puttable common stock —   76,921,359   Stockholders’ equity (deficit):

Common stock, $0.001 par value at September 30, 2014, no par value at December 31,2013. Authorized, 100,000,000 and 38,100,100 shares at September 30, 2014 andDecember 31, 2013, respectively; issued and outstanding 25,447,157 and 5,005,911shares at September 30, 2014 and December 31, 2013, respectively

25,447 15,221,195 Additional paid-in-capital 171,489,117 — Accumulated other comprehensive loss (544,320 ) (485,917 ) Accumulated deficit (106,784,455 ) (78,016,761 ) Total stockholders’ equity (deficit) 64,185,789   (63,281,483 ) Total liabilities and stockholders’ equity (deficit) $ 104,631,713   $ 70,097,121      

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

            Three Months Ended Nine Months Ended

 

September 30, September 30, 2014       2013 2014       2013 Revenue: Subscription $ 11,441,819 $ 9,827,099 $ 32,582,297 $ 27,242,428 Professional services 4,981,001   3,558,641   14,638,476   9,677,762   Total revenue 16,422,820   13,385,740   47,220,773   36,920,190   Cost of revenue (1): Cost of subscription revenue 3,778,873 3,314,294 10,775,454 9,504,416 Cost of professional services revenue 3,224,945   2,392,352   9,467,835   6,748,785   Total cost of revenue 7,003,818   5,706,646   20,243,289   16,253,201   Gross profit 9,419,002   7,679,094   26,977,484   20,666,989   Operating expenses (1): Sales and marketing 4,717,795 4,103,382 14,680,287 11,868,510 Research and development 2,492,531 2,051,430 7,060,149 5,825,681 General and administrative 4,249,190 2,801,763 12,301,061 7,684,449 Restricted stock expense —   1,993,543   18,683,277   8,705,754   Total operating expenses 11,459,516   10,950,118   52,724,774   34,084,394   Loss from operations (2,040,514 ) (3,271,024 ) (25,747,290 ) (13,417,405 ) Interest income 1,615 211 1,919 18,239 Interest expense (48,546 ) (51,210 ) (217,440 ) (75,403 ) Loss before income taxes (2,087,445 ) (3,322,023 ) (25,962,811 ) (13,474,569 ) Income tax expense 150,901   169,472   400,450   412,040   Net loss (2,238,346 ) (3,491,495 ) (26,363,261 ) (13,886,609 )

Accretion of redeemable convertible preferred stock and puttable common stock

—   (1,212,764 ) (2,416,505 ) (3,638,292 ) Net loss attributable to common stockholders $ (2,238,346 ) $ (4,704,259 ) $ (28,779,766 ) $ (17,524,901 )   Net loss per common share: Basic and diluted $ (0.09 ) $ (1.25 ) $ (1.52 ) $ (4.67 )   Weighted-average common shares outstanding: Basic and diluted 25,299,109   3,777,828   18,962,601   3,756,614       (1) Includes stock-based compensation as follows:                 Three Months Ended Nine Months Ended September 30, September 30, 2014 2013 2014 2013 Cost of subscription revenue $ 113,555 $ 23,051 $ 149,068 $ 57,077 Cost of professional services revenue 82,672 11,955 94,746 28,081 Sales and marketing 125,171 23,028 167,208 53,561 Research and development 185,660 16,553 245,506 30,504 General and administrative 482,280   91,606   672,134   166,704 $ 989,338   $ 166,193   $ 1,328,662   $ 335,927    

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

      Nine Months Ended September 30, 2014       2013 Cash flows from operating activities: Net loss $ (26,363,261 ) $ (13,886,609 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 3,616,780 2,538,981 Bad debt expense 20,953 47,944 Stock-based compensation 1,328,662 335,927 Loss on asset impairment 11,964 30,261 Restricted stock non-cash compensation 18,683,277 8,705,754 Compensation related to puttable common stock 41,073 4,564 Increase in fair value of contingent consideration liability 122,826 2,382 Non-cash interest expense related to debt — 21,290 Change in fair value of warrant liability 1,244,635 1,475,959 Amortization of debt financing costs 39,905 7,906 Changes in operating assets and liabilities: Accounts receivable (1,736,510 ) 62,530 Unbilled receivables (115,333 ) (22,012 ) Prepaid expenses and other current assets (458,465 ) (2,727,424 ) Accounts payable (818,796 ) 453,848 Accrued expenses (973,538 ) 940,985 Other liabilities (66,863 ) (15,235 ) Deferred revenue (3,679,116 ) (891,770 ) Net cash used in operating activities (9,101,807 ) (2,914,719 ) Cash flows from investing activities: Capital expenditures (641,197 ) (814,953 ) Addition of capitalized software development costs (1,529,459 ) (1,653,770 ) Acquisition, net of cash acquired of $85,310 — (1,914,768 ) Cash received (paid) for deposits 116,828 (34,157 ) Decrease in restricted cash 56,409   —   Net cash used in investing activities (1,997,419 ) (4,417,648 ) Cash flows from financing activities: Proceeds from revolving line of credit — 6,178,525 Payments on revolving line of credit (6,978,525 ) (500,000 ) Debt financing costs — (31,623 ) Repayments on capital lease obligations (860,651 ) (187,110 ) Proceeds from the exercise of stock options 823,152 29,750 Proceeds from the exercise of common stock warrant 40,452 — Payment of offering costs (4,266,455 ) (207,100 ) Proceeds from initial public offering, net of underwriting discounts and commissions 57,824,899   —   Net cash provided by financing activities 46,582,872   5,282,442   Effect of exchange rate on cash and cash equivalents (58,451 ) (344,142 ) Net increase (decrease) in cash and cash equivalents 35,425,195 (2,394,067 ) Cash and cash equivalents at beginning of period 5,147,735   4,279,821   Cash and cash equivalents at end of period $ 40,572,930   $ 1,885,754      

Reconciliation of Net Loss to Adjusted EBITDA

(unaudited)

          Three Months Ended Nine Months Ended September 30, September 30, 2014       2013 2014       2013 Net loss $ (2,238,346 ) $ (3,491,495 ) $ (26,363,261 ) $ (13,886,609 ) Depreciation and amortization expense 1,271,360 910,385 3,616,780 2,538,981 Interest expense 48,546 51,210 217,440 75,403 Interest income (1,615 ) (211 ) (1,919 ) (18,239 ) Income tax expense 150,901   169,472   400,450   412,040   EBITDA (769,154 ) (2,360,639 ) (22,130,510 ) (10,878,424 ) Stock-based compensation 989,338 166,193 1,328,662 335,927 Restricted stock expense — 1,993,543 18,683,277 8,705,754 Compensation expense related to loan forgiveness — — 927,093 — Puttable stock compensation 13,691 4,564 41,073 4,564

Increase in fair value of contingent consideration  liability

25,403 2,382 122,826 2,382 Warrant expense — 416,378 1,244,635 1,475,959 Severance costs 1,121,285   —   1,121,285   —   Adjusted EBITDA $ 1,380,563   $ 222,421   $ 1,338,341   $ (353,838 )  

Reconciliation of Net Loss to Non-GAAP Adjusted Net Loss

(unaudited)

            Three Months Ended Nine Months Ended September 30, September 30, 2014   2013 2014       2013 Net loss $ (2,238,346 ) $ (3,491,495 ) $ (26,363,261 ) $ (13,886,609 ) Stock-based compensation 989,338 166,193 1,328,662 335,927 Restricted stock expense — 1,993,543 18,683,277 8,705,754 Compensation expense related to loan forgiveness — — 927,093 — Puttable stock compensation 13,691 4,564 41,073 4,564 Increase in fair value of contingent consideration liability 25,403 2,382 122,826 2,382 Warrant expense — 416,378 1,244,635 1,475,959 Severance costs 1,121,285   —   1,121,285   —   Non-GAAP adjusted net loss $ (88,629 ) $ (908,435 ) $ (2,894,410 ) $ (3,362,023 )   Adjusted non-GAAP net loss per common share: Basic and diluted $ 0.00   $ (0.24 ) $ (0.12 ) $ (0.89 )   Weighted-average common shares outstanding:

GAAP weighted average number of common shares  outstanding - basic and diluted

25,299,109 3,777,828 18,962,601 3,756,614

Additional weighted average shares giving effect to  initial public offering and conversion of preferred

  stock at the beginning of the period

—   —   6,199,958   —  

Non-GAAP weighted average number of common  shares outstanding - basic and diluted

25,299,109   3,777,828   25,162,559   3,756,614      

Reconciliation of Loss from Operations to

Non-GAAP Adjusted Income (Loss) from Operations

(unaudited)

          Three Months Ended Nine Months Ended September 30, September 30, 2014       2013 2014       2013 Loss from operations $ (2,040,514 ) $ (3,271,024 ) $ (25,747,290 ) $ (13,417,405 ) Stock-based compensation 989,338 166,193 1,328,662 335,927 Restricted stock expense — 1,993,543 18,683,277 8,705,754 Compensation expense related to loan forgiveness — — 927,093 — Puttable stock compensation 13,691 4,564 41,073 4,564

Increase in fair value of contingent consideration  liability

25,403 2,382 122,826 2,382 Warrant expense — 416,378 1,244,635 1,475,959 Severance costs 1,121,285   —   1,121,285   —   Non-GAAP adjusted income (loss) from operations $ 109,203   $ (687,964 ) $ (2,278,439 ) $ (2,892,819 )

Investor Relations Contact:ICRStaci Mortenson, 201-804-6170InvestorRelations@AmberRoad.comorAmber Road Contacts:Annika Helmrich, 201-806-3656 (US & Canada)AnnikaHelmrich@AmberRoad.comorMartijn van Gils, +31 (0) 207997790 (Europe & Asia)MartijnvanGils@AmberRoad.com