AMBR Amber Road, Inc.

Amber Road, Inc. (NYSE: AMBR), a leading provider of global trade management (GTM) solutions, today announced its financial results for the second quarter ended June 30, 2015.

Jim Preuninger, Chief Executive Officer of Amber Road, stated, “During the second quarter, we saw ongoing momentum in the US mid-market and Asia but continued to experience subscription bookings weakness in the large enterprise space. This will impact our subscription and related professional services revenue in the back half of the year, and as a result, we are lowering our full year guidance. We are obviously disappointed in this. However, these large enterprise deals are not lost; a meaningful portion have just been deferred to the second half of 2015. Our pipeline is strong and we believe we will benefit in the second half of the year as we capitalize on seasonal enterprise spending.”

Second Quarter 2015 Financial Highlights

Revenue

• GAAP total revenue was $17.4 million, an increase of 10% from the comparable period in 2014.
• Non-GAAP total revenue(1) was $17.9 million, which includes an adjustment of $0.5 million related to the purchase accounting deferred revenue adjustment associated with our acquisition of ecVision.
• GAAP Subscription revenue was $11.7 million, an increase of 10% from the comparable period in 2014.
• GAAP Professional Services revenue was $5.7 million, an increase of 10% from the comparable period in 2014.

Operating Loss

• GAAP operating loss was $(7.8) million, compared to $(2.0) million in the comparable period in 2014.
• Non-GAAP adjusted operating loss(2) was $(4.6) million, compared to $(1.8) million in the comparable period in 2014.

Net Loss attributable to common stockholders

• GAAP net loss attributable to common stockholders was $(8.2) million, compared to $(2.2) million for the comparable period in 2014.
• GAAP basic and diluted net loss per common share was $(0.32), compared to $(0.09) for the comparable period in 2014, based on 26.1 million and 25.2 million basic and diluted weighted average common shares outstanding, respectively.
• Non-GAAP adjusted net loss(2) was $(5.0) million, compared to $(2.0) million in the comparable period in 2014.
• Non-GAAP adjusted net loss per common share was $(0.19), compared to $(0.08) for the comparable period in 2014, based on 26.1 million and 25.2 million basic and diluted weighted average common shares outstanding, respectively.

Adjusted EBITDA

• Adjusted EBITDA was $(2.9) million for the three months ended June 30, 2015 and $(0.6) million in the comparable period in 2014.

Balance Sheet and Cash Flow

• Cash and cash equivalents at June 30, 2015 totaled $27.1 million, compared with $41.2 million at December 31, 2014.
• Cash used in operating activities was $(6.8) million for the first six months of 2015, compared to $(8.9) million for the first six months of 2014.

A reconciliation of GAAP operating and net loss to Non-GAAP adjusted operating loss and net loss, of GAAP net loss to Adjusted EBITDA and of GAAP total revenue to Non-GAAP total revenue 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.”

Second Quarter 2015 and Recent Business Highlights

• Announced the launch of a comprehensive global trade management training practice known as the Global Trade Academy™. The Global Trade Academy provides rich training and professional development to industry professionals in the areas of customs and trade compliance, import and export management, global logistics, risk assessment and international commerce. At launch, it offers over 60 courses, spanning instructor led in-classroom and web-based training, as well as computer-based training designed for the U.S., European and Chinese markets.
• Announced that Electrocomponents plc (LSE: ECM) selected Amber Road to provide a comprehensive Trade Automation Export Management solution. Electrocomponents has been using the Amber Road on-demand solution for restricted party screening since 2011. This new implementation vastly expands Electrocomponents trade management reach and capabilities, enabling automated product classification, license determination and management, and landed cost analysis. With these new capabilities, the existing automated restricted party screening will become a seamless part of Electrocomponents overall trade management processes. The full Amber Road solution will be integrated with the Electrocomponents ERP system and deployed across the global supply chain.
• Announced that Marine Harvest ASA has selected Amber Road’s restricted party screening solution to monitor its worldwide trading partners and has signed a five-year subscription. As the world’s largest supplier of farmed Atlantic Salmon, Marine Harvest operates the entire value chain for all its products. It has a global network of suppliers, forwarders and customers totaling more than 100,000 trading partners worldwide.
• Received Supply & Demand Chain Executive's Top 100 Award for 2015, nominated by its customer NCR Corporation. This is the tenth year that Amber Road has been recognized by the publication for its dedication to providing customers with superior global supply chain solutions. The SDCE 100 spotlights successful and innovative supply chain projects delivering bottom-line value to small, medium and large enterprises. The transformative projects featured in this awards program can serve as a roadmap for driving operational improvements.
• Received Inbound Logistics’ Top Logistics IT Providers Award for 2015. This is the twelfth year in a row Amber Road has been recognized by the publication for its dedication in pioneering a cloud-based global trade management and collaborative sourcing platform that enables goods to flow unimpeded across international borders in the most efficient, compliant and profitable way.

Business Outlook

Based on information available as of August 6, 2015, Amber Road is issuing guidance for the third quarter and full year 2015 as indicated below:

Third Quarter 2015:

• Total non-GAAP revenue(1) is expected to be in the range of $17.3 million to $17.6 million.
• Non-GAAP adjusted operating loss(2) is expected to be in the range of ($4.7) million to ($5.0) million.
• Non-GAAP adjusted net loss per common share(2) is expected to be in the range of ($0.20) to ($0.21). This assumes 26.3 million basic shares outstanding.

Full Year 2015:

• Total non-GAAP revenue(1) is expected to be in the range of $68.0 million to $70.0 million.
• Non-GAAP adjusted operating loss(2) is expected to be in the range of ($17.8) million to ($18.8) million.
• Non-GAAP adjusted net loss per common share(2) is expected to be in the range of ($0.73) to ($0.77). This assumes 26.3 million basic shares outstanding.

Endnotes:

(1) For 2015, non-GAAP total revenue includes the purchase accounting deferred revenue adjustment.

(2) For 2015, non-GAAP adjusted operating and net loss excludes stock-based compensation, puttable stock compensation, acquisition compensation costs, purchase accounting adjustment to deferred revenue and acquisition related costs. For 2014, non-GAAP adjusted operating loss excludes stock-based compensation, puttable stock compensation and change in fair value of contingent consideration liability.

Conference Call Information

Amber Road will host a conference call on Thursday, August 6, 2015 at 5:00 p.m. Eastern Time (ET) to discuss the Company’s second quarter and full year financial results and its business outlook. To access this call, dial 888-329-8862 (domestic) or 719-457-2727 (international). The conference ID is 8985269.

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 August 6, 2015, 8:00pm EST to August 13, 2015, 11:59pm EST. The replay pass code is 8985269. 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 145 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, adjusted EBITDA and non-GAAP total revenue, 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, net loss to adjusted EBITDA and GAAP total revenue to Non-GAAP total revenue. 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, purchase accounting adjustment to deferred revenue and acquisition related costs. Non-GAAP total revenue is defined as GAAP total revenue before purchase accounting adjustments as a result of an acquisition. 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, and GAAP total revenue to Non-GAAP total revenue, 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 SUBSIDIARIESCondensed Consolidated Balance Sheets(Unaudited)

      June 30,2015 December 31,2014 Assets Current assets: Cash and cash equivalents $ 27,068,744 $ 41,242,200 Accounts receivable, net 13,589,865 15,645,386 Unbilled receivables 431,934 254,243 Deferred commissions 3,447,920 3,322,553 Prepaid expenses and other current assets 2,690,852   1,445,964   Total current assets 47,229,315 61,910,346 Property and equipment, net 13,321,451 12,918,540 Goodwill 41,850,326 24,476,157 Other intangibles, net 8,575,566 1,011,526 Deferred commissions 6,165,676 6,906,165 Deposits and other assets 1,099,647   1,007,923   Total assets $ 118,241,981   $ 108,230,657   Liabilities and Stockholders’ Equity Current liabilities: Current installments of obligations under capital leases $ 1,473,075 $ 1,321,610 Accounts payable 1,511,030 1,733,209 Accrued expenses 6,624,573 8,043,759 Deferred revenue 27,287,433 26,168,358 Current portion of term loan, net of discount 616,667   —   Total current liabilities 37,512,778 37,266,936 Capital lease obligations, less current portion 2,202,190 2,141,584 Deferred revenue, less current portion 1,793,928 1,753,886 Term loan, net of discount, less current portion 19,361,111 — Other noncurrent liabilities 3,006,471   2,109,544   Total liabilities 63,876,478   43,271,950  

Commitments and contingencies

Stockholders’ equity:

Common stock, $0.001 par value; 100,000,000 shares authorized;issued and outstanding 26,189,268 and 25,765,792 sharesat June 30, 2015 and December 31, 2014, respectively

26,189 25,766 Additional paid-in-capital 178,416,979 173,665,585 Accumulated other comprehensive loss (783,887 ) (607,492 ) Accumulated deficit (123,293,778 ) (108,125,152 ) Total stockholders’ equity 54,365,503   64,958,707   Total liabilities and stockholders’ equity $ 118,241,981   $ 108,230,657      

AMBER ROAD, INC. AND SUBSIDIARIESCondensed Consolidated Statements of Operations(Unaudited)

      Three Months EndedJune 30, Six Months EndedJune 30, 2015   2014 2015   2014 Revenue: Subscription $ 11,704,722 $ 10,630,709 $ 22,046,072 $ 21,140,478 Professional services 5,672,674   5,178,236   10,525,449   9,657,475   Total revenue 17,377,396   15,808,945   32,571,521   30,797,953   Cost of revenue (1): Cost of subscription revenue 4,920,945 3,651,853 9,309,185 6,996,581 Cost of professional services revenue 4,746,866   3,342,566   8,563,384   6,242,890   Total cost of revenue 9,667,811   6,994,419   17,872,569   13,239,471   Gross profit 7,709,585   8,814,526   14,698,952   17,558,482   Operating expenses (1): Sales and marketing 6,486,750 5,114,468 12,201,891 9,962,492 Research and development 3,986,639 2,379,144 7,612,358 4,567,618 General and administrative 5,078,434 3,299,735 9,461,857 8,051,871 Restricted stock expense —   —   —   18,683,277   Total operating expenses 15,551,823   10,793,347   29,276,106   41,265,258   Loss from operations (7,842,238 ) (1,978,821 ) (14,577,154 ) (23,706,776 ) Interest income 16,398 91 28,346 304 Interest expense (266,694 ) (55,917 ) (391,627 ) (168,894 ) Loss before income taxes (8,092,534 ) (2,034,647 ) (14,940,435 ) (23,875,366 ) Income tax expense 125,916   150,537   228,191   249,549   Net loss (8,218,450 ) (2,185,184 ) (15,168,626 ) (24,124,915 )

Accretion of redeemable convertible preferred stockand puttable common stock

—   —   —   (2,416,505 ) Net loss attributable to common stockholders $ (8,218,450 ) $ (2,185,184 ) $ (15,168,626 ) $ (26,541,420 )   Net loss per common share:

Basic and diluted

$ (0.32 ) $ (0.09 ) $ (0.58 ) $ (1.69 )   Weighted-average common shares outstanding: Basic and diluted 26,079,695   25,212,460   26,019,846   15,741,835               (1) Includes stock-based compensation as follows:   Three Months EndedJune 30, Six Months EndedJune 30, 2015 2014 2015 2014 Cost of subscription revenue $ 193,804 $ 15,188 $ 388,356 $ 35,513 Cost of professional services revenue 148,661 6,116 272,142 12,074 Sales and marketing 149,708 19,852 395,568 42,037 Research and development 186,509 29,250 493,203 59,846 General and administrative 1,169,740   95,384   2,016,452   189,854 $ 1,848,422   $ 165,790   $ 3,565,721   $ 339,324    

AMBER ROAD, INC. AND SUBSIDIARIESCondensed Consolidated Statements of Cash Flows(Unaudited)

    Six Months Ended 2015   2014 Cash flows from operating activities: Net loss $ (15,168,626 ) $ (24,124,915 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 3,258,769 2,345,420 Bad debt expense 70,062 5,394 Stock-based compensation 3,565,721 339,324 Loss on asset impairment — 11,964 Restricted stock non-cash compensation — 18,683,277 Compensation related to puttable common stock 27,382 27,382 Changes in fair value of contingent consideration liability (287,441 ) 97,423 Non-cash interest expense related to debt 247,144 — Change in fair value of warrant liability — 1,244,635 Amortization of debt financing costs and accretion of debt discount 22,764 — Changes in operating assets and liabilities: Accounts receivable 3,876,071 (1,818,325 ) Unbilled receivables (177,444 ) (53,139 ) Prepaid expenses and other assets (322,687 ) (792,789 ) Accounts payable (250,437 ) (539,624 ) Accrued expenses (2,698,798 ) (958,316 ) Other liabilities 471,368 (7,874 ) Deferred revenue 578,699   (3,384,445 ) Net cash used in operating activities (6,787,453 ) (8,924,608 ) Cash flows from investing activities: Capital expenditures (626,376 ) (456,652 ) Addition of capitalized software development costs (940,485 ) (1,052,851 ) Addition of intangible assets (275,000 ) — Acquisition, net of cash acquired of $1,569,867 (25,593,426 ) — Cash received (paid) for deposits (5,566 ) 150,128 Decrease in restricted cash —   56,409   Net cash used in investing activities (27,440,853 ) (1,302,966 ) Cash flows from financing activities: Payments on revolving line of credit — (6,978,525 ) Proceeds from term loan 20,000,000 — Debt discount and financing costs (186,582 ) 35,953 Repayments on capital lease obligations (736,892 ) (557,593 ) Proceeds from the exercise of stock options 1,158,714 339,183 Proceeds from the exercise of common stock warrant — 40,452 Payment of offering costs — (4,258,955 ) Proceeds from initial public offering, net of underwriting discounts and commissions —   57,824,899   Net cash provided by financing activities 20,235,240   46,445,414   Effect of exchange rate on cash and cash equivalents (180,390 ) (59,243 ) Net (decrease) increase in cash and cash equivalents (14,173,456 ) 36,158,597 Cash and cash equivalents at beginning of period 41,242,200   5,147,735   Cash and cash equivalents at end of period $ 27,068,744   $ 41,306,332      

Reconciliation of Net Loss to Adjusted EBITDA(unaudited)

      Three Months EndedJune 30, Six Months EndedJune 30, 2015   2014 2015   2014 Net loss $ (8,218,450 ) $ (2,185,184 ) $ (15,168,626 ) $ (24,124,915 ) Depreciation and amortization expense 1,701,813 1,215,928 3,258,769 2,345,420 Interest expense 266,694 55,917 391,627 168,894 Interest income (16,398 ) (91 ) (28,346 ) (304 ) Income tax expense 125,916   150,537   228,191   249,549   EBITDA (6,140,425 ) (762,893 ) (11,318,385 ) (21,361,356 ) Stock-based compensation 1,848,422 165,790 3,565,721 339,324 Restricted stock expense — — — 18,683,277

Compensation expense related toloan forgiveness

— — — 927,093 Puttable stock compensation 13,691 13,691 27,382 27,382

Change in fair value of contingentconsideration liability

— 15,859 (287,441 ) 97,423 Warrant expense — — — 1,244,635 Purchase accounting deferred revenue adjustment 511,825 — 773,093 — Acquisition compensation costs 407,533 — 544,444 — Acquisition related costs 416,738   —   1,148,221   —   Adjusted EBITDA $ (2,942,216 ) $ (567,553 ) $ (5,546,965 ) $ (42,222 )  

Reconciliation of GAAP Total Revenue to Non-GAAP Total Revenue(unaudited)

      Three Months EndedJune 30, Six Months EndedJune 30, 2015   2014 2015   2014 Total revenue $ 17,377,396 $ 15,808,945 $ 32,571,521 $ 30,797,953 Purchase accounting deferred revenue adjustment 511,825   —   773,093   — Non-GAAP total revenue $ 17,889,221   $ 15,808,945   $ 33,344,614   $ 30,797,953    

Reconciliation of Net Loss to Non-GAAP Adjusted Net Loss(unaudited)

      Three Months EndedJune 30, Six Months EndedJune 30, 2015   2014 2015   2014 Net loss $ (8,218,450 ) $ (2,185,184 ) $ (15,168,626 ) $ (24,124,915 ) Stock-based compensation 1,848,422 165,790 3,565,721 339,324 Restricted stock expense — — — 18,683,277 Compensation expense related to loan forgiveness — — — 927,093 Puttable stock compensation 13,691 13,691 27,382 27,382 Change in fair value of contingent consideration liability — 15,859 (287,441 ) 97,423 Warrant expense — — — 1,244,635 Purchase accounting deferred revenue adjustment 511,825 — 773,093 — Acquisition compensation costs 407,533 — 544,444 — Acquisition related costs 416,738   —   1,148,221   —   Non-GAAP adjusted net loss $ (5,020,241 ) $ (1,989,844 ) $ (9,397,206 ) $ (2,805,781 )   Adjusted non-GAAP net loss per common share: Basic and diluted $ (0.19 ) $ (0.08 ) $ (0.36 ) $ (0.11 )   Weighted-average common shares outstanding:

GAAP weighted average number of commonshares outstanding - basic and diluted

26,079,695 25,212,460 26,019,846 15,741,835

Additional weighted average shares giving effectto initial public offering and conversion of preferredstock at the beginning of the period

—   —   —   9,351,280  

Non-GAAP weighted average number of commonshares outstanding - basic and diluted

26,079,695   25,212,460   26,019,846   25,093,115      

Reconciliation of Loss from Operations toNon-GAAP Adjusted Loss from Operations(unaudited)

      Three Months EndedJune 30, Six Months EndedJune 30, 2015   2014 2015   2014 Loss from operations $ (7,842,238 ) $ (1,978,821 ) $ (14,577,154 ) $ (23,706,776 ) Stock-based compensation 1,848,422 165,790 3,565,721 339,324 Restricted stock expense — — — 18,683,277 Compensation expense related to loan forgiveness — — — 927,093 Puttable stock compensation 13,691 13,691 27,382 27,382 Change in fair value of contingent consideration liability — 15,859 (287,441 ) 97,423 Warrant expense — — — 1,244,635 Purchase accounting deferred revenue adjustment 511,825 — 773,093 — Acquisition compensation costs 407,533 — 544,444 — Acquisition related costs 416,738   —   1,148,221   —   Non-GAAP adjusted loss from operations $ (4,644,029 ) $ (1,783,481 ) $ (8,805,734 ) $ (2,387,642 )  

View source version on businesswire.com: http://www.businesswire.com/news/home/20150806006505/en/

Investor Relations Contact:ICRStaci Mortenson, 201-806-3663InvestorRelations@AmberRoad.comorAmber Road Contacts:(US & Canada)Annika Helmrich, 201-806-3656AnnikaHelmrich@AmberRoad.comor(Europe & Asia)Martijn van Gils, +31 (0) 207997790MartijnvanGils@AmberRoad.com