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 first quarter ended March 31, 2018.

Jim Preuninger, Chief Executive Officer of Amber Road, stated, “Q1 was a very good start to the year. We once again generated positive Adjusted EBITDA and positive cash flow from operations. We closed a range of deals with both new and existing customers and exited the quarter well positioned to meet our growth objectives for the year. Increasingly complex global trade regulations and the new and ever changing free trade agreements heighten the need for our platform, including our Global Knowledge database, which uniquely makes sense of this trade content at scale. We continue to make progress on our goal to deliver stronger levels of revenue growth and sustainable levels of profit and cash flow.”

First Quarter 2018 Financial Highlights

Revenue

• Total revenue was $20.1 million, an increase compared to $18.6 million for the comparable period of 2017.
• Subscription revenue was $15.1 million, an increase compared to $13.9 million for the comparable period of 2017.
• Professional services revenue was $5.0 million, an increase compared to $4.7 million for the comparable period of 2017.

Operating Loss

• GAAP operating loss was $(2.7) million, compared to $(4.0) million for the comparable period of 2017.
• Non-GAAP adjusted operating loss(1) was $(0.7) million, compared to $(2.7) million for the comparable period of 2017.

Net Loss

• GAAP net loss was $(3.2) million, compared to $(4.4) million for the comparable period of 2017.
• GAAP basic and diluted net loss per share was $(0.11), compared to $(0.16) for the comparable period of 2017, based on 27.6 million and 27.2 million basic and diluted weighted average shares outstanding, respectively.
• Non-GAAP adjusted net loss(1) was $(1.2) million, compared to $(3.2) million for the comparable period of 2017.
• Non-GAAP adjusted net loss per share was $(0.04), compared to $(0.12) for the comparable period of 2017, based on 27.6 million and 27.2 million basic and diluted weighted average shares outstanding, respectively.

Adjusted EBITDA

• Adjusted EBITDA was $0.5 million for the three months ended March 31, 2018 and $(1.2) million for the comparable period of 2017.

Effect of Accounting Standards Codification (ASC) 606 versus ASC 605

The table below shows the effects of the adoption of ASC 606 versus ASC 605 on our Q1 2018 consolidated financial statements for the following items:

   

Three Months Ended March 31, 2018

WithAdoptionof ASC 606

   

WithoutAdoptionof ASC 606

   

Effect of

ChangeHigher/(Lower)

Total revenue $ 20.1 $ 20.2 $ (0.1 ) Non-GAAP adjusted loss from operations $ (0.7 ) $ (0.9 ) $ 0.2 Non-GAAP net loss per share, basic and diluted $ (0.04 ) $ (0.05 ) $ 0.01  

Balance Sheet and Cash Flow

• Cash and cash equivalents at March 31, 2018 totaled $9.3 million, compared to $9.4 million at December 31, 2017 and $15.0 million at March 31, 2017.
• Cash provided by operating activities was $1.4 million for the three months March 31, 2018, compared to cash provided by operating activities of $0.8 million for the three months March 31, 2017.

A reconciliation of GAAP operating loss and net loss to Non-GAAP adjusted operating 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.”

Business Outlook

Based on information available as of May 10, 2018, Amber Road is issuing guidance for the second quarter and full year 2018. Refer to the reconciliation of GAAP guidance to non-GAAP guidance tables at the end of this release for details on non-GAAP adjustments.

Given our adoption of ASC 606, we anticipate second quarter and full-year 2018 results to be in the following ranges:

Second Quarter 2018 Guidance (in millions, except per share info):

        Low High Revenue $ 20.4 $ 21.0 Non-GAAP adjusted loss from operations $ (1.8 ) $ (1.2 ) Non-GAAP net loss per share, basic and diluted $ (0.08 ) $ (0.06 ) Assumed weighted average shares outstanding 28.0 28.0  

Full Year 2018 Guidance (in millions, except per share info):

        Low High Revenue $ 84.0 $ 87.0 Non-GAAP adjusted loss from operations $ (5.3 ) $ (2.3 ) Non-GAAP net loss per share, basic and diluted $ (0.26 ) $ (0.15 ) Assumed weighted average shares outstanding 28.5 28.5  

Endnotes:

(1) For 2018, non-GAAP adjusted operating loss and adjusted net loss excludes stock-based compensation. For 2017, non-GAAP adjusted operating loss and adjusted net loss excludes stock-based compensation and change in fair value of contingent consideration liability.

Conference Call Information

Amber Road will host a conference call on Thursday, May 10, 2018 at 5:00 p.m. Eastern Time (ET) to discuss the Company’s first quarter financial results and its business outlook. To access this call, dial (800)-289-0438 (domestic) or (323)-794-2423 (international). The conference ID is 6513909. 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 until May 17, 2018 at (844)-512-2921 (domestic) or (412)-317-6671 (international). The replay pass code is 6513909. 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 transform the way companies conduct global trade. As a leading provider of cloud-based global trade management (GTM) software, trade content and training, we help companies all over the world create value through their global supply chain by improving margins, achieving greater agility and lowering risk. We do this by creating a digital model of the global supply chain that enables collaboration between buyers, sellers and logistics companies. We replace manual and outdated processes with comprehensive automation for global trade activities, including sourcing, supplier management, production tracking, transportation management, supply chain visibility, import and export compliance, and duty management. We provide rich data analytics to uncover areas for optimization and deliver a platform that is responsive and flexible to adapt to the ever-changing nature of global trade.

Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, Amber Road has provided non-GAAP financial measures and non-GAAP guidance within this press release including 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 and changes in the fair value of contingent consideration liability. 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 within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only our current expectations and beliefs, and therefore, contain risks and uncertainties about future events or our future financial performance, including, but not limited to, achieving revenue from bookings, closing business from the sales pipeline, new customer deployments and maintaining these relationships, the ability to reduce operating losses and use of cash, and attaining profitability. 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 annual, 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)

       

March 31, 2018

December 31, 2017 Assets Current assets: Cash and cash equivalents $ 9,312,412 $ 9,360,601 Accounts receivable, net 13,058,740 16,957,044 Unbilled receivables 1,453,819 884,104 Deferred commissions 3,841,985 4,400,015 Prepaid expenses and other current assets 2,835,879   1,715,534   Total current assets 30,502,835 33,317,298 Property and equipment, net 9,529,360 9,370,104 Goodwill 43,694,239 43,768,269 Other intangibles, net 4,725,002 4,999,885 Deferred commissions 8,611,504 6,734,326 Deposits and other assets 1,260,796   1,180,163   Total assets $ 98,323,736   $ 99,370,045   Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 2,028,922 $ 2,650,582 Accrued expenses 6,918,731 7,589,482 Current portion of capital lease obligations 1,416,455 1,352,456 Deferred revenue 35,700,091 37,812,239 Current portion of term loan, net of discount 714,391   714,391   Total current liabilities 46,778,590 50,119,150 Capital lease obligations, less current portion 1,357,126 1,461,101 Deferred revenue, less current portion 313,276 1,830,706 Term loan, net of discount, less current portion 12,660,794 12,839,392 Revolving credit facility 6,000,000 6,000,000 Other noncurrent liabilities 1,993,954   1,619,744   Total liabilities 69,103,740   73,870,093   Stockholders’ equity: Common stock, $0.001 par value; 100,000,000 shares authorized; issued and outstanding 27,331,022 and 27,288,985 shares at March 31, 2018 and December 31, 2017, respectively 27,331 27,289 Additional paid-in capital 197,289,661 195,203,097 Accumulated other comprehensive loss (2,029,576 ) (1,822,396 ) Accumulated deficit (166,067,420 ) (167,908,038 ) Total stockholders’ equity 29,219,996   25,499,952   Total liabilities and stockholders’ equity $ 98,323,736   $ 99,370,045    

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

   

Three Months Ended March 31,

2018     2017 Revenue:

Subscription

$ 15,089,112 $ 13,901,308 Professional services 4,975,280   4,653,248   Total revenue 20,064,392   18,554,556   Cost of revenue (1): Cost of subscription revenue 5,215,051 5,380,028 Cost of professional services revenue 4,258,962   4,021,746   Total cost of revenue 9,474,013   9,401,774   Gross profit 10,590,379   9,152,782   Operating expenses (1): Sales and marketing 5,807,315 5,803,386 Research and development 3,448,565 3,535,415 General and administrative 4,076,004   3,806,707   Total operating expenses 13,331,884   13,145,508   Loss from operations (2,741,505 ) (3,992,726 ) Interest income 993 805 Interest expense (299,599 ) (235,168 ) Loss before income taxes (3,040,111 ) (4,227,089 ) Income tax expense 127,081   186,107   Net loss $ (3,167,192 ) $ (4,413,196 )   Net loss per share: Basic and diluted $ (0.11 ) $ (0.16 ) Weighted-average shares outstanding: Basic and diluted 27,596,070   27,238,887                             (1) Includes stock-based compensation as follows:

Three Months Ended March 31,

2018 2017 Cost of subscription revenue $ 208,437 $ 203,272 Cost of professional services revenue 157,616 119,764 Sales and marketing 345,033 210,718 Research and development 428,066 283,638 General and administrative 866,436   408,243 $ 2,005,588   $ 1,225,635    

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

  Three Months Ended March 31, 2018     2017 Cash flows from operating activities: Net loss $ (3,167,192 ) $ (4,413,196 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 1,284,346 1,553,214 Bad debt expense 2,199 195,889 Stock-based compensation 2,005,588 1,225,635 Changes in fair value of contingent consideration liability — 18,525 Accretion of debt discount 8,902 11,177 Changes in operating assets and liabilities: Accounts receivable and unbilled receivables 3,357,243 3,187,957 Prepaid expenses and other assets (869,287 ) 169,675 Accounts payable (600,915 ) (978,355 ) Accrued expenses (689,650 ) (938,082 ) Other liabilities 381,842 (91,416 ) Deferred revenue (285,938 ) 852,333   Net cash provided by operating activities 1,427,138   793,356   Cash flows from investing activities: Capital expenditures (15,607 ) (11,014 ) Addition of capitalized software development costs (850,373 ) (473,797 ) Cash received (paid) for deposits 421   (18,008 ) Net cash used in investing activities (865,559 ) (502,819 ) Cash flows from financing activities: Proceeds from revolving line of credit 7,000,000 6,000,000 Payments on revolving line of credit (7,000,000 ) (6,000,000 ) Payments on term loan (187,500 ) (187,500 ) Debt financing costs — (35,701 ) Repayments on capital lease obligations (357,990 ) (367,365 ) Proceeds from the exercise of stock options 81,018   24,355   Net cash used in financing activities (464,472 ) (566,211 ) Effect of exchange rate on cash, cash equivalents and restricted cash (145,296 ) (117,620 ) Net decrease in cash and cash equivalents (48,189 ) (393,294 ) Cash, cash equivalents and restricted cash at beginning of period 9,417,001   15,464,274   Cash, cash equivalents and restricted cash at end of period $ 9,368,812   $ 15,070,980     Reconciliation of cash, cash equivalents and restricted cash to condensed consolidated balance sheet: Cash and cash equivalents $ 9,312,412 $ 15,014,839 Restricted cash in deposits and other assets 56,400   56,141   Total cash, cash equivalents and restricted cash $ 9,368,812   $ 15,070,980     Supplemental disclosures of cash flow information: Cash paid for interest $ 290,697 $ 226,958 Non-cash property and equipment acquired under capital lease 318,014 1,319,106 Non-cash property and equipment purchases in accounts payable — 17,729  

Reconciliation of Net Loss to Adjusted EBITDA(Unaudited)

    Three Months Ended March 31, 2018     2017 Net loss $ (3,167,192 ) $ (4,413,196 ) Depreciation and amortization expense 1,284,346 1,553,214 Interest expense 299,599 235,168 Interest income (993 ) (805 ) Income tax expense 127,081   186,107   EBITDA (1,457,159 ) (2,439,512 ) Stock-based compensation 2,005,588 1,225,635 Change in fair value of contingent consideration liability —   18,525   Adjusted EBITDA $ 548,429   $ (1,195,352 )  

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

    Three Months Ended March 31, 2018     2017 Net loss $ (3,167,192 ) $ (4,413,196 ) Stock-based compensation 2,005,588 1,225,635 Change in fair value of contingent consideration liability —   18,525   Non-GAAP adjusted net loss $ (1,161,604 ) $ (3,169,036 )   Adjusted non-GAAP net loss per share: Basic and diluted $ (0.04 ) $ (0.12 ) Weighted-average shares outstanding: GAAP weighted average number of shares outstanding - basic and diluted 27,596,070   27,238,887    

Reconciliation of Loss from Operations to Non-GAAP Adjusted Loss from Operations(Unaudited)

    Three Months Ended March 31, 2018     2017 Loss from operations $ (2,741,505 ) $ (3,992,726 ) Stock-based compensation 2,005,588 1,225,635 Change in fair value of contingent consideration liability —   18,525   Non-GAAP adjusted loss from operations $ (735,917 ) $ (2,748,566 )

Based on information available as of May 10, 2018, the following tables show 2018 GAAP guidance reconciled to non-GAAP guidance for the second quarter and full year 2018 as indicated below (numbers in millions, except per share data):

 

Reconciliation of Loss from Operations to Non-GAAP Adjusted Loss from Operations Guidance(Unaudited)

        Second Quarter 2018 Full Year 2018 Low   High Low     High Loss from operations $ (3.3 ) $ (2.7 ) $ (11.5 ) $ (8.5 ) Stock-based compensation 1.5   1.5   6.2   6.2   Non-GAAP adjusted loss from operations $ (1.8 ) $ (1.2 ) $ (5.3 ) $ (2.3 )  

Reconciliation of Net Loss per Share to Non-GAAP Adjusted Net Loss per Share Guidance (1)(Unaudited)

        Second Quarter 2018 Full Year 2018 Low     High Low     High Net loss per share, basic and diluted $ (0.13 ) $ (0.11 ) $ (0.48 ) $ (0.37 ) Stock-based compensation 0.05   0.05   0.22   0.22   Non-GAAP adjusted net loss per share, basic and diluted $ (0.08 ) $ (0.06 ) $ (0.26 ) $ (0.15 )   (1) This assumes weighted average shares outstanding - basic and diluted 28.0   28.0   28.5   28.5  

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Investor Relations ContactICRStaci Mortenson, 201-806-3663InvestorRelations@AmberRoad.comorAmber Road ContactsAnnika Helmrich (US & Canada), +1 201-806-3656AnnikaHelmrich@AmberRoad.comorMartijn van Gils (Europe & Asia), +31 858769534MartijnvanGils@AmberRoad.com