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 third quarter ended September 30, 2018.

Jim Preuninger, Chief Executive Officer of Amber Road, stated, “Q3 was another good quarter for Amber Road, exceeding our guidance on both the top and bottom lines. I am especially pleased to report positive non-GAAP operating income and strong adjusted EBITDA. We also generated meaningful cash flow from operations bringing our year-to-date cash flow from operations to roughly $5 million. We have established Amber Road as a company that can deliver solid revenue growth, with improving profit and cash flow.”

Third Quarter 2018 Financial Highlights

Revenue

• Total revenue was $22.2 million, an increase compared to $20.2 million for the comparable period of 2017.
• Subscription revenue was $15.9 million, an increase compared to $14.9 million for the comparable period of 2017.
• Professional services revenue was $6.3 million, an increase compared to $5.3 million for the comparable period of 2017.

Operating Income (Loss)

• GAAP operating loss was $(1.2) million, compared to $(1.8) million for the comparable period of 2017.
• Non-GAAP adjusted operating income (loss)(1) was $1.3 million, compared to $(11,862) for the comparable period of 2017.

Net Income (Loss)

• GAAP net loss was $(1.6) million, compared to $(2.2) million for the comparable period of 2017.
• GAAP basic and diluted net loss per share was $(0.06), compared to $(0.08) for the comparable period of 2017, based on 27.9 million and 27.5 million basic and diluted weighted average shares outstanding, respectively.
• Non-GAAP adjusted net income (loss)(1) was $0.8 million, compared to $(0.4) million for the comparable period of 2017.
• Non-GAAP adjusted net income (loss) per share was $0.03, compared to $(0.02) for the comparable period of 2017, based on 27.9 million and 27.5 million basic and diluted weighted average shares outstanding, respectively.

Adjusted EBITDA

• Adjusted EBITDA was $2.5 million, compared to $1.0 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 consolidated financial statements for the three and nine months ended September 30, 2018 for the following items:

  Three Months EndedSeptember 30, 2018   Nine Months EndedSeptember 30, 2018 (in millions, except per share info)

WithAdoptionofASC 606

 

WithoutAdoptionofASC 606

 

Effect ofChangeHigher/(Lower)

WithAdoptionofASC 606

 

WithoutAdoptionofASC 606

 

Effect ofChangeHigher/(Lower)

Total revenue $ 22.2 $ 22.1 $ 0.1 $ 63.3 $ 63.4 $ (0.1) Non-GAAP adjusted income (loss) from operations $ 1.3 $ 1.0 $ 0.3 $ — $ (0.5) $ 0.5 Non-GAAP net income (loss) per share, basic and diluted $ 0.03 $ 0.02 $ 0.01 $ (0.04) $ (0.06) $ 0.02  

Balance Sheet and Cash Flow

• Cash and cash equivalents at September 30, 2018 were $10.1 million, compared to $9.4 million at December 31, 2017 and $8.3 million at September 30, 2017.
• Cash provided by operating activities was $4.9 million for the nine months September 30, 2018, compared to cash used in operating activities of $(2.8) million for the nine months September 30, 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 November 8, 2018, Amber Road is issuing guidance for the fourth 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 fourth quarter and full-year 2018 results to be in the following ranges:

  Fourth Quarter   Full Year (in millions, except per share info) Low   High Low   High Revenue $ 21.1 $ 21.7 $ 84.4 $ 85.0 Non-GAAP adjusted loss from operations $ (0.9) $ (0.3) $ (0.9) $ (0.3) Non-GAAP net loss per share, basic and diluted $ (0.05) $ (0.03) $ (0.10) $ (0.08) Assumed weighted average shares outstanding 28.0 28.0 28.0 28.0  

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, November 8, 2018 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)-394-8218 (domestic) or (323)-794-2588 (international). The conference ID is 4359810. 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 November 15, 2018 at (844)-512-2921 (domestic) or (412)-317-6671 (international). The replay pass code is 4359810. 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 income (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 income (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 SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

    September 30,2018   December 31,2017 Assets Current assets: Cash and cash equivalents $ 10,140,432 $ 9,360,601 Accounts receivable, net 12,603,370 16,957,044 Unbilled receivables 1,122,441 884,104 Deferred commissions 4,026,733 4,400,015 Prepaid expenses and other current assets 2,436,187 1,715,534 Total current assets 30,329,163 33,317,298 Property and equipment, net 10,218,127 9,370,104 Goodwill 43,739,860 43,768,269 Other intangibles, net 4,214,467 4,999,885 Deferred commissions 8,638,543 6,734,326 Deposits and other assets 1,378,937 1,180,163 Total assets $ 98,519,097 $ 99,370,045 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 1,238,368 $ 2,650,582 Accrued expenses 8,170,708 7,589,482 Current portion of capital lease obligations 1,390,224 1,352,456 Deferred revenue 35,628,497 37,812,239 Current portion of term loan, net of discount 714,391 714,391 Total current liabilities 47,142,188 50,119,150 Capital lease obligations, less current portion 1,440,732 1,461,101 Deferred revenue, less current portion 94,162 1,830,706 Term loan, net of discount, less current portion 12,303,598 12,839,392 Revolving credit facility 6,000,000 6,000,000 Other noncurrent liabilities 1,777,158 1,619,744 Total liabilities 68,757,838 73,870,093 Stockholders’ equity: Common stock, $0.001 par value; 100,000,000 shares authorized; issued and outstanding 27,618,995 and 27,288,985 shares at September 30, 2018 and December 31, 2017, respectively 27,619 27,289 Additional paid-in capital 205,433,858 195,203,097 Accumulated other comprehensive loss (1,820,143) (1,822,396) Accumulated deficit (173,880,075) (167,908,038) Total stockholders’ equity 29,761,259 25,499,952 Total liabilities and stockholders’ equity $ 98,519,097 $ 99,370,045    

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

    Three Months EndedSeptember 30,   Nine Months EndedSeptember 30,   2018     2017   2018     2017 Revenue: Subscription $ 15,857,436 $ 14,944,160 $ 46,373,970 $ 43,532,217 Professional services   6,303,562   5,269,090   16,907,775   14,910,883 Total revenue   22,160,998   20,213,250   63,281,745   58,443,100 Cost of revenue (1): Cost of subscription revenue 5,358,242 4,903,483 16,170,349 16,066,645 Cost of professional services revenue   4,102,453   4,247,519   12,727,948   12,396,228 Total cost of revenue   9,460,695   9,151,002   28,898,297   28,462,873 Gross profit   12,700,303   11,062,248   34,383,448   29,980,227 Operating expenses (1): Sales and marketing 5,523,108 5,551,239 17,443,921 17,043,562 Research and development 3,515,997 3,830,431 11,066,004 11,201,577 General and administrative   4,840,543   3,517,187   15,577,665   11,247,825 Total operating expenses   13,879,648   12,898,857   44,087,590   39,492,964 Loss from operations (1,179,345) (1,836,609) (9,704,142) (9,512,737) Interest income 3,029 1,238 6,661 2,564 Interest expense   (325,253)   (272,293)   (964,423)   (751,644) Loss before income taxes (1,501,569) (2,107,664) (10,661,904) (10,261,817) Income tax expense   113,201   130,039   317,943   906,557 Net loss $ (1,614,770) $ (2,237,703) $ (10,979,847)

$

(11,168,374)

  Net loss per share: Basic and diluted $ (0.06) $ (0.08) $ (0.40) $ (0.41) Weighted-average shares outstanding: Basic and diluted   27,871,168   27,471,248   27,717,793   27,377,058      

(1) Includes stock-based compensation as follows:

Three Months EndedSeptember 30, Nine Months EndedSeptember 30,   2018   2017   2018   2017 Cost of subscription revenue $ 178,358 $ 214,033 $ 756,014 $ 591,965 Cost of professional services revenue 146,954 153,357 564,141 405,129 Sales and marketing 215,433 321,226 1,177,833 780,626 Research and development 449,065 401,567 1,680,615 987,427 General and administrative   1,470,133   734,564   5,560,416   1,513,898 $ 2,459,943 $ 1,824,747 $ 9,739,019 $ 4,279,045    

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

   

Nine Months EndedSeptember 30,

2018   2017 Cash flows from operating activities: Net loss $ (10,979,847) $ (11,168,374) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 3,761,482 4,015,240 Bad debt expense 63,221 305,612 Stock-based compensation 9,739,019 4,279,045 Changes in fair value of contingent consideration liability — 18,525 Accretion of debt discount 26,706 28,981 Changes in operating assets and liabilities: Accounts receivable and unbilled receivables 4,019,452 3,239,595 Prepaid expenses and other assets (862,296) 823,889 Accounts payable (1,251,867) (967,975) Accrued expenses 720,711 (1,172,824) Settlement of contingent accrued compensation related to former ecVision founder — (2,366,469) Other liabilities 213,120 (264,429) Deferred revenue (536,448) 477,278 Net cash provided by (used in) operating activities 4,913,253 (2,751,906) Cash flows from investing activities: Capital expenditures (189,073) (169,739) Addition of capitalized software development costs (2,532,519) (1,217,126) Cash paid for deposits (46,522) (205,264) Net cash used in investing activities (2,768,114) (1,592,129) Cash flows from financing activities: Proceeds from revolving line of credit 18,350,000 18,350,000 Payments on revolving line of credit (18,350,000) (18,250,000) Payments on term loan (562,500) (468,750) Debt financing costs — (35,701) Repayments on capital lease obligations (1,100,659) (1,237,031) Proceeds from the exercise of stock options 492,072 175,056 Contingent consideration related to ecVision acquisition — (1,308,525) Net cash used in financing activities (1,171,087) (2,774,951) Effect of exchange rate on cash, cash equivalents and restricted cash (194,221) (6,654) Net decrease in cash, cash equivalents and restricted cash 779,831 (7,125,640) 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 $ 10,196,832 $ 8,338,634   Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet: Cash and cash equivalents $ 10,140,432 $ 8,282,234 Restricted cash in deposits and other assets 56,400 56,400 Total cash, cash equivalents and restricted cash $ 10,196,832 $ 8,338,634   Supplemental disclosures of cash flow information: Cash paid for interest $ 937,716 $ 717,057 Non-cash property and equipment acquired under capital lease 1,118,058 1,638,819 Non-cash property and equipment purchases in accounts payable 6,691 46,545    

Reconciliation of Net Loss to Adjusted EBITDA

(Unaudited)

    Three Months EndedSeptember 30,   Nine Months EndedSeptember 30, 2018   2017 2018   2017 Net loss $ (1,614,770) $ (2,237,703) $ (10,979,847) $ (11,168,374) Depreciation and amortization expense 1,214,214 1,007,083 3,761,482 4,015,240 Interest expense 325,253 272,293 964,423 751,644 Interest income (3,029) (1,238) (6,661) (2,564) Income tax expense 113,201 130,039 317,943 906,557 EBITDA 34,869 (829,526) (5,942,660) (5,497,497) Stock-based compensation 2,459,943 1,824,747 9,739,019 4,279,045 Change in fair value of contingent consideration liability — — — 18,525 Adjusted EBITDA $ 2,494,812 $ 995,221 $ 3,796,359 $ (1,199,927)    

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

(Unaudited)

    Three Months EndedSeptember 30,   Nine Months EndedSeptember 30, 2018   2017 2018   2017 Net loss $ (1,614,770) $ (2,237,703) $ (10,979,847) $ (11,168,374)

Stock-based compensation

2,459,943 1,824,747 9,739,019 4,279,045 Change in fair value of contingent consideration liability — — — 18,525 Non-GAAP adjusted net income (loss) $ 845,173 $ (412,956) $ (1,240,828) $ (6,870,804)   Adjusted non-GAAP net income (loss) per share: Basic and diluted $ 0.03 $ (0.02) $ (0.04) $ (0.25) GAAP Weighted-average shares outstanding: Basic and diluted 27,871,168 27,471,248 27,717,793 27,377,058    

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

(Unaudited)

    Three Months EndedSeptember 30,   Nine Months EndedSeptember 30, 2018   2017 2018   2017 Loss from operations $ (1,179,345) $ (1,836,609) $ (9,704,142) $ (9,512,737) Stock-based compensation 2,459,943 1,824,747 9,739,019 4,279,045 Change in fair value of contingent consideration liability — — — 18,525 Non-GAAP adjusted income (loss) from operations $ 1,280,598 $ (11,862) $ 34,877 $ (5,215,167)  

Based on information available as of November 8, 2018, the following tables show 2018 GAAP guidance reconciled to non-GAAP guidance for the fourth 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)

          Fourth Quarter 2018 Full Year 2018 Low   High Low   High Loss from operations $ (3.4) $ (2.8) $ (13.1) $ (12.5) Stock-based compensation 2.5 2.5 12.2 12.2 Non-GAAP adjusted loss from operations $ (0.9) $ (0.3) $ (0.9) $ (0.3)  

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

(Unaudited)

  Fourth Quarter 2018 Full Year 2018 Low High Low High Net loss per share, basic and diluted $ (0.14) $ (0.12) $ (0.54) $ (0.52) Stock-based compensation 0.09 0.09 0.44 0.44 Non-GAAP adjusted net loss per share, basic and diluted $ (0.05) $ (0.03) $ (0.10) $ (0.08)   (1) This assumes weighted average shares outstanding - basic and diluted 28.0 28.0 28.0 28.0  

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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