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 fourth quarter and full year ended December 31, 2018.

Jim Preuninger, Chief Executive Officer of Amber Road, stated, “Q4 was a strong quarter for Amber Road, exceeding the high end of both our revenue and profit guidance. Strength in the quarter was driven by accelerating subscription growth rates. For the full year 2018, I am pleased to report that we generated $3.3 million in cash flow from operations. We also had very strong Adjusted EBITDA of $5.4 million or a 6.3% margin, a significant improvement from break-even in the prior year. We have built a business that is financially strong with improving levels of profit and cash flow. We believe in 2019 and beyond, we can continue to deliver against these key metrics by taking advantage of opportunities in global trade, bringing more focus to our sales and marketing efforts, driving expansion into new markets, and returning subscription revenue growth to the double-digit levels exiting the year.”

Fourth Quarter 2018 Financial Highlights

Revenue

• Total revenue was $21.9 million, an increase compared to $20.6 million for the comparable period of 2017.
• Subscription revenue was $16.3 million, an increase compared to $14.9 million for the comparable period of 2017.
• Professional services revenue was $5.6 million, a decrease compared to $5.7 million for the comparable period of 2017.

Operating Income (Loss)

• GAAP operating loss was $(2.1) million, compared to $(1.9) million for the comparable period of 2017.
• Non-GAAP adjusted operating income (loss)(1) was $0.4 million, compared to $(0.1) million for the comparable period of 2017.

Net Loss

• GAAP net loss was $(2.6) million, compared to $(1.8) million for the comparable period of 2017.
• GAAP basic and diluted net loss per share was $(0.09), compared to $(0.07) for the comparable period of 2017, based on 28.1 million and 27.5 million basic and diluted weighted average shares outstanding, respectively.
• Non-GAAP adjusted net loss(1) was $(86,526), compared to $(10,292) for the comparable period of 2017.
• Non-GAAP adjusted net loss per share was $0.00, compared to $0.00 for the comparable period of 2017, based on 28.1 million and 27.5 million basic and diluted weighted average shares outstanding, respectively.

Adjusted EBITDA

• Adjusted EBITDA was $1.6 million, compared to $1.3 million for the comparable period of 2017.

Full Year 2018 Financial Highlights

Revenue

• Total revenue was $85.2 million, an increase compared to $79.1 million in 2017.
• Subscription revenue was $62.6 million, an increase compared to $58.5 million in 2017.
• Professional Services revenue was $22.5 million, an increase compared to $20.6 million in 2017.

Operating Income (Loss)

• GAAP operating loss was $(11.8) million, compared to $(11.4) million in 2017.
• Non-GAAP adjusted operating income (loss)(1) was $0.4 million, compared to $(5.3) million in 2017.

Net Loss

• GAAP net loss was $(13.6) million, compared to $(13.0) million in 2017.
• GAAP basic and diluted net loss per common share was $(0.49), compared to $(0.47) in 2017, based on 27.8 million and 27.4 million basic and diluted weighted average common shares outstanding, respectively.
• Non-GAAP adjusted net loss(1) was $(1.3) million, compared to $(6.9) million in 2017.
• Non-GAAP adjusted net loss per common share was $(0.05), compared to $(0.25) in 2017, based on 27.8 million and 27.4 million basic and diluted weighted average common shares outstanding, respectively.

Adjusted EBITDA

• Adjusted EBITDA was $5.4 million for 2018 and $0.1 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 months and year ended December 31, 2018 for the following items:

   

Three Months EndedDecember 31, 2018

   

Year Ended December 31, 2018

(in millions, except per share info)

WithAdoptionofASC 606

   

WithoutAdoption ofASC 606

   

Effect ofChangeHigher/(Lower)

WithAdoptionofASC 606

   

WithoutAdoptionofASC 606

   

Effect ofChangeHigher/(Lower)

Total revenue $ 21.9 $ 21.7 $ 0.2 $ 85.2 $ 85.1 $ 0.1 Non-GAAP adjusted income (loss) from operations $ 0.4 $ 0.1 $ 0.3 $ 0.4 $ (0.3) $ 0.8 Non-GAAP net income (loss) per share, basic and diluted $ 0.00 $ (0.01) $ 0.01 $ (0.05) $ (0.07) $ 0.02

Balance Sheet and Cash Flow

• Cash and cash equivalents at December 31, 2018 were $7.5 million, compared to $9.4 million at September 30, 2018 and $9.4 million at December 31, 2017.
• Cash provided by operating activities was $3.3 million for the year ended December 31, 2018, compared to cash used in operating activities of $(0.7) million for the year ended December 31, 2017.

A reconciliation of GAAP operating loss 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.”

Business Outlook

Based on information available as of February 11, 2019, Amber Road is issuing guidance for the first quarter and full year 2019. Refer to the reconciliation of GAAP guidance to non-GAAP guidance tables at the end of this release for details on non-GAAP adjustments.

We anticipate first quarter and full-year 2019 results to be in the following ranges:

    First Quarter     Full Year (in millions, except per share info) Low     High Low     High Revenue $ 20.3 $ 20.9 $ 88.7 $ 91.7 Non-GAAP adjusted income (loss) from operations $ (0.7) $ (0.1) $ 0.0 $ 3.0 Non-GAAP net income (loss) per share, basic and diluted $ (0.04) $ (0.02) $ (0.06) $ 0.04 Assumed weighted average shares outstanding - basic 28.3 28.3 29.0 29.0 Assumed weighted average shares outstanding - diluted 28.3 28.3 29.0 32.4

Endnote:

(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 Monday, February 11, 2019 at 5:00 p.m. Eastern Time (ET) to discuss the Company’s fourth 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 9818081. 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 February 18, 2019 at (844)-512-2921 (domestic) or (412)-317-6671 (international). The replay pass code is 9818081. 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 SUBSIDIARIESConsolidated Balance Sheets(Unaudited)

        December 31, 2018     2017 Assets Current assets: Cash and cash equivalents $ 7,514,719 $ 9,360,601 Accounts receivable, net 17,171,777 16,957,044 Unbilled receivables 1,004,447 884,104 Deferred commissions 4,023,473 4,400,015 Prepaid expenses and other current assets 1,977,662 1,715,534 Total current assets 31,692,078 33,317,298 Property and equipment, net 10,132,808 9,370,104 Goodwill 43,731,942 43,768,269 Other intangibles, net 3,953,582 4,999,885 Deferred commissions 9,092,591 6,734,326 Deposits and other assets 1,499,976 1,180,163 Total assets $ 100,102,977 $ 99,370,045 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 2,110,956 $ 2,650,582 Accrued expenses 9,509,165 7,589,482 Current portion of capital lease obligations 1,263,375 1,352,456 Deferred revenue 35,144,355 37,812,239 Current portion of term loan, net of discount 714,745 714,391 Total current liabilities 48,742,596 50,119,150 Capital lease obligations, less current portion 1,197,399 1,461,101 Deferred revenue, less current portion 265,324 1,830,706 Term loan, net of discount, less current portion 12,054,490 12,839,392 Revolving credit facility 6,000,000 6,000,000 Other noncurrent liabilities 1,808,479 1,619,744 Total liabilities 70,068,288 73,870,093 Stockholders’ equity: Common stock, $0.001 par value; 100,000,000 shares authorized; issued and outstanding 27,841,498 and 27,288,985 shares at December 31, 2018 and 2017, respectively 27,842 27,289 Additional paid-in capital 208,349,895 195,203,097 Accumulated other comprehensive loss (1,840,300) (1,822,396) Accumulated deficit (176,502,748) (167,908,038) Total stockholders’ equity 30,034,689 25,499,952 Total liabilities and stockholders’ equity $ 100,102,977 $ 99,370,045    

AMBER ROAD, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

          Three Months EndedDecember 31,     Year Ended December 31, 2018     2017 2018     2017 Revenue: Subscription $ 16,262,921 $ 14,946,927 $ 62,636,891 $ 58,479,139 Professional services 5,621,387 5,686,092 22,529,162 20,596,971 Total revenue 21,884,308 20,633,019 85,166,053 79,076,110 Cost of revenue (1): Cost of subscription revenue 5,387,445 5,084,777 21,557,794 21,151,419 Cost of professional services revenue 3,865,267 4,193,925 16,593,215 16,590,148 Total cost of revenue 9,252,712 9,278,702 38,151,009 37,741,567 Gross profit 12,631,596 11,354,317 47,015,044 41,334,543 Operating expenses (1): Sales and marketing 5,505,566 5,482,973 22,949,487 22,526,535 Research and development 3,598,839 3,739,819 14,664,843 14,941,394 General and administrative 5,670,514 4,015,475 21,248,179 15,263,297 Total operating expenses 14,774,919 13,238,267 58,862,509 52,731,226 Loss from operations (2,143,323) (1,883,950) (11,847,465) (11,396,683) Interest income 2,080 2,242 8,741 4,806 Interest expense (307,363) (225,190) (1,271,786) (976,834) Loss before income taxes (2,448,606) (2,106,898) (13,110,510) (12,368,711) Income tax expense 174,067 (297,782) 492,010 608,775 Net loss $ (2,622,673) $ (1,809,116) $ (13,602,520) $ (12,977,486)   Net loss per share: Basic and diluted $ (0.09) $ (0.07) $ (0.49) $ (0.47) Weighted-average shares outstanding: Basic and diluted 28,146,280 27,531,369 27,825,795 27,415,953     (1) Includes stock-based compensation as follows: Three Months EndedDecember 31, Year Ended December 31, 2018 2017 2018 2017 Cost of subscription revenue $ 139,463 $ 175,912 $ 895,477 $ 767,877 Cost of professional services revenue 97,358 144,249 661,499 549,378 Sales and marketing 257,222 234,681 1,435,055 1,015,307 Research and development 355,690 417,344 2,036,305 1,404,771 General and administrative 1,686,414 826,638 7,246,830 2,340,536 $ 2,536,147 $ 1,798,824 $ 12,275,166 $ 6,077,869    

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

        Year Ended December 31, 2018     2017 Cash flows from operating activities: Net loss $ (13,602,520) $ (12,977,486) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 4,979,615 5,386,789 Bad debt expense 195,372 568,193 Stock-based compensation 12,275,166 6,077,869 Changes in fair value of contingent consideration liability — 18,525 Accretion of debt discount 35,608 37,884 Changes in operating assets and liabilities: Accounts receivable and unbilled receivables (577,960) 1,615,836 Prepaid expenses and other assets (881,663) 1,313,029 Accounts payable (556,039) (166,898) Accrued expenses 2,055,400 (2,988,525) Settlement of contingent accrued compensation related to former ecVision founder — (2,366,469) Other liabilities 215,162 (209,859) Deferred revenue (846,843) 3,021,248 Net cash provided by (used in) operating activities 3,291,298 (669,864) Cash flows from investing activities: Capital expenditures (219,945) (257,893) Addition of capitalized software development costs (3,214,896) (1,458,495) Cash paid for deposits (119,036) (190,752) Net cash used in investing activities (3,553,877) (1,907,140) Cash flows from financing activities: Proceeds from revolving line of credit 23,850,000 24,350,000 Payments on revolving line of credit (23,850,000) (24,350,000) Payments on term loan (750,000) (656,250) Debt financing costs (70,156) (35,701) Repayments on capital lease obligations (1,497,865) (1,556,097) Proceeds from the exercise of stock options 872,185 313,695 Contingent consideration related to ecVision acquisition — (1,308,525) Net cash used in financing activities (1,445,836) (3,242,878) Effect of exchange rate on cash, cash equivalents and restricted cash (137,467) (227,391) Net decrease in cash, cash equivalents and restricted cash (1,845,882) (6,047,273) 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 $ 7,571,119 $ 9,417,001   Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheet: Cash and cash equivalents $ 7,514,719 $ 9,360,601 Restricted cash in deposits and other assets 56,400 56,400 Total cash, cash equivalents and restricted cash $ 7,571,119 $ 9,417,001   Supplemental disclosures of cash flow information: Cash paid for interest $ 1,236,178 $ 938,949 Non-cash property and equipment acquired under capital lease 1,145,082 1,936,990 Non-cash property and equipment purchases in accounts payable 136,623 —    

Reconciliation of Net Loss to Adjusted EBITDA(Unaudited)

 

        Three Months EndedDecember 31, Year Ended December 31, 2018     2017 2018     2017 Net loss $ (2,622,673) $ (1,809,116) $ (13,602,520) $ (12,977,486) Depreciation and amortization expense 1,218,133 1,371,549 4,979,615 5,386,789 Interest expense 307,363 225,190 1,271,786 976,834 Interest income (2,080) (2,242) (8,741) (4,806) Income tax expense 174,067 (297,782) 492,010 608,775 EBITDA (925,190) (512,401) (6,867,850) (6,009,894) Stock-based compensation 2,536,147 1,798,824 12,275,166 6,077,869 Change in fair value of contingent consideration liability — — — 18,525 Adjusted EBITDA $ 1,610,957 $ 1,286,423 $ 5,407,316 $ 86,500    

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

        Three Months EndedDecember 31, Year Ended December 31, 2018     2017 2018     2017 Net loss $ (2,622,673) $ (1,809,116) $ (13,602,520) $ (12,977,486) Stock-based compensation 2,536,147 1,798,824 12,275,166 6,077,869 Change in fair value of contingent consideration liability — — — 18,525 Non-GAAP adjusted net loss $ (86,526) $ (10,292) $ (1,327,354) $ (6,881,092)   Adjusted non-GAAP net loss per share: Basic and diluted $ 0.00 $ 0.00 $ (0.05) $ (0.25) GAAP Weighted-average shares outstanding: Basic and diluted 28,146,280 27,531,369 27,825,795 27,415,953    

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

(Unaudited)

        Three Months EndedDecember 31, Year Ended December 31, 2018     2017 2018     2017 Loss from operations $ (2,143,323) $ (1,883,950) $ (11,847,465) $ (11,396,683) Stock-based compensation 2,536,147 1,798,824 12,275,166 6,077,869 Change in fair value of contingent consideration liability — — — 18,525 Non-GAAP adjusted income (loss) from operations $ 392,824 $ (85,126) $ 427,701 $ (5,300,289)  

Based on information available as of February 11, 2019, the following tables show 2019 GAAP guidance reconciled to non-GAAP guidance for the first quarter and full year 2019 as indicated below (numbers in millions, except per share data):

 

Reconciliation of Loss from Operations to Non-GAAP Adjusted Loss from Operations Guidance

(Unaudited)

            First Quarter 2019 Full Year 2019 Low     High Low     High Loss from operations $ (2.6) $ (2.0) $ (4.7) $ (1.7) Stock-based compensation 1.9 1.9 4.7 4.7 Non-GAAP adjusted loss from operations $ (0.7) $ (0.1) $ 0.0 $ 3.0    

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

(Unaudited)

            First Quarter 2019 Full Year 2019 Low     High Low     High Net loss per share, basic and diluted $ (0.11) $ (0.09) $ (0.22) $ (0.12) Stock-based compensation 0.07 0.07 0.16 0.16 Non-GAAP adjusted net loss per share, basic and diluted $ (0.04) $ (0.02) $ (0.06) $ 0.04   (1) This assumes weighted average shares outstanding - basic 28.3 28.3 29.0 29.0 (1) This assumes weighted average shares outstanding - diluted 28.3 28.3 29.0 32.4

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Investor Relations ContactStaci MortensonICR201-806-3663InvestorRelations@AmberRoad.comAmber Road ContactsAnnika Helmrich (US & Canada)+1 201 806 3656AnnikaHelmrich@AmberRoad.comMartijn van Gils (Europe & Asia)+31 858769534MartijnvanGils@AmberRoad.com