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Amber Road Announces Second Quarter 2018 Financial Results

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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, 2018.

Jim Preuninger, Chief Executive Officer of Amber Road, stated, "Q2 was
another good quarter for Amber Road, exceeding our guidance on both the
top and bottom lines. We once again generated positive Adjusted EBITDA
and were cash flow positive from operations for the first half of
2018. We had healthy deal closures, adding a number of new customers and
expanding our relationship with many existing ones. Global trade is
experiencing unprecedented levels of uncertainty, confusion and
escalating costs, and we have built a business that can help enterprises
respond to these ever changing macro global trade events. We continue to
make progress on our goal to deliver stronger levels of revenue growth
and sustainable levels of profit and cash flow."

Second Quarter 2018 Financial Highlights

Revenue

  • Total revenue was $21.1 million, an increase compared to $19.7 million
    for the comparable period of 2017.
  • Subscription revenue was $15.4 million, an increase compared to $14.7
    million for the comparable period of 2017.
  • Professional services revenue was $5.6 million, an increase compared
    to $5.0 million for the comparable period of 2017.

Operating Loss

  • GAAP operating loss was $(2.8) million, compared to $(3.7) million for
    the comparable period of 2017.
  • Non-GAAP adjusted operating loss(1) was $(0.5) million,
    compared to $(2.5) million for the comparable period of 2017.

Net Loss

  • GAAP net loss was $(3.2) million, compared to $(4.5) million for the
    comparable period of 2017.
  • GAAP basic and diluted net loss per share was $(0.12), compared to
    $(0.16) for the comparable period of 2017, based on 27.7 million and
    27.4 million basic and diluted weighted average shares outstanding,
    respectively.
  • Non-GAAP adjusted net loss(1) was $(0.9) million, compared
    to $(3.3) million for the comparable period of 2017.
  • Non-GAAP adjusted net loss per share was $(0.03), compared to $(0.12)
    for the comparable period of 2017, based on 27.7 million and 27.4
    million basic and diluted weighted average shares outstanding,
    respectively.

Adjusted EBITDA

  • Adjusted EBITDA was $0.8 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 six
months ended June 30, 2018 for the following items:

       
Three Months Ended
June 30, 2018
Six Months Ended
June 30, 2018
(in millions, except per share info)

With
Adoption
of ASC 606

   

Without
Adoption
of ASC 606

   

Effect of
Change
Higher/
(Lower)

With
Adoption
of ASC 606

   

Without
Adoption
of ASC 606

   

Effect of
Change
Higher/
(Lower)

Total revenue $ 21.1 $ 21.1 $ $ 41.1 $ 41.3 $ (0.2 )
Non-GAAP adjusted loss from operations $ (0.5 ) $ (0.6 ) $ 0.1 $ (1.2 ) $ (1.5 ) $ 0.3
Non-GAAP net loss per share, basic and diluted $ (0.03 ) $ (0.04 ) $ 0.01 $ (0.08 ) $ (0.08 ) $
 

Balance Sheet and Cash Flow

  • Cash and cash equivalents at June 30, 2018 was $7.5 million, compared
    to $9.4 million at December 31, 2017 and $11.1 million at June 30,
    2017.
  • Cash provided by operating activities was $0.8 million for the six
    months June 30, 2018, compared to cash used in operating activities of
    $(1.1) million for the six months June 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 August 7, 2018, Amber Road is
issuing guidance for the third 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 third quarter and full-year
2018 results to be in the following ranges:

       
Third Quarter Full Year
(in millions, except per share info) Low     High Low     High
Revenue $ 21.3 $ 21.9 $ 84.4 $ 86.4
Non-GAAP adjusted loss from operations $ (0.8 ) $ (0.2 ) $ (3.2 ) $ (1.2 )
Non-GAAP net loss per share, basic and diluted $ (0.05 ) $ (0.03 ) $ (0.19 ) $ (0.12 )
Assumed weighted average shares outstanding 28.0 28.0 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 Tuesday, August 7, 2018 at
5:00 p.m. Eastern Time (ET) to discuss the Company's second quarter
financial results and its business outlook. To access this call, dial
(888)-394-8218 (domestic) or (323)-701-0225 (international). The
conference ID is 9876935. 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 August
14, 2018 at (844)-512-2921 (domestic) or (412)-317-6671 (international).
The replay pass code is 9876935. 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 SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

 
June 30,
2018
December 31,
2017
Assets
Current assets:
Cash and cash equivalents $ 7,508,655 $ 9,360,601
Accounts receivable, net 16,102,172 16,957,044
Unbilled receivables 912,268 884,104
Deferred commissions 4,271,834 4,400,015
Prepaid expenses and other current assets 2,284,206   1,715,534  
Total current assets 31,079,135 33,317,298
Property and equipment, net 9,700,769 9,370,104
Goodwill 43,700,512 43,768,269
Other intangibles, net 4,466,739 4,999,885
Deferred commissions 8,456,002 6,734,326
Deposits and other assets 1,446,860   1,180,163  
Total assets $ 98,850,017   $ 99,370,045  
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,947,271 $ 2,650,582
Accrued expenses 6,735,396 7,589,482
Current portion of capital lease obligations 1,398,234 1,352,456
Deferred revenue 37,323,361 37,812,239
Current portion of term loan, net of discount 714,391   714,391  
Total current liabilities 48,118,653 50,119,150
Capital lease obligations, less current portion 1,399,052 1,461,101
Deferred revenue, less current portion 265,324 1,830,706
Term loan, net of discount, less current portion 12,482,196 12,839,392
Revolving credit facility 6,000,000 6,000,000
Other noncurrent liabilities 1,862,405   1,619,744  
Total liabilities 70,127,630   73,870,093  
Stockholders' equity:
Common stock, $0.001 par value; 100,000,000 shares authorized;
issued and outstanding 27,496,442 and 27,288,985 shares at June 30,
2018 and December 31, 2017, respectively
27,497 27,289
Additional paid-in capital 199,819,099 195,203,097
Accumulated other comprehensive loss (1,852,667 ) (1,822,396 )
Accumulated deficit (169,271,542 ) (167,908,038 )
Total stockholders' equity 28,722,387   25,499,952  
Total liabilities and stockholders' equity $ 98,850,017   $ 99,370,045  
 

       

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

 
Three Months Ended
June 30,
Six Months Ended
June 30,
2018     2017 2018     2017
Revenue:
Subscription $ 15,427,422 $ 14,686,744 $ 30,516,534 $ 28,588,052
Professional services 5,628,933   4,988,541   10,604,213   9,641,789  
Total revenue 21,056,355   19,675,285   41,120,747   38,229,841  
Cost of revenue (1):
Cost of subscription revenue 5,447,788 5,783,131 10,662,839 11,163,159
Cost of professional services revenue 4,286,163   4,126,958   8,545,125   8,148,704  
Total cost of revenue 9,733,951   9,910,089   19,207,964   19,311,863  
Gross profit 11,322,404   9,765,196   21,912,783   18,917,978  
Operating expenses (1):
Sales and marketing 5,885,177 5,688,937 11,692,492 11,492,323
Research and development 3,801,215 3,835,729 7,249,780 7,371,144
General and administrative 4,425,541   3,923,928   8,501,545   7,730,635  
Total operating expenses 14,111,933   13,448,594   27,443,817   26,594,102  
Loss from operations (2,789,529 ) (3,683,398 ) (5,531,034 ) (7,676,124 )
Interest income 2,639 521 3,632 1,326
Interest expense (339,571 ) (244,183 ) (639,170 ) (479,351 )
Loss before income taxes (3,126,461 ) (3,927,060 ) (6,166,572 ) (8,154,149 )
Income tax expense 77,661   590,411   204,742   776,518  
Net loss $ (3,204,122 ) $ (4,517,471 ) $ (6,371,314 ) $ (8,930,667 )
 
Net loss per share:
Basic and diluted $ (0.12 ) $ (0.16 ) $ (0.23 ) $ (0.33 )
Weighted-average shares outstanding:
Basic and diluted 27,683,120   27,418,487   27,639,835   27,329,183  
 
                                 
               
(1) Includes stock-based compensation as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
2018 2017 2018 2017
Cost of subscription revenue $ 219,951 $ 174,660 $ 428,388 $ 377,932
Cost of professional services revenue 179,201 132,008 336,817 251,772
Sales and marketing 389,046 248,682 734,079 459,400
Research and development 503,257 302,222 931,323 585,860
General and administrative 988,269   371,091   1,854,705   779,334
$ 2,279,724   $ 1,228,663   $ 4,285,312   $ 2,454,298
 

   

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 
Six Months Ended
June 30,
2018     2017
Cash flows from operating activities:
Net loss $ (6,371,314 ) $ (8,930,667 )
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Depreciation and amortization 2,547,268 3,008,155
Bad debt expense 167,327 478,519
Stock-based compensation 4,285,312 2,454,298
Changes in fair value of contingent consideration liability 18,525
Accretion of debt discount 17,804 20,079
Changes in operating assets and liabilities:
Accounts receivable and unbilled receivables 664,339 4,802,249
Prepaid expenses and other assets (665,835 ) 737,378
Accounts payable (637,658 ) (515,904 )
Accrued expenses (807,023 ) (1,867,288 )
Settlement of contingent accrued compensation related to former
ecVision founder
(2,366,469 )
Other liabilities 268,276 (184,101 )
Deferred revenue 1,305,675   1,256,536  
Net cash provided by (used in) operating activities 774,171   (1,088,690 )
Cash flows from investing activities:
Capital expenditures (78,394 ) (55,579 )
Addition of capitalized software development costs (1,569,092 ) (839,409 )
Cash paid for deposits (164,780 ) (169,140 )
Net cash used in investing activities (1,812,266 ) (1,064,128 )
Cash flows from financing activities:
Proceeds from revolving line of credit 13,650,000 12,250,000
Payments on revolving line of credit (13,650,000 ) (12,000,000 )
Payments on term loan (375,000 ) (281,250 )
Debt financing costs (35,701 )
Repayments on capital lease obligations (720,109 ) (845,967 )
Proceeds from the exercise of stock options 330,898 98,348
Contingent consideration related to ecVision acquisition   (1,308,531 )
Net cash used in financing activities (764,211 ) (2,123,101 )
Effect of exchange rate on cash, cash equivalents and restricted cash (49,640 ) (49,083 )
Net decrease in cash, cash equivalents and restricted cash (1,851,946 ) (4,325,002 )
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 $ 7,565,055   $ 11,139,272  
 
Reconciliation of cash, cash equivalents and restricted cash to the
condensed consolidated balance sheet:
Cash and cash equivalents $ 7,508,655 $ 11,082,872
Restricted cash in deposits and other assets 56,400   56,400  
Total cash, cash equivalents and restricted cash $ 7,565,055   $ 11,139,272  
 
Supplemental disclosures of cash flow information:
Cash paid for interest $ 621,366 $ 453,666
Non-cash property and equipment acquired under capital lease 703,838 1,384,336
Non-cash property and equipment purchases in accounts payable 14,061 11,603
 

       

Reconciliation of Net Loss to Adjusted EBITDA

(Unaudited)

 
Three Months Ended
June 30,
Six Months Ended
June 30,
2018     2017 2018     2017
Net loss $ (3,204,122 ) $ (4,517,471 ) $ (6,371,314 ) $ (8,930,667 )
Depreciation and amortization expense 1,262,922 1,454,943 2,547,268 3,008,155
Interest expense 339,571 244,183 639,170 479,351
Interest income (2,639 ) (521 ) (3,632 ) (1,326 )
Income tax expense 77,661   590,411   204,742   776,518  
EBITDA (1,526,607 ) (2,228,455 ) (2,983,766 ) (4,667,969 )
Stock-based compensation 2,279,724 1,228,663 4,285,312 2,454,298
Change in fair value of contingent consideration liability       18,525  
Adjusted EBITDA $ 753,117   $ (999,792 ) $ 1,301,546   $ (2,195,146 )
 
       

Reconciliation of Net Loss to Non-GAAP Adjusted Net Loss

(Unaudited)

 
Three Months Ended
June 30,
Six Months Ended
June 30,
2018     2017 2018     2017
Net loss $ (3,204,122 ) $ (4,517,471 ) $ (6,371,314 ) $ (8,930,667 )
Stock-based compensation 2,279,724 1,228,663 4,285,312 2,454,298
Change in fair value of contingent consideration liability       18,525  
Non-GAAP adjusted net loss $ (924,398 ) $ (3,288,808 ) $ (2,086,002 ) $ (6,457,844 )
 
Adjusted non-GAAP net loss per share:
Basic and diluted $ (0.03 ) $ (0.12 ) $ (0.08 ) $ (0.24 )
GAAP Weighted-average shares outstanding:
Basic and diluted 27,683,120   27,418,487   27,639,835   27,329,183  
 

       

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

(Unaudited)

 
Three Months Ended
June 30,
Six Months Ended
June 30,
2018     2017 2018     2017
Loss from operations $ (2,789,529 ) $ (3,683,398 ) $ (5,531,034 ) $ (7,676,124 )
Stock-based compensation 2,279,724 1,228,663 4,285,312 2,454,298
Change in fair value of contingent consideration liability       18,525  
Non-GAAP adjusted loss from operations $ (509,805 ) $ (2,454,735 ) $ (1,245,722 ) $ (5,203,301 )
 

Based on information available as of August 7, 2018, the following
tables show 2018 GAAP guidance reconciled to non-GAAP guidance for the
third 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)

 
Third Quarter 2018 Full Year 2018
Low   High Low   High
Loss from operations $ (2.3 ) $ (1.7 ) $ (10.5 ) $ (8.5 )
Stock-based compensation 1.5   1.5   7.3   7.3  
Non-GAAP adjusted loss from operations $ (0.8 ) $ (0.2 ) $ (3.2 ) $ (1.2 )
 

       

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

(Unaudited)

 
Third Quarter 2018 Full Year 2018
Low     High Low     High
Net loss per share, basic and diluted $ (0.10 ) $ (0.08 ) $ (0.45 ) $ (0.38 )
Stock-based compensation 0.05   0.05   0.26   0.26  
Non-GAAP adjusted net loss per share, basic and diluted $ (0.05 ) $ (0.03 ) $ (0.19 ) $ (0.12 )
 
(1) This assumes weighted average shares outstanding - basic and
diluted
28.0   28.0   28.5   28.5  
 

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