REDWOOD CITY, Calif.--(BUSINESS WIRE)--
Model N, Inc., (NYSE: MODN), the leading revenue management solutions
provider to the life science and technology industries, today announced
financial results for the second quarter of fiscal 2014, which ended
March 31, 2014.
“Our results this quarter showed continued progress towards our goal of
returning to growth in Fiscal 2015,” said Zack Rinat, Founder, Chairman,
and Chief Executive Officer at Model N. “We had the largest bookings
quarter in the history of the company and significantly enhanced our
market opportunity through the launch of the REVVY Sales Application
Suite. I am pleased to have both reported results above our projections
and increased our guidance for the balance of the fiscal year.”
Second Quarter Fiscal 2014 Financial Highlights:
- Total Revenues: Total revenues were $20.7 million, compared to
$24.6 million for the second quarter of fiscal 2013.
- Gross Profit: Gross profit was $10.8 million, compared to $13.0
million for the second quarter of fiscal 2013. Non-GAAP gross profit
was $11.5 million, compared to $13.3 million for the second quarter of
fiscal 2013.
- Loss from operations: GAAP loss from operations was $(4.9)
million, compared to $(1.0) million for the second quarter of fiscal
2013. Non-GAAP loss from operations was $(1.9) million, compared to
roughly breakeven for the second quarter of fiscal 2013.
- Net loss: GAAP net loss was $(5.0) million, compared to $(1.9)
million for the second quarter of fiscal 2013. GAAP diluted net loss
per share attributed to common stockholders was $(0.21) based upon
weighted average shares outstanding of 24.4 million, as compared to
$(0.19) for the second quarter of fiscal 2013 based upon weighted
average shares outstanding of 10.1 million.
- Non-GAAP net loss: Non-GAAP net loss was $(2.0) million, as
compared to $(0.2) million for the second quarter of fiscal 2013.
Non-GAAP diluted net loss per share was $(0.08) based upon weighted
average shares outstanding of 24.4 million, as compared to $(0.01) for
the second quarter of fiscal 2013 based upon weighted average shares
outstanding of 16.4 million.
- Adjusted EBITDA: Adjusted EBITDA was $(1.1) million, compared
to $0.5 million for the second quarter of fiscal 2013.
Use of Non-GAAP Financial Measures
A reconciliation of GAAP to non-GAAP financial measures has been
provided in the financial statement tables included in this press
release. An explanation of these measures, including the reasons
management uses each measure, is also included below under the heading
"Non-GAAP Financial Measures."
Guidance:
As of May 1, 2014, we are providing guidance for the third quarter of
fiscal 2014 as well as the full fiscal year ending September 30, 2014.
Third Quarter Fiscal 2014 Guidance:
-
Total revenues are expected to be in the range from $19.0 million to
$19.5 million,
-
Non-GAAP loss from operations is expected to be in the range of ($4.0)
to ($3.5) million,
-
Non-GAAP net loss per diluted share is expected to be in the range of
($0.16) to ($0.14) based upon weighted average shares outstanding of
24.8 million shares.
Fiscal Year 2014 Guidance:
-
Total revenues are expected to be in the range from $80.0 million to
$82.0 million,
-
Non-GAAP loss from operations is expected to be in the range of
($11.0) to ($9.0) million,
-
Non-GAAP net loss per diluted share is expected to be in the range of
($0.45) to ($0.37) based upon weighted average shares outstanding of
24.5 million shares.
Quarterly Results Conference Call
Model N will host a conference call today at 2:00 PM Pacific Time (5:00
PM Eastern Time) to review the company’s financial results for the
second quarter 2014, which ended March 31, 2014. To access the call,
please dial (877) 705-6003 in the U.S. or (201) 493-6725
internationally. Passcode is 13579773. A live webcast of the conference
will be accessible from Model N’s website at: http://investor.modeln.com.
Following the completion of the call through 11:59 p.m. ET on May 8,
2014, a recording will be available for replay at: http://investor.modeln.com
and a telephone replay will be available by dialing (877) 870-5176 in
the U.S. or (858) 384-5517 internationally with recording access code
13579773.
About Model N
Model N is the leader in Revenue Management solutions. Model N helps its
customers maximize their revenue and reduce revenue compliance risk by
managing every dollar that impacts their top line encompassing
contracting, pricing, incentives, and rebates. Model N leverages its
deep industry expertise to support the unique business needs of Life
Sciences and Technology companies in more than 50 countries. Global
Customers include: Actavis, Allergan, Amgen, Atmel, Boston Scientific,
Bristol-Myers Squibb, Dell, Johnson & Johnson, Linear Technology, Merck,
Marvell, Maxim, Micron, Nokia, Novartis, Novo Nordisk, ON Semiconductor,
and STMicroelectronics. Learn more at: http://www.modeln.com.
Model N is traded on the New York Stock Exchange under the symbol MODN.
Forward-Looking Statements
This press release contains forward-looking statements including, among
other things, statements regarding Model N’s third quarter and full year
fiscal year 2014 revenue and other financial projections, future
prospects, and market opportunities. The words “believe,” “may,” “will,”
“estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar
expressions are intended to identify forward-looking statements. These
forward-looking statements are subject to risks, uncertainties, and
assumptions. If the risks materialize or assumptions prove incorrect,
actual results could differ materially from the results implied by these
forward-looking statements. Risks include, but are not limited to: (i)
delays in closing customer contracts; (ii) our ability to resolve our
sales execution challenges; (iii) the timing of new orders and the
associated revenue recognition; (iv) adverse changes in general economic
or market conditions; (v) delays or reductions in information technology
spending and resulting variability in customer orders from quarter to
quarter; (vi) competitive factors, including but not limited to pricing
pressures, industry consolidation, entry of new competitors and new
applications and marketing initiatives by our competitors; (vii) our
ability to manage our growth effectively; and (viii) acceptance of our
applications and services by customers; (ix) success of new products;
(x) the risk that the strategic initiatives that we may pursue will not
result in significant future revenues; (x) our ability to retain
customers. Further information on risks that could affect Model N’s
results is included in our filings with the Securities and Exchange
Commission, including our final prospectus, our most recent quarterly
report on Form 10-Q and our annual report on Form 10-K for the fiscal
year ended September 30, 2013, and any current reports on Form 8-K that
we may file from time to time. Should any of these risks or
uncertainties materialize, actual results could differ materially from
expectations. Model N assumes no obligation to, and does not currently
intend to, update any such forward-looking statements after the date of
this release.
Non-GAAP Financial Measures
We have provided in this release financial information that has not been
prepared in accordance with accounting standards generally accepted in
the United States of America (“GAAP”). We use these non-GAAP financial
measures internally in analyzing our financial results and believe they
are useful to investors, as a supplement to GAAP measures, in evaluating
our ongoing operational performance. We believe that the use of these
non-GAAP financial measures provides an additional tool for investors to
use in evaluating ongoing operating results and trends and in comparing
our financial results with other companies in our industry, many of
which present similar non-GAAP financial measures to investors.
Non-GAAP financial measures should not be considered in isolation from,
or as a substitute for, financial information prepared in accordance
with GAAP. Investors are encouraged to review the reconciliation of
these non-GAAP financial measures to their most directly comparable GAAP
financial measures below. A reconciliation of our non-GAAP financial
measures to their most directly comparable GAAP measures has been
provided in the financial statement tables included below in this press
release.
Our reported results include certain non-GAAP financial measures,
including non-GAAP gross profit, non-GAAP loss from operations, non-GAAP
net loss, weighted-average shares outstanding, non-GAAP net loss per
share, and adjusted EBITDA. Non-GAAP gross profit excludes stock-based
compensation expense, LeapFrogRX compensation charges and amortization
of intangible assets. Non-GAAP loss from operations and non-GAAP net
loss exclude stock-based compensation expense, LeapFrogRX compensation
charges, amortization of intangible assets, changes in fair value of
preferred stock warrant liability, and restructuring charges as they are
often excluded by other companies to help investors understand the
operational performance of their business and, in the case of
stock-based compensation, can be difficult to predict. In addition,
stock-based compensation expense varies from period to period and
company to company due to such things as differing valuation
methodologies and changes in stock price. Adjusted EBITDA is defined as
net loss, adjusted for LeapFrogRX compensation charges, depreciation and
amortization, stock-based compensation expense, restructuring charges,
interest and other (income) expenses, net, and provision for income
taxes. Reconciliation tables are provided in this press release.
|
|
|
Model N Inc. |
Condensed Consolidated Balance Sheets |
(dollars in thousands) |
(unaudited) |
|
|
| |
| |
|
|
|
| | | | March 31, | | September 30, |
| | | | | | 2014 | | 2013 |
| Assets | | | | | |
|
Current assets:
| | | | | |
|
Cash and cash equivalents
| | |
$
|
101,724
| | |
$
|
103,350
| |
|
Accounts receivable, net
| | | |
20,394
| | | |
16,140
| |
|
Deferred cost of implementation services, current portion
| | | |
395
| | | |
491
| |
|
Prepaid expenses
| | | |
2,733
| | | |
3,225
| |
|
Other current assets
| | |
|
322
|
| |
|
342
|
|
|
Total current assets
| | | |
125,568
| | | |
123,548
| |
|
Property and equipment, net
| | | |
6,638
| | | |
7,871
| |
|
Goodwill
| | | |
1,509
| | | |
1,509
| |
|
Intangible assets, net
| | | |
753
| | | |
918
| |
|
Other assets
| | |
|
944
|
| |
|
626
|
|
|
Total assets
| | |
$
|
135,412
|
| |
$
|
134,472
|
|
Liabilities and Stockholders' Equity | | | | | |
|
Current liabilities:
| | | | | |
|
Accounts payable
| | |
$
|
287
| | |
$
|
468
| |
|
Accrued employee compensation
| | | |
11,074
| | | |
13,941
| |
|
Accrued liabilities
| | | |
2,398
| | | |
2,848
| |
|
Deferred revenue, current portion
| | | |
22,727
| | | |
19,131
| |
|
Capital lease obligations, current portion
| | |
|
97
|
| |
|
318
|
|
|
Total current liabilities
| | | |
36,583
| | | |
36,706
| |
|
Long-term liabilities:
| | | | | |
|
Deferred revenue, net of current portion
| | | |
2,995
| | | |
3,507
| |
|
Other long-term liabilities
| | |
|
671
|
| |
|
641
|
|
|
Total long-term liabilities
| | |
|
3,666
|
| |
|
4,148
|
|
|
Total liabilities
| | |
|
40,249
|
| |
|
40,854
|
|
| | | | |
|
|
Stockholders' equity:
| | | | | |
|
Common stock
| | | |
4
| | | |
3
| |
|
Preferred stock
| | | |
-
| | | |
-
| |
|
Additional paid-in capital
| | | |
165,657
| | | |
156,032
| |
|
Accumulated other comprehensive loss
| | | |
(228
|
)
| | |
(302
|
)
|
|
Accumulated deficit
| | |
|
(70,270
|
)
| |
|
(62,115
|
)
|
|
Total stockholders' equity
| | |
|
95,163
|
| |
|
93,618
|
|
|
Total liabilities and stockholders' equity
| | |
$
|
135,412
|
| |
$
|
134,472
|
|
| | | | | | | | |
|
|
|
|
Model N Inc. |
Condensed Consolidated Statements of Operations |
(dollars and shares in thousands, except per share amounts) |
(unaudited) |
|
|
|
| |
|
|
|
| | | | | Three months ended March 31, |
|
| Six months ended March 31, |
| | | | | | |
| 2014 |
|
|
|
| 2013 |
| | | |
| 2014 |
|
|
|
| 2013 |
|
|
Revenues:
| | | | | | | | | | | | | | |
|
License and implementation
| | | |
$
|
9,846
| | | |
$
|
14,481
| | | | |
$
|
19,376
| | | |
$
|
26,943
| |
| SaaS and maintenance
| | | |
|
10,804
|
| | |
|
10,078
|
| | | |
|
22,833
|
| | |
|
19,957
|
|
|
Total revenues
| | | | |
20,650
| | | | |
24,559
| | | | | |
42,209
| | | | |
46,900
| |
|
Cost of revenues:
| | | | | | | | | | | | | | |
|
License and implementation
| | | | |
4,544
| | | | |
6,800
| | | | | |
9,143
| | | | |
12,360
| |
| SaaS and maintenance
| | | |
|
5,269
|
| | |
|
4,781
|
| | | |
|
10,615
|
| | |
|
9,304
|
|
|
Total cost of revenues
| | | |
|
9,813
|
| | |
|
11,581
|
| | | |
|
19,758
|
| | |
|
21,664
|
|
|
Gross profit
| | | |
|
10,837
|
| | |
|
12,978
|
| | | |
|
22,451
|
| | |
|
25,236
|
|
|
Operating expenses:
| | | | | | | | | | | | | | |
|
Research and development
| | | | |
4,681
| | | | |
4,483
| | | | | |
9,548
| | | | |
8,602
| |
|
Sales and marketing
| | | | |
6,336
| | | | |
5,770
| | | | | |
11,629
| | | | |
11,106
| |
|
General and administrative
| | | | |
4,717
| | | | |
3,758
| | | | | |
9,115
| | | | |
7,635
| |
|
Restructuring
| | | |
|
-
|
| | |
|
-
|
| | | |
|
69
|
| | |
|
-
|
|
|
Total operating expenses
| | | |
|
15,734
|
| | |
|
14,011
|
| | | |
|
30,361
|
| | |
|
27,343
|
|
|
Loss from operations
| | | | |
(4,897
|
)
| | | |
(1,033
|
)
| | | | |
(7,910
|
)
| | | |
(2,107
|
)
|
|
Interest (income) expense, net
| | | | |
(3
|
)
| | | |
115
| | | | | |
(7
|
)
| | | |
241
| |
|
Other expenses, net
| | | |
|
56
|
| | |
|
660
|
| | | |
|
87
|
| | |
|
712
|
|
|
Loss before income taxes
| | | | |
(4,950
|
)
| | | |
(1,808
|
)
| | | | |
(7,990
|
)
| | | |
(3,060
|
)
|
|
Provision for income taxes
| | | |
|
82
|
| | |
|
88
|
| | | |
|
165
|
| | |
|
149
|
|
|
Net loss
| | | |
|
(5,032
|
)
| | |
|
(1,896
|
)
| | | |
|
(8,155
|
)
| | |
|
(3,209
|
)
|
|
Net loss attributable to common stockholders
| | | |
|
(5,032
|
)
| | |
|
(1,896
|
)
| | | |
|
(8,155
|
)
| | |
|
(3,209
|
)
|
|
Net loss per share attributable to common stockholders:
| | | | | | | | | | | |
|
Basic and diluted
| | | |
$
|
(0.21
|
)
| | |
$
|
(0.19
|
)
| | | |
$
|
(0.34
|
)
| | |
$
|
(0.35
|
)
|
Weighted average number of shares used in computing net loss per
share attributable to common stockholders
| | | | | | | | | | | |
| | | | | | | | | |
|
|
Basic and diluted
| | | |
|
24,406
|
| | |
|
10,137
|
| | | |
|
23,924
|
| | |
|
9,071
|
|
|
|
|
|
| |
| |
Model N Inc. |
Condensed Consolidated Statements of Cash Flows |
| (dollars in thousands) |
| (unaudited) |
| | | | | |
|
|
|
|
|
| | | | Three months ended March 31, | | Six months ended March 31, |
| | | | | | |
| 2014 |
| |
| 2013 |
| |
| 2014 |
|
|
| 2013 |
|
|
Cash flows from operating activities:
| | | | | | | | | |
|
Net loss
| | |
$
|
(5,032
|
)
| |
$
|
(1,896
|
)
| |
$
|
(8,155
|
)
| |
$
|
(3,209
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
| | | | | | | | |
|
Depreciation
| | | |
839
| | | |
495
| | | |
1,714
| | | |
937
| |
|
Amortization of intangible assets
| | | |
82
| | | |
84
| | | |
165
| | | |
165
| |
|
Stock-based compensation
| | | |
2,816
| | | |
942
| | | |
4,788
| | | |
1,499
| |
|
Amortization of debt discount
| | | |
-
| | | |
10
| | | |
-
| | | |
20
| |
|
Changes in fair value of preferred stock warrant liability
| | | |
-
| | | |
685
| | | |
-
| | | |
671
| |
|
Provision for doubtful accounts
| | | |
-
| | | |
1
| | | |
-
| | | |
9
| |
|
Deferred income taxes
| | | |
10
| | | |
34
| | | |
20
| | | |
59
| |
|
Changes in operating assets and liabilities, net of acquired assets
and liabilities:
| | | | | | | | | |
| | | | | | | |
|
|
Accounts receivable
| | | |
(3,702
|
)
| | |
748
| | | |
(4,254
|
)
| | |
(2,732
|
)
|
|
Prepaid expenses and other assets
| | | |
(809
|
)
| | |
(151
|
)
| | |
287
| | | |
(1,491
|
)
|
|
Deferred cost of implementation services
| | | |
78
| | | |
273
| | | |
89
| | | |
290
| |
|
Accounts payable
| | | |
175
| | | |
(862
|
)
| | |
(174
|
)
| | |
307
| |
|
Accrued employee compensation
| | | |
(2,112
|
)
| | |
449
| | | |
(2,777
|
)
| | |
424
| |
|
Other accrued and long-term liabilities
| | | |
(247
|
)
| | |
(457
|
)
| | |
(532
|
)
| | |
1,579
| |
|
Deferred revenue
| | |
|
3,957
|
| |
|
(1,756
|
)
| |
|
3,084
|
| |
|
(1,045
|
)
|
|
Net cash used in operating activities
| | |
|
(3,945
|
)
| |
|
(1,401
|
)
| |
|
(5,745
|
)
| |
|
(2,517
|
)
|
|
Cash flows from investing activities:
| | | | | | | | | |
|
Purchases of property and equipment
| | | |
(437
|
)
| | |
(308
|
)
| | |
(518
|
)
| | |
(472
|
)
|
|
Capitalization of software development costs
| | | |
-
| | | |
(831
|
)
| | |
-
| | | |
(1,722
|
)
|
|
Sale (purchase) of short-term investments
| | |
|
9,998
|
| |
|
-
|
| |
|
-
|
| |
|
(63
|
)
|
|
Net cash provided by (used in) investing activities
| | |
|
9,561
|
| |
|
(1,139
|
)
| |
|
(518
|
)
| |
|
(2,257
|
)
|
|
Cash flows from financing activities:
| | | | | | | | | |
|
Proceeds from initial public offering, net of offering costs of $7.6
million | | | |
-
| | | |
101,064
| | | |
-
| | | |
101,064
| |
|
Proceeds from exercise of stock options and employee stock purchase
plan
| | | |
3,388
| | | |
423
| | | |
4,838
| | | |
513
| |
|
Payments for deferred offering costs
| | | |
-
| | | |
(1,761
|
)
| | |
-
| | | |
(1,976
|
)
|
|
Principal payments on capital lease obligations
| | | |
(94
|
)
| | |
(158
|
)
| | |
(221
|
)
| | |
(298
|
)
|
|
Principal payments on loan
| | |
|
-
|
| |
|
(625
|
)
| |
|
-
|
| |
|
(1,250
|
)
|
|
Net cash provided by financing activities
| | |
|
3,294
|
| |
|
98,943
|
| |
|
4,617
|
| |
|
98,053
|
|
|
Effect of exchange rate changes on cash and cash equivalents
| | |
|
25
|
| |
|
(12
|
)
| |
|
20
|
| |
|
(23
|
)
|
|
Net change in cash and cash equivalents
| | | |
8,935
| | | |
96,391
| | | |
(1,626
|
)
| | |
93,256
| |
|
Cash and cash equivalents at beginning of period
| | |
|
92,789
|
| |
|
12,633
|
| |
|
103,350
|
| |
|
15,768
|
|
|
Cash and cash equivalents at end of period
| | |
$
|
101,724
|
| |
$
|
109,024
|
| |
$
|
101,724
|
| |
$
|
109,024
|
|
|
|
|
|
| |
|
| | |
| |
| |
| |
| Model N Inc. |
| Reconciliation of GAAP to Non-GAAP Operating Results |
| (dollars and shares in thousands, except per share amounts) |
| (unaudited) |
|
|
| | | | | | Three months ended March 31, |
| Six months ended March 31, |
| | | | | |
| 2014 |
| |
| 2013 |
| |
| 2014 |
| |
| 2013 |
|
|
Reconciliation from GAAP net loss to adjusted EBITDTA
| | | | | | | | | | |
|
GAAP net loss:
| | |
$
|
(5,032
|
)
| |
$
|
(1,896
|
)
| |
$
|
(8,155
|
)
| |
$
|
(3,209
|
)
|
|
Reversal of non-GAAP expenses:
| | | | | | | | | | |
|
Stock-based compensation
| | | |
2,816
| | | |
942
| | | |
4,788
| | | |
1,499
| |
|
Depreciation and amortization
| | | |
921
| | | |
578
| | | |
1,879
| | | |
1,102
| |
|
LeapFrogRx compensation charges
| | | |
101
| | | |
25
| | | |
301
| | | |
414
| |
|
Restructuring
| | | |
-
| | | |
-
| | | |
69
| | | |
-
| |
|
Interest (income) expense, net
| | | |
(3
|
)
| | |
115
| | | |
(7
|
)
| | |
241
| |
|
Other expenses, net
| | | |
56
| | | |
660
| | | |
87
| | | |
712
| |
|
Provision for income taxes
| | |
|
82
|
| |
|
88
|
| |
|
165
|
| |
|
149
|
|
|
Adjusted EBITDA
| | |
$
|
(1,059
|
)
| |
$
|
512
|
| |
$
|
(873
|
)
| |
$
|
908
|
|
| | | | | | | | | | | | |
|
| | | | | | Three months ended March 31, |
| Six months ended March 31, |
| | | | | |
| 2014 |
| |
| 2013 |
| |
| 2014 |
| |
| 2013 |
|
|
Reconciliation from GAAP gross profit to non-GAAP gross profit:
| | | | | | | | | | |
|
GAAP gross profit:
| | |
$
|
10,837
| | |
$
|
12,978
| | |
$
|
22,451
| | |
$
|
25,236
| |
|
Reversal of non-GAAP expenses:
| | | | | | | | | | |
|
Stock-based compensation (a)
| | | |
514
| | | |
204
| | | |
955
| | | |
318
| |
|
Amortization of intangible assets (b)
| | | |
60
| | | |
61
| | | |
121
| | | |
121
| |
|
LeapFrogRx compensation charges (c)
| | |
|
63
|
| |
|
16
|
| |
|
188
|
| |
|
257
|
|
|
Non-GAAP gross profit
| | |
$
|
11,474
|
| |
$
|
13,259
|
| |
$
|
23,715
|
| |
$
|
25,932
|
|
|
Percentage of revenue
| | | |
55.6
|
%
| | |
54.0
|
%
| | |
56.2
|
%
| | |
55.3
|
%
|
| | | | | | | | | |
|
| | | Three months ended March 31, |
| Six months ended March 31, |
| | |
| 2014 |
| |
| 2013 |
| |
| 2014 |
| |
| 2013 |
|
|
Reconciliation from GAAP gross profit to non-GAAP gross profit:
| | | | | | | | | | |
|
for license and implementation:
| | | | | | | | | | |
|
GAAP gross profit - license and implementation:
| | |
$
|
5,302
| | |
$
|
7,681
| | |
$
|
10,233
| | |
$
|
14,583
| |
|
Reversal of non-GAAP expenses:
| | | | | | | | | | |
|
Stock-based compensation (a)
| | |
|
330
|
| |
|
90
|
| |
|
546
|
| |
|
130
|
|
|
Non-GAAP gross profit - license and implementation
| | |
$
|
5,632
|
| |
$
|
7,771
|
| |
$
|
10,779
|
| |
$
|
14,713
|
|
|
Percentage of revenue
| | | |
57.2
|
%
| | |
53.7
|
%
| | |
55.6
|
%
| | |
54.6
|
%
|
| | | | | | | | | |
|
| | | Three months ended March 31, |
| Six months ended March 31, |
| | | | | |
| 2014 |
| |
| 2013 |
| |
| 2014 |
| |
| 2013 |
|
|
Reconciliation from GAAP gross profit to non-GAAP gross profit:
| | | | | | | | | | |
|
for SaaS and maintenance:
| | | | | | | | | | |
|
GAAP gross profit - SaaS and maintenance:
| | |
$
|
5,535
| | |
$
|
5,297
| | |
$
|
12,218
| | |
$
|
10,653
| |
|
Reversal of non-GAAP expenses:
| | | | | | | | | | |
|
Stock-based compensation (a)
| | | |
184
| | | |
114
| | | |
409
| | | |
188
| |
|
Amortization of intangible assets (b)
| | | |
60
| | | |
61
| | | |
121
| | | |
121
| |
|
LeapFrogRx compensation charges (c)
| | |
|
63
|
| |
|
16
|
| |
|
188
|
| |
|
257
|
|
|
Non-GAAP gross profit - SaaS and maintenance
| | |
$
|
5,842
|
| |
$
|
5,488
|
| |
$
|
12,936
|
| |
$
|
11,219
|
|
|
Percentage of revenue
| | | |
54.1
|
%
| | |
54.5
|
%
| | |
56.7
|
%
| | |
56.2
|
%
|
| | | | | | | | | | | | |
|
| | | | | | Three months ended March 31, |
| Six months ended March 31, |
| | | | | |
| 2014 |
| |
| 2013 |
| |
| 2014 |
| |
| 2013 |
|
|
Reconciliation from GAAP research and development to non-GAAP
research and development:
| | | | | | | | | | |
|
GAAP research and development:
| | |
$
|
4,681
| | |
$
|
4,483
| | |
$
|
9,548
| | |
$
|
8,602
| |
|
Reversal of non-GAAP expenses:
| | | | | | | | | | |
|
Stock-based compensation (a)
| | | |
(400
|
)
| | |
(98
|
)
| | |
(662
|
)
| | |
(152
|
)
|
|
LeapFrogRx compensation charges (c)
| | |
|
(2
|
)
| |
|
(4
|
)
| |
|
(9
|
)
| |
|
(31
|
)
|
|
Non-GAAP research and development
| | |
$
|
4,279
|
| |
$
|
4,381
|
| |
$
|
8,877
|
| |
$
|
8,419
|
|
| | | | | | | | | | | | |
|
| | | | | | Three months ended March 31, |
| Six months ended March 31, |
| | | | | |
| 2014 |
| |
| 2013 |
| |
| 2014 |
| |
| 2013 |
|
|
Reconciliation from GAAP sales and marketing to non-GAAP sales and
marketing:
| | | | | | | | | | |
|
GAAP sales and marketing:
| | |
$
|
6,336
| | |
$
|
5,770
| | |
$
|
11,629
| | |
$
|
11,106
| |
|
Reversal of non-GAAP expenses:
| | | | | | | | | | |
|
Stock-based compensation (a)
| | | |
(668
|
)
| | |
(454
|
)
| | |
(1,210
|
)
| | |
(713
|
)
|
|
Amortization of intangible assets (b)
| | | |
(22
|
)
| | |
(22
|
)
| | |
(44
|
)
| | |
(43
|
)
|
|
LeapFrogRx compensation charges (c)
| | |
|
(14
|
)
| |
|
(4
|
)
| |
|
(54
|
)
| |
|
(88
|
)
|
|
Non-GAAP sales and marketing
| | |
$
|
5,632
|
| |
$
|
5,290
|
| |
$
|
10,321
|
| |
$
|
10,262
|
|
| | | | | | | | | | | | |
|
| | | | | | Three months ended March 31, |
| Six months ended March 31, |
| | | | | |
| 2014 |
| |
| 2013 |
| |
| 2014 |
| |
| 2013 |
|
| | | | | | | | | | | | |
|
|
Reconciliation from GAAP general and administrative to non-GAAP
general and administrative:
| | | | | | | | | | |
|
GAAP general and administrative:
| | |
$
|
4,717
| | |
$
|
3,758
| | |
$
|
9,115
| | |
$
|
7,635
| |
|
Reversal of non-GAAP expenses:
| | | | | | | | | | |
|
Stock-based compensation (a)
| | | |
(1,234
|
)
| | |
(186
|
)
| | |
(1,961
|
)
| | |
(316
|
)
|
|
LeapFrogRx compensation charges (c)
| | |
|
(22
|
)
| |
|
(1
|
)
| |
|
(50
|
)
| |
|
(38
|
)
|
|
Non-GAAP general and administrative
| | |
$
|
3,461
|
| |
$
|
3,571
|
| |
$
|
7,104
|
| |
$
|
7,281
|
|
| | | | | | | | | | | | |
|
| | | | | | Three months ended March 31, |
| Six months ended March 31, |
| | | | | |
| 2014 |
| |
| 2013 |
| |
| 2014 |
| |
| 2013 |
|
|
Reconciliation from GAAP loss from operations to non-GAAP income
(loss) from operations:
| | | | | | | | | | |
|
GAAP loss from operations:
| | |
$
|
(4,897
|
)
| |
$
|
(1,033
|
)
| |
$
|
(7,910
|
)
| |
$
|
(2,107
|
)
|
|
Reversal of non-GAAP expenses:
| | | | | | | | | | |
|
Stock-based compensation (a)
| | | |
2,816
| | | |
942
| | | |
4,788
| | | |
1,499
| |
|
Amortization of intangible assets (b)
| | | |
82
| | | |
83
| | | |
165
| | | |
164
| |
|
LeapFrogRx compensation charges (c)
| | | |
101
| | | |
25
| | | |
301
| | | |
414
| |
|
Restructuring (e)
| | |
|
-
|
| |
|
-
|
| |
|
69
|
| |
|
-
|
|
|
Non-GAAP income (loss from) operations
| | |
$
|
(1,898
|
)
| |
$
|
17
|
| |
$
|
(2,587
|
)
| |
$
|
(30
|
)
|
| | | | | | | | | | | | |
|
| | | | | | Three months ended March 31, |
| Six months ended March 31, |
| | | | | |
| 2014 |
| |
| 2013 |
| |
| 2014 |
| |
| 2013 |
|
Numerator: | | | | | | | | | | |
|
Reconciliation between GAAP and non-GAAP net loss:
| | | | | | | | | | |
|
GAAP net loss:
| | |
$
|
(5,032
|
)
| |
$
|
(1,896
|
)
| |
$
|
(8,155
|
)
| |
$
|
(3,209
|
)
|
|
Reversal of non-GAAP expenses:
| | | | | | | | | | |
|
Stock-based compensation (a)
| | | |
2,816
| | | |
942
| | | |
4,788
| | | |
1,499
| |
|
Amortization of intangible assets (b)
| | | |
82
| | | |
83
| | | |
165
| | | |
164
| |
|
LeapFrogRx compensation charges (c)
| | | |
101
| | | |
25
| | | |
301
| | | |
414
| |
|
Changes in fair value of preferred stock warrant liability (d)
| | | |
-
| | | |
684
| | | |
-
| | | |
670
| |
|
Restructuring (e)
| | |
|
-
|
| |
|
-
|
| |
|
69
|
| |
|
-
|
|
|
Non-GAAP net loss attributable to Model N Inc. common stockholders
| | |
$
|
(2,033
|
)
| |
$
|
(162
|
)
| |
$
|
(2,832
|
)
| |
$
|
(462
|
)
|
Denominator: | | | | | | | | | | |
|
Reconciliation between GAAP and non-GAAP weighted average shares
used in computing
| | | | | | | | | | |
|
diluted net loss per share attributable to Model N Inc. common
stockholders:
| | | | | | | | | | |
|
Weighted average number of shares used in computing GAAP diluted net
loss per share
| | | |
24,406
| | | |
10,137
| | | |
23,924
| | | |
9,071
| |
|
Assuming the conversion of preferred stock at the beginning of each
period
| | |
|
-
|
| |
|
6,284
|
| |
|
-
|
| |
|
6,772
|
|
|
Weighted average shares used in computing non-GAAP diluted net loss
per common share
| | |
|
24,406
|
| |
|
16,421
|
| |
|
23,924
|
| |
|
15,843
|
|
|
GAAP diluted net loss per share attributable to Model N Inc. common
stockholders
| | |
$
|
(0.21
|
)
| |
$
|
(0.19
|
)
| |
$
|
(0.34
|
)
| |
$
|
(0.35
|
)
|
|
Non-GAAP diluted net loss per share attributable to Model N Inc.
common stockholders
| | |
$
|
(0.08
|
)
| |
$
|
(0.01
|
)
| |
$
|
(0.12
|
)
| |
$
|
(0.03
|
)
|
| | | | | | | | | | | | | | | | |
|
| Use of Non-GAAP Financial Measures |
|
To supplement our condensed consolidated financial statements
presented on a GAAP basis, Model N uses non-GAAP measures of
adjusted EBITDA, net loss, weighted average shares outstanding and
net loss per share, which are adjusted to exclude LeapFrogRx
compensation charges, stock-based compensation expense,
restructuring charge, amortization of intangible assets and changes
in fair value of preferred stock warrant liability and includes
dilutive shares where applicable. We believe these adjustments are
appropriate to enhance an overall understanding of our past
financial performance and also our prospects for the future. These
adjustments to our current period GAAP results are made with the
intent of providing both management and investors a more complete
understanding of Model N’s underlying operating results and trends
and our marketplace performance. The non-GAAP results are an
indication of our baseline performance that are considered by
management for the purpose of making operational decisions. In
addition, these non-GAAP results are the primary indicators
management uses as a basis for our planning and forecasting of
future periods. The presentation of this additional information is
not meant to be considered in isolation or as a substitute for
operating loss, net loss or basic and diluted net loss per share
prepared in accordance with generally accepted accounting principles
in the United States. Non-GAAP financial measures are not based on a
comprehensive set of accounting rules or principles and are subject
to limitations.
|
|
|
|
While a large component of our expense in certain periods, we
believe investors may want to exclude the effects of these items in
order to compare our financial performance with that of other
companies and between time periods:
|
|
|
|
|
|
(a)
|
Stock-based compensation is a non-cash expense accounted for in
accordance with FASB ASC Topic 718. Stock-based compensation
expenses are excluded from our non-GAAP income because stock-based
compensation amounts are difficult to forecast due in part to the
volume and timing of stock option and restricted stock grants and
the volatility of our common stock. We believe that the exclusion of
stock-based compensation expense provides for a better comparison of
our operation results to prior periods and to our peer companies.
|
|
|
|
(b)
|
Amortization of intangible assets resulted principally from
acquisitions. Intangible asset amortization is a non-cash item. As
such, we believe exclusion of these expenses provides for a better
comparison of our operation results to prior periods and to our peer
companies.
|
|
|
|
(c)
|
In January 2012, we acquired LeapFrog Rx for initial cash
consideration of $3.0 million as well as potential additional
payments to former LeapFrogRx shareholders totalling upto $8.3
million which are expected to be incurred through January 2015.
These additional payments are, among other things, subject to future
continued employment and are therefore considered compensatory in
nature and are being recognized as compensation expense (LeapFrogRx
compensation charges) over the term of each component. We believe
that the exclusion of these expenses provides for a better
comparison of our operation results to prior periods and to our peer
companies.
|
|
|
|
(d)
|
Preferred stock warrant was classified as liability and was marked
to market in each period until the preferred stock warrant was
converted to common stock warrant upon the closing date of IPO. The
change in fair value of preferred stock warrant liability was a
non-cash item. We believe that the exclusion of this expense
provides for a better comparison of our operation results to prior
periods and to our peer companies.
|
|
|
|
(e)
|
On September 30, 2013, the Company recorded a workforce reduction
restructuring charge of $1.2 million primarily related to employee
separation packages, which included severance pay, benefits
continuation and outplacement costs. We believe that the exclusion
of this expense provides for a better comparison of our operation
results to prior periods and to our peer companies.
|
Investor Relations Contact:
ICR for Model N
Greg
Kleiner, 650-610-4998
investorrelations@modeln.com
or
Media
Contact:
Model N
Alexandria Rumble, +44 (0)1932 895090
Marketing
arumble@modeln.com
Source: Model N, Inc.