REDWOOD CITY, Calif.--(BUSINESS WIRE)--
Model N, Inc., (NYSE:MODN), the leading provider of cloud-based Revenue
Management solutions to life science, technology and manufacturing
companies, today announced financial results for the first quarter of
fiscal year 2016, which ended December 31, 2015.
“Model N posted a strong start to fiscal year 2016 exceeding our
guidance for the top and bottom line. We continue to make excellent
progress on executing our strategy to concurrently grow our revenues AND
to transform our business to SaaS and Recurring Revenue. In particular,
I am very excited by the fact that Model N reported 81% of total
revenues as SaaS and Maintenance revenue as this is a 25 percentage
point increase from the year ago level,” said Zack Rinat, Founder,
Chairman, and Chief Executive Officer of Model N. “Additionally, I am
very pleased that effective February 21, 2016, Edward Sander will join
Model N as Chief Executive Officer. I will assume a new role as
Executive Chairman, focusing on board development, strategy, and
supporting Ed as the new CEO of Model N. Ed brings a wealth of executive
leadership experience to the company to accelerate our very positive
trajectory. I am confident that under his leadership, Model N will reach
exciting new heights in the years ahead.”
First Quarter 2016 Financial Highlights:
- Total Revenues: Total revenues were $24.5 million, compared to
$22.1 million for the first quarter of fiscal 2015.
- Gross Profit: Gross profit was $12.1 million, compared to $12.6
million for the first quarter of fiscal 2015. Gross margins were 49%,
compared to 57% for the first quarter of fiscal 2015. Non-GAAP gross
profit was $12.7 million, compared to $13.0 million for the first
quarter of fiscal 2015. Non-GAAP gross margins were 52%, compared to
59% for the first quarter of fiscal 2015.
- Loss from operations: GAAP loss from operations was $(7.7)
million, compared to a loss from operations of $(4.2) million for the
first quarter of fiscal 2015. Non-GAAP loss from operations was $(4.4)
million, compared to a Non-GAAP loss from operations of $(1.7) million
for the first quarter of fiscal 2015.
- Net loss: GAAP net loss was $(7.8) million, compared to net
loss of $(4.3) million for the first quarter of fiscal 2015. GAAP
diluted net loss per share attributed to common stockholders was
$(0.29) based upon weighted average shares outstanding of 26.8
million, as compared to net loss per share of $(0.17) for the first
quarter of fiscal 2015 based upon weighted average shares outstanding
of 25.3 million.
- Non-GAAP net loss: Non-GAAP net loss was $(4.4) million, as
compared to Non-GAAP net loss of $(1.7) million for the first quarter
of fiscal 2015. Non-GAAP net loss per share was $(0.16) based upon
weighted average shares outstanding of 26.8 million, as compared to
Non-GAAP net loss per share of $(0.07) for the first quarter of fiscal
2015 based upon weighted average shares outstanding of 25.3 million.
- Adjusted EBITDA: Adjusted EBITDA was $(3.2) million, compared
to $(0.8) million for the first quarter of fiscal 2015.
Use of Non-GAAP Financial Measures
A reconciliation of GAAP to non-GAAP financial measures has been
provided in the financial tables included in this press release.
Guidance:
As of February 8, 2016, we are providing guidance for the second quarter
of fiscal 2016 and the full fiscal year ending September 30, 2016.
Second Quarter Fiscal 2016 Guidance:
• Total revenues are expected to be in the range from $25.4 million to
$25.6 million,
• Non-GAAP loss from operations is expected to be in the range of ($7.0)
million to ($6.8) million,
• Non-GAAP net loss per share is expected to be in the range of ($0.26)
to ($0.25) based upon weighted average shares outstanding of 27.0
million shares.
Fiscal Year 2016 Guidance:
• Total revenues are expected to be in the range from $106.5 million to
$107.5 million,
• Non-GAAP loss from operations is expected to be in the range of
($17.5) million to ($17.2) million,
• Non-GAAP net loss per share is expected to be in the range of ($0.65)
to ($0.63) based upon weighted average shares outstanding of 27.2
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 first
quarter of fiscal year 2016, which ended December 31, 2015. To access
the call, please dial (877) 705-6003 in the U.S. or (201) 493-6725
internationally. Passcode is 13628027. 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, a recording will be available for
one year for replay at: http://investor.modeln.com
and a telephone replay will be available through 11:59 p.m. ET on
February 15, 2016 by dialing (877) 870-5176 in the U.S. or (858)
384-5517 internationally with recording access code 13628027.
About Model N
Model N is the leader in Revenue Management Cloud solutions for life
science, technology and manufacturing companies. Driving mission
critical business processes such as configure, price and quote (CPQ),
contract management, rebates and regulatory compliance, Model N Cloud
solutions transform the revenue lifecycle from a series of disjointed
operations into a strategic end-to-end process. With deep industry
expertise, Model N supports the unique business needs of the world’s
leading brands in life science, technology and manufacturing companies
across more than 100 countries.
Model N is a trusted partner to some of the world’s largest brands,
including Johnson & Johnson, AstraZeneca, Boston Scientific, Novartis,
Ortho Clinical Diagnostics, Atmel, Fairchild and Marvell. Model N trades
on the New York Stock Exchange under the symbol MODN.
Model N® is the registered trademark of Model N, Inc. Any other company
names mentioned are the property of their respective owners and are
mentioned for identification purposes only.
Forward-Looking Statements
This press release contains forward-looking statements including, among
other things, statements regarding Model N’s second quarter and full
year fiscal year 2016 revenue and other financial results. 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 improve and sustain our sales execution; (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; and (xi) 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 (“SEC”), including our most
recent quarterly report on Form 10-Q and our annual report on Form 10-K
for the fiscal year ended September 30, 2015, 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, non-GAAP net (loss) income 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, certain legal expenses and acquisition & integration
related expenses 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, certain legal expenses,
restructuring charges, interest income and other expenses, net, and
provision for income taxes. Reconciliation tables are provided in this
press release.
|
|
Model N Inc.
Condensed Consolidated Balance Sheets
(in
thousands)
(unaudited) |
|
| | |
| | |
| | As of | | | As of | |
| | December 31, | | | September 30, | |
| | 2015 | | | 2015 | |
| Assets | | | | | | | | |
|
Current assets:
| | | | | | | | |
|
Cash and cash equivalents
| |
$
|
70,353
| | |
$
|
91,019
| |
|
Accounts receivable, net
| | |
22,202
| | | |
16,106
| |
|
Deferred cost of implementation services, current portion
| | |
633
| | | |
498
| |
|
Prepaid expenses
| | |
3,336
| | | |
3,229
| |
|
Other current assets
| |
|
151
| | |
|
109
| |
|
Total current assets
| | |
96,675
| | | |
110,961
| |
|
Property and equipment, net
| | |
7,452
| | | |
7,553
| |
| Goodwill | | |
6,939
| | | |
1,509
| |
|
Intangible assets, net
| | |
6,832
| | | |
317
| |
|
Other assets
| |
|
1,567
| | |
|
1,630
| |
|
Total assets
| |
$
|
119,465
| | |
$
|
121,970
| |
| Liabilities and Stockholders' Equity | | | | | | | | |
|
Current liabilities:
| | | | | | | | |
|
Accounts payable
| |
$
|
1,547
| | |
$
|
1,597
| |
|
Accrued employee compensation
| | |
7,616
| | | |
9,047
| |
|
Accrued liabilities
| | |
3,986
| | | |
3,464
| |
|
Deferred revenue, current portion
| |
|
25,370
| | |
|
22,039
| |
|
Total current liabilities
| | |
38,519
| | | |
36,147
| |
|
Long-term liabilities:
| | | | | | | | |
|
Deferred revenue, net of current portion
| | |
2,321
| | | |
1,942
| |
|
Other long-term liabilities
| |
|
702
| | |
|
819
| |
|
Total long-term liabilities
| |
|
3,023
| | |
|
2,761
| |
|
Total liabilities
| |
|
41,542
| | |
|
38,908
| |
|
Stockholders' equity:
| | | | | | | | |
|
Common Stock
| | |
4
| | | |
4
| |
|
Preferred Stock
| | |
—
| | | |
—
| |
|
Additional paid-in capital
| | |
188,844
| | | |
186,159
| |
|
Accumulated other comprehensive loss
| | |
(491
|
)
| | |
(466
|
)
|
|
Accumulated deficit
| |
|
(110,434
|
)
| |
|
(102,635
|
)
|
|
Total stockholders' equity
| |
|
77,923
| | |
|
83,062
| |
|
Total liabilities and stockholders' equity
| |
$
|
119,465
| | |
$
|
121,970
| |
| | | | | | | |
|
|
|
Model N Inc.
Condensed Consolidated Statements of
Operations
(in thousands, except per share amounts)
(unaudited) |
|
| | |
| | Three months ended December 31, | |
| | 2015 | |
| 2014 | |
|
Revenues:
| | | | | | | | |
|
License and implementation
| |
$
|
4,562
| | |
$
|
9,681
| |
|
SaaS and maintenance
| |
|
19,925
| | |
|
12,420
| |
|
Total revenues
| | |
24,487
| | | |
22,101
| |
|
Cost of Revenues:
| | | | | | | | |
|
License and implementation
| | |
3,417
| | | |
4,015
| |
|
SaaS and maintenance
| |
|
9,012
| | |
|
5,511
| |
|
Total cost of revenues
| |
|
12,429
| | |
|
9,526
| |
|
Gross profit
| | |
12,058
| | | |
12,575
| |
|
Operating Expenses:
| | | | | | | | |
|
Research and development
| | |
5,284
| | | |
4,454
| |
|
Sales and marketing
| | |
7,707
| | | |
6,740
| |
|
General and administrative
| |
|
6,720
| | |
|
5,588
| |
|
Total operating expenses
| |
|
19,711
| | |
|
16,782
| |
|
Loss from operations
| | |
(7,653
|
)
| | |
(4,207
|
)
|
|
Interest income, net
| | |
(1
|
)
| | |
(4
|
)
|
|
Other (income) expenses, net
| |
|
57
| | |
|
(39
|
)
|
|
Loss before income taxes
| | |
(7,709
|
)
| | |
(4,164
|
)
|
|
Provision for income taxes
| |
|
90
| | |
|
135
| |
|
Net loss
| |
$
|
(7,799
|
)
| |
$
|
(4,299
|
)
|
|
Net loss per share attributable to common stockholders:
| | | | | | | | |
|
Basic and diluted
| |
$
|
(0.29
|
)
| |
$
|
(0.17
|
)
|
|
Weighted average number of shares used in computing net loss per
share attributable to
common stockholders:
| | | | | | | | |
|
Basic and diluted
| |
|
26,827
| | |
|
25,319
| |
| | | | | | | |
|
|
|
Model N Inc.
Condensed Consolidated Statements of
Cash Flows
(in thousands)
(unaudited) |
|
| | |
| | Three months ended December 31, | |
| | 2015 | |
| 2014 | |
|
Cash Flows From Operating Activities:
| | | | | | | | |
|
Net loss
| |
$
|
(7,799
|
)
| |
$
|
(4,299
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities
| | | | | | | | |
|
Depreciation and amortization
| | |
1,319
| | | |
933
| |
|
Stock-based compensation
| | |
2,550
| | | |
2,394
| |
|
Other non cash charges, net
| | |
46
| | | |
57
| |
|
Changes in assets and liabilities:
| | | | | | | | |
|
Accounts receivable
| | |
(4,984
|
)
| | |
(1,516
|
)
|
|
Prepaid expenses and other assets
| | |
84
| | | |
(392
|
)
|
|
Deferred cost of implementation services
| | |
(85
|
)
| | |
(86
|
)
|
|
Accounts payable
| | |
(222
|
)
| | |
494
| |
|
Accrued employee compensation
| | |
(1,425
|
)
| | |
(797
|
)
|
|
Other accrued and long-term liabilities
| | |
496
| | | |
(30
|
)
|
|
Deferred revenue
| |
|
2,730
| | |
|
(211
|
)
|
|
Net cash used in operating activities
| |
|
(7,290
|
)
| |
|
(3,453
|
)
|
|
Cash Flows From Investing Activities:
| | | | | | | | |
|
Purchases of property and equipment, net
| | |
(357
|
)
| | |
(710
|
)
|
|
Acquisition of business
| | |
(12,615
|
)
| | |
-
| |
|
Capitalization of software development costs
| |
|
(532
|
)
| |
|
(563
|
)
|
|
Net cash used in investing activities
| |
|
(13,504
|
)
| |
|
(1,273
|
)
|
|
Cash Flows From Financing Activities:
| | | | | | | | |
|
Proceeds from exercise of stock options
| |
|
135
| | |
|
158
| |
|
Net cash provided by financing activities
| |
|
135
| | |
|
158
| |
|
Effect of exchange rate changes on cash and cash equivalents
| | |
(7
|
)
| | |
(24
|
)
|
|
Net decrease in cash and cash equivalents
| | |
(20,666
|
)
| | |
(4,592
|
)
|
|
Cash and cash equivalents
| | | | | | | | |
|
Beginning of period
| |
|
91,019
| | |
|
101,006
| |
|
End of period
| |
$
|
70,353
| | |
$
|
96,414
| |
| | | | | | | |
|
|
|
Model N Inc.
Reconciliation of GAAP to Non-GAAP
Operating Results
(in thousands, except per share
amounts)
(unaudited) |
|
| | |
| | Three months ended December 31, | |
| | 2015 | |
| 2014 | |
|
Reconciliation from GAAP net loss to adjusted EBITDA:
| | | | | | | | |
|
GAAP net loss:
| |
$
|
(7,799
|
)
| |
$
|
(4,299
|
)
|
|
Reversal of non-GAAP items:
| | | | | | | | |
|
Stock-based compensation expense
| | |
2,550
| | | |
2,394
| |
|
Depreciation and amortization
| | |
1,319
| | | |
933
| |
|
LeapFrogRx compensation charges
| | |
—
| | | |
80
| |
|
Acquisition and integration related costs
| | |
279
| | | |
—
| |
|
Legal expenses
| | |
305
| | | |
—
| |
|
Interest income, net
| | |
(1
|
)
| | |
(4
|
)
|
|
Other (income) expenses, net
| | |
57
| | | |
(39
|
)
|
|
Provision for income taxes
| |
|
90
| | |
|
135
| |
|
Adjusted EBITDA
| |
$
|
(3,200
|
)
| |
$
|
(800
|
)
|
| | | | | | | |
|
| | Three months ended December 31, | |
| | 2015 | | | 2014 | |
|
Reconciliation from GAAP gross profit to non-GAAP gross profit:
| | | | | | | | |
|
GAAP gross profit:
| |
$
|
12,058
| | |
$
|
12,575
| |
|
Reversal of non-GAAP expenses:
| | | | | | | | |
|
Stock-based compensation (a)
| | |
427
| | | |
334
| |
|
Amortization of intangible assets (b)
| | |
190
| | | |
61
| |
|
LeapFrogRx compensation charges (c)
| |
|
—
| | |
|
50
| |
|
Non-GAAP gross profit
| |
$
|
12,675
| | |
$
|
13,020
| |
|
Percentage of revenue
| | |
51.8
|
%
| | |
58.9
|
%
|
| | | | | | | |
|
| | Three months ended December 31, | |
| | 2015 | | | 2014 | |
|
Reconciliation from GAAP gross profit to non-GAAP gross profit:
| | | | | | | | |
|
for license and implementation:
| | | | | | | | |
|
GAAP gross profit - license and implementation:
| |
$
|
1,145
| | |
$
|
5,666
| |
|
Reversal of non-GAAP expenses:
| | | | | | | | |
|
Stock-based compensation (a)
| |
|
200
| | |
|
138
| |
|
Non-GAAP gross profit - license and implementation
| |
$
|
1,345
| | |
$
|
5,804
| |
|
Percentage of revenue
| | |
29.5
|
%
| | |
60.0
|
%
|
| | |
|
| | Three months ended December 31, | |
| | 2015 | | | 2014 | |
|
Reconciliation from GAAP gross profit to non-GAAP gross profit:
| | | | | | | | |
|
for SaaS and maintenance:
| | | | | | | | |
|
GAAP gross profit - SaaS and maintenance:
| |
$
|
10,913
| | |
$
|
6,909
| |
|
Reversal of non-GAAP expenses:
| | | | | | | | |
|
Stock-based compensation (a)
| | |
227
| | | |
196
| |
|
Amortization of intangible assets (b)
| | |
190
| | | |
61
| |
|
LeapFrogRx compensation charges (c)
| |
|
—
| | |
|
50
| |
|
Non-GAAP gross profit - SaaS and maintenance
| |
$
|
11,330
| | |
$
|
7,216
| |
|
Percentage of revenue
| | |
56.9
|
%
| | |
58.1
|
%
|
| | | | | | | |
|
| | Three months ended December 31, | |
| | 2015 | | | 2014 | |
|
Reconciliation from GAAP research and development to non-GAAP
| | | | | | | | |
|
research and development:
| | | | | | | | |
|
GAAP research and development
| |
$
|
5,284
| | |
$
|
4,454
| |
|
Reversal of non-GAAP expenses:
| | | | | | | | |
|
Stock-based compensation (a)
| | |
(401
|
)
| | |
(328
|
)
|
|
LeapFrogRx compensation charges (c)
| |
|
—
| | |
|
(1
|
)
|
|
Non-GAAP research and development
| |
$
|
4,883
| | |
$
|
4,125
| |
| | | | | | | |
|
| | Three months ended December 31, | |
| | 2015 | | | 2014 | |
|
Reconciliation from GAAP sales and marketing to non-GAAP
| | | | | | | | |
|
sales and marketing:
| | | | | | | | |
|
GAAP sales and marketing
| |
$
|
7,707
| | |
$
|
6,740
| |
|
Reversal of non-GAAP expenses:
| | | | | | | | |
|
Stock-based compensation (a)
| | |
(593
|
)
| | |
(647
|
)
|
|
Amortization of intangible assets (b)
| | |
(85
|
)
| | |
(22
|
)
|
|
LeapFrogRx compensation charges (c)
| |
|
—
| | |
|
(11
|
)
|
|
Non-GAAP sales and marketing
| |
$
|
7,029
| | |
$
|
6,060
| |
| | |
|
| | Three months ended December 31, | |
| | 2015 | | | | 2014 | |
|
Reconciliation from GAAP general and administrative to non-GAAP
| | | | | | | | | |
|
general and administrative:
| | | | | | | | | |
|
GAAP general and administrative
| |
$
|
6,720
| | | |
$
|
5,588
| |
|
Reversal of non-GAAP expenses:
| | | | | | | | | |
|
Stock-based compensation (a)
| | |
(1,129
|
)
| | | |
(1,085
|
)
|
|
LeapFrogRx compensation charges (c)
| | |
—
| | | | |
(18
|
)
|
|
Legal expenses (d)
| | |
(305
|
)
| | | |
—
| |
|
Acquisition and integration related expenses (e)
| |
|
(103
|
)
| | |
|
—
| |
|
Non-GAAP general and administrative
| |
$
|
5,183
| | | |
$
|
4,485
| |
| | | | | | | | |
|
| | Three months ended December 31, | |
| | 2015 | | | | 2014 | |
|
Reconciliation from GAAP loss from operations to non-GAAP
| | | | | | | | | |
|
loss from operations:
| | | | | | | | | |
|
GAAP net loss from operations:
| |
$
|
(7,653
|
)
| | |
$
|
(4,207
|
)
|
|
Reversal of non-GAAP expenses:
| | | | | | | | | |
|
Stock-based compensation (a)
| | |
2,550
| | | | |
2,394
| |
|
Amortization of intangible assets (b)
| | |
275
| | | | |
83
| |
|
LeapFrogRx compensation charges (c)
| | |
—
| | | | |
80
| |
|
Legal expenses (d)
| | |
305
| | | | |
—
| |
|
Acquisition and integration related expenses (e)
| |
|
103
| | | |
|
—
| |
|
Non-GAAP loss from operations
| |
$
|
(4,420
|
)
| | |
$
|
(1,650
|
)
|
| | | | | | | | |
|
| | Three months ended December 31, | |
| | 2015 | | | | 2014 | |
| Numerator: | | | | | | | | | |
|
Reconciliation between GAAP and non-GAAP net loss:
| | | | | | | | | |
|
GAAP net loss:
| |
$
|
(7,799
|
)
| | |
$
|
(4,299
|
)
|
|
Reversal of non-GAAP expenses:
| | | | | | | | | |
|
Stock-based compensation (a)
| | |
2,550
| | | | |
2,394
| |
|
Amortization of intangible assets (b)
| | |
275
| | | | |
83
| |
|
LeapFrogRx compensation charges (c)
| | |
—
| | | | |
80
| |
|
Legal expenses (d)
| | |
305
| | | | |
—
| |
|
Acquisition and integration related expenses (e)
| |
|
279
| | | |
|
—
| |
|
Non-GAAP net loss attributable to Model N Inc. | | | | | | | | | |
|
common stockholders
| |
$
|
(4,390
|
)
| | |
$
|
(1,742
|
)
|
| 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 and
| | | | | | | | | |
|
non-GAAP diluted net loss per share
| |
|
26,827
| | | |
|
25,319
| |
|
GAAP diluted net loss per share attributable to Model N Inc. | | | | | | | | | |
common stockholders
| |
$
|
(0.29
|
)
| | |
$
|
(0.17
|
)
|
|
Non-GAAP diluted net loss per share attributable to Model N Inc. | | | | | | | | | |
|
common stockholders
| |
|
(0.16
|
)
| | |
$
|
(0.07
|
)
|
| | | | | | | | |
|
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,
gross profit, loss from operations, net loss, weighted average shares
outstanding and net loss per share, which are adjusted to exclude
LeapFrogRx compensation charges, Channel Insight acquisition related
costs, stock-based compensation expense and amortization of intangible
assets 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 results because stock-based
compensation amounts are difficult to forecast due in part to the
volume, timing and terms of 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 totaling up-to $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)
| |
Legal expense is for the securities class action lawsuits filed in
September 2014 and January 2015. We believe that the exclusion of
these legal expenses provides for a better comparison of our
operation results to prior periods and to our peer companies.
|
|
(e)
| |
In October 2015, we acquired Channel Insight for a cash
consideration of $12.6 million, as part of the acquisition, we
incurred certain non-recurring integration costs and purchase price
adjustments. We believe that exclusion of these acquisition related
adjustments and costs provides for a better comparison of our
operation results to prior periods and to our peer companies.
|
| |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160208006297/en/
Investor Relations:
ICR for Model N
Sheila Ennis,
650-610-4998
investorrelations@modeln.com
or
Media:
The
Hoffman Agency
Jacqueline Velasco, 408-975-3012
jvelasco@hoffman.com
Source: Model N, Inc.