REDWOOD CITY, Calif.--(BUSINESS WIRE)--
Model N, Inc., (NYSE: MODN), the leading provider of cloud-based Revenue
Management solutions to life sciences, technology and manufacturing
companies, today announced financial results for the fourth quarter and
full fiscal year 2017, which ended September 30, 2017.
“Model N exceeded both revenue and profitability guidance for the fourth
quarter of fiscal year 2017, and in particular we are pleased to report
that we generated over $1 million in Adjusted EBITDA and positive free
cash flow this quarter,” said Zack Rinat, Founder, Executive Chairman
and Chief Executive Officer of Model N. “We are encouraged with the
strategic, operational, and financial progress we made during fiscal
year 2017 and are committed to continuing to deliver for both our
customers and our shareholders.”
Fourth Quarter 2017 Financial Highlights:
- Revenues: SaaS and maintenance revenues were $29.6 million
compared to $22.4 million in the fourth quarter of fiscal 2016.
Excluding Revitas, which contributed $3.6 million, growth was 16% as
compared to the fourth quarter of fiscal 2016. Total revenues were
$35.6 million after the $1.3 million deferred revenue adjustment
related to the purchase accounting for the Revitas acquisition,
compared to $28.5 million for the fourth quarter of fiscal 2016.
- Gross Profit: Gross profit was $20.1 million compared to $14.9
million for the fourth quarter of fiscal 2016. Gross margins were 57%
compared to 52% for the fourth quarter of fiscal 2016. Non-GAAP gross
profit was $22.7 million, compared to $15.8 million for the fourth
quarter of fiscal 2016. Non-GAAP gross margins were 61% compared to
55% for the fourth quarter of fiscal 2016.
- (Loss) income from operations: GAAP loss from operations was
$(7.2) million compared to a loss from operations of $(7.7) million
for the fourth quarter of fiscal 2016. Non-GAAP income from operations
was $0.1 million compared to a Non-GAAP loss from operations of $(2.9)
million for the fourth quarter of fiscal 2016.
- Net loss: GAAP net loss was $(9.0) million compared to net loss
of $(7.8) million for the fourth quarter of fiscal 2016. GAAP diluted
net loss per share attributed to common stockholders was $(0.31) based
upon weighted average shares outstanding of 29.2 million, as compared
to net loss per share of $(0.28) for the fourth quarter of fiscal 2016
based upon weighted average shares outstanding of 27.8 million.
- Non-GAAP net loss: Non-GAAP net loss was $(1.7) million as
compared to Non-GAAP net loss of $(3.0) million for the fourth quarter
of fiscal 2016. Non-GAAP net loss per share was $(0.06) based upon
weighted average shares outstanding of 29.2 million, as compared to
Non-GAAP net loss per share of $(0.28) for the fourth quarter of
fiscal 2016 based upon weighted average shares outstanding of 27.8
million.
- Adjusted EBITDA: Adjusted EBITDA was $1.0 million compared to
$(1.7) million for the fourth quarter of fiscal 2016.
Fiscal Year 2017 Financial Highlights:
- Revenues: SaaS and maintenance revenues were $108.1 million
compared to $86.4 million in fiscal 2016. Excluding Revitas, which
contributed $15.2 million, growth was 7% as compared fiscal 2016.
Total revenues were $131.2 million after the $5.2 million deferred
revenue adjustment related to the purchase accounting for the Revitas
acquisition, compared to $107.0 million for fiscal 2016.
- Gross Profit: Gross profit was $70.1 million compared to $53.3
million for fiscal 2016. Gross margins were 53% compared to 50% for
fiscal 2016. Non-GAAP gross profit was $79.5 million, compared to
$56.4 million for fiscal 2016. Non-GAAP gross margins were 58%
compared to 53% for fiscal 2016.
- Loss from operations: GAAP loss from operations was $(38.6)
million compared to a loss from operations of $(32.7) million for
fiscal 2016. Non-GAAP loss from operations was $(11.8) million
compared to a Non-GAAP loss from operations of $(17.3) million for
fiscal 2016.
- Net loss: GAAP net loss was $(39.5) million compared to net
loss of $(33.1) million for fiscal 2016. GAAP diluted net loss per
share attributed to common stockholders was $(1.38) based upon
weighted average shares outstanding of 28.6 million as compared to net
loss per share of $(1.21) for fiscal 2016 based upon weighted average
shares outstanding of 27.4 million.
- Non-GAAP net loss: Non-GAAP net loss was $(16.9) million as
compared to Non-GAAP net loss of $(17.4) million for fiscal 2016.
Non-GAAP net loss per share was $(0.59) based upon weighted average
shares outstanding of 28.6 million, as compared to Non-GAAP net loss
per share of $(0.64) for fiscal 2016 based upon weighted average
shares outstanding of 27.4 million.
- Adjusted EBITDA: Adjusted EBITDA was $(8.3) million compared to
$(12.6) million for fiscal 2016.
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 November 07, 2017, we are providing guidance for the first quarter
of fiscal 2018 and the full fiscal year ending September 30, 2018.
| (in $ millions, except per share outlook) |
| First Quarter Fiscal 2018 |
| Full Year Fiscal 2018 |
|
Total GAAP Revenues
|
|
37.0 – 37.5
|
|
147.0 – 150.0
|
|
Non-GAAP income/(loss) from operations
| |
(0.3) – 0.2
| |
0.5 – 3.5
|
|
Non-GAAP net loss per share
| |
(0.07) – (0.05)
| |
(0.23) – (0.13)
|
|
Adjusted EBITDA
| |
0.6 – 1.1
| |
4.0 – 7.0
|
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
fourth quarter and fiscal year 2017, which ended September 30, 2017. To
access the call, please dial (877) 407-4018 in the U.S. or (201)
689-8471 internationally. 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
November 14, 2017 by dialing (844) 512-2921 in the U.S. or (412)
317-6671 internationally with recording access code 13671836.
About Model N
Model N is the leader in revenue management solutions. Driving mission
critical business processes such as configure, price and quote (CPQ),
contract and rebate management, business intelligence, and regulatory
compliance, Model N 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 complex business
needs of the world’s leading brands in life sciences, technology and
manufacturing across more than 120 countries, including Johnson &
Johnson, AstraZeneca, Boston Scientific, Novartis and Microchip
Technology. For more information, visit www.modeln.com
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 first quarter and full year
fiscal year 2018 revenue and other financial results as well as outlook
for fiscal year 2018 and future prospects. 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; (xi)
changes in health care regulation and policy and tax in the United
States and worldwide; and (xii) our ability to retain customers, and
(xiii) acquisition-related risks from our recent acquisition of Revitas.
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, 2017,
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 income (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,
acquisition & integration related expenses, deferred revenue adjustment
and amortization of intangible assets. Non-GAAP loss from operations and
non-GAAP net loss exclude stock-based compensation expense, amortization
of intangible assets, certain legal expenses, and acquisition &
integration related expenses, deferred revenue adjustment and valuation
allowance resulting from Revitas acquisition 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 and therefore we have not
provided a reconciliation of forecasted Non-GAAP results with GAAP. 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 depreciation and amortization, stock-based
compensation expense, certain legal expenses, acquisition & integration
related expenses, deferred revenue adjustment, interest (income)
expense, net, and other (income) expenses, net, and provision (benefit)
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 |
| | September 30, | | September 30, |
| | 2017 | | 2016 |
| Assets | | | | | | | | |
|
Current assets:
| | | | | | | | |
|
Cash and cash equivalents
| |
$
|
57,558
| | |
$
|
66,149
| |
|
Accounts receivable, net
| | |
24,784
| | | |
19,925
| |
|
Deferred cost of implementation services, current portion
| | |
493
| | | |
1,630
| |
|
Prepaid expenses
| | |
3,733
| | | |
4,845
| |
|
Other current assets
| |
|
520
| | |
|
283
| |
|
Total current assets
| | |
87,088
| | | |
92,832
| |
|
Property and equipment, net
| | |
4,611
| | | |
6,141
| |
| Goodwill | | |
39,283
| | | |
6,939
| |
|
Intangible assets, net
| | |
40,156
| | | |
5,684
| |
|
Other assets
| |
|
798
| | |
|
1,371
| |
|
Total assets
| |
$
|
171,936
| | |
$
|
112,967
| |
| Liabilities and Stockholders' Equity | | | | | | | | |
|
Current liabilities:
| | | | | | | | |
|
Accounts payable
| |
$
|
3,002
| | |
$
|
3,334
| |
|
Accrued employee compensation
| | |
14,996
| | | |
8,349
| |
|
Accrued liabilities
| | |
4,979
| | | |
3,707
| |
|
Deferred revenue, current portion
| | |
49,186
| | | |
28,854
| |
|
Short-term debt
| |
|
4,753
| | |
|
—
| |
|
Total current liabilities
| | |
76,916
| | | |
44,244
| |
|
Long-term liabilities:
| | | | | | | | |
|
Deferred revenue, net of current portion
| | |
227
| | | |
1,924
| |
|
Long-term debt
| | |
52,452
| | | |
—
| |
|
Other long-term liabilities
| |
|
1,080
| | |
|
597
| |
|
Total long-term liabilities
| |
|
53,759
| | |
|
2,521
| |
|
Total liabilities
| |
|
130,675
| | |
|
46,765
| |
|
Stockholders' equity:
| | | | | | | | |
|
Common Stock
| | |
4
| | | |
4
| |
|
Preferred Stock
| | |
—
| | | |
—
| |
|
Additional paid-in capital
| | |
217,052
| | | |
202,506
| |
|
Accumulated other comprehensive loss
| | |
(502
|
)
| | |
(562
|
)
|
|
Accumulated deficit
| |
|
(175,293
|
)
| |
|
(135,746
|
)
|
|
Total stockholders' equity
| |
|
41,261
| | |
|
66,202
| |
|
Total liabilities and stockholders' equity
| |
$
|
171,936
| | |
$
|
112,967
| |
Model N Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) |
|
| | |
| | |
| | Three months ended September 30, | | Fiscal year ended September 30, |
| | 2017 |
| 2016 | | 2017 |
| 2016 |
|
Revenues:
| | | | | | | | | | | | | | | | |
|
License and implementation
| |
$
|
5,977
| | |
$
|
6,075
| | |
$
|
23,114
| | |
$
|
20,579
| |
|
SaaS and maintenance
| |
$
|
29,628
| | |
$
|
22,433
| | |
$
|
108,055
| | |
$
|
86,392
| |
|
Total revenues
| | |
35,605
| | | |
28,508
| | | |
131,169
| | | |
106,971
| |
|
Cost of revenues:
| | | | | | | | | | | | | | | | |
|
License and implementation
| | |
3,118
| | | |
2,437
| | | |
14,224
| | | |
12,976
| |
|
SaaS and maintenance
| |
|
12,345
| | |
|
11,137
| | |
|
46,872
| | |
|
40,717
| |
|
Total cost of revenues
| |
|
15,463
| | |
|
13,574
| | |
|
61,096
| | |
|
53,693
| |
|
Gross profit
| | |
20,142
| | | |
14,934
| | | |
70,073
| | | |
53,278
| |
|
Operating expenses:
| | | | | | | | | | | | | | | | |
|
Research and development
| | |
7,762
| | | |
6,057
| | | |
31,064
| | | |
23,706
| |
|
Sales and marketing
| | |
10,258
| | | |
8,265
| | | |
41,339
| | | |
32,261
| |
|
General and administrative
| |
|
9,332
| | |
|
8,278
| | |
|
36,281
| | |
|
30,051
| |
|
Total operating expenses
| |
|
27,352
| | |
|
22,600
| | |
|
108,684
| | |
|
86,018
| |
|
Loss from operations
| | |
(7,210
|
)
| | |
(7,666
|
)
| | |
(38,611
|
)
| | |
(32,740
|
)
|
|
Interest expense (income), net
| | |
1,370
| | | |
(22
|
)
| | |
4,159
| | | |
(50
|
)
|
|
Other (income) expenses, net
| |
|
(15
|
)
| |
|
63
| | |
|
62
| | |
|
86
| |
|
Loss before income taxes
| | |
(8,565
|
)
| | |
(7,707
|
)
| | |
(42,832
|
)
| | |
(32,776
|
)
|
|
(Benefit) provision for income taxes
| |
|
457
| | |
|
49
| | |
|
(3,285
|
)
| |
|
335
| |
|
Net loss
| |
$
|
(9,022
|
)
| |
$
|
(7,756
|
)
| |
$
|
(39,547
|
)
| |
$
|
(33,111
|
)
|
|
Net loss per share attributable to common stockholders:
| | | | | | | | | | | | | | | | |
|
Basic and diluted
| |
$
|
(0.31
|
)
| |
$
|
(0.28
|
)
| |
$
|
(1.38
|
)
| |
$
|
(1.21
|
)
|
Weighted average number of shares used in computing net loss per
share
attributable to common stockholders:
| | | | | | | | | | | | | | | | |
|
Basic and diluted
| |
|
29,198
| | |
|
27,766
| | |
|
28,649
| | |
|
27,379
| |
Model N Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) |
|
| | |
| | Fiscal year ended September 30, |
| | 2017 |
| 2016 |
|
Cash flows from operating activities:
| | | | | | | | |
|
Net loss
| |
$
|
(39,547
|
)
| |
$
|
(33,111
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities
| | | | | | | | |
|
Depreciation and amortization
| | |
8,185
| | | |
5,929
| |
|
Stock-based compensation
| | |
10,560
| | | |
13,068
| |
|
Amortization of debt discount and issuance costs
| | |
683
| | | |
—
| |
|
Deferred income taxes
| | |
(3,952
|
)
| | |
172
| |
|
Other non-cash charges
| | |
216
| | | |
(94
|
)
|
|
Changes in assets and liabilities, net of acquisition
| | | | | | | | |
|
Accounts receivable
| | |
1,420
| | | |
(2,850
|
)
|
|
Prepaid expenses and other assets
| | |
2,117
| | | |
(1,458
|
)
|
|
Deferred cost of implementation services
| | |
1,502
| | | |
(996
|
)
|
|
Accounts payable
| | |
(1,558
|
)
| | |
1,494
| |
|
Accrued employee compensation
| | |
2,626
| | | |
(677
|
)
|
|
Other accrued and long-term liabilities
| | |
13
| | | |
253
| |
|
Deferred revenue
| |
|
5,770
| | |
|
5,946
| |
|
Net cash used in operating activities
| |
|
(11,965
|
)
| |
|
(12,324
|
)
|
|
Cash flows from investing activities:
| | | | | | | | |
|
Purchases of property and equipment
| | |
(359
|
)
| | |
(2,102
|
)
|
|
Acquisition of business, net of cash acquired
| | |
(47,773
|
)
| | |
(12,615
|
)
|
|
Capitalization of software development costs
| |
|
(369
|
)
| |
|
(1,072
|
)
|
|
Net cash used in investing activities
| |
|
(48,501
|
)
| |
|
(15,789
|
)
|
|
Cash flows from financing activities:
| | | | | | | | |
|
Proceeds from exercise of stock options and issuance of employee
stock purchase plan
| | |
3,986
| | | |
3,279
| |
|
Proceeds from term loan
| | |
48,686
| | | |
—
| |
|
Debt issuance costs
| |
|
(806
|
)
| |
|
—
| |
|
Net cash provided by financing activities
| |
|
51,866
| | |
|
3,279
| |
|
Effect of exchange rate changes on cash and cash equivalents
| | |
9
| | | |
(36
|
)
|
|
Net decrease in cash and cash equivalents
| | |
(8,591
|
)
| | |
(24,870
|
)
|
|
Cash and cash equivalents
| | | | | | | | |
|
Beginning of period
| |
|
66,149
| | |
|
91,019
| |
|
End of period
| |
$
|
57,558
| | |
$
|
66,149
| |
| Model N Inc. |
| Reconciliation of GAAP to Non-GAAP Operating Results |
| (in thousands, except per share amounts) |
| (unaudited) |
|
| | | |
| | | |
|
| | | |
|
| | | |
| | Three months ended September 30, | | | Fiscal year ended September 30, |
| | 2017 | | 2016 | | | 2017 | | 2016 |
|
Reconciliation from GAAP net loss to adjusted EBITDA:
| | | | | | | | | | | | | | | | | | |
|
GAAP net loss:
| |
$
|
(9,022
|
)
| |
$
|
(7,756
|
)
| | |
$
|
(39,547
|
)
| | |
$
|
(33,111
|
)
|
|
Reversal of non-GAAP items:
| | | | | | | | | | | | | | | | | | |
|
Stock-based compensation expense
| | |
3,625
| | | |
4,281
| | | | |
10,560
| | | | |
13,068
| |
|
Depreciation and amortization
| | |
2,319
| | | |
1,527
| | | | |
8,185
| | | | |
5,929
| |
|
Deferred revenue adjustments
| | |
1,341
| | | |
—
| | | | |
5,151
| | | | |
—
| |
|
Acquisition and integration related expense
| | |
970
| | | |
130
| | | | |
6,446
| | | | |
867
| |
|
Legal expenses
| | |
—
| | | |
—
| | | | |
—
| | | | |
305
| |
|
Interest (income) expense, net
| | |
1,370
| | | |
(22
|
)
| | | |
4,159
| | | | |
(50
|
)
|
|
Other (income) expenses, net
| | |
(15
|
)
| | |
63
| | | | |
62
| | | | |
86
| |
|
(Benefit) provision for income taxes
| |
|
457
| | |
|
49
| | | |
|
(3,285
|
)
| | |
|
335
| |
|
Adjusted EBITDA
| |
$
|
1,045
| | |
$
|
(1,728
|
)
| | |
$
|
(8,269
|
)
| | |
$
|
(12,571
|
)
|
| | | | | | | | | | | | | | | | | |
|
| | Three months ended September 30, | | Fiscal year ended September 30, |
| | 2017 | | 2016 | | 2017 | | 2016 |
Reconciliation from GAAP revenue to revenue before deferred
revenue
adjustment:
| | | | | | | | | | | | | | | | | | |
|
GAAP revenue
| |
$
|
35,605
| | |
$
|
28,508
| | | |
$
|
131,169
| | | |
$
|
106,971
| |
|
Deferred revenue adjustment (e)
| |
|
1,341
| | |
|
—
| | | |
$
|
5,151
| | | |
|
—
| |
|
Revenue before deferred revenue adjustment
| |
$
|
36,946
| | |
$
|
28,508
| | | |
$
|
136,320
| | | |
$
|
106,971
| |
| | | | | | | | | | | | | | | | | |
|
| | Three months ended September 30, | | Fiscal year ended September 30, |
| | 2017 | | 2016 | | 2017 | | 2016 |
|
Reconciliation from GAAP gross profit to non-GAAP gross profit:
| | | | | | | | | | | | | | | | | | |
|
GAAP gross profit:
| |
$
|
20,142
| | |
$
|
14,934
| | | |
$
|
70,073
| | | |
$
|
53,278
| |
|
Reversal of non-GAAP expenses:
| | | | | | | | | | | | | | | | | | |
|
Stock-based compensation (a)
| | |
540
| | | |
546
| | | | |
2,022
| | | | |
1,951
| |
|
Amortization of intangible assets (b)
| | |
476
| | | |
255
| | | | |
1,694
| | | | |
955
| |
|
Acquisition and integration related expenses (d)
| | |
159
| | | |
68
| | | | |
578
| | | | |
250
| |
|
Deferred revenue adjustment (e)
| |
|
1,341
| | |
|
—
| | | |
|
5,151
| | | |
|
—
| |
|
Non-GAAP gross profit
| |
$
|
22,658
| | |
$
|
15,803
| | | |
$
|
79,518
| | | |
$
|
56,434
| |
|
Percentage of revenue
| | |
61.3
|
%
| | |
55.4
|
%
| | | |
58.3
|
%
| | | |
52.8
|
%
|
| | | | | | | | | | | | | | | | | |
|
| | Three months ended September 30, | | Fiscal year ended September 30, |
| | 2017 | | 2016 | | 2017 | | 2016 |
|
Reconciliation from GAAP loss from operations to non-GAAP
loss from operations:
| | | | | | | | | | | | | | | | | | |
|
GAAP net loss from operations:
| |
$
|
(7,210
|
)
| |
$
|
(7,666
|
)
| | |
$
|
(38,611
|
)
| | |
$
|
(32,740
|
)
|
|
Reversal of non-GAAP expenses:
| | | | | | | | | | | | | | | | | | |
|
Stock-based compensation (a)
| | |
3,625
| | | |
4,281
| | | | |
10,560
| | | | |
13,068
| |
|
Amortization of intangible assets (b)
| | |
1,418
| | | |
382
| | | | |
4,629
| | | | |
1,422
| |
|
Legal expenses (c)
| | |
—
| | | |
—
| | | | |
—
| | | | |
305
| |
|
Acquisition and integration related expenses (d)
| | |
970
| | | |
130
| | | | |
6,446
| | | | |
657
| |
|
Deferred revenue adjustments (e)
| |
|
1,341
| | |
|
—
| | | |
|
5,151
| | | |
|
—
| |
|
Non-GAAP income (loss) from operations
| |
$
|
144
| | |
$
|
(2,873
|
)
| | |
$
|
(11,825
|
)
| | |
$
|
(17,288
|
)
|
| | | | | | | | | | | | | | | | | |
|
| | Three months ended September 30, | | Fiscal year ended September 30, |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Numerator: | | | | | | | | | | | | | | | | | | |
|
Reconciliation between GAAP and non-GAAP net loss:
| | | | | | | | | | | | | | | | | | |
|
GAAP net loss:
| |
$
|
(9,022
|
)
| |
$
|
(7,756
|
)
| | |
$
|
(39,547
|
)
| | |
$
|
(33,111
|
)
|
|
Reversal of non-GAAP expenses:
| | | | | | | | | | | | | | | | | | |
|
Stock-based compensation (a)
| | |
3,625
| | | |
4,281
| | | | |
10,560
| | | | |
13,068
| |
|
Amortization of intangible assets (b)
| | |
1,418
| | | |
382
| | | | |
4,629
| | | | |
1,422
| |
|
Legal expenses (c)
| | |
—
| | | |
—
| | | | |
—
| | | | |
305
| |
|
Acquisition and integration related expenses (d)
| | |
970
| | | |
130
| | | | |
6,446
| | | | |
867
| |
|
Deferred revenue adjustment (e)
| | |
1,341
| | | |
—
| | | | |
5,151
| | | | |
—
| |
|
Deferred tax valuation allowance (f)
| |
|
—
| | |
|
—
| | | |
|
(4,165
|
)
| | |
|
—
| |
|
Non-GAAP net loss attributable to common stockholders
| |
$
|
(1,668
|
)
| |
$
|
(2,963
|
)
| | |
$
|
(16,926
|
)
| | |
$
|
(17,449
|
)
|
| | | | | | | | | | | | | | | | | |
|
| Denominator: | | | | | | | | | | | | | | | | | | |
|
Reconciliation between GAAP and non-GAAP weighted average shares
used in
computing diluted net loss per share attributable to common
stockholders:
| | | | | | | | | | | | | | | | | | |
|
Weighted average number of shares used in computing GAAP and
non-GAAP diluted net loss per share
| |
|
29,198
| | |
|
27,766
| | | |
|
28,649
| | | |
|
27,379
| |
|
GAAP diluted net loss per share attributable to common stockholders
| |
$
|
(0.31
|
)
| |
$
|
(0.28
|
)
| | |
$
|
(1.38
|
)
| | |
$
|
(1.21
|
)
|
|
Non-GAAP diluted net loss per share attributable to common
stockholders
| |
|
(0.06
|
)
| |
|
(0.11
|
)
| | |
|
(0.59
|
)
| | |
|
(0.64
|
)
|
| | | | | | | | | | | | | | | | | |
|
| | Three months ended September 30, | | Fiscal year ended September 30, |
| | 2017 | | 2016 | | 2017 | | 2016 |
|
Amortization of intangibles assets recorded in the statement of
operations:
| | | | | | | | | | | | | | | | | | |
|
Cost of revenues:
| | | | | | | | | | | | | | | | | | |
|
License and implementation
| |
$
|
—
| | |
$
|
—
| | | |
$
|
—
| | | |
$
|
—
| |
|
SaaS and maintenance
| |
|
476
| | |
|
255
| | | |
|
1,694
| | | |
|
955
| |
|
Total amortization of intangibles assets in cost of revenue (b)
| |
|
476
| | |
|
255
| | | |
|
1,694
| | | |
|
955
| |
|
Cost of revenues:
| | | | | | | | | | | | | | | | | | |
|
Research and development
| |
$
|
—
| | |
$
|
—
| | | |
$
|
—
| | | |
$
|
—
| |
|
Sales and marketing
| | |
942
| | | |
127
| | | | |
2,935
| | | | |
467
| |
|
General and administrative
| |
|
—
| | |
|
—
| | | |
|
—
| | | |
|
—
| |
|
Total amortization of intangibles assets in operating expense (b)
| |
|
942
| | |
|
127
| | | |
|
2,935
| | | |
|
467
| |
|
Total amortization of intangible assets (b)
| |
$
|
1,418
| | |
$
|
382
| | | |
$
|
4,629
| | | |
$
|
1,422
| |
| | | | | | | | | | | | | | | | | |
|
| | Three months ended September 30, | | Fiscal year ended September 30, |
| | 2017 | | 2016 | | 2017 | | 2016 |
|
Stock-based compensation recorded in the statement of operations:
| | | | | | | | | | | | | | | | | | |
|
Cost of revenues:
| | | | | | | | | | | | | | | | | | |
|
License and implementation
| |
$
|
275
| | |
$
|
259
| | | |
$
|
1,015
| | | |
$
|
918
| |
|
SaaS and maintenance
| |
|
265
| | |
|
287
| | | |
|
1,007
| | | |
|
1,032
| |
|
Total stock-based compensation in cost of revenues (a)
| |
|
540
| | |
|
546
| | | |
|
2,022
| | | |
|
1,950
| |
|
Operating expenses:
| | | | | | | | | | | | | | | | | | |
|
Research and development
| |
$
|
471
| | |
$
|
430
| | | |
$
|
1,744
| | | |
$
|
1,393
| |
|
Sales and marketing
| | |
907
| | | |
1,183
| | | | |
2,651
| | | | |
3,307
| |
|
General and administrative
| |
|
1,707
| | |
|
2,122
| | | |
|
4,143
| | | |
|
6,418
| |
|
Total stock-based compensation in operating expenses (a)
| |
|
3,085
| | |
|
3,735
| | | |
|
8,538
| | | |
|
11,118
| |
|
Total stock-based compensation (a)
| |
$
|
3,625
| | |
$
|
4,281
| | | |
$
|
10,560
| | | |
$
|
13,068
| |
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
certain legal expenses, Channel Insight and Revitas acquisition related
costs, deferred revenue adjustment and valuation allowance resulting
from Revitas acquisition, stock-based compensation expense, 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 expenses incurred 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 is a
non-cash item. We believe that the exclusion of stock-based
compensation expense provides for a better comparison of our
operating 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)
| |
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.
|
| | |
|
|
(d)
| |
In October 2015, we acquired Channel Insight and in January 2017
we acquired Revitas, as part of the acquisition we incurred
certain non-recurring integration costs. 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.
|
| | |
|
|
(e)
| |
Represents deferred revenue adjustment resulting from purchase
price accounting that is related to the Revitas acquisition and 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.
|
| | |
|
|
(f)
| |
Represents a discrete tax benefit recorded as a result of a
partial release of valuation allowance resulting from the
acquisition of Revitas. Deferred tax valuation allowance is a
non-cash item. As such, we believe exclusion of this item provides
for a better comparison of our operation results to prior periods.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171107006630/en/
Investor Relations:
ICR for Model N
Staci Mortenson,
650-610-4998
investorrelations@modeln.com
or
Media:
pr@modeln.com
Source: Model N, Inc.