Appoints David Barter as Chief Financial Officer
Appoints Baljit Dail to Board of Directors
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 second quarter,
which ended March 31, 2017.
“We are pleased with both our strategic progress and our execution
during the second quarter. We closed the Revitas acquisition on January
5, 2017, delivered strong performance as a combined company, and
accelerated the transition to SaaS and recurring revenues with record
percentage of SaaS and maintenance revenue,” said Zack Rinat, Founder,
Executive Chairman and Chief Executive Officer of Model N. “Our market
momentum is further validated by our record attendance at our annual
customer event. We are committed to delivering value for both our
customers and shareholders and accelerating our growth and path towards
cash flow generation.”
Second Quarter 2017 Financial Highlights:
- Total Revenues: Total revenues were $33.3 million after the
$2.1 million deferred revenue adjustment related to the purchase
accounting for the Revitas acquisition, compared to $26.1 million for
the second quarter of fiscal 2016.
- Gross Profit: Gross profit was $17.2 million, compared to $12.2
million for the second quarter of fiscal 2017. Gross margins were 52%,
compared to 47% for the second quarter of fiscal 2016. Non-GAAP gross
profit was $20.4 million, compared to $13.1 million for the second
quarter of fiscal 2016. Non-GAAP gross margins were 58%, compared to
50% for the second quarter of fiscal 2016.
- Loss from operations: GAAP loss from operations was $(15.0)
million, compared to a loss from operations of $(8.9) million for the
second quarter of fiscal 2016. Non-GAAP loss from operations was
$(5.3) million, compared to a Non-GAAP loss from operations of $(5.7)
million for the second quarter of fiscal 2016.
- Net loss: GAAP net loss was $(12.5) million, compared to net
loss of $(8.9) million for the second quarter of fiscal 2016. GAAP
diluted net loss per share attributed to common stockholders was
$(0.44) based upon weighted average shares outstanding of 28.5
million, as compared to net loss per share of $(0.33) for the second
quarter of fiscal 2016 based upon weighted average shares outstanding
of 27.2 million.
- Non-GAAP net loss: Non-GAAP net loss was $(7.0) million, as
compared to Non-GAAP net loss of $(5.7) million for the second quarter
of fiscal 2016. Non-GAAP net loss per share was $(0.25) based upon
weighted average shares outstanding of 28.5 million, as compared to
Non-GAAP net loss per share of $(0.21) for the second quarter of
fiscal 2016 based upon weighted average shares outstanding of 27.2
million.
- Adjusted EBITDA: Adjusted EBITDA was $(4.4) million, compared
to $(4.5) million for the second quarter of 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.
Announces Appointment of David Barter to Chief
Financial Officer
Model N today announced the appointment of David Barter as its new Chief
Financial Officer, effective as of May 10, 2017. Mr. Barter will replace
Mark Tisdel who announced his intention to resign as Chief Financial
Officer to purse an opportunity and relocated to New Zealand. Mr. Tisdel
will remain with Model N through May 29, 2017 to assist with the
transition.
Barter joined Guidewire Software (NYSE: GWRE), a vertical software
company focused on property and casualty insurance, in September 2013 as
Vice President with responsibility for finance, accounting, and tax
operations. Prior to Guidewire, Barter held several senior finance
positions at Microsoft (NYSE: MSFT), most recently as CFO of Microsoft
Financing, a captive finance business unit of Microsoft Corporation.
Barter also worked as a senior consultant at the Boston Consulting Group
and held several finance positions at General Electric. Throughout his
career, Barter has helped to scale rapidly growing technology companies
and develop high-performing teams. Barter holds a BBA in Finance and
Philosophy from the University of Notre Dame and an MBA from
Northwestern University - Kellogg School of Management.
“We are thrilled to have David join our executive management team as our
Chief Financial Officer. David has meaningful experience growing and
scaling high growth software companies as well as a deep background in
finance and accounting. We look forward to his leadership in scaling
Model N,” said Mr. Rinat. “On behalf of the Board of Directors and the
Model N management team, I want to thank Mark for his many contributions
and wish him well in his future endeavors. He has built a strong finance
team and I am confident we have the team in place to execute on our
strategic vision and growth goals.”
“It is a tremendous opportunity to join Model N at such an exciting
time,” said Barter. “Model N has established itself as a leader in
Revenue Management, delivering mission-critical solutions to enterprises
globally. I’m looking forward to working with the team to drive growth
and scale in the business and to achieve the company’s financial
objectives.”
Announces Appointment of Baljit S. Dail to the Board of Directors
Model N today also announced the appointment of Baljit S. Dail to the
company’s Board of Directors, effective May 4, 2017. Mr. Dail is a
seasoned business executive with proven experience managing global
enterprises and will play an important role as Model N continues to
scale its business and execute the company’s long-term growth strategy.
Mr. Dail currently serves as an Advisor of New Mountain Capital.
Previously, he was Chairman and CEO of JDA Software, and served in a
number of executive roles at Aon Corporation. He was also a principal at
McKinsey & Company focused on the high-tech sector.
Guidance:
As of May 8, 2017, we are providing guidance for the third quarter of
fiscal 2017 and the full fiscal year ending September 30, 2017.
Third Quarter Fiscal 2017 Guidance:
• Total revenues are expected to be in the range from $33.5 million to
$33.8 million after the deferred revenue adjustment from purchase
accounting of approximately $1.9 million,
• Non-GAAP loss from operations is expected to be in the range of ($3.5)
million to ($3.0) million,
• Non-GAAP net loss per share is expected to be in the range of ($0.19)
to ($0.17) based upon weighted average shares outstanding of 28.8
million shares.
Fiscal Year 2017 Guidance:
• Total revenues are expected to be in the range from $129.4 million to
$130.0 million, after the deferred revenue adjustment of approximately
$5.1 million,
• Non-GAAP loss from operations is expected to be in the range of
($14.5) million to ($14.0) million,
• Non-GAAP net loss per share is expected to be in the range of ($0.68)
to ($0.66) based upon weighted average shares outstanding of 28.7
million shares.
• We expect our ending cash balance at September 30, 2017 to be between
$50.0 million and $52.0 million.
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, which ended March 31, 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 May
15, 2017 by dialing (844) 512-2921 in the U.S. or (412) 317-6671
internationally with recording access code 13659907.
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, Microchip Technology
and Fairchild. 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 third quarter and full year
fiscal year 2017 revenue and other financial results as well as outlook
for fiscal year 2017 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. 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, 2016, 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,
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. 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 | |
| | | March 31, | | | | September 30, | |
| | | 2017 | | | | 2016 | |
| Assets | | | | | | | | | | |
|
Current assets:
| | | | | | | | | | |
|
Cash and cash equivalents
| | |
$
|
53,682
| | | |
$
|
66,149
| |
|
Accounts receivable, net
| | | |
27,016
| | | | |
19,925
| |
|
Deferred cost of implementation services, current portion
| | | |
921
| | | | |
1,630
| |
|
Prepaid expenses
| | | |
4,106
| | | | |
4,845
| |
|
Other current assets
| | |
|
475
| | | |
|
283
| |
|
Total current assets
| | | |
86,200
| | | | |
92,832
| |
|
Property and equipment, net
| | | |
6,399
| | | | |
6,141
| |
| Goodwill | | | |
39,283
| | | | |
6,939
| |
|
Intangible assets, net
| | | |
42,991
| | | | |
5,684
| |
|
Other assets
| | |
|
749
| | | |
|
1,371
| |
|
Total assets
| | |
$
|
175,622
| | | |
$
|
112,967
| |
| Liabilities and Stockholders' Equity | | | | | | | | | | |
|
Current liabilities:
| | | | | | | | | | |
|
Accounts payable
| | |
$
|
3,848
| | | |
$
|
3,334
| |
|
Accrued employee compensation
| | | |
11,548
| | | | |
8,349
| |
|
Accrued liabilities
| | | |
3,108
| | | | |
3,707
| |
|
Deferred revenue, current portion
| | |
|
46,566
| | | |
|
28,854
| |
|
Total current liabilities
| | | |
65,070
| | | | |
44,244
| |
|
Long-term liabilities:
| | | | | | | | | | |
|
Deferred revenue, net of current portion
| | | |
799
| | | | |
1,924
| |
|
Long term debt
| | | |
56,767
| | | | |
—
| |
|
Other long-term liabilities
| | |
|
830
| | | |
|
597
| |
|
Total long-term liabilities
| | |
|
58,396
| | | |
|
2,521
| |
|
Total liabilities
| | |
|
123,466
| | | |
|
46,765
| |
|
Stockholders' equity:
| | | | | | | | | | |
|
Common Stock
| | | |
4
| | | | |
4
| |
|
Preferred Stock
| | | |
—
| | | | |
—
| |
|
Additional paid-in capital
| | | |
208,503
| | | | |
202,506
| |
|
Accumulated other comprehensive loss
| | | |
(515
|
)
| | | |
(562
|
)
|
|
Accumulated deficit
| | |
|
(155,836
|
)
| | |
|
(135,746
|
)
|
|
Total stockholders' equity
| | |
|
52,156
| | | |
|
66,202
| |
|
Total liabilities and stockholders' equity
| | |
$
|
175,622
| | | |
$
|
112,967
| |
|
|
Model N Inc.
Condensed Consolidated Statements of
Operations
(in thousands, except per share amounts)
(unaudited)
|
|
|
| | |
|
| | |
| | | Three months ended March 31, | | | | Six months ended March 31, | |
| | | 2017 | |
|
| 2016 | | | | 2017 | |
|
| 2016 | |
|
Revenues:
| | | | | | | | | | | | | | | | | | | | |
|
License and implementation
| | |
$
|
6,000
| | | |
$
|
4,823
| | | |
$
|
11,423
| | | |
$
|
9,385
| |
|
SaaS and maintenance
| | |
|
27,257
| | | |
|
21,236
| | | |
|
49,897
| | | |
|
41,161
| |
|
Total revenues
| | | |
33,257
| | | | |
26,059
| | | | |
61,320
| | | | |
50,546
| |
|
Cost of Revenues:
| | | | | | | | | | | | | | | | | | | | |
|
License and implementation
| | | |
4,159
| | | | |
3,601
| | | | |
7,773
| | | | |
7,018
| |
|
SaaS and maintenance
| | |
|
11,880
| | | |
|
10,238
| | | |
|
22,088
| | | |
|
19,250
| |
|
Total cost of revenues
| | |
|
16,039
| | | |
|
13,839
| | | |
|
29,861
| | | |
|
26,268
| |
|
Gross profit
| | | |
17,218
| | | | |
12,220
| | | | |
31,459
| | | | |
24,278
| |
|
Operating Expenses:
| | | | | | | | | | | | | | | | | | | | |
|
Research and development
| | | |
8,934
| | | | |
6,175
| | | | |
14,909
| | | | |
11,459
| |
|
Sales and marketing
| | | |
11,608
| | | | |
8,307
| | | | |
20,342
| | | | |
16,014
| |
|
General and administrative
| | |
|
11,668
| | | |
|
6,644
| | | |
|
18,853
| | | |
|
13,364
| |
|
Total operating expenses
| | |
|
32,210
| | | |
|
21,126
| | | |
|
54,104
| | | |
|
40,837
| |
|
Loss from operations
| | | |
(14,992
|
)
| | | |
(8,906
|
)
| | | |
(22,645
|
)
| | | |
(16,559
|
)
|
|
Interest (income) expense, net
| | | |
1,380
| | | | |
(13
|
)
| | | |
1,347
| | | | |
(14
|
)
|
|
Other (income) expenses, net
| | |
|
228
| | | |
|
(12
|
)
| | |
|
74
| | | |
|
45
| |
|
Loss before income taxes
| | | |
(16,600
|
)
| | | |
(8,881
|
)
| | | |
(24,066
|
)
| | | |
(16,590
|
)
|
|
Provision for (benefit from) income taxes
| | |
|
(4,110
|
)
| | |
|
29
| | | |
|
(3,976
|
)
| | |
|
119
| |
|
Net loss
| | |
$
|
(12,490
|
)
| | |
$
|
(8,910
|
)
| | |
$
|
(20,090
|
)
| | |
$
|
(16,709
|
)
|
|
Net loss per share attributable to common stockholders:
| | | | | | | | | | | | | | | | | | | | |
|
Basic and diluted
| | |
$
|
(0.44
|
)
| | |
$
|
(0.33
|
)
| | |
|
(0.71
|
)
| | |
$
|
(0.62
|
)
|
|
Weighted average number of shares used in computing net loss per
share attributable to common stockholders:
| | | | | | | | | | | | | | | | | | | | |
|
Basic and diluted
| | |
|
28,452
| | | |
|
27,238
| | | |
|
28,228
| | | |
|
27,031
| |
|
|
Model N Inc.
Condensed Consolidated Statements of
Cash Flows
(in thousands)
(unaudited)
|
|
|
| | |
| | | Six Months Ended March 31, | |
| | | 2017 | |
|
| 2016 | |
|
Cash Flows From Operating Activities:
| | | | | | | | | | |
|
Net loss
| | |
$
|
(20,090
|
)
| | |
$
|
(16,709
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities
| | | | | | | | | | |
|
Depreciation and amortization
| | | |
3,493
| | | | |
2,856
| |
|
Stock-based compensation
| | | |
4,448
| | | | |
5,158
| |
|
Amortization of debt discount and issuance cost
| | | |
244
| | | | |
—
| |
|
Deferred income taxes
| | | |
(4,073
|
)
| | | |
8
| |
|
Other non-cash charges
| | | |
235
| | | | |
—
| |
|
Changes in assets and liabilities, net of acquisition:
| | | | | | | | | | |
|
Accounts receivable
| | | |
(876
|
)
| | | |
(5,247
|
)
|
|
Prepaid expenses and other assets
| | | |
1,707
| | | | |
197
| |
|
Deferred cost of implementation services
| | | |
1,076
| | | | |
(459
|
)
|
|
Accounts payable
| | | |
(762
|
)
| | | |
(311
|
)
|
|
Accrued employee compensation
| | | |
(818
|
)
| | | |
(1,443
|
)
|
|
Other accrued and long-term liabilities
| | | |
(1,926
|
)
| | | |
324
| |
|
Deferred revenue
| | |
|
3,731
| | | |
|
7,404
| |
|
Net cash used in operating activities
| | |
|
(13,611
|
)
| | |
|
(8,222
|
)
|
|
Cash Flows From Investing Activities:
| | | | | | | | | | |
|
Purchases of property and equipment, net
| | | |
(222
|
)
| | | |
(1,103
|
)
|
|
Acquisition of businesses, net of cash acquired
| | | |
(47,773
|
)
| | | |
(12,615
|
)
|
|
Capitalization of software development costs
| | |
|
(285
|
)
| | |
|
(615
|
)
|
|
Net cash used in investing activities
| | |
|
(48,280
|
)
| | |
|
(14,333
|
)
|
|
Cash Flows From Financing Activities:
| | | | | | | | | | |
|
Proceeds from exercise of stock options and employee stock purchase
plan
| | | |
1,548
| | | | |
1,545
| |
|
Proceeds from term loan
| | | |
48,686
| | | | |
—
| |
|
Debt issuance costs
| | |
|
(806
|
)
| | |
|
—
| |
|
Net cash provided by financing activities
| | |
|
49,428
| | | |
|
1,545
| |
|
Effect of exchange rate changes on cash and cash equivalents
| | | |
(4
|
)
| | | |
(14
|
)
|
|
Net decrease in cash and cash equivalents
| | | |
(12,467
|
)
| | | |
(21,024
|
)
|
|
Cash and cash equivalents
| | | | | | | | | | |
|
Beginning of period
| | |
|
66,149
| | | |
|
91,019
| |
|
End of period
| | |
$
|
53,682
| | | |
$
|
69,995
| |
|
|
| Model N Inc. | |
| Reconciliation of GAAP to Non-GAAP Operating Results | |
| (in thousands, except per share amounts) | |
| (unaudited) | |
|
|
| | | |
|
| | | |
|
| | | |
|
| | | |
| | | Three months ended March 31, | | | | Six months ended March 31, | |
| | | 2017 | | | | 2016 | | | | 2017 | | | | 2016 | |
|
Reconciliation from GAAP net loss to adjusted EBITDA:
| | | | | | | | | | | | | | | | | | | | |
|
GAAP net loss:
| | |
$
|
(12,490
|
)
| | |
$
|
(8,910
|
)
| | |
$
|
(20,090
|
)
| | |
$
|
(16,709
|
)
|
|
Reversal of non-GAAP items:
| | | | | | | | | | | | | | | | | | | | |
|
Stock-based compensation expense
| | | |
2,553
| | | | |
2,608
| | | | |
4,448
| | | | |
5,158
| |
|
Depreciation and amortization
| | | |
2,399
| | | | |
1,536
| | | | |
3,493
| | | | |
2,856
| |
|
Deferred revenue adjustment
| | | |
2,100
| | | | |
—
| | | | |
2,100
| | | | |
—
| |
|
Acquisition and integration related costs
| | | |
3,563
| | | | |
268
| | | | |
4,765
| | | | |
547
| |
|
Legal expenses
| | | |
—
| | | | |
—
| | | | |
—
| | | | |
305
| |
|
Interest (income) expense, net
| | | |
1,380
| | | | |
(13
|
)
| | | |
1,347
| | | | |
(14
|
)
|
|
Other (income) expenses, net
| | | |
228
| | | | |
(12
|
)
| | | |
74
| | | | |
45
| |
|
Provision (benefit) for income taxes
| | |
|
(4,110
|
)
| | |
|
29
| | | |
|
(3,976
|
)
| | |
|
119
| |
|
Adjusted EBITDA
| | |
$
|
(4,377
|
)
| | |
$
|
(4,494
|
)
| | |
$
|
(7,839
|
)
| | |
$
|
(7,693
|
)
|
| | | | | | | | | | | | | | | | | | | |
|
| | | Three months ended March 31, | | | | Six months ended March 31, | |
| | | 2017 | | | | 2016 | | | | 2017 | | | | 2016 | |
|
Reconciliation from GAAP revenue to revenue before deferred revenue
adjustment:
| | | | | | | | | | | | | | | | | | | | |
|
GAAP revenue:
| | |
$
|
33,257
| | | |
$
|
26,059
| | | |
$
|
61,320
| | | |
$
|
50,546
| |
|
Deferred revenue adjustment (e)
| | |
|
2,100
| | | |
|
—
| | | |
|
2,100
| | | |
|
—
| |
|
Revenue before deferred revenue adjustment
| | |
$
|
35,357
| | | |
$
|
26,059
| | | |
$
|
63,420
| | | |
$
|
50,546
| |
| | | | | | | | | | | | | | | | | | | |
|
| | | Three months ended March 31, | | | | Six months ended March 31, | |
| | | 2017 | | | | 2016 | | | | 2017 | | | | 2016 | |
|
Reconciliation from GAAP gross profit to non-GAAP gross profit:
| | | | | | | | | | | | | | | | | | | | |
|
GAAP gross profit:
| | |
$
|
17,218
| | | |
$
|
12,220
| | | |
$
|
31,459
| | | |
$
|
24,278
| |
|
Reversal of non-GAAP expenses:
| | | | | | | | | | | | | | | | | | | | |
|
Stock-based compensation (a)
| | | |
416
| | | | |
478
| | | | |
896
| | | | |
905
| |
|
Amortization of intangible assets (b)
| | | |
487
| | | | |
255
| | | | |
742
| | | | |
445
| |
|
Acquisition and integration related expenses (d)
| | | |
202
| | | | |
114
| | | | |
223
| | | | |
114
| |
|
Deferred revenue adjustment (e)
| | |
|
2,100
| | | |
|
—
| | | |
|
2,100
| | | |
|
—
| |
|
Non-GAAP gross profit
| | |
$
|
20,423
| | | |
$
|
13,067
| | | |
$
|
35,420
| | | |
$
|
25,742
| |
|
Percentage of revenue before deferred revenue adjustment
| | | |
57.8
|
%
| | | |
50.1
|
%
| | | |
55.8
|
%
| | | |
50.9
|
%
|
| | | | | | | | | | | | | | | | | | | |
|
| | | Three months ended March 31, | | | | Six months ended March 31, | |
| | | 2017 | | | | 2016 | | | | 2017 | | | | 2016 | |
|
Reconciliation from GAAP loss from operations to non-GAAP
loss from operations:
| | | | | | | | | | | | | | | | | | | | |
|
GAAP net loss from operations:
| | |
$
|
(14,992
|
)
| | |
$
|
(8,906
|
)
| | |
$
|
(22,645
|
)
| | |
$
|
(16,559
|
)
|
|
Reversal of non-GAAP expenses:
| | | | | | | | | | | | | | | | | | | | |
|
Stock-based compensation (a)
| | | |
2,553
| | | | |
2,608
| | | | |
4,448
| | | | |
5,158
| |
|
Amortization of intangible assets (b)
| | | |
1,429
| | | | |
382
| | | | |
1,793
| | | | |
657
| |
|
Legal expenses (c)
| | | |
—
| | | | |
—
| | | | |
—
| | | | |
305
| |
|
Acquisition and integration related expenses (d)
| | | |
3,563
| | | | |
234
| | | | |
4,765
| | | | |
337
| |
|
Deferred revenue adjustment (e)
| | |
|
2,100
| | | |
|
—
| | | |
|
2,100
| | | |
|
—
| |
|
Non-GAAP loss from operations
| | |
$
|
(5,347
|
)
| | |
$
|
(5,682
|
)
| | |
$
|
(9,539
|
)
| | |
$
|
(10,102
|
)
|
| | | | | | | | | | | | | | | | | | | |
|
| | | Three months ended March 31, | | | | Six months ended March 31, | |
| | | 2017 | | | | 2016 | | | | 2016 | | | | 2015 | |
| Numerator: | | | | | | | | | | | | | | | | | | | | |
|
Reconciliation between GAAP and non-GAAP net loss:
| | | | | | | | | | | | | | | | | | | | |
|
GAAP net loss:
| | |
$
|
(12,490
|
)
| | |
$
|
(8,910
|
)
| | |
$
|
(20,090
|
)
| | |
$
|
(16,709
|
)
|
|
Reversal of non-GAAP expenses:
| | | | | | | | | | | | | | | | | | | | |
|
Stock-based compensation (a)
| | | |
2,553
| | | | |
2,608
| | | | |
4,448
| | | | |
5,158
| |
|
Amortization of intangible assets (b)
| | | |
1,429
| | | | |
382
| | | | |
1,793
| | | | |
657
| |
|
Legal expenses (c)
| | | |
—
| | | | |
—
| | | | |
—
| | | | |
305
| |
|
Acquisition and integration related expenses (d)
| | | |
3,563
| | | | |
268
| | | | |
4,765
| | | | |
547
| |
|
Deferred revenue adjustment (e)
| | | |
2,100
| | | | |
—
| | | | |
2,100
| | | | |
—
| |
|
Deferred tax valuation allowances (f)
| | |
|
(4,165
|
)
| | |
|
—
| | | |
|
(4,165
|
)
| | |
|
—
| |
|
Non-GAAP net loss attributable to Model N Inc.
common stockholders
| | |
$
|
(7,010
|
)
| | |
$
|
(5,652
|
)
| | |
$
|
(11,149
|
)
| | |
$
|
(10,042
|
)
|
| 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
| | |
|
28,452
| | | |
|
27,238
| | | |
|
28,228
| | | |
|
27,031
| |
|
GAAP diluted net loss per share attributable to Model N Inc.
common stockholders
| | |
$
|
(0.44
|
)
| | |
$
|
(0.33
|
)
| | |
$
|
(0.71
|
)
| | |
$
|
(0.62
|
)
|
|
Non-GAAP diluted net loss per share attributable to Model N Inc.
common stockholders
| | |
|
(0.25
|
)
| | |
|
(0.21
|
)
| | |
|
(0.40
|
)
| | |
|
(0.37
|
)
|
| 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/20170508006219/en/
Investor Relations Contact:
ICR for Model N
Staci
Mortenson, 650-610-4998
investorrelations@modeln.com
or
Media
Contact:
pr@modeln.com
Source: Model N, Inc.