Amber Road, Inc. (NYSE:AMBR), a leading provider of global trade management (GTM) solutions, today announced its financial results for the third quarter ended September 30, 2017.

Jim Preuninger, Chief Executive Officer of Amber Road, stated, “I am particularly pleased that we generated positive Adjusted EBITDA as we set the Company on a path towards sustainable and growing profitability and cash flow. We continue to benefit from the investments we have made to expand our presence into new geographies and markets, extending our competitive differentiation through product innovation while maintaining a strong focus on cost controls to improve profitability. We enter the seasonally strong fourth quarter with a solid pipeline of opportunities and good visibility into these opportunities.”

Third Quarter 2017 Financial Highlights

Revenue

  • Total revenue was $20.2 million, an increase compared to $18.9 million for the comparable period of 2016.
  • Subscription revenue was $14.9 million, an increase compared to $14.1 million for the comparable period of 2016.
  • Professional services revenue was $5.3 million, an increase compared to $4.8 million for the comparable period of 2016.

Operating Loss

  • GAAP operating loss was $(1.8) million, compared to $(3.5) million for the comparable period of 2016.
  • Non-GAAP adjusted operating loss(1) was $(11,862), compared to $(1.7) million for the comparable period of 2016.

Net Loss

  • GAAP net loss was $(2.2) million, compared to $(3.8) million for the comparable period of 2016.
  • GAAP basic and diluted net loss per common share was $(0.08), compared to $(0.14) for the comparable period of 2016, based on 27.5 million and 26.8 million basic and diluted weighted average common shares outstanding, respectively.
  • Non-GAAP adjusted net loss(1) was $(0.4) million, compared to $(2.0) million for the comparable period of 2016.
  • Non-GAAP adjusted net loss per common share was $(0.02), compared to $(0.08) for the comparable period of 2016, based on 27.5 million and 26.8 million basic and diluted weighted average common shares outstanding, respectively.

Adjusted EBITDA

  • Adjusted EBITDA was $1.0 million for the three months ended September 30, 2017 and $16,140 for the comparable period of 2016.

Balance Sheet and Cash Flow

  • Cash and cash equivalents at September 30, 2017 totaled $8.3 million, compared to $15.4 million at December 31, 2016.
  • Cash used in operating activities was $(2.8) million for the nine months ended September 30, 2017, compared to cash used in operating activities of $(38,854) for the nine months ended September 30, 2016.

A reconciliation of GAAP operating loss and net loss to Non-GAAP adjusted operating loss and net loss, of GAAP net loss to Adjusted EBITDA and of GAAP total revenue to Non-GAAP total revenue has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Third Quarter 2017 Business Highlights

  • Announced that GEODIS, part of SCNF Logistics, has chosen the Amber Road Export On-Demand solution to screen third-party trade partners to ensure compliance with global sanctions and embargo lists. Using the Restricted Party Screening module in Amber Road’s Export On-Demand solution, GEODIS will be able to transform its screening processes, replacing numerous disparate and partial systems with a single system covering its worldwide operations.
  • Announced that its software platform has expanded support for the new import filing requirements under the United States Automated Commercial Environment (ACE) Single Window for Partner Government Agencies (PGAs). US Customs and Border Protection is leveraging the ACE system to implement the concept of the Single Window with all PGAs.

Business Outlook

Based on information available as of November 2, 2017, Amber Road is issuing guidance for the fourth quarter and full year 2017. Refer to the reconciliation of GAAP guidance to non-GAAP guidance tables at the end of this release for details on non-GAAP adjustments.

Fourth Quarter 2017:

  • Total revenue is expected to be in the range of $20.0 million to $20.6 million.
  • Non-GAAP adjusted operating loss(1) is expected to be in the range of $(1.2) million to $(0.6) million.
  • Non-GAAP adjusted net loss per common share is expected to be in the range of $(0.07) to $(0.04). This assumes 28.0 million basic and diluted shares outstanding.

Full Year 2017:

  • Total revenue is expected to be in the range of $78.4 million to $79.0 million.
  • Non-GAAP adjusted operating loss(1) is expected to be in the range of $(6.4) million to $(5.8) million.
  • Non-GAAP adjusted net loss per common share is expected to be in the range of $(0.31) to $(0.29). This assumes 28.0 million basic and diluted shares outstanding.

Endnotes:

(1)   For 2017, non-GAAP adjusted operating loss and adjusted net loss excludes stock-based compensation and change in fair value of contingent consideration liability. For 2016, non-GAAP adjusted operating loss and adjusted net loss excludes stock-based compensation, change in fair value of contingent consideration liability, purchase accounting deferred revenue adjustment, acquisition compensation costs and acquisition related costs.

Conference Call Information

Amber Road will host a conference call on Thursday, November 2, 2017 at 5:00 p.m. Eastern Time (ET) to discuss the Company’s third quarter financial results and its business outlook. To access this call, dial (800)-289-0548 (domestic) or (719) 457-2615 (international). The conference ID is 2296616. Additionally, a live webcast of the conference call will be available in the “Investor Relations” section of the Company’s web site at www.AmberRoad.com.

Following the conference call, a replay will be available until November 9, 2017 at (844)-512-2921 (domestic) or (412)-317-6671 (international). The replay pass code is 2296616. An archived webcast of this conference call will also be available in the “Investor Relations” section of the Company’s web site at www.AmberRoad.com.

About Amber Road

Amber Road’s (NYSE: AMBR) mission is to dramatically transform the way companies conduct global trade. As a leading provider of cloud-based global trade management (GTM) software, trade content and training, we help companies all over the world create value through their global supply chain by improving margins, achieving greater agility and lowering risk. We do this by creating a digital model of the global supply chain that enables collaboration between buyers, sellers and logistics companies. We replace manual and outdated processes with comprehensive automation for global trade activities, including sourcing, supplier management, production tracking, transportation management, supply chain visibility, import and export compliance, and duty management. We provide rich data analytics to uncover areas for optimization and deliver a platform that is responsive and flexible to adapt to the ever-changing nature of global trade.

Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, Amber Road has provided non-GAAP financial measures and non-GAAP guidance within this press release including non-GAAP adjusted operating and net loss and adjusted EBITDA, financial measures that are not calculated in accordance with generally accepted accounting principles, or GAAP. Provided below is a reconciliation of GAAP operating and net loss to non-GAAP adjusted operating and net loss, and net loss to adjusted EBITDA. EBITDA consists of net loss plus depreciation and amortization, interest expense (income) and income tax expense. Adjusted EBITDA consists of EBITDA plus stock-based compensation, changes in the fair value of contingent consideration liability, purchase accounting adjustment to deferred revenue, acquisition compensation costs and acquisition related costs. Amber Road has included these non-GAAP measures in this press release because it assists in comparing performance on a consistent basis across reporting periods, as it removes from operating results the impact of the Company’s capital structure. Amber Road believes these non-GAAP measures are useful to an investor in evaluating its operating performance because they are often used by the financial community to measure a company’s operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of performance exclusive of its capital structure and the method by which assets were acquired.

Amber Road’s use of these non-GAAP measures has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of its results as reported under GAAP. Some of these limitations are:

  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and these non-GAAP measures do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
  • these non-GAAP measures do not reflect changes in, or cash requirements for, working capital needs;
  • these non-GAAP measures do not reflect the potentially dilutive impact of equity-based compensation;
  • these non-GAAP measures do not reflect interest or tax payments that may represent a reduction in cash available; and
  • other companies, including companies in Amber Road’s industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these and other limitations, you should consider these non-GAAP measures together with other GAAP-based financial performance measures, including various cash flow metrics, net loss and other GAAP results. A reconciliation of GAAP operating and net loss to non-GAAP adjusted operating and net loss, and adjusted EBITDA has been provided in the financial statement tables included in this press release.

Cautionary Language Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only our current expectations and beliefs, and therefore, contain risks and uncertainties about future events or our future financial performance, including, but not limited to, achieving revenue from bookings, closing business from the sales pipeline, new customer deployments and maintaining these relationships, the ability to reduce operating losses and use of cash, and attaining profitability. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” and similar expressions, whether in the negative or affirmative. These statements are only predictions and may be inaccurate. Actual events or results may differ materially. In evaluating these statements, you should specifically consider various factors, including the risks outlined in our filings with the Securities and Exchange Commission (SEC), including, without limitation, our annual, periodic and current SEC reports. These factors may cause our actual results to differ materially from any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, our future results, levels of activity, performance or achievements may differ from our expectations. Other than as required by law, we do not undertake to update any of the forward-looking statements after the date of this press release, even though our situation may change in the future.

 
AMBER ROAD, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheet
(Unaudited)
   

September 30,
2017

December 31,
2016

Assets
Current assets:
Cash and cash equivalents $ 8,282,234 $ 15,408,133
Accounts receivable, net 15,465,557 19,661,156
Unbilled receivables 992,875 314,328
Deferred commissions 4,396,974 4,420,632
Prepaid expenses and other current assets 1,926,004   1,719,612  
Total current assets 31,063,644 41,523,861
Property and equipment, net 9,894,886 9,978,255
Goodwill 43,777,158 43,907,017
Other intangibles, net 5,263,149 6,148,820
Deferred commissions 7,013,656 8,046,664
Deposits and other assets 1,154,004   884,471  
Total assets $ 98,166,497   $ 110,489,088  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 1,860,562 $ 2,724,591
Accrued expenses 9,365,484 14,127,304
Current portion of capital lease obligations 1,270,056 1,155,964
Deferred revenue 35,199,938 34,464,264
Current portion of term loan, net of discount 714,391   593,336  
Total current liabilities 48,410,431 53,065,459
Capital lease obligations, less current portion 1,564,396 1,276,700
Deferred revenue, less current portion 1,887,526 2,135,620
Term loan, net of discount, less current portion 13,017,989 13,614,514
Revolving credit facility 6,100,000 6,000,000
Other noncurrent liabilities 1,560,533   1,825,317  
Total liabilities 72,540,875   77,917,610  
Stockholders’ equity:

Common stock, $0.001 par value; 100,000,000 shares authorized; issued and outstanding 27,209,232 and
26,926,268 shares at September 30, 2017 and December 31, 2016, respectively

27,209 26,926
Additional paid-in capital 193,265,714 188,811,896
Accumulated other comprehensive loss (1,568,375 ) (1,336,792 )
Accumulated deficit (166,098,926 ) (154,930,552 )
Total stockholders’ equity 25,625,622   32,571,478  
Total liabilities and stockholders’ equity $ 98,166,497   $ 110,489,088  
 

 

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Operations

(Unaudited)

 
 

Three Months Ended
September 30,

  

Nine Months Ended
September 30,

2017   2016 2017   2016
Revenue:
Subscription $ 14,944,160 $ 14,079,394 $ 43,532,217 $ 39,358,586
Professional services 5,269,090   4,771,407   14,910,883   14,595,827  
Total revenue 20,213,250   18,850,801   58,443,100   53,954,413  
Cost of revenue (1):
Cost of subscription revenue 4,903,483 4,964,971 16,066,645 14,988,695
Cost of professional services revenue 4,247,519   3,845,548   12,396,228   11,872,116  
Total cost of revenue 9,151,002   8,810,519   28,462,873   26,860,811  
Gross profit 11,062,248   10,040,282   29,980,227   27,093,602  
Operating expenses (1):
Sales and marketing 5,551,239 5,488,309 17,043,562 16,968,999
Research and development 3,830,431 4,231,492 11,201,577 12,119,137
General and administrative 3,517,187   3,782,591   11,247,825   11,329,134  
Total operating expenses 12,898,857   13,502,392   39,492,964   40,417,270  
Loss from operations (1,836,609 ) (3,462,110 ) (9,512,737 ) (13,323,668 )
Interest income 1,238 4,810 2,564 55,858
Interest expense (272,293 ) (221,370 ) (751,644 ) (643,543 )
Loss before income taxes (2,107,664 ) (3,678,670 ) (10,261,817 ) (13,911,353 )
Income tax expense 130,039   112,580   906,557   306,465  
Net loss $ (2,237,703 ) $ (3,791,250 ) $ (11,168,374 ) $ (14,217,818 )
 
Net loss per common share:
Basic and diluted $ (0.08 ) $ (0.14 ) $ (0.41 ) $ (0.53 )
Weighted-average common shares outstanding:
Basic and diluted 27,471,248   26,809,137   27,377,058   26,609,322  
 

________________________________________________________________________

 
(1) Includes stock-based compensation as follows:
 
 

Three Months Ended
September 30,

  

Nine Months Ended
September 30,

2017   2016 2017   2016
Cost of subscription revenue $ 214,033 $ 219,120 $ 591,965 $ 638,069
Cost of professional services revenue 153,357 128,254 405,129 377,467
Sales and marketing 321,226 238,324 780,626 675,057
Research and development 401,567 304,501 987,427 847,057
General and administrative 734,564   564,626   1,513,898   1,669,410
$ 1,824,747   $ 1,454,825   $ 4,279,045   $ 4,207,060
 

 
AMBER ROAD, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Cash Flows
(Unaudited)
 
 

Nine Months Ended
September 30,

2017   2016
Cash flows from operating activities:
Net loss $ (11,168,374 ) $ (14,217,818 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 4,015,240 5,063,509
Bad debt expense 305,612 523,403
Stock-based compensation 4,279,045 4,207,060
Acquisition related deferred compensation — 851,931
Changes in fair value of contingent consideration liability 18,525 10,469
Accretion of debt discount 28,981 47,186
Changes in operating assets and liabilities:
Accounts receivable and unbilled receivables 3,239,595 5,352,339
Prepaid expenses and other assets 823,889 (2,074,943 )
Accounts payable (967,975 ) (418,732 )
Accrued expenses (1,172,824 ) 2,669,696
Settlement of contingent accrued compensation related to former ecVision founder (2,366,469 ) —
Other liabilities (264,429 ) (2,025,820 )
Deferred revenue 477,278   (27,134 )
Net cash used in operating activities (2,751,906 ) (38,854 )
Cash flows from investing activities:
Capital expenditures (169,739 ) (220,718 )
Addition of capitalized software development costs (1,217,126 ) (1,859,969 )
Addition of intangible assets — (275,000 )
Cash paid for deposits (205,264 ) (143,836 )
Decrease (increase) in restricted cash (259 ) 113,094  
Net cash used in investing activities (1,592,388 ) (2,386,429 )
Cash flows from financing activities:
Proceeds from revolving line of credit 18,350,000 14,250,000
Payments on revolving line of credit (18,250,000 ) (13,750,000 )
Payments on term loan (468,750 ) (281,250 )
Debt financing costs (35,701 ) —
Repayments on capital lease obligations (1,237,031 ) (1,052,029 )
Proceeds from the exercise of stock options 175,056 1,467,749
Contingent consideration related to ecVision acquisition (1,308,525 ) —  
Net cash provided by (used in) financing activities (2,774,951 ) 634,470  
Effect of exchange rate on cash and cash equivalents (6,654 ) (423,250 )
Net decrease in cash and cash equivalents (7,125,899 ) (2,214,063 )
Cash and cash equivalents at beginning of period 15,408,133   17,854,523  
Cash and cash equivalents at end of period $ 8,282,234   $ 15,640,460  
 
Supplemental disclosures of cash flow information:
Cash paid for interest $ 717,057 $ 564,401
Non-cash property and equipment acquired under capital lease 1,638,819 246,286
Non-cash property and equipment purchases in accounts payable 46,545 —
 

 
Reconciliation of Net Loss to Adjusted EBITDA
(Unaudited)
 
 

Three Months Ended
September 30,

  

Nine Months Ended
September 30,

2017   2016 2017   2016
Net loss $ (2,237,703 ) $ (3,791,250 ) $ (11,168,374 ) $ (14,217,818 )
Depreciation and amortization expense 1,007,083 1,729,448 4,015,240 5,063,509
Interest expense 272,293 221,370 751,644 643,543
Interest income (1,238 ) (4,810 ) (2,564 ) (55,858 )
Income tax expense 130,039   112,580   906,557   306,465  
EBITDA (829,526 ) (1,732,662 ) (5,497,497 ) (8,260,159 )
Stock-based compensation 1,824,747 1,454,825 4,279,045 4,207,060
Change in fair value of contingent consideration liability — 10,000 18,525 10,469
Purchase accounting deferred revenue adjustment — — — 69,095
Acquisition compensation costs — 283,977 — 851,931
Acquisition related costs —   —   —   5,420  
Adjusted EBITDA $ 995,221   $ 16,140   $ (1,199,927 ) $ (3,116,184 )
 
 
Reconciliation of Net Loss to Non-GAAP Adjusted Net Loss
(Unaudited)
 
 

Three Months Ended
September 30,

  

Nine Months Ended
September 30,

2017   2016 2017   2016
Net loss $ (2,237,703 ) $ (3,791,250 ) $ (11,168,374 ) $ (14,217,818 )
Stock-based compensation 1,824,747 1,454,825 4,279,045 4,207,060
Change in fair value of contingent consideration liability — 10,000 18,525 10,469
Purchase accounting deferred revenue adjustment — — — 69,095
Acquisition compensation costs — 283,977 — 851,931
Acquisition related costs —   —   —   5,420  
Non-GAAP adjusted net loss $ (412,956 ) $ (2,042,448 ) $ (6,870,804 ) $ (9,073,843 )
 
Adjusted non-GAAP net loss per common share:
Basic and diluted $ (0.02 ) $ (0.08 ) $ (0.25 ) $ (0.34 )
 
Weighted-average common shares outstanding:
GAAP weighted average number of common shares outstanding - basic and diluted 27,471,248   26,809,137   27,377,058   26,609,322  
 
 
Reconciliation of Loss from Operations to Non-GAAP Adjusted Loss from Operations
(Unaudited)
 
 

Three Months Ended
September 30,

  

Nine Months Ended
September 30,

2017   2016 2017   2016
Loss from operations $ (1,836,609 ) $ (3,462,110 ) $ (9,512,737 ) $ (13,323,668 )
Stock-based compensation 1,824,747 1,454,825 4,279,045 4,207,060
Change in fair value of contingent consideration liability — 10,000 18,525 10,469
Purchase accounting deferred revenue adjustment — — — 69,095
Acquisition compensation costs — 283,977 — 851,931
Acquisition related costs —   —   —   5,420  
Non-GAAP adjusted loss from operations $ (11,862 ) $ (1,713,308 ) $ (5,215,167 ) $ (8,179,693 )
 

Based on information available as of November 2, 2017, the following tables show 2017 GAAP guidance reconciled to non-GAAP guidance for the fourth quarter and full year 2017 as indicated below (numbers in millions, except per share data):

 
Reconciliation of Loss from Operations to Non-GAAP Adjusted Loss from Operations Guidance
(Unaudited)
 
 

Fourth Quarter 2017

  

Full Year 2017

Low   High Low   High
Loss from operations $ (2.6 ) $ (2.0 ) $ (12.1 ) $ (11.5 )
Stock-based compensation 1.4   1.4   5.7   5.7  
Non-GAAP adjusted loss from operations $ (1.2 ) $ (0.6 ) $ (6.4 ) $ (5.8 )
 
 
Reconciliation of Net Loss per Share to Non-GAAP Adjusted Net Loss per Share Guidance ((1))
(Unaudited)
 
 

Fourth Quarter 2017

  

Full Year 2017

Low   High Low   High
Net loss per share, basic and diluted $ (0.12 ) $ (0.09 ) $ (0.51 ) $ (0.49 )
Stock-based compensation 0.05   0.05   0.20   0.20  
Non-GAAP adjusted net loss per share, basic and diluted $ (0.07 ) $ (0.04 ) $ (0.31 ) $ (0.29 )
 
(1) This assumes weighted average shares outstanding - basic and diluted 28.0   28.0   28.0   28.0