Amber Road Announces Fourth Quarter and Full Year 2018 Financial Results

EAST RUTHERFORD, N.J.–(BUSINESS WIRE)–Amber Road, Inc. (NYSE: AMBR), a leading provider of global trade
management (GTM) solutions, today announced its financial results for
the fourth quarter and full year ended December 31, 2018.

Jim Preuninger, Chief Executive Officer of Amber Road, stated, “Q4 was a
strong quarter for Amber Road, exceeding the high end of both our
revenue and profit guidance. Strength in the quarter was driven by
accelerating subscription growth rates. For the full year 2018, I am
pleased to report that we generated $3.3 million in cash flow from
operations. We also had very strong Adjusted EBITDA of $5.4 million or a
6.3% margin, a significant improvement from break-even in the prior
year. We have built a business that is financially strong with improving
levels of profit and cash flow. We believe in 2019 and beyond, we can
continue to deliver against these key metrics by taking advantage of
opportunities in global trade, bringing more focus to our sales and
marketing efforts, driving expansion into new markets, and returning
subscription revenue growth to the double-digit levels exiting the year.”

Fourth Quarter 2018 Financial Highlights

Revenue

  • Total revenue was $21.9 million, an increase compared to $20.6 million
    for the comparable period of 2017.
  • Subscription revenue was $16.3 million, an increase compared to $14.9
    million for the comparable period of 2017.
  • Professional services revenue was $5.6 million, a decrease compared to
    $5.7 million for the comparable period of 2017.

Operating Income (Loss)

  • GAAP operating loss was $(2.1) million, compared to $(1.9) million for
    the comparable period of 2017.
  • Non-GAAP adjusted operating income (loss)(1) was $0.4
    million, compared to $(0.1) million for the comparable period of 2017.

Net Loss

  • GAAP net loss was $(2.6) million, compared to $(1.8) million for the
    comparable period of 2017.
  • GAAP basic and diluted net loss per share was $(0.09), compared to
    $(0.07) for the comparable period of 2017, based on 28.1 million and
    27.5 million basic and diluted weighted average shares outstanding,
    respectively.
  • Non-GAAP adjusted net loss(1) was $(86,526), compared to
    $(10,292) for the comparable period of 2017.
  • Non-GAAP adjusted net loss per share was $0.00, compared to $0.00 for
    the comparable period of 2017, based on 28.1 million and 27.5 million
    basic and diluted weighted average shares outstanding, respectively.

Adjusted EBITDA

  • Adjusted EBITDA was $1.6 million, compared to $1.3 million for the
    comparable period of 2017.

Full Year 2018 Financial Highlights

Revenue

  • Total revenue was $85.2 million, an increase compared to $79.1 million
    in 2017.
  • Subscription revenue was $62.6 million, an increase compared to $58.5
    million in 2017.
  • Professional Services revenue was $22.5 million, an increase compared
    to $20.6 million in 2017.

Operating Income (Loss)

  • GAAP operating loss was $(11.8) million, compared to $(11.4) million
    in 2017.
  • Non-GAAP adjusted operating income (loss)(1) was $0.4
    million, compared to $(5.3) million in 2017.

Net Loss

  • GAAP net loss was $(13.6) million, compared to $(13.0) million in 2017.
  • GAAP basic and diluted net loss per common share was $(0.49), compared
    to $(0.47) in 2017, based on 27.8 million and 27.4 million basic and
    diluted weighted average common shares outstanding, respectively.
  • Non-GAAP adjusted net loss(1) was $(1.3) million, compared
    to $(6.9) million in 2017.
  • Non-GAAP adjusted net loss per common share was $(0.05), compared to
    $(0.25) in 2017, based on 27.8 million and 27.4 million basic and
    diluted weighted average common shares outstanding, respectively.

Adjusted EBITDA

  • Adjusted EBITDA was $5.4 million for 2018 and $0.1 million for the
    comparable period of 2017.

Effect of Accounting Standards Codification (ASC) 606 versus ASC
605

The table below shows the effects of the adoption of ASC 606 versus ASC
605 on our consolidated financial statements for the three months and
year ended December 31, 2018 for the following items:

   

Three Months Ended
December 31, 2018

   

Year Ended
December 31, 2018

(in millions, except per share info)

With
Adoption
of
ASC 606

   

Without
Adoption of
ASC 606

   

Effect of
Change
Higher/
(Lower)

With
Adoption
of
ASC 606

   

Without
Adoption
of
ASC 606

   

Effect of
Change
Higher/
(Lower)

Total revenue $ 21.9 $ 21.7 $ 0.2 $ 85.2 $ 85.1 $ 0.1
Non-GAAP adjusted income (loss) from operations $ 0.4 $ 0.1 $ 0.3 $ 0.4 $ (0.3) $ 0.8
Non-GAAP net income (loss) per share, basic and diluted $ 0.00 $ (0.01) $ 0.01 $ (0.05) $ (0.07) $ 0.02

Balance Sheet and Cash Flow

  • Cash and cash equivalents at December 31, 2018 were $7.5 million,
    compared to $9.4 million at September 30, 2018 and $9.4 million at
    December 31, 2017.
  • Cash provided by operating activities was $3.3 million for the year
    ended December 31, 2018, compared to cash used in operating activities
    of $(0.7) million for the year ended December 31, 2017.

A reconciliation of GAAP operating loss and net loss to Non-GAAP
adjusted operating income (loss) and net loss, and of GAAP net loss to
Adjusted EBITDA 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.”

Business Outlook

Based on information available as of February 11, 2019, Amber Road is
issuing guidance for the first quarter and full year 2019. Refer to the
reconciliation of GAAP guidance to non-GAAP guidance tables at the end
of this release for details on non-GAAP adjustments.

We anticipate first quarter and full-year 2019 results to be in the
following ranges:

    First Quarter     Full Year
(in millions, except per share info) Low     High Low     High
Revenue $ 20.3 $ 20.9 $ 88.7 $ 91.7
Non-GAAP adjusted income (loss) from operations $ (0.7) $ (0.1) $ 0.0 $ 3.0
Non-GAAP net income (loss) per share, basic and diluted $ (0.04) $ (0.02) $ (0.06) $ 0.04
Assumed weighted average shares outstanding – basic 28.3 28.3 29.0 29.0
Assumed weighted average shares outstanding – diluted 28.3 28.3 29.0 32.4

Endnote:

(1) For 2018, non-GAAP adjusted operating loss and adjusted net loss
excludes stock-based compensation. For 2017, non-GAAP adjusted operating
loss and adjusted net loss excludes stock-based compensation and change
in fair value of contingent consideration liability.

Conference Call Information

Amber Road will host a conference call on Monday, February 11, 2019 at
5:00 p.m. Eastern Time (ET) to discuss the Company’s fourth quarter
financial results and its business outlook. To access this call, dial
(888)-394-8218 (domestic) or (323)-794-2588 (international). The
conference ID is 9818081. 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
February 18, 2019 at (844)-512-2921 (domestic) or (412)-317-6671
(international). The replay pass code is 9818081. 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 income (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 income
(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 and changes in the fair value of contingent consideration
liability. 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
Consolidated
Balance Sheets

(Unaudited)

       
December 31,
2018     2017
Assets
Current assets:
Cash and cash equivalents $ 7,514,719 $ 9,360,601
Accounts receivable, net 17,171,777 16,957,044
Unbilled receivables 1,004,447 884,104
Deferred commissions 4,023,473 4,400,015
Prepaid expenses and other current assets 1,977,662 1,715,534
Total current assets 31,692,078 33,317,298
Property and equipment, net 10,132,808 9,370,104
Goodwill 43,731,942 43,768,269
Other intangibles, net 3,953,582 4,999,885
Deferred commissions 9,092,591 6,734,326
Deposits and other assets 1,499,976 1,180,163
Total assets $ 100,102,977 $ 99,370,045
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 2,110,956 $ 2,650,582
Accrued expenses 9,509,165 7,589,482
Current portion of capital lease obligations 1,263,375 1,352,456
Deferred revenue 35,144,355 37,812,239
Current portion of term loan, net of discount 714,745 714,391
Total current liabilities 48,742,596 50,119,150
Capital lease obligations, less current portion 1,197,399 1,461,101
Deferred revenue, less current portion 265,324 1,830,706
Term loan, net of discount, less current portion 12,054,490 12,839,392
Revolving credit facility 6,000,000 6,000,000
Other noncurrent liabilities 1,808,479 1,619,744
Total liabilities 70,068,288 73,870,093
Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized;
issued and outstanding 27,841,498 and 27,288,985 shares at December
31, 2018 and 2017, respectively
27,842 27,289
Additional paid-in capital 208,349,895 195,203,097
Accumulated other comprehensive loss (1,840,300) (1,822,396)
Accumulated deficit (176,502,748) (167,908,038)
Total stockholders’ equity 30,034,689 25,499,952
Total liabilities and stockholders’ equity $ 100,102,977 $ 99,370,045
 
 

AMBER ROAD, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

 
        Three Months Ended
December 31,
    Year Ended
December 31,
2018     2017 2018     2017
Revenue:
Subscription $ 16,262,921 $ 14,946,927 $ 62,636,891 $ 58,479,139
Professional services 5,621,387 5,686,092 22,529,162 20,596,971
Total revenue 21,884,308 20,633,019 85,166,053 79,076,110
Cost of revenue (1):
Cost of subscription revenue 5,387,445 5,084,777 21,557,794 21,151,419
Cost of professional services revenue 3,865,267 4,193,925 16,593,215 16,590,148
Total cost of revenue 9,252,712 9,278,702 38,151,009 37,741,567
Gross profit 12,631,596 11,354,317 47,015,044 41,334,543
Operating expenses (1):
Sales and marketing 5,505,566 5,482,973 22,949,487 22,526,535
Research and development 3,598,839 3,739,819 14,664,843 14,941,394
General and administrative 5,670,514 4,015,475 21,248,179 15,263,297
Total operating expenses 14,774,919 13,238,267 58,862,509 52,731,226
Loss from operations (2,143,323) (1,883,950) (11,847,465) (11,396,683)
Interest income 2,080 2,242 8,741 4,806
Interest expense (307,363) (225,190) (1,271,786) (976,834)
Loss before income taxes (2,448,606) (2,106,898) (13,110,510) (12,368,711)
Income tax expense 174,067 (297,782) 492,010 608,775
Net loss $ (2,622,673) $ (1,809,116) $ (13,602,520) $ (12,977,486)
 
Net loss per share:
Basic and diluted $ (0.09) $ (0.07) $ (0.49) $ (0.47)
Weighted-average shares outstanding:
Basic and diluted 28,146,280 27,531,369 27,825,795 27,415,953
 
 
(1) Includes stock-based compensation as follows:
Three Months Ended
December 31,
Year Ended
December 31,
2018 2017 2018 2017
Cost of subscription revenue $ 139,463 $ 175,912 $ 895,477 $ 767,877
Cost of professional services revenue 97,358 144,249 661,499 549,378
Sales and marketing 257,222 234,681 1,435,055 1,015,307
Research and development 355,690 417,344 2,036,305 1,404,771
General and administrative 1,686,414 826,638 7,246,830 2,340,536
$ 2,536,147 $ 1,798,824 $ 12,275,166 $ 6,077,869
 
 

AMBER ROAD, INC. AND SUBSIDIARIES
Consolidated
Statements of Cash Flows

(Unaudited)

       
Year Ended
December 31,
2018     2017
Cash flows from operating activities:
Net loss $ (13,602,520) $ (12,977,486)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Depreciation and amortization 4,979,615 5,386,789
Bad debt expense 195,372 568,193
Stock-based compensation 12,275,166 6,077,869
Changes in fair value of contingent consideration liability 18,525
Accretion of debt discount 35,608 37,884
Changes in operating assets and liabilities:
Accounts receivable and unbilled receivables (577,960) 1,615,836
Prepaid expenses and other assets (881,663) 1,313,029
Accounts payable (556,039) (166,898)
Accrued expenses 2,055,400 (2,988,525)
Settlement of contingent accrued compensation related to former
ecVision founder
(2,366,469)
Other liabilities 215,162 (209,859)
Deferred revenue (846,843) 3,021,248
Net cash provided by (used in) operating activities 3,291,298 (669,864)
Cash flows from investing activities:
Capital expenditures (219,945) (257,893)
Addition of capitalized software development costs (3,214,896) (1,458,495)
Cash paid for deposits (119,036) (190,752)
Net cash used in investing activities (3,553,877) (1,907,140)
Cash flows from financing activities:
Proceeds from revolving line of credit 23,850,000 24,350,000
Payments on revolving line of credit (23,850,000) (24,350,000)
Payments on term loan (750,000) (656,250)
Debt financing costs (70,156) (35,701)
Repayments on capital lease obligations (1,497,865) (1,556,097)
Proceeds from the exercise of stock options 872,185 313,695
Contingent consideration related to ecVision acquisition (1,308,525)
Net cash used in financing activities (1,445,836) (3,242,878)
Effect of exchange rate on cash, cash equivalents and restricted cash (137,467) (227,391)
Net decrease in cash, cash equivalents and restricted cash (1,845,882) (6,047,273)
Cash, cash equivalents and restricted cash at beginning of period 9,417,001 15,464,274
Cash, cash equivalents and restricted cash at end of period $ 7,571,119 $ 9,417,001
 
Reconciliation of cash, cash equivalents and restricted cash to the
consolidated balance sheet:
Cash and cash equivalents $ 7,514,719 $ 9,360,601
Restricted cash in deposits and other assets 56,400 56,400
Total cash, cash equivalents and restricted cash $ 7,571,119 $ 9,417,001
 
Supplemental disclosures of cash flow information:
Cash paid for interest $ 1,236,178 $ 938,949
Non-cash property and equipment acquired under capital lease 1,145,082 1,936,990
Non-cash property and equipment purchases in accounts payable 136,623
 
 

Reconciliation of Net Loss to Adjusted EBITDA
(Unaudited)

 

       
Three Months Ended
December 31,
Year Ended
December 31,
2018     2017 2018     2017
Net loss $ (2,622,673) $ (1,809,116) $ (13,602,520) $ (12,977,486)
Depreciation and amortization expense 1,218,133 1,371,549 4,979,615 5,386,789
Interest expense 307,363 225,190 1,271,786 976,834
Interest income (2,080) (2,242) (8,741) (4,806)
Income tax expense 174,067 (297,782) 492,010 608,775
EBITDA (925,190) (512,401) (6,867,850) (6,009,894)
Stock-based compensation 2,536,147 1,798,824 12,275,166 6,077,869
Change in fair value of contingent consideration liability 18,525
Adjusted EBITDA $ 1,610,957 $ 1,286,423 $ 5,407,316 $ 86,500
 
 

Reconciliation of Net Loss to Non-GAAP Adjusted Net Loss
(Unaudited)

       
Three Months Ended
December 31,
Year Ended
December 31,
2018     2017 2018     2017
Net loss $ (2,622,673) $ (1,809,116) $ (13,602,520) $ (12,977,486)
Stock-based compensation 2,536,147 1,798,824 12,275,166 6,077,869
Change in fair value of contingent consideration liability 18,525
Non-GAAP adjusted net loss $ (86,526) $ (10,292) $ (1,327,354) $ (6,881,092)
 
Adjusted non-GAAP net loss per share:
Basic and diluted $ 0.00 $ 0.00 $ (0.05) $ (0.25)
GAAP Weighted-average shares outstanding:
Basic and diluted 28,146,280 27,531,369 27,825,795 27,415,953
 
 

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

(Unaudited)

       
Three Months Ended
December 31,
Year Ended
December 31,
2018     2017 2018     2017
Loss from operations $ (2,143,323) $ (1,883,950) $ (11,847,465) $ (11,396,683)
Stock-based compensation 2,536,147 1,798,824 12,275,166 6,077,869
Change in fair value of contingent consideration liability 18,525
Non-GAAP adjusted income (loss) from operations $ 392,824 $ (85,126) $ 427,701 $ (5,300,289)
 

Based on information available as of February 11, 2019, the following
tables show 2019 GAAP guidance reconciled to non-GAAP guidance for the
first quarter and full year 2019 as indicated below (numbers in
millions, except per share data):

 

Reconciliation of Loss from Operations to Non-GAAP Adjusted
Loss from Operations Guidance

(Unaudited)

           
First Quarter 2019 Full Year 2019
Low     High Low     High
Loss from operations $ (2.6) $ (2.0) $ (4.7) $ (1.7)
Stock-based compensation 1.9 1.9 4.7 4.7
Non-GAAP adjusted loss from operations $ (0.7) $ (0.1) $ 0.0 $ 3.0
 
 

Reconciliation of Net Loss per Share to Non-GAAP Adjusted Net
Loss per Share Guidance
(1)

(Unaudited)

           
First Quarter 2019 Full Year 2019
Low     High Low     High
Net loss per share, basic and diluted $ (0.11) $ (0.09) $ (0.22) $ (0.12)
Stock-based compensation 0.07 0.07 0.16 0.16
Non-GAAP adjusted net loss per share, basic and diluted $ (0.04) $ (0.02) $ (0.06) $ 0.04
 
(1) This assumes weighted average shares outstanding – basic 28.3 28.3 29.0 29.0
(1) This assumes weighted average shares outstanding – diluted 28.3 28.3 29.0 32.4

Contacts

Investor Relations Contact
Staci Mortenson
ICR
201-806-3663
[email protected]

Amber
Road Contacts

Annika Helmrich (US & Canada)
+1 201 806
3656
[email protected]

Martijn
van Gils (Europe & Asia)
+31 858769534
[email protected]

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