AMBR Amber Road, Inc.

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, 2016.

Jim Preuninger, Chief Executive Officer of Amber Road, stated, “The fourth quarter capped off a very strong 2016 for Amber Road. I am very pleased with our ability to deliver on our key goals in 2016 to improve bookings, restore subscription growth rates, cut the cash burn, and put us on a path towards profitability. We enter 2017 with stronger go-to-market teams, an expanded portfolio of offerings to automate more areas of global trade for customers, and an increasingly complex global trade environment which requires our technology and content, and believe we can drive healthy results for the Company as we take further steps on our path towards profitability.”

Fourth Quarter 2016 Financial Highlights

Revenue

• Total revenue was $19.2 million, an increase compared to $17.2 million for the comparable period of 2015.
• Subscription revenue was $14.0 million, an increase compared to $12.9 million for the comparable period of 2015.
• Professional Services revenue was $5.3 million, an increase compared to $4.3 million for the comparable period of 2015.

Operating Loss

• GAAP operating loss was $(4.0) million, compared to $(6.4) million for the comparable period of 2015.
• Non-GAAP adjusted operating loss(1) was $(2.2) million, compared to $(5.2) million for the comparable period of 2015.

Net Loss

• GAAP net loss was $(4.5) million, compared to $(6.6) million for the comparable period of 2015.
• GAAP basic and diluted net loss per common share was $(0.17), compared to $(0.25) for the comparable period of 2015, based on 27.0 million and 26.3 million basic and diluted weighted average common shares outstanding, respectively.
• Non-GAAP adjusted net loss(1) was $(2.7) million, compared to $(5.5) million for the comparable period of 2015.
• Non-GAAP adjusted net loss per common share was $(0.10), compared to $(0.21) for the comparable period of 2015, based on 27.0 million and 26.3 million basic and diluted weighted average common shares outstanding, respectively.

Adjusted EBITDA

• Adjusted EBITDA was $(0.6) million for the three months ended December 31, 2016 and $(2.7) million for the comparable period of 2015.

Full Year 2016 Financial Highlights

Revenue

• Total revenue was $73.2 million, an increase compared to $67.1 million for the comparable period of 2015.
• Non-GAAP total revenue(2) was $73.2 million, which includes an adjustment of $69,095 related to the purchase accounting deferred revenue adjustment associated with our acquisition of ecVision in 2015.
• Subscription revenue was $53.3 million, an increase compared to $47.1 million for the comparable period of 2015.
• Professional Services revenue was $19.9 million compared to $20.0 million for the comparable period of 2015.

Operating Loss

• GAAP operating loss was $(17.3) million, compared to $(27.0) million in 2015.
• Non-GAAP adjusted operating loss(1) was $(10.3) million, compared to $(18.1) million in 2015.

Net Loss attributable to common stockholders

• GAAP net loss attributable to common stockholders was $(18.7) million, compared to $(28.1) million in 2015.
• GAAP basic and diluted net loss per common share was $(0.70), compared to $(1.07) in 2015, based on 26.7 million and 26.2 million basic and diluted weighted average common shares outstanding, respectively.
• Non-GAAP adjusted net loss(1) was $(11.7) million, compared to $(19.2) million in 2015.
• Non-GAAP adjusted net loss per common share was $(0.44), compared to $(0.73) in 2015, based on 26.7 million and 26.2 million basic and diluted weighted average common shares outstanding, respectively.

Adjusted EBITDA

• Adjusted EBITDA was $(3.7) million for 2016 and $(10.5) million for the comparable period of 2015.

Balance Sheet and Cash Flow

• Cash and cash equivalents at December 31, 2016 totaled $15.4 million, compared to $17.9 million at 2015.
• Cash used in operating activities was $(0.2) million for the year ended 2016, compared to cash used in operating activities of $(13.2) million for the year ended 2015.

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.”

Business Outlook

Based on information available as of February 16, 2017, Amber Road is issuing guidance for the first 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.

First Quarter 2017:

• Total revenue is expected to be in the range of $18.2 million to $18.8 million.
• Non-GAAP adjusted operating loss(1) is expected to be in the range of $(3.6) million to $(3.0) million.
• Non-GAAP adjusted net loss per common share is expected to be in the range of $(0.15) to $(0.12). This assumes 27.3 million basic and diluted shares outstanding.

Full Year 2017:

• Total revenue is expected to be in the range of $80.3 million to $83.3 million.
• Non-GAAP adjusted operating loss(1) is expected to be in the range of $(10.3) million to $(7.3) million.
• Non-GAAP adjusted net loss per common share is expected to be in the range of $(0.43) to $(0.32). This assumes 28.0 million basic and diluted shares outstanding.

Endnotes:(1) 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. For 2015, non-GAAP adjusted operating loss excludes stock-based compensation, puttable stock compensation, change in fair value of contingent consideration liability, purchase accounting deferred revenue adjustment, acquisition compensation costs and acquisition related costs.(2) Non-GAAP total revenue includes the purchase accounting deferred revenue adjustment.

Conference Call Information

Amber Road will host a conference call on Thursday, February 16, 2017 at 5:00 p.m. Eastern Time (ET) to discuss the Company’s fourth quarter and full year 2016 financial results and its business outlook. To access this call, dial (888)-378-4361 (domestic) or (719) 325-2144 (international). The conference ID is 5623914. 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 23, 2017 at (844)-512-2921 (domestic) or (412)-317-6671 (international). The replay pass code is 5623914. 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 improve the way companies manage their international supply chains and conduct global trade. As a leading provider of cloud based global trade management (GTM) solutions, we automate the global supply chain across sourcing, logistics, cross-border trade and regulatory compliance activities to dramatically improve operating efficiencies and financial performance. This includes collaborating with suppliers on development, sourcing and quality assurance; executing import and export compliance checks and generating international shipping documentation; booking international carriers and tracking goods as they move around the world; and minimizing the associated duties through preferential trade agreements and foreign trade zones. Our solution combines enterprise-class software, trade content sourced from government agencies and transportation providers in 147 countries, and a global supply chain network connecting our customers with their trading partners, including suppliers, testing/auditing firms, freight forwarders, customs brokers and transportation carriers. We deliver our GTM solution using a Software-as-a-Service (SaaS) model and leverage a highly flexible technology framework to quickly and efficiently meet our customers’ unique requirements around the world. For more information, please visit www.AmberRoad.com, e-mail Solutions@AmberRoad.com or call 201-935-8588.

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, adjusted EBITDA and non-GAAP total revenue, 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, net loss to adjusted EBITDA and GAAP total revenue to Non-GAAP total revenue. 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, puttable stock compensation, changes in the fair value of contingent consideration liability, purchase accounting adjustment to deferred revenue, acquisition compensation costs and acquisition related costs. Non-GAAP total revenue is defined as GAAP total revenue before purchase accounting adjustments as a result of an acquisition. 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, and GAAP total revenue to non-GAAP total revenue, 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 SUBSIDIARIESConsolidated Balance Sheet(unaudited)

    December 31, 2016   2015 Assets Current assets: Cash and cash equivalents $ 15,408,133 $ 17,854,523 Accounts receivable, net 19,661,156 18,308,547 Unbilled receivables 314,328 1,024,861 Deferred commissions 4,420,632 3,767,432 Prepaid expenses and other current assets 1,719,612   2,003,849   Total current assets 41,523,861 42,959,212 Property and equipment, net 9,978,255 12,180,109 Goodwill 43,907,017 43,913,185 Other intangibles, net 6,148,820 7,673,661 Deferred commissions 8,046,664 7,007,518 Deposits and other assets 884,471   890,059   Total assets $ 110,489,088   $ 114,623,744   Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 2,724,591 $ 1,451,463 Accrued expenses 14,127,304 8,805,159 Current portion of capital lease obligations 1,155,964 1,598,450 Deferred revenue 34,464,264 30,532,404 Current portion of term loan, net of discount and debt financing costs 593,336   312,086   Total current liabilities 53,065,459 42,699,562 Capital lease obligations, less current portion 1,276,700 1,916,944 Deferred revenue, less current portion 2,135,620 2,393,345 Term loan, net of discount and debt financing costs, less current portion 13,614,514 14,207,850 Revolving credit facility 6,000,000 5,000,000 Other noncurrent liabilities 1,825,317   3,909,728   Total liabilities 77,917,610   70,127,429   Commitments and contingencies Stockholders’ equity:

Common stock, $0.001 par value; 100,000,000 shares authorized; issued andoutstanding 26,926,268 and 26,260,459 shares at December 31, 2016and 2015, respectively

26,926 26,261 Additional paid-in capital 188,811,896 181,457,089 Accumulated other comprehensive loss (1,336,792 ) (783,209 ) Accumulated deficit (154,930,552 ) (136,203,826 ) Total stockholders’ equity 32,571,478   44,496,315   Total liabilities and stockholders’ equity $ 110,489,088   $ 114,623,744      

AMBER ROAD, INC. AND SUBSIDIARIESConsolidated Statement of Operations(unaudited)

      Three Months Ended December 31, Year Ended December 31, 2016   2015 2016   2015 Revenue: Subscription $ 13,951,947 $ 12,894,250 $ 53,310,533 $ 47,067,117 Professional services 5,254,830   4,307,962   19,850,657   20,042,803   Total revenue 19,206,777   17,202,212   73,161,190   67,109,920   Cost of revenue (1): Cost of subscription revenue 4,934,144 5,602,278 19,922,839 20,041,196 Cost of professional services revenue 3,941,446   3,878,512   15,813,562   16,852,844   Total cost of revenue 8,875,590   9,480,790   35,736,401   36,894,040   Gross profit 10,331,187   7,721,422   37,424,789   30,215,880   Operating expenses (1): Sales and marketing 5,668,985 6,004,056 22,637,984 24,200,504 Research and development 4,675,379 4,547,878 16,794,516 16,448,625 General and administrative 3,988,964   3,522,755   15,318,098   16,528,568   Total operating expenses 14,333,328   14,074,689   54,750,598   57,177,697   Loss from operations (4,002,141 ) (6,353,267 ) (17,325,809 ) (26,961,817 ) Interest income 1,268 12,254 57,126 61,414 Interest expense (218,778 ) (255,286 ) (862,321 ) (910,046 ) Loss before income taxes (4,219,651 ) (6,596,299 ) (18,131,004 ) (27,810,449 ) Income tax expense (benefit) 289,257   50,756   595,722   268,225   Net loss $ (4,508,908 ) $ (6,647,055 ) $ (18,726,726 ) $ (28,078,674 )   Net loss per common share: Basic and diluted $ (0.17 ) $ (0.25 ) $ (0.70 ) $ (1.07 ) Weighted-average common shares outstanding: Basic and diluted 27,045,179   26,324,177   26,718,882   26,152,301                 (1) Includes stock-based compensation as follows: Three Months Ended December 31, Year Ended December 31, 2016 2015 2016 2015 Cost of subscription revenue $ 172,386 $ 106,539 $ 810,455 $ 766,498 Cost of professional services revenue 102,693 79,685 480,160 515,354 Sales and marketing 197,842 122,759 872,899 821,177 Research and development 314,365 216,400 1,161,422 1,077,638 General and administrative 473,544   280,866   2,142,954   3,279,635 $ 1,260,830   $ 806,249   $ 5,467,890   $ 6,460,302    

AMBER ROAD, INC. AND SUBSIDIARIESConsolidated Cash Flow Statement(unaudited)

    Year Ended December 31, 2016   2015 Cash flows from operating activities: Net loss $ (18,726,726 ) $ (28,078,674 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 6,590,343 7,575,783 Bad debt expense 509,454 80,571 Stock-based compensation 5,467,890 6,460,302 Compensation related to puttable common stock — 54,764 Acquisition related deferred compensation 1,419,885 946,590 Changes in fair value of contingent consideration liability 30,469 (1,350,441 ) Amortization of debt financing costs and accretion of debt discount 62,914 56,382 Changes in operating assets and liabilities: Accounts receivable and unbilled receivables (1,213,717 ) (1,658,964 ) Prepaid expenses and other assets (1,437,777 ) (863,713 ) Accounts payable 1,284,742 (316,655 ) Accrued expenses 4,228,119 (304,962 ) Other liabilities (2,084,343 ) (281,876 ) Deferred revenue 3,702,924   4,451,731   Net cash used in operating activities (165,823 ) (13,229,162 ) Cash flows from investing activities: Capital expenditures (231,979 ) (1,385,082 ) Addition of capitalized software development costs (2,286,778 ) (1,926,302 ) Addition of intangible assets (275,000 ) (275,000 ) Acquisition, net of cash acquired — (25,717,078 ) Cash paid for deposits (118,993 ) (21,989 ) Decrease in restricted cash 113,094   112,815   Net cash used in investing activities (2,799,656 ) (29,212,636 ) Cash flows from financing activities: Proceeds from revolving line of credit 20,250,000 5,000,000 Payments on revolving line of credit (19,250,000 ) — Proceeds from term loan — 20,000,000 Payments on term loan (375,000 ) (5,343,750 ) Debt discount and financing costs — (188,743 ) Repayments on capital lease obligations (1,425,882 ) (1,493,664 ) Proceeds from the exercise of stock options 1,887,582 1,299,427 Taxes paid related to net share settlement —   (22,494 ) Net cash provided by financing activities 1,086,700   19,250,776   Effect of exchange rate on cash and cash equivalents (567,611 ) (196,655 ) Net decrease in cash and cash equivalents (2,446,390 ) (23,387,677 ) Cash and cash equivalents at beginning of period 17,854,523   41,242,200   Cash and cash equivalents at end of period $ 15,408,133   $ 17,854,523      

Reconciliation of Net Loss to Adjusted EBITDA(Unaudited)

      Three Months Ended December 31, Year Ended December 31, 2016   2015 2016   2015 Net loss $ (4,508,908 ) $ (6,647,055 ) $ (18,726,726 ) $ (28,078,674 ) Depreciation and amortization expense 1,526,834 2,498,537 6,590,343 7,575,783 Interest expense 218,778 255,286 862,321 910,046 Interest income (1,268 ) (12,254 ) (57,126 ) (61,414 ) Income tax expense (benefit) 289,257   50,756   595,722   268,225   EBITDA (2,475,307 ) (3,854,730 ) (10,735,466 ) (19,386,034 ) Stock-based compensation 1,260,830 806,249 5,467,890 6,460,302 Puttable stock compensation — 13,691 — 54,764 Change in fair value of contingent consideration liability 20,000 (291,000 ) 30,469 (1,350,441 ) Purchase accounting deferred revenue adjustment — 310,095 69,095 1,530,719 Acquisition compensation costs 567,954 283,977 1,419,885 946,590 Acquisition related costs —   13,630   5,420   1,259,351   Adjusted EBITDA $ (626,523 ) $ (2,718,088 ) $ (3,742,707 ) $ (10,484,749 )    

Reconciliation of GAAP Total Revenue to Non-GAAP Total Revenue(Unaudited)

      Three Months Ended December 31, Year Ended December 31, 2016   2015 2016   2015 Total revenue $ 19,206,777 $ 17,202,212 $ 73,161,190 $ 67,109,920 Purchase accounting deferred revenue adjustment —   310,095   69,095   1,530,719 Non-GAAP total revenue $ 19,206,777   $ 17,512,307   $ 73,230,285   $ 68,640,639    

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

      Three Months Ended December 31, Year Ended December 31, 2016   2015 2016   2015 Net loss $ (4,508,908 ) $ (6,647,055 ) $ (18,726,726 ) $ (28,078,674 ) Stock-based compensation 1,260,830 806,249 5,467,890 6,460,302 Puttable stock compensation — 13,691 — 54,764 Change in fair value of contingent consideration liability 20,000 (291,000 ) 30,469 (1,350,441 ) Purchase accounting deferred revenue adjustment — 310,095 69,095 1,530,719 Acquisition compensation costs 567,954 283,977 1,419,885 946,590 Acquisition related costs —   13,630   5,420   1,259,351   Non-GAAP adjusted net loss $ (2,660,124 ) $ (5,510,413 ) $ (11,733,967 ) $ (19,177,389 )   Adjusted non-GAAP net loss per common share: Basic and diluted $ (0.10 ) $ (0.21 ) $ (0.44 ) $ (0.73 )   Weighted-average common shares outstanding: GAAP weighted average number of common shares outstanding - basic and diluted 27,045,179   26,324,177   26,718,882   26,152,301      

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

      Three Months Ended December 31, Year Ended December 31, 2016   2015 2016   2015 Loss from operations $ (4,002,141 ) $ (6,353,267 ) $ (17,325,809 ) $ (26,961,817 ) Stock-based compensation 1,260,830 806,249 5,467,890 6,460,302 Puttable stock compensation — 13,691 — 54,764 Change in fair value of contingent consideration liability 20,000 (291,000 ) 30,469 (1,350,441 ) Purchase accounting deferred revenue adjustment — 310,095 69,095 1,530,719 Acquisition compensation costs 567,954 283,977 1,419,885 946,590 Acquisition related costs —   13,630   5,420   1,259,351   Non-GAAP adjusted loss from operations $ (2,153,357 ) $ (5,216,625 ) $ (10,333,050 ) $ (18,060,532 )  

Based on information available as of February 16, 2017, the following tables show 2017 GAAP guidance reconciled to non-GAAP guidance for the first 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)

      First Quarter 2017 Full Year 2017 Low   High Low   High Loss from operations $ (4.9 ) $ (4.3 ) $ (16.0 ) $ (13.0 ) Stock-based compensation 1.3   1.3   5.7   5.7   Non-GAAP adjusted loss from operations $ (3.6 ) $ (3.0 ) $ (10.3 ) $ (7.3 )    

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

      First Quarter 2017 Full Year 2017 Low   High Low   High Net loss per share, basic and diluted $ (0.20 ) $ (0.17 ) $ (0.63 ) $ (0.52 ) Stock-based compensation 0.05   0.05   0.20   0.20   Non-GAAP adjusted net loss per share, basic and diluted $ (0.15 ) $ (0.12 ) $ (0.43 ) $ (0.32 )   (1) This assumes weighted average shares outstanding - basic and diluted 27.3   27.3   28.0   28.0    

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Investor Relations ContactICRStaci Mortenson, 201-806-3663InvestorRelations@AmberRoad.comorAmber Road ContactsAnnika Helmrich (US & Canada), +1 201-806-3656AnnikaHelmrich@AmberRoad.comorMartijn van Gils (Europe & Asia), +31 858769534MartijnvanGils@AmberRoad.com