Benefitfocus, Inc. (NASDAQ:
BNFT), an industry-leading benefits technology
platform that simplifies benefits administration for employers,
health plans and brokers, today announces
its fourth quarter and full year 2020 financial
results.
Highlights include:
- Met or exceeded all fourth quarter
and full year 2020 guidance metrics including revenue, adjusted
EBITDA and free cash flow;
- Augmented leadership team with
hiring of first chief data officer to solidify the
company as a leading, data-driven benefits technology
platform;
- Enhanced Benefit Catalog including
partnership with Transamerica to enable integrated retirement plan
enrollment directly through Benefitplace™;
- Invested to remove friction in
benefits management and improve the customer experience
through AI-backed platform enrollment enhancements; and
- Strengthened corporate governance
and continued to enhance independence of company’s board
structure.
“Benefitfocus continues to execute on its
strategies to drive industry leadership and accelerate growth,”
said Steve Swad, president and chief executive officer
of Benefitfocus. “The investments we made in operational
excellence, automation and enhanced customer interactions resulted
in our best open enrollment yet.” Swad added, “To drive future
growth, we are focused on simplifying the enrollment of benefits,
improving our customers’ engagement with their benefits, and using
data to personalize our offerings and create products that lower
health care costs. I am confident we have the right strategy, the
right assets and are building the right leadership team to unlock
substantial shareholder value.”
“For the fourth quarter and full year, we
delivered record EBITDA and free cash flow, moving us further
towards our goal to become the most efficient and best-performing
company in our industry,” said Alpana Wegner, chief financial
officer of Benefitfocus. “I am pleased with the strong foundation
we have established to deliver increased profitability and free
cash flow, and remain focused on driving continued operating
leverage in the business.”
Fourth Quarter 2020 Financial
Highlights
Revenue
- Total revenue was $76.2 million,
down 13% compared to the fourth quarter of 2019.
- Software services was $62.3
million, 9% lower compared to the fourth quarter of 2019. Software
services is comprised of subscription and platform revenue.•
Subscription revenue was $44.9 million, a decrease of 9% compared
to the fourth quarter of 2019.• Platform revenue was $17.4
million, a decrease of 8% compared to the fourth quarter of
2019.
- Professional services revenue was
$13.9 million, down 26% compared to the fourth quarter of
2019.
Net Income (Loss)
- GAAP net income was $3.1 million,
compared to ($3.8) million in the fourth quarter of 2019. GAAP net
income per share was $0.04, based on $1.3 million net income
available to common stockholders and 33.5 million fully diluted
weighted average common shares outstanding, compared to ($0.12) for
the fourth quarter of 2019, based on ($3.8) million net loss
available to common stockholders and 32.8 million basic and diluted
weighted average common shares outstanding.
Non-GAAP Net Income, Adjusted EBITDA and
Free Cash Flow
- Non-GAAP net income was $8.7
million compared to $1.9 million in the fourth quarter of 2019.
Non-GAAP net income per share was $0.18, based on $6.1 million net
income available to common stockholders and 34.5 million fully
diluted weighted average common shares outstanding, compared to
$0.06 in the fourth quarter of 2019, based $1.9 million net income
available to common stockholders and 33.2 million fully diluted
weighted average common shares outstanding.
- Adjusted EBITDA was $20.2 million,
compared to $12.5 million in the fourth quarter of 2019.
- Free cash flow was $13.4 million,
compared to $2.5 million in the fourth quarter of 2019.
See important disclosures about non-GAAP
measures, and a reconciliation of them to GAAP, below.
Full Year 2020 Financial
Highlights
Revenue
- Total revenue was $268.1 million,
down 9% compared to the full year 2019.
- Software services was $214.8
million, 6% lower compared to the full year 2019. Software services
is comprised of subscription and platform
revenue.• Subscription revenue was $179.7 million, a decrease
of 8% compared to the full year 2019.• Platform revenue was
$35.1 million, an increase of 4% compared to the full year
2019.
- Professional services revenue was
$53.3 million, down 20% compared to the full year 2019.
Net Loss
- GAAP net loss was ($24.3) million,
compared to ($45.5) million in the full year 2019. GAAP net loss
per share was ($0.87), based on ($28.0) million net loss available
to common stockholders and 32.3 million basic and diluted weighted
average common shares outstanding, compared to ($1.40) for the full
year 2019, based on ($45.5) million net loss available to common
stockholders and 32.5 million basic and diluted weighted average
common shares outstanding.
Non-GAAP Net Loss, Adjusted EBITDA and
Free Cash Flow
- Non-GAAP net loss was ($6.8)
million, compared to ($22.3) million in the full year 2019.
Non-GAAP net loss per share was ($0.32), based on ($10.5) million
Non-GAAP net loss available to common stockholders and 32.3 million
basic and diluted weighted average common shares outstanding,
compared to ($0.69) for the full year 2019, based on ($22.3)
million net loss available to common stockholders and 32.5 million
basic and diluted weighted average common shares outstanding.
- Adjusted EBITDA was $44.0 million,
compared to $19.0 million in the full year 2019.
- Free cash flow was $19.9 million,
compared to ($31.6) million in the full year 2019.
See important disclosures about non-GAAP
measures, and a reconciliation of them to GAAP, below.
Balance Sheet
- Cash and cash equivalents and
marketable securities at December 31, 2020 totaled $185.8 million,
compared to $176.0 million at the end of the third quarter of
2020.
- The full $50.0 million line of
credit remains available to the Company.
Business Outlook
Based on information available as of March 8,
2021, Benefitfocus is providing guidance for the first quarter and
full year 2021 as indicated below. Adjusted EBITDA and free cash
flow guidance excludes the impact of restructuring charges.
First Quarter 2021
- Total revenue is expected to be in
the range of $59 million to $61 million.
- Adjusted EBITDA is expected to be
in the range of $9 million to $11 million.
- Non-GAAP net loss is expected to be
between $5.1 and $3.1 million, or between ($0.16) and ($0.10) per
share based on 32.3 million basic shares outstanding.
Full Year 2021
- Total revenue is expected to be in
the range of $254 million to $260 million.
- Adjusted EBITDA is expected to be
in the range of $44 million to $50 million.
- Free cash flow is expected to be in
the range of $20 million to $26 million.
In addition, Benefitfocus is providing mid-term
financial targets and an update on continued enhancements to the
company’s board structure as part of its conference call today.
Management has not reconciled forward-looking
non-GAAP net loss, adjusted EBITDA or free cash flow to their most
directly comparable GAAP measure of GAAP net loss or GAAP operating
cash flows. This is because we cannot predict with reasonable
certainty the ultimate outcome of the various necessary GAAP
components of such reconciliations, including, for example, those
related to compensation, acquisition transactions and integration,
or others that may arise during the year, without unreasonable
effort. These components and other factors could materially impact
the amount of the future directly comparable GAAP measures, which
may differ significantly from their non-GAAP counterparts. See
below for additional important disclosures regarding our non-GAAP
financial measures.
Conference Call Details:
In conjunction with this
announcement, Benefitfocus will host a conference call to
discuss the company’s financial results and business outlook
on Monday, March 8, 2021, at 5:00 p.m. ET. To access this
call, dial (877) 407-9208 (domestic) or (201) 493-6784
(international). A live webcast of the conference call will be
available on the Investor Relations page of the company’s website
at http://investor.benefitfocus.com/. After the conference
call, a replay will be available until March 15, 2021, and can
be accessed by dialing (844) 512-2921 (domestic) or (412) 317-6671
(international) with passcode 13715704.
About Benefitfocus
Benefitfocus (NASDAQ: BNFT) unifies the entire
U.S. benefits industry on a single technology platform to protect
consumers' health, wealth, property and lifestyle. Our powerful
cloud-based software, data-driven insights and
thoughtfully-designed services, enable employers, insurance
brokers, carriers and suppliers to simplify the complexity of
benefits administration and deliver a world-class benefits
experience. Learn more at www.benefitfocus.com, LinkedIn and
Twitter.
Non-GAAP Financial Measures
The company uses certain non-GAAP financial
measures in this release, including non-GAAP gross profit,
operating income/loss, net loss/income, net loss/income per common
share, adjusted EBITDA and free cash flow. Generally, a non-GAAP
financial measure is a numerical measure of a company’s performance
or financial position that either excludes or includes amounts that
are not normally excluded or included in the most directly
comparable measure calculated and presented in accordance with
GAAP.
Non-GAAP gross profit, operating income/loss,
net loss/income and net loss/income per common share exclude
stock-based compensation expenses, amortization of
acquisition-related intangible assets, transaction and
acquisition-related costs expensed, restructuring charges, expense
related to the impairment of goodwill, intangible assets and
long-lived assets, gain or loss on extinguishment of debt, and
costs not core to our business. We define adjusted EBITDA as net
loss before net interest, taxes, and depreciation and amortization
expense, adjusted to eliminate stock-based compensation expense,
expense related to the impairment of goodwill, intangible assets
and long-lived assets, transaction and acquisition-related costs
expensed, restructuring charges, gain or loss on extinguishment of
debt, and costs not core to our business. We define free cash flow
as cash used in operating activities less capital expenditures,
adjusted to eliminate restructuring charges. Beginning in the
fourth quarter of 2020, we revised our definition of non-GAAP net
loss/income and net loss/income per common share to also exclude
expense related to the impairment of goodwill, intangible assets
and long-lived assets. Additionally, we revised our
definition of adjusted EBITDA to also exclude expense related
to the impairment of long-lived assets, restructuring charges and
gains or loss on extinguishment of debt. The revisions to
these definitions had no impact on our reported non-GAAP net
loss/income and net loss/income per common share and adjusted
EBITDA for periods prior to the three months ended December 31,
2020. Please note that other companies might define their non-GAAP
financial measures differently than we do.
Management presents these non-GAAP
financial measures in this release because it considers them to be
important supplemental measures of performance. Management uses
these non-GAAP financial measures for planning purposes, including
analysis of the company's performance against prior periods, the
preparation of operating budgets and to determine appropriate
levels of operating and capital investments. Management believes
that these non-GAAP financial measures provide additional insight
for analysts and investors in evaluating the company's financial
and operational performance. Management also intends to provide
these non-GAAP financial measures as part of the company’s future
earnings discussions and, therefore, their inclusion should provide
consistency in the company’s financial reporting.
Non-GAAP financial measures have limitations as
an analytical tool. Investors are encouraged to review the
reconciliation of the non-GAAP measures to their most directly
comparable GAAP measures provided in this release, including in the
accompanying tables.
Safe Harbor Statement
Except for historical information, all of the
statements, expectations, and assumptions contained in this press
release are forward-looking statements. Actual results might differ
materially from those explicit or implicit in the forward-looking
statements. Important factors that could cause actual results to
differ materially include: volatility and uncertainty in the global
economy and financial markets in light of the evolving COVID-19
pandemic and uncertainties arising from the recent U.S. elections;
our continuing losses and need to achieve GAAP profitability;
fluctuations in our financial results; our ability to maintain our
culture, retain and motivate qualified personnel; the immature and
volatile market for our products and services; risks related to
changing healthcare and other applicable regulations; risks
associated with acquisitions; cyber-security risks; the need to
innovate and provide useful products and services; our ability to
compete effectively; privacy, security and other risks associated
with our business; and the other risk factors set forth from time
to time in our SEC filings, copies of which are available
free of charge within the Investor Relations section of
the Benefitfocus website
at http://investor.benefitfocus.com/sec-filings or upon
request from our Investor Relations
Department. Benefitfocus assumes no obligation and does
not intend to update these forward-looking statements, except as
required by law.
Source: Benefitfocus, Inc.
|
|
Benefitfocus, Inc. |
|
Consolidated Statements of Operations and Comprehensive
Loss |
|
(in thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Revenue |
|
$ |
76,230 |
|
|
$ |
87,143 |
|
|
$ |
268,141 |
|
|
$ |
295,686 |
|
Cost of revenue (1)(2)(3) |
|
|
34,966 |
|
|
|
42,848 |
|
|
|
129,388 |
|
|
|
144,090 |
|
Gross profit |
|
|
41,264 |
|
|
|
44,295 |
|
|
|
138,753 |
|
|
|
151,596 |
|
Operating expenses:(1)(2)(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
12,347 |
|
|
|
18,585 |
|
|
|
52,210 |
|
|
|
76,049 |
|
Research and development |
|
|
11,923 |
|
|
|
13,085 |
|
|
|
46,175 |
|
|
|
54,724 |
|
General and administrative |
|
|
8,400 |
|
|
|
10,976 |
|
|
|
37,720 |
|
|
|
45,329 |
|
Restructuring costs |
|
|
– |
|
|
|
– |
|
|
|
5,616 |
|
|
|
– |
|
Total operating expenses |
|
|
32,670 |
|
|
|
42,646 |
|
|
|
141,721 |
|
|
|
176,102 |
|
Income (loss) from operations |
|
|
8,594 |
|
|
|
1,649 |
|
|
|
(2,968 |
) |
|
|
(24,506 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
69 |
|
|
|
518 |
|
|
|
632 |
|
|
|
2,613 |
|
Interest expense |
|
|
(5,547 |
) |
|
|
(5,947 |
) |
|
|
(23,071 |
) |
|
|
(23,524 |
) |
Gain on repurchase of convertible senior notes |
|
|
– |
|
|
|
– |
|
|
|
1,138 |
|
|
|
– |
|
Other (expense) income |
|
|
(14 |
) |
|
|
(10 |
) |
|
|
(6 |
) |
|
|
(71 |
) |
Total other expense, net |
|
|
(5,492 |
) |
|
|
(5,439 |
) |
|
|
(21,307 |
) |
|
|
(20,982 |
) |
Income (loss) before income taxes |
|
|
3,102 |
|
|
|
(3,790 |
) |
|
|
(24,275 |
) |
|
|
(45,488 |
) |
Income tax expense |
|
|
5 |
|
|
|
1 |
|
|
|
22 |
|
|
|
27 |
|
Net income (loss) |
|
|
3,097 |
|
|
|
(3,791 |
) |
|
|
(24,297 |
) |
|
|
(45,515 |
) |
Preferred dividends |
|
|
(1,600 |
) |
|
|
– |
|
|
|
(3,662 |
) |
|
|
– |
|
Undistributed earnings allocated to preferred stockholders |
|
|
(212 |
) |
|
|
– |
|
|
|
– |
|
|
|
– |
|
Net income (loss) available to common stockholders |
|
$ |
1,285 |
|
|
$ |
(3,791 |
) |
|
$ |
(27,959 |
) |
|
$ |
(45,515 |
) |
Comprehensive income (loss) |
|
$ |
3,097 |
|
|
$ |
(3,791 |
) |
|
$ |
(24,297 |
) |
|
$ |
(45,515 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.04 |
|
|
$ |
(0.12 |
) |
|
$ |
(0.87 |
) |
|
$ |
(1.40 |
) |
Diluted |
|
$ |
0.04 |
|
|
$ |
(0.12 |
) |
|
$ |
(0.87 |
) |
|
$ |
(1.40 |
) |
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
32,312,246 |
|
|
|
32,774,924 |
|
|
|
32,318,201 |
|
|
|
32,539,748 |
|
Diluted |
|
|
33,512,904 |
|
|
|
32,774,924 |
|
|
|
32,318,201 |
|
|
|
32,539,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Stock-based compensation included in above line items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
$ |
1,099 |
|
|
$ |
1,181 |
|
|
$ |
3,703 |
|
|
$ |
3,569 |
|
Sales and marketing |
|
|
841 |
|
|
|
1,202 |
|
|
|
3,081 |
|
|
|
3,799 |
|
Research and development |
|
|
838 |
|
|
|
665 |
|
|
|
2,555 |
|
|
|
3,265 |
|
General and administrative |
|
|
900 |
|
|
|
2,023 |
|
|
|
5,198 |
|
|
|
8,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Amortization of acquired intangible assets included
in above line items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
$ |
330 |
|
|
$ |
317 |
|
|
$ |
1,291 |
|
|
$ |
1,029 |
|
Sales and marketing |
|
|
75 |
|
|
|
91 |
|
|
|
331 |
|
|
|
337 |
|
Research and development |
|
|
118 |
|
|
|
111 |
|
|
|
460 |
|
|
|
400 |
|
General and administrative |
|
|
46 |
|
|
|
50 |
|
|
|
192 |
|
|
|
167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefitfocus, Inc. |
Consolidated Balance Sheets |
(in thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
|
2020 |
|
|
2019 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
90,706 |
|
|
$ |
130,976 |
|
Marketable securities |
|
|
95,085 |
|
|
|
– |
|
Accounts receivable, net |
|
|
22,240 |
|
|
|
33,754 |
|
Contract, prepaid and other current assets |
|
|
21,354 |
|
|
|
21,523 |
|
Total current assets |
|
|
229,385 |
|
|
|
186,253 |
|
Property and equipment, net |
|
|
29,701 |
|
|
|
28,669 |
|
Financing lease right-of-use assets |
|
|
68,670 |
|
|
|
78,520 |
|
Operating lease right-of-use assets |
|
|
1,107 |
|
|
|
1,715 |
|
Intangible assets, net |
|
|
10,393 |
|
|
|
12,667 |
|
Goodwill |
|
|
12,857 |
|
|
|
12,857 |
|
Deferred contract costs and other non-current assets |
|
|
10,259 |
|
|
|
11,002 |
|
Total assets |
|
$ |
362,372 |
|
|
$ |
331,683 |
|
Liabilities and stockholders' deficit |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
2,160 |
|
|
$ |
9,563 |
|
Accrued expenses |
|
|
6,262 |
|
|
|
10,526 |
|
Accrued compensation and benefits |
|
|
19,129 |
|
|
|
15,246 |
|
Deferred revenue, current portion |
|
|
27,782 |
|
|
|
33,429 |
|
Lease liabilities and financing obligations, current portion |
|
|
5,959 |
|
|
|
6,871 |
|
Total current liabilities |
|
|
61,292 |
|
|
|
75,635 |
|
Deferred revenue, net of current portion |
|
|
4,422 |
|
|
|
5,079 |
|
Convertible senior notes |
|
|
184,308 |
|
|
|
187,949 |
|
Lease liabilities and financing obligations, net of current
portion |
|
|
79,282 |
|
|
|
88,572 |
|
Other non-current liabilities |
|
|
2,470 |
|
|
|
92 |
|
Total liabilities |
|
|
331,774 |
|
|
|
357,327 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
Redeemable preferred stock: |
|
|
|
|
|
|
|
|
Series A preferred stock, par value $0.001, 5,000,000 shares
authorized, 1,777,778 and 0 shares issued and outstanding at
December 31, 2020 and 2019, respectively, liquidation preference
$45 per share as of December 31, 2020 |
|
|
79,193 |
|
|
|
– |
|
Stockholders' deficit: |
|
|
|
|
|
|
|
|
Common stock, par value $0.001, 50,000,000 shares authorized,
32,327,439 and 32,788,980 shares issued and outstanding at December
31, 2020 and 2019, respectively |
|
|
32 |
|
|
|
33 |
|
Additional paid-in capital |
|
|
427,431 |
|
|
|
426,025 |
|
Accumulated deficit |
|
|
(476,058 |
) |
|
|
(451,702 |
) |
Total stockholders' deficit |
|
|
(48,595 |
) |
|
|
(25,644 |
) |
Total liabilities, redeemable preferred stock and stockholders'
deficit |
|
$ |
362,372 |
|
|
$ |
331,683 |
|
|
|
|
|
|
|
|
|
|
Benefitfocus, Inc. |
|
Consolidated Statements of Cash Flows |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2018 |
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(24,297 |
) |
|
$ |
(45,515 |
) |
|
$ |
(52,627 |
) |
Adjustments to reconcile net loss to net cash and cash
equivalents used in operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
25,014 |
|
|
|
22,351 |
|
|
|
15,815 |
|
Stock-based compensation expense |
|
|
14,537 |
|
|
|
19,572 |
|
|
|
28,868 |
|
Accretion of interest on convertible senior notes |
|
|
11,656 |
|
|
|
11,256 |
|
|
|
– |
|
Interest accrual on finance lease liabilities |
|
|
97 |
|
|
|
33 |
|
|
|
– |
|
Interest accrual on financing obligations (prior to adoption of ASC
842) |
|
|
– |
|
|
|
– |
|
|
|
7,521 |
|
Rent payments in excess of expense |
|
|
(32 |
) |
|
|
(16 |
) |
|
|
– |
|
Non-cash interest income for short-term investments |
|
|
143 |
|
|
|
– |
|
|
|
– |
|
Loss on disposal or impairment of property and equipment |
|
|
918 |
|
|
|
9 |
|
|
|
7 |
|
Gain on extinguishment of debt |
|
|
(1,138 |
) |
|
|
– |
|
|
|
– |
|
Provision for doubtful accounts |
|
|
43 |
|
|
|
111 |
|
|
|
364 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
11,412 |
|
|
|
(11,875 |
) |
|
|
8,650 |
|
Accrued interest on short-term investments |
|
|
(102 |
) |
|
|
– |
|
|
|
– |
|
Contract, prepaid and other current assets |
|
|
169 |
|
|
|
(3,642 |
) |
|
|
(570 |
) |
Deferred costs and other non-current assets |
|
|
743 |
|
|
|
2,893 |
|
|
|
3,137 |
|
Accounts payable and accrued expenses |
|
|
(11,468 |
) |
|
|
426 |
|
|
|
6,566 |
|
Accrued compensation and benefits |
|
|
3,884 |
|
|
|
161 |
|
|
|
649 |
|
Deferred revenue |
|
|
(6,304 |
) |
|
|
(14,047 |
) |
|
|
(9,165 |
) |
Other non-current liabilities |
|
|
2,376 |
|
|
|
(92 |
) |
|
|
(234 |
) |
Net cash and cash equivalents provided by (used in) operating
activities |
|
|
27,651 |
|
|
|
(18,375 |
) |
|
|
8,981 |
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of short-term investments held to maturity |
|
|
(104,125 |
) |
|
|
– |
|
|
|
– |
|
Proceeds from short-term investments held to maturity |
|
|
9,000 |
|
|
|
– |
|
|
|
– |
|
Business combination, net of cash acquired |
|
|
– |
|
|
|
(20,914 |
) |
|
|
– |
|
Purchases of property and equipment |
|
|
(13,085 |
) |
|
|
(13,248 |
) |
|
|
(8,290 |
) |
Net cash and cash equivalents used in investing activities |
|
|
(108,210 |
) |
|
|
(34,162 |
) |
|
|
(8,290 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
Draws on revolving line of credit |
|
|
10,000 |
|
|
|
– |
|
|
|
115,000 |
|
Payments on revolving line of credit |
|
|
(10,000 |
) |
|
|
– |
|
|
|
(171,246 |
) |
Proceeds from issuance of convertible senior notes |
|
|
– |
|
|
|
– |
|
|
|
240,000 |
|
Repurchase of convertible senior notes |
|
|
(14,619 |
) |
|
|
– |
|
|
|
– |
|
Payments of debt issuance costs |
|
|
(154 |
) |
|
|
(357 |
) |
|
|
(6,000 |
) |
Purchase of convertible note capped call hedge |
|
|
– |
|
|
|
– |
|
|
|
(33,024 |
) |
Cancellation of convertible note capped call hedge |
|
|
26 |
|
|
|
– |
|
|
|
– |
|
Proceeds from issuance of preferred stock, net of issuance
costs |
|
|
79,192 |
|
|
|
– |
|
|
|
– |
|
Payment of preferred dividends |
|
|
(3,662 |
) |
|
|
– |
|
|
|
– |
|
Repurchase of common stock |
|
|
(9,667 |
) |
|
|
– |
|
|
|
– |
|
Proceeds from exercises of stock options and ESPP |
|
|
585 |
|
|
|
453 |
|
|
|
712 |
|
Payments on capital lease and financing obligations |
|
|
(1,212 |
) |
|
|
(1,627 |
) |
|
|
(10,540 |
) |
Payments of principal on finance lease liabilities |
|
|
(10,200 |
) |
|
|
(5,884 |
) |
|
|
– |
|
Net cash and cash equivalents provided by (used in) financing
activities |
|
|
40,289 |
|
|
|
(7,415 |
) |
|
|
134,902 |
|
Net (decrease) increase in cash and cash
equivalents |
|
|
(40,270 |
) |
|
|
(59,952 |
) |
|
|
135,593 |
|
Cash and cash equivalents, beginning of year |
|
|
130,976 |
|
|
|
190,928 |
|
|
|
55,335 |
|
Cash and cash equivalents, end of year |
|
$ |
90,706 |
|
|
$ |
130,976 |
|
|
$ |
190,928 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash investing and financing
activities |
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment purchases in accounts payable and
accrued expenses |
|
$ |
142 |
|
|
$ |
154 |
|
|
$ |
244 |
|
Property and equipment purchased with financing and capital
lease obligations (prior to adoption of ASC 842) |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
4,810 |
|
Post contract support purchased with financing obligations |
|
$ |
- |
|
|
$ |
1,287 |
|
|
$ |
790 |
|
Debt issuance costs included in accounts payable and accrued
expenses |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
358 |
|
Supplemental disclosure of cash flow
information |
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes paid |
|
$ |
22 |
|
|
$ |
28 |
|
|
$ |
28 |
|
Interest paid |
|
$ |
11,408 |
|
|
$ |
12,374 |
|
|
$ |
11,884 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefitfocus, Inc. |
|
Reconciliation of GAAP to Non-GAAP Measures |
|
(unaudited, dollars in thousands except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December
31, |
|
|
Year Ended December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Reconciliation from Gross Profit to Non-GAAP Gross
Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
41,264 |
|
|
$ |
44,295 |
|
|
$ |
138,753 |
|
|
$ |
151,596 |
|
Amortization of acquired intangible assets |
|
|
330 |
|
|
|
317 |
|
|
|
1,291 |
|
|
|
1,029 |
|
Stock-based compensation expense |
|
|
1,099 |
|
|
|
1,181 |
|
|
|
3,703 |
|
|
|
3,569 |
|
Impairment of long-lived assets |
|
|
468 |
|
|
|
— |
|
|
|
468 |
|
|
|
— |
|
Total net adjustments |
|
|
1,897 |
|
|
|
1,498 |
|
|
|
5,462 |
|
|
|
4,598 |
|
Non-GAAP gross profit |
|
$ |
43,161 |
|
|
$ |
45,793 |
|
|
$ |
144,215 |
|
|
$ |
156,194 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from Operating Income (Loss) to Non-GAAP
Operating Income (Loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
$ |
8,594 |
|
|
$ |
1,649 |
|
|
$ |
(2,968 |
) |
|
$ |
(24,506 |
) |
Amortization of acquired intangible assets |
|
|
569 |
|
|
|
569 |
|
|
|
2,274 |
|
|
|
1,933 |
|
Stock-based compensation expense |
|
|
3,678 |
|
|
|
5,071 |
|
|
|
14,537 |
|
|
|
19,572 |
|
Transaction and acquisition-related costs expensed |
|
|
25 |
|
|
|
30 |
|
|
|
450 |
|
|
|
1,035 |
|
Impairment of long-lived assets |
|
|
916 |
|
|
|
— |
|
|
|
916 |
|
|
|
— |
|
Costs not core to our business |
|
|
457 |
|
|
|
— |
|
|
|
457 |
|
|
|
649 |
|
Total net adjustments |
|
|
5,645 |
|
|
|
5,670 |
|
|
|
18,634 |
|
|
|
23,189 |
|
Non-GAAP operating income (loss) |
|
$ |
14,239 |
|
|
$ |
7,319 |
|
|
$ |
15,666 |
|
|
$ |
(1,317 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from Net Income (Loss) to Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
3,097 |
|
|
$ |
(3,791 |
) |
|
$ |
(24,297 |
) |
|
$ |
(45,515 |
) |
Depreciation |
|
|
3,789 |
|
|
|
3,783 |
|
|
|
15,285 |
|
|
|
15,288 |
|
Amortization of software development costs |
|
|
2,177 |
|
|
|
1,370 |
|
|
|
7,455 |
|
|
|
5,130 |
|
Amortization of acquired intangible assets |
|
|
569 |
|
|
|
569 |
|
|
|
2,274 |
|
|
|
1,933 |
|
Interest income |
|
|
(69 |
) |
|
|
(518 |
) |
|
|
(632 |
) |
|
|
(2,613 |
) |
Interest expense |
|
|
5,547 |
|
|
|
5,947 |
|
|
|
23,071 |
|
|
|
23,524 |
|
Income tax expense |
|
|
5 |
|
|
|
1 |
|
|
|
22 |
|
|
|
27 |
|
Stock-based compensation expense |
|
|
3,678 |
|
|
|
5,071 |
|
|
|
14,537 |
|
|
|
19,572 |
|
Transaction and acquisition-related costs expensed |
|
|
25 |
|
|
|
30 |
|
|
|
450 |
|
|
|
1,035 |
|
Restructuring costs |
|
|
— |
|
|
|
— |
|
|
|
5,616 |
|
|
|
— |
|
Impairment of long-lived assets |
|
|
916 |
|
|
|
— |
|
|
|
916 |
|
|
|
— |
|
Gain on repurchase of convertible senior notes |
|
|
— |
|
|
|
— |
|
|
|
(1,138 |
) |
|
|
— |
|
Costs not core to our business |
|
|
457 |
|
|
|
— |
|
|
|
457 |
|
|
|
649 |
|
Total net adjustments |
|
|
17,094 |
|
|
|
16,253 |
|
|
|
68,313 |
|
|
|
64,545 |
|
Adjusted EBITDA |
|
$ |
20,191 |
|
|
$ |
12,462 |
|
|
$ |
44,016 |
|
|
$ |
19,030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from Net Income (Loss) to Non-GAAP Net
Income (Loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
3,097 |
|
|
$ |
(3,791 |
) |
|
$ |
(24,297 |
) |
|
$ |
(45,515 |
) |
Amortization of acquired intangible assets |
|
|
569 |
|
|
|
569 |
|
|
|
2,274 |
|
|
|
1,933 |
|
Stock-based compensation expense |
|
|
3,678 |
|
|
|
5,071 |
|
|
|
14,537 |
|
|
|
19,572 |
|
Transaction and acquisition-related costs expensed |
|
|
25 |
|
|
|
30 |
|
|
|
450 |
|
|
|
1,035 |
|
Impairment of long-lived assets |
|
|
916 |
|
|
|
— |
|
|
|
916 |
|
|
|
— |
|
Gain on repurchase of convertible senior notes |
|
|
— |
|
|
|
— |
|
|
|
(1,138 |
) |
|
|
— |
|
Costs not core to our business |
|
|
457 |
|
|
|
— |
|
|
|
457 |
|
|
|
649 |
|
Total net adjustments |
|
|
5,645 |
|
|
|
5,670 |
|
|
|
17,496 |
|
|
|
23,189 |
|
Non-GAAP net income (loss) |
|
$ |
8,742 |
|
|
$ |
1,879 |
|
|
$ |
(6,801 |
) |
|
$ |
(22,326 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Non-GAAP Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income (loss) |
|
$ |
8,742 |
|
|
$ |
1,879 |
|
|
$ |
(6,801 |
) |
|
$ |
(22,326 |
) |
Preferred dividends |
|
|
(1,600 |
) |
|
|
— |
|
|
|
(3,662 |
) |
|
|
— |
|
Undistributed earnings allocated to preferred stockholders |
|
|
(1,012 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Non-GAAP net income (loss) available to common stockholders |
|
$ |
6,130 |
|
|
$ |
1,879 |
|
|
$ |
(10,463 |
) |
|
$ |
(22,326 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - basic |
|
|
32,312,246 |
|
|
|
32,774,924 |
|
|
|
32,318,201 |
|
|
|
32,539,748 |
|
Weighted average shares outstanding - diluted |
|
|
34,556,833 |
|
|
|
32,774,924 |
|
|
|
32,318,201 |
|
|
|
32,539,748 |
|
Shares used in computing non-GAAP net income (loss) per share -
basic |
|
|
32,312,246 |
|
|
|
32,774,924 |
|
|
|
32,318,201 |
|
|
|
32,539,748 |
|
Shares used in computing non-GAAP net income (loss) per share -
diluted |
|
|
33,512,904 |
|
|
|
33,209,220 |
|
|
|
32,318,201 |
|
|
|
32,539,748 |
|
Non-GAAP net income (loss) per common share - basic |
|
$ |
0.19 |
|
|
$ |
0.06 |
|
|
$ |
(0.32 |
) |
|
$ |
(0.69 |
) |
Non-GAAP net income (loss) per common share - diluted |
|
$ |
0.18 |
|
|
$ |
0.06 |
|
|
$ |
(0.32 |
) |
|
$ |
(0.69 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Cash Flows from Operations to Free Cash
Flow: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents provided by (used in) operating
activities |
|
$ |
16,577 |
|
|
$ |
5,140 |
|
|
$ |
27,651 |
|
|
$ |
(18,375 |
) |
Purchases of property and equipment |
|
|
(3,346 |
) |
|
|
(2,644 |
) |
|
|
(13,085 |
) |
|
|
(13,248 |
) |
Cash paid for restructuring costs |
|
|
141 |
|
|
|
— |
|
|
|
5,342 |
|
|
|
— |
|
Total net adjustments |
|
|
(3,205 |
) |
|
|
(2,644 |
) |
|
|
(7,743 |
) |
|
|
(13,248 |
) |
Free Cash Flow |
|
$ |
13,372 |
|
|
$ |
2,496 |
|
|
$ |
19,908 |
|
|
$ |
(31,623 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefitfocus, Inc.843-981-8898pr@benefitfocus.com
Investor Relations:Patti
Leahy843-981-8899ir@benefitfocus.com
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