Company to Focus on Providing Trusted
Content and Collaborative Solutions for Physicians
Company to Explore Strategic
Alternatives for its Electronic Health Records Offering
Full Year 2011 Revenue Increased 9%
to $113 Million
Epocrates, Inc. (Nasdaq:EPOC), a leading physician platform for
clinical content, practice tools and health industry engagement,
today announced a strategic streamlining of its business and
reported its financial results for the fiscal fourth quarter and
full year 2011.
"The foundational strength of Epocrates is our physician
network," said Peter Brandt, Epocrates' interim president and chief
executive officer. "We believe the opportunities to build upon that
strength and expand beyond our current product portfolio throughout
our physician network are significant and have the potential to
generate meaningful revenue streams for the company. While we have
developed a meaningful use certified, state-of-the-art electronic
health record (EHR), including a native iPad version, the effort
has hindered our ability to aggressively pursue such opportunities.
As a result, we are exploring strategic alternatives for our EHR
offering. By focusing more on the natural extensions of our core
business and providing trusted content and collaborative solutions,
we have the potential to support physicians to an even greater
extent and to significantly grow our company."
For the year ended December 31, 2011, Epocrates' revenue
increased 9.0% to $113.3 million compared to $104.0 million for the
year ended December 31, 2010. Epocrates' revenue totaled $29.7
million in the fourth quarter of 2011 compared to $30.3 million in
the same quarter of the prior year, a decrease of 1.9%.
For the year ended December 31, 2011, net loss was $3.6 million
compared to net income of $3.8 million in 2010. On a dilutive
basis, net loss attributable to common stockholders was $3.9
million, or $0.17 per diluted share, compared to net income
attributable to common stockholders of $0.1 million, or $0.01 per
diluted share, for the same period in 2010. For the fourth quarter
ended December 31, 2011, net loss was $6.5 million compared to net
income of $2.7 million in the same quarter of the prior year. On a
dilutive basis, net loss attributable to common stockholders was
$6.5 million or $0.27 per diluted share compared to net income of
$0.8 million or $0.09 per diluted share in the previous fourth
quarter. The decrease in GAAP and non-GAAP net income for the year
to date and for the fourth quarter of 2011 was primarily
attributable to the impairment of long-lived assets and goodwill
associated with the EHR offering. Net (loss) income attributable to
common stockholders is calculated as net (loss) income less the
preferred stock dividend that was due to Epocrates' preferred
stockholders less an allocation of any remaining net income to the
preferred stockholders. Upon completion of the company's initial
public offering of its common stock, the preferred stock was
converted to common stock.
Epocrates' adjusted EBITDA, as defined in the GAAP to non-GAAP
reconciliation provided later in this release, was $13.2 million,
or 12% of revenue, for the year ended December 31, 2011 compared to
$17.6 million, or 17% of revenue for the same period in 2010.
Adjusted EBITDA was $3.1 million, or 11% of revenue, for the fourth
quarter of 2011, compared to $7.1 million, or 23% of revenue, in
the same period last year. The decline in adjusted EBITDA for the
year to date and for the fourth quarter of 2011 was primarily
attributable to the decrease in gross margin and operating expenses
excluding the changes in non-recurring and non-cash items.
Cash, cash equivalents and short-term investments totaled $85.2
million as of December 31, 2011.
Brandt concluded, "Epocrates' success this year will be defined
by our ability to realize the full potential of our physician
network – more than 340,000 strong. Our primary focus will be to
strengthen our position of trust with physicians, based on value,
which in turn will drive enhanced commercialization opportunities
for our business."
Outlook for Full Year 2012
Epocrates expects full year 2012 revenue to be in the range of
$105 million to $115 million, representing a decrease of 7% to an
increase of 1.5% over full year 2011.
Earnings Call Information
Epocrates will host a conference call today beginning at 5:00
p.m. ET to discuss its strategic realignment, fourth quarter and
full year 2011 results, followed by a question and answer
session.
To participate in Epocrates' live conference call and webcast,
please dial (877) 398-9481 (domestic) or (760) 298-5095
(international) using conference code 44991959, or visit
http://investor.epocrates.com. A replay of the call will be
available at the same address.
About Epocrates, Inc.
Epocrates, Inc. (Nasdaq:EPOC) is a leading physician platform
for essential clinical content, practice tools and health industry
engagement at the point of care. The Epocrates network consists of
well over one million healthcare professionals, including
approximately 340,000, or more than 50 percent of, U.S. physicians,
who routinely use its solutions and services. Epocrates' portfolio
includes top-ranked medical apps, such as the industry's #1 most
used mobile drug reference and valuable manufacturer resources.
Through these intuitive and reliable resources, the company
supports clinical decisions, helps improve physician workflow and
impacts patient outcomes. For more information, please visit
https://epocrates.com/who.
Epocrates is a trademark of Epocrates, Inc., registered in the
U.S. and other countries.
The Epocrates, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=11331
Forward-Looking Statements
Statements contained in this press release under the heading
"Outlook for Full Year 2012" and in Mr. Brandt's quotes regarding
the company's ability to expand its business are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. The words "believe," "potential," "will"
and "expects" identify statements as forward-looking
statements. Forward-looking statements by their nature address
matters that are, to different degrees,
uncertain. Uncertainties and risks may cause Epocrates' actual
results to be materially different than those expressed in or
implied by Epocrates' forward-looking statements. For Epocrates,
particular uncertainties and risks include, among
others: unexpected delays in delivering new products may
occur, the company's inability to expand its physician network at
the rate it expects, and lack of market acceptance of new products,
which could cause Epocrates' revenues to be lower than expected.
Additionally, the impact of competitive products and pricing may
decrease demand for Epocrates's products and/or force Epocrates to
decrease the price of its products, which would reduce its
revenues. More detailed information on these and additional factors
that could affect Epocrates' actual results are described in
Epocrates' filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 31, 2011 under the heading "Risk
Factors." Except as required by law, Epocrates undertakes no
obligation to publicly update its forward-looking statements.
Use of Non-GAAP Financial
Measures
To supplement Epocrates' consolidated financial statements
presented on a U.S. generally accepted accounting principles (GAAP)
basis, Epocrates uses non-GAAP measures of adjusted EBITDA, gross
profit, gross margin, net income and net income per share, which
are adjusted to exclude certain costs, expenses, gains and losses
Epocrates believes are appropriate to enhance an overall
understanding of its past and future financial performance. These
adjustments to current period GAAP results are made with the intent
of providing both management and investors a more complete
understanding of Epocrates' underlying operational results and
trends and its marketplace performance. In addition, these adjusted
non-GAAP results are among the information management uses as a
basis for planning and forecasting of future periods. The
presentation of this additional information is not meant to be
considered in isolation or as a substitute for results prepared in
accordance with U.S. GAAP.
Adjusted EBITDA is not a measure of liquidity calculated in
accordance with U.S. GAAP, and should be viewed as a supplement
to—not a substitute for—results of operations presented on a GAAP
basis. Adjusted EBITDA does not purport to represent cash flow
provided by, or used in, operating activities as defined by GAAP.
Epocrates' Consolidated Statements of Cash Flows presents its cash
flow activity in accordance with GAAP. Furthermore, adjusted EBITDA
is not necessarily comparable to similarly‑titled measures reported
by other companies.
Epocrates believes adjusted EBITDA, adjusted net income,
adjusted net income per share, adjusted gross profit and adjusted
gross margin are used by and are useful to investors and other
users of its financial statements in evaluating its operating
performance because it provides them with additional tools to
compare business performance across companies and across periods.
Epocrates believes that:
- EBITDA is widely used by investors to measure a company's
operating performance without regard to such items as non-recurring
items, interest (income) expense, taxes, depreciation and
amortization, which can vary substantially from company to company
depending upon accounting methods and book value of assets, capital
structure and the method by which assets were acquired;
- investors commonly adjust EBITDA information to eliminate the
effect of stock‑based compensation expenses and other charges,
which can vary widely from company to company and impair
comparability; and
- adjusted net income, adjusted net income per share and adjusted
gross profit/gross margin eliminate the effect of non-recurring and
non-cash charges , which can vary widely from company to company
and impair comparability year over year and across companies.
Epocrates management uses adjusted EBITDA, adjusted net income,
adjusted net income per share, adjusted gross profit and adjusted
gross margin:
- as measures of operating performance to assist in comparing
performance from period to period on a consistent basis;
- as measures for planning and forecasting overall expectations
and for evaluating actual results against such expectations;
- in communications with the Board of Directors, stockholders,
analysts and investors concerning our financial performance;
and
Additionally, Epocrates management uses adjusted EBITDA as a
significant performance measurement included in its bonus plan.
The tables that follow set forth a reconciliation of net (loss)
income to adjusted net income and adjusted EBITDA. These tables
also show a reconciliation of gross profit and gross margin from a
GAAP to a non-GAAP basis.
EPOCRATES,
INC. |
RECONCILIATION OF
NET (LOSS) INCOME TO ADJUSTED NET INCOME AND ADJUSTED
EBITDA |
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
Three
Months Ended December 31, |
|
2011 |
2010 |
|
|
Earnings |
Gross Profit |
Gross Margin |
Earnings |
Gross Profit |
Gross Margin |
|
|
|
|
|
|
|
|
Net (loss) income, as
reported |
|
$ (6,527) |
$ 18,015 |
60.6% |
$ 2,679 |
$ 21,885 |
72.3% |
|
|
|
|
|
|
|
|
Add: Non-recurring and non-cash
charges (income) |
|
|
|
|
|
|
|
Amortization of purchased
intangible assets related to core business * |
|
1,021 |
1,021 |
|
769 |
769 |
|
Stock-based compensation * |
|
1,885 |
39 |
|
1,652 |
54 |
|
Impairment of intangibles and
long-lived assets related to EHR* |
|
7,281 |
|
|
- |
|
|
Loss on impairment related to
EHR business * |
|
1,220 |
|
|
- |
|
|
Gain on settlement and change
in fair value of contingent consideration * |
(1) |
(449) |
|
|
(1,919) |
|
|
Other expenses * |
(2) |
848 |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
Add: Tax adjustment |
(3) |
(4,115) |
|
|
492 |
|
|
|
|
|
|
|
|
|
|
Net income, as adjusted |
|
$ 1,164 |
$ 19,075 |
64.2% |
$ 3,675 |
$ 22,708 |
75.0% |
|
|
|
|
|
|
|
|
Net (loss) income, as
reported |
|
$ (6,527) |
|
|
$ 2,679 |
|
|
|
|
|
|
|
|
|
|
Add: (Income) expenses unrelated to
core business activities |
|
|
|
|
|
|
|
Interest income |
|
(9) |
|
|
(20) |
|
|
Other (income) expense,
net |
|
(1) |
|
|
2 |
|
|
(Benefit from) provision for
income taxes |
|
(3,460) |
|
|
3,045 |
|
|
|
|
|
|
|
|
|
|
Add: Non-recurring and non-cash
charges (income) |
|
|
|
|
|
|
|
Depreciation and amortization
expense (including intangible assets) related to core business |
|
1,992 |
|
|
1,612 |
|
|
Stock-based compensation |
|
1,885 |
|
|
1,652 |
|
|
Impairment of intangibles and
long-lived assets related to EHR |
|
7,281 |
|
|
- |
|
|
Loss on impairment related to
EHR business |
|
1,220 |
|
|
- |
|
|
Gain on settlement and change
in fair value of contingent consideration |
(1) |
(449) |
|
|
(1,919) |
|
|
Other expenses |
(4) |
1,189 |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ 3,121 |
|
|
$ 7,053 |
|
|
|
|
|
|
|
|
|
|
(1) For the three months ended
December 31, 2011, represents a gain of $449 from the write-down of
the contingent consideration liability related to an earn-out
agreement with the sellers of Caretools, Inc., a company that
Epocrates acquired in 2010. |
|
|
|
|
|
|
|
|
(2) For the three months ended
December 31, 2011, includes employee severance charges of $799 and
current period amortization expense of $48 related to intangible
assets assigned to the EHR business. For the three months ended
December 31, 2010, represents amortization expense for the period
related to intangible assets assigned to the EHR business. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) 2011 Non-GAAP net income
reflects a provision for income tax rate of 36%, which is our
current projected long-term rate. 2010 Non-GAAP net income reflects
a provision for income tax rate of 41%, which was our projected
long-term rate in fiscal year 2010. The calculation of these
adjustments is as follows: |
|
Three Months
Ended December 31, |
|
2011 |
2010 |
(Loss) income before income taxes |
(9,987) |
5,724 |
Add: Non-GAAP adjustments (indicated by
*) |
11,806 |
504 |
Non-GAAP income before income taxes |
1,819 |
6,228 |
Effective income tax rate |
36% |
41% |
Non-GAAP tax provision (Non-GAAP income
before income taxes multiplied by the effective income tax
rate) |
655 |
2,553 |
(Benefit from) provision for income
taxes |
(3,460) |
3,045 |
Non-GAAP tax adjustment (calculated as
(benefit from) provision for income taxes less non-GAAP tax
provision) |
(4,115) |
492 |
|
|
|
(4) For the three months ended
December 31, 2011, includes employee severance charges of $799 and
current period depreciation and amortization expense of $389
related to assets assigned to the EHR business. For the three
months ended December 31, 2010, represents depreciation and
amortization expense for the period related to assets assigned to
the EHR business. |
|
|
|
Note: prior period amounts have
been restated to conform to the current period presentation. |
|
EPOCRATES,
INC. |
RECONCILIATION OF
NET (LOSS) INCOME TO ADJUSTED NET INCOME AND ADJUSTED
EBITDA |
(in thousands, except
percentages) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31, |
|
2011 |
2010 |
|
|
Earnings |
Gross Profit |
Gross Margin |
Earnings |
Gross Profit |
Gross Margin |
|
|
|
|
|
|
|
|
Net (loss) income, as
reported |
|
$ (3,573) |
$ 71,635 |
63.2% |
$ 3,803 |
$ 72,258 |
69.5% |
|
|
|
|
|
|
|
|
Add: Non-recurring and non-cash
charges (income) |
|
|
|
|
|
|
|
Amortization of purchased
intangible assets related to core business * |
|
4,097 |
4,097 |
|
1,312 |
1,312 |
|
Stock-based compensation
* |
|
7,342 |
183 |
|
6,356 |
272 |
|
Impairment of intangibles
and long-lived assets related to EHR* |
|
7,281 |
|
|
|
|
|
Loss on impairment
related to EHR business * |
|
1,220 |
|
|
- |
|
|
Gain on settlement and
change in fair value of contingent consideration * |
(1) |
(8,145) |
|
|
(1,034) |
|
|
Gain on sale-leaseback of
building * |
|
- |
|
|
(1,689) |
|
|
Other expenses * |
(2) |
2,721 |
|
|
701 |
|
|
|
|
|
|
|
|
|
|
Add: Tax adjustment |
(3) |
(5,346) |
|
|
(814) |
|
|
Net income, as adjusted |
|
$ 5,597 |
$ 75,915 |
67.0% |
$ 8,635 |
$ 73,842 |
71.0% |
|
|
|
|
|
|
|
|
Net (loss) income, as
reported |
|
$ (3,573) |
|
|
$ 3,803 |
|
|
|
|
|
|
|
|
|
|
Add: (Income) expenses unrelated to
core business activities |
|
|
|
|
|
|
|
Interest income |
|
(75) |
|
|
(93) |
|
|
Other income, net |
|
(183) |
|
|
- |
|
|
(Benefit from) provision
for income taxes |
|
(2,198) |
|
|
5,187 |
|
|
|
|
|
|
|
|
|
|
Add: Non-recurring and non-cash
charges (income) |
|
|
|
|
|
|
|
Depreciation and
amortization expense (including intangible assets) related to
core business |
|
8,065 |
|
|
4,395 |
|
|
Stock-based
compensation |
|
7,342 |
|
|
6,356 |
|
|
Impairment of intangibles
and long-lived assets related to EHR |
|
7,281 |
|
|
|
|
|
Loss on impairment
related to EHR business |
|
1,220 |
|
|
- |
|
|
Gain on settlement and
change in fair value of contingent consideration |
(1) |
(8,145) |
|
|
(1,034) |
|
|
Gain on sale-leaseback of
building |
|
- |
|
|
(1,689) |
|
|
Other expenses |
(4) |
3,484 |
|
|
701 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ 13,218 |
|
|
$ 17,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the 12 months ended
December 31, 2011, includes a gain of $449 from the write-down of
the contingent consideration liability related to an earn-out
agreement recognized in the fourth quarter of 2011 for Caretools
and a $5.9 million gain recognized in the second quarter of 2011
relating to the settlement of the contingent consideration
liability with the sellers of MedCafe Inc., a company that
Epocrates acquired in 2010. |
|
|
|
|
|
|
|
|
(2) For the 12 months ended
December 31, 2011, includes legal expenses of $1,033, facilities
exit costs of $618, employee severance charges of $986 and current
period amortization expense of $84 related to intangible assets
assigned to the EHR business. For the 12 months ended December 31,
2010, includes employee severance charges of $694 and amortization
expense of $7 related to intangible assets assigned to the EHR
business. |
|
|
|
|
|
|
|
|
(3) 2011 Non-GAAP net income
reflects a provision for income tax rate of 36%, which is our
current projected long-term rate. 2010 Non-GAAP net income reflects
a provision for income tax rate of 41%, which was our projected
long-term rate in fiscal year 2010. The calculation of these
adjustments is as follows: |
|
Twelve Months
Ended December 31, |
|
2011 |
2010 |
(Loss) income before income taxes |
(5,771) |
8,990 |
Add: Non-GAAP adjustments (indicated by
*) |
14,516 |
5,646 |
Non-GAAP income before income taxes |
8,745 |
14,636 |
Effective income tax rate |
36% |
41% |
Non-GAAP tax provision (Non-GAAP income
before income taxes multiplied by the effective income tax
rate) |
3,148 |
6,001 |
(Benefit from) provision for income
taxes |
(2,198) |
5,187 |
Non-GAAP tax adjustment (calculated as
(benefit from) provision for income taxes less non-GAAP tax
provision) |
(5,346) |
(814) |
|
|
|
(4) For the 12 months ended
December 31, 2011, includes legal expenses of $1,033, facilities
exit costs of $618, employee severance charges of $986, current
period depreciation and amortization expense of $673 related to
assets assigned to the EHR business and $174 relating to a refund
of rent. For the 12 months ended December 31, 2010, includes
employee severance charges of $694 and amortization expense of $7
related to intangible assets assigned to the EHR business. |
|
|
|
|
|
Note: prior period amounts have
been restated to conform to the current period presentation. |
The table that follows sets forth a reconciliation of net (loss)
income per diluted common share to adjusted net income per diluted
common share.
EPOCRATES,
INC. |
RECONCILIATION OF
NET (LOSS) INCOME PER DILUTED COMMON SHARE TO ADJUSTED NET INCOME
PER DILUTED COMMON SHARE |
(in thousands, except per
share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, |
Twelve Months
Ended December 31, |
|
2011 |
2010 |
2011 |
2010 |
GAAP net (loss) income per
diluted common share |
|
|
|
|
Net (loss) income attributable to common
stockholders - diluted, as reported |
$ (6,527) |
$ 821 |
$ (3,867) |
$ 126 |
Divided by: Weighted average number of common
shares outstanding - diluted, as reported |
24,202 |
9,309 |
22,297 |
9,145 |
Net (loss) income per diluted common share,
as reported |
$ (0.27) |
$ 0.09 |
$ (0.17) |
$ 0.01 |
|
|
|
|
|
Non-GAAP net income per diluted
common share |
|
|
|
|
Net income, as adjusted |
$ 1,164 |
$ 3,675 |
$ 5,597 |
$ 8,635 |
Less: difference between net income, as
reported and net income attributable to common stockholders -
diluted |
-- |
1,858 |
294 |
3,677 |
Net income attributable to common
stockholders - diluted, as adjusted |
$ 1,164 |
$ 1,817 |
$ 5,303 |
$ 4,958 |
Divided by: Weighted average number of common
shares outstanding - diluted, as adjusted |
24,856 |
20,407 |
23,875 |
20,242 |
Net income per diluted common share, as
adjusted |
$ 0.05 |
$ 0.09 |
$ 0.22 |
$ 0.24 |
|
|
|
|
|
Weighted average number of
common shares outstanding - diluted, as adjusted |
|
|
|
|
Weighted average number of common shares
outstanding - diluted, as reported |
24,202 |
9,309 |
22,297 |
9,145 |
Add: dilutive effect of conversion of
outstanding stock options, restricted stock units and
warrants |
654 |
-- |
1,578 |
-- |
Add: dilutive effect of conversion of
outstanding shares of preferred stock into common stock and
conversion of preferred stock warrant into common stock
warrant |
-- |
11,098 |
-- |
11,097 |
Weighted average number of common shares
outstanding - diluted, as adjusted |
24,856 |
20,407 |
23,875 |
20,242 |
|
EPOCRATES,
INC. |
CONSOLIDATED STATEMENTS
OF OPERATIONS |
(in thousands, except per share
information) |
|
|
|
|
|
|
Three Months
Ended December 31, |
Twelve Months
Ended December 31, |
|
2011 |
2010 |
2011 |
2010 |
|
|
|
|
|
|
|
|
|
|
Subscription revenues |
$ 5,067 |
$ 7,368 |
$ 22,520 |
$ 24,683 |
Interactive services revenues |
24,640 |
22,917 |
90,826 |
79,305 |
Total revenues, net |
29,707 |
30,285 |
113,346 |
103,988 |
|
|
|
|
|
Subscription cost of revenues |
2,342 |
1,697 |
8,360 |
6,516 |
Interactive services cost of
revenues |
9,350 |
6,703 |
33,351 |
25,214 |
Total cost of revenues
(1) |
11,692 |
8,400 |
41,711 |
31,730 |
|
|
|
|
|
Gross profit |
18,015 |
21,885 |
71,635 |
72,258 |
|
|
|
|
|
Operating expenses (1): |
|
|
|
|
Sales and marketing |
7,963 |
8,413 |
31,193 |
30,424 |
Research and development |
5,721 |
5,205 |
22,797 |
19,717 |
General and administrative |
6,276 |
4,480 |
22,700 |
15,729 |
Facilities exit costs |
-- |
-- |
618 |
-- |
Gain on settlement and change in fair value
of contingent consideration |
(449) |
(1,919) |
(8,145) |
(1,034) |
Impairment of long-lived assets and
goodwill |
8,501 |
-- |
8,501 |
-- |
Total operating
expenses |
28,012 |
16,179 |
77,664 |
64,836 |
|
|
|
|
|
Income (loss) from operations |
(9,997) |
5,706 |
(6,029) |
7,422 |
|
|
|
|
|
Interest income |
9 |
20 |
75 |
93 |
Interest expense |
-- |
-- |
-- |
(214) |
Other income (expense), net |
1 |
(2) |
183 |
-- |
Gain on sale-leaseback of building |
-- |
-- |
-- |
1,689 |
(Loss) income before income taxes |
(9,987) |
5,724 |
(5,771) |
8,990 |
|
|
|
|
|
Benefit from (provision for) income
taxes |
3,460 |
(3,045) |
2,198 |
(5,187) |
|
|
|
|
|
Net income (loss) |
(6,527) |
2,679 |
(3,573) |
3,803 |
|
|
|
|
|
Net income (loss) attributable to common
stockholders - basic |
$ (6,527) |
$ 736 |
$ (3,867) |
$ 113 |
Net income (loss) attributable to common
stockholders - diluted |
$ (6,527) |
$ 821 |
$ (3,867) |
$ 126 |
|
|
|
|
|
Net income (loss) per common share
attributable to common stockholders - basic |
$ (0.27) |
$ 0.10 |
$ (0.17) |
$ 0.01 |
Net income (loss) per common share
attributable to common stockholders - diluted |
$ (0.27) |
$ 0.09 |
$ (0.17) |
$ 0.01 |
|
|
|
|
|
Weighted average common shares outstanding -
basic |
24,202 |
7,678 |
22,297 |
7,558 |
Weighted average common shares outstanding -
diluted |
24,202 |
9,309 |
22,297 |
9,145 |
|
|
|
|
|
(1) Includes stock-based
compensation in the following amounts: |
|
|
|
|
|
|
|
|
|
Cost of revenues |
39 |
54 |
183 |
272 |
Sales and marketing |
252 |
421 |
1,361 |
1,741 |
Research and development |
172 |
275 |
730 |
1,512 |
General and administrative |
1,422 |
902 |
5,068 |
2,831 |
|
EPOCRATES,
INC. |
CONSOLIDATED BALANCE
SHEETS |
(in thousands) |
|
|
|
|
December 31,
2011 |
December 31,
2010 |
Assets |
|
|
|
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 75,326 |
$ 35,987 |
Short-term investments |
9,897 |
18,697 |
Accounts receivable,
net |
22,748 |
21,101 |
Deferred tax asset |
7,390 |
4,971 |
Prepaid expenses and other
current assets |
3,218 |
3,548 |
Total current assets |
118,579 |
84,304 |
|
|
|
Property and equipment, net |
7,283 |
8,757 |
Deferred tax asset, long-term |
1,280 |
779 |
Goodwill |
17,959 |
19,079 |
Other intangible assets, net |
6,771 |
11,438 |
Other assets |
352 |
2,859 |
|
|
|
Total assets |
$ 152,224 |
$ 127,216 |
|
|
|
Liabilities, Mandatorily
Redeemable Convertible Preferred Stock and Stockholders' Equity
(Deficit) |
|
|
|
Current liabilities: |
|
|
Accounts payable |
$ 3,282 |
$ 3,635 |
Deferred revenue |
46,429 |
46,164 |
Other accrued liabilities |
9,600 |
9,251 |
Total current liabilities |
59,311 |
59,050 |
|
|
|
Deferred revenue, less current portion |
8,088 |
8,732 |
Contingent consideration |
- |
15,016 |
Other liabilities |
1,893 |
1,913 |
Total liabilities |
69,292 |
84,711 |
|
|
|
Mandatorily redeemable convertible preferred
stock |
- |
73,342 |
|
|
|
Stockholders' equity (deficit): |
|
|
Common stock at par |
24 |
8 |
Additional paid-in capital |
129,238 |
11,911 |
Accumulated other comprehensive
loss |
(2) |
(1) |
Accumulated deficit |
(46,328) |
(42,755) |
Total stockholders' equity
(deficit) |
82,932 |
(30,837) |
|
|
|
Total liabilities, mandatorily
redeemable convertible |
preferred stock and stockholders' equity
(deficit) |
$ 152,224 |
$ 127,216 |
|
EPOCRATES,
INC. |
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(in thousands) |
|
|
|
|
Twelve
Months Ended December 31, |
|
2011 |
2010 |
|
|
|
Cash flows from operating
activities: |
|
|
Net income (loss) |
$ (3,573) |
$ 3,803 |
Adjustments to reconcile net income (loss) to
net cash |
|
|
provided by operating activities: |
|
|
Stock-based compensation |
7,342 |
6,356 |
Depreciation and
amortization |
4,557 |
3,083 |
Amortization of intangible
assets |
4,181 |
1,319 |
Allowance for doubtful accounts
and sales returns reserve |
(56) |
119 |
Loss on write-off of property
and equipment |
187 |
- |
Facilities exit costs |
618 |
- |
Impairment of long-lived assets
and goodwill |
8,501 |
- |
Change in carrying value of
preferred stock liability |
- |
33 |
Excess tax benefit from
stock-based compensation awards |
(328) |
(319) |
Gain on settlement and change
in fair value of contingent consideration |
(8,145) |
(1,034) |
Gain on sale-leaseback of
building |
- |
(1,689) |
Changes in assets and
liabilities, net of effect of acquisitions: |
|
|
Accounts receivable |
(1,591) |
(3,911) |
Deferred tax asset, current and
noncurrent |
(2,920) |
4,495 |
Prepaid expenses and other
assets |
797 |
(1,165) |
Accounts payable |
27 |
1,210 |
Deferred revenue |
(379) |
(7,464) |
Other accrued liabilities and
other payables |
(399) |
4,276 |
Net cash provided by operating
activities |
8,819 |
9,112 |
|
|
|
Cash flows from investing
activities: |
|
|
Purchase of property and equipment |
(10,064) |
(4,657) |
Business acquisitions |
- |
(14,600) |
Purchase of short-term investments |
(24,849) |
(27,793) |
Sale of short-term investments |
8,590 |
1,797 |
Maturity of restricted certificate of
deposit |
500 |
- |
Maturity of short-term investments |
24,800 |
11,725 |
Net cash used in investing
activities |
(1,023) |
(33,528) |
|
|
|
Cash flows from financing
activities: |
|
|
Net proceeds from issuance of common
stock |
64,188 |
- |
Acquisition of common stock |
- |
(3,491) |
Excess tax benefit from stock-based
compensation awards |
328 |
319 |
Proceeds from exercise of common stock
options |
3,484 |
2,680 |
Payment and settlement of contingent
consideration |
(6,871) |
- |
Payment of accrued dividends on Series B
mandatorily |
|
|
redeemable convertible preferred
stock |
(29,586) |
- |
Net cash provided by (used in)
financing activities |
31,543 |
(492) |
|
|
|
Net increase (decrease) in cash and cash
equivalents |
39,339 |
(24,908) |
Cash and cash equivalents at beginning of
period |
35,987 |
60,895 |
Cash and cash equivalents at end of
period |
$ 75,326 |
$ 35,987 |
CONTACT: INVESTORS & MEDIA:
Erica Sniad Morgenstern
Senior Director, Public Relations and Communications
Epocrates, Inc.
(650) 227-6907
ir@epocrates.com
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