Exhibit 99.1
CommerceHub Announces Fourth Quarter and Full Year 2017 Financial Results
Revenue for the fourth quarter and full year grows 12% and 11%, respectively
Net income of $3.2 million and adjusted EBITDA of $19.6 million in seasonally strong fourth quarter
Signs Macy’s as a retail drop-ship customer
ALBANY, N.Y., Feb. 28, 2018 (GLOBE NEWSWIRE) – CommerceHub, Inc. (NASDAQ:CHUBA) (NASDAQ:CHUBK) (“CommerceHub,” “we,” “us,” “our” or the “Company”), a leading distributed commerce network for retailers and brands, today announced financial results for the fourth quarter and full year ended December 31, 2017.
“We had another a strong financial performance in the quarter, with core drop-ship revenue increasing 14%, but we are most excited about the January 2018 signing of Macy’s as a new drop-ship retail customer,” said Frank Poore, CommerceHub’s Founder, President and CEO. “Macy’s is a storied retail brand with a significant online presence. This new relationship is yet another validation of CommerceHub’s role as strategic partner to many of the largest and most successful retailers online. Drop-shipping and virtual inventory are strategic initiatives at leading retailers, and CommerceHub’s superior platform, solutions and supplier network power our market-leading position.”
“The power of our business model was again on display in the fourth quarter, generating $10.7 million of operating cash flow and $10.5 million of free cash flow on $3.2 million of net income and $19.6 million of adjusted EBITDA, while adjusted EBITDA margin expanded to 53%,” said Michael Trimarchi, CommerceHub’s CFO. “Full-year 2017 total revenue of $111.1 million grew 11% year-over-year, while net income rose 8% and adjusted EBITDA increased 20%,” he continued.
Fourth Quarter 2017 Financial Highlights
| |
| • | Revenue was $36.7 million, a 12% increase from $32.9 million in 2016. Core drop-ship revenue was $34.4 million, a 14% increase from $30.2 million in 2016. |
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| • | Gross margin was 85%, compared to 82% in 2016. |
| |
| • | Adjusted gross margin was 86%, compared to 83% in 2016. |
| |
| • | Net income was $3.2 million, or $0.07 per diluted share, compared to $6.0 million, or $0.13 per diluted share, in 2016. |
| |
| • | Adjusted net income was $10.7 million, or $0.23 per diluted share, compared to $8.7 million, or $0.20 per diluted share, in 2016. |
| |
| • | Adjusted EBITDA was $19.6 million, compared to $16.8 million in 2016. |
| |
| • | Operating cash flow was $10.7 million, compared to $4.3 million in 2016. |
| |
| • | Free cash flow was $10.5 million, compared to $3.3 million in 2016. |
| |
| • | Net cash and cash equivalents at quarter end was $19.8 million. |
Full Year 2017 Financial Highlights
| |
| • | Revenue was $111.1 million in 2017, an 11% increase from $100.6 million in 2016. Core drop-ship revenue was $102.1 million, a 13% increase from $90.4 million in 2016. |
| |
| • | Gross margin was 81% in 2017, compared to 77% in 2016. |
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| • | Adjusted gross margin was 81% in 2017, compared to 78% in 2016. |
| |
| • | Net income was $9.9 million, or $0.22 per diluted share, in 2017, compared to $9.1 million, or $0.21 per diluted share, in 2016. |
| |
| • | Adjusted net income was $22.0 million, or $0.49 per diluted share in 2017, compared to $17.6 million, or $0.40 per diluted share, in 2016. |
| |
| • | Adjusted EBITDA was $45.4 million in 2017, compared to $37.8 million in 2016. |
| |
| • | Operating cash flow was $38.1 million in 2017, compared to negative $48.1 million in 2016. |
| |
| • | Free cash flow was $35.5 million in 2017, compared to negative $57.7 million in 2016. |
An explanation of the non-GAAP financial measures discussed above is included below under the heading “Statement Regarding Non-GAAP Financial Measures.” A reconciliation of these non-GAAP financial measures to the closest comparable GAAP financial measures has also been provided in the financial tables included at the end of this press release.
Other Recent Highlights
| |
| • | Total customer count at December 31, 2017 was approximately 11,600, up 15% year-over-year from approximately 10,100 at December 31, 2016. |
| |
| • | Drop-ship order volume grew 15% in the fourth quarter of 2017 and 16% for the full year of 2017, compared to the same periods in 2016. |
| |
| • | We expanded our CommerceHub for Retailers network with the signing of Macy’s, a top 10 online retailer, as a new drop-ship customer in January 2018. This win is a conversion of an existing in-house drop-ship program, which we believe demonstrates the complexity of such programs and the value CommerceHub can deliver through increased operational efficiencies, improved customer service and capital-efficient expansion of product assortments. |
Conference Call Details
The Company will offer a live conference call, and a live, listen-only webcast of the call via the CommerceHub Investor Relations website at 4:30 p.m., E.T., today, Wednesday, February 28, 2018. See http://ir.commercehub.com/events.cfm, where supporting materials, including a presentation and supplemental financial data, have been posted.
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| Live Call: | U.S./Canada Toll-Free Participants Dial-in Number: (800) 219-6912 International Toll Participants Dial-in Number: (574) 990-1026 Conference ID/Passcode: 5492517 |
| Webcast (live and replay): | http://ir.commercehub.com/events.cfm |
About CommerceHub:
CommerceHub is a distributed commerce network connecting supply, demand and delivery that helps retailers and brands increase sales by expanding product assortments, promoting products on the channels that perform, and enabling rapid, on-time customer delivery. With its robust platform and proven scalability, CommerceHub helped over 11,500 retailers, brands, and distributors achieve an estimated $16 billion in Gross Merchandise Value in 2017.
Important Information Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about future business strategies, future financial performance, cost savings, market conditions and potential, future growth of ecommerce, customer growth and performance, sales channel expansion and other matters that are not historical facts. These statements involve risks, uncertainties, estimates and assumptions, many of which are beyond our control, that could cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, market acceptance and performance of our products and services, competitive issues, general market conditions, regulatory matters and changes in law affecting our business and the risk factors described in our most recent Annual Report on Form 10-K under Item 1A "Risk Factors.” Further, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all potential risks or assess their potential effects on our business. These forward-looking statements speak only as of the date of this press release, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any such statement contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. There can be no assurance that any expectation or belief expressed in a forward-looking statement will occur, and you should not place undue reliance on any forward-looking statements. Please refer to our public filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, for additional information about us and the risks and uncertainties we face that may affect the forward-looking statements made in this press release.
Statement Regarding Non-GAAP Financial Measures
In addition to reporting financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), we provide non-GAAP financial measures that management considers in reviewing our financial performance because we feel they are relevant measures of the overall efficiency of our business model. These non-GAAP financial measures are not a substitute for, or superior to, and should be considered only in addition to, financial measures calculated in accordance with GAAP. They are subject to inherent limitations and exclude significant expenses and income that are required by GAAP to be recorded in our financial statements. Certain of these adjustments are based on estimates and assumptions of management and do not purport to reflect actual historical results. In addition, you should be aware that our computation of these non-GAAP financial measures may not be comparable to other similarly titled measures computed by other companies, because all companies do not calculate these measures in the same fashion. We define “adjusted gross profit” as gross profit plus share-based compensation, acquisition-related intangible amortization and restructuring charges. We define “adjusted gross margin” as adjusted gross profit divided by revenue. We define “adjusted operating expenses” as total operating expenses less share-based compensation, acquisition-related intangible amortization and restructuring charges. We define “adjusted EBITDA” as net income or loss plus interest expense, income tax expense, depreciation of property and equipment, amortization of capitalized software costs and intangible assets, share-based compensation and restructuring charges, less interest income and income tax benefit. We define “adjusted net income” as net income or loss plus share-based compensation, acquisition-related intangible amortization, restructuring charges and the tax effects of these adjustments, federal tax reform and other deferred charges. We define “adjusted earnings per diluted share” or “adjusted EPS” as earnings per diluted share plus the diluted per share effects of share-based compensation, acquisition-related intangible amortization, restructuring charges and the tax effects of these adjustments, federal tax reform and other deferred charges. We define “free cash flow” as net cash provided by, or used in, operating activities less purchases of property and equipment and additions to capitalized software. Certain of these non-GAAP financial measures exclude restructuring charges, the elimination of which does not result in a reduction of operating expenses necessary to conduct our business. By excluding these charges, we believe these non-GAAP financial measures provide supplemental information that enables us and investors to better analyze our operating performance and the sustainability of our results and to compare our performance on a more consistent basis from period to period. A reconciliation of these non-GAAP financial measures to the closest comparable GAAP financial measures has been provided in the financial tables included at the end of this press release.
CommerceHub Investor Relations Contact
Sara Leggat
investor@commercehub.com
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| | | | | | | | | | | | | | | | |
| CommerceHub, Inc. |
| Consolidated Statements of Operations |
| (in thousands except per share data) |
| (unaudited) |
| | | | | | | | | |
| | | | | | | | | |
| | | 3 months ended: | | 12 months ended: |
| | | 12/31/2017 | | 12/31/2016 | | 12/31/2017 | | 12/31/2016 |
| | Revenue | $ | 36,731 |
| | $ | 32,881 |
| | $ | 111,121 |
| | $ | 100,552 |
|
| | Cost of revenue | 5,417 |
| | 5,895 |
| | 21,600 |
| | 23,057 |
|
| | Gross profit | 31,314 |
| | 26,986 |
| | 89,521 |
| | 77,495 |
|
| | Gross margin | 85 | % | | 82 | % | | 81 | % | | 77 | % |
| | | | | | | | | |
| | Research and development | 6,814 |
| | 5,796 |
| | 25,559 |
| | 19,187 |
|
| | Sales and marketing | 1,826 |
| | 2,310 |
| | 8,576 |
| | 11,334 |
|
| | General and administrative | 7,634 |
| | 7,075 |
| | 28,920 |
| | 30,282 |
|
| | Operating expenses | 16,274 |
| | 15,181 |
| | 63,055 |
| | 60,803 |
|
| | | | | | | | | |
| | Operating income | 15,040 |
| | 11,805 |
| | 26,466 |
| | 16,692 |
|
| | | | | | | | | |
| | Interest expense, net | (128 | ) | | (302 | ) | | (732 | ) | | (434 | ) |
| | | | | | | | | |
| | Pre-tax income | 14,912 |
| | 11,503 |
| | 25,734 |
| | 16,258 |
|
| | Income tax expense | 11,746 |
| | 5,551 |
| | 15,876 |
| | 7,162 |
|
| | | | | | | | | |
| | Net income | $ | 3,166 |
| | $ | 5,952 |
| | $ | 9,858 |
| | $ | 9,096 |
|
| | | | | | | | | |
| | Earnings per share: | | | | | | | |
| | Basic | $ | 0.07 |
| | $ | 0.14 |
| | $ | 0.23 |
| | $ | 0.21 |
|
| | Diluted | $ | 0.07 |
| | $ | 0.13 |
| | $ | 0.22 |
| | $ | 0.21 |
|
| | | | | | | | | |
| | Share count: | | | | | | | |
| | Basic | 43,391 |
| | 42,876 |
| | 43,204 |
| | 42,831 |
|
| | Diluted | 45,864 |
| | 44,408 |
| | 45,230 |
| | 44,343 |
|
|
| | | | | | | | |
| CommerceHub, Inc. |
| Consolidated Balance Sheets |
| (in thousands) |
| (unaudited) |
| | | | | |
| | | | | |
| | | 12/31/2017 | | 12/31/2016 |
| | Assets | | | |
| | Cash and cash equivalents | $ | 19,841 |
| | $ | 6,471 |
|
| | Accounts receivable, net of allowances | 21,310 |
| | 18,109 |
|
| | Prepaid income taxes | — |
| | 4,311 |
|
| | Prepaid expenses | 1,652 |
| | 1,549 |
|
| | Total current assets | 42,803 |
| | 30,440 |
|
| | | | | |
| | Capitalized software, net | 2,850 |
| | 6,716 |
|
| | Deferred services costs | 4,853 |
| | 4,989 |
|
| | Property and equipment, net | 6,066 |
| | 7,629 |
|
| | Goodwill | 21,410 |
| | 21,410 |
|
| | Deferred income taxes | 5,798 |
| | 7,714 |
|
| | Other long-term assets | 1,339 |
| | 1,122 |
|
| | Total assets | $ | 85,119 |
| | $ | 80,020 |
|
| | | | | |
| | Liabilities and Equity | | | |
| | Accounts payable and accrued expenses | $ | 3,360 |
| | $ | 2,135 |
|
| | Accrued payroll and related expenses | 9,429 |
| | 7,435 |
|
| | Income taxes payable | 962 |
| | 7 |
|
| | Deferred revenue | 5,339 |
| | 5,149 |
|
| | Total current liabilities | 19,090 |
| | 14,726 |
|
| | Deferred revenue, long-term | 8,272 |
| | 7,581 |
|
| | Other long-term liabilities | 3,210 |
| | 1,135 |
|
| | Long-term debt | — |
| | 26,000 |
|
| | Total liabilities | 30,572 |
| | 49,442 |
|
| | | | | |
| | Equity: | | | |
| | Total equity | 54,547 |
| | 30,578 |
|
| | Total liabilities and equity | $ | 85,119 |
| | $ | 80,020 |
|
|
| | | | | | | | | | | | | | | | |
| CommerceHub, Inc. |
| Consolidated Statements of Cash Flows |
| (in thousands) |
| (unaudited) |
| | | | | | | | | |
| | | | | | | | | |
| | | 3 months ended: | | 12 months ended: |
| | | 12/31/2017 | | 12/31/2016 | | 12/31/2017 | | 12/31/2016 |
| | Cash flows from operating activities | | | | | | | |
| | Net income | $ | 3,166 |
| | $ | 5,952 |
| | $ | 9,858 |
| | $ | 9,096 |
|
| | Adjustments to net income: | | | | | | | |
| | Depreciation and amortization | 1,754 |
| | 2,488 |
| | 8,032 |
| | 9,803 |
|
| | Amortization of debt issuance costs | 55 |
| | 56 |
| | 221 |
| | 111 |
|
| | Share-based compensation | 1,643 |
| | 2,537 |
| | 8,629 |
| | 11,290 |
|
| | Deferred income taxes | 5,307 |
| | 4,311 |
| | 3,571 |
| | 21,326 |
|
| | Bad debt expense | 338 |
| | (66 | ) | | 1,269 |
| | 629 |
|
| | Accrued interest income | — |
| | — |
| | — |
| | (273 | ) |
| | Impairment and loss on disposal of long-term assets | 100 |
| | 19 |
| | 310 |
| | 179 |
|
| | Working capital changes: | | | | | | | |
| | Accounts receivable | (9,120 | ) | | (7,993 | ) | | (4,470 | ) | | (2,326 | ) |
| | Prepaid expenses and other assets | 255 |
| | 357 |
| | (532 | ) | | (599 | ) |
| | Income taxes, net | 4,008 |
| | (5,114 | ) | | 5,266 |
| | (4,304 | ) |
| | Deferred costs | 45 |
| | 168 |
| | 136 |
| | (33 | ) |
| | Deferred revenue | (366 | ) | | 442 |
| | 883 |
| | 708 |
|
| | Accounts payable and accrued expenses | 811 |
| | (313 | ) | | 2,210 |
| | 166 |
|
| | Accrued payroll and related expenses | 2,722 |
| | 1,485 |
| | 2,718 |
| | 1,901 |
|
| | Share-based compensation liability payments | — |
| | — |
| | — |
| | (86,684 | ) |
| | Parent receivables and payables, net | — |
| | — |
| | — |
| | (9,112 | ) |
| | Net cash provided by (used in) operating activities | 10,718 |
| | 4,329 |
| | 38,101 |
| | (48,122 | ) |
| | | | | | | | | |
| | Cash flows from investing activities | | | | | | | |
| | Purchases of property and equipment | (156 | ) | | (482 | ) | | (1,315 | ) | | (4,995 | ) |
| | Additions to capitalized software | (109 | ) | | (582 | ) | | (1,247 | ) | | (4,545 | ) |
| | Collections on note receivable - Parent | — |
| | — |
| | — |
| | 36,380 |
|
| | Net cash (used in) provided by investing activities | (265 | ) | | (1,064 | ) | | (2,562 | ) | | 26,840 |
|
| | | | | | | | | |
| | Cash flows from financing activities | | | | | | | |
| | Borrowings on revolver | — |
| | — |
| | — |
| | 50,000 |
|
| | Repayments on revolver | — |
| | (15,000 | ) | | (26,000 | ) | | (24,000 | ) |
| | Cash paid for debt issuance costs | — |
| �� | — |
| | — |
| | (1,100 | ) |
| | Purchase of treasury stock | — |
| | — |
| | — |
| | (3,600 | ) |
| | Cash received from exercise of stock options | 872 |
| | 598 |
| | 3,289 |
| | 846 |
|
| | Cash received from employee stock purchase plan | — |
| | — |
| | 464 |
| | — |
|
| | Cash received from deferred stock units | 75 |
| | — |
| | 75 |
| | — |
|
| | Borrowings on note payable - Parent | — |
| | — |
| | — |
| | 28,664 |
|
| | Payments on note payable - Parent | — |
| | — |
| | — |
| | (28,664 | ) |
| | Contributions from Parent | — |
| | — |
| | — |
| | 6,000 |
|
| | Dividends paid to Parent and others | — |
| | — |
| | — |
| | (19,730 | ) |
| | Net cash provided by (used in) financing activities | 947 |
| | (14,402 | ) | | (22,172 | ) | | 8,416 |
|
| | Currency effect on cash and cash equivalents | 3 |
| | — |
| | 3 |
| | — |
|
| | Net increase (decrease) in cash and cash equivalents | 11,403 |
| | (11,137 | ) | | 13,370 |
| | (12,866 | ) |
| | | | | | | | | |
| | Beginning cash and cash equivalents | 8,438 |
| | 17,608 |
| | 6,471 |
| | 19,337 |
|
| | Ending cash and cash equivalents | $ | 19,841 |
| | $ | 6,471 |
| | $ | 19,841 |
| | $ | 6,471 |
|
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| CommerceHub, Inc. |
| Supplemental Information |
| (in thousands) |
| (unaudited) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | 3 months ended: | | 12 months ended: |
| | | 12/31/2017 | | 12/31/2016 | | % Inc (Dec) | | 12/31/2017 | | 12/31/2016 | | % Inc (Dec) |
| | Revenue by type: (1) | | | | | | | | | | | |
| | Core Drop-Ship Revenue | | | | | | | | | | | |
| | Order fee revenue | $ | 22,573 |
| | $ | 19,569 |
| | 15 | % | | $ | 59,788 |
| | $ | 52,095 |
| | 15 | % |
| | Subscription and other platform revenue | 9,797 |
| | 9,195 |
| | 7 | % | | 35,224 |
| | 32,617 |
| | 8 | % |
| | Set-up and professional services revenue | 1,987 |
| | 1,387 |
| | 43 | % | | 7,047 |
| | 5,692 |
| | 24 | % |
| | Total core drop-ship revenue | 34,357 |
| | 30,151 |
| | 14 | % | | 102,059 |
| | 90,404 |
| | 13 | % |
| | | | | | | | | | | | | |
| | Demand channel revenue | 2,374 |
| | 2,730 |
| | -13 | % | | 9,062 |
| | 10,148 |
| | -11 | % |
| | Total | $ | 36,731 |
| | $ | 32,881 |
| | 12 | % | | $ | 111,121 |
| | $ | 100,552 |
| | 11 | % |
| | | | | | | | | | | | | |
| | Drop-ship order count growth | 15 | % | | 16 | % | | | | 16 | % | | 16 | % | | |
| |
| | | | | | | | | | | |
| | (1) In the fourth quarter of 2017, we updated the way in which we present revenue by type. To provide additional clarity over this change, we have provided supplemental revenue disclosures at the end of this earnings release to disclose our historical revenue by type for the periods presented above, as well as amounts previously reported that conform to our current presentation of revenue by type. |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | 3 months ended: | | | | 12 months ended: | | |
| | | 12/31/2017 | | 12/31/2016 | | | | 12/31/2017 | | 12/31/2016 | | �� |
| | Share-based compensation: | | | | | | | | | | | |
| | Cost of revenue | $ | 97 |
| | $ | 105 |
| | | | $ | 396 |
| | $ | (102 | ) | | |
| | Research and development | 341 |
| | 564 |
| | | | 1,728 |
| | 2,261 |
| | |
| | Sales and marketing | 5 |
| | 130 |
| | | | 553 |
| | 834 |
| | |
| | General and administrative | 1,200 |
| | 1,738 |
| | | | 5,952 |
| | 8,297 |
| | |
| | Total | $ | 1,643 |
| | $ | 2,537 |
| | | | $ | 8,629 |
| | $ | 11,290 |
| | |
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| | | | | | | | | | | | | |
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| CommerceHub, Inc. |
| GAAP to Non-GAAP Reconciliations |
| (in thousands) |
| (unaudited) |
| | | | | | | | | |
| | | | | | | | | |
| | Reconciliation of GAAP gross profit to adjusted gross profit: |
| | | | | | | | | |
| | | 3 months ended: | | 12 months ended: |
| | | 12/31/2017 | | 12/31/2016 | | 12/31/2017 | | 12/31/2016 |
| | Gross profit | $ | 31,314 |
| | $ | 26,986 |
| | $ | 89,521 |
| | $ | 77,495 |
|
| | Share-based compensation | 97 |
| | 105 |
| | 396 |
| | (102 | ) |
| | Acquisition-related intangible amortization | — |
| | 188 |
| | — |
| | 750 |
|
| | Restructuring charges (1) | 246 |
| | — |
| | 486 |
| | — |
|
| | Adjusted gross profit | $ | 31,657 |
| | $ | 27,279 |
| | $ | 90,403 |
| | $ | 78,143 |
|
| | | | | | | | | |
| | Adjusted gross margin | 86 | % | | 83 | % | | 81 | % | | 78 | % |
| | | | | | | | | |
| |
| | | | | | | |
| | Reconciliation of GAAP operating expenses to adjusted operating expenses: |
| | | | | | | | | |
| | | 3 months ended: | | 12 months ended: |
| | | 12/31/2017 | | 12/31/2016 | | 12/31/2017 | | 12/31/2016 |
| | Operating expenses | $ | 16,274 |
| | $ | 15,181 |
| | $ | 63,055 |
| | $ | 60,803 |
|
| | Share-based compensation | (1,546 | ) | | (2,432 | ) | | (8,233 | ) | | (11,392 | ) |
| | Acquisition-related intangible amortization | — |
| | (250 | ) | | — |
| | (1,000 | ) |
| | Restructuring charges (1) | (957 | ) | | — |
| | (1,793 | ) | | — |
|
| | Adjusted operating expenses | $ | 13,771 |
| | $ | 12,499 |
| | $ | 53,029 |
| | $ | 48,411 |
|
| | | | | | | | | |
| |
| | | | | | | |
| | Reconciliation of GAAP net income to adjusted EBITDA: |
| | | | | | | | | |
| | | 3 months ended: | | 12 months ended: |
| | | 12/31/2017 | | 12/31/2016 | | 12/31/2017 | | 12/31/2016 |
| | Net income | $ | 3,166 |
| | $ | 5,952 |
| | $ | 9,858 |
| | $ | 9,096 |
|
| | Interest expense, net | 128 |
| | 302 |
| | 732 |
| | 434 |
|
| | Income tax expense | 11,746 |
| | 5,551 |
| | 15,876 |
| | 7,162 |
|
| | Depreciation and amortization | 1,754 |
| | 2,488 |
| | 8,032 |
| | 9,803 |
|
| | Share-based compensation | 1,643 |
| | 2,537 |
| | 8,629 |
| | 11,290 |
|
| | Restructuring charges (1) | 1,203 |
| | — |
| | 2,279 |
| | — |
|
| | Adjusted EBITDA | $ | 19,640 |
| | $ | 16,830 |
| | $ | 45,406 |
| | $ | 37,785 |
|
| | | | | | | | | |
| | Adjusted EBITDA margin | 53 | % | | 51 | % | | 41 | % | | 38 | % |
| | | | | | | | | |
| | (1) Restructuring charges include termination and retention benefits and the impairment of certain capitalized software projects in connection with our 2017 restructuring plan. |
|
| | | | | | | | | | | | | | | | |
| CommerceHub, Inc. |
| GAAP to Non-GAAP Reconciliations, continued |
| (in thousands except per share data) |
| (unaudited) |
| | | | | | | | | |
| | Reconciliation of GAAP net income to adjusted net income: |
| | | | | | | | | |
| | | 3 months ended: | | 12 months ended: |
| | | 12/31/2017 | | 12/31/2016 | | 12/31/2017 | | 12/31/2016 |
| | Net income | $ | 3,166 |
| | $ | 5,952 |
| | $ | 9,858 |
| | $ | 9,096 |
|
| | Share-based compensation | 1,643 |
| | 2,537 |
| | 8,629 |
| | 11,290 |
|
| | Acquisition-related intangible amortization | — |
| | 438 |
| | — |
| | 1,750 |
|
| | Restructuring charges (1) | 1,203 |
| | — |
| | 2,279 |
| | — |
|
| | Tax effect of adjustments (2) | (1,794 | ) | | (240 | ) | | (5,218 | ) | | (4,557 | ) |
| | Tax effects of federal tax reform and other deferred tax charges (3) | 6,437 |
| | — |
| | 6,437 |
| | — |
|
| | Adjusted net income | $ | 10,655 |
| | $ | 8,687 |
| | $ | 21,985 |
| | $ | 17,579 |
|
| | | | | | | | | |
| | Reconciliation of GAAP earnings per diluted share to adjusted earnings per diluted share: |
| | | | | | | | | |
| | | 3 months ended: | | 12 months ended: |
| | | 12/31/2017 | | 12/31/2016 | | 12/31/2017 | | 12/31/2016 |
| | GAAP earnings per diluted share | $ | 0.07 |
| | $ | 0.13 |
| | $ | 0.22 |
| | $ | 0.21 |
|
| | Share-based compensation | 0.04 |
| | 0.06 |
| | 0.19 |
| | 0.25 |
|
| | Acquisition-related intangible amortization | — |
| | 0.01 |
| | — |
| | 0.04 |
|
| | Restructuring charges (1) | 0.03 |
| | — |
| | 0.05 |
| | — |
|
| | Tax effect of adjustments (2) | (0.04 | ) | | (0.01 | ) | | (0.12 | ) | | (0.10 | ) |
| | Tax effects of federal tax reform and other deferred tax charges (3) | 0.14 |
| | — |
| | 0.14 |
| | — |
|
| | Adjusted earnings per diluted share | $ | 0.23 |
| | $ | 0.20 |
| | $ | 0.49 |
| | $ | 0.40 |
|
| | | | | | | | | |
| | Diluted share count | 45,864 |
| | 44,408 |
| | 45,230 |
| | 44,343 |
|
| | | | | | | | | |
| | (1) Restructuring charges include termination and retention benefits and the impairment of certain capitalized software projects in connection with our 2017 restructuring plan. |
| | (2) Adjusted earnings per diluted share assumes a tax rate of 40%. |
| | (3) Represents the effects from the change in federal effective tax rate from 35% to 21%, which resulted in a charge to deferred tax expense, as well as the effect of a deferred tax charge associated with a 162(m) adjustment recorded in the fourth quarter of 2017. |
| | | | | | | | | |
| | Reconciliation of GAAP net cash provided by (used in) operating activities to free cash flow: |
| | | | | | | | | |
| | | 3 months ended: | | 12 months ended: |
| | | 12/31/2017 | | 12/31/2016 | | 12/31/2017 | | 12/31/2016 |
| | Net cash provided by (used in) operating activities | $ | 10,718 |
| | $ | 4,329 |
| | $ | 38,101 |
| | $ | (48,122 | ) |
| | Purchases of property and equipment | (156 | ) | | (482 | ) | | (1,315 | ) | | (4,995 | ) |
| | Additions to capitalized software | (109 | ) | | (582 | ) | | (1,247 | ) | | (4,545 | ) |
| | Free cash flow (1) | $ | 10,453 |
| | $ | 3,265 |
| | $ | 35,539 |
| | $ | (57,662 | ) |
| | | | | | | | | |
| | (1) Includes share-based compensation liability payments of: | $ | — |
| | $ | — |
| | $ | — |
| | $ | (86,684 | ) |
|
| | | | | | | | | | | | | | | | | | | | | | |
| CommerceHub, Inc. |
| Supplemental Revenue Information |
| (in thousands) |
| (unaudited) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Historical presentation of revenue by type: |
| | | | | |
| | | 3 months ended: | | 12 months ended: |
| | | 12/31/2017 | | 12/31/2016 | | % Inc (Dec) | | 12/31/2017 | | 12/31/2016 | | % Inc (Dec) |
| | Revenue by type: | | | | | | | | | | | |
| | Usage revenue | $ | 27,751 |
| | $ | 24,661 |
| | 13 | % | | $ | 75,996 |
| | $ | 69,098 |
| | 10 | % |
| | Subscription revenues | 6,933 |
| | 6,737 |
| | 3 | % | | 27,759 |
| | 25,503 |
| | 9 | % |
| | Set-up and professional services | 2,047 |
| | 1,483 |
| | 38 | % | | 7,366 |
| | 5,951 |
| | 24 | % |
| | Total revenue | $ | 36,731 |
| | $ | 32,881 |
| | 12 | % | | $ | 111,121 |
| | $ | 100,552 |
| | 11 | % |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenue by type for previously reported periods under current presentation: |
| | | | | | | | | | | | |
| | 3 months ended: |
| | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 |
| Revenue by type: | | | | | | | | | | | |
| Core drop-ship revenue: | | | | | | | | | | | |
| Order fee revenue | $ | 12,276 |
| $ | 12,901 |
| $ | 12,038 |
| $ | 19,569 |
| $ | 10,900 |
| $ | 11,227 |
| $ | 10,399 |
| $ | 17,070 |
| $ | 9,414 |
| $ | 9,683 |
| $ | 9,102 |
|
| Subscription and other platform revenue | 8,544 |
| 8,432 |
| 8,451 |
| 9,195 |
| 8,053 |
| 7,827 |
| 7,542 |
| 7,728 |
| 6,767 |
| 6,529 |
| 6,474 |
|
| Set-up and professional services revenue | 1,713 |
| 1,622 |
| 1,725 |
| 1,387 |
| 1,431 |
| 1,491 |
| 1,383 |
| 1,238 |
| 1,106 |
| 1,055 |
| 894 |
|
| Total core drop-ship revenue | 22,533 |
| 22,955 |
| 22,214 |
| 30,151 |
| 20,384 |
| 20,545 |
| 19,324 |
| 26,036 |
| 17,287 |
| 17,267 |
| 16,470 |
|
| | | | | | | | | | | | |
| Demand channel revenue | 2,081 |
| 2,253 |
| 2,354 |
| 2,730 |
| 2,094 |
| 2,558 |
| 2,766 |
| 3,235 |
| 2,408 |
| 2,591 |
| 2,320 |
|
| Total | $ | 24,614 |
| $ | 25,208 |
| $ | 24,568 |
| $ | 32,881 |
| $ | 22,478 |
| $ | 23,103 |
| $ | 22,090 |
| $ | 29,271 |
| $ | 19,695 |
| $ | 19,858 |
| $ | 18,790 |
|
|
| | | | | | | | | | | | | | | | | | |
| Drop-ship order count growth | 15 | % | 17 | % | 18 | % | 16 | % | 16 | % | 15 | % | 14 | % | | | | |
