SPS Commerce Reports First Quarter 2010 Financial Results
MINNEAPOLIS, May 17, 2010 (GLOBE NEWSWIRE) -- SPS Commerce (Nasdaq:SPSC), a leading provider of on-demand supply chain management solutions, today announced financial results for the quarter ended March 31, 2010. Revenue was $10.2 million in the first quarter of 2010, compared to $8.5 million in the first quarter of 2009, reflecting 20% growth in total revenue from first quarter 2009.
Net income in the first quarter of 2010 was $919,000 or $0.10 per diluted share, compared to net loss of $54,000, or ($0.16) per diluted share1, in the first quarter of 2009. Adjusted EBITDA for the first quarter of 2010 was $1.4 million, compared to $536,000, for the first quarter of 2009.
"Over the past decade we have built a great company through the loyalty of our customers and the dedication of all our employees," said Archie Black, President and CEO of SPS Commerce. "We were proud to complete our initial public offering and are looking forward to sharing our story with a much wider audience. Our first quarter results are reflective of our overall growth strategy to expand our customer base through viral marketing, further penetrate our existing customer base with new solutions like Trading Partner Intelligence, and expand our sales teams both domestic and internationally."
"We are pleased with our results this quarter, which were driven by increases in both the number of recurring revenue customers and the annualized average recurring revenue per recurring revenue customer," said Kim Nelson, Chief Financial Officer of SPS Commerce. "Our 100% SaaS subscription model provides visibility and recurring revenue streams that give us confidence in our ability to execute against our growth objectives."
Guidance
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For the second quarter of 2010, revenue is expected to be in the range of approximately $10.4 to $10.6 million, representing growth of 8% to 10% compared to the second quarter of 2009. Second quarter net income per share is expected to be in the range of $0.01 to $0.02. We expect Adjusted EBITDA to be in the range of $650,000 - $750,000.
- For the full year 2010, revenue is expected to be in the range of approximately $42.8 to $43.5 million, representing growth of 13% to 15% over 2009. Net income per diluted share for the full year 2010 is expected to be in the range of approximately $0.14 to $0.16. We expect Adjusted EBITDA to be in the range of $3.8 to $4.2 million.
Quarterly Conference Call
SPS Commerce will discuss its quarterly results today via teleconference at 3:30 p.m. Central Time (4:30 p.m. Eastern Time). To access the call, please dial (877) 312-7508, or outside the U.S. (253) -237-1184, at least five minutes prior to the 3:30 p.m. CT start time. A live webcast of the call will also be available at http://investors.spscommerce.com under the Events & Presentations menu. An audio replay will be available between 6:30 p.m. CT May 17, 2010 and 10:59 p.m. CT May 30, 2010 by calling (800) 642-1687 or (706) 645-9291, with Conference ID 72491151. The replay will also be available on the Company's website at http://investors.spscommerce.com.
About SPS Commerce
SPS Commerce is a leading provider of on-demand supply chain management solutions, providing integration, collaboration, connectivity, visibility and data analytics to thousands of customers worldwide. We deliver our solutions over the Internet using a Software-as-a-Service model to improve the way suppliers, retailers, distributors and other customers manage and fulfill orders. Our SPSCommerce.net platform features pre-built integrations used by current and new customers alike, spanning 2,700 order management models across 1,300 retailers, grocers and distributors, as well as integrations to over 100 accounting, warehouse management, enterprise resource planning, and packing and shipping applications. More than 35,000 customers across more than 40 countries have used SPSCommerce.net, making it one of the largest trading partner integration centers. SPS Commerce has had 37 consecutive quarters of increased revenues and is headquartered in Minneapolis. For additional information, please contact SPS Commerce at 866-245-8100 or visit www.spscommerce.com.
SPS Commerce is a registered trademark of SPS Commerce, Inc. SPSCommerce.net and the SPS Commerce logo are the property of SPS Commerce, Inc.
The SPS Commerce logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7184
1 Except as otherwise indicated, all share and per share information referenced throughout this release and in the accompanying financial tables has been adjusted to reflect the 0.267 for 1 reverse stock split of the Company's common stock that occurred on April 13, 2010.
Use of Non-GAAP Financial Measures
To supplement its financial statements, SPS Commerce also provides investors with Adjusted EBITDA. EBITDA consists of net income (loss) plus depreciation and amortization, interest expense and income tax expense. Adjusted EBITDA consists of EBITDA plus its non-cash, share-based compensation expense. SPS Commerce uses Adjusted EBITDA as a measure of operating performance because it assists the Company in comparing performance on a consistent basis, as it removes from the operating results the impact of the Company's capital structure. SPS Commerce believes Adjusted EBITDA is useful to an investor in evaluating the Company's operating performance because it is widely used 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 corporate performance exclusive of the Company's capital structure and the method by which assets were acquired. These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with generally accepted accounting principles in the United States. The following table provides a reconciliation of net income (loss) to Adjusted EBITDA:
| Three Months Ended March 31, | ||
| (Dollars in thousands) | 2010 | 2009 |
| Net income (loss) | $ 919 | $ (54) |
| Depreciation and amortization | 342 | 442 |
| Interest expense | 45 | 89 |
| Income tax expense | 65 | 11 |
| EBITDA | 1,371 | 488 |
| Non-cash, share-based compensation expense | 51 | 48 |
| Adjusted EBITDA | $ 1,422 | $ 536 |
Forward-Looking Statements
This press release may contain forward-looking statements, including information about management's view of SPS Commerce's future expectations, plans and prospects, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors which may cause the results of SPS Commerce, its subsidiaries, divisions and concepts to be materially different than those expressed or implied in such statements. Certain of these risk factors and others are included in documents of SPS Commerce files with the Securities and Exchange Commission, including but not limited to, the final prospectus relating to its initial public offering, as well as subsequent reports filed with the Securities and Exchange Commission. Other unknown or unpredictable factors also could have material adverse effects on SPS Commerce's future results. The forward-looking statements included in this press release are made only as of the date hereof. SPS Commerce cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, SPS Commerce expressly disclaims any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances.
| SPS COMMERCE, INC. CONDENSED BALANCE SHEETS (In thousands, except share amounts) | ||
| March 31, 2010 | December 31, 2009 | |
| (unaudited) | ||
| ASSETS | ||
| CURRENT ASSETS | ||
| Cash and cash equivalents | $ 5,996 | $ 5,931 |
| Accounts receivable, less allowance for doubtful accounts of $231 and $226 | 5,125 | 4,766 |
| Deferred costs, current | 4,259 | 4,126 |
| Prepaid expenses and other current assets | 2,013 | 1,440 |
| Total current assets | 17,393 | 16,263 |
| PROPERTY AND EQUIPMENT, net | 2,311 | 2,520 |
| GOODWILL | 1,166 | 1,166 |
| INTANGIBLE ASSETS, net | 290 | 290 |
| OTHER ASSETS | ||
| Deferred costs, net of current portion | 1,719 | 1,617 |
| Other non-current assets | 61 | 63 |
| $ 22,940 | $ 21,919 | |
| LIABILITIES, REDEEMABLE CONVERTIBLE | ||
| PREFERRED STOCK AND STOCKHOLDERS' DEFICIT | ||
| CURRENT LIABILITIES | ||
| Current portion of long-term debt | $ 886 | $ 837 |
| Line of credit | 1,600 | 1,500 |
| Accounts payable | 1,208 | 1,345 |
| Accrued compensation and benefits | 2,667 | 3,005 |
| Accrued expenses and other current liabilities | 1,457 | 1,196 |
| Current portion of deferred revenue | 3,593 | 3,407 |
| Total current liabilities | 11,411 | 11,290 |
| LONG-TERM DEBT, less current portion | 146 | 355 |
| OTHER LIABILITIES | ||
| Deferred revenue, less current portion | 4,158 | 4,025 |
| Other non-current liabilities | 943 | 937 |
| Total liabilities | 16,658 | 16,607 |
| REDEEMABLE CONVERTIBLE PREFERRED STOCK | ||
| Series A redeemable convertible preferred stock, $0.001 par value, 1,182,217 shares authorized, 1,154,151 shares issued and outstanding; aggregate liquidation preference of $10,000 | 37,676 | 37,676 |
| Series B redeemable convertible preferred stock, $0.001 par value, 6,274,329 shares authorized, 5,688,116 shares issued and outstanding, aggregate liquidation preference of $21,112 | 20,658 | 20,658 |
| Series C redeemable convertible preferred stock, $0.001 par value, 1,602,000 shares authorized, 1,251,559 shares issued and outstanding, aggregate liquidation preference of $7,500 | 7,444 | 7,444 |
| Total redeemable convertible preferred stock | 65,778 | 65,778 |
| STOCKHOLDERS' DEFICIT | ||
| Common stock, $0.001 par value; 13,442,303 shares authorized; 327,113 shares issued and outstanding | -- | -- |
| Additional paid-in capital | 5,237 | 5,186 |
| Accumulated deficit | (64,733) | (65,652) |
| Total stockholders' equity (deficit) | (59,496) | (60,466) |
| $ 22,940 | $ 21,919 | |
| SPS COMMERCE, INC. | ||
| CONDENSED STATEMENTS OF OPERATIONS - Unaudited | ||
| (In thousands, except per share amounts) | ||
| For the Three Months Ended March 31, | ||
| 2010 | 2009 | |
| Revenues | $ 10,243 | $ 8,531 |
| Cost of revenues | 2,981 | 2,837 |
| Gross profit | 7,262 | 5,694 |
| Operating expenses | ||
| Sales and marketing | 3,507 | 3,075 |
| Research and development | 1,043 | 1,044 |
| General and administrative | 1,665 | 1,652 |
| Total operating expenses | 6,215 | 5,771 |
| Income (loss) from operations | 1,047 | (77) |
| Other income (expense) | ||
| Interest expense | (45) | (89) |
| Other income | (18) | 123 |
| Total other income (expense) | (63) | 34 |
| Income tax expense | (65) | (11) |
| Net income (loss) | $ 919 | $ (54) |
| Net income (loss) per share | ||
| Basic | $ 2.81 | $ (0.16) |
| Fully diluted | $ 0.10 | $ (0.16) |
| Weighted average common shares used to compute net income (loss) per share | ||
| Basic | 327 | 331 |
| Fully diluted | 9,525 | 331 |
| SPS COMMERCE, INC. CONDENSED STATEMENTS OF CASH FLOWS - Unaudited (In thousands) | ||
| For the Three Months Ended | ||
| March 31, | ||
| 2010 | 2009 | |
| Cash flows from operating activities | ||
| Net income (loss) | $ 919 | $ (54) |
| Reconciliation of net income (loss) to net cash provided by operating activities | ||
| Depreciation and amortization | 340 | 440 |
| Provision for doubtful accounts | 102 | 98 |
| Stock-based compensation | 51 | 48 |
| Change in carrying value of preferred stock warrants | 27 | (115) |
| Other | 2 | 8 |
| Changes in assets and liabilities | ||
| Accounts receivable | (460) | (166) |
| Prepaid expenses and other current assets | (573) | (9) |
| Other assets | -- | (6) |
| Deferred costs | (235) | (16) |
| Accounts payable | (137) | 269 |
| Deferred revenue | 319 | 423 |
| Accrued compensation and benefits | (338) | 286 |
| Accrued expenses and other current liabilities | 237 | (12) |
| Net cash provided by operating activities | 254 | 1,194 |
| Cash flows used in investing activities | ||
| Purchases of property and equipment | (130) | (68) |
| Net cash flows used in investing activities | (130) | (68) |
| Cash flows used in financing activities | ||
| Borrowings on line of credit | 4,450 | 3,900 |
| Payments on line of credit | (4,350) | (3,850) |
| Payments on equipment loans | (138) | (215) |
| Payments on term loan | -- | (167) |
| Payments of capital lease obligations | (21) | (196) |
| Net cash flows used in financing activities | (59) | (528) |
| Net increase in cash and cash equivalents | 65 | 598 |
| Cash and cash equivalents at beginning of period | 5,931 | 3,715 |
| Cash and cash equivalents at end of period | $ 5,996 | $ 4,313 |
CONTACT: The Blueshirt Group
Investor Relations
Todd Friedman
todd@blueshirtgroup.com
Stacie Bosinoff
stacie@blueshirtgroup.com
415-217-7721
SPS Commerce
Kay Rindels
866-245-8100
krindels@spscommerce.com
PAN Communications
Kim Baker
978-474-1900
spscommerce@pancomm.com
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