SPS Commerce Reports Third Quarter 2010 Financial Results
MINNEAPOLIS, Oct 28, 2010 (GlobeNewswire via COMTEX News Network) -- SPS Commerce (Nasdaq:SPSC), a leading provider of on-demand supply chain management solutions, today announced financial results for the quarter ended September 30, 2010.
Revenue was $11.5 million in the third quarter of 2010, compared to $9.6 million in the third quarter of 2009, reflecting 19% growth in revenue from the third quarter 2009. Recurring revenue grew 23% from the third quarter of 2009.
Net income in the third quarter of 2010 was $886,000 or $0.07 per diluted share, compared to net income of $346,000, or $0.04 per diluted share, in the third quarter of 2009. Non-GAAP net income per diluted share was $0.09, compared to non-GAAP net income per diluted share of $0.05 in the third quarter of 2009. Adjusted EBITDA for the third quarter of 2010 was $1.4 million, compared to $861,000 for the third quarter of 2009.
"We're pleased to report another strong quarter driven by solid execution," said Archie Black, President and CEO of SPS Commerce. "We saw our relationships grow with partners on all sides of the supply chain, and we continue to deliver a solid value proposition to the SMB market while driving higher revenue streams across our products. In addition, we continue to execute and focus on our unique viral platform that we believe gives us a competitive advantage in the supply chain world."
Revenue for the nine months ended September 30, 2010 was $32.7 million, compared to $27.8 million for the comparable period in 2009. Net income for the nine months ended September 30, 2010 was $2.4 million, or $0.22 per diluted share, compared to net income of $949,000, or $0.10 per diluted share, for the comparable period in 2009. Non-GAAP net income per diluted share for the nine months ended September 30, 2010 was $0.26, compared to non-GAAP net income per diluted share of $0.14 for the comparable period in 2009. Adjusted EBITDA for the first nine months of this year was $4.1 million, compared to $2.5 million for the first nine months of last year.
"The 23% year-over-year increase in recurring revenue demonstrates our success in growing 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. "This continued solid execution gives us the confidence to raise our full year guidance."
Guidance
For the fourth quarter of 2010, revenue is expected to be in the range of $11.7 to $11.9 million, representing growth of 17% to 19% compared to the fourth quarter of 2009. Fourth quarter net income per diluted share is expected to be in the range of $0.03 to $0.04. Non-GAAP net income per diluted share is expected to be in the range of $0.04 to $0.05. Adjusted EBITDA is expected to be in the range of $900,000 to $1.0 million. Non-cash, share based compensation expense is expected to be approximately $235,000.
For the full year 2010, revenue is expected to be in the range of $44.4 to $44.6 million, representing growth of approximately 18% over 2009. Net income per diluted share for the full year 2010 is expected to be in the range of $0.24 to $0.25. Non-GAAP net income per diluted share is expected to be in the range of $0.30 to $0.31. Adjusted EBITDA is expected to be in the range of $5.0 to $5.1 million. Non-cash, share based compensation expense is expected to be approximately $700,000.
Quarterly Conference Call
SPS Commerce will discuss its quarterly results today via teleconference at 3:15 p.m. Central Time (4:15 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 3:15 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 October 28, 2010 and 10:59 p.m. CT November 11, 2010 by calling (800) 642-1687 or (706) 645-9291, with Conference ID 16024652. 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 39 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
Use of Non-GAAP Financial Measures
To supplement its financial statements, SPS Commerce also provides investors with Adjusted EBITDA and non-GAAP net income per share, which are non-GAAP financial measures. SPS Commerce believes that these non-GAAP measures provide useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. SPS Commerce's management uses these non-GAAP measures to compare the company's performance to that of prior periods for trend analyses and planning purposes. It uses Adjusted EBITDA for purposes of determining executive and senior management incentive compensation. These measures are also presented to the company's board of directors.
EBITDA consists of net income plus depreciation and amortization, interest expense, interest income and income tax (benefit) expense. Adjusted EBITDA consists of EBITDA plus 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 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.
Non-GAAP net income per share consists of net income plus non-cash, share-based compensation expense and amortization expense related to intangible assets divided by the weighted average number of shares of common stock outstanding during each period. SPS Commerce believes non-GAAP net income per share is useful to an investor because it is widely used to measure a company's operating performance.
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. These non-GAAP financial measures exclude significant expenses and income that are required by GAAP to be recorded in the company's financial statements and are subject to inherent limitations. SPS Commerce urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures that are includes in this press release. The following tables provide reconciliations of net income to Adjusted EBITDA and non-GAAP net income per share (in thousands, except per share amounts):
SPS COMMERCE, INC.
NON-GAAP RECONCILIATION
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -------------------
2010 2009 2010 2009
--------- ------- --------- --------
Net income $ 886 $ 346 $ 2,443 $ 949
Depreciation and
amortization 403 326 1,148 1,089
Interest expense 8 61 66 225
Interest income (104) -- (104) --
Income tax (benefit)
expense (7) 49 96 60
--------- ------- --------- --------
EBITDA 1,186 782 3,649 2,323
Non-cash, share-based
compensation expense 232 79 458 177
--------- ------- --------- --------
Adjusted EBITDA $ 1,418 $ 861 $ 4,107 $ 2,500
========= ======= ========= ========
Net income $ 886 $ 346 $ 2,443 $ 949
Non-cash, share-based
compensation expense 232 79 458 177
Amortization of
intangible assets -- -- -- 155
--------- ------- --------- --------
Non-GAAP net income $ 1,118 $ 425 $ 2,901 $ 1,281
========= ======= ========= ========
Shares used to compute
non-GAAP net income per
share
Basic 11,620 331 6,796 331
Diluted 12,413 9,004 11,275 9,084
Non-GAAP net income per
share
Basic $ 0.10 $ 1.28 $ 0.43 $ 3.87
Diluted $ 0.09 $ 0.05 $ 0.26 $ 0.14
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, 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 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-F
SPS COMMERCE, INC.
CONDENSED BALANCE SHEETS
(In thousands, except share amounts)
September December
30, 31,
2010 2009
----------- ---------
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 39,113 $ 5,931
Accounts receivable, less allowance
for doubtful accounts
of $217 and $226 5,517 4,766
Deferred costs, current 4,581 4,126
Prepaid expenses and other current
assets 991 1,440
----------- ---------
Total current assets 50,202 16,263
PROPERTY AND EQUIPMENT, net 2,602 2,520
GOODWILL 1,166 1,166
INTANGIBLE ASSETS, net 290 290
OTHER ASSETS
Deferred costs, net of current
portion 1,887 1,617
Other non-current assets 80 63
----------- ---------
$ 56,227 $ 21,919
=========== =========
LIABILITIES, REDEEMABLE CONVERTIBLE
PREFERRED
STOCK AND STOCKHOLDERS' EQUITY
(DEFICIT)
CURRENT LIABILITIES
Current portion of long-term debt $ 122 $ 837
Line of credit -- 1,500
Accounts payable 1,058 1,345
Accrued compensation and benefits 3,719 3,005
Accrued expenses and other current
liabilities 1,021 1,196
Current portion of deferred revenue 3,674 3,407
----------- ---------
Total current liabilities 9,594 11,290
LONG-TERM DEBT, less current portion -- 355
OTHER LIABILITIES
Deferred revenue, less current
portion 4,624 4,025
Other non-current liabilities 289 937
----------- ---------
Total liabilities 14,507 16,607
----------- ---------
REDEEMABLE CONVERTIBLE PREFERRED STOCK
Series A redeemable convertible
preferred stock, $0.001 par value,
0 and 1,182,217 shares authorized; 0
and 1,154,151 shares issued
and outstanding; aggregate
liquidation preference of $0 and
$10,000,
respectively -- 37,676
Series B redeemable convertible
preferred stock, $0.001 par value,
0 and 6,274,329 shares authorized; 0
and 5,688,116 shares issued
and outstanding; aggregate
liquidation preference of $0 and
$21,112,
respectively -- 20,658
Series C redeemable convertible
preferred stock, $0.001 par value,
0 and 1,602,000 shares authorized; 0
and 1,251,559 shares issued
and outstanding; aggregate
liquidation preference of $0 and
$7,500,
respectively -- 7,444
----------- ---------
Total redeemable convertible
preferred stock -- 65,778
----------- ---------
STOCKHOLDERS' EQUITY (DEFICIT )
Preferred stock, $0.001 par value;
5,000,000 and 0 shares authorized;
0 shares issued and outstanding -- --
Common stock, $0.001 par value;
55,000,000 and 13,442,303 shares
authorized; 11,627,743 and 327,113
shares issued and outstanding,
respectively 12 --
Additional paid-in capital 104,916 5,186
Accumulated deficit (63,208) (65,652)
----------- ---------
Total stockholders' equity (deficit) 41,720 (60,466)
----------- ---------
$ 56,227 $ 21,919
=========== =========
SPS COMMERCE, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
For the Three Months For the Nine Months
Ended Ended
September 30, September 30,
------------------------ ------------------------
2010 2009 2010 2009
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues $ 11,491 $ 9,634 $ 32,678 $ 27,765
Cost of revenues 3,211 3,009 9,293 8,742
----------- ----------- ----------- -----------
Gross profit 8,280 6,625 23,385 19,023
----------- ----------- ----------- -----------
Operating expenses
Sales and marketing 4,139 3,533 11,768 10,005
Research and development 1,108 1,123 3,218 3,226
General and
administrative 2,165 1,505 5,805 4,671
----------- ----------- ----------- -----------
Total operating expenses 7,412 6,161 20,791 17,902
----------- ----------- ----------- -----------
Income from operations 868 464 2,594 1,121
----------- ----------- ----------- -----------
Other income (expense)
Interest expense (8) (61) (66) (225)
Interest income 104 -- 104 --
Other income (expense) (85) (8) (93) 113
----------- ----------- ----------- -----------
Total other income
(expense), net 11 (69) (55) (112)
Income tax benefit
(expense) 7 (49) (96) (60)
----------- ----------- ----------- -----------
Net income $ 886 $ 346 $ 2,443 $ 949
=========== =========== =========== ===========
Net income per share
Basic $ 0.08 $ 1.05 $ 0.36 $ 2.87
Diluted $ 0.07 $ 0.04 $ 0.22 $ 0.10
Weighted average common
shares used to compute
net income per share
Basic 11,620 331 6,796 331
Diluted 12,413 9,004 11,275 9,084
SPS COMMERCE, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
For the Nine Months
Ended
September 30,
------------------------
2010 2009
----------- -----------
(unaudited) (unaudited)
Cash flows from operating activities
Net income $ 2,443 $ 949
Reconciliation of net income to net cash provided by
operating activities
Depreciation and amortization 1,148 1,082
Provision for doubtful accounts 225 319
Stock-based compensation 458 177
Change in carrying value of preferred
stock warrants 27 (95)
Other 1 8
Changes in assets and liabilities
Accounts receivable (975) (574)
Prepaid expenses and other current
assets 450 (12)
Other assets (18) (6)
Deferred costs (724) (128)
Accounts payable (287) 133
Deferred revenue 866 837
Accrued compensation and benefits 714 1,319
Accrued expenses and other current
liabilities (256) 78
----------- -----------
Net cash provided by operating
activities 4,072 4,087
----------- -----------
Cash flows from investing activities
Purchases of property and equipment (1,230) (506)
----------- -----------
Net cash flows used in investing
activities (1,230) (506)
----------- -----------
Cash flows from financing activities
Borrowings on line of credit 4,450 12,025
Payments on line of credit (5,950) (12,025)
Payments on equipment loans (732) (580)
Payments on term loan -- (500)
Payments of capital lease obligations (338) (420)
Net proceeds from initial public
offering 32,902 --
Net proceeds from exercise of options
to purchase common stock 8 --
----------- -----------
Net cash flows provided by (used in)
financing activities 30,340 (1,500)
----------- -----------
Net increase in cash and cash
equivalents 33,182 2,081
Cash and cash equivalents at beginning
of period 5,931 3,715
----------- -----------
Cash and cash equivalents at end of
period $ 39,113 $ 5,796
=========== ===========
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: SPS Commerce
CONTACT: The Blueshirt Group Investor Relations: Todd Friedman todd@blueshirtgroup.com Stacie Bosinoff stacie@blueshirtgroup.com 415-217-7722 SPS Commerce Media: Kay Rindels 866-245-8100 krindels@spscommerce.com PAN Communications Kim Baker 978-474-1900 spscommerce@pancomm.com
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