bnft-8k_20180314.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 14, 2018

 

BENEFITFOCUS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware

(State or other jurisdiction of incorporation)

 

 

 

 

001-36061

 

46-2346314

(Commission File Number)

 

(IRS Employer Identification No.)

100 Benefitfocus Way, Charleston, South Carolina 29492

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (843) 849-7476

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this Chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this Chapter).

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 


Item 2.02.

Results of Operations and Financial Condition.

On March 14, 2018, Benefitfocus, Inc. issued a press release announcing its operating results for the fourth quarter and full year ended December 31, 2017.  A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.

 

The information in this Item 2.02 (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits

Exhibit No.     Description

99.1                Press release dated March 14, 2018


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

BENEFITFOCUS, INC.

 

 

 

Date: March 14, 2018

 

/s/ Jonathon E. Dussault

 

 

Jonathon E. Dussault

 

 

Chief Financial Officer

 

bnft-ex991_6.htm

Exhibit 99.1

Benefitfocus, Inc.

843-284-1052 ext. 3527

pr@benefitfocus.com

 

Investor Relations:

Michael Bauer

843-284-1052 ext. 6654

michael.bauer@benefitfocus.com  

 

 

Benefitfocus Announces Fourth Quarter and Full Year 2017 Financial Results

2017 total revenue of $256.7 million grew 10% year-over-year

2017 employer revenue of $164.0 million grew 17% year-over-year

 

Charleston, S.C. – March 14, 2018 – Benefitfocus, Inc. (NASDAQ: BNFT), a leading provider of cloud-based benefits management software, today announced its fourth quarter and full year 2017 financial results.

“Our results for the fourth quarter reflect total revenue and adjusted EBITDA exceeding the midpoint of our guidance and we achieved a major milestone of becoming free cash flow positive,” said Ray August, President and Chief Executive Officer of Benefitfocus. “Overall, the fourth quarter was a successful one that reflects improved execution and progress across our growing company.”

 

August added, “As we focus on 2018, our teams are aligned to improve our sales execution, expand our revenue opportunities and strengthen our core. Successfully executing on these three priorities will result in faster recurring revenue growth, improved profitability, and drive long-term shareholder value.”  

 

Fourth Quarter 2017 Financial Highlights

Revenue

 

Total revenue was $66.8 million, an increase of 7% compared to the fourth quarter of 2016.

 

Software services revenue was $55.1 million, an increase of 5% compared to the fourth quarter of 2016.

 

Professional services revenue was $11.7 million, an increase of 15% compared to the fourth quarter of 2016.

 

Employer revenue was $44.4 million, an increase of 21% compared to the fourth quarter of 2016.

 

Insurance carrier revenue was $22.4 million, a decline of 14% compared to the fourth quarter of 2016.

Net Loss

 

GAAP net loss was ($7.0) million, compared to ($7.1) million in the fourth quarter of 2016. GAAP net loss per share was ($0.22), based on 31.3 million basic and diluted weighted average common shares outstanding, compared to ($0.24) for the fourth quarter of 2016, based on 30.0 million basic and diluted weighted average common shares outstanding.

Non-GAAP Net Loss and Adjusted EBITDA

 

Non-GAAP net loss was ($1.9) million, compared to ($2.6) million in the fourth quarter of 2016. Non-GAAP net loss per share was ($0.06), based on 31.3 million basic and diluted weighted average common shares outstanding, compared to ($0.09) for the fourth quarter of 2016, based on 30.0 million basic and diluted weighted average common shares outstanding.

 

Adjusted EBITDA was $5.3 million, compared to $2.9 million in the fourth quarter of 2016.

See important disclosures about non-GAAP measures, and a reconciliation of them to GAAP, below.


Balance Sheet

 

Cash, cash equivalents and marketable securities at December 31, 2017 totaled $55.3 million, compared to $54.6 million at the end of the third quarter of 2017.

Full Year 2017 Financial Highlights

Revenue

 

Total revenue was $256.7 million, an increase of 10% compared to the full year 2016.

 

Software services revenue was $218.4 million, an increase of 8% compared to the full year 2016.

 

Professional services revenue was $38.3 million, an increase of 21% compared to the full year 2016.

 

Employer revenue was $164.0 million, an increase of 17% compared to the full year 2016.

 

Insurance carrier revenue was $92.7 million, approximately unchanged compared to the full year 2016.

Net Loss

 

GAAP net loss was ($25.9) million, compared to ($40.1) million in 2016. GAAP net loss per share was ($0.83), based on 31.1 million basic and diluted weighted average common shares outstanding, compared to ($1.35) in 2016, based on 29.6 million basic and diluted weighted average common shares outstanding.

Non-GAAP Net Loss and Adjusted EBITDA

 

Non-GAAP net loss was ($8.4) million, compared to ($21.7) million in 2016. Non-GAAP net loss per share was ($0.27), based on 31.1 million basic and diluted weighted average common shares outstanding, compared to ($0.73) in 2016, based on 29.6 million basic and diluted weighted average common shares outstanding.

 

Adjusted EBITDA was $19.4 million, compared to ($1.1) million in 2016.

See important disclosures about non-GAAP measures, and a reconciliation of them to GAAP, below.

Fourth Quarter and Recent Business Highlights

 

We ended the quarter with 920 large employer customers, up from 833 at the end of the year-ago period and 903 at the end of the third quarter of 2017.

 

We announced our Winter Software Release, which included platform investments designed to simplify end-of-year reporting and deliver data-driven insights for 2018 planning. The release also included new communication capabilities to help increase transparency and improve personalization.

 

We published our third annual “State of Employee Benefits” report, a snapshot of real, but anonymous benefit election data from more than 1.3 million consumers from 540 large employers on our Platform.

 

The Brandon Hall Group awarded us its gold medal award for the Best Advance in Compensation and Benefits and/or Payroll Administration category.

Business Outlook

Based on information available as of March 14, 2018, Benefitfocus is providing guidance for the first quarter and full year 2018.  Our guidance is based on the new ASC 606 revenue recognition standard that is effective beginning January 1, 2018.

First Quarter 2018:

 

Total revenue is expected to be in the range of $57.5 million to $59.5 million.

 

Adjusted EBITDA is expected to be in the range of ($6.0) million to ($4.0) million.

 

Non-GAAP net loss is expected to be in the range of ($13.0) million to ($11.0) million.  

 

Diluted weighted average common shares outstanding is expected to be 31.3 million.


Full Year 2018:

 

Total revenue is expected to be in the range of $250.0 million to $258.0 million.

 

Adjusted EBITDA is expected to be in the range of $5.0 million to $13.0 million.

 

Non-GAAP net loss is expected to be in the range of ($25.0) million to ($17.0) million.  

 

Diluted weighted average common shares outstanding is expected to be 31.7 million.

See important disclosures about non-GAAP measures, and a reconciliation of them to GAAP, below.

Conference Call Details:

In conjunction with this announcement, Benefitfocus will host a conference call today, March 14, 2018, at 5:00 p.m. Eastern Time to discuss the company’s financial results. To access this call, dial (877) 407-9039 (domestic) or (201) 689-8470 (international). A live webcast, as well as the replay, of the conference call will be available on the Investor Relations page of the company’s website at http://investor.benefitfocus.com/. A replay of this conference call can also be accessed by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) with replay passcode 13675332 through March 21, 2018.

Investor Presentation Details

An investor presentation providing additional information on the ASC 605 to ASC 606 accounting change can be found at http://investor.benefitfocus.com.  

About Benefitfocus

Benefitfocus (NASDAQ: BNFT) provides technology and services that improve the way employers of all sizes manage their benefits investment. Through a combination of powerful cloud-based software, data-driven insights and thoughtfully-designed services, we provide employers, their brokers and insurance carriers with a single partner to 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, net loss 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 and net loss per share exclude stock-based compensation expenses, amortization of acquisition-related intangible assets, offering costs expensed, if any and costs not core to our business, if any.  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 and intangible assets, and costs not core to our business.  We define free cash flow as cash from operations plus purchases of property and equipment.  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: our continuing losses and need to achieve GAAP profitability; fluctuations in our financial results; risks related to changing healthcare and other applicable regulations; our ability to maintain our culture, recruit and retain qualified personnel and effectively expand our sales force; cyber-security risks;  the immature and volatile market for our products and services; 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,

 

 

 

 

2017

 

 

 

2016

 

 

 

2017

 

 

 

2016

 

Revenue

 

$

66,763

 

 

$

62,647

 

 

$

256,735

 

 

$

233,335

 

Cost of revenue (1)(2)

 

 

33,260

 

 

 

32,522

 

 

 

124,156

 

 

 

120,681

 

Gross profit

 

 

33,503

 

 

 

30,125

 

 

 

132,579

 

 

 

112,654

 

Operating expenses:(1)(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

18,177

 

 

 

13,546

 

 

 

69,280

 

 

 

55,488

 

Research and development

 

 

12,327

 

 

 

13,308

 

 

 

49,549

 

 

 

56,584

 

General and administrative

 

 

6,781

 

 

 

8,335

 

 

 

27,268

 

 

 

32,750

 

Total operating expenses

 

 

37,285

 

 

 

35,189

 

 

 

146,097

 

 

 

144,822

 

Loss from operations

 

 

(3,782

)

 

 

(5,064

)

 

 

(13,518

)

 

 

(32,168

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

53

 

 

 

21

 

 

 

182

 

 

 

138

 

Interest expense on building lease financing obligations

 

 

(1,865

)

 

 

(1,696

)

 

 

(7,450

)

 

 

(6,826

)

Interest expense on other borrowings

 

 

(1,405

)

 

 

(404

)

 

 

(4,931

)

 

 

(1,095

)

Other expense

 

 

 

 

 

46

 

 

 

(140

)

 

 

(90

)

Total other expense, net

 

 

(3,217

)

 

 

(2,033

)

 

 

(12,339

)

 

 

(7,873

)

Loss before income taxes

 

 

(6,999

)

 

 

(7,097

)

 

 

(25,857

)

 

 

(40,041

)

Income tax expense

 

 

5

 

 

 

2

 

 

 

15

 

 

 

17

 

Net loss

 

$

(7,004

)

 

$

(7,099

)

 

$

(25,872

)

 

$

(40,058

)

Comprehensive loss

 

$

(7,004

)

 

$

(7,099

)

 

$

(25,872

)

 

$

(40,058

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.22

)

 

$

(0.24

)

 

$

(0.83

)

 

$

(1.35

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

31,285,263

 

 

 

30,030,164

 

 

 

31,052,378

 

 

 

29,589,857

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Stock-based compensation included in above line items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

705

 

 

$

726

 

 

$

2,508

 

 

$

2,798

 

Sales and marketing

 

 

1,378

 

 

 

857

 

 

 

4,953

 

 

 

3,213

 

Research and development

 

 

790

 

 

 

994

 

 

 

2,990

 

 

 

4,532

 

General and administrative

 

 

1,618

 

 

 

1,901

 

 

 

5,686

 

 

 

7,545

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) Amortization of acquired intangible assets included in

       above line items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

36

 

 

$

36

 

 

$

141

 

 

$

147

 

Sales and marketing

 

 

14

 

 

 

12

 

 

 

52

 

 

 

42

 

Research and development

 

 

12

 

 

 

13

 

 

 

50

 

 

 

54

 

General and administrative

 

 

2

 

 

 

2

 

 

 

15

 

 

 

14

 

 



Benefitfocus, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31,

 

 

 

 

2017

 

 

2016

 

 

Assets

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

55,335

 

 

$

56,853

 

 

Marketable securities

 

 

 

 

 

2,007

 

 

Accounts receivable, net

 

 

30,156

 

 

 

28,340

 

 

Accounts receivable, related party, net

 

 

 

 

 

4,626

 

 

Prepaid expenses and other current assets

 

 

4,337

 

 

 

4,449

 

 

Total current assets

 

 

89,828

 

 

 

96,275

 

 

Property and equipment, net

 

 

72,681

 

 

 

80,518

 

 

Intangible assets, net

 

 

150

 

 

 

408

 

 

Goodwill

 

 

1,634

 

 

 

1,634

 

 

Other non-current assets

 

 

816

 

 

 

1,575

 

 

Total assets

 

$

165,109

 

 

$

180,410

 

 

Liabilities and stockholders' deficit

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

4,260

 

 

$

5,829

 

 

Accrued expenses

 

 

9,136

 

 

 

10,867

 

 

Accrued compensation and benefits

 

 

14,250

 

 

 

17,347

 

 

Deferred revenue, current portion

 

 

38,821

 

 

 

35,426

 

 

Revolving line of credit, current portion

 

 

24,000

 

 

 

20,000

 

 

Financing and capital lease obligations, current portion

 

 

3,423

 

 

 

2,604

 

 

Total current liabilities

 

 

93,890

 

 

 

92,073

 

 

Deferred revenue, net of current portion

 

 

19,898

 

 

 

40,412

 

 

Revolving line of credit, net of current portion

 

 

32,246

 

 

 

20,246

 

 

Financing and capital lease obligations, net of current portion

 

 

55,597

 

 

 

57,934

 

 

Other non-current liabilities

 

 

2,809

 

 

 

3,056

 

 

Total liabilities

 

 

204,440

 

 

 

213,721

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

 

Preferred stock, par value $0.001, 5,000,000 shares authorized, no shares issued

   and outstanding at December 31, 2017 and 2016

 

 

-

 

 

 

-

 

 

Common stock, par value $0.001, 50,000,000 shares authorized, 31,307,989 and

   30,429,014 shares issued and outstanding at December 31, 2017 and 2016,

   respectively

 

 

31

 

 

 

30

 

 

Additional paid-in capital

 

 

355,301

 

 

 

335,059

 

 

Accumulated deficit

 

 

(394,663

)

 

 

(368,400

)

 

Total stockholders' deficit

 

 

(39,331

)

 

 

(33,311

)

 

Total liabilities and stockholders' deficit

 

$

165,109

 

 

$

180,410

 

 

 



Benefitfocus, Inc.

 

Consolidated Statements of Cash Flows

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

2017

 

 

 

2016

 

 

 

2015

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(25,872

)

 

$

(40,058

)

 

$

(62,084

)

Adjustments to reconcile net loss to net cash and cash equivalents

   used in operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

15,906

 

 

 

13,073

 

 

 

11,664

 

Stock-based compensation expense

 

 

16,137

 

 

 

18,088

 

 

 

10,454

 

Interest accrual on financing obligations

 

 

7,500

 

 

 

6,827

 

 

 

7,092

 

Provision for doubtful accounts

 

 

75

 

 

 

667

 

 

 

22

 

Loss on disposal or impairment of property and equipment

 

 

157

 

 

 

141

 

 

 

18

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

2,735

 

 

 

(3,936

)

 

 

(7,800

)

Accrued interest on short-term investments

 

 

7

 

 

 

220

 

 

 

205

 

Prepaid expenses and other current assets

 

 

112

 

 

 

1,626

 

 

 

(1,328

)

Other non-current assets

 

 

759

 

 

 

339

 

 

 

1,380

 

Accounts payable

 

 

(1,372

)

 

 

(1,849

)

 

 

3,418

 

Accrued expenses

 

 

(1,617

)

 

 

990

 

 

 

2,961

 

Accrued compensation and benefits

 

 

(3,097

)

 

 

(3,337

)

 

 

3,310

 

Deferred revenue

 

 

(17,119

)

 

 

(17,690

)

 

 

(1,189

)

Other non-current liabilities

 

 

(248

)

 

 

2,073

 

 

 

332

 

Net cash and cash equivalents used in operating activities

 

 

(5,937

)

 

 

(22,826

)

 

 

(31,545

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of short-term investments held to maturity

 

 

 

 

 

(2,004

)

 

 

(68,185

)

Proceeds from short-term investments held to maturity

 

 

2,000

 

 

 

40,225

 

 

 

32,667

 

Purchases of property and equipment

 

 

(8,279

)

 

 

(12,705

)

 

 

(14,727

)

Net cash and cash equivalents (used in) provided by investing activities

 

 

(6,279

)

 

 

25,516

 

 

 

(50,245

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

Draws on revolving line of credit

 

 

105,000

 

 

 

84,000

 

 

 

57,492

 

Payments on revolving line of credit

 

 

(89,000

)

 

 

(74,000

)

 

 

(44,903

)

Proceeds from exercises of stock options and ESPP

 

 

3,715

 

 

 

6,870

 

 

 

4,229

 

Proceeds from issuance of common stock and

   warrant, net of issuance costs

 

 

 

 

 

 

 

 

74,538

 

Payments of deferred financing costs and debt issuance costs

 

 

 

 

 

(379

)

 

 

(566

)

Remittance of taxes upon vesting of restricted stock units

 

 

 

 

 

(202

)

 

 

(2,116

)

Payments on financing and capital lease obligations

 

 

(9,017

)

 

 

(10,200

)

 

 

(9,884

)

Net cash and cash equivalents provided by financing activities

 

 

10,698

 

 

 

6,089

 

 

 

78,790

 

Net (decrease) increase in cash and cash equivalents

 

 

(1,518

)

 

 

8,779

 

 

 

(3,000

)

Cash and cash equivalents, beginning of year

 

 

56,853

 

 

 

48,074

 

 

 

51,074

 

Cash and cash equivalents, end of year

 

$

55,335

 

 

$

56,853

 

 

$

48,074

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment purchases in accounts

   payable and accrued expenses

 

$

389

 

 

$

699

 

 

$

1,489

 

Property and equipment purchased with financing

   and capital lease obligations

 

$

-

 

 

$

28,032

 

 

$

914

 

Post contract support purchased with financing obligations

 

$

-

 

 

$

1,048

 

 

$

272

 

Allocation of proceeds to deferred revenue from issuance

  of common stock based on relative selling price

 

$

-

 

 

$

-

 

 

$

207

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes paid

 

$

14

 

 

$

7

 

 

$

18

 

Interest paid

 

$

10,911

 

 

$

6,655

 

 

$

6,525

 

 



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,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Reconciliation from Gross Profit to Non-GAAP Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

33,503

 

 

$

30,125

 

 

$

132,579

 

 

$

112,654

 

Amortization of acquired intangible assets

 

 

36

 

 

 

36

 

 

 

141

 

 

 

147

 

Stock-based compensation expense

 

 

705

 

 

 

726

 

 

 

2,508

 

 

 

2,798

 

Total net adjustments

 

 

741

 

 

 

762

 

 

 

2,649

 

 

 

2,945

 

Non-GAAP gross profit

 

$

34,244

 

 

$

30,887

 

 

$

135,228

 

 

$

115,599

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Operating Loss to Non-GAAP Operating Loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

$

(3,782

)

 

$

(5,064

)

 

$

(13,518

)

 

$

(32,168

)

Amortization of acquired intangible assets

 

 

64

 

 

 

63

 

 

 

258

 

 

 

257

 

Stock-based compensation expense

 

 

4,491

 

 

 

4,478

 

 

 

16,137

 

 

 

18,088

 

Costs not core to our business

 

 

578

 

 

 

 

 

 

1,058

 

 

 

 

Total net adjustments

 

 

5,133

 

 

 

4,541

 

 

 

17,453

 

 

 

18,345

 

Non-GAAP operating income (loss)

 

$

1,351

 

 

$

(523

)

 

$

3,935

 

 

$

(13,823

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Net Loss to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(7,004

)

 

$

(7,099

)

 

$

(25,872

)

 

$

(40,058

)

Depreciation

 

 

3,146

 

 

 

2,615

 

 

 

12,391

 

 

 

9,959

 

Amortization of software development costs

 

 

848

 

 

 

776

 

 

 

3,257

 

 

 

2,857

 

Amortization of acquired intangible assets

 

 

64

 

 

 

63

 

 

 

258

 

 

 

257

 

Interest income

 

 

(53

)

 

 

(21

)

 

 

(182

)

 

 

(138

)

Interest expense on building lease financing obligations

 

 

1,865

 

 

 

1,696

 

 

 

7,450

 

 

 

6,826

 

Interest expense on other borrowings

 

 

1,405

 

 

 

404

 

 

 

4,931

 

 

 

1,095

 

Income tax expense

 

 

5

 

 

 

2

 

 

 

15

 

 

 

17

 

Stock-based compensation expense

 

 

4,491

 

 

 

4,478

 

 

 

16,137

 

 

 

18,088

 

Costs not core to our business

 

 

578

 

 

 

 

 

 

1,058

 

 

 

 

Total net adjustments

 

 

12,349

 

 

 

10,013

 

 

 

45,315

 

 

 

38,961

 

Adjusted EBITDA

 

$

5,345

 

 

$

2,914

 

 

$

19,443

 

 

$

(1,097

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Net Loss to Non-GAAP Net Loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(7,004

)

 

$

(7,099

)

 

$

(25,872

)

 

$

(40,058

)

Amortization of acquired intangible assets

 

 

64

 

 

 

63

 

 

 

258

 

 

 

257

 

Stock-based compensation expense

 

 

4,491

 

 

 

4,478

 

 

 

16,137

 

 

 

18,088

 

Costs not core to our business

 

 

578

 

 

 

 

 

 

1,058

 

 

 

 

Total net adjustments

 

 

5,133

 

 

 

4,541

 

 

 

17,453

 

 

 

18,345

 

Non-GAAP net loss

 

$

(1,871

)

 

$

(2,558

)

 

$

(8,419

)

 

$

(21,713

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Non-GAAP Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net loss

 

$

(1,871

)

 

$

(2,558

)

 

$

(8,419

)

 

$

(21,713

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic and diluted

 

 

31,285,263

 

 

 

30,030,164

 

 

 

31,052,378

 

 

 

29,589,857

 

Shares used in computing non-GAAP net loss per share - basic and diluted

 

 

31,285,263

 

 

 

30,030,164

 

 

 

31,052,378

 

 

 

29,589,857

 

Non-GAAP net loss per common share - basic and diluted

 

$

(0.06

)

 

$

(0.09

)

 

$

(0.27

)

 

$

(0.73

)



Benefitfocus, Inc.

 

Unaudited Reconciliation of GAAP to Non-GAAP Guidance Ranges

 

(in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Quarter 2018

 

 

Full Year 2018

 

 

Range

 

 

Range