Benefitfocus, Inc.
Aug 3, 2015

Benefitfocus Announces Second Quarter 2015 Financial Results

Total revenue of $42.7 million grew 32% year-over-year

Added 94 net new large employer customers

CHARLESTON, S.C., Aug. 3, 2015 (GLOBE NEWSWIRE) -- Benefitfocus, Inc. (NASDAQ:BNFT), a leading provider of cloud-based benefits software solutions, today announced its second quarter 2015 financial results.

"Benefitfocus reported strong second quarter financial results that exceeded the high end of our guidance on both the top and bottom line," said Shawn Jenkins, Chief Executive Officer of Benefitfocus. "We saw tremendous demand for our cloud-based platform in what is traditionally the most active quarter in the benefits market, highlighted by a record 94 net new large employer customers."

Jenkins added, "We also had exciting early success with our recently introduced new offerings for the employer market, including BenefitStore and Advanced Analytics, as well as our partnership with SAP. Our expanding product portfolio and distribution reach are helping to further solidify our strong leadership position in the cloud-based benefits administration market. We believe we are well positioned to continue to drive strong growth, improve profitability and generate significant value for our shareholders over time."

Second Quarter 2015 Financial Highlights

Revenue

Non-GAAP Net Loss and Adjusted EBITDA

Balance Sheet and Cash Flow

Second Quarter and Recent Business Highlights

Business Outlook

Based on information available as of August 3, 2015, Benefitfocus is providing guidance for the third quarter and updating full year 2015 as indicated below.

Third Quarter 2015:

Full Year 2015:

Conference Call Details:

In conjunction with this announcement, Benefitfocus will host a conference call today, August 3, 2015 at 5:00 p.m. Eastern Time to discuss the company's financial results. To access this call, dial (855) 233-6991 (domestic) or (317) 586-4497 (international) with conference ID 88817734. 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 (855) 859-2056 (domestic) or (404) 537-3406 (international) until August 10, 2015.

About Benefitfocus

Benefitfocus, Inc. (NASDAQ:BNFT) is a leading provider of cloud-based benefits software solutions for consumers, employers, insurance carriers and brokers. Benefitfocus has served more than 25 million consumers on its platform that consists of an integrated portfolio of products and services enabling clients to more efficiently shop, enroll, manage and exchange benefits information. With a user-friendly interface and consumer-centric design, the Benefitfocus Platform provides one place for consumers to access all their benefits. Benefitfocus solutions support the administration of all types of benefits including core medical, dental and other voluntary benefits plans as well as wellness programs. For more information, visit www.benefitfocus.com.

Non-GAAP Financial Measures

The company uses certain non-GAAP financial measures in this release, including non-GAAP gross profit, operating loss, net loss, net loss per common share and adjusted EBITDA. 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 loss, net loss and net loss per share exclude stock-based compensation expenses and amortization of acquisition-related intangible assets. We define adjusted EBITDA as net loss before net interest, taxes, and depreciation and amortization expense, adjusted to eliminate stock-based compensation expense and expense related to the impairment of goodwill and intangible assets. Please note that other companies might define their non-GAAP financial measures differently than we do.

Management presents certain 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, the inclusion of the non-GAAP financial measures 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: fluctuations in our financial results; general economic risks; the immature and volatile market for our products and services; the need to innovate and provide useful products and services; risks related to changing healthcare and other applicable regulations; our ability to compete effectively; our ability to maintain our culture and recruit and retain qualified personnel; 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.cfm 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.

Benefitfocus, Inc.
Unaudited Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share data)
         
  Three Months Ended
June 30,
Six Months Ended
June 30,
  2015 2014 2015 2014
Revenue  $ 42,708  $ 32,337  $ 85,377  $ 63,033
Cost of revenue (1)(2)  23,640  21,037  46,103  40,263
Gross profit  19,068  11,300  39,274  22,770
Operating expenses:(1)(2)        
 Sales and marketing  15,804  14,067  31,279  25,054
 Research and development  13,271  10,372  25,048  19,150
 General and administrative  6,393  4,272  11,804  7,801
 Total operating expenses  35,468  28,711  68,131  52,005
Loss from operations  (16,400)  (17,411)  (28,857)  (29,235)
Other income (expense):        
Interest income  56  24  74  50
Interest expense on building lease financing obligations  (1,730)  (648)  (3,644)  (1,107)
Interest expense on other borrowings  (210)  (149)  (490)  (278)
Other income (expense)  5  (1)  4  (3)
 Total other expense, net  (1,879)  (774)  (4,056)  (1,338)
Loss before income taxes   (18,279)  (18,185)  (32,913)  (30,573)
Income tax expense   5  15  20  29
Net loss  $ (18,284)  $ (18,200)  $ (32,933)  $ (30,602)
Comprehensive loss  $ (18,284)  $ (18,200)  $ (32,933)  $ (30,602)
         
Net loss per common share:        
 Basic and diluted  $ (0.64)  $ (0.72)  $ (1.19)  $ (1.23)
Weighted-average common shares outstanding:        
 Basic and diluted  28,633,992  25,200,093  27,694,935  24,872,545
         
         
(1) Stock-based compensation included in above line items:        
 Cost of revenue  $ 434  $ 213  $ 754  $ 292
 Sales and marketing  713  371  1,036  535
 Research and development  613  366  1,052  515
 General and administrative  1,021  401  1,775  549
         
(2) Amortization of acquired intangible assets included in
 above line items:
       
 Cost of revenue  $ 59  $ 59  $ 117  $ 117
 Sales and marketing  6  6  13  13
 Research and development  9  10  19  19
 General and administrative  2  2  4  4
 
Benefitfocus, Inc.
Unaudited Consolidated Balance Sheets
(in thousands, except share and per share data)
     
  As of
June 30,
2015
As of
December 31,
2014
Assets    
Current assets:    
Cash and cash equivalents  $ 40,424  $ 51,074
Marketable securities  48,091  5,135
Accounts receivable, net   20,322  21,311
Accounts receivable, related party  1,603  -
Prepaid expenses and other current assets  5,765  4,242
Total current assets   116,205  81,762
Property and equipment, net  54,060  54,021
Intangible assets, net  798  951
Goodwill   1,634  1,634
Other non-current assets  1,507  1,650
Total assets  $ 174,204  $ 140,018
Liabilities and stockholders' equity (deficit)     
Current liabilities:    
Accounts payable  $ 6,835  $ 5,589
Accrued expenses  7,332  9,171
Accrued compensation and benefits  19,242  17,374
Deferred revenue, current portion  31,446  20,384
Financing and capital lease obligations, current portion  4,142  4,197
Total current liabilities  68,997  56,715
Deferred revenue, net of current portion  62,776  74,126
Revolving line of credit, net of current portion  5,246  17,657
Financing and capital lease obligations, net of current portion  31,257  32,240
Other non-current liabilities  2,292  2,103
Total liabilities  170,568  182,841
Commitments and contingencies    
Stockholders' equity (deficit):    
Preferred stock, par value $0.001, 5,000,000 shares authorized,
 no shares issued and outstanding at June 30, 2015
 and December 31, 2014
 --   -- 
Common stock, par value $0.001, 50,000,000 shares authorized,
 28,723,308 and 25,608,937 shares issued and outstanding
 at June 30, 2015 and December 31, 2014, respectively
 29  26
Additional paid-in capital  302,798  223,409
Accumulated deficit  (299,191)  (266,258)
Total stockholders' equity (deficit)  3,636  (42,823)
Total liabilities and stockholders' equity (deficit)  $ 174,204  $ 140,018
 
Benefitfocus, Inc.
Unaudited Consolidated Statements of Cash Flows
(in thousands)
     
  Six Months Ended
June 30,
  2015 2014
Cash flows from operating activities    
Net loss  $ (32,933)  $ (30,602)
Adjustments to reconcile net loss to net cash and cash
 equivalents used in operating activities:
   
Depreciation and amortization  5,726  5,000
Stock-based compensation expense  4,617  1,891
Change in fair value and accretion of warrant  -  446
Interest accrual on financing obligation  3,644  1,107
Loss on disposal or impairment of property and equipment  8  5
Changes in operating assets and liabilities:    
Accounts receivable, net  (614)  2,301
Accrued interest on short-term investments  88  93
Prepaid expenses and other current assets  (1,523)  (368)
Other non-current assets  711  293
Accounts payable  1,427  (2,055)
Accrued expenses  648  125
Accrued compensation and benefits  1,868  4,900
Deferred revenue  (495)  8,977
Other non-current liabilities  189  662
Net cash and cash equivalents used in operating
 activities
 (16,639)  (7,225)
Cash flows from investing activities    
Purchases of short-term investments held to maturity  (51,111)  (12,959)
Proceeds from maturity of short-term investments held to
 maturity
 8,067  9,566
Purchases of property and equipment  (8,054)  (3,730)
Net cash and cash equivalents used in investing activities  (51,098)  (7,123)
Cash flows from financing activities    
Draws on revolving line of credit  22,492  7,000
Payments on revolving line of credit  (34,903)  -
Proceeds from exercises of stock options  1,318  2,244
Proceeds from issuance of common stock and warrant, net of issuance costs  74,538  -
Payments of deferred financing costs and debt issuance costs  (566)  -
Remittance of taxes upon vesting of restricted stock units  (874)  -
Payments on financing and capital lease obligations  (4,918)  (5,316)
Net cash and cash equivalents provided by financing activities  57,087  3,928
Net decrease in cash and cash equivalents  (10,650)  (10,420)
Cash and cash equivalents, beginning of period  51,074  65,645
Cash and cash equivalents, end of period  $ 40,424  $ 55,225
 
Benefitfocus, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(unaudited, in thousands except share and per share data)
         
  Three Months Ended
June 30,
Six Months Ended
June 30,
  2015 2014 2015 2014
Reconciliation from Gross Profit to Non-GAAP Gross Profit:        
Gross profit  $ 19,068  $ 11,300  $ 39,274  $ 22,770
Amortization of acquired intangible assets  59  59  117  117
Stock-based compensation expense  434  213  754  292
Total net adjustments  493  272  871  409
Non-GAAP gross profit  $ 19,561  $ 11,572  $ 40,145  $ 23,179
         
Reconciliation from Operating Loss to Non-GAAP Operating Loss:        
Operating loss  $ (16,400)  $ (17,411)  $ (28,857)  $ (29,235)
Amortization of acquired intangible assets  76  77  153  153
Stock-based compensation expense  2,781  1,351  4,617  1,891
Offering costs expensed  136  424  136  424
Total net adjustments  2,993  1,852  4,906  2,468
Non-GAAP operating loss  $ (13,407)  $ (15,559)  $ (23,951)  $ (26,767)
         
Reconciliation from Net Loss to Adjusted EBITDA:        
Net loss  $ (18,284)  $ (18,200)  $ (32,933)  $ (30,602)
Depreciation  2,156  1,712  4,226  3,384
Amortization of software development costs  671  767  1,347  1,463
Amortization of acquired intangible assets  76  77  153  153
Interest income  (56)  (24)  (74)  (50)
Interest expense on building lease financing obligations  1,730  648  3,644  1,107
Interest expense on other borrowings  210  149  490  278
Income tax (benefit) expense  5  15  20  29
Stock-based compensation expense  2,781  1,351  4,617  1,891
Total net adjustments  7,573  4,695  14,423  8,255
Adjusted EBITDA  $ (10,711)  $ (13,505)  $ (18,510)  $ (22,347)
         
Reconciliation from Net Loss to Non-GAAP Net Loss:        
Net loss  $ (18,284)  $ (18,200)  $ (32,933)  $ (30,602)
Amortization of acquired intangible assets  76  77  153  153
Stock-based compensation expense  2,781  1,351  4,617  1,891
Offering costs expensed  136  424  136  424
Total net adjustments  2,993  1,852  4,906  2,468
Non-GAAP net loss  $ (15,291)  $ (16,348)  $ (28,027)  $ (28,134)
         
Calculation of Non-GAAP Earnings Per Share:        
Non-GAAP net loss  $ (15,291)  $ (16,348)  $ (28,027)  $ (28,134)
         
Weighted average shares outstanding - basic and diluted  28,633,992  25,200,093  27,694,935  24,872,585
Shares used in computing non-GAAP net loss per share - basic and diluted  28,633,992  25,200,093  27,694,935  24,872,585
Non-GAAP net loss per common share - basic and diluted  $ (0.53)  $ (0.65)  $ (1.01)  $ (1.13)
CONTACT: Benefitfocus, Inc.

         843-284-1052 ext. 3527

         pr@benefitfocus.com



         Investor Relations:

         ICR for Benefitfocus, Inc.

         Brian Denyeau

         646-277-1251

         brian.denyeau@icrinc.com

Benefitfocus, Inc. logo

Source: Benefitfocus, Inc.

News Provided by Acquire Media