bnft-8k_20201105.htm
false 0001576169 0001576169 2020-11-05 2020-11-05

 

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) November 5, 2020

 

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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $0.001 Par Value

 

BNFT

 

Nasdaq Global Market

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 November 5, 2020, Benefitfocus, Inc. issued a press release announcing its operating results for the quarter ended September 30, 2020.  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 November 5, 2020

          104                 Cover Page Interactive Data File (embedded within the Inline XBRL document).


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: November 5, 2020

 

/s/ Alpana Wegner

 

 

Alpana Wegner

 

 

Chief Financial Officer

(Principal financial and accounting officer)

 

bnft-ex991_36.htm

 

Exhibit 99.1

Benefitfocus, Inc.

843-981-8898

pr@benefitfocus.com

 

Investor Relations:

Patti Leahy

843-981-8899

ir@benefitfocus.com   

 

 

 

 

Benefitfocus Announces Third Quarter 2020 Financial Results 

 

Exceeds high end of revenue and adjusted EBITDA guidance

Outlines priorities to unlock shareholder value  

 

Charleston, S.C. – November 5, 2020 – Benefitfocus, Inc. (NASDAQ: BNFT), an industry-leading  benefits technology platform that simplifies benefits administration for employers, health plans and brokers, today announces its third quarter 2020 financial results.  

 

Highlights include:  

 

Exceeded guidance for revenue and adjusted EBITDA

 

Enabled key customer implementations:

 

o

Successful first open enrollment for University of Texas System

 

o

Three new large health plan customers initiated use of the company’s end-to-end, quote to pay solution

 

Added new benefit catalog suppliers:

 

o

Financial wellness partners, Lincoln Financial Group and PayActive

 

o

Family planning and reproductive health innovator, Natalist

 

Delivered enhanced digital resources for benefits shopping experience and employee communications

 

“I am pleased to report exceptional third quarter results and am convinced we have the ability to unlock substantial shareholder value,” said Steve Swad, president and chief executive officer of Benefitfocus. “Achieving our enhanced value creation goal is based on three key priorities:  

 

 

First is customer centricity; our team is 100% focused right now on the most important promise we make to our customers, which is to deliver a successful open enrollment.

 

Second is to improve profitability and become the most efficient and best performing company in our industry.

 

And third is a focus on three key strategic areas – enrollment, engagement and data – to drive industry leadership and future growth.”

 

Alpana Wegner, chief financial officer, said, “Benefitfocus exceeded the high end of our guidance for revenue and adjusted EBITDA. This financial performance was driven primarily by the decisive cost-reduction actions initiated earlier this year in response to the pandemic, and efficiencies from our investments in automation and process improvements. As we execute on our three key priorities, we expect to continue to improve profitability and invest in future growth opportunities.”  

 

Third Quarter 2020 Financial Highlights

Revenue

 

Total revenue was $63.6 million, down 11% compared to the third quarter of 2019.


 

 

Software services was $50.6 million, 7% lower compared to the third quarter of 2019. Software services comprise subscription and platform revenue.

 

o

Subscription revenue was $45.0 million, a decrease of 10% compared to the third quarter of 2019.

 

o

Platform revenue was $5.6 million, an increase of 36% compared to the third quarter of 2019.

 

Professional services revenue was $13.0 million, down 26% compared to the third quarter of 2019.

Net Loss

 

GAAP net loss was ($4.4) million, compared to ($12.6) million in the third quarter of 2019. GAAP net loss per share was ($0.19), based on ($6.0) million net loss available to common stockholders and 32.3 million basic and diluted weighted average common shares outstanding, compared to ($0.38) for the third quarter of 2019, based on ($12.6) million net loss available to common stockholders and 32.7 million basic and diluted weighted average common shares outstanding.

Non-GAAP Net Loss, Adjusted EBITDA and Free Cash Flow

 

Non-GAAP net loss was ($1.1) million compared to ($7.5) million in the third quarter of 2019. Non-GAAP net loss per share was ($0.08) and ($0.23) in the third quarter of 2020 and 2019, respectively, based on ($2.7) million and ($7.6) million net loss available to common stockholders and 32.3 million and 32.7 million basic and fully diluted weighted average common shares outstanding for the third quarter of 2020 and 2019, respectively.

 

Adjusted EBITDA was $10.5 million, compared to $2.9 million in the third quarter of 2019.

 

Free cash flow was $11.3 million, compared to ($6.3) in the third quarter of 2019.

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

Balance Sheet

 

Cash and cash equivalents and marketable securities at September 30, 2020 totaled $176.0 million, compared to $183.5 million at the end of the second quarter of 2020.  

 

During the third quarter of 2020, we repurchased $18.8 million of our convertible senior notes at a cost of approximately $14.6 million, which resulted in a gain of $1.1 million.

Business Outlook

Based on information available as of November 5, 2020, Benefitfocus is providing guidance for the fourth quarter and maintaining full year 2020 guidance as indicated below.

Fourth Quarter 2020:

 

Total revenue is expected to be in the range of $68.1 million to $78.1 million.

 

Non-GAAP net income is expected to be between zero and $5 million, or ($0.05) per share based on 32.3 million basic shares outstanding and $0.08 per share based on 35.0 million diluted weighted average common shares outstanding based on a range of between ($1.6) million net loss to $3.0 million net income available to common shareholders.

 

Adjusted EBITDA is expected to be in the range of $11.2 million to $16.2 million.

Full Year 2020:

 

Total revenue is expected to be in the range of $260 million to $270 million.

 

Non-GAAP net loss is expected to be in the range of ($16.0) million to ($11.0) million, or ($0.59) to ($0.44) per share, based on 32.3 million basic and diluted weighted average common shares outstanding.


 

 

Adjusted EBITDA is expected to be in the range of $35 million to $40 million.

 

Free cash flow is expected to be in the range of $10 million to $20 million.

Adjusted EBITDA and free cash flow guidance excludes the impact of restructuring charges.

Management has not reconciled forward-looking non-GAAP net income, non-GAAP net loss, adjusted EBITDA or free cash flow to their most directly comparable GAAP measure of GAAP net income, GAAP net loss or GAAP operating cash flows. This is because we cannot predict with reasonable certainty the ultimate outcome of the various necessary GAAP components of such reconciliations, including, for example, those related to compensation, acquisition transactions and integration, or others that may arise during the year, without unreasonable effort. These components and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts. See below for additional important disclosures regarding our non-GAAP financial measures.

Conference Call Details:

In conjunction with this announcement, Benefitfocus will host a conference call to discuss the company’s financial results and business outlook on Thursday, November 5, 2020, at 5:00 p.m. ET. To access this call, dial (800) 738-1032 (domestic) or (212) 231-2935 (international). A live webcast of the conference call will be available on the Investor Relations page of the company’s website at http://investor.benefitfocus.com/. After the conference call, a replay will be available until November 12, 2020, and can be accessed by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) with passcode 21971109.

 

About Benefitfocus

Benefitfocus (NASDAQ: BNFT) unifies the entire U.S. benefits industry on a single technology platform to protect consumers' health, wealth, property and lifestyle. Our powerful cloud-based software, data-driven insights and thoughtfully-designed services, enable employers, insurance brokers, carriers and suppliers to simplify the complexity of benefits administration and 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/income, net loss/income 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/income and net loss/income per common share exclude stock-based compensation expenses, amortization of acquisition-related intangible assets, transaction and acquisition-related costs expensed, if any, restructuring charges, if any, gain or loss on extinguishment of debt, 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, transaction and acquisition-related costs expensed, restructuring charges, gain or loss on extinguishment of debt, and costs not core to our business. We define free cash flow as cash used in operating activities less capital expenditures, adjusted to eliminate restructuring charges. Beginning in the third quarter of 2020, we revised our definitions of non-GAAP net loss/income and net loss/income per common share and adjusted EBITDA to also exclude gain or loss of extinguishment of debt.  The revisions to these definitions had no impact on our reported non-GAAP net loss/income and net loss/income per common share and adjusted EBITDA for periods prior to the three months ended September 30, 2020. 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: volatility and uncertainty in the global economy and financial markets in light of the evolving COVID-19 pandemic and uncertainties arising from the recent U.S. elections; our continuing losses and need to achieve GAAP profitability; fluctuations in our financial results; our ability to maintain our culture, retain and motivate qualified personnel; the immature and volatile market for our products and services; risks related to changing healthcare and other applicable regulations; risks associated with acquisitions; cyber-security risks; 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 ahttp://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.

Unaudited Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue

 

$

63,583

 

 

$

71,665

 

 

$

191,911

 

 

$

208,543

 

Cost of revenue(1)(2)(3)

 

 

30,113

 

 

 

35,588

 

 

 

94,422

 

 

 

101,242

 

Gross profit

 

 

33,470

 

 

 

36,077

 

 

 

97,489

 

 

 

107,301

 

Operating expenses:(1)(2)(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

12,405

 

 

 

18,527

 

 

 

39,863

 

 

 

57,464

 

Research and development

 

 

11,439

 

 

 

14,088

 

 

 

34,252

 

 

 

41,639

 

General and administrative

 

 

9,424

 

 

 

10,772

 

 

 

29,320

 

 

 

34,353

 

Restructuring costs

 

 

 

 

 

 

 

 

5,616

 

 

 

 

Total operating expenses

 

 

33,268

 

 

 

43,387

 

 

 

109,051

 

 

 

133,456

 

Loss from operations

 

 

202

 

 

 

(7,310

)

 

 

(11,562

)

 

 

(26,155

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

40

 

 

 

673

 

 

 

563

 

 

 

2,095

 

Interest expense

 

 

(5,771

)

 

 

(5,926

)

 

 

(17,524

)

 

 

(17,577

)

Gain on repurchase of convertible senior notes

 

 

1,138

 

 

 

 

 

 

1,138

 

 

 

 

Other (expense) income

 

 

1

 

 

 

3

 

 

 

8

 

 

 

(61

)

Total other expense, net

 

 

(4,592

)

 

 

(5,250

)

 

 

(15,815

)

 

 

(15,543

)

Loss before income taxes

 

 

(4,390

)

 

 

(12,560

)

 

 

(27,377

)

 

 

(41,698

)

Income tax expense

 

 

6

 

 

 

17

 

 

 

17

 

 

 

26

 

Net loss

 

 

(4,396

)

 

 

(12,577

)

 

 

(27,394

)

 

 

(41,724

)

Preferred dividends

 

 

(1,600

)

 

 

 

 

 

(2,062

)

 

 

 

Net loss available to common stockholders

 

$

(5,996

)

 

$

(12,577

)

 

$

(29,456

)

 

$

(41,724

)

Comprehensive loss

 

$

(5,996

)

 

$

(12,577

)

 

$

(29,456

)

 

$

(41,724

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.19

)

 

$

(0.38

)

 

$

(0.91

)

 

$

(1.29

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

32,263,876

 

 

 

32,703,723

 

 

 

32,320,201

 

 

 

32,460,494

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

1,304

 

 

$

798

 

 

$

2,604

 

 

$

2,388

 

Sales and marketing

 

 

766

 

 

 

923

 

 

 

2,240

 

 

 

2,597

 

Research and development

 

 

785

 

 

 

690

 

 

 

1,717

 

 

 

2,600

 

General and administrative

 

 

1,004

 

 

 

2,004

 

 

 

4,298

 

 

 

6,916

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) Amortization of acquired intangible assets included in above line items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

321

 

 

$

305

 

 

$

961

 

 

$

712

 

Sales and marketing

 

 

82

 

 

 

97

 

 

 

256

 

 

 

246

 

Research and development

 

 

119

 

 

 

118

 

 

 

342

 

 

 

289

 

General and administrative

 

 

46

 

 

 

49

 

 

 

146

 

 

 

117

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3) Transaction and acquisition-related costs expensed included in above line items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

$

18

 

 

$

3

 

 

$

425

 

 

$

1,005

 

 



 

Benefitfocus, Inc.

Unaudited Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

As of

September 30,

2020

 

 

As of

December 31,

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

108,240

 

 

$

130,976

 

Marketable securities

 

 

67,807

 

 

 

 

Accounts receivable, net

 

 

29,899

 

 

 

33,754

 

Contract, prepaid and other current assets

 

 

14,021

 

 

 

21,523

 

Total current assets

 

 

219,967

 

 

 

186,253

 

Property and equipment, net

 

 

30,502

 

 

 

28,669

 

Financing lease right-of-use assets

 

 

70,970

 

 

 

78,520

 

Operating lease right-of-use assets

 

 

1,467

 

 

 

1,715

 

Intangible assets, net

 

 

10,962

 

 

 

12,667

 

Goodwill

 

 

12,857

 

 

 

12,857

 

Deferred contract costs and other non-current assets

 

 

9,987

 

 

 

11,002

 

Total assets

 

$

356,712

 

 

$

331,683

 

Liabilities and stockholders' deficit

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,475

 

 

$

9,563

 

Accrued expenses

 

 

8,116

 

 

 

10,526

 

Accrued compensation and benefits

 

 

15,736

 

 

 

15,246

 

Deferred revenue, current portion

 

 

28,239

 

 

 

33,429

 

Lease liabilities and financing obligations, current portion

 

 

6,297

 

 

 

6,871

 

Total current liabilities

 

 

60,863

 

 

 

75,635

 

Deferred revenue, net of current portion

 

 

4,543

 

 

 

5,079

 

Convertible senior notes

 

 

181,486

 

 

 

187,949

 

Lease liabilities and financing obligations, net current portion

 

 

80,885

 

 

 

88,572

 

Other non-current liabilities

 

 

3,582

 

 

 

92

 

Total liabilities

 

 

331,359

 

 

 

357,327

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Redeemable preferred stock:

 

 

 

 

 

 

 

 

Series A preferred stock, par value $0.001, 5,000,000 shares

  authorized, 1,777,778 and 0 shares issued and outstanding

  at September 30, 2020 and December 31, 2019, respectively,

  liquidation preference $45 per share as of September 30, 2020

 

 

79,193

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

Common stock, par value $0.001, 50,000,000 shares authorized,

   32,288,044 and 32,788,980 shares issued and outstanding

   at September 30, 2020 and December 31, 2019, respectively

 

 

32

 

 

 

33

 

Additional paid-in capital

 

 

425,283

 

 

 

426,025

 

Accumulated deficit

 

 

(479,155

)

 

 

(451,702

)

Total stockholders' deficit

 

 

(53,840

)

 

 

(25,644

)

Total liabilities, redeemable preferred stock and stockholders' deficit

 

$

356,712

 

 

$

331,683

 

 



 

Benefitfocus, Inc.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

 

 

Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(27,394

)

 

$

(41,724

)

Adjustments to reconcile net loss to net cash and cash

   equivalents used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

18,479

 

 

 

16,629

 

Stock-based compensation expense

 

 

10,859

 

 

 

14,501

 

Accretion of interest on convertible senior notes

 

 

8,834

 

 

 

8,377

 

Interest accrual on finance lease liabilities

 

 

71

 

 

 

25

 

Rent expense less than payments

 

 

(24

)

 

 

(6

)

Non-cash interest income for short-term investments

 

 

16

 

 

 

 

Gain on extinguishment of debt

 

 

(1,138

)

 

 

 

Provision for doubtful accounts

 

 

111

 

 

 

108

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

3,685

 

 

 

(12,791

)

Accrued interest on short-term investments

 

 

(38

)

 

 

 

Contract, prepaid and other current assets

 

 

7,502

 

 

 

1,282

 

Deferred costs and other non-current assets

 

 

1,014

 

 

 

3,746

 

Accounts payable and accrued expenses

 

 

(9,157

)

 

 

(642

)

Accrued compensation and benefits

 

 

490

 

 

 

(1,524

)

Deferred revenue

 

 

(5,726

)

 

 

(11,427

)

Other non-current liabilities

 

 

3,490

 

 

 

(69

)

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

 

 

11,074

 

 

 

(23,515

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchases of short term investments held to maturity

 

 

(67,785

)

 

 

 

Business combination, net of cash acquired

 

 

 

 

 

(20,914

)

Purchases of property and equipment

 

 

(9,739

)

 

 

(10,604

)

Net cash and cash equivalents used in investing activities

 

 

(77,524

)

 

 

(31,518

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

Draws on revolving line of credit

 

 

10,000

 

 

 

 

Payments on revolving line of credit

 

 

(10,000

)

 

 

 

Repurchase of convertible senior notes

 

 

(14,619

)

 

 

 

Payments of debt issuance costs

 

 

(154

)

 

 

(357

)

Cancellation of convertible senior notes capped call hedge

 

 

26

 

 

 

 

Proceeds from issuance of preferred stock, net of issuance costs

 

 

79,192

 

 

 

 

Payments of preferred dividends

 

 

(2,062

)

 

 

 

Repurchase of common stock

 

 

(9,667

)

 

 

 

Proceeds from exercises of stock options and ESPP

 

 

513

 

 

 

305

 

Payments on financing obligations

 

 

(635

)

 

 

(1,032

)

Payments of principal on finance lease liabilities

 

 

(8,880

)

 

 

(4,112

)

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

 

 

43,714

 

 

 

(5,196

)

Net decrease in cash and cash equivalents

 

 

(22,736

)

 

 

(60,229

)

Cash and cash equivalents, beginning of period

 

 

130,976

 

 

 

190,928

 

Cash and cash equivalents, end of period

 

$

108,240

 

 

$

130,699

 

 



 

Benefitfocus, Inc.

Unaudited Reconciliation of GAAP to Non-GAAP Measures

(in thousands, except share and per share date)


 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Reconciliation from Gross Profit to Non-GAAP Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

33,470

 

 

$

36,077

 

 

$

97,489

 

 

$

107,301

 

Amortization of acquired intangible assets

 

 

321

 

 

 

305

 

 

 

961

 

 

 

712

 

Stock-based compensation expense

 

 

1,304

 

 

 

798

 

 

 

2,604

 

 

 

2,388

 

Total net adjustments

 

 

1,625

 

 

 

1,103

 

 

 

3,565

 

 

 

3,100

 

Non-GAAP gross profit

 

$

35,095

 

 

$

37,180

 

 

$

101,054

 

 

$

110,401

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Operating Income (Loss) to Non-GAAP Operating Income (Loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

202

 

 

$

(7,310

)

 

$

(11,562

)

 

$

(26,155

)

Amortization of acquired intangible assets

 

 

568

 

 

 

569

 

 

 

1,705

 

 

 

1,364

 

Stock-based compensation expense

 

 

3,859

 

 

 

4,415

 

 

 

10,859

 

 

 

14,501

 

Transaction and acquisition-related costs expensed

 

 

18

 

 

 

3

 

 

 

425

 

 

 

1,005

 

Costs not core to our business

 

 

 

 

 

63

 

 

 

 

 

 

649

 

Total net adjustments

 

 

4,445

 

 

 

5,050

 

 

 

12,989

 

 

 

17,519

 

Non-GAAP operating income (loss)

 

$

4,647

 

 

$

(2,260

)

 

$

1,427

 

 

$

(8,636

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Net Loss to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(4,396

)

 

$

(12,577

)

 

$

(27,394

)

 

$

(41,724

)

Depreciation

 

 

3,774

 

 

 

3,848

 

 

 

11,496

 

 

 

11,505

 

Amortization of software development costs

 

 

2,032

 

 

 

1,263

 

 

 

5,278

 

 

 

3,760

 

Amortization of acquired intangible assets

 

 

568

 

 

 

569

 

 

 

1,705

 

 

 

1,364

 

Interest income

 

 

(40

)

 

 

(673

)

 

 

(563

)

 

 

(2,095

)

Interest expense

 

 

5,771

 

 

 

5,926

 

 

 

17,524

 

 

 

17,577

 

Income tax expense

 

 

6

 

 

 

17

 

 

 

17

 

 

 

26

 

Stock-based compensation expense

 

 

3,859

 

 

 

4,415

 

 

 

10,859

 

 

 

14,501

 

Transaction and acquisition-related costs expensed

 

 

18

 

 

 

3

 

 

 

425

 

 

 

1,005

 

Restructuring costs

 

 

 

 

 

 

 

 

5,616

 

 

 

 

Gain on repurchase of convertible senior notes

 

 

(1,138

)

 

 

 

 

 

(1,138

)

 

 

 

Costs not core to our business

 

 

 

 

 

63

 

 

 

 

 

 

649

 

Total net adjustments

 

 

14,850

 

 

 

15,431

 

 

 

51,219

 

 

 

48,292

 

Adjusted EBITDA

 

$

10,454

 

 

$

2,854

 

 

$

23,825

 

 

$

6,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Net Loss to Non-GAAP Net Loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(4,396

)

 

$

(12,577

)

 

$

(27,394

)

 

$

(41,724

)

Amortization of acquired intangible assets

 

 

568

 

 

 

569

 

 

 

1,705

 

 

 

1,364

 

Stock-based compensation expense

 

 

3,859

 

 

 

4,415

 

 

 

10,859

 

 

 

14,501

 

Transaction and acquisition-related costs expensed

 

 

18

 

 

 

3

 

 

 

425

 

 

 

1,005

 

Gain on repurchase of convertible senior notes

 

 

(1,138

)

 

 

 

 

 

(1,138

)

 

 

 

Costs not core to our business

 

 

 

 

 

63

 

 

 

 

 

 

649

 

Total net adjustments

 

 

3,307

 

 

 

5,050

 

 

 

11,851

 

 

 

17,519

 

Non-GAAP net loss

 

$

(1,089

)

 

$

(7,527

)

 

$

(15,543

)

 

$

(24,205

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Non-GAAP Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net loss

 

$

(1,089

)

 

$

(7,527

)

 

$

(15,543

)

 

$

(24,205

)

Preferred dividends

 

 

(1,600

)

 

 

 

 

 

(2,062

)

 

 

 

Non-GAAP net loss available to common stockholders

 

$

(2,689

)

 

$

(7,527

)

 

$

(17,605

)

 

$

(24,205

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic and diluted

 

 

32,263,876

 

 

 

32,703,723

 

 

 

32,320,201

 

 

 

32,460,494

 

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

 

 

32,263,876

 

 

 

32,703,723

 

 

 

32,320,201

 

 

 

32,460,494

 

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

 

$

(0.08

)

 

$

(0.23

)

 

$

(0.54

)

 

$

(0.75

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Cash Flows from Operations to Free Cash Flow:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

13,208

 

 

$

(3,054

)

 

$

11,074

 

 

$

(23,515

)

Purchases of property and equipment

 

 

(2,664

)

 

 

(3,203

)

 

 

(9,739

)

 

 

(10,604

)

Cash paid for restructuring costs

 

 

745

 

 

 

 

 

 

5,201

 

 

 

 


 

<

Total net adjustments