UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
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(Commission File Number) |
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(IRS Employer Identification No.) |
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Registrant's telephone number, including area code (
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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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:
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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 8, 2021, Benefitfocus, Inc. issued a press release announcing its operating results for the quarter ended December 31, 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 March 8, 2021
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.
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BENEFITFOCUS, INC. |
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Date: March 8, 2021 |
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/s/ Alpana Wegner |
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Alpana Wegner |
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Chief Financial Officer (Principal financial and accounting officer) |
Exhibit 99.1
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Benefitfocus, Inc. 843-981-8898 pr@benefitfocus.com
Investor Relations: Patti Leahy 843-981-8899 ir@benefitfocus.com |
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Benefitfocus Announces Fourth Quarter and Full Year 2020 Financial Results
Delivers record Q4 adjusted EBITDA of $20.2 million, GAAP EPS of $0.04 and non-GAAP EPS of $0.18
Executing on clear priorities to drive growth and operating leverage
Charleston, S.C. – March 8, 2021 – Benefitfocus, Inc. (NASDAQ: BNFT), an industry-leading benefits technology platform that simplifies benefits administration for employers, health plans and brokers, today announces its fourth quarter and full year 2020 financial results.
Highlights include:
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Met or exceeded all fourth quarter and full year 2020 guidance metrics including revenue, adjusted EBITDA and free cash flow; |
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Augmented leadership team with hiring of first chief data officer to solidify the company as a leading, data-driven benefits technology platform; |
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Enhanced Benefit Catalog including partnership with Transamerica to enable integrated retirement plan enrollment directly through Benefitplace™; |
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Invested to remove friction in benefits management and improve the customer experience through AI-backed platform enrollment enhancements; and |
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Strengthened corporate governance and continued to enhance independence of company’s board structure. |
“Benefitfocus continues to execute on its strategies to drive industry leadership and accelerate growth,” said Steve Swad, president and chief executive officer of Benefitfocus. “The investments we made in operational excellence, automation and enhanced customer interactions resulted in our best open enrollment yet.” Swad added, “To drive future growth, we are focused on simplifying the enrollment of benefits, improving our customers’ engagement with their benefits, and using data to personalize our offerings and create products that lower health care costs. I am confident we have the right strategy, the right assets and are building the right leadership team to unlock substantial shareholder value.”
“For the fourth quarter and full year, we delivered record EBITDA and free cash flow, moving us further towards our goal to become the most efficient and best-performing company in our industry,” said Alpana Wegner, chief financial officer of Benefitfocus. “I am pleased with the strong foundation we have established to deliver increased profitability and free cash flow, and remain focused on driving continued operating leverage in the business.”
Fourth Quarter 2020 Financial Highlights
Revenue
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Total revenue was $76.2 million, down 13% compared to the fourth quarter of 2019. |
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Software services was $62.3 million, 9% lower compared to the fourth quarter of 2019. Software services is comprised of subscription and platform revenue. |
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Subscription revenue was $44.9 million, a decrease of 9% compared to the fourth quarter of 2019. |
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Platform revenue was $17.4 million, a decrease of 8% compared to the fourth quarter of 2019. |
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Professional services revenue was $13.9 million, down 26% compared to the fourth quarter of 2019. |
Net Income (Loss)
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GAAP net income was $3.1 million, compared to ($3.8) million in the fourth quarter of 2019. GAAP net income per share was $0.04, based on $1.3 million net income available to common stockholders and 33.5 million fully diluted weighted average common shares outstanding, compared to ($0.12) for the fourth quarter of 2019, based on ($3.8) million net loss available to common stockholders and 32.8 million basic and diluted weighted average common shares outstanding. |
Non-GAAP Net Income, Adjusted EBITDA and Free Cash Flow
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Non-GAAP net income was $8.7 million compared to $1.9 million in the fourth quarter of 2019. Non-GAAP net income per share was $0.18, based on $6.1 million net income available to common stockholders and 34.5 million fully diluted weighted average common shares outstanding, compared to $0.06 in the fourth quarter of 2019, based $1.9 million net income available to common stockholders and 33.2 million fully diluted weighted average common shares outstanding. |
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Adjusted EBITDA was $20.2 million, compared to $12.5 million in the fourth quarter of 2019. |
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Free cash flow was $13.4 million, compared to $2.5 million in the fourth quarter of 2019. |
See important disclosures about non-GAAP measures, and a reconciliation of them to GAAP, below.
Full Year 2020 Financial Highlights
Revenue
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Total revenue was $268.1 million, down 9% compared to the full year 2019. |
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Software services was $214.8 million, 6% lower compared to the full year 2019. Software services is comprised of subscription and platform revenue. |
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Subscription revenue was $179.7 million, a decrease of 8% compared to the full year 2019. |
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Platform revenue was $35.1 million, an increase of 4% compared to the full year 2019. |
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Professional services revenue was $53.3 million, down 20% compared to the full year 2019. |
Net Loss
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GAAP net loss was ($24.3) million, compared to ($45.5) million in the full year 2019. GAAP net loss per share was ($0.87), based on ($28.0) million net loss available to common stockholders and 32.3 million basic and diluted weighted average common shares outstanding, compared to ($1.40) for the full year 2019, based on ($45.5) million net loss available to common stockholders and 32.5 million basic and diluted weighted average common shares outstanding. |
Non-GAAP Net Loss, Adjusted EBITDA and Free Cash Flow
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Non-GAAP net loss was ($6.8) million, compared to ($22.3) million in the full year 2019. Non-GAAP net loss per share was ($0.32), based on ($10.5) million Non-GAAP net loss available to common stockholders and 32.3 million basic and diluted weighted average common shares outstanding, compared to ($0.69) for the full year 2019, based |
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on ($22.3) million net loss available to common stockholders and 32.5 million basic and diluted weighted average common shares outstanding. |
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Adjusted EBITDA was $44.0 million, compared to $19.0 million in the full year 2019. |
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Free cash flow was $19.9 million, compared to ($31.6) million in the full year 2019. |
See important disclosures about non-GAAP measures, and a reconciliation of them to GAAP, below.
Balance Sheet
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Cash and cash equivalents and marketable securities at December 31, 2020 totaled $185.8 million, compared to $176.0 million at the end of the third quarter of 2020. |
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The full $50.0 million line of credit remains available to the Company. |
Business Outlook
Based on information available as of March 8, 2021, Benefitfocus is providing guidance for the first quarter and full year 2021 as indicated below. Adjusted EBITDA and free cash flow guidance excludes the impact of restructuring charges.
First Quarter 2021
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Total revenue is expected to be in the range of $59 million to $61 million. |
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Adjusted EBITDA is expected to be in the range of $9 million to $11 million. |
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Non-GAAP net loss is expected to be between $5.1 and $3.1 million, or between ($0.16) and ($0.10) per share based on 32.3 million basic shares outstanding. |
Full Year 2021
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Total revenue is expected to be in the range of $254 million to $260 million. |
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Adjusted EBITDA is expected to be in the range of $44 million to $50 million. |
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Free cash flow is expected to be in the range of $20 million to $26 million. |
In addition, Benefitfocus is providing mid-term financial targets and an update on continued enhancements to the company’s board structure as part of its conference call today.
Management has not reconciled forward-looking non-GAAP net loss, adjusted EBITDA or free cash flow to their most directly comparable GAAP measure of 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 Monday, March 8, 2021, at 5:00 p.m. ET. To access this call, dial (877) 407-9208 (domestic) or (201) 493-6784 (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 March 15, 2021, and can be accessed by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) with passcode 13715704.
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, restructuring charges, expense related to the impairment of goodwill, intangible assets and long-lived assets, gain or loss on extinguishment of debt, and costs not core to our business. 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, intangible assets and long-lived 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 fourth quarter of 2020, we revised our definition of non-GAAP net loss/income and net loss/income per common share to also exclude expense related to the impairment of goodwill, intangible assets and long-lived assets. Additionally, we revised our definition of adjusted EBITDA to also exclude expense related to the impairment of long-lived assets, restructuring charges and gains or loss on 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 December 31, 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 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.
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Benefitfocus, Inc. |
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Consolidated Statements of Operations and Comprehensive Loss |
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(in thousands, except share and per share data) |
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Three Months Ended |
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Year Ended |
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December 31, |
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December 31, |
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2020 |
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2019 |
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2020 |
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2019 |
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Revenue |
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$ |
76,230 |
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$ |
87,143 |
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$ |
268,141 |
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$ |
295,686 |
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Cost of revenue (1)(2)(3) |
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34,966 |
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42,848 |
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129,388 |
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144,090 |
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Gross profit |
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41,264 |
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44,295 |
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138,753 |
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151,596 |
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Operating expenses:(1)(2)(3) |
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Sales and marketing |
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12,347 |
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18,585 |
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52,210 |
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76,049 |
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Research and development |
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11,923 |
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13,085 |
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46,175 |
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54,724 |
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General and administrative |
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8,400 |
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10,976 |
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37,720 |
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45,329 |
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Restructuring costs |
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– |
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– |
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5,616 |
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– |
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Total operating expenses |
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32,670 |
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42,646 |
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141,721 |
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176,102 |
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Income (loss) from operations |
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8,594 |
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1,649 |
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(2,968 |
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(24,506 |
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Other income (expense): |
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Interest income |
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69 |
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518 |
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632 |
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2,613 |
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Interest expense |
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(5,547 |
) |
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(5,947 |
) |
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(23,071 |
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(23,524 |
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Gain on repurchase of convertible senior notes |
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– |
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– |
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1,138 |
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– |
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Other (expense) income |
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(14 |
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(10 |
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(6 |
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(71 |
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Total other expense, net |
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(5,492 |
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(5,439 |
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(21,307 |
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(20,982 |
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Income (loss) before income taxes |
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3,102 |
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(3,790 |
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(24,275 |
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(45,488 |
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Income tax expense |
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5 |
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1 |
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22 |
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27 |
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Net income (loss) |
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3,097 |
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(3,791 |
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(24,297 |
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(45,515 |
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Preferred dividends |
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(1,600 |
) |
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– |
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(3,662 |
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– |
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Undistributed earnings allocated to preferred stockholders |
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(212 |
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– |
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– |
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– |
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Net income (loss) available to common stockholders |
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$ |
1,285 |
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$ |
(3,791 |
) |
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$ |
(27,959 |
) |
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$ |
(45,515 |
) |
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Comprehensive income (loss) |
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$ |
3,097 |
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$ |
(3,791 |
) |
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$ |
(24,297 |
) |
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$ |
(45,515 |
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Net income (loss) per common share: |
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Basic |
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$ |
0.04 |
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$ |
(0.12 |
) |
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$ |
(0.87 |
) |
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$ |
(1.40 |
) |
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Diluted |
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$ |
0.04 |
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$ |
(0.12 |
) |
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$ |
(0.87 |
) |
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$ |
(1.40 |
) |
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Weighted-average common shares outstanding: |
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Basic |
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32,312,246 |
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32,774,924 |
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32,318,201 |
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32,539,748 |
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Diluted |
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33,512,904 |
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32,774,924 |
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32,318,201 |
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32,539,748 |
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(1) Stock-based compensation included in above line items: |
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Cost of revenue |
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$ |
1,099 |
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$ |
1,181 |
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$ |
3,703 |
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$ |
3,569 |
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Sales and marketing |
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|
841 |
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1,202 |
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3,081 |
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3,799 |
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Research and development |
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838 |
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|
665 |
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|
2,555 |
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3,265 |
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General and administrative |
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|
900 |
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2,023 |
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5,198 |
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8,939 |
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(2) Amortization of acquired intangible assets included in above line items: |
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Cost of revenue |
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$ |
330 |
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$ |
317 |
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$ |
1,291 |
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$ |
1,029 |
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Sales and marketing |
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75 |
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|
91 |
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|
331 |
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|
337 |
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Research and development |
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118 |
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|
111 |
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|
460 |
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|
400 |
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General and administrative |
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|
46 |
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|
50 |
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|
192 |
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|
167 |
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Benefitfocus, Inc. |
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Consolidated Balance Sheets |
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(in thousands, except share and per share data) |
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As of December 31, |
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2020 |
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2019 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
90,706 |
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$ |
130,976 |
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Marketable securities |
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95,085 |
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– |
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Accounts receivable, net |
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22,240 |
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|
33,754 |
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Contract, prepaid and other current assets |
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21,354 |
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21,523 |
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Total current assets |
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229,385 |
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|
186,253 |
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Property and equipment, net |
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29,701 |
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|
28,669 |
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Financing lease right-of-use assets |
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68,670 |
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78,520 |
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Operating lease right-of-use assets |
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1,107 |
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|
1,715 |
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Intangible assets, net |
|
|
10,393 |
|
|
|
12,667 |
|
|
|
Goodwill |
|
|
12,857 |
|
|
|
12,857 |
|
|
|
Deferred contract costs and other non-current assets |
|
|
10,259 |
|
|
|
11,002 |
|
|
|
Total assets |
|
$ |
362,372 |
|
|
$ |
331,683 |
|
|
|
Liabilities and stockholders' deficit |
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
2,160 |
|
|
$ |
9,563 |
|
|
|
Accrued expenses |
|
|
6,262 |
|
|
|
10,526 |
|
|
|
Accrued compensation and benefits |
|
|
19,129 |
|
|
|
15,246 |
|
|
|
Deferred revenue, current portion |
|
|
27,782 |
|
|
|
33,429 |
|
|
|
Lease liabilities and financing obligations, current portion |
|
|
5,959 |
|
|
|
6,871 |
|
|
|
Total current liabilities |
|
|
61,292 |
|
|
|
75,635 |
|
|
|
Deferred revenue, net of current portion |
|
|
4,422 |
|
|
|
5,079 |
|
|
|
Convertible senior notes |
|
|
184,308 |
|
|
|
187,949 |
|
|
|
Lease liabilities and financing obligations, net of current portion |
|
|
79,282 |
|
|
|
88,572 |
|
|
|
Other non-current liabilities |
|
|
2,470 |
|
|
|
92 |
|
|
|
Total liabilities |
|
|
331,774 |
|
|
|
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 December 31, 2020 and 2019, respectively, liquidation preference $45 per share as of December 31, 2020 |
|
|
79,193 |
|
|
|
– |
|
|
|
Stockholders' deficit: |
|
|
|
|
|
|
|
|
|
|
Common stock, par value $0.001, 50,000,000 shares authorized, 32,327,439 and 32,788,980 shares issued and outstanding at December 31, 2020 and 2019, respectively |
|
|
32 |
|
|
|
33 |
|
|
|
Additional paid-in capital |
|
|
427,431 |
|
|
|
426,025 |
|
|
|
Accumulated deficit |
|
|
(476,058 |
) |
|
|
(451,702 |
) |
|
|
Total stockholders' deficit |
|
|
(48,595 |
) |
|
|
(25,644 |
) |
|
|
Total liabilities, redeemable preferred stock and stockholders' deficit |
|
$ |
362,372 |
|
|
$ |
331,683 |
|
|
|
Benefitfocus, Inc. |
|
|||||||||||
|
Consolidated Statements of Cash Flows |
|
|||||||||||
|
(in thousands) |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|||||||||
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2018 |
|
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(24,297 |
) |
|
$ |
(45,515 |
) |
|
$ |
(52,627 |
) |
|
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
25,014 |
|
|
|
22,351 |
|
|
|
15,815 |
|
|
Stock-based compensation expense |
|
|
14,537 |
|
|
|
19,572 |
|
|
|
28,868 |
|
|
Accretion of interest on convertible senior notes |
|
|
11,656 |
|
|
|
11,256 |
|
|
|
– |
|
|
Interest accrual on finance lease liabilities |
|
|
97 |
|
|
|
33 |
|
|
|
– |
|
|
Interest accrual on financing obligations (prior to adoption of ASC 842) |
|
|
– |
|
|
|
– |
|
|
|
7,521 |
|
|
Rent payments in excess of expense |
|
|
(32 |
) |
|
|
(16 |
) |
|
|
– |
|
|
Non-cash interest income for short-term investments |
|
|
143 |
|
|
|
– |
|
|
|
– |
|
|
Loss on disposal or impairment of property and equipment |
|
|
918 |
|
|
|
9 |
|
|
|
7 |
|
|
Gain on extinguishment of debt |
|
|
(1,138 |
) |
|
|
– |
|
|
|
– |
|
|
Provision for doubtful accounts |
|
|
43 |
|
|
|
111 |
|
|
|
364 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
11,412 |
|
|
|
(11,875 |
) |
|
|
8,650 |
|
|
Accrued interest on short-term investments |
|
|
(102 |
) |
|
|
– |
|
|
|
– |
|
|
Contract, prepaid and other current assets |
|
|
169 |
|
|
|
(3,642 |
) |
|
|
(570 |
) |
|
Deferred costs and other non-current assets |
|
|
743 |
|
|
|
2,893 |
|
|
|
3,137 |
|
|
Accounts payable and accrued expenses |
|
|
(11,468 |
) |
|
|
426 |
|
|
|
6,566 |
|
|
Accrued compensation and benefits |
|
|
3,884 |
|
|
|
161 |
|
|
|
649 |
|
|
Deferred revenue |
|
|
(6,304 |
) |
|
|
(14,047 |
) |
|
|
(9,165 |
) |
|
Other non-current liabilities |
|
|
2,376 |
|
|
|
(92 |
) |
|
|
(234 |
) |
|
Net cash and cash equivalents provided by (used in) operating activities |
|
|
27,651 |
|
|
|
(18,375 |
) |
|
|
8,981 |
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of short-term investments held to maturity |
|
|
(104,125 |
) |
|
|
– |
|
|
|
– |
|
|
Proceeds from short-term investments held to maturity |
|
|
9,000 |
|
|
|
– |
|
|
|
– |
|
|
Business combination, net of cash acquired |
|
|
– |
|
|
|
(20,914 |
) |
|
|
– |
|
|
Purchases of property and equipment |
|
|
(13,085 |
) |
|
|
(13,248 |
) |
|
|
(8,290 |
) |
|
Net cash and cash equivalents used in investing activities |
|
|
(108,210 |
) |
|
|
(34,162 |
) |
|
|
(8,290 |
) |
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Draws on revolving line of credit |
|
|
10,000 |
|
|
|
– |
|
|
|
115,000 |
|
|
Payments on revolving line of credit |
|
|
(10,000 |
) |
|
|
– |
|
|
|
(171,246 |
) |
|
Proceeds from issuance of convertible senior notes |
|
|
– |
|
|
|
– |
|
|
|
240,000 |
|
|
Repurchase of convertible senior notes |
|
|
(14,619 |
) |
|
|
– |
|
|
|
– |
|
|
Payments of debt issuance costs |
|
|
(154 |
) |
|
|
(357 |
) |
|
|
(6,000 |
) |
|
Purchase of convertible note capped call hedge |
|
|
– |
|
|
|
– |
|
|
|
(33,024 |
) |
|
Cancellation of convertible note capped call hedge |
|
|
26 |
|
|
|
– |
|
|
|
– |
|
|
Proceeds from issuance of preferred stock, net of issuance costs |
|
|
79,192 |
|
|
|
– |
|
|
|
– |
|
|
Payment of preferred dividends |
|
|
(3,662 |
) |
|
|
– |
|
|
|
– |
|
|
Repurchase of common stock |
|
|
(9,667 |
) |
|
|
– |
|
|
|
– |
|
|
Proceeds from exercises of stock options and ESPP |
|
|
585 |
|
|
|
453 |
|
|
|
712 |
|
|
Payments on capital lease and financing obligations |
|
|
(1,212 |
) |
|
|
(1,627 |
) |
|
|
(10,540 |
) |
|
Payments of principal on finance lease liabilities |
|
|
(10,200 |
) |
|
|
(5,884 |
) |
|
|
– |
|
|
Net cash and cash equivalents provided by (used in) financing activities |
|
|
40,289 |
|
|
|
(7,415 |
) |
|
|
134,902 |
|
|
Net (decrease) increase in cash and cash equivalents |
|
|
(40,270 |
) |
|
|
(59,952 |
) |
|
|
135,593 |
|
|
Cash and cash equivalents, beginning of year |
|
|
130,976 |
|
|
|
190,928 |
|
|
|
55,335 |
|
|
Cash and cash equivalents, end of year |
|
$ |
90,706 |
|
|
$ |
130,976 |
|
|
$ |
190,928 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash investing and financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment purchases in accounts payable and accrued expenses |
|
$ |
142 |
|
|
$ |
154 |
|
|
$ |
244 |
|
|
Property and equipment purchased with financing and capital lease obligations (prior to adoption of ASC 842) |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
4,810 |
|
|
Post contract support purchased with financing obligations |
|
$ |
- |
|
|
$ |
1,287 |
|
|
$ |
790 |
|
|
Debt issuance costs included in accounts payable and accrued expenses |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
358 |
|
|
Supplemental disclosure of cash flow information |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes paid |
|
$ |
22 |
|
|
$ |
28 |
|
|
$ |
28 |
|
|
Interest paid |
|
$ |
11,408 |
|
|
$ |
12,374 |
|
|
$ |
11,884 |
|
|
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, |
|
||||||||||
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
|
Reconciliation from Gross Profit to Non-GAAP Gross Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
41,264 |
|
|
$ |
44,295 |
|
|
$ |
138,753 |
|
|
$ |
151,596 |
|
|
Amortization of acquired intangible assets |
|
|
330 |
|
|
|
317 |
|
|
|
1,291 |
|
|
|
1,029 |
|
|
Stock-based compensation expense |
|
|
1,099 |
|
|
|
1,181 |
|
|
|
3,703 |
|
|
|
3,569 |
|
|
Impairment of long-lived assets |
|
|
468 |
|
|
|
— |
|
|
|
468 |
|
|
|
— |
|
|
Total net adjustments |
|
|
1,897 |
|
|
|
1,498 |
|
|
|
5,462 |
|
|
|
4,598 |
|
|
Non-GAAP gross profit |
|
$ |
43,161 |
|
|
$ |
45,793 |
|
|
$ |
144,215 |
|
|
$ |
156,194 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from Operating Income (Loss) to Non-GAAP Operating Income (Loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
$ |
8,594 |
|
|
$ |
1,649 |
|
|
$ |
(2,968 |
) |
|
$ |
(24,506 |
) |
|
Amortization of acquired intangible assets |
|
|
569 |
|
|
|
569 |
|
|
|
2,274 |
|
|
|
1,933 |
|
|
Stock-based compensation expense |
|
|
3,678 |
|
|
|
5,071 |
|
|
|
14,537 |
|
|
|
19,572 |
|
|
Transaction and acquisition-related costs expensed |
|
|
25 |
|
|
|
30 |
|
|
|
450 |
|
|
|
1,035 |
|
|
Impairment of long-lived assets |
|
|
916 |
|
|
|
— |
|
|
|
916 |
|
|
|
— |
|
|
Costs not core to our business |
|
|
457 |
|
|
|
— |
|
|
|
457 |
|
|
|
649 |
|
|
Total net adjustments |
|
|
5,645 |
|
|
|
5,670 |
|
|
|
18,634 |
|
|
|
23,189 |
|
|
Non-GAAP operating income (loss) |
|
$ |
14,239 |
|
|
$ |
7,319 |
|
|
$ |
15,666 |
|
|
$ |
(1,317 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from Net Income (Loss) to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
3,097 |
|
|
$ |
(3,791 |
) |
|
$ |
(24,297 |
) |
|
$ |
(45,515 |
) |
|
Depreciation |
|
|
3,789 |
|
|
|
3,783 |
|
|
|
15,285 |
|
|
|
15,288 |
|
|
Amortization of software development costs |
|
|
2,177 |
|
|
|
1,370 |
|
|
|
7,455 |
|
|
|
5,130 |
|
|
Amortization of acquired intangible assets |
|
|
569 |
|
|
|
569 |
|
|
|
2,274 |
|
|
|
1,933 |
|
|
Interest income |
|
|
(69 |
) |
|
|
(518 |
) |
|
|
(632 |
) |
|
|
(2,613 |
) |
|
Interest expense |
|
|
5,547 |
|
|
|
5,947 |
|
|
|
23,071 |
|
|
|
23,524 |
|
|
Income tax expense |
|
|
5 |
|
|
|
1 |
|
|
|
22 |
|
|
|
27 |
|
|
Stock-based compensation expense |
|
|
3,678 |
|
|
|
5,071 |
|
|
|
14,537 |
|
|
|
19,572 |
|
|
Transaction and acquisition-related costs expensed |
|
|
25 |
|
|
|
30 |
|
|
|
450 |
|
|
|
1,035 |
|
|
Restructuring costs |
|
|
— |
|
|
|
— |
|
|
|
5,616 |
|
|
|
— |
|
|
Impairment of long-lived assets |
|
|
916 |
|
|
|
— |
|
|
|
916 |
|
|
|
— |
|
|
Gain on repurchase of convertible senior notes |
|
|
— |
|
|
|
— |
|
|
|
(1,138 |
) |
|
|
— |
|
|
Costs not core to our business |
|
|
457 |
|
|
|
— |
|
|
|
457 |
|
|
|
649 |
|
|
Total net adjustments |
|
|
17,094 |
|
|
|
16,253 |
|
|
|
68,313 |
|
|
|
64,545 |
|
|
Adjusted EBITDA |
|
$ |
20,191 |
|
|
$ |
12,462 |
|
|
$ |
44,016 |
|
|
$ |
19,030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from Net Income (Loss) to Non-GAAP Net Income (Loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
3,097 |
|
|
$ |
(3,791 |
) |
|
$ |
(24,297 |
) |
|
$ |
(45,515 |
) |
|
Amortization of acquired intangible assets |
|
|
569 |
|
|
|
569 |
|
|
|
2,274 |
|
|
|
1,933 |
|
|
Stock-based compensation expense |
|
|
3,678 |
|
|
|
5,071 |
|
|
|
14,537 |
|
|
|
19,572 |
|
|
Transaction and acquisition-related costs expensed |
|
|
25 |
|
|
|
30 |
|
|
|
450 |
|
|
|
1,035 |
|
|
Impairment of long-lived assets |
|
|
916 |
|
|
|
— |
|
|
|
916 |
|
|
|
— |
|
|
Gain on repurchase of convertible senior notes |
|
|
— |
|
|
|
— |
|
|
|
(1,138 |
) |
|
|
— |
|
|
Costs not core to our business |
|
|
457 |
|
|
|
— |
|
|
|
457 |
|
|
|
649 |
|
|
Total net adjustments |
|
|
5,645 |
|
|
|
5,670 |
|
|
|
17,496 |
|
|
|
23,189 |
|
|
Non-GAAP net income (loss) |
|
$ |
8,742 |
|
|
$ |
1,879 |
|
|
$ |
(6,801 |
) |
|
$ |
(22,326 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Non-GAAP Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income (loss) |
|
$ |
8,742 |
|
|
$ |
1,879 |
|
|
$ |
(6,801 |
) |
|
$ |
(22,326 |
) |
|
Preferred dividends |
|
|
(1,600 |
) |
|
|
— |
|
|
|
(3,662 |
) |
|
|
— |
|
|
Undistributed earnings allocated to preferred stockholders |
|
|
(1,012 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Non-GAAP net income (loss) available to common stockholders |
|
$ |
6,130 |
|
|
$ |
1,879 |
|
|
$ |
(10,463 |
) |
|
$ |
(22,326 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - basic |
|
|
32,312,246 |
|
|
|
32,774,924 |
|
|
|
32,318,201 |
|
|
|
32,539,748 |
|
|
Weighted average shares outstanding - diluted |
|
|
34,556,833 |
|
|
|
32,774,924 |
|
|
|
32,318,201 |
|
|
|
32,539,748 |
|
|
Shares used in computing non-GAAP net income (loss) per share - basic |
|
|
32,312,246 |
|
|
|
32,774,924 |
|
|
|
32,318,201 |
|
|
|
32,539,748 |
|
|
Shares used in computing non-GAAP net income (loss) per share - diluted |
|
|
33,512,904 |
|
|
|
33,209,220 |
|
|
|
32,318,201 |
|
|
|
32,539,748 |
|
|
Non-GAAP net income (loss) per common share - basic |
|
$ |
0.19 |
|
|
$ |
0.06 |
|
|
$ |
(0.32 |
) |
|
$ |
(0.69 |
) |
|
Non-GAAP net income (loss) per common share - diluted |
|
$ |
0.18 |
|
|
$ |
0.06 |
|
|
$ |
(0.32 |
) |
|
$ |
(0.69 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Cash Flows from Operations to Free Cash Flow: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents provided by (used in) operating activities |
|
$ |
16,577 |
|
|
$ |
5,140 |
|
|
$ |
27,651 |
|
|
$ |
(18,375 |
) |
|
Purchases of property and equipment |
|
|
(3,346 |
) |
|
|
(2,644 |
) |
|
|
(13,085 |
) |
|
|
(13,248 |
) |
|
Cash paid for restructuring costs |
|
|
141 |
|
|
|
— |
|
|
|
5,342 |
|
|
|
— |
|
|
Total net adjustments |
|
|
(3,205 |
) |
|
|
(2,644 |
) |
|
|
(7,743 |
) |
|
|
(13,248 |
) |
|
Free Cash Flow |
|
$ |
13,372 |
|
|
$ |
2,496 |
|
|
$ |
19,908 |
|
|
$ |
(31,623 |
) |