bnft-8k_20210308.htm
false 0001576169 0001576169 2021-03-08 2021-03-08

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 8, 2021

 

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 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.

 

 

 

BENEFITFOCUS, INC.

 

 

 

Date: March 8, 2021

 

/s/ Alpana Wegner

 

 

Alpana Wegner

 

 

Chief Financial Officer

(Principal financial and accounting officer)

 

bnft-ex991_28.htm

 

Exhibit 99.1

Benefitfocus, Inc.

843-981-8898

pr@benefitfocus.com

 

Investor Relations:

Patti Leahy

843-981-8899

ir@benefitfocus.com   

 

 

 

 

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:  

 

Met or exceeded all fourth quarter and full year 2020 guidance metrics including revenue, adjusted EBITDA and free cash flow;

 

Augmented leadership team with hiring of first chief data officer to solidify the company as a leading, data-driven benefits technology platform;

 

Enhanced Benefit Catalog including partnership with Transamerica to enable integrated retirement plan enrollment directly through Benefitplace™;

 

Invested to remove friction in benefits management and improve the customer experience through AI-backed platform enrollment enhancements; and

 

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

 

Total revenue was $76.2 million, down 13% compared to the fourth quarter of 2019.


 

 

 

Software services was $62.3 million, 9% lower compared to the fourth quarter of 2019. Software services is comprised of subscription and platform revenue.

 

o

Subscription revenue was $44.9 million, a decrease of 9% compared to the fourth quarter of 2019.

 

o

Platform revenue was $17.4 million, a decrease of 8% compared to the fourth quarter of 2019.

 

Professional services revenue was $13.9 million, down 26% compared to the fourth quarter of 2019.

Net Income (Loss)

 

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

 

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.

 

Adjusted EBITDA was $20.2 million, compared to $12.5 million in the fourth quarter of 2019.

 

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

 

Total revenue was $268.1 million, down 9% compared to the full year 2019.

 

Software services was $214.8 million, 6% lower compared to the full year 2019. Software services is comprised of subscription and platform revenue.

 

o

Subscription revenue was $179.7 million, a decrease of 8% compared to the full year 2019.

 

o

Platform revenue was $35.1 million, an increase of 4% compared to the full year 2019.

 

Professional services revenue was $53.3 million, down 20% compared to the full year 2019.

Net Loss

 

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

 

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


 

 

on ($22.3) million net loss available to common stockholders and 32.5 million basic and diluted weighted average common shares outstanding.

 

Adjusted EBITDA was $44.0 million, compared to $19.0 million in the full year 2019.

 

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

 

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.  

 

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

 

Total revenue is expected to be in the range of $59 million to $61 million.

 

Adjusted EBITDA is expected to be in the range of $9 million to $11 million.

 

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

 

Total revenue is expected to be in the range of $254 million to $260 million.

 

Adjusted EBITDA is expected to be in the range of $44 million to $50 million.

 

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 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.

 

Consolidated Statements of Operations and Comprehensive Loss

 

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

Revenue

 

$

76,230

 

 

$

87,143

 

 

$

268,141

 

 

$

295,686

 

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

 

 

34,966

 

 

 

42,848

 

 

 

129,388

 

 

 

144,090

 

Gross profit

 

 

41,264

 

 

 

44,295

 

 

 

138,753

 

 

 

151,596

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

12,347

 

 

 

18,585

 

 

 

52,210

 

 

 

76,049

 

Research and development

 

 

11,923

 

 

 

13,085

 

 

 

46,175

 

 

 

54,724

 

General and administrative

 

 

8,400

 

 

 

10,976

 

 

 

37,720

 

 

 

45,329

 

Restructuring costs

 

 

 

 

 

 

 

 

5,616

 

 

 

 

Total operating expenses

 

 

32,670

 

 

 

42,646

 

 

 

141,721

 

 

 

176,102

 

Income (loss) from operations

 

 

8,594

 

 

 

1,649

 

 

 

(2,968

)

 

 

(24,506

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

69

 

 

 

518

 

 

 

632

 

 

 

2,613

 

Interest expense

 

 

(5,547

)

 

 

(5,947

)

 

 

(23,071

)

 

 

(23,524

)

Gain on repurchase of convertible senior notes

 

 

 

 

 

 

 

 

1,138

 

 

 

 

Other (expense) income

 

 

(14

)

 

 

(10

)

 

 

(6

)

 

 

(71

)

Total other expense, net

 

 

(5,492

)

 

 

(5,439

)

 

 

(21,307

)

 

 

(20,982

)

Income (loss) before income taxes

 

 

3,102

 

 

 

(3,790

)

 

 

(24,275

)

 

 

(45,488

)

Income tax expense

 

 

5

 

 

 

1

 

 

 

22

 

 

 

27

 

Net income (loss)

 

 

3,097

 

 

 

(3,791

)

 

 

(24,297

)

 

 

(45,515

)

Preferred dividends

 

 

(1,600

)

 

 

 

 

 

(3,662

)

 

 

 

Undistributed earnings allocated to preferred stockholders

 

 

(212

)

 

 

 

 

 

 

 

 

 

Net income (loss) available to common stockholders

 

$

1,285

 

 

$

(3,791

)

 

$

(27,959

)

 

$

(45,515

)

Comprehensive income (loss)

 

$

3,097

 

 

$

(3,791

)

 

$

(24,297

)

 

$

(45,515

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.04

 

 

$

(0.12

)

 

$

(0.87

)

 

$

(1.40

)

Diluted

 

$

0.04

 

 

$

(0.12

)

 

$

(0.87

)

 

$

(1.40

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

32,312,246

 

 

 

32,774,924

 

 

 

32,318,201

 

 

 

32,539,748

 

Diluted

 

 

33,512,904

 

 

 

32,774,924

 

 

 

32,318,201

 

 

 

32,539,748

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

1,099

 

 

$

1,181

 

 

$

3,703

 

 

$

3,569

 

Sales and marketing

 

 

841

 

 

 

1,202

 

 

 

3,081

 

 

 

3,799

 

Research and development

 

 

838

 

 

 

665

 

 

 

2,555

 

 

 

3,265

 

General and administrative

 

 

900

 

 

 

2,023

 

 

 

5,198

 

 

 

8,939

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) Amortization of acquired intangible assets included in

       above line items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

330

 

 

$

317

 

 

$

1,291

 

 

$

1,029

 

Sales and marketing

 

 

75

 

 

 

91

 

 

 

331

 

 

 

337

 

Research and development

 

 

118

 

 

 

111

 

 

 

460

 

 

 

400

 

General and administrative

 

 

46

 

 

 

50

 

 

 

192

 

 

 

167

 

 



 

Benefitfocus, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31,

 

 

 

 

2020

 

 

2019

 

 

Assets

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

90,706

 

 

$

130,976

 

 

Marketable securities

 

 

95,085

 

 

 

 

 

Accounts receivable, net

 

 

22,240

 

 

 

33,754

 

 

Contract, prepaid and other current assets

 

 

21,354

 

 

 

21,523

 

 

Total current assets

 

 

229,385

 

 

 

186,253

 

 

Property and equipment, net

 

 

29,701

 

 

 

28,669

 

 

Financing lease right-of-use assets

 

 

68,670

 

 

 

78,520

 

 

Operating lease right-of-use assets

 

 

1,107

 

 

 

1,715

 

 

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