bnft-10q_20210930.htm
false 2021 Q3 0001576169 --12-31 P3Y P1Y P5Y 2021 P3Y 0 0 0 0001576169 2021-01-01 2021-09-30 xbrli:shares 0001576169 2021-11-01 iso4217:USD 0001576169 2021-09-30 0001576169 2020-12-31 iso4217:USD xbrli:shares 0001576169 2021-07-01 2021-09-30 0001576169 2020-07-01 2020-09-30 0001576169 2020-01-01 2020-09-30 0001576169 us-gaap:CommonStockMember 2020-12-31 0001576169 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001576169 us-gaap:RetainedEarningsMember 2020-12-31 0001576169 us-gaap:CommonStockMember 2021-01-01 2021-03-31 0001576169 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-03-31 0001576169 us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0001576169 2021-01-01 2021-03-31 0001576169 us-gaap:CommonStockMember 2021-03-31 0001576169 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0001576169 us-gaap:RetainedEarningsMember 2021-03-31 0001576169 2021-03-31 0001576169 us-gaap:CommonStockMember 2021-04-01 2021-06-30 0001576169 us-gaap:AdditionalPaidInCapitalMember 2021-04-01 2021-06-30 0001576169 us-gaap:RetainedEarningsMember 2021-04-01 2021-06-30 0001576169 2021-04-01 2021-06-30 0001576169 us-gaap:CommonStockMember 2021-06-30 0001576169 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0001576169 us-gaap:RetainedEarningsMember 2021-06-30 0001576169 2021-06-30 0001576169 us-gaap:CommonStockMember 2021-07-01 2021-09-30 0001576169 us-gaap:AdditionalPaidInCapitalMember 2021-07-01 2021-09-30 0001576169 us-gaap:RetainedEarningsMember 2021-07-01 2021-09-30 0001576169 us-gaap:CommonStockMember 2021-09-30 0001576169 us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0001576169 us-gaap:RetainedEarningsMember 2021-09-30 0001576169 us-gaap:CommonStockMember 2019-12-31 0001576169 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001576169 us-gaap:RetainedEarningsMember 2019-12-31 0001576169 2019-12-31 0001576169 us-gaap:CommonStockMember us-gaap:AccountingStandardsUpdate201912Member srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2019-12-31 0001576169 us-gaap:AdditionalPaidInCapitalMember us-gaap:AccountingStandardsUpdate201912Member srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2019-12-31 0001576169 us-gaap:RetainedEarningsMember us-gaap:AccountingStandardsUpdate201912Member srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2019-12-31 0001576169 us-gaap:AccountingStandardsUpdate201912Member srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2019-12-31 0001576169 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001576169 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001576169 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001576169 2020-01-01 2020-03-31 0001576169 us-gaap:CommonStockMember 2020-03-31 0001576169 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001576169 us-gaap:RetainedEarningsMember 2020-03-31 0001576169 2020-03-31 0001576169 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001576169 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001576169 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001576169 2020-04-01 2020-06-30 0001576169 us-gaap:CommonStockMember 2020-06-30 0001576169 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001576169 us-gaap:RetainedEarningsMember 2020-06-30 0001576169 2020-06-30 0001576169 us-gaap:CommonStockMember 2020-07-01 2020-09-30 0001576169 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0001576169 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0001576169 us-gaap:CommonStockMember 2020-09-30 0001576169 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0001576169 us-gaap:RetainedEarningsMember 2020-09-30 0001576169 2020-09-30 0001576169 country:US 2021-01-01 2021-01-31 0001576169 2021-06-01 2021-06-30 0001576169 srt:MinimumMember us-gaap:SellingAndMarketingExpenseMember 2021-01-01 2021-09-30 0001576169 us-gaap:SellingAndMarketingExpenseMember srt:MaximumMember 2021-01-01 2021-09-30 0001576169 us-gaap:CostOfSalesMember 2021-01-01 2021-09-30 0001576169 us-gaap:SellingAndMarketingExpenseMember 2021-09-30 0001576169 us-gaap:SellingAndMarketingExpenseMember 2020-12-31 0001576169 us-gaap:CostOfSalesMember 2021-09-30 0001576169 us-gaap:CostOfSalesMember 2020-12-31 0001576169 us-gaap:SellingAndMarketingExpenseMember 2021-07-01 2021-09-30 0001576169 us-gaap:SellingAndMarketingExpenseMember 2020-07-01 2020-09-30 0001576169 us-gaap:SellingAndMarketingExpenseMember 2021-01-01 2021-09-30 0001576169 us-gaap:SellingAndMarketingExpenseMember 2020-01-01 2020-09-30 0001576169 us-gaap:CostOfSalesMember 2021-07-01 2021-09-30 0001576169 us-gaap:CostOfSalesMember 2020-07-01 2020-09-30 0001576169 us-gaap:CostOfSalesMember 2020-01-01 2020-09-30 0001576169 bnft:DeferredCostsMember 2021-09-30 xbrli:pure 0001576169 us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember 2021-01-01 2021-09-30 0001576169 us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember 2020-01-01 2020-12-31 bnft:Customer 0001576169 us-gaap:AccountsReceivableMember 2021-09-30 0001576169 us-gaap:AccountsReceivableMember 2020-12-31 0001576169 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2021-07-01 2021-09-30 0001576169 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2021-01-01 2021-09-30 0001576169 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2020-07-01 2020-09-30 0001576169 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2020-01-01 2020-09-30 0001576169 us-gaap:SalesRevenueNetMember 2021-09-30 0001576169 us-gaap:SalesRevenueNetMember 2020-09-30 0001576169 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2021-01-01 2021-09-30 0001576169 us-gaap:RestrictedStockUnitsRSUMember 2021-07-01 2021-09-30 0001576169 us-gaap:RestrictedStockUnitsRSUMember 2020-07-01 2020-09-30 0001576169 us-gaap:RestrictedStockUnitsRSUMember 2021-01-01 2021-09-30 0001576169 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-09-30 0001576169 us-gaap:EmployeeStockOptionMember 2021-07-01 2021-09-30 0001576169 us-gaap:EmployeeStockOptionMember 2020-07-01 2020-09-30 0001576169 us-gaap:EmployeeStockOptionMember 2021-01-01 2021-09-30 0001576169 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-09-30 0001576169 us-gaap:ConvertibleDebtMember 2021-07-01 2021-09-30 0001576169 us-gaap:ConvertibleDebtMember 2020-07-01 2020-09-30 0001576169 us-gaap:ConvertibleDebtMember 2021-01-01 2021-09-30 0001576169 us-gaap:ConvertibleDebtMember 2020-01-01 2020-09-30 0001576169 us-gaap:ConvertiblePreferredStockMember 2021-07-01 2021-09-30 0001576169 us-gaap:ConvertiblePreferredStockMember 2020-07-01 2020-09-30 0001576169 us-gaap:ConvertiblePreferredStockMember 2021-01-01 2021-09-30 0001576169 us-gaap:ConvertiblePreferredStockMember 2020-01-01 2020-09-30 0001576169 us-gaap:EmployeeStockMember 2021-07-01 2021-09-30 0001576169 us-gaap:EmployeeStockMember 2020-07-01 2020-09-30 0001576169 us-gaap:EmployeeStockMember 2021-01-01 2021-09-30 0001576169 us-gaap:EmployeeStockMember 2020-01-01 2020-09-30 0001576169 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0001576169 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0001576169 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0001576169 us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0001576169 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0001576169 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0001576169 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0001576169 us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0001576169 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001576169 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001576169 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001576169 us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001576169 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001576169 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001576169 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001576169 us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001576169 us-gaap:CommercialAndIndustrialSectorMember 2021-09-30 0001576169 us-gaap:FinancialServicesSectorMember 2021-09-30 0001576169 bnft:UtilitySectorMember 2021-09-30 0001576169 us-gaap:CommercialAndIndustrialSectorMember 2020-12-31 0001576169 us-gaap:FinancialServicesSectorMember 2020-12-31 0001576169 us-gaap:GovernmentSectorMember 2020-12-31 0001576169 bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2018-12-31 0001576169 bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2018-01-01 2018-12-31 0001576169 us-gaap:CommonStockMember bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2021-01-01 2021-09-30 0001576169 us-gaap:CommonStockMember bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2021-09-30 0001576169 bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2021-09-30 0001576169 srt:MaximumMember bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2021-01-01 2021-09-30 bnft:Day 0001576169 bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2021-01-01 2021-09-30 0001576169 bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2021-07-01 2021-09-30 0001576169 bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2020-09-30 0001576169 bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2020-07-01 2020-09-30 0001576169 bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2020-12-31 0001576169 bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2020-01-01 2020-12-31 0001576169 bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0001576169 bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2020-01-01 2020-09-30 0001576169 us-gaap:CallOptionMember bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2021-09-30 0001576169 us-gaap:CallOptionMember bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2021-01-01 2021-09-30 0001576169 us-gaap:CallOptionMember bnft:OnePointTwoFivePercentageConvertibleSeniorNotesMember 2021-07-01 2021-09-30 0001576169 us-gaap:RevolvingCreditFacilityMember bnft:SiliconValleyBank1Member 2020-03-03 2020-03-03 0001576169 us-gaap:RevolvingCreditFacilityMember bnft:SiliconValleyBank1Member 2020-03-03 0001576169 us-gaap:RevolvingCreditFacilityMember bnft:SiliconValleyBank1Member srt:MinimumMember 2020-03-03 2020-03-03 0001576169 us-gaap:RevolvingCreditFacilityMember bnft:SiliconValleyBank1Member srt:MaximumMember 2020-03-03 2020-03-03 0001576169 us-gaap:RevolvingCreditFacilityMember 2021-09-30 0001576169 us-gaap:RevolvingCreditFacilityMember 2021-01-01 2021-09-30 0001576169 us-gaap:RevolvingCreditFacilityMember 2020-01-01 2020-09-30 0001576169 2021-04-01 2021-04-30 bnft:Building 0001576169 2021-04-30 0001576169 us-gaap:SeriesAPreferredStockMember 2020-06-04 0001576169 us-gaap:SeriesAPreferredStockMember 2020-06-04 2020-06-04 0001576169 2020-06-04 0001576169 us-gaap:ConvertiblePreferredStockMember 2020-06-04 0001576169 2020-06-04 2020-06-04 0001576169 srt:MaximumMember 2020-06-04 2020-06-04 0001576169 us-gaap:PreferredStockMember 2020-06-04 2020-06-04 0001576169 us-gaap:PreferredStockMember 2021-01-01 2021-09-30 0001576169 us-gaap:RestrictedStockUnitsRSUMember 2021-01-01 2021-09-30 0001576169 us-gaap:RestrictedStockUnitsRSUMember srt:MinimumMember 2021-01-01 2021-09-30 0001576169 us-gaap:RestrictedStockUnitsRSUMember srt:MaximumMember 2021-01-01 2021-09-30 0001576169 bnft:PerformanceBasedRestrictedStockUnitsRSUsMember 2021-01-01 2021-09-30 0001576169 bnft:PerformanceBasedRestrictedStockUnitsRSUsMember srt:MinimumMember 2021-01-01 2021-09-30 0001576169 bnft:PerformanceBasedRestrictedStockUnitsRSUsMember srt:MaximumMember 2021-01-01 2021-09-30 0001576169 bnft:PerformanceBasedRestrictedStockUnitsRSUsMember 2021-05-01 2021-05-31 0001576169 bnft:PerformanceBasedRestrictedStockUnitsRSUsMember srt:MinimumMember 2021-09-30 0001576169 bnft:StockAwardPlansMember 2021-09-30 0001576169 us-gaap:EmployeeStockMember 2021-09-30 0001576169 us-gaap:SeriesAPreferredStockMember 2021-09-30 0001576169 us-gaap:SubscriptionAndCirculationMember 2021-07-01 2021-09-30 0001576169 us-gaap:SubscriptionAndCirculationMember 2020-07-01 2020-09-30 0001576169 us-gaap:SubscriptionAndCirculationMember 2021-01-01 2021-09-30 0001576169 us-gaap:SubscriptionAndCirculationMember 2020-01-01 2020-09-30 0001576169 bnft:ManagementPlatformMember 2021-07-01 2021-09-30 0001576169 bnft:ManagementPlatformMember 2020-07-01 2020-09-30 0001576169 bnft:ManagementPlatformMember 2021-01-01 2021-09-30 0001576169 bnft:ManagementPlatformMember 2020-01-01 2020-09-30 0001576169 bnft:SoftwareServicesMember 2021-07-01 2021-09-30 0001576169 bnft:SoftwareServicesMember 2020-07-01 2020-09-30 0001576169 bnft:SoftwareServicesMember 2021-01-01 2021-09-30 0001576169 bnft:SoftwareServicesMember 2020-01-01 2020-09-30 0001576169 bnft:ProfessionalServicesMember 2021-07-01 2021-09-30 0001576169 bnft:ProfessionalServicesMember 2020-07-01 2020-09-30 0001576169 bnft:ProfessionalServicesMember 2021-01-01 2021-09-30 0001576169 bnft:ProfessionalServicesMember 2020-01-01 2020-09-30 0001576169 2021-01-01 2021-09-30 0001576169 srt:MaximumMember 2021-01-01 2021-09-30 bnft:Segment 0001576169 us-gaap:SeriesAPreferredStockMember 2021-01-01 2021-09-30 0001576169 us-gaap:SeriesAPreferredStockMember 2021-07-01 2021-09-30 0001576169 us-gaap:SeriesAPreferredStockMember 2020-07-01 2020-09-30 0001576169 us-gaap:SeriesAPreferredStockMember 2020-01-01 2020-09-30 0001576169 us-gaap:SeriesAPreferredStockMember 2020-06-01 2020-06-30 0001576169 us-gaap:SeriesAPreferredStockMember 2020-12-31 0001576169 bnft:RelatedPartyLeasingArrangementsMember bnft:NonCancellableLeaseMember 2021-09-30 0001576169 bnft:RelatedPartyLeasingArrangementsMember bnft:NonCancellableLeaseMember 2021-01-01 2021-09-30 0001576169 2021-01-01 2021-06-30 0001576169 2020-03-01 2020-03-31 0001576169 bnft:RelatedPartyAMember 2020-01-01 2020-09-30 0001576169 bnft:RelatedPartyAMember 2021-01-01 2021-06-30 0001576169 bnft:RelatedPartyAMember 2020-07-01 2020-09-30 0001576169 us-gaap:SubsequentEventMember 2021-10-01 2021-10-01

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File Number: 001-36061

 

Benefitfocus, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware

 

46-2346314

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

100 Benefitfocus Way

Charleston, South Carolina 29492

(Address of principal executive offices and zip code)

(843) 849-7476

(Registrant’s telephone number, including area code)

 

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:  

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

 

 

 

 

 

 

Smaller reporting company

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of November 1, 2021, there were approximately 33,430,384 shares of the registrant’s common stock outstanding.

 


 

 

Benefitfocus, Inc.

Form 10-Q

For the Quarterly Period Ended September 30, 2021

TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

3

 

 

Unaudited Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020

3

 

 

Unaudited Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2021 and 2020

4

 

 

Unaudited Consolidated Statements of Changes in Stockholders' Deficit for the Three and Nine Months Ended September 30, 2021 and 2020  

5

 

 

Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020

7

 

 

Notes to Unaudited Consolidated Financial Statements

8

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

22

 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

34

 

 

ITEM 4. CONTROLS AND PROCEDURES

35

 

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

36

 

 

ITEM 1A. RISK FACTORS

36

 

 

 

 

ITEM 6. EXHIBITS

37

 

 

SIGNATURES

38

 

 

 

 

2


 

 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Benefitfocus, Inc.

Unaudited Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

As of

September 30,

2021

 

 

As of

December 31,

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

12,589

 

 

$

90,706

 

Marketable securities

 

 

81,899

 

 

 

95,085

 

Accounts receivable, net

 

 

20,368

 

 

 

22,240

 

Contract, prepaid and other current assets

 

 

17,239

 

 

 

21,354

 

Total current assets

 

 

132,095

 

 

 

229,385

 

Property and equipment, net

 

 

27,259

 

 

 

29,701

 

Financing lease right-of-use assets

 

 

58,503

 

 

 

68,670

 

Operating lease right-of-use assets

 

 

925

 

 

 

1,107

 

Intangible assets, net

 

 

8,688

 

 

 

10,393

 

Goodwill

 

 

12,857

 

 

 

12,857

 

Deferred contract costs and other non-current assets

 

 

12,078

 

 

 

10,259

 

Total assets

 

$

252,405

 

 

$

362,372

 

Liabilities, redeemable preferred stock and stockholders' deficit

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

7,729

 

 

$

2,160

 

Accrued expenses

 

 

8,155

 

 

 

6,262

 

Accrued compensation and benefits

 

 

16,993

 

 

 

19,129

 

Deferred revenue, current portion

 

 

26,113

 

 

 

27,782

 

Lease liabilities and financing obligations, current portion

 

 

7,226

 

 

 

5,959

 

Total current liabilities

 

 

66,216

 

 

 

61,292

 

Deferred revenue, net of current portion

 

 

2,651

 

 

 

4,422

 

Convertible senior notes

 

 

105,637

 

 

 

184,308

 

Lease liabilities and financing obligations, net current portion

 

 

77,265

 

 

 

79,282

 

Other non-current liabilities

 

 

2,661

 

 

 

2,470

 

Total liabilities

 

 

254,430

 

 

 

331,774

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Redeemable preferred stock:

 

 

 

 

 

 

 

 

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

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

  at September 30, 2021 and December 31, 2020, respectively,

  liquidation preference $45 per share as of September 30, 2021 and December 31, 2020, respectively

 

 

79,193

 

 

 

79,193

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

Common stock, par value $0.001, 95,000,000 and 50,000,000 shares authorized,

   33,386,994 and 32,327,439 issued and outstanding at September 30, 2021 and December 31, 2020, respectively

 

 

33

 

 

 

32

 

Additional paid-in capital

 

 

429,978

 

 

 

427,431

 

Accumulated deficit

 

 

(511,229

)

 

 

(476,058

)

Total stockholders' deficit

 

 

(81,218

)

 

 

(48,595

)

Total liabilities, redeemable preferred stock and stockholders' deficit

 

$

252,405

 

 

$

362,372

 

 

The accompanying notes are an integral part of the Unaudited Consolidated Financial Statements.

 

 

3


 

 

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,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

$

62,026

 

 

$

63,583

 

 

$

187,993

 

 

$

191,911

 

Cost of revenue

 

 

31,247

 

 

 

30,113

 

 

 

87,870

 

 

 

94,422

 

Gross profit

 

 

30,779

 

 

 

33,470

 

 

 

100,123

 

 

 

97,489

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

12,669

 

 

 

12,405

 

 

 

34,481

 

 

 

39,863

 

Research and development

 

 

11,062

 

 

 

11,439

 

 

 

32,997

 

 

 

34,252

 

General and administrative

 

 

12,156

 

 

 

9,424

 

 

 

39,592

 

 

 

29,320

 

Restructuring costs

 

 

 

 

 

 

 

 

4,127

 

 

 

5,616

 

Total operating expenses

 

 

35,887

 

 

 

33,268

 

 

 

111,197

 

 

 

109,051

 

(Loss) income from operations

 

 

(5,108

)

 

 

202

 

 

 

(11,074

)

 

 

(11,562

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

52

 

 

 

40

 

 

 

163

 

 

 

563

 

Interest expense

 

 

(5,556

)

 

 

(5,771

)

 

 

(16,757

)

 

 

(17,524

)

(Loss) gain on repurchase of convertible senior notes

 

 

(7,520

)

 

 

1,138

 

 

 

(7,520

)

 

 

1,138

 

Other income

 

 

120

 

 

 

1

 

 

 

142

 

 

 

8

 

Total other expense, net

 

 

(12,904

)

 

 

(4,592

)

 

 

(23,972

)

 

 

(15,815

)

Loss before income taxes

 

 

(18,012

)

 

 

(4,390

)

 

 

(35,046

)

 

 

(27,377

)

Income tax expense

 

 

42

 

 

 

6

 

 

 

125

 

 

 

17

 

Net loss

 

 

(18,054

)

 

 

(4,396

)

 

 

(35,171

)

 

 

(27,394

)

Preferred dividends

 

 

(1,600

)

 

 

(1,600

)

 

 

(4,800

)

 

 

(2,062

)

Net loss available to common stockholders

 

$

(19,654

)

 

$

(5,996

)

 

$

(39,971

)

 

$

(29,456

)

Comprehensive loss

 

$

(18,054

)

 

$

(4,396

)

 

$

(35,171

)

 

$

(27,394

)

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.59

)

 

$

(0.19

)

 

$

(1.21

)

 

$

(0.91

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

33,354,624

 

 

 

32,263,876

 

 

 

32,978,394

 

 

 

32,320,201

 

 

 

The accompanying notes are an integral part of the Unaudited Consolidated Financial Statements.

 

 

4


 

 

Benefitfocus, Inc.

Unaudited Consolidated Statements of Changes in Stockholders’ Deficit

(in thousands, except share and per share data)

 

 

 

Common Stock,

 

 

Additional

 

 

 

 

 

 

Total

 

 

 

$0.001 Par Value

 

 

Paid-in

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Deficit

 

 

Deficit

 

Balance, December 31, 2020

 

 

32,327,439

 

 

$

32

 

 

$

427,431

 

 

$

(476,058

)

 

$

(48,595

)

Exercise of stock options

 

 

15,000

 

 

 

1

 

 

 

154

 

 

 

 

 

 

155

 

Issuance of common stock upon vesting of restricted stock units

 

 

173,731

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,523

 

 

 

 

 

 

1,523

 

Preferred dividends

 

 

 

 

 

 

 

 

(1,600

)

 

 

 

 

 

(1,600

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(2,097

)

 

 

(2,097

)

Balance, March 31, 2021

 

 

32,516,170

 

 

$

33

 

 

$

427,508

 

 

$

(478,155

)

 

$

(50,614

)

Exercise of stock options

 

 

9,250

 

 

 

 

 

 

102

 

 

 

 

 

 

102

 

Issuance of common stock upon vesting of restricted stock units

 

 

704,543

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under Employee Stock Purchase Plan, or ESPP

 

 

4,823

 

 

 

 

 

 

65

 

 

 

 

 

 

65

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,376

 

 

 

 

 

 

4,376

 

Preferred dividends

 

 

 

 

 

 

 

 

(1,600

)

 

 

 

 

 

(1,600

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

(15,020

)

 

 

(15,020

)

Balance, June 30, 2021

 

 

33,234,786

 

 

$

33

 

 

$

430,451

 

 

$

(493,175

)

 

$

(62,691

)

Issuance of common stock upon vesting of restricted stock units

 

 

152,208

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancellation of convertible senior note capped call hedge

 

 

 

 

 

 

 

 

98

 

 

 

 

 

 

98

 

Equity component of repurchased convertible senior notes

 

 

 

 

 

 

 

 

(3,566

)

 

 

 

 

 

(3,566

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,595

 

 

 

 

 

 

4,595

 

Preferred dividends

 

 

 

 

 

 

 

 

(1,600

)

 

 

 

 

 

(1,600

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(18,054

)

 

 

(18,054

)

Balance, September 30, 2021

 

 

33,386,994

 

 

$

33

 

 

$

429,978

 

 

$

(511,229

)

 

$

(81,218

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock,

 

 

Additional

 

 

 

 

 

 

Total

 

 

 

$0.001 Par Value

 

 

Paid-in

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Deficit

 

 

Deficit

 

Balance, December 31, 2019

 

 

32,788,980

 

 

$

33

 

 

$

426,025

 

 

$

(451,702

)

 

$

(25,644

)

Cumulative effect adjustment from adoption of credit standard

 

 

 

 

 

 

 

 

 

 

 

(59

)

 

 

(59

)

Exercise of stock options

 

 

13,584

 

 

 

 

 

 

73

 

 

 

 

 

 

73

 

Issuance of common stock upon vesting of restricted stock units

 

 

43,315

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

3,677

 

 

 

 

 

 

3,677

 

Common stock repurchased

 

 

(1,070,665

)

 

 

(1

)

 

 

(9,382

)

 

 

 

 

 

(9,383

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(11,136

)

 

 

(11,136

)

Balance, March 31, 2020

 

 

31,775,214

 

 

$

32

 

 

$

420,393

 

 

$

(462,897

)

 

$

(42,472

)

Exercise of stock options

 

 

10,685

 

 

 

 

 

 

69

 

 

 

 

 

 

69

 

Issuance of common stock upon vesting of restricted stock units

 

 

416,848

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under ESPP

 

 

8,205

 

 

 

 

 

 

83

 

 

 

 

 

 

83

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

3,323

 

 

 

 

 

 

3,323

 

Common stock repurchased

 

 

(35,508

)

 

 

 

 

 

(284

)

 

 

 

 

 

(284

)

Preferred dividends

 

 

 

 

 

 

 

 

(462

)

 

 

 

 

 

(462

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(11,862

)

 

 

(11,862

)

Balance, June 30, 2020

 

 

32,175,444

 

 

$

32

 

 

$

423,122

 

 

$

(474,759

)

 

$

(51,605

)

Exercise of stock options

 

 

38,000

 

 

 

 

 

 

288

 

 

 

 

 

 

288

 

Issuance of common stock upon vesting of restricted stock units

 

 

78,251

 

 

 

 

 

 

 

 

 

 

 

 

 

5


 

Cancellation of convertible senior note capped call hedge

 

 

(3,651

)

 

 

 

 

 

26

 

 

 

 

 

 

26

 

Equity component of repurchased convertible senior notes

 

 

 

 

 

 

 

 

(412

)

 

 

 

 

 

(412

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

3,859

 

 

 

 

 

 

3,859

 

Preferred dividends

 

 

 

 

 

 

 

 

(1,600

)

 

 

 

 

 

(1,600

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(4,396

)

 

 

(4,396

)

Balance, September 30, 2020

 

 

32,288,044

 

 

$

32

 

 

$

425,283

 

 

$

(479,155

)

 

$

(53,840

)

 

The accompanying notes are an integral part of the Unaudited Consolidated Financial Statements.

 

 

6


 

 

Benefitfocus, Inc.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

 

 

 

Nine Months Ended

September 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(35,171

)

 

$

(27,394

)

Adjustments to reconcile net loss to net cash and cash

   equivalents provided by operating activities: