8-K

 

 

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 27, 2014

 

 

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))

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On March 27, 2014, Benefitfocus, Inc. posted on its website, www.benefitfocus.com (under the section entitled –About–Investor Relations–Financial Information–Quarterly Results), final financial results for the fourth quarter and full year ended December 31, 2013. A copy of the financial results 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    Benefitfocus, Inc. financial results for the fourth quarter and full year ended December 31, 2013.


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 28, 2014  

/s/ Milton A. Alpern

  Milton A. Alpern, Chief Financial Officer
EX-99.1

Exhibit 99.1

Benefitfocus, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

 

     Three Months Ended December 31,     Year Ended December 31,  
     2013     2012     2013     2012  
           (Restated)           (Restated)  

Revenue

   $ 30,256      $ 22,208      $ 104,752      $ 81,739   

Cost of revenue

     19,473        11,881        62,411        44,400   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     10,783        10,327        42,341        37,339   

Operating expenses:

        

Sales and marketing

     8,976        6,357        36,072        27,905   

Research and development

     6,708        3,520        23,532        14,621   

General and administrative

     2,790        1,990        10,974        7,494   

Change in fair value of contingent consideration

     —          (49     (43     121   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     18,474        11,818        70,535        50,141   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (7,691     (1,491     (28,194     (12,802

Other income (expense):

        

Interest income

     15        12        46        53   

Interest expense

     (552     (507     (2,149     (1,976

Other expense

     (66     (8     (95     (64
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other expense, net

     (603     (503     (2,198     (1,987
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (8,294     (1,994     (30,392     (14,789

Income tax (benefit) expense

     (12     35        (31     84   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (8,282   $ (2,029   $ (30,361   $ (14,873
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive loss

   $ (8,282   $ (2,029   $ (30,361   $ (14,873
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per common share:

        

Basic and diluted

   $ (0.34   $ (0.42   $ (2.99   $ (3.09
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding:

        

Basic and diluted

     24,474,566        4,842,205        10,144,243        4,812,632   
  

 

 

   

 

 

   

 

 

   

 

 

 


Benefitfocus, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

 

     As of December 31,  
     2013     2012  
           (Restated)  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 65,645      $ 19,703   

Marketable securities

     13,168        —     

Accounts receivable, net

     23,668        13,372   

Prepaid expenses and other current assets

     4,322        1,482   
  

 

 

   

 

 

 

Total current assets

     106,803        34,557   

Property and equipment, net

     27,444        20,456   

Intangible assets, net

     1,256        1,579   

Goodwill

     1,634        1,634   

Other non-current assets

     2,474        —     
  

 

 

   

 

 

 

Total assets

   $ 139,611      $ 58,226   
  

 

 

   

 

 

 

Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

    

Current liabilities:

    

Accounts payable

   $ 4,354      $ 1,726   

Accrued expenses

     3,911        2,453   

Accrued compensation and benefits

     14,183        9,661   

Deferred revenue, current portion

     15,158        11,165   

Financing and capital lease obligations, current portion

     4,288        1,228   

Notes payable, current portion

     —          2,420   

Contingent consideration related to acquisition, current portion

     —          328   
  

 

 

   

 

 

 

Total current liabilities

     41,894        28,981   
  

 

 

   

 

 

 

Deferred revenue, net of current portion

     65,063        46,355   

Revolving line of credit

     5,757        —     

Financing and capital lease obligations, net of current portion

     14,263        9,589   

Notes payable, net of current portion

     —          3,561   

Other non-current liabilities

     1,202        871   
  

 

 

   

 

 

 

Total liabilities

     128,179        89,357   
  

 

 

   

 

 

 

Commitments and contingencies

    

Redeemable convertible preferred stock:

    

Convertible Series A preferred stock, no par value, no shares authorized, issued and outstanding at December 31, 2013; 14,055,851 shares authorized, issued and outstanding at December 31, 2012

     —          105,505   

Convertible Series B preferred stock, no par value, no shares authorized, issued and outstanding at December 31, 2013; 2,441,009 shares authorized, issued and outstanding at December 31, 2012

     —          29,973   
  

 

 

   

 

 

 

Total redeemable convertible preferred stock

     —          135,478   
  

 

 

   

 

 

 

Stockholders’ equity (deficit):

    

Preferred stock, par value $0.001, 5,000,000 shares authorized, no shares issued and outstanding at December 31, 2013 and 2012

     —          —     

Common stock, no par value, no shares authorized issued and outstanding at December 31, 2013; 100,000,000 shares authorized, 20,125,063 shares issued and 4,792,347 shares outstanding at December 31, 2012

     —         
6,109
  

Common stock, par value $0.001, 50,000,000 shares authorized, 24,495,651 shares issued and outstanding at December 31, 2013; no shares authorized, issued and outstanding at December 31, 2012

     24        —     

Additional paid-in capital

     214,487        —     

Accumulated deficit

     (203,079     (172,718
  

 

 

   

 

 

 

Total stockholders’ equity (deficit)

     11,432        (166,609
  

 

 

   

 

 

 

Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

   $ 139,611      $ 58,226   
  

 

 

   

 

 

 


Benefitfocus.com, Inc.

Consolidated Statements of Cash Flows

(in thousands)

 

     Three Months Ended
December 31,
    Year Ended December 31,  
     2013     2012     2013     2012  
           (Restated)           (Restated)  

Cash flows from operating activities

        

Net loss

   $ (8,282   $ (2,029   $ (30,361   $ (14,873

Adjustments to reconcile net loss to net cash and cash equivalents provided by operating activities:

        

Depreciation and amortization

     2,246        1,794        8,172        8,560   

Stock-based compensation expense

     381        248        1,202        712   

Change in fair value and accretion of warrant

     223        168        892        488   

Interest accrual on financing obligation

     443        444        1,768        1,774   

Change in fair value of contingent consideration

     1        (37     (17     188   

Provision for doubtful accounts

     (87     18        (32     98   

Loss on disposal of property and equipment

     45        8        65        17   

Changes in operating assets and liabilities:

        

Accounts receivable, net

     (2,404     (1,974     (10,264     (4,411

Prepaid expenses and other current assets

     (428     411        (1,440     639   

Accounts payable

     (1,246     457        2,625        862   

Accrued expenses

     138        76        904        532   

Accrued compensation and benefits

     (1,555     (557     4,521        3,102   

Contingent consideration related to acquisition

     —           —           —           (320

Deferred revenue

     7,863        5,582        22,701        14,747   

Other non-current liabilities

     97        73        331        293   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

     (2,565     4,682        1,067        12,408   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from investing activities

        

Purchases of short-term investments held to maturity

     (13,168     —           (13,168     —      

Purchases of property and equipment

     (2,223     (1,154     (8,918     (6,308

Proceeds from sale of property and equipment

     —           —           9        —      
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash and cash equivalents used in investing activities

     (15,391     (1,154     (22,077     (6,308
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from financing activities

        

Proceeds from initial public offering, net of issuance costs

     —           —           70,064        —      

Draws on revolving line of credit

     —           —           10,757        —      

Payments on revolving line of credit

     —           —           (5,000     —      

Proceeds from notes payable borrowing

     —           4,535        1,465        4,535   

Repayment of notes payable

     —           (239     (7,447     (1,074

Proceeds from exercises of stock options

     127        24        699        108   

Proceeds from issuance of common stock (excluding IPO)

     —           —           68        —      

Repurchases of common stock

     —           (6     —           (599

Payments of contingent consideration

     (311     (378     (311     (2,078

Payments on financing and capital lease obligations

     (887     (745     (3,343     (3,145
  

 

 

   

 

 

   

 

 

   

 

 

 

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

     (1,071     3,191        66,952        (2,253
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     (19,027     6,719        45,942        3,847   

Cash and cash equivalents, beginning of period

     84,672        12,984        19,703        15,856   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of year

   $ 65,645      $ 19,703      $ 65,645      $ 19,703   
  

 

 

   

 

 

   

 

 

   

 

 

 


Benefitfocus, Inc.

Reconciliation of GAAP to Non-GAAP Measures

For the Three Months and Years Ended December 31, 2013 and 2012

(unaudited, dollars in thousands except share and per share data)

 

     Three Months December 31,     Year Ended December 31,  
     2013     2012     2013     2012  
           (Restated)           (Restated)  

Reconciliation from Gross Profit to Adjusted Gross Profit:

        

Gross profit

   $ 10,783      $ 10,327      $ 42,341      $ 37,339   

Depreciation

     1,186        1,053        4,257        4,224   

Amortization of software development costs

     714        485        2,618        3,149   

Amortization of acquired intangible assets

     58        64        245        254   

Stock-based compensation expense

     86        69        274        195   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted gross profit

   $ 12,827      $ 11,998      $ 49,735      $ 45,161   
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation from Operating Loss to Non-GAAP Operating Loss:

        

Operating loss

   $ (7,691   $ (1,491   $ (28,194   $ (12,802

Amortization of acquired intangible assets

     76        84        323        335   

Stock-based compensation expense

     381        248        1,202        712   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net adjustments

   $ 457      $ 332      $ 1,525      $ 1,047   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating loss

   $ (7,234   $ (1,159   $ (26,669   $ (11,755
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation from Net Loss to Adjusted EBITDA:

        

Net loss

   $ (8,282   $ (2,029   $ (30,361   $ (14,873

Depreciation

     1,456        1,225        5,231        5,076   

Amortization of software development costs

     714        485        2,618        3,149   

Amortization of acquired intangible assets

     76        84        323        335   

Interest income

     (15     (12     (46     (53

Interest expense

     552        507        2,149        1,976   

Income tax (benefit) expense

     (12     35        (31     84   

Stock-based compensation expense

     381        248        1,202        712   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net adjustments

   $ 3,152      $ 2,572      $ 11,446      $ 11,279   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ (5,130   $ 543      $ (18,915   $ (3,594
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation from Net Loss to Non-GAAP Net Loss:

        

Net loss

   $ (8,282   $ (2,029   $ (30,361   $ (14,873

Amortization of acquired intangible assets

     76        84        323        335   

Stock-based compensation expense

     381        248        1,202        712   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net adjustments

     457        332        1,525        1,047   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss

     (7,825     (1,697     (28,836     (13,826
  

 

 

   

 

 

   

 

 

   

 

 

 

Calculation of Non-GAAP Earnings Per Share:

        

Non-GAAP net loss

   $ (7,825   $ (1,697   $ (28,836   $ (13,826

Weighted average shares outstanding - basic and diluted

     24,474,566        4,842,205        10,144,243        4,812,632   

Additional weighted average shares giving effect to conversion of convertible preferred stock at the beginning of the period

     —          16,496,860        12,022,369        16,496,860   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

     24,474,566        21,339,065        22,166,612        21,309,492   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ (0.32   $ (0.08   $ (1.30   $ (0.65