Financial Engines (NASDAQ:FNGN), America’s largest independent
investment advisori, today reported financial results for its
second quarter ended June 30, 2014.
Financial results for the second quarter of 2014 compared to the
second quarter of 2013:ii
-
Revenue increased 21% to $69.8 million for the second quarter of 2014
from $57.8 million for the second quarter of 2013.
-
Professional management revenue increased 25% to $60.7 million for the
second quarter of 2014 from $48.5 million for the second quarter of
2013.
-
Net income was $10.1 million, or $0.19 per diluted share, for the
second quarter of 2014 compared to $6.3 million, or $0.12 per diluted
share, for the second quarter of 2013.
-
Non-GAAP Adjusted EBITDAii increased 47% to $26.2
million for the second quarter of 2014 from $17.8 million for the
second quarter of 2013.
-
Non-GAAP Adjusted Net Incomeii increased 56% to
$13.2 million for the second quarter of 2014 from $8.5 million for the
second quarter of 2013.
-
Non-GAAP Adjusted Earnings Per Shareii increased 56%
to $0.25 for the second quarter of 2014 from $0.16 for the second
quarter of 2013.
Key operating metrics as of June 30, 2014:iii
-
Assets under contract (“AUC”) were $869 billion.
-
Assets under management (“AUM”) were $98.4 billion.
-
Members in Professional Management were over 797,000.
-
Asset enrollment rates for companies where services have been
available for 26 months or more averaged 13.2%iv.
“There is a seismic shift underway in the U.S. with millions of baby
boomers transitioning into retirement over the next 15 years,” said Jeff
Maggioncalda, chief executive officer of Financial Engines. “Our
services help near-retirees maximize their retirement income and our new
Social Security and income planner has already identified almost $2.6
billion in additional expected Social Security benefits, providing great
value to Americans.”
Review of Financial Results for the Second Quarter of 2014
Revenue increased 21% to $69.8 million for the second quarter of 2014
from $57.8 million for the second quarter of 2013. The increase in
revenue was driven primarily by the growth in professional management
revenue, which increased 25% to $60.7 million for the second quarter of
2014 from $48.5 million for the second quarter of 2013.
Costs and expenses increased 11% to $53.2 million for the second quarter
of 2014 from $48.0 million for the second quarter of 2013. This was due
primarily to an increase in fees paid to plan providers for connectivity
to plan and plan participant data, as well as an increase in non-cash
stock-based compensation and an increase in wages, benefits, and
employer payroll taxes due primarily to increased headcount and higher
compensation, partially offset by a decrease in cash incentive
compensation expense.
As a percentage of revenue, cost of revenue (exclusive of amortization
of internal use software) remained constant at 39% for both the second
quarters of 2014 and 2013.
Income from operations was $16.6 million for the second quarter of 2014
compared to $9.8 million for the second quarter of 2013. As a percentage
of revenue, income from operations was 24% for the second quarter of
2014 compared to 17% for the second quarter of 2013.
Net income was $10.1 million, or $0.19 per diluted share, for the second
quarter of 2014 compared to net income of $6.3 million, or $0.12 per
diluted share, for the second quarter of 2013.
On a non-GAAP basis, Adjusted Net Incomeii was $13.2
million and Adjusted Earnings Per Shareii were $0.25
for the second quarter of 2014 compared to Adjusted Net Income of $8.5
million and Adjusted Earnings Per Share of $0.16 for the second quarter
of 2013.
“We are pleased with over 30% growth in both AUC and AUM,” said Ray
Sims, chief financial officer of Financial Engines. “We will continue to
invest in enhancing our services for participants to differentiate them
from competing offerings and to drive future growth and profitability.”
Assets Under Contract and Assets Under Management
AUC was $869 billion as of June 30, 2014, an increase of 30% from $667
billion as of June 30, 2013, due primarily to market performance, new
employers making our services available, and contributions. AUC for
plans in which the Income+ service has been made available was $188
billion as of June 30, 2014, an increase of 262% from $52 billion as of
June 30, 2013.
AUM increased by 32% year over year to $98.4 billion as of June 30,
2014, from $74.3 billion as of June 30, 2013. The increase in AUM was
driven primarily by market performance, contributions, and net new
enrollment into the Professional Management service.
|
In billions
|
|
|
|
Q3'13
|
|
|
|
Q4'13
|
|
|
|
Q1'14
|
|
|
|
Q2'14
|
|
AUM, Beginning of Period
|
|
|
$
|
74.3
|
|
|
$
|
82.0
|
|
|
$
|
88.2
|
|
|
|
92.0
|
|
New Enrollment(1)
|
|
|
|
4.8
|
|
|
|
4.4
|
|
|
|
3.9
|
|
|
|
4.0
|
|
Voluntary Cancellations(2)
|
|
|
|
(1.5)
|
|
|
|
(1.6)
|
|
|
|
(1.5)
|
|
|
|
(1.2)
|
|
Involuntary Cancellations(3)
|
|
|
|
(1.3)
|
|
|
|
(1.8)
|
|
|
|
(1.2)
|
|
|
|
(1.4)
|
|
Contributions(4)
|
|
|
|
1.4
|
|
|
|
1.4
|
|
|
|
1.5
|
|
|
|
1.6
|
|
Market Movement and Other(5)
|
|
|
|
4.3
|
|
|
|
3.8
|
|
|
|
1.1
|
|
|
|
3.4
|
|
AUM, End of Period
|
|
|
$
|
82.0
|
|
|
$
|
88.2
|
|
|
$
|
92.0
|
|
|
|
98.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The aggregate amount of assets under management, at the time of
enrollment, of new members who enrolled in our Professional
Management service within the period.
|
|
|
|
|
|
(2)
|
|
The aggregate amount of assets, at the time of cancellation, for
voluntary cancellations from the Professional Management service
within the period.
|
|
|
|
|
|
(3)
|
|
The aggregate amount of assets, as of the last available positive
account balance, for involuntary cancellations occurring when the
member’s 401(k) plan account balance has been reduced to zero or
when the cancellation of a plan sponsor contract for the
Professional Management service has become effective within the
period.
|
|
|
|
|
|
(4)
|
|
Employer and employee contributions are estimated each quarter from
annual contribution rates based on data received from plan providers
or plan sponsors. The data presented in the table above differ from
data provided in filings prior to September 30, 2012, as the
previously reported contributions data represented only that subset
of members for whom we received salary data.
|
|
|
|
|
|
(5)
|
|
Other factors affecting assets under management include estimated
market movement, plan administrative fees, participant loans and
hardship withdrawals, and timing differences.
|
|
|
|
|
|
For further information on the AUM data above, please refer to our
Form 10-Q to be filed for the period ended June 30, 2014.
|
|
|
Aggregate Investment Style Exposure for Portfolios Under Management
As of June 30, 2014, the approximate aggregate investment style exposure
of the portfolios we managed was as follows:
|
Cash
|
|
|
3%
|
|
Bonds
|
|
|
24%
|
|
Domestic Equity
|
|
|
46%
|
|
International Equity
|
|
|
27%
|
|
Total
|
|
|
100%
|
|
|
|
|
|
Quarterly Dividend
On July 29, 2014, Financial Engines’ Board of Directors declared a
regular quarterly cash dividend of $0.06 per share of the Company’s
common stock. The cash dividend will be paid on October 6, 2014 to
stockholders of record as of the close of business on September 22, 2014.
Outlook
Financial Engines’ growth strategy includes focusing on increasing
penetration within existing Professional Management plan sponsors,
enhancing and extending services to individuals entering and in
retirement, and expanding the number of plan sponsors.
Based on financial markets remaining at July 28, 2014 levels, the
Company estimates that its 2014 revenue will be in the range of $277
million to $282 million, and its 2014 non-GAAP Adjusted EBITDA will be
in the range of $98 million to $100 million.
Conference Call
The Company will host a conference call to discuss second quarter 2014
financial results today at 5:00 PM ET. Hosting the call will be Jeff
Maggioncalda, chief executive officer, and Ray Sims, chief financial
officer. The conference call can be accessed live over the phone by
dialing (877) 300-8521, or for international callers, (412) 317-6026. A
replay will be available beginning approximately one hour after the call
and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for
international callers. The conference ID is 10049450. The replay will
remain available until Friday, August 8, 2014, and an archived replay
will be available at http://ir.financialengines.com/
for 30 calendar days after the call.
About Non-GAAP Financial Measures
This press release and its attachments include certain non-GAAP
financial measures. The presentation of this financial information is
not intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with U.S.
generally accepted accounting principles (GAAP). These non-GAAP measures
include non-GAAP Adjusted Net Income, non-GAAP Adjusted Earnings Per
Share and non-GAAP Adjusted EBITDA. Non-GAAP Adjusted Net Income is
defined as net income before non-cash stock-based compensation expense,
net of tax, and certain other items such as the income tax benefit from
the release of valuation allowances, if applicable for the period.
Non-GAAP Adjusted Earnings Per Share is defined as non-GAAP Adjusted Net
Income divided by the weighted-average of dilutive common share
equivalents outstanding. Non-GAAP Adjusted EBITDA is defined as net
income before net interest income, income tax expense (benefit),
depreciation, amortization of internal use software, amortization of
direct response advertising, amortization of deferred commissions, and
non-cash stock-based compensation. Further information regarding the
non-GAAP financial measures included in this press release is contained
in the attachments.
To supplement the Company’s consolidated financial statements presented
on a GAAP basis, management believes that these non-GAAP measures
provide useful information about the Company’s core operating results
and thus are appropriate to enhance the overall understanding of the
Company’s past financial performance and its prospects for the future.
These adjustments to the Company’s GAAP results are made with the intent
of providing both management and investors a more complete understanding
of the Company’s underlying operational results, trends and performance.
About Financial Engines
Financial Engines, America's largest independent investment advisor, is
dedicated to making high-quality retirement help available to everyone —
regardless of how much money they have. We’re proudly independent, which
means we don’t sell products or earn commissions based on our investment
recommendations. The companies that choose to work with us offer our
services to their workers as a valuable employee benefit.
Co-founded in 1996 by Nobel Prize-winning economist Bill Sharpe,
Financial Engines currently offers personalized advice for saving,
investing and living in retirement to millions of workers nationwide.
Some people love the challenge of investing. Others prefer to focus
their time elsewhere, but everyone needs to plan for retirement.
Whatever their interest level in investing, Financial Engines combines
cutting-edge technology and a personal, human touch to help all types of
investors reach their retirement goals. For more information, visit www.financialengines.com.
All advisory services provided by Financial Engines Advisors, L.L.C., a
federally registered investment advisor and wholly-owned subsidiary of
Financial Engines, Inc. Financial Engines does not guarantee future
results.
Forward-Looking Statements
This press release and its attachments contain forward-looking
statements that involve risks and uncertainties. These forward-looking
statements may be identified by terms such as “plan to,” “designed to,”
“will,” “can,” “expect,” “estimates,” “believes,” “intends,” “may,”
“continues,” “to be” or the negative of these terms, and similar
expressions intended to identify forward-looking statements. These
forward-looking statements include, but are not limited to, statements
regarding Financial Engines’ expected financial performance and outlook,
benefits of our services, objectives and growth strategy, investments in
our services, our focus on taking advantage of our market opportunity,
and the benefits of our non-GAAP financial measures. These statements
involve known and unknown risks, uncertainties and other factors which
may cause actual results, performance or achievements to differ
materially from those expressed or implied by such forward-looking
statements, and reported results should not be considered as an
indication of future performance. These risks and uncertainties include,
but are not limited to, our reliance on fees earned on the value of
assets we manage for a substantial portion of our revenue, the impact of
the financial markets on our revenue and earnings, unanticipated delays
in rollouts of our services, our ability to increase enrollment, our
ability to correctly identify and invest appropriately in growth
opportunities, our ability to introduce new services and accurately
estimate the impact of any future services on our business, the risk
that the anticipated benefits of our investments in these services or in
growth opportunities may not outweigh the resources and costs associated
with these investments or the liabilities associated with the operation
of these services, our relationships with plan providers and plan
sponsors, the fees we can charge for our Professional Management
service, our reliance on accurate and timely data from plan providers
and plan sponsors, system failures, errors or unsatisfactory performance
of our services, our reputation, our ability to protect the
confidentiality of plan provider, plan sponsor and plan participant data
and other privacy concerns, acquisition activity involving plan
providers or plan sponsors, our ability to compete, our regulatory
environment and risks associated with our fiduciary obligations. More
information regarding these and other risks, uncertainties and factors
is contained in the Company’s Form 10-K for the year ended December 31,
2013, as filed with the SEC, and in other reports filed by the Company
with the SEC from time to time. You are cautioned not to unduly rely on
these forward-looking statements, which speak only as of the date of
this press release. All information in this press release and its
attachments is as of the date stated or July 31, 2014 and unless
required by law, Financial Engines undertakes no obligation to publicly
revise any forward-looking statement to reflect circumstances or events
after the date of this press release or to report the occurrence of
unanticipated events.
Our investment advisory and management services are provided through our
subsidiary, Financial Engines Advisors L.L.C., a federally registered
investment advisor. References in this press release to “Financial
Engines,” “our company,” “the Company,” “we,” “us” and “our” refer to
Financial Engines, Inc. and its consolidated subsidiaries during the
periods presented unless the context requires otherwise.
______________________________________
i For independence methodology and ranking, see
InvestmentNews RIA Data Center. (http://data.investmentnews.com/ria/).
ii Please see “About Non-GAAP Financial Measures” for
definitions of the terms Adjusted Net Income, Adjusted Earnings Per
Share, and Adjusted EBITDA.
iii Operating metrics include both advised and subadvised
relationships.
iv Information regarding enrollment rates and the component
AUC can be found in the section entitled “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in the
Company’s Securities and Exchange Commission (“SEC”) filings, including
the Form 10-K for the year ended December 31, 2013.
|
|
|
|
|
|
|
|
|
|
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
Unaudited Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
June 30,
|
|
|
|
|
|
|
2013
|
|
|
|
|
2014
|
|
|
|
Assets
|
|
|
(In thousands, except per share data)
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
126,003
|
|
|
|
$
|
131,280
|
|
|
Short-term investments
|
|
|
|
120,027
|
|
|
|
|
149,929
|
|
|
Accounts receivable, net
|
|
|
|
63,805
|
|
|
|
|
64,003
|
|
|
Prepaid expenses
|
|
|
|
3,271
|
|
|
|
|
3,749
|
|
|
Deferred tax assets
|
|
|
|
17,363
|
|
|
|
|
15,012
|
|
|
Other current assets
|
|
|
|
3,326
|
|
|
|
|
2,422
|
|
|
Total current assets
|
|
|
|
333,795
|
|
|
|
|
366,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
15,273
|
|
|
|
|
15,826
|
|
|
Internal use software, net
|
|
|
|
8,530
|
|
|
|
|
7,460
|
|
|
Long-term deferred tax assets
|
|
|
|
4,989
|
|
|
|
|
4,989
|
|
|
Direct response advertising, net
|
|
|
|
9,717
|
|
|
|
|
8,373
|
|
|
Other assets
|
|
|
|
3,377
|
|
|
|
|
3,063
|
|
|
Total assets
|
|
|
$
|
375,681
|
|
|
|
$
|
406,106
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
20,801
|
|
|
|
$
|
19,703
|
|
|
Accrued compensation
|
|
|
|
14,138
|
|
|
|
|
6,850
|
|
|
Deferred revenue
|
|
|
|
7,868
|
|
|
|
|
7,853
|
|
|
Dividend payable
|
|
|
|
2,540
|
|
|
|
|
3,097
|
|
|
Other current liabilities
|
|
|
|
959
|
|
|
|
|
1,057
|
|
|
Total current liabilities
|
|
|
|
46,306
|
|
|
|
|
38,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term deferred revenue
|
|
|
|
714
|
|
|
|
|
487
|
|
|
Long-term deferred rent
|
|
|
|
6,644
|
|
|
|
|
6,554
|
|
|
Other liabilities
|
|
|
|
131
|
|
|
|
|
1,223
|
|
|
Total liabilities
|
|
|
|
53,795
|
|
|
|
|
46,824
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value - 10,000
|
|
|
|
|
|
|
|
authorized as of December 31, 2013 and June 30, 2014;
|
|
|
|
|
|
|
|
None issued or outstanding as of December 31, 2013 and June 30, 2014
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Common stock, $0.0001 par value - 500,000
|
|
|
|
|
|
|
|
authorized as of December 31, 2013 and June 30, 2014;
|
|
|
|
|
|
|
|
50,890 and 51,679 shares issued and outstanding
|
|
|
|
|
|
|
|
at December 31, 2013 and June 30, 2014, respectively
|
|
|
|
5
|
|
|
|
|
5
|
|
|
Additional paid-in capital
|
|
|
|
361,955
|
|
|
|
|
387,653
|
|
|
Accumulated deficit
|
|
|
|
(40,074
|
)
|
|
|
|
(28,376
|
)
|
|
Total stockholders’ equity
|
|
|
|
321,886
|
|
|
|
|
359,282
|
|
|
Total liabilities and stockholders’ equity
|
|
|
$
|
375,681
|
|
|
|
$
|
406,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
|
|
|
|
(In thousands, except per share data)
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional management
|
|
|
$
|
48,501
|
|
|
$
|
60,735
|
|
|
$
|
93,955
|
|
|
$
|
117,804
|
|
Platform
|
|
|
|
8,454
|
|
|
|
8,222
|
|
|
|
16,503
|
|
|
|
16,512
|
|
Other
|
|
|
|
825
|
|
|
|
832
|
|
|
|
1,187
|
|
|
|
1,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
|
57,780
|
|
|
|
69,789
|
|
|
|
111,645
|
|
|
|
135,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue (exclusive of amortization of internal use software)
|
|
|
|
22,546
|
|
|
|
27,178
|
|
|
|
42,474
|
|
|
|
53,156
|
|
Research and development
|
|
|
|
7,643
|
|
|
|
7,011
|
|
|
|
15,267
|
|
|
|
14,932
|
|
Sales and marketing
|
|
|
|
10,910
|
|
|
|
11,823
|
|
|
|
21,263
|
|
|
|
23,700
|
|
General and administrative
|
|
|
|
5,147
|
|
|
|
5,576
|
|
|
|
9,965
|
|
|
|
11,446
|
|
Amortization of internal use software
|
|
|
|
1,723
|
|
|
|
1,623
|
|
|
|
3,360
|
|
|
|
3,135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses
|
|
|
|
47,969
|
|
|
|
53,211
|
|
|
|
92,329
|
|
|
|
106,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
|
9,811
|
|
|
|
16,578
|
|
|
|
19,316
|
|
|
|
29,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net
|
|
|
|
7
|
|
|
|
41
|
|
|
|
10
|
|
|
|
77
|
|
Other income, net
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
9,818
|
|
|
|
16,619
|
|
|
|
19,326
|
|
|
|
29,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
3,475
|
|
|
|
6,565
|
|
|
|
6,791
|
|
|
|
11,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net and comprehensive income
|
|
|
$
|
6,343
|
|
|
$
|
10,054
|
|
|
$
|
12,535
|
|
|
$
|
17,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per share of common stock
|
|
|
$
|
0.05
|
|
|
$
|
0.06
|
|
|
$
|
0.10
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to holders of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.13
|
|
|
$
|
0.20
|
|
|
$
|
0.26
|
|
|
$
|
0.35
|
|
Diluted
|
|
|
$
|
0.12
|
|
|
$
|
0.19
|
|
|
$
|
0.24
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute net income per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
attributable to holders of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
49,201
|
|
|
|
51,523
|
|
|
|
48,744
|
|
|
|
51,313
|
|
Diluted
|
|
|
|
52,086
|
|
|
|
53,275
|
|
|
|
51,766
|
|
|
|
53,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
2013
|
|
|
|
|
2014
|
|
|
|
|
|
|
(In thousands)
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
12,535
|
|
|
|
$
|
17,871
|
|
|
Adjustments to reconcile net income to net cash provided by
|
|
|
|
|
|
|
|
operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
1,921
|
|
|
|
|
2,232
|
|
|
Amortization of internal use software
|
|
|
|
3,145
|
|
|
|
|
2,953
|
|
|
Stock-based compensation
|
|
|
|
6,210
|
|
|
|
|
9,850
|
|
|
Amortization of deferred sales commissions
|
|
|
|
967
|
|
|
|
|
804
|
|
|
Amortization and impairment of direct response advertising
|
|
|
|
2,970
|
|
|
|
|
3,097
|
|
|
Amortization of discount on short-term investments
|
|
|
|
(3
|
)
|
|
|
|
1
|
|
|
Provision for doubtful accounts
|
|
|
|
237
|
|
|
|
|
356
|
|
|
Deferred tax assets
|
|
|
|
4,735
|
|
|
|
|
3,365
|
|
|
Loss (gain) on fixed asset disposal
|
|
|
|
-
|
|
|
|
|
(8
|
)
|
|
Excess tax benefit associated with stock-based compensation
|
|
|
|
(1,234
|
)
|
|
|
|
(8,109
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
(6,961
|
)
|
|
|
|
(555
|
)
|
|
Prepaid expenses
|
|
|
|
(256
|
)
|
|
|
|
(478
|
)
|
|
Direct response advertising
|
|
|
|
(2,055
|
)
|
|
|
|
(1,749
|
)
|
|
Other assets
|
|
|
|
(26
|
)
|
|
|
|
413
|
|
|
Accounts payable
|
|
|
|
6,430
|
|
|
|
|
7,631
|
|
|
Accrued compensation
|
|
|
|
(2,596
|
)
|
|
|
|
(7,287
|
)
|
|
Deferred revenue
|
|
|
|
483
|
|
|
|
|
(243
|
)
|
|
Deferred rent
|
|
|
|
251
|
|
|
|
|
(35
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
26,753
|
|
|
|
|
30,109
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
|
(1,943
|
)
|
|
|
|
(3,234
|
)
|
|
Sale of property and equipment
|
|
|
|
-
|
|
|
|
|
8
|
|
|
Capitalization of internal use software
|
|
|
|
(2,357
|
)
|
|
|
|
(1,922
|
)
|
|
Purchases of short-term investments
|
|
|
|
(39,971
|
)
|
|
|
|
(89,902
|
)
|
|
Maturities of short-term investments
|
|
|
|
-
|
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
|
(44,271
|
)
|
|
|
|
(35,050
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Payments on capital lease obligations
|
|
|
|
(31
|
)
|
|
|
|
(50
|
)
|
|
Excess tax benefit associated with stock-based compensation
|
|
|
|
1,234
|
|
|
|
|
8,109
|
|
|
Net share settlements for minimum tax withholdings
|
|
|
|
-
|
|
|
|
|
(128
|
)
|
|
Proceeds from issuance of common stock
|
|
|
|
13,300
|
|
|
|
|
7,903
|
|
|
Cash dividend payments
|
|
|
|
(2,436
|
)
|
|
|
|
(5,616
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
|
12,067
|
|
|
|
|
10,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
(5,451
|
)
|
|
|
|
5,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
|
181,231
|
|
|
|
|
126,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
|
$
|
175,780
|
|
|
|
$
|
131,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flows information:
|
|
|
|
|
|
|
|
Income taxes paid, net of refunds
|
|
|
$
|
429
|
|
|
|
$
|
211
|
|
|
Interest paid
|
|
|
$
|
5
|
|
|
|
$
|
6
|
|
|
Non-cash operating, investing and financing activities:
|
|
|
|
|
|
|
|
Purchase of property and equipment under capital lease
|
|
|
$
|
34
|
|
|
|
$
|
169
|
|
|
Unpaid purchases of property and equipment
|
|
|
$
|
233
|
|
|
|
$
|
444
|
|
|
Capitalized stock-based compensation for internal use software
|
|
|
$
|
140
|
|
|
|
$
|
142
|
|
|
Capitalized stock-based compensation for direct response advertising
|
|
|
$
|
25
|
|
|
|
$
|
36
|
|
|
Dividends declared but not yet paid
|
|
|
$
|
2,475
|
|
|
|
$
|
3,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Operating Results
|
|
|
|
|
|
|
|
|
|
The table below sets forth a reconciliation of net income to
non-GAAP Adjusted EBITDA based on our historical results:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
Non-GAAP Adjusted EBITDA
|
|
|
|
2013
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
|
2014
|
|
|
|
|
|
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
6,343
|
|
|
|
$
|
10,054
|
|
|
|
$
|
12,535
|
|
|
|
$
|
17,871
|
|
|
Interest income, net
|
|
|
|
(7
|
)
|
|
|
|
(41
|
)
|
|
|
|
(10
|
)
|
|
|
|
(77
|
)
|
|
Income tax expense
|
|
|
|
3,475
|
|
|
|
|
6,565
|
|
|
|
|
6,791
|
|
|
|
|
11,506
|
|
|
Depreciation
|
|
|
|
972
|
|
|
|
|
1,116
|
|
|
|
|
1,921
|
|
|
|
|
2,232
|
|
|
Amortization of internal use software
|
|
|
|
1,612
|
|
|
|
|
1,528
|
|
|
|
|
3,145
|
|
|
|
|
2,953
|
|
|
Amortization and impairment of direct response advertising
|
|
|
|
1,491
|
|
|
|
|
1,555
|
|
|
|
|
2,970
|
|
|
|
|
3,097
|
|
|
Amortization of deferred sales commissions
|
|
|
|
495
|
|
|
|
|
381
|
|
|
|
|
967
|
|
|
|
|
804
|
|
|
Stock-based compensation
|
|
|
|
3,418
|
|
|
|
|
5,070
|
|
|
|
|
6,210
|
|
|
|
|
9,850
|
|
|
Non-GAAP Adjusted EBITDA
|
|
|
$
|
17,799
|
|
|
|
$
|
26,228
|
|
|
|
$
|
34,529
|
|
|
|
$
|
48,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below sets forth a reconciliation of net income to non-GAAP
Adjusted Net Income and non-GAAP Adjusted Earnings Per Share based on
our historical results:
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
Non-GAAP Adjusted Net Income
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
|
|
(In thousands, except per share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
6,343
|
|
|
$
|
10,054
|
|
|
$
|
12,535
|
|
|
$
|
17,871
|
|
Stock-based compensation, net of tax (1)
|
|
|
|
2,113
|
|
|
|
3,133
|
|
|
|
3,838
|
|
|
|
6,087
|
|
Non-GAAP Adjusted Net Income
|
|
|
$
|
8,456
|
|
|
$
|
13,187
|
|
|
$
|
16,373
|
|
|
$
|
23,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted Earnings Per Share
|
|
|
$
|
0.16
|
|
|
$
|
0.25
|
|
|
$
|
0.32
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of common stock outstanding
|
|
|
|
49,201
|
|
|
|
51,523
|
|
|
|
48,744
|
|
|
|
51,313
|
|
Dilutive stock options, RSUs and PSUs
|
|
|
|
2,885
|
|
|
|
1,752
|
|
|
|
3,022
|
|
|
|
1,957
|
|
Non-GAAP adjusted common shares outstanding
|
|
|
|
52,086
|
|
|
|
53,275
|
|
|
|
51,766
|
|
|
|
53,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
For the calculation of non-GAAP Adjusted Net Income, an estimated
statutory tax rate of 38.2% has been applied to non-cash stock-based
compensation for all periods presented.
|
Copyright Business Wire 2014