Financial Engines (NASDAQ:FNGN), America’s largest independent
investment advisori, today reported financial results for its
fourth quarter and full year ended December 31, 2014.
Financial results for the fourth quarter of 2014 compared to the
fourth quarter of 2013:ii
-
Revenue increased 13% to $73.5 million for the fourth quarter of 2014
from $65.2 million for the fourth quarter of 2013.
-
Professional management revenue increased 15% to $64.8 million for the
fourth quarter of 2014 from $56.4 million for the fourth quarter of
2013.
-
Net income was $10.1 million, or $0.19 per diluted share, for the
fourth quarter of 2014 compared to $9.3 million, or $0.17 per diluted
share, for the fourth quarter of 2013.
-
Non-GAAP Adjusted EBITDAii increased 11% to $25.9 million
for the fourth quarter of 2014 from $23.3 million for the fourth
quarter of 2013.
-
Non-GAAP Adjusted Net Incomeii increased 9% to $12.9
million for the fourth quarter of 2014 from $11.9 million for the
fourth quarter of 2013.
-
Non-GAAP Adjusted Earnings Per Shareii increased 9% to
$0.24 for the fourth quarter of 2014 from $0.22 for the fourth quarter
of 2013.
Financial results for the full year of 2014 compared to the full year
of 2013:ii
-
Revenue increased 18% to $281.9 million for 2014 from $239.0 million
for 2013.
-
Professional management revenue increased 21% to $245.8 million for
2014 from $202.8 million for 2013.
-
Net income was $37.0 million, or $0.69 per diluted share, for 2014
compared to $30.0 million, or $0.57 per diluted share, for 2013.
-
Non-GAAP Adjusted EBITDAii increased 24% to $98.6 million
for 2014 from $79.3 million for 2013.
-
Non-GAAP Adjusted Net Incomeii increased 25% to $48.9
million for 2014 from $39.0 million for 2013.
-
Non-GAAP Adjusted Earnings Per Shareii increased 23% to
$0.92 for 2014 from $0.75 for 2013.
Key operating metrics as of December 31, 2014:iii
-
Assets under contract (“AUC”) were $895 billion.
-
Assets under management (“AUM”) were $104.4 billion.
-
Members in Professional Management were over 848,000.
-
Asset enrollment rates for companies where services have been
available for 26 months or more averaged 13.3%iv.
“As millions of baby boomers age and prepare for a longer retirement, it
is clear that a growing number of Americans need more help,” said Larry
Raffone, president and chief executive officer of Financial Engines.
“Our long term growth strategy is rooted in our desire to create a
unique offering and experience that will help people with their toughest
financial decisions and confidently prepare them for retirement.”
Review of Financial Results for the Fourth Quarter of 2014
Revenue increased 13% to $73.5 million for the fourth quarter of 2014
from $65.2 million for the fourth quarter of 2013. The increase in
revenue was driven primarily by the growth in professional management
revenue, which increased 15% to $64.8 million for the fourth quarter of
2014 from $56.4 million for the fourth quarter of 2013.
Costs and expenses increased 9% to $57.0 million for the fourth quarter
of 2014 from $52.4 million for the fourth quarter of 2013. This was due
primarily to increases in fees paid to plan providers for connectivity
to plan and plan participant data, wages, benefits, and employer payroll
taxes due primarily to increased headcount and higher compensation and
facilities-related expenses, partially offset by decreases in non-cash
stock-based compensation expense and cash incentive compensation expense.
As a percentage of revenue, cost of revenue (exclusive of amortization
of internal use software) was 40% for the fourth quarter of 2014
compared to 38% for the fourth quarter of 2013.
Income from operations was $16.5 million for the fourth quarter of 2014
compared to $12.9 million for the fourth quarter of 2013. As a
percentage of revenue, income from operations was 22% for the fourth
quarter of 2014 compared to 20% for the fourth quarter of 2013.
Net income was $10.1 million, or $0.19 per diluted share, for the fourth
quarter of 2014 compared to net income of $9.3 million, or $0.17 per
diluted share, for the fourth quarter of 2013.
On a non-GAAP basis, Adjusted Net Incomeii was $12.9 million
and Adjusted Earnings Per Shareii were $0.24 for the fourth
quarter of 2014 compared to Adjusted Net Income of $11.9 million and
Adjusted Earnings Per Share of $0.22 for the fourth quarter of 2013.
“Because of our solid, predictable profitability and strong cash
generation, we can confidently increase the regular quarterly dividend
by 17% to $0.07 in 2015 in addition to buying shares through the stock
repurchase program we initiated in November 2014,” said Ray Sims, chief
financial officer of Financial Engines.
Assets Under Contract and Assets Under Management
AUC was $895 billion as of December 31, 2014, an increase of 14% from
$786 billion as of December 31, 2013, due primarily to new employers
making our services available, market performance, and contributions.
AUC for plans in which the Income+ service has been made available was
$227 billion as of December 31, 2014, an increase of 112% from $107
billion as of December 31, 2013.
AUM increased by 18% year over year to $104.4 billion as of December 31,
2014, from $88.2 billion as of December 31, 2013. The increase in AUM
was driven primarily by contributions, net new enrollment into the
Professional Management service, and market performance.
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In billions
|
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Q1'14
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Q2'14
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Q3'14
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Q4'14
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AUM, Beginning of Period
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$
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88.2
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92.0
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98.4
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101.9
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New Enrollment(1)
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3.9
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4.0
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6.5
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3.9
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Voluntary Cancellations(2)
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(1.5
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)
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(1.2
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)
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(1.5
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)
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(2.6
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)
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Involuntary Cancellations(3)
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(1.2
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)
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(1.4
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)
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(1.2
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)
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(1.9
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)
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Contributions(4)
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1.5
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1.6
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1.6
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1.7
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Market Movement and Other(5)
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1.1
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3.4
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(1.9
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)
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1.4
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AUM, End of Period
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$
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92.0
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$
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98.4
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$
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101.9
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$
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104.4
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(1)
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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.
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(2)
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The aggregate amount of assets, at the time of cancellation, for
voluntary cancellations from the Professional Management service
within the period.
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(3)
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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.
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(4)
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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.
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(5)
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Other factors affecting assets under management include estimated
market movement, plan administrative fees, participant loans and
hardship withdrawals, and timing differences.
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For further information on the AUM data above, please refer to our Form
10-K to be filed for the period ended December 31, 2014.
Aggregate Investment Style Exposure for Portfolios Under Management
As of December 31, 2014, the approximate aggregate investment style
exposure of the portfolios we managed was as follows:
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Cash
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3%
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Bonds
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26%
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Domestic Equity
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45%
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International Equity
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26%
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Total
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100%
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Quarterly Dividend
On February 12, 2015, Financial Engines’ Board of Directors declared a
regular quarterly cash dividend of $0.07 per share of the Company’s
common stock. The cash dividend will be paid on April 6, 2015 to
stockholders of record as of the close of business on March 23, 2015.
Stock Repurchase Program
On November 5, 2014, Financial Engines’ Board of Directors approved a
twelve month stock repurchase program under which we may purchase up to
$50 million of our Common Stock. During the fourth quarter, the Company
purchased 280,000 shares for $9.2 million on the open market. Any stock
repurchases may be made at times and in such amounts as management deems
appropriate. The timing and amount of stock repurchased, if any, will
depend on a variety of factors including stock price, market conditions,
corporate and regulatory requirements, and any additional constraints
related to material inside information the Company may possess. The
repurchase is funded by available working capital. The weighted average
shares repurchased have been deducted from our shares outstanding for
the calculation of EPS and Non-GAAP Adjusted EPS.
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 February 13, 2015 levels, the
Company estimates that its 2015 revenue will be in the range of $313
million and $319 million and 2015 non-GAAP adjusted EBITDA will be in
the range of $96 million to $100 million.
Conference Call
The Company will host a conference call to discuss fourth quarter 2014
financial results today at 5:00 PM ET. Hosting the call will be Larry
Raffone, chief executive officer, and Ray Sims, chief financial officer.
The conference call can be accessed live over the phone by dialing (888)
348-6435, or for international callers, (412) 902-4238. 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 10059289. The replay will remain available
until Friday, February 27, 2015, 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 is America’s largest independent investment advisor.
We help people make the most of their retirement assets by providing
professional investment management and advice.
Headquartered in Sunnyvale, CA, Financial Engines was co-founded in 1996
by Nobel Prize-winning economist Bill Sharpe. Today, we offer retirement
help to more than nine million employees across over 600 companies
nationwide (including 144 of the Fortune 500). Our investment
methodology, combined with powerful online services, dedicated advisor
center and personal attention allow us to help more Americans get on the
path to a secure retirement.
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,
including factors which may impact our outlook, benefits of our
services, objectives and growth strategy, investments in our services,
our focus on taking advantage of our market opportunity, the benefits of
our non-GAAP financial measures, and the anticipated amount, duration,
methods, timing and other aspects of our stock repurchase program. 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. In addition, any negative impact on our operating results
and financial condition as a result of the foregoing or other risks,
including any unforeseen need for capital which may require us to divert
funds we may have otherwise used for the stock repurchase program, may
in turn negatively impact our ability to administer the repurchase of
our common stock. 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, including
the Form 10-K to be filed for the year ended December 31, 2014. 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 February
19, 2015 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 and the Form 10-K to
be filed for the year ended December 31, 2014.
###
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Financial Tables
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FINANCIAL ENGINES, INC. AND SUBSIDIARIES
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|
Unaudited Consolidated Balance Sheets
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December 31,
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2013
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2014
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Assets
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(In thousands, except per share data)
|
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Current assets:
|
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|
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Cash and cash equivalents
|
|
$
|
126,003
|
|
|
$
|
126,564
|
|
|
Short-term investments
|
|
|
120,027
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|
|
|
179,885
|
|
|
Accounts receivable, net of allowances of $124 and $172 as of
December 31, 2013 and 2014, respectively
|
|
|
63,805
|
|
|
|
66,001
|
|
|
Prepaid expenses
|
|
|
3,271
|
|
|
|
3,763
|
|
|
Deferred tax assets
|
|
|
17,363
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|
|
|
7,932
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|
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Other current assets
|
|
|
3,326
|
|
|
|
5,445
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|
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Total current assets
|
|
|
333,795
|
|
|
|
389,590
|
|
|
Property and equipment, net
|
|
|
15,273
|
|
|
|
20,723
|
|
|
Internal use software, net
|
|
|
8,530
|
|
|
|
6,421
|
|
|
Long-term deferred tax assets
|
|
|
4,989
|
|
|
|
6,844
|
|
|
Direct response advertising, net
|
|
|
9,717
|
|
|
|
8,202
|
|
|
Other assets
|
|
|
3,377
|
|
|
|
3,265
|
|
|
Total assets
|
|
$
|
375,681
|
|
|
$
|
435,045
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
20,801
|
|
|
$
|
21,678
|
|
|
Accrued compensation
|
|
|
14,138
|
|
|
|
10,103
|
|
|
Deferred revenue
|
|
|
7,868
|
|
|
|
5,840
|
|
|
Dividend payable
|
|
|
2,540
|
|
|
|
3,113
|
|
|
Other current liabilities
|
|
|
959
|
|
|
|
1,161
|
|
|
Total current liabilities
|
|
|
46,306
|
|
|
|
41,895
|
|
|
Long-term deferred revenue
|
|
|
714
|
|
|
|
427
|
|
|
Long-term deferred rent
|
|
|
6,644
|
|
|
|
8,689
|
|
|
Other liabilities
|
|
|
131
|
|
|
|
3,823
|
|
|
Total liabilities
|
|
|
53,795
|
|
|
|
54,834
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
Preferred stock, $0.0001 par value - 10,000 authorized as of
December 31, 2013 and 2014; None issued or outstanding as of
December 31, 2013 and 2014
|
|
|
-
|
|
|
|
-
|
|
|
Common stock, $0.0001 par value - 500,000 authorized as of
December 31, 2013 and 2014; 50,890 and 52,224 shares issued and
50,890 and 51,944 shares outstanding at December 31, 2013 and
2014, respectively
|
|
|
5
|
|
|
|
5
|
|
|
Additional paid-in capital
|
|
|
361,955
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|
|
|
404,908
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|
|
Treasury stock, at cost (no shares and 280 shares as of December
31, 2013 and 2014, respectively)
|
|
|
-
|
|
|
|
(9,182
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)
|
|
Accumulated deficit
|
|
|
(40,074
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)
|
|
|
(15,520
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)
|
|
Total stockholders’ equity
|
|
|
321,886
|
|
|
|
380,211
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
375,681
|
|
|
$
|
435,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
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|
|
Unaudited Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
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|
(In thousands, except per share data)
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
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|
Professional management
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|
$
|
56,358
|
|
|
$
|
64,782
|
|
$
|
202,811
|
|
|
$
|
245,812
|
|
|
Platform
|
|
|
8,488
|
|
|
|
8,243
|
|
|
33,475
|
|
|
|
33,071
|
|
|
Other
|
|
|
382
|
|
|
|
478
|
|
|
2,672
|
|
|
|
3,037
|
|
|
Total revenue
|
|
|
65,228
|
|
|
|
73,503
|
|
|
238,958
|
|
|
|
281,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue (exclusive of amortization of internal use software)
|
|
|
24,873
|
|
|
|
29,381
|
|
|
91,990
|
|
|
|
112,817
|
|
|
Research and development
|
|
|
8,390
|
|
|
|
7,438
|
|
|
30,917
|
|
|
|
29,830
|
|
|
Sales and marketing
|
|
|
11,708
|
|
|
|
13,484
|
|
|
43,400
|
|
|
|
50,091
|
|
|
General and administrative
|
|
|
5,986
|
|
|
|
5,458
|
|
|
21,353
|
|
|
|
22,453
|
|
|
Amortization of internal use software
|
|
|
1,409
|
|
|
|
1,265
|
|
|
6,402
|
|
|
|
5,974
|
|
|
Total costs and expenses
|
|
|
52,366
|
|
|
|
57,026
|
|
|
194,062
|
|
|
|
221,165
|
|
|
Income from operations
|
|
|
12,862
|
|
|
|
16,477
|
|
|
44,896
|
|
|
|
60,755
|
|
|
Interest income, net
|
|
|
29
|
|
|
|
48
|
|
|
58
|
|
|
|
169
|
|
|
Other income (expense)
|
|
|
(3
|
)
|
|
|
4
|
|
|
(13
|
)
|
|
|
3
|
|
|
Income before income taxes
|
|
|
12,888
|
|
|
|
16,529
|
|
|
44,941
|
|
|
|
60,927
|
|
|
Income tax expense
|
|
|
3,614
|
|
|
|
6,455
|
|
|
14,986
|
|
|
|
23,975
|
|
|
Net and comprehensive income
|
|
|
9,274
|
|
|
|
10,074
|
|
|
29,955
|
|
|
|
36,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per share of common stock
|
|
$
|
0.05
|
|
|
$
|
0.06
|
|
$
|
0.20
|
|
|
$
|
0.24
|
|
|
Net income per share attributable to holders of common stock
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.18
|
|
|
$
|
0.19
|
|
$
|
0.61
|
|
|
$
|
0.72
|
|
|
Diluted
|
|
$
|
0.17
|
|
|
$
|
0.19
|
|
$
|
0.57
|
|
|
$
|
0.69
|
|
|
Shares used to compute net income per share attributable to
holders of common stock
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
50,599
|
|
|
|
51,958
|
|
|
49,512
|
|
|
|
51,601
|
|
|
Diluted
|
|
|
53,098
|
|
|
|
53,375
|
|
|
52,335
|
|
|
|
53,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
|
|
|
Unaudited Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31,
|
|
|
|
|
|
2012
|
|
2013
|
|
2014
|
|
|
|
|
|
(In thousands)
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
18,574
|
|
|
$
|
29,955
|
|
|
$
|
36,952
|
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
3,084
|
|
|
|
4,024
|
|
|
|
4,930
|
|
|
|
Amortization of internal use software
|
|
|
5,726
|
|
|
|
6,007
|
|
|
|
5,614
|
|
|
|
Stock-based compensation
|
|
|
10,372
|
|
|
|
16,518
|
|
|
|
19,765
|
|
|
|
Amortization of deferred sales commissions
|
|
|
1,932
|
|
|
|
1,869
|
|
|
|
1,525
|
|
|
|
Amortization and impairment of direct response advertising
|
|
|
5,149
|
|
|
|
5,994
|
|
|
|
6,010
|
|
|
|
Amortization of premium (discount) on short-term investments
|
|
|
-
|
|
|
|
29
|
|
|
|
(69
|
)
|
|
|
Provision for doubtful accounts
|
|
|
311
|
|
|
|
448
|
|
|
|
617
|
|
|
|
Deferred tax assets
|
|
|
8,652
|
|
|
|
13,502
|
|
|
|
10,869
|
|
|
|
Loss (gain) on fixed asset disposal
|
|
|
20
|
|
|
|
-
|
|
|
|
(17
|
)
|
|
|
Excess tax benefit associated with stock-based compensation
|
|
|
(1,962
|
)
|
|
|
(1,145
|
)
|
|
|
(12,659
|
)
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(14,444
|
)
|
|
|
(19,626
|
)
|
|
|
(2,813
|
)
|
|
|
Prepaid expenses
|
|
|
(85
|
)
|
|
|
(177
|
)
|
|
|
(492
|
)
|
|
|
Direct response advertising
|
|
|
(6,515
|
)
|
|
|
(5,454
|
)
|
|
|
(4,450
|
)
|
|
|
Other assets
|
|
|
(2,631
|
)
|
|
|
(1,321
|
)
|
|
|
(3,533
|
)
|
|
|
Accounts payable
|
|
|
6,844
|
|
|
|
6,510
|
|
|
|
13,653
|
|
|
|
Accrued compensation
|
|
|
(983
|
)
|
|
|
1,859
|
|
|
|
(4,034
|
)
|
|
|
Deferred revenue
|
|
|
(2,228
|
)
|
|
|
(414
|
)
|
|
|
(2,315
|
)
|
|
|
Deferred rent
|
|
|
6,270
|
|
|
|
680
|
|
|
|
2,202
|
|
|
|
Net cash provided by operating activities
|
|
|
38,086
|
|
|
|
59,258
|
|
|
|
71,755
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(11,903
|
)
|
|
|
(5,470
|
)
|
|
|
(10,157
|
)
|
|
|
Sale of property and equipment
|
|
|
-
|
|
|
|
-
|
|
|
|
17
|
|
|
|
Capitalization of internal use software
|
|
|
(5,389
|
)
|
|
|
(4,323
|
)
|
|
|
(3,571
|
)
|
|
|
Purchases of short-term investments
|
|
|
-
|
|
|
|
(140,056
|
)
|
|
|
(179,789
|
)
|
|
|
Maturities of short-term investments
|
|
|
-
|
|
|
|
20,000
|
|
|
|
120,000
|
|
|
|
Restricted cash
|
|
|
550
|
|
|
|
759
|
|
|
|
-
|
|
|
|
Net cash used in investing activities
|
|
|
(16,742
|
)
|
|
|
(129,090
|
)
|
|
|
(73,500
|
)
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Payments on capital lease obligations
|
|
|
(22
|
)
|
|
|
(66
|
)
|
|
|
(105
|
)
|
|
|
Net share settlements for stock-based awards minimum tax withholdings
|
|
|
(699
|
)
|
|
|
(3,473
|
)
|
|
|
(2,002
|
)
|
|
|
Excess tax benefit associated with stock-based compensation
|
|
|
1,962
|
|
|
|
1,145
|
|
|
|
12,659
|
|
|
|
Cash dividend payments
|
|
|
-
|
|
|
|
(7,422
|
)
|
|
|
(11,825
|
)
|
|
|
Repurchase of common stock
|
|
|
-
|
|
|
|
-
|
|
|
|
(9,182
|
)
|
|
|
Proceeds from issuance of common stock
|
|
|
13,644
|
|
|
|
24,420
|
|
|
|
12,761
|
|
|
|
Net cash provided by financing activities
|
|
|
14,885
|
|
|
|
14,604
|
|
|
|
2,306
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
36,229
|
|
|
|
(55,228
|
)
|
|
|
561
|
|
|
|
Cash and cash equivalents, beginning of year
|
|
|
145,002
|
|
|
|
181,231
|
|
|
|
126,003
|
|
|
|
Cash and cash equivalents, end of year
|
|
$
|
181,231
|
|
|
$
|
126,003
|
|
|
$
|
126,564
|
|
|
|
Supplemental cash flows information:
|
|
|
|
|
|
|
|
|
Income taxes paid, net of refunds
|
|
$
|
194
|
|
|
$
|
506
|
|
|
$
|
91
|
|
|
|
Interest paid
|
|
$
|
12
|
|
|
$
|
9
|
|
|
$
|
12
|
|
|
|
Non-cash operating, investing and financing activities:
|
|
|
|
|
|
|
|
|
Purchase of property and equipment under capital lease
|
|
$
|
255
|
|
|
$
|
34
|
|
|
$
|
169
|
|
|
|
Unpaid purchases of property and equipment
|
|
$
|
636
|
|
|
$
|
1,063
|
|
|
$
|
1,118
|
|
|
|
Capitalized stock-based compensation for internal use software
|
|
$
|
353
|
|
|
$
|
271
|
|
|
$
|
294
|
|
|
|
Capitalized stock-based compensation for direct response advertising
|
|
$
|
64
|
|
|
$
|
76
|
|
|
$
|
119
|
|
|
|
Dividends declared but not yet paid
|
|
$
|
-
|
|
|
$
|
2,540
|
|
|
$
|
3,113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
Non-GAAP Adjusted EBITDA
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
|
|
|
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
9,274
|
|
|
$
|
10,074
|
|
|
$
|
29,955
|
|
|
$
|
36,952
|
|
|
|
Interest income, net
|
|
|
(29
|
)
|
|
|
(48
|
)
|
|
|
(58
|
)
|
|
|
(169
|
)
|
|
|
Income tax expense
|
|
|
3,614
|
|
|
|
6,455
|
|
|
|
14,986
|
|
|
|
23,975
|
|
|
|
Depreciation
|
|
|
1,136
|
|
|
|
1,437
|
|
|
|
4,024
|
|
|
|
4,930
|
|
|
|
Amortization of internal use software
|
|
|
1,328
|
|
|
|
1,181
|
|
|
|
6,007
|
|
|
|
5,613
|
|
|
|
Amortization and impairment of direct response advertising
|
|
|
1,503
|
|
|
|
1,379
|
|
|
|
5,994
|
|
|
|
6,010
|
|
|
|
Amortization of deferred sales commissions
|
|
|
437
|
|
|
|
353
|
|
|
|
1,869
|
|
|
|
1,526
|
|
|
|
Stock-based compensation
|
|
|
6,076
|
|
|
|
5,020
|
|
|
|
16,518
|
|
|
|
19,765
|
|
|
|
Non-GAAP Adjusted EBITDA
|
|
$
|
23,339
|
|
|
$
|
25,851
|
|
|
$
|
79,295
|
|
|
$
|
98,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Year Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
Non-GAAP Adjusted Net Income and Adjusted EPS
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
|
|
(In thousands, except per shares data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
9,274
|
|
|
$
|
10,074
|
|
|
$
|
29,955
|
|
|
$
|
36,952
|
|
|
Stock-based compensation, net of tax (1)
|
|
|
3,754
|
|
|
|
3,102
|
|
|
|
10,207
|
|
|
|
12,214
|
|
|
Income tax benefit from release of valuation allowance
|
|
|
(1,125
|
)
|
|
|
(243
|
)
|
|
|
(1,125
|
)
|
|
|
(243
|
)
|
|
Non-GAAP Adjusted Net Income
|
|
$
|
11,903
|
|
|
$
|
12,933
|
|
|
$
|
39,037
|
|
|
$
|
48,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted Earnings Per Share
|
|
$
|
0.22
|
|
|
$
|
0.24
|
|
|
$
|
0.75
|
|
|
$
|
0.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of common stock outstanding
|
|
|
50,599
|
|
|
|
51,958
|
|
|
|
49,512
|
|
|
|
51,601
|
|
|
Dilutive stock options, RSUs and PSUs
|
|
|
2,499
|
|
|
|
1,417
|
|
|
|
2,823
|
|
|
|
1,708
|
|
|
Non-GAAP adjusted common shares outstanding
|
|
|
53,098
|
|
|
|
53,375
|
|
|
|
52,335
|
|
|
|
53,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 2015