Financial Engines (NASDAQ:FNGN), America’s largest independent
investment advisori, today reported financial results for its
first quarter ended March 31, 2015.
Financial results for the first quarter of 2015 compared to the first
quarter of 2014:ii
-
Revenue increased 14% to $74.9 million for the first quarter of 2015
from $65.9 million for the first quarter of 2014.
-
Professional management revenue increased 17% to $66.6 million for the
first quarter of 2015 from $57.1 million for the first quarter of 2014.
-
Net income was $7.9 million, or $0.15 per diluted share, for the first
quarter of 2015 compared to $7.8 million, or $0.15 per diluted share,
for the first quarter of 2014.
-
Non-GAAP Adjusted EBITDAii increased 4% to $23.0 million
for the first quarter of 2015 from $22.0 million for the first quarter
of 2014.
-
Non-GAAP Adjusted Net Incomeii increased 11% to $11.9
million for the first quarter of 2015 from $10.8 million for the first
quarter of 2014.
-
Non-GAAP Adjusted Earnings Per Shareii increased 10% to
$0.22 for the first quarter of 2015 from $0.20 for the first quarter
of 2014.
Key operating metrics as of March 31, 2015:iii
-
Assets under contract (“AUC”) were $1.003 trillion.
-
Assets under management (“AUM”) were $109.2 billion.
-
Members in Professional Management were over 869,000.
-
Asset enrollment rates for companies where services have been
available for 26 months or more averaged 13.0% iv and an
estimated 13.1% had AUC been marked-to-market at the end of the first
quarter 2015.
“In 2015, we are taking meaningful steps to strengthen our business by
increasing our investment in several key areas we believe are most
likely to increase enrollment and retention, and ultimately grow our
assets under management,” said Larry Raffone, president and chief
executive officer of Financial Engines. “We are focused on the plan
participants we serve and working hard to deliver to them a great
customer experience that we believe will help drive our top line growth
and create long-term value for our stockholders.”
Review of Financial Results for the First Quarter of 2015
Revenue increased 14% to $74.9 million for the first quarter of 2015
from $65.9 million for the first quarter of 2014. The increase in
revenue was driven primarily by the growth in professional management
revenue, which increased 17% to $66.6 million for the first quarter of
2015 from $57.1 million for the first quarter of 2014.
Costs and expenses increased 18% to $62.8 million for the first quarter
of 2015 from $53.2 million for the first quarter of 2014. 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
non-cash stock-based compensation.
As a percentage of revenue, cost of revenue (exclusive of amortization
of internal use software) was 41% for the first quarter of 2015 compared
to 39% for the first quarter of 2014.
Income from operations was $12.2 million for the first quarter of 2015
compared to $12.7 million for the first quarter of 2014. As a percentage
of revenue, income from operations was 16% for the first quarter of 2015
compared to 19% for the first quarter of 2014.
Net income was $7.9 million, or $0.15 per diluted share, for the first
quarter of 2015 compared to net income of $7.8 million, or $0.15 per
diluted share, for the first quarter of 2014.
On a non-GAAP basis, Adjusted Net Incomeii was $11.9 million
and Adjusted Earnings Per Shareii were $0.22 for the first
quarter of 2015 compared to Adjusted Net Income of $10.8 million and
Adjusted Earnings Per Share of $0.20 for the first quarter of 2014.
“During Q1, we crossed $1 trillion in retirement assets under contract,”
said Ray Sims, chief financial officer of Financial Engines. “Our growth
in assets under contract is largely driven by the robust plan sponsor
adoption of our offering, and we are honored to be trusted by 617
employers to deliver independent, high quality retirement help to their
plan participants.”
Assets Under Contract and Assets Under Management
AUC was $1.003 trillion as of March 31, 2015, an increase of 22% from
$824 billion as of March 31, 2014, 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 $254
billion as of March 31, 2015, an increase of 81% from $140 billion as of
March 31, 2014.
AUM increased by 19% year over year to $109.2 billion as of March 31,
2015, from $92.0 billion as of March 31, 2014. The increase in AUM was
driven primarily by contributions, net new enrollment into the
Professional Management service, and market performance.
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In billions
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Q2'14
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Q3'14
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Q4'14
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|
Q1'15
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|
AUM, Beginning of Period
|
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$
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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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104.4
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New Enrollment(1)
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4.0
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6.5
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3.9
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4.6
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Voluntary Cancellations(2)
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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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(1.9
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)
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Involuntary Cancellations(3)
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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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(1.6
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)
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Contributions(4)
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1.6
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1.6
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1.7
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1.7
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Market Movement and Other(5)
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3.4
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(1.9
|
)
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1.4
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2.0
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AUM, End of Period
|
|
$
|
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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$
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109.2
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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-Q to be filed for the period ended March 31, 2015.
Aggregate Investment Style Exposure for Portfolios Under Management
As of March 31, 2015, the approximate aggregate investment style
exposure of the portfolios we managed was as follows:
Cash
|
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3%
|
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 May 1, 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 July 3, 2015 to stockholders of
record as of the close of business on June 15, 2015.
Stock Repurchase Program
On November 5, 2014, Financial Engines’ Board of Directors approved a
twelve month stock repurchase program under which the Company may buy up
to $50 million of our common stock. During the first quarter of 2015,
the Company purchased 275,000 shares for $11.3 million on the open
market. When combined with prior purchases, the Company has bought a
total of 555,000 shares for $20.5 million on the open market.
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 May 1, 2015 levels, the Company
estimates that its 2015 revenue will be in the range of $315 million and
$321 million and 2015 non-GAAP adjusted EBITDA will be in the range of
$97 million to $101 million.
Conference Call
The Company will host a conference call to discuss first quarter 2015
financial results today at 5:00 PM ET. Hosting the call will be Larry
Raffone, president and 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 10063789. The
replay will remain available until Friday, May 8, 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 146 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 our plans to strengthen our business by increasing investment
in key areas we believe are most likely to increase enrollment and
retention, and ultimately grow our AUM, our focus on plan participants
and the customer experience to help drive topline growth and create
long-term value for our stockholders, Financial Engines’ expected
financial performance and outlook, including factors which may impact
our outlook, benefits of our services, objectives and growth strategy,
including our focus on increasing penetration within existing
Professional Management plan sponsors, enhancing and extending services
to individuals in retirement and expanding the number of plan sponsors,
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, the timing and amount of future stock
repurchases, if any, will be made as management deems appropriate and
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. Further, 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, 2014, 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 May 6,
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.
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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, 2014.
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Financial Tables
|
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
Unaudited Consolidated Balance Sheets
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|
December 31,
|
|
March 31,
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|
2014
|
|
2015
|
Assets
|
(In thousands, except per share data)
|
Current assets:
|
|
|
|
Cash and cash equivalents
|
$
|
126,564
|
|
|
$
|
116,180
|
|
Short-term investments
|
|
179,885
|
|
|
|
194,837
|
|
Accounts receivable, net
|
|
66,001
|
|
|
|
69,328
|
|
Prepaid expenses
|
|
3,763
|
|
|
|
3,489
|
|
Deferred tax assets
|
|
7,932
|
|
|
|
8,430
|
|
Other current assets
|
|
5,445
|
|
|
|
5,143
|
|
Total current assets
|
|
389,590
|
|
|
|
397,407
|
|
Property and equipment, net
|
|
20,723
|
|
|
|
19,576
|
|
Internal use software, net
|
|
6,421
|
|
|
|
6,469
|
|
Long-term deferred tax assets
|
|
6,844
|
|
|
|
6,843
|
|
Direct response advertising, net
|
|
8,202
|
|
|
|
7,473
|
|
Other assets
|
|
3,265
|
|
|
|
3,002
|
|
Total assets
|
$
|
435,045
|
|
|
$
|
440,770
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
Current liabilities:
|
|
|
|
Accounts payable
|
$
|
21,678
|
|
|
$
|
23,555
|
|
Accrued compensation
|
|
10,103
|
|
|
|
7,429
|
|
Deferred revenue
|
|
5,840
|
|
|
|
6,329
|
|
Dividend payable
|
|
3,113
|
|
|
|
3,627
|
|
Other current liabilities
|
|
1,161
|
|
|
|
1,177
|
|
Total current liabilities
|
|
41,895
|
|
|
|
42,117
|
|
Long-term deferred revenue
|
|
427
|
|
|
|
356
|
|
Long-term deferred rent
|
|
8,689
|
|
|
|
8,743
|
|
Non-current tax liabilities
|
|
3,672
|
|
|
|
3,847
|
|
Other liabilities
|
|
151
|
|
|
|
121
|
|
Total liabilities
|
|
54,834
|
|
|
|
55,184
|
|
Stockholders’ equity:
|
|
|
|
Preferred stock, $0.0001 par value - 10,000
|
|
|
|
authorized as of December 31, 2014 and March 31, 2015;
|
|
|
|
None issued or outstanding as of December 31, 2014 and March 31, 2015
|
|
-
|
|
|
|
-
|
|
Common stock, $0.0001 par value - 500,000
|
|
|
|
authorized as of December 31, 2014 and March 31, 2015;
|
|
|
|
52,224 and 52,394 shares issued and
|
|
|
|
51,944 and 51,839 shares outstanding
|
|
|
|
as of December 31, 2014 and March 31, 2015, respectively
|
|
5
|
|
|
|
5
|
|
Additional paid-in capital
|
|
404,908
|
|
|
|
417,324
|
|
Treasury stock, at cost 280 shares and 555 shares as of
|
|
|
|
December 31, 2014 and March 31, 2015, respectively
|
|
(9,182
|
)
|
|
|
(20,498
|
)
|
Accumulated deficit
|
|
(15,520
|
)
|
|
|
(11,245
|
)
|
Total stockholders’ equity
|
|
380,211
|
|
|
|
385,586
|
|
Total liabilities and stockholders’ equity
|
$
|
435,045
|
|
|
$
|
440,770
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Income
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|
Three Months Ended
|
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|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
2014
|
|
2015
|
|
|
|
|
|
|
|
(In thousands, except per share data)
|
Revenue:
|
|
|
|
Professional management
|
$
|
57,069
|
|
$
|
66,583
|
Platform
|
|
8,290
|
|
|
7,890
|
Other
|
|
518
|
|
|
473
|
Total revenue
|
|
65,877
|
|
|
74,946
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
Cost of revenue (exclusive of amortization of internal use software)
|
|
25,978
|
|
|
30,891
|
Research and development
|
|
7,921
|
|
|
8,945
|
Sales and marketing
|
|
11,877
|
|
|
14,615
|
General and administrative
|
|
5,870
|
|
|
7,158
|
Amortization of internal use software
|
|
1,512
|
|
|
1,176
|
Total costs and expenses
|
|
53,158
|
|
|
62,785
|
Income from operations
|
|
12,719
|
|
|
12,161
|
Interest income, net
|
|
36
|
|
|
62
|
Other income, net
|
|
3
|
|
|
-
|
Income before income taxes
|
|
12,758
|
|
|
12,223
|
Income tax expense
|
|
4,941
|
|
|
4,322
|
Net and comprehensive income
|
$
|
7,817
|
|
$
|
7,901
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per share of common stock
|
$
|
0.06
|
|
$
|
0.07
|
|
|
|
|
Net income per share attributable to holders of common stock
|
|
|
|
Basic
|
$
|
0.15
|
|
$
|
0.15
|
Diluted
|
$
|
0.15
|
|
$
|
0.15
|
|
|
|
|
Shares used to compute net income per share attributable to
holders of common stock
|
|
|
|
Basic
|
|
51,100
|
|
|
51,923
|
Diluted
|
|
53,262
|
|
|
53,288
|
|
|
|
|
|
|
|
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
|
2014
|
|
2015
|
|
|
|
|
|
|
|
|
(In thousands)
|
Cash flows from operating activities:
|
|
|
|
|
Net income
|
|
$
|
7,817
|
|
|
$
|
7,901
|
|
Adjustments to reconcile net income to net cash provided by
|
|
|
|
|
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
1,116
|
|
|
|
1,457
|
|
Amortization of internal use software
|
|
|
1,425
|
|
|
|
1,099
|
|
Stock-based compensation
|
|
|
4,780
|
|
|
|
6,524
|
|
Amortization of deferred sales commissions
|
|
|
423
|
|
|
|
368
|
|
Amortization and impairment of direct response advertising
|
|
|
1,542
|
|
|
|
1,360
|
|
Amortization of premium (discount) on short-term investments
|
|
|
13
|
|
|
|
(64
|
)
|
Provision for doubtful accounts
|
|
|
175
|
|
|
|
235
|
|
Deferred tax assets
|
|
|
1,629
|
|
|
|
(323
|
)
|
Loss (gain) on fixed asset disposal
|
|
|
(8
|
)
|
|
|
-
|
|
Excess tax benefit associated with stock-based compensation
|
|
|
(3,289
|
)
|
|
|
(4,214
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
|
(663
|
)
|
|
|
(3,563
|
)
|
Prepaid expenses
|
|
|
(189
|
)
|
|
|
274
|
|
Direct response advertising
|
|
|
(400
|
)
|
|
|
(644
|
)
|
Other assets
|
|
|
406
|
|
|
|
197
|
|
Accounts payable
|
|
|
4,676
|
|
|
|
6,412
|
|
Accrued compensation
|
|
|
(7,751
|
)
|
|
|
(2,674
|
)
|
Deferred revenue
|
|
|
(1,291
|
)
|
|
|
417
|
|
Deferred rent
|
|
|
(152
|
)
|
|
|
68
|
|
Net cash provided by operating activities
|
|
|
10,259
|
|
|
|
14,830
|
|
Cash flows from investing activities:
|
|
|
|
|
Purchase of property and equipment
|
|
|
(1,687
|
)
|
|
|
(630
|
)
|
Sale of property and equipment
|
|
|
8
|
|
|
|
-
|
|
Capitalization of internal use software
|
|
|
(938
|
)
|
|
|
(1,132
|
)
|
Purchases of short-term investments
|
|
|
(29,965
|
)
|
|
|
(44,889
|
)
|
Maturities of short-term investments
|
|
|
20,000
|
|
|
|
30,000
|
|
Net cash used in investing activities
|
|
|
(12,582
|
)
|
|
|
(16,651
|
)
|
Cash flows from financing activities:
|
|
|
|
|
Payments on capital lease obligations
|
|
|
(21
|
)
|
|
|
(29
|
)
|
Net share settlements for stock-based awards minimum tax withholdings
|
|
|
-
|
|
|
|
(282
|
)
|
Excess tax benefit associated with stock-based compensation
|
|
|
3,289
|
|
|
|
4,214
|
|
Cash dividend payments
|
|
|
(2,540
|
)
|
|
|
(3,113
|
)
|
Repurchase of common stock
|
|
|
-
|
|
|
|
(11,316
|
)
|
Proceeds from issuance of common stock
|
|
|
4,288
|
|
|
|
1,963
|
|
Net cash provided by (used in) financing activities
|
|
|
5,016
|
|
|
|
(8,563
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
2,693
|
|
|
|
(10,384
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
126,003
|
|
|
|
126,564
|
|
Cash and cash equivalents, end of period
|
|
$
|
128,696
|
|
|
$
|
116,180
|
|
Supplemental cash flows information:
|
|
|
|
|
Income taxes paid, net of refunds
|
|
$
|
188
|
|
|
$
|
206
|
|
Interest paid
|
|
$
|
3
|
|
|
$
|
3
|
|
Non-cash operating, investing and financing activities:
|
|
|
|
|
Purchase of property and equipment under capital lease
|
|
$
|
125
|
|
|
$
|
-
|
|
Unpaid purchases of property and equipment
|
|
$
|
83
|
|
|
$
|
797
|
|
Capitalized stock-based compensation for internal use software
|
|
$
|
67
|
|
|
$
|
90
|
|
Capitalized stock-based compensation for direct response advertising
|
|
$
|
9
|
|
|
$
|
7
|
|
Dividends declared but not yet paid
|
|
$
|
3,076
|
|
|
$
|
3,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
March 31,
|
Non-GAAP Adjusted EBITDA
|
2014
|
|
2015
|
|
(In thousands, unaudited)
|
|
|
|
|
Net income
|
$
|
7,817
|
|
|
$
|
7,901
|
|
Interest income, net
|
|
(36
|
)
|
|
|
(62
|
)
|
Income tax expense
|
|
4,941
|
|
|
|
4,322
|
|
Depreciation and amortization
|
|
1,116
|
|
|
|
1,457
|
|
Amortization of internal use software
|
|
1,425
|
|
|
|
1,099
|
|
Amortization and impairment of direct response advertising
|
|
1,542
|
|
|
|
1,360
|
|
Amortization of deferred sales commissions
|
|
423
|
|
|
|
368
|
|
Stock-based compensation
|
|
4,780
|
|
|
|
6,524
|
|
Non-GAAP Adjusted EBITDA
|
$
|
22,008
|
|
|
$
|
22,969
|
|
|
|
|
|
|
|
|
|
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
|
|
|
March 31,
|
Non-GAAP Adjusted Net Income
|
|
2014
|
|
2015
|
|
|
(In thousands, except per share data, unaudited)
|
|
|
|
|
|
Net income
|
|
$
|
7,817
|
|
$
|
7,901
|
Stock-based compensation, net of tax (1)
|
|
|
2,954
|
|
|
4,032
|
Non-GAAP Adjusted Net Income
|
|
$
|
10,771
|
|
$
|
11,933
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted Earnings Per Share
|
|
$
|
0.20
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
Shares of common stock outstanding
|
|
|
51,100
|
|
|
51,923
|
Dilutive stock options, RSUs and PSUs
|
|
|
2,162
|
|
|
1,365
|
Non-GAAP adjusted common shares outstanding
|
|
|
53,262
|
|
|
53,288
|
|
|
|
|
|
|
|
|
|
|
(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