MINNEAPOLIS, Feb. 07, 2017 (GLOBE NEWSWIRE) -- SPS Commerce, Inc. (Nasdaq:SPSC), a leader in retail cloud services,
today announced financial results for the fourth quarter and full year ended December 31, 2016.
Revenue was $51.1 million in the fourth quarter of 2016, compared to $42.3 million in the fourth quarter of 2015,
reflecting 21% growth in revenue from the fourth quarter of 2015. Recurring revenue grew 22% from the fourth quarter of 2015.
Net income in the fourth quarter of 2016 was $1.8 million or $0.10 per diluted share, compared to net income of
$2.1 million or $0.12 per diluted share, in the fourth quarter of 2015. Non-GAAP net income per diluted share was $0.29, compared
to non-GAAP net income per diluted share of $0.27 in the fourth quarter of 2015. Adjusted EBITDA for the fourth quarter of 2016
increased 11% to $7.4 million compared to the fourth quarter of 2015.
“The expansion of our network continued to drive our successful results in 2016 as we grew our customer base and
increased wallet share,” said Archie Black, President and CEO of SPS Commerce. “Throughout the year, we expanded the size and
strength of our network and saw steady adoption of our products. We remain enthusiastic about the large market opportunity
and intend to bolster our leadership position in 2017 as retailers and suppliers build their omnichannel businesses.”
Revenue for the full year ended December 31, 2016 was $193.3 million compared to $158.5 million for the full year
ended December 31, 2015, reflecting 22% growth in revenue. Recurring revenue grew 23% from the year ended December 31,
2015.
Net income for the twelve months ended December 31, 2016 was $5.7 million or $0.33 per diluted share, compared to
net income of $4.6 million or $0.27 per diluted share, for the comparable period in 2015. Non-GAAP net income per diluted share for
the twelve months ended December 31, 2016 was $1.01, compared to non-GAAP net income per diluted share of $0.84 for the comparable
period in 2015. Adjusted EBITDA for the full year ended December 31, 2016 increased 17% to $26.5 million, compared to the full year
ended December 31, 2015.
“In 2016, we achieved year-over-year recurring revenue growth of 23%, customer growth of 6% and wallet share growth
of 16%,” said Kim Nelson, CFO of SPS Commerce. “In 2017, we will continue to invest for profitable growth as we leverage our broad
based retail network to further extend our market leadership.”
Guidance
First quarter 2017 revenue is expected to be in the range of $51.5 million to $52 million. Full year 2017
revenue is expected to be in the range of $220 million to $222 million, representing approximately 14% to 15% growth over 2016.
First quarter 2017 net income per diluted share is expected to be in the range of $0.06 to $0.07 with fully diluted
weighted average shares outstanding of approximately 17.6 million shares. Full year 2017 net income per diluted share is expected
to be in the range of $0.29 to $0.33 with fully diluted weighted average shares outstanding of approximately 17.6 million
shares.
Commencing with the first quarter of 2017, we are tax effecting non-GAAP net income to conform to the Compliance
and Disclosure Interpretations published by the U.S. Securities and Exchange Commission in May 2016 (the "May C&DI")
on non-GAAP measures. Our guidance for the first quarter and full year 2017 reflects these changes. Details of the
impact on prior year periods are included in the financial data sheet posted to investors.spscommerce.com.
First quarter 2017 non-GAAP net income per diluted share is expected to be in the range of $0.18 to $0.20.
Full year 2017 non-GAAP net income per diluted share is expected to be in the range of $0.80 to $0.83.
First quarter 2017 Adjusted EBITDA is expected to be in the range of $7 to $7.5 million. Full year 2017 Adjusted
EBITDA is expected to be in the range of $31.5 million to $32.5 million, representing approximately 19% to 22% growth over
2016.
First quarter 2017 non-cash, share-based compensation expense is expected to be approximately $2.4 million.
Depreciation expense is expected to be approximately $1.9 million and amortization expense is expected to be approximately $1.2
million.
Full year 2017 non-cash, share-based compensation expense is expected to be approximately $10.3 million.
Depreciation expense is expected to be approximately $8.5 million and amortization expense is expected to be approximately $4.8
million.
For 2017, we expect an annual effective tax rate of approximately 40%, with cash taxes for the year to be
minimal.
Quarterly Conference Call
SPS Commerce will discuss its quarterly results today via teleconference at 3:30 p.m. CT (4:30 p.m. ET). To access
the call, please dial (877) 312-7508, or outside the U.S. (253) 237-1184, with Conference ID # 51135280 at least five minutes prior
to the 3:30 p.m. CT start time. A live webcast of the call will also be available at investors.spscommerce.com under the Events
and Presentations menu. The replay will also be available on our website at investors.spscommerce.com.
About SPS Commerce
SPS Commerce perfects the power of trading partner relationships with the industry's most broadly adopted, retail
cloud services platform. As a leader in cloud-based supply chain management solutions, we provide proven integrations and
comprehensive retail performance analytics to thousands of customers worldwide. SPS Commerce has achieved 64 consecutive quarters
of revenue growth and is headquartered in Minneapolis. For additional information, please contact SPS Commerce at 866-245-8100 or
visit www.spscommerce.com.
SPS COMMERCE, SPS, SPS logo, RETAIL UNIVERSE, 1=INFINITY logo, AS THE NETWORK GROWS, SO DOES YOUR OPPORTUNITY,
INFINITE RETAIL POWER, RETAIL UNIVERSE are marks of SPS Commerce, Inc. and Registered in the U.S. Patent and Trademark Office. RSX,
IN:FLUENCE, and others are further marks of SPS Commerce, Inc. These marks may be registered or otherwise protected in other
countries.
SPS-F
Use of Non-GAAP Financial Measures
To supplement its financial statements, SPS Commerce also provides investors with Adjusted EBITDA and non-GAAP net
income per share, which are non-GAAP financial measures. SPS Commerce believes that these non-GAAP measures provide useful
information to management and investors regarding certain financial and business trends relating to its financial condition and
results of operations. SPS Commerce's management uses these non-GAAP measures to compare the company's performance to that of prior
periods for trend analyses and planning purposes. It uses Adjusted EBITDA for purposes of determining executive and senior
management incentive compensation. These measures are also presented to the company's board of directors.
EBITDA consists of net income plus depreciation and amortization, interest expense, interest income, income tax
expense and other adjustments as necessary for a fair presentation. Adjusted EBITDA consists of EBITDA plus non-cash, stock-based
compensation expense. SPS Commerce uses Adjusted EBITDA as a measure of operating performance because it assists the company in
comparing performance on a consistent basis, as it removes from operating results the impact of the company's capital structure.
SPS Commerce believes Adjusted EBITDA is useful to an investor in evaluating the company's operating performance because it is
widely used to measure a company's operating performance without regard to items such as depreciation and amortization, which can
vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of corporate performance
exclusive of the company's capital structure and the method by which assets were acquired.
Non-GAAP net income per share consists of net income plus non-cash, stock-based compensation expense and
amortization expense related to intangible assets divided by the weighted average number of shares of common stock outstanding
during each period. SPS Commerce believes non-GAAP net income per share is useful to an investor because it is widely used to
measure a company's operating performance.
These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in
accordance with generally accepted accounting principles in the United States. These non-GAAP financial measures exclude
significant expenses and income that are required by GAAP to be recorded in the company's financial statements and are subject to
inherent limitations. SPS Commerce urges investors to review the reconciliation of its non-GAAP financial measures to the
comparable GAAP financial measures that are included in this press release.
The SEC’s May C&DI related to the use of non-GAAP financial measures discusses companies including an
additional adjustment to non-GAAP income to reflect the income tax effects of the adjustments to GAAP net income, as discussed
above. In reporting non-GAAP income results for the fourth quarter and full year of 2016, SPS Commerce has elected to
calculate non-GAAP income consistent with its historical practice, without the tax adjustment discussed in the May C&DI. SPS
Commerce believes that maintaining consistency with its historical practice, as well as SPS Commerce's original 2016 financial
outlook, better allows SPS Commerce's investors to evaluate financial performance. Commencing with the first quarter of 2017, SPS
Commerce is tax effecting non-GAAP net income to conform its disclosure in accordance with the May C&DI. Details of the impact
on prior year periods are included in the financial data sheet posted to investors.spscommerce.com.
Forward-Looking Statements
This press release may contain forward-looking statements, including information about management's view of SPS
Commerce's future expectations, plans and prospects, including our views regarding future execution within our business, the
opportunity we see in the retail supply chain world and our performance for the first quarter and full year of 2017, within the
safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown
risks, uncertainties and other factors which may cause the results of SPS Commerce to be materially different than those expressed
or implied in such statements. Certain of these risk factors and others are included in documents SPS Commerce files with the
Securities and Exchange Commission, including but not limited to, SPS Commerce's Annual Report on Form 10-K for the year ended
December 31, 2015, as well as subsequent reports filed with the Securities and Exchange Commission. Other unknown or unpredictable
factors also could have material adverse effects on SPS Commerce's future results. The forward-looking statements included in this
press release are made only as of the date hereof. SPS Commerce cannot guarantee future results, levels of activity, performance or
achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, SPS Commerce expressly
disclaims any intent or obligation to update or revise any forward-looking statements, whether as a result of new information,
future events, or otherwise.
| SPS COMMERCE, INC. |
| CONDENSED CONSOLIDATED
BALANCE SHEETS |
| (Unaudited; in thousands, except share amounts) |
| |
|
|
|
|
| |
|
December 31, |
|
December 31, |
| |
|
|
2016 |
|
|
|
2015 |
|
| |
|
|
|
|
| ASSETS |
|
|
|
|
| |
|
|
|
|
| CURRENT ASSETS |
|
|
|
|
| Cash and cash equivalents |
|
$ |
115,877 |
|
|
$ |
121,538 |
|
| Short-term marketable securities |
|
|
23,076 |
|
|
|
7,517 |
|
| Accounts receivable, less allowance for doubtful accounts of $515 and
$446, respectively |
|
|
20,746 |
|
|
|
17,615 |
|
| Deferred costs |
|
|
19,224 |
|
|
|
15,086 |
|
| Other current assets |
|
|
7,010 |
|
|
|
5,030 |
|
| Total current assets |
|
|
185,933 |
|
|
|
166,786 |
|
| |
|
|
|
|
| PROPERTY AND EQUIPMENT, net |
|
|
15,314 |
|
|
|
13,620 |
|
| GOODWILL |
|
|
49,777 |
|
|
|
33,848 |
|
| INTANGIBLE ASSETS, net |
|
|
19,788 |
|
|
|
15,081 |
|
| MARKETABLE SECURITIES, non-current |
|
|
7,494 |
|
|
|
14,950 |
|
| OTHER ASSETS |
|
|
|
|
| Deferred costs, non-current |
|
|
6,086 |
|
|
|
5,260 |
|
| Deferred income tax asset, non-current |
|
|
12,446 |
|
|
|
11,149 |
|
| Other non-current assets |
|
|
1,527 |
|
|
|
1,037 |
|
| Total assets |
|
$ |
298,365 |
|
|
$ |
261,731 |
|
| |
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| |
|
|
|
|
| CURRENT LIABILITIES |
|
|
|
|
| Accounts payable |
|
$ |
2,302 |
|
|
$ |
2,163 |
|
| Accrued compensation |
|
|
13,740 |
|
|
|
11,150 |
|
| Accrued expenses |
|
|
3,508 |
|
|
|
1,987 |
|
| Deferred revenue |
|
|
11,055 |
|
|
|
7,740 |
|
| Deferred rent |
|
|
1,556 |
|
|
|
1,194 |
|
| Total current liabilities |
|
|
32,161 |
|
|
|
24,234 |
|
| |
|
|
|
|
| OTHER LIABILITIES |
|
|
|
|
| Deferred revenue, non-current |
|
|
10,847 |
|
|
|
11,005 |
|
| Deferred rent, non-current |
|
|
4,179 |
|
|
|
4,307 |
|
| Deferred income tax liability, non-current |
|
|
1,911 |
|
|
|
- |
|
| Total liabilities |
|
|
49,098 |
|
|
|
39,546 |
|
| |
|
|
|
|
| COMMITMENTS and CONTINGENCIES |
|
|
|
|
| |
|
|
|
|
| STOCKHOLDERS’ EQUITY |
|
|
|
|
| Preferred stock, $0.001 par value; 5,000,000 shares authorized;
0 shares issued and outstanding |
|
|
- |
|
|
|
- |
|
| Common stock, $0.001 par value; 55,000,000 shares authorized;
17,081,145 and 16,723,994 shares issued and outstanding, respectively |
|
|
17 |
|
|
|
17 |
|
| Additional paid-in capital |
|
|
286,315 |
|
|
|
265,265 |
|
| Accumulated deficit |
|
|
(33,739 |
) |
|
|
(39,449 |
) |
| Accumulated other comprehensive loss |
|
|
(3,326 |
) |
|
|
(3,648 |
) |
| Total stockholders’ equity |
|
|
249,267 |
|
|
|
222,185 |
|
| Total liabilities and stockholders’ equity |
|
$ |
298,365 |
|
|
$ |
261,731 |
|
| |
|
|
|
|
| SPS COMMERCE, INC. |
| CONDENSED CONSOLIDATED
STATEMENTS OF INCOME |
| (Unaudited; in thousands, except per share
amounts) |
| |
|
|
|
|
|
|
|
|
| |
|
Three Months
Ended |
|
Year
Ended |
| |
|
December 31, |
|
December 31, |
| |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
| |
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
51,061 |
|
|
$ |
42,348 |
|
|
$ |
193,295 |
|
|
$ |
158,518 |
|
| Cost of revenues |
|
|
17,322 |
|
|
|
13,436 |
|
|
|
64,346 |
|
|
|
50,043 |
|
| Gross profit |
|
|
33,739 |
|
|
|
28,912 |
|
|
|
128,949 |
|
|
|
108,475 |
|
| Operating expenses |
|
|
|
|
|
|
|
|
| Sales and marketing |
|
|
16,794 |
|
|
|
13,734 |
|
|
|
65,886 |
|
|
|
55,374 |
|
| Research and development |
|
|
5,796 |
|
|
|
4,896 |
|
|
|
21,981 |
|
|
|
17,954 |
|
| General and administrative |
|
|
7,311 |
|
|
|
6,668 |
|
|
|
28,827 |
|
|
|
24,817 |
|
| Amortization of intangible assets |
|
|
1,185 |
|
|
|
800 |
|
|
|
4,738 |
|
|
|
3,307 |
|
| Total operating expenses |
|
|
31,086 |
|
|
|
26,098 |
|
|
|
121,432 |
|
|
|
101,452 |
|
| Income from operations |
|
|
2,653 |
|
|
|
2,814 |
|
|
|
7,517 |
|
|
|
7,023 |
|
| Other income (expense) |
|
|
|
|
|
|
|
|
| Interest income, net |
|
|
193 |
|
|
|
74 |
|
|
|
601 |
|
|
|
197 |
|
| Other income (expense), net |
|
|
(134 |
) |
|
|
110 |
|
|
|
732 |
|
|
|
(145 |
) |
| Total other income (expense), net |
|
|
59 |
|
|
|
184 |
|
|
|
1,333 |
|
|
|
52 |
|
| Income before income taxes |
|
|
2,712 |
|
|
|
2,998 |
|
|
|
8,850 |
|
|
|
7,075 |
|
| Income tax expense |
|
|
(907 |
) |
|
|
(866 |
) |
|
|
(3,140 |
) |
|
|
(2,436 |
) |
| Net income |
|
$ |
1,805 |
|
|
$ |
2,132 |
|
|
$ |
5,710 |
|
|
$ |
4,639 |
|
| |
|
|
|
|
|
|
|
|
| Net income per share |
|
|
|
|
|
|
|
|
| Basic |
|
$ |
0.11 |
|
|
$ |
0.13 |
|
|
$ |
0.34 |
|
|
$ |
0.28 |
|
| Diluted |
|
$ |
0.10 |
|
|
$ |
0.12 |
|
|
$ |
0.33 |
|
|
$ |
0.27 |
|
| |
|
|
|
|
|
|
|
|
| Weighted average common shares used to compute net income per share |
|
|
|
|
|
|
|
|
| Basic |
|
|
17,050 |
|
|
|
16,681 |
|
|
|
16,947 |
|
|
|
16,565 |
|
| Diluted |
|
|
17,366 |
|
|
|
17,110 |
|
|
|
17,241 |
|
|
|
17,032 |
|
| |
|
|
|
|
|
|
|
|
| SPS COMMERCE, INC. |
|
| CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
| (Unaudited; in thousands) |
|
| |
|
|
|
|
|
| |
|
Year
Ended |
|
| |
|
December 31, |
|
| |
|
|
2016 |
|
|
|
2015 |
|
|
| |
|
|
|
|
|
| Cash flows from operating activities |
|
|
|
|
|
| Net income |
|
$ |
5,710 |
|
|
$ |
4,639 |
|
|
| Reconciliation of net income to net cash provided by operating
activities |
|
|
|
|
|
| Deferred income taxes |
|
|
(1,698 |
) |
|
|
(38 |
) |
|
| Share based earn-out liability |
|
|
(1,103 |
) |
|
|
- |
|
|
| Depreciation and amortization of property and equipment |
|
|
6,598 |
|
|
|
6,265 |
|
|
| Amortization of intangible assets |
|
|
4,738 |
|
|
|
3,307 |
|
|
| Provision for doubtful accounts |
|
|
1,375 |
|
|
|
1,271 |
|
|
| Stock-based compensation |
|
|
8,023 |
|
|
|
6,379 |
|
|
| Changes in assets and liabilities, net of effect of acquisition |
|
|
|
|
|
| Accounts receivable |
|
|
(3,735 |
) |
|
|
(3,517 |
) |
|
| Deferred costs |
|
|
(4,964 |
) |
|
|
(3,023 |
) |
|
| Other current and non-current assets |
|
|
(1,911 |
) |
|
|
(2,037 |
) |
|
| Accounts payable |
|
|
(382 |
) |
|
|
(1,569 |
) |
|
| Accrued compensation |
|
|
2,180 |
|
|
|
1,295 |
|
|
| Accrued expenses |
|
|
990 |
|
|
|
(461 |
) |
|
| Deferred revenue |
|
|
2,710 |
|
|
|
587 |
|
|
| Deferred rent |
|
|
234 |
|
|
|
1,331 |
|
|
| Net cash provided by operating activities |
|
|
18,765 |
|
|
|
14,429 |
|
|
| Cash flows from investing activities |
|
|
|
|
|
| Purchases of property and equipment |
|
|
(8,008 |
) |
|
|
(8,757 |
) |
|
| Purchases of marketable securities |
|
|
(23,135 |
) |
|
|
(22,527 |
) |
|
| Maturities of marketable securities |
|
|
15,018 |
|
|
|
- |
|
|
| Business acquisition, net of cash acquired |
|
|
(18,032 |
) |
|
|
- |
|
|
| Net cash used in investing activities |
|
|
(34,157 |
) |
|
|
(31,284 |
) |
|
| Cash flows from financing activities |
|
|
|
|
|
| Net proceeds from exercise of options to purchase common stock |
|
|
4,303 |
|
|
|
4,440 |
|
|
| Excess tax benefit from exercise of options to purchase common
stock |
|
|
4,070 |
|
|
|
2,336 |
|
|
| Net proceeds from employee stock purchase plan |
|
|
1,732 |
|
|
|
1,478 |
|
|
| Net cash provided by financing activities |
|
|
10,105 |
|
|
|
8,254 |
|
|
| Effect of foreign currency exchange rate changes |
|
|
(374 |
) |
|
|
(656 |
) |
|
| Net decrease in cash and cash equivalents |
|
|
(5,661 |
) |
|
|
(9,257 |
) |
|
| Cash and cash equivalents at beginning of period |
|
|
121,538 |
|
|
|
130,795 |
|
|
| Cash and cash equivalents at end of period |
|
$ |
115,877 |
|
|
$ |
121,538 |
|
|
| |
|
|
|
|
|
| SPS COMMERCE,
INC. |
|
| NON-GAAP
RECONCILIATION |
|
| (Unaudited; in thousands, except per share
amounts) |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months
Ended |
|
Year
Ended |
|
| |
|
|
December 31, |
|
December 31, |
|
| |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Net income |
|
$ |
1,805 |
|
|
$ |
2,132 |
|
|
$ |
5,710 |
|
|
$ |
4,639 |
|
|
| Depreciation and amortization of property |
|
|
|
|
|
|
|
|
| and equipment |
|
1,715 |
|
|
|
1,572 |
|
|
|
6,598 |
|
|
|
6,265 |
|
|
| Amortization of intangible assets |
|
|
1,185 |
|
|
|
800 |
|
|
|
4,738 |
|
|
|
3,307 |
|
|
| Interest income, net |
|
|
(193 |
) |
|
|
(74 |
) |
|
|
(601 |
) |
|
|
(197 |
) |
|
| Income tax expense |
|
|
907 |
|
|
|
866 |
|
|
|
3,140 |
|
|
|
2,436 |
|
|
| Other |
|
|
- |
|
|
|
(209 |
) |
|
|
(1,106 |
) |
|
|
(209 |
) |
|
| |
|
|
|
|
|
|
|
|
|
| EBITDA |
|
|
5,419 |
|
|
|
5,087 |
|
|
|
18,479 |
|
|
|
16,241 |
|
|
| Stock-based compensation expense |
|
|
2,019 |
|
|
|
1,623 |
|
|
|
8,023 |
|
|
|
6,379 |
|
|
| |
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
|
$ |
7,438 |
|
|
$ |
6,710 |
|
|
$ |
26,502 |
|
|
$ |
22,620 |
|
|
| |
|
|
|
|
|
|
|
|
|
| Net income |
|
$ |
1,805 |
|
|
$ |
2,132 |
|
|
$ |
5,710 |
|
|
$ |
4,639 |
|
|
| Stock-based compensation expense |
|
|
2,019 |
|
|
|
1,623 |
|
|
|
8,023 |
|
|
|
6,379 |
|
|
| Amortization of intangible assets |
|
|
1,185 |
|
|
|
800 |
|
|
|
4,738 |
|
|
|
3,307 |
|
|
| Other |
|
|
- |
|
|
|
- |
|
|
|
(1,106 |
) |
|
|
- |
|
|
| |
|
|
|
|
|
|
|
|
|
| Non-GAAP income |
|
$ |
5,009 |
|
|
$ |
4,555 |
|
|
$ |
17,365 |
|
|
$ |
14,325 |
|
|
| |
|
|
|
|
|
|
|
|
|
| Shares used to compute non-GAAP income |
|
|
|
|
|
|
|
|
|
| per share |
|
|
|
|
|
|
|
|
|
| Basic |
|
|
17,050 |
|
|
|
16,681 |
|
|
|
16,947 |
|
|
|
16,565 |
|
|
| Diluted |
|
|
17,366 |
|
|
|
17,110 |
|
|
|
17,241 |
|
|
|
17,032 |
|
|
| |
|
|
|
|
|
|
|
|
|
| Non-GAAP income per share |
|
|
|
|
|
|
|
|
|
| Basic |
|
$ |
0.29 |
|
|
$ |
0.27 |
|
|
$ |
1.02 |
|
|
$ |
0.86 |
|
|
| Diluted |
|
$ |
0.29 |
|
|
$ |
0.27 |
|
|
$ |
1.01 |
|
|
$ |
0.84 |
|
|
Contact: Investor Relations The Blueshirt Group Lisa Laukkanen Nicole Gunderson SPSC@blueshirtgroup.com 415-217-7722 Ali Finer SPS Commerce 866-245-8100 abfiner@spscommerce.com
