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| 8-K - 8-K - PROS Holdings, Inc. | form8-kearningreleasexlead.htm |
Exhibit 99.1
PROS HOLDINGS, INC. REPORTS SECOND QUARTER 2013 FINANCIAL RESULTS
• | Record second quarter revenue of $35.5 million, exceeding the high end of guidance, an increase of 26% over the second quarter of 2012. |
• | GAAP operating income of $0.8 million for the second quarter. |
• | Non-GAAP operating income for the second quarter was $4.9 million, exceeding the high end of guidance. |
• | GAAP earnings per share for the second quarter of $0.02, and non-GAAP earnings per share of $0.12. |
HOUSTON, Texas – August 1, 2013 — PROS Holdings, Inc. (NYSE: PRO), a big data software company, today announced financial results for the second quarter ended June 30, 2013.
Total revenue for the second quarter of 2013 was $35.5 million and represented an increase of 26% over the second quarter of 2012.
CEO Andres Reiner stated, “We are pleased with our results this quarter, which exceeded guidance. Our solid performance reflects increasing recognition among executives that big data is an untapped source for sales growth. PROS is in a strong and differentiated position to deliver on the promise of big data, and we will continue to invest in innovation to drive further value for our customers and continued preference for PROS.”
For the quarter ended June 30, 2013, GAAP operating income was $0.8 million, compared with $2.0 million in the second quarter of 2012. GAAP net income for the second quarter was $0.6 million, or $0.02 per share, compared with $1.0 million, or $0.04 per share, in the second quarter of 2012.
For the quarter ended June 30, 2013, non-GAAP operating income was $4.9 million, compared with $4.4 million in the second quarter of 2012. Non-GAAP net income for the second quarter of 2013 was $3.5 million, or $0.12 per share, compared with $2.8 million, or $0.10 per share, in the second quarter of 2012.
2013 Business Highlights
• | Announced PROS Step™, the company's latest big data application innovation designed to help mid-size companies meet sales targets and outperform in their markets. Step provides pricing and selling recommendations, powered by data science, in a cloud-based, self-serve model that's easy to set up and use. Learn more at http://step.pros.com/ |
• | Experienced record attendance at PROS Outperform big data conference in Brussels where guests heard many examples from customers of the value delivered by PROS solutions, including 3663, Hewlett Packard, Johnson & Johnson Depuy, Novozymes and Volvo Trucks. |
• | Won the 2013 Microsoft Application Development Partner of the Year Award recognizing PROS exceptional innovation for big data solutions delivered on the Microsoft platform. |
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Executive Vice President and Chief Financial Officer Charles Murphy stated, “We are pleased with our second quarter performance with revenue increasing 26% period over period. Our strong revenue performance through the first half of the year, especially given the challenging macroeconomic environment, reflects that our investments are showing returns and our growth strategies are working, enabling us to capture the opportunity for our real-time Big Data solutions. We continue to believe full year revenue growth will be approximately 23%.”
The attached table provides a reconciliation of GAAP to non-GAAP income from operations and net income as well as net income per share available to common stockholders for the three and six months ended June 30, 2013 and 2012.
Financial Outlook
Based on information as of today, PROS anticipates the following:
• | Total revenue for the third quarter of 2013 in the range of $36.2 million to $36.8 million |
• | GAAP income from operations of $0.5 million and GAAP earnings per share of $0.01 for the third quarter of 2013 |
• | Non-GAAP income from operations of $4.2 million to $4.8 million and non-GAAP earnings per share of $0.10 to $0.11 for the third quarter of 2013, which excludes estimated non-cash share-based compensation charges of approximately $4.3 million for the third quarter of 2013 |
• | GAAP and non-GAAP estimated tax rate of approximately 27%, for the third quarter of 2013 |
• | Estimated weighted average of 30.3 million diluted shares outstanding for the third quarter of 2013 |
Conference Call
In conjunction with this announcement, PROS Holdings, Inc. will host a conference call on August 1, 2013, at 4:30 p.m. (ET) to discuss the company’s financial results. To access this call, dial (866) 318-8618 (domestic) or (617) 399-5137 (international). The pass code for the call is 54837367. Additionally, a live webcast of the conference call will be available in the “Investor Relations” section of the Company’s web site at www.pros.com.
Following the conference call, a replay will be available at (888) 286-8010 (domestic) or (617) 801-6888 (international). The replay pass code is 74206619. An archived webcast of this conference call will also be available in the “Investor Relations” section of the Company’s web site at www.pros.com.
About PROS
PROS Holdings, Inc. (NYSE: PRO) is a big data software company that helps customers outperform in their markets by using big data to sell more effectively. We apply 27 years of data science experience to unlock buying patterns and preferences within transaction data to reveal which opportunities are most likely to close, which offers are most likely to sell and which prices are most likely to win. PROS offers big data solutions to optimize sales, pricing, quoting, rebates and revenue management across more than 30 industries. PROS has implemented more than 600 solutions in more than 55 countries. The PROS team comprises more than 700 people around the world. To learn more, visit www.pros.com.
Forward-looking Statements
This press release contains forward-looking statements, including statements about PROS’ momentum and future financial performance; positioning; management's confidence and optimism; customer successes; reseller and OEM network growth and reach; big data solutions to optimize sales, pricing, quoting, rebates and revenue management; solutions demand; business predictability and effective tax rate. The forward-looking statements contained in this press release are based upon PROS’ historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates or expectations will be achieved. Factors that could cause actual results to differ materially from those described herein include risks related to: (a)
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the risk that we will face increased competition as part of entering new markets, (b) the risk that the market for PROS’ sales, pricing quoting, rebate and revenue management optimization software does not grow as anticipated, (c) the challenges associated with selling, installing, and delivering PROS' products and services, (d) the impact that a slowdown in the world or any particular economy has on PROS’ business sales cycles, prospects’ and customers’ spending decisions and timing of implementation decisions, (e) the difficulties and risks associated with developing and selling complex new products and enhancements with the technical specifications and functionality desired by customers, (f) the difficulties of making accurate estimates necessary to complete a project and recognize revenue and risk that PROS’ revenue model will not continue to provide predictability of the PROS business, (g) the risk that PROS will not be able to maintain historical maintenance renewal rates, (h) personnel and other risks associated with growing a business generally, (i) the risk that modification or negotiation of contractual arrangements will be necessary during PROS’ implementations of its solutions, (j) the impact of currency fluctuations on PROS’ results of operations,(k) civil and political unrest in regions in which PROS operate and (l) the risk that reseller and other relationships do not increase sales of PROS’ solutions. Additional information relating to the uncertainty affecting the PROS business are contained in PROS’ filings with the Securities and Exchange Commission. These forward-looking statements represent PROS’ expectations as of the date of this press release. Subsequent events may cause these expectations to change, and PROS disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
PROS has provided in this release certain financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP income from operations, net income and diluted earnings per share. PROS uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating PROS’ ongoing operational performance.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure as detailed above. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release. PROS use of non-GAAP financial measures may not be consistent with the presentations by similar companies in PROS industry.
Investor Contact:PROS Investor Relations
Staci Strauss-Mortenson
Staci Strauss-Mortenson
646-277-1200
Staci.Mortenson@icrinc.com
Staci.Mortenson@icrinc.com
Media Contact:PROS Public Relations
Yvonne Donaldson
Yvonne Donaldson
713-335-5310
ydonaldson@pros.com
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PROS Holdings, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
(Unaudited)
June 30, 2013 | December 31, 2012 | |||||||
Assets: | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 88,227 | $ | 83,558 | ||||
Accounts and unbilled receivables, net of allowance of $690 and $760, respectively | 37,553 | 38,801 | ||||||
Prepaid and other current assets | 6,041 | 5,067 | ||||||
Total current assets | 131,821 | 127,426 | ||||||
Restricted cash | 329 | 329 | ||||||
Property and equipment, net | 14,838 | 12,788 | ||||||
Other long term assets, net | 5,759 | 5,936 | ||||||
Total assets | $ | 152,747 | $ | 146,479 | ||||
Liabilities and Stockholders’ Equity: | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 4,532 | $ | 3,775 | ||||
Accrued liabilities | 4,129 | 3,258 | ||||||
Accrued payroll and other employee benefits | 4,828 | 7,669 | ||||||
Deferred revenue | 36,013 | 39,774 | ||||||
Total current liabilities | 49,502 | 54,476 | ||||||
Long-term deferred revenue | 3,149 | 2,007 | ||||||
Other Long-term liabilities | 1,010 | 1,327 | ||||||
Total liabilities | 53,661 | 57,810 | ||||||
Stockholders' equity: | ||||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized none issued | — | — | ||||||
Common stock, $0.001 par value, 75,000,000 shares authorized; 32,486,851 and 31,966,432 shares issued, respectively; 28,069,266 and 27,548,847 shares outstanding, respectively | 32 | 32 | ||||||
Additional paid-in capital | 95,795 | 87,693 | ||||||
Treasury stock, 4,417,585 common shares, at cost | (13,938 | ) | (13,938 | ) | ||||
Retained earnings | 17,197 | 14,882 | ||||||
Total stockholders’ equity | 99,086 | 88,669 | ||||||
Total liabilities and stockholders’ equity | $ | 152,747 | $ | 146,479 | ||||
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PROS Holdings, Inc.
Condensed Consolidated Statements of Comprehensive Income
(In thousands, except share and per share data)
(Unaudited)
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenue: | ||||||||||||||||
License and implementation | $ | 24,170 | $ | 18,176 | $ | 46,762 | $ | 35,972 | ||||||||
Maintenance and support | 11,357 | 9,958 | 22,391 | 19,183 | ||||||||||||
Total revenue | 35,527 | 28,134 | 69,153 | 55,155 | ||||||||||||
Cost of revenue: | ||||||||||||||||
License and implementation | 8,808 | 5,540 | 17,278 | 11,543 | ||||||||||||
Maintenance and support | 1,978 | 1,959 | 4,061 | 3,895 | ||||||||||||
Total cost of revenue | 10,786 | 7,499 | 21,339 | 15,438 | ||||||||||||
Gross profit | 24,741 | 20,635 | 47,814 | 39,717 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling, marketing, general and administrative | 15,935 | 11,884 | 30,223 | 22,140 | ||||||||||||
Research and development | 8,026 | 6,772 | 16,121 | 13,469 | ||||||||||||
Income from operations | 780 | 1,979 | 1,470 | 4,108 | ||||||||||||
Other (expense) income, net | (129 | ) | (129 | ) | (234 | ) | (106 | ) | ||||||||
Income before income tax provision | 651 | 1,850 | 1,236 | 4,002 | ||||||||||||
Income tax provision (benefit) | 71 | 855 | (1,078 | ) | 1,816 | |||||||||||
Net income | $ | 580 | $ | 995 | $ | 2,314 | $ | 2,186 | ||||||||
Net earnings per share: | ||||||||||||||||
Basic | $ | 0.02 | $ | 0.04 | $ | 0.08 | $ | 0.08 | ||||||||
Diluted | $ | 0.02 | $ | 0.04 | $ | 0.08 | $ | 0.08 | ||||||||
Weighted average number of shares: | ||||||||||||||||
Basic | 28,006,517 | 27,375,429 | 27,881,957 | 27,271,201 | ||||||||||||
Diluted | 29,958,580 | 28,337,143 | 29,710,202 | 28,303,760 | ||||||||||||
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PROS Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
For the Six Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
Operating activities: | ||||||||
Net income | 2,314 | $ | 2,186 | |||||
Adjustments to reconcile net income to net | ||||||||
cash provided by operating activities: | ||||||||
Depreciation and amortization | 1,999 | 938 | ||||||
Share-based compensation | 7,559 | 4,472 | ||||||
Excess tax benefits on share-based compensation | — | (1,685 | ) | |||||
Tax (shortfall)/benefit from share-based compensation | (10 | ) | 1,633 | |||||
Provision for doubtful accounts | (70 | ) | (257 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts and unbilled receivables | 1,317 | (2,407 | ) | |||||
Prepaid expenses and other assets | (821 | ) | 4,177 | |||||
Accounts payable | 715 | (2,465 | ) | |||||
Accrued liabilities | 391 | 630 | ||||||
Accrued payroll and other employee benefits | (2,841 | ) | (1,115 | ) | ||||
Deferred revenue | (2,619 | ) | 846 | |||||
Net cash provided by operating activities | 7,934 | 6,953 | ||||||
Investing activities: | ||||||||
Purchases of property and equipment | (2,172 | ) | (3,264 | ) | ||||
Capitalized internal-use software development costs | (1,534 | ) | (815 | ) | ||||
Net cash used in investing activities | (3,706 | ) | (4,079 | ) | ||||
Financing activities: | ||||||||
Exercise of stock options | 2,771 | 511 | ||||||
Excess tax benefits on share-based compensation | — | 1,685 | ||||||
Tax withholding related to net share settlement of restricted stock units | (2,330 | ) | (2,365 | ) | ||||
Net cash provided by (used in) financing activities | 441 | (169 | ) | |||||
Net increase in cash and cash equivalents | 4,669 | 2,705 | ||||||
Cash and cash equivalents: | ||||||||
Beginning of period | 83,558 | 68,457 | ||||||
End of period | $ | 88,227 | $ | 71,162 | ||||
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PROS Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Dollars in thousands, except per share data)
(Unaudited)
We use these non-GAAP financial measures to assist in the management of the Company because we believe that this information provides a more consistent and complete understanding of the underlying results and trends of the ongoing business due to the uniqueness of these charges.
Quarter over Quarter | Year over Year | |||||||||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||||
2013 | 2012 | % change | 2013 | 2012 | % change | |||||||||||||||||||
GAAP gross profit | $ | 24,741 | $ | 20,635 | 19.9% | $ | 47,814 | $ | 39,717 | 20.4% | ||||||||||||||
Non-GAAP adjustment: | ||||||||||||||||||||||||
GAAP share-based compensation | 534 | 301 | 996 | 630 | ||||||||||||||||||||
Non-GAAP gross profit | $ | 25,275 | $ | 20,936 | 20.7% | $ | 48,810 | $ | 40,347 | 21.0% | ||||||||||||||
Non-GAAP gross margin | 71.1 | % | 74.4 | % | 70.6 | % | 73.2 | % | ||||||||||||||||
GAAP selling, marketing, general and administrative | $ | 15,935 | $ | 11,884 | 34.1% | $ | 30,223 | $ | 22,140 | 36.5% | ||||||||||||||
Non-GAAP adjustment: | ||||||||||||||||||||||||
GAAP share-based compensation | 2,838 | 1,636 | 5,059 | 2,904 | ||||||||||||||||||||
Non- GAAP selling, marketing, general and administrative | $ | 13,097 | $ | 10,248 | 27.8% | $ | 25,164 | $ | 19,236 | 30.8% | ||||||||||||||
GAAP research and development | $ | 8,026 | $ | 6,772 | 18.5% | $ | 16,121 | $ | 13,469 | 19.7% | ||||||||||||||
Non-GAAP adjustment: | ||||||||||||||||||||||||
GAAP share-based compensation | 767 | 503 | 1,504 | 938 | ||||||||||||||||||||
Non- GAAP research and development | $ | 7,259 | $ | 6,269 | 15.8% | $ | 14,617 | $ | 12,531 | 16.6% | ||||||||||||||
Income from operations | $ | 780 | $ | 1,979 | (60.6)% | $ | 1,470 | $ | 4,108 | (64.2)% | ||||||||||||||
Non-GAAP adjustment: | ||||||||||||||||||||||||
GAAP share-based compensation | 4,139 | 2,440 | 7,559 | 4,472 | ||||||||||||||||||||
Non-GAAP income from operations | $ | 4,919 | $ | 4,419 | 11.3% | $ | 9,029 | $ | 8,580 | 5.2% | ||||||||||||||
Non-GAAP income from operations % of total revenue | 13.8 | % | 15.7 | % | 13.1 | % | 15.6 | % | ||||||||||||||||
GAAP net income | $ | 580 | $ | 995 | (41.7)% | $ | 2,314 | $ | 2,186 | 5.9% | ||||||||||||||
Non-GAAP adjustment: | ||||||||||||||||||||||||
GAAP share-based compensation | 4,139 | 2,440 | 7,559 | 4,472 | ||||||||||||||||||||
Tax impact related to non-GAAP adjustments | (1,216 | ) | (647 | ) | (2,041 | ) | (1,150 | ) | ||||||||||||||||
Non-GAAP net income | $ | 3,503 | $ | 2,788 | 25.6% | $ | 7,832 | $ | 5,508 | 42.2% | ||||||||||||||
Non-GAAP diluted earnings per share | $ | 0.12 | $ | 0.10 | $ | 0.26 | $ | 0.19 | ||||||||||||||||
Shares used in computing non-GAAP earnings per share | 29,959 | 28,337 | 29,710 | 28,304 | ||||||||||||||||||||
Detail of non-GAAP share-based compensation expense: | ||||||||||||||||||||||||
Cost of revenue | $ | 534 | $ | 301 | $ | 996 | $ | 630 | ||||||||||||||||
Selling, marketing, general and administrative | 2,838 | 1,636 | 5,059 | 2,904 | ||||||||||||||||||||
Research and development | 767 | 503 | 1,504 | 938 | ||||||||||||||||||||
Total share-based compensation expense | $ | 4,139 | $ | 2,440 | $ | 7,559 | $ | 4,472 | ||||||||||||||||
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