Attached files
| file | filename |
|---|---|
| 8-K - 8-K - TANGOE INC | a14-12258_18k.htm |
Exhibit 99.1
For Immediate Release
Tangoe, Inc. Announces First Quarter 2014 Financial Results
· Total revenue of $50.4 million; recurring revenue of $46.0 million, up 15% year-over-year
· GAAP operating income of $0.2 million; non-GAAP operating income of $6.4 million
· GAAP EPS of negative $0.01; non-GAAP EPS of $0.15
· Adjusted EBITDA of $7.1 million; adjusted EBITDA margin of 14.1%
· Maintain revenue and profitability guidance for full year 2014
Orange, Conn., May 8, 2014 — Tangoe, Inc. (NASDAQ: TNGO), a leading global provider of Connection Lifecycle Management (CLM) software and related services, today announced financial results for its first quarter ended March 31, 2014.
“During the first quarter, customer interest remained high as evidenced by the strength in new customer additions, expansion with existing customers and growth in our recurring revenue,” stated Al Subbloie, president and CEO of Tangoe. “We have always shared that non-recurring revenue, which is the less strategic component of our business, can be variable quarter-to-quarter and this was the element of our business that caused revenue and profitability to be slightly below our expectations for the quarter. We remain optimistic about the company’s future which is supported by the ongoing strong demand for our integrated solution and our expectation for total revenue to remain on track for the full year 2014.”
First Quarter 2014 Financial Highlights
· Revenue: Total revenue for the first quarter was $50.4 million, an increase of 12% on a year-over-year basis. Recurring technology and services revenue was $46.0 million, an increase of 15% on a year-over-year basis. Strategic consulting, software licenses and other services revenue contributed the remaining $4.4 million of total revenue for the first quarter of 2014.
· Operating Income: GAAP operating income for the first quarter was $0.2 million, compared to GAAP operating income of $0.9 million for the first quarter of 2013. Non-GAAP operating income for the first quarter was $6.4 million, compared to $6.2 million for the first quarter of 2013.
· Net Income (Loss): GAAP net loss for the first quarter was $(0.3) million, compared to $1.1 million of GAAP net income for the same period last year. GAAP net loss per share for the first quarter was $(0.01), based on 38.4 million weighted-average shares outstanding, compared to GAAP net income per share of $0.03, based on 40.5 million weighted-average diluted shares outstanding, for the same period last year.
Non-GAAP net income was $6.0 million for the first quarter of both 2014 and 2013. Non-GAAP diluted net income per share was $0.15 for both the first quarter of 2014 and 2013 based on 41.0 million and 40.5 million weighted-average diluted shares outstanding, respectively.
· Adjusted EBITDA: Adjusted EBITDA for the first quarter was $7.1 million, compared to $6.7 million for the first quarter of 2013. Adjusted EBITDA margin was 14.1% for the first quarter of 2014, compared to a 15.0% margin for the same period last year.
· Cash and Cash Flow: As of March 31, 2014, Tangoe had cash and cash equivalents of $46.1 million, an increase of $2.9 million from the end of the prior quarter.
The company generated $3.1 million in net cash from operations for the first quarter of 2014, compared to $5.8 million during the first quarter of 2013. The company generated $1.9 million in unlevered free cash flow for the quarter, compared to $5.6 million during the first quarter of 2013.
A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”
Financial Outlook
As of May 8, 2014, Tangoe is providing guidance for its second quarter and full year 2014.
· Second Quarter 2014 Guidance: Total revenue is expected to be in the range of $52.4 million to $53.1 million. Adjusted EBITDA is expected to be in the range of $8.4 million to $8.7 million. Non-GAAP net income per share is expected to be approximately $0.18 based on approximately 41.5 million weighted-average diluted shares outstanding.
· Full Year 2014 Guidance: Total revenue is expected to be in the range of $220.0 million to $224.0 million. Adjusted EBITDA is expected to be in the range of $37.0 million to $39.0 million. Non-GAAP net income per share is expected to be in the range of $0.77 to $0.82 based on approximately 41.7 million weighted-average diluted shares outstanding.
Quarterly Conference Call
Tangoe will host a conference call today at 5:00 p.m. EDT to review the company’s financial results for the first quarter 2014 and business outlook. To access this call, dial 800-967-7144 (United States), or 719.325.2322 (international), with conference ID #1611182. A live webcast of the conference call will be accessible from the investor relations page of Tangoe’s website at http://investor.tangoe.com, and a recording will be archived and accessible at http://investor.tangoe.com/events.cfm. A recording of this conference call will also be available through May 22, 2014, by dialing 877.870.5176 (United States), or 858.384.5517 (international). The recording access code is #1611182.
About Tangoe
Tangoe (NASDAQ:TNGO) is a leading global provider of Connection Lifecycle Management software and services to a wide range of global enterprises and service providers. The company’s Connection Lifecycle Management technology, Matrix, is an on-demand suite of software and services designed to turn on, track, manage, secure, and support various connections in an enterprise’s connection lifecycle, including mobile, fixed, machine-to-machine, cloud software and services, enterprise social, and IT connections. Additional information about Tangoe can be found at www.tangoe.com.
Tangoe is a registered trademark of Tangoe, Inc.
Non-GAAP Financial Measures
Adjusted EBITDA discussed in this press release is defined as net income (loss) plus interest expense, income tax provision, depreciation and amortization, amortization of marketing agreement intangible assets, stock-based compensation expense and, for 2013 only, restructuring charge; less amortization of leasehold interest, interest income and other income. Non-GAAP operating income excludes stock-based compensation expense, amortization of intangible assets and, for 2013 only, restructuring charge. Non-GAAP net income excludes stock-based compensation expense, amortization of intangible assets, amortization of debt discount, other income, and, for 2013 only, restructuring charge. Unlevered free cash flow is defined as net cash provided by operating activities plus net interest payments, less capital expenditures. Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the company’s performance against prior periods, the preparation of operating budgets and determination of appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company’s financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared
in accordance with GAAP. We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.
Forward-Looking Statements
This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “target,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about our estimates regarding future revenue and financial performance. We may not actually achieve the expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the expectations disclosed in the forward-looking statements we make. More information about potential factors that could affect our business and financial results is contained in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 17, 2014. Additional information will also be set forth in our future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend, and undertake no duty, to release publicly any updates or revisions to any forward-looking statements contained herein.
TANGOE, INC.
Consolidated Statements of Operations (unaudited)
(in thousands, except per share amounts)
|
|
|
Three Months Ended |
| ||||
|
|
|
March 31, |
| ||||
|
|
|
2013 |
|
2014 |
| ||
|
|
|
|
|
|
| ||
|
Revenue: |
|
|
|
|
| ||
|
Recurring technology and services |
|
$ |
40,048 |
|
$ |
45,999 |
|
|
Strategic consulting, software licenses and other |
|
4,812 |
|
4,395 |
| ||
|
Total revenue |
|
44,860 |
|
50,394 |
| ||
|
|
|
|
|
|
| ||
|
Cost of revenue: |
|
|
|
|
| ||
|
Recurring technology and services |
|
18,755 |
|
21,398 |
| ||
|
Strategic consulting, software licenses and other |
|
2,061 |
|
2,334 |
| ||
|
Total cost of revenue |
|
20,816 |
|
23,732 |
| ||
|
|
|
|
|
|
| ||
|
Gross profit |
|
24,044 |
|
26,662 |
| ||
|
|
|
|
|
|
| ||
|
Operating expenses: |
|
|
|
|
| ||
|
Sales and marketing |
|
7,392 |
|
9,945 |
| ||
|
General and administrative |
|
8,127 |
|
8,788 |
| ||
|
Research and development |
|
4,945 |
|
5,129 |
| ||
|
Depreciation and amortization |
|
2,489 |
|
2,607 |
| ||
|
Restructuring charge |
|
155 |
|
— |
| ||
|
Income from operations |
|
936 |
|
193 |
| ||
|
|
|
|
|
|
| ||
|
Other income (expense), net |
|
|
|
|
| ||
|
Interest expense |
|
(162 |
) |
(37 |
) | ||
|
Interest income |
|
19 |
|
9 |
| ||
|
Other income |
|
563 |
|
13 |
| ||
|
Income before income tax provision |
|
1,356 |
|
178 |
| ||
|
Income tax provision |
|
231 |
|
445 |
| ||
|
Net income (loss) |
|
$ |
1,125 |
|
$ |
(267 |
) |
|
|
|
|
|
|
| ||
|
Net income (loss) per common share: |
|
|
|
|
| ||
|
Basic |
|
$ |
0.03 |
|
$ |
(0.01 |
) |
|
Diluted |
|
$ |
0.03 |
|
$ |
(0.01 |
) |
|
|
|
|
|
|
| ||
|
Weighted average number of common share: |
|
|
|
|
| ||
|
Basic |
|
37,547 |
|
38,364 |
| ||
|
Diluted |
|
40,459 |
|
38,364 |
| ||
TANGOE, INC.
Consolidated Balance Sheets
(in thousands)
|
|
|
December 31, |
|
March 31, |
| ||
|
|
|
2013 |
|
2014 |
| ||
|
|
|
|
|
(Unaudited) |
| ||
|
ASSETS |
|
|
|
|
| ||
|
CURRENT ASSETS: |
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
43,182 |
|
$ |
46,079 |
|
|
Accounts receivable |
|
43,273 |
|
44,807 |
| ||
|
Prepaid expenses and other current assets |
|
4,537 |
|
5,791 |
| ||
|
Total current assets |
|
90,992 |
|
96,677 |
| ||
|
COMPUTERS, FURNITURE AND EQUIPMENT-NET |
|
4,317 |
|
4,888 |
| ||
|
|
|
|
|
|
| ||
|
OTHER ASSETS: |
|
|
|
|
| ||
|
Intangible assets-net |
|
36,637 |
|
34,548 |
| ||
|
Goodwill |
|
65,963 |
|
65,900 |
| ||
|
Security deposits and other non-current assets |
|
935 |
|
1,052 |
| ||
|
TOTAL ASSETS |
|
$ |
198,844 |
|
$ |
203,065 |
|
|
|
|
|
|
|
| ||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
|
CURRENT LIABILITIES: |
|
|
|
|
| ||
|
Accounts payable |
|
$ |
9,570 |
|
$ |
9,776 |
|
|
Accrued expenses |
|
8,871 |
|
8,179 |
| ||
|
Deferred revenue-current portion |
|
9,063 |
|
9,649 |
| ||
|
Notes payable-current portion |
|
1,831 |
|
1,705 |
| ||
|
Other current liabilities |
|
160 |
|
— |
| ||
|
Total current liabilities |
|
29,495 |
|
29,309 |
| ||
|
|
|
|
|
|
| ||
|
OTHER LIABILITIES: |
|
|
|
|
| ||
|
Deferred taxes and other non-current liabilities |
|
3,598 |
|
3,881 |
| ||
|
Deferred revenue-less current portion |
|
1,536 |
|
663 |
| ||
|
Notes payable-less current portion |
|
203 |
|
255 |
| ||
|
Total liabilities |
|
34,832 |
|
34,108 |
| ||
|
|
|
|
|
|
| ||
|
COMMITMENT AND CONTINGENCIES |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
|
Common Stock |
|
4 |
|
4 |
| ||
|
Additional paid-in capital |
|
202,808 |
|
208,178 |
| ||
|
Warrants for common stock |
|
10,610 |
|
10,610 |
| ||
|
Accumulated deficit |
|
(48,795 |
) |
(49,062 |
) | ||
|
Other comprehensive loss |
|
(615 |
) |
(773 |
) | ||
|
Total stockholders’ equity |
|
164,012 |
|
168,957 |
| ||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
198,844 |
|
$ |
203,065 |
|
TANGOE, INC.
Condensed Consolidated Statements of Cash Flows (unaudited)
(in thousands)
|
|
|
For the Three Months Ended |
| ||||
|
|
|
March 31, |
| ||||
|
|
|
2013 |
|
2014 |
| ||
|
|
|
|
|
|
| ||
|
Operating activities: |
|
|
|
|
| ||
|
Net income (loss) |
|
$ |
1,125 |
|
$ |
(267 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
| ||
|
Amortization of debt discount |
|
136 |
|
25 |
| ||
|
Amortization of leasehold interest |
|
(24 |
) |
(24 |
) | ||
|
Depreciation and amortization |
|
2,489 |
|
2,607 |
| ||
|
Decrease in deferred rent liability |
|
(15 |
) |
(31 |
) | ||
|
Amortization of marketing agreement intangible assets |
|
55 |
|
108 |
| ||
|
Allowance for doubtful accounts |
|
23 |
|
30 |
| ||
|
Deferred income taxes |
|
111 |
|
307 |
| ||
|
Foreign exchange adjustment |
|
(138 |
) |
— |
| ||
|
Stock based compensation expense |
|
3,099 |
|
4,197 |
| ||
|
Decrease in fair value of contingent consideration |
|
(517 |
) |
— |
| ||
|
Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
| ||
|
Accounts receivable |
|
452 |
|
(1,593 |
) | ||
|
Prepaid expenses and other current assets |
|
(198 |
) |
(1,035 |
) | ||
|
Other assets |
|
35 |
|
(340 |
) | ||
|
Accounts payable |
|
1,529 |
|
183 |
| ||
|
Accrued expenses and other current liabilities |
|
(2,052 |
) |
(807 |
) | ||
|
Deferred revenue |
|
(268 |
) |
(283 |
) | ||
|
Net cash provided by operating activities |
|
5,842 |
|
3,077 |
| ||
|
Investing activities: |
|
|
|
|
| ||
|
Purchases of computers, furniture and equipment |
|
(273 |
) |
(1,218 |
) | ||
|
Cash paid in connection with acquisitions, net of cash received |
|
(8,789 |
) |
— |
| ||
|
Net cash used in investing activities |
|
(9,062 |
) |
(1,218 |
) | ||
|
Financing activities: |
|
|
|
|
| ||
|
Borrowings of debt |
|
— |
|
177 |
| ||
|
Repayment of debt |
|
(307 |
) |
(276 |
) | ||
|
Repurchase of common stock |
|
(3,235 |
) |
— |
| ||
|
Proceeds from exercise of stock options and stock warrants |
|
306 |
|
1,172 |
| ||
|
Net cash (used in) provided by financing activities |
|
(3,236 |
) |
1,073 |
| ||
|
|
|
|
|
|
| ||
|
Effect of exchange rate on cash |
|
(201 |
) |
(35 |
) | ||
|
|
|
|
|
|
| ||
|
Net (decrease) increase in cash and cash equivalents |
|
(6,657 |
) |
2,897 |
| ||
|
Cash and cash equivalents, beginning of period |
|
50,211 |
|
43,182 |
| ||
|
Cash and cash equivalents, end of period |
|
$ |
43,554 |
|
$ |
46,079 |
|
TANGOE, INC.
Calculation of Non-GAAP Operating Income (Unaudited)
(in thousands)
|
|
|
Three Months Ended |
| ||||||||
|
|
|
March 31, |
| ||||||||
|
|
|
2013 |
|
2014 |
| ||||||
|
|
|
|
|
% of |
|
|
|
% of |
| ||
|
|
|
Amount |
|
Revenue |
|
Amount |
|
Revenue |
| ||
|
Income from operations |
|
$ |
936 |
|
2.1 |
% |
$ |
193 |
|
0.4 |
% |
|
|
|
|
|
|
|
|
|
|
| ||
|
Add: |
|
|
|
|
|
|
|
|
| ||
|
Stock based compensation expense |
|
3,099 |
|
6.9 |
% |
4,197 |
|
8.3 |
% | ||
|
Amortization of intangibles |
|
2,024 |
|
4.5 |
% |
2,036 |
|
4.0 |
% | ||
|
Restructuring charge |
|
155 |
|
0.3 |
% |
— |
|
0.0 |
% | ||
|
Non-GAAP income from operations |
|
$ |
6,214 |
|
13.9 |
% |
$ |
6,426 |
|
12.8 |
% |
TANGOE, INC.
Reconciliation of Net (loss) income to Adjusted EBITDA (Unaudited)
(in thousands)
|
|
|
Three Months Ended |
| ||||||||
|
|
|
March 31, |
| ||||||||
|
|
|
2013 |
|
2014 |
| ||||||
|
|
|
|
|
% of |
|
|
|
% of |
| ||
|
|
|
Amount |
|
Revenue |
|
Amount |
|
Revenue |
| ||
|
Net income (loss) |
|
$ |
1,125 |
|
2.5 |
% |
$ |
(267 |
) |
-0.5 |
% |
|
Interest expense |
|
162 |
|
0.4 |
% |
37 |
|
0.1 |
% | ||
|
Other income |
|
(563 |
) |
-1.3 |
% |
(13 |
) |
0.0 |
% | ||
|
Interest income |
|
(19 |
) |
0.0 |
% |
(9 |
) |
0.0 |
% | ||
|
Income tax provision |
|
231 |
|
0.5 |
% |
445 |
|
0.9 |
% | ||
|
Depreciation and amortization |
|
2,489 |
|
5.5 |
% |
2,607 |
|
5.2 |
% | ||
|
Amortization of marketing agreement intangible assets |
|
55 |
|
0.1 |
% |
108 |
|
0.2 |
% | ||
|
Amortization of leasehold interest |
|
(24 |
) |
-0.1 |
% |
(24 |
) |
0.0 |
% | ||
|
Stock based compensation expense |
|
3,099 |
|
6.9 |
% |
4,197 |
|
8.3 |
% | ||
|
Restructuring charge |
|
155 |
|
0.3 |
% |
— |
|
0.0 |
% | ||
|
Adjusted EBITDA |
|
$ |
6,710 |
|
15.0 |
% |
$ |
7,081 |
|
14.1 |
% |
TANGOE, INC.
Calculation of Non-GAAP Net Income and Non-GAAP Net Income per Share (Unaudited)
(in thousands, except per share data)
|
|
|
Three Months Ended |
| ||||
|
|
|
March 31, |
| ||||
|
|
|
2013 |
|
2014 |
| ||
|
Net income (loss) |
|
$ |
1,125 |
|
$ |
(267 |
) |
|
|
|
|
|
|
| ||
|
Add: |
|
|
|
|
| ||
|
Stock based compensation expense |
|
3,099 |
|
4,197 |
| ||
|
Restructuring charge |
|
155 |
|
— |
| ||
|
Amortization of intangibles |
|
2,024 |
|
2,036 |
| ||
|
Amortization of debt discount |
|
136 |
|
25 |
| ||
|
Other income |
|
(563 |
) |
(13 |
) | ||
|
Non-GAAP net income |
|
$ |
5,976 |
|
$ |
5,978 |
|
|
|
|
|
|
|
| ||
|
Non-GAAP net income per share: diluted |
|
$ |
0.15 |
|
$ |
0.15 |
|
|
|
|
|
|
|
| ||
|
Fully diluted weighted average shares outstanding |
|
40,459 |
|
40,969 |
| ||
TANGOE, INC.
Stock Based Compensation Expense (Unaudited)
(in thousands)
|
|
|
Three Months Ended |
| ||||
|
|
|
March 31, |
| ||||
|
|
|
2013 |
|
2014 |
| ||
|
Cost of revenue |
|
$ |
554 |
|
$ |
1,488 |
|
|
Sales and marketing |
|
813 |
|
1,256 |
| ||
|
General and administrative |
|
1,472 |
|
1,035 |
| ||
|
Research and development |
|
260 |
|
418 |
| ||
|
Total |
|
$ |
3,099 |
|
$ |
4,197 |
|
TANGOE, INC.
Calculation of Unlevered Free Cash Flow (Unaudited)
(in thousands)
|
|
|
Three Months Ended |
| ||||
|
|
|
March 31, |
| ||||
|
|
|
2013 |
|
2014 |
| ||
|
Net cash provided by operating activities |
|
$ |
5,842 |
|
$ |
3,077 |
|
|
|
|
|
|
|
| ||
|
Add: |
|
|
|
|
| ||
|
Interest payments, net |
|
21 |
|
9 |
| ||
|
|
|
|
|
|
| ||
|
Subtract: |
|
|
|
|
| ||
|
Capital Expenditures |
|
273 |
|
1,218 |
| ||
|
Unlevered Free Cash Flow |
|
$ |
5,590 |
|
$ |
1,868 |
|
Investor Contact:
Seth Potter
ICR, Inc.
512.344.0277
investor.relations@tangoe.com
Media Contact:
Nikki Festa/Ariel Burch
PAN Communications, Inc.
617.502.4300
tangoe@pancomm.com