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| 8-K - FORM 8-K - TRUPANION, INC. | v392704_8k.htm |
Trupanion, Inc. Reports Third Quarter 2014 Results
- Total revenue of $30 million, an increase of 37% from third quarter 2013.
- Adjusted revenue (for our subscription business) of $27 million, an increase of 38% from third quarter 2013.
- 207,843 total pets enrolled, an increase of 30% from third quarter 2013.
SEATTLE, Oct. 30, 2014 /PRNewswire/ -- Trupanion, Inc. (NYSE:TRUP), a direct-to-consumer, monthly subscription business that provides medical plans for cats and dogs through its affiliated entities, today announced financial results for the third quarter of 2014.
"The third quarter was a strong showing for our team," said Darryl Rawlings, CEO of Trupanion. "Our award-winning contact center continues to innovate with cutting edge technology and customer focused initiatives that are driving up our overall member satisfaction, retention and referral rates. We received a record 133,569 calls in our contact center and we serviced 99,495 veterinary invoices during the third quarter. These are two examples of the scale and expertise we have built in customer facing areas of our business. This strong focus on our customer experience drove a 98.67% monthly retention in the quarter which implies a subscriber life of 75 months. We are pleased with our consistent growth and strong cohort metrics."
Third Quarter 2014 Financial Highlights
- Total revenue for the third quarter of 2014 was $30 million, an increase of 37% from the third quarter of 2013.
- Adjusted revenue (for our subscription business) for the third quarter of 2014 was $27 million, an increase of 38% from the third quarter of 2013.
- Adjusted EBITDA for the third quarter of 2014 was $(2.9) million, compared to $(0.4) million for the third quarter of 2013.
- Net Loss for the third quarter of 2014 was $(8.5) million, compared to $(1.2) million for the third quarter of 2013. Non-cash charges comprised $(4.3) million of the net loss in the third quarter of 2014 and were attributed to expensing of debt discounts related to debt repayments, the revaluation of warrants related to certain adjustments contingent upon our initial public offering, and stock-based compensation awards.
Operating Metrics
- Total enrolled pets for the third quarter of 2014 was 207,843, an increase of 30% from the third quarter of 2013.
- Average monthly adjusted revenue per pet for the third quarter of 2014 was $44.98, an increase of 5.6% from the third quarter of 2013.
- The ratio of lifetime value of a pet (LVP) to average pet acquisition cost (PAC) or LVP to PAC ratio was 5.2 to 1.
Full Year 2014
- Total revenue is expected to be between $115 million and $117 million for 2014, representing a slight increase from previously stated expectations.
- Adjusted EBITDA is still expected to be between $(11.8) million and $(9.8) million for 2014.
Fourth Quarter 2014
- Total revenue is expected to be between $31 million and $33 million for the fourth quarter of 2014.
- Adjusted EBITDA is still expected to be between $(4.4) million and $(2.4) million for the fourth quarter of 2014.
Trupanion plans to continue to invest heavily in business initiatives, which it believes will continue to drive up overall member satisfaction, retention and referral rates.
Conference Call
Trupanion's management will host a conference call today to review its third quarter 2014 results and to discuss its financial outlook for the fourth quarter and full year 2014. The call is scheduled to begin at 2:00 p.m. PT/ 5:00 p.m. ET. A live webcast will be accessible through the Investor Relations section of Trupanion's website at http://investors.trupanion.com and will be archived online for 60 days upon completion of the conference call. Participants can access the conference call by dialing 1-866-311-7654 (United States), 1-855-669-9657 (Canada), or 1-412-902-4113 (International). A telephonic replay of the call will also be available, one hour after the completion of the call, by dialing 1-877-344-7529 (United States), 1-855-669-9658 (Canada), or 1-412-317-0088 (International) and entering the replay pin number: 10053693.
About Trupanion
Founded in 2000, Trupanion is an industry-leading, direct-to-consumer, monthly subscription business that provides medical plans for cats and dogs in the United States, Canada and Puerto Rico through its affiliated entities. Trupanion's mission is to help the pets we all love receive the best veterinary care. Trupanion offers a simple and comprehensive pet medical plan that pays 90% of veterinary costs for covered pets' illness and injury claims. As of September 30, 2014, Trupanion provided medical coverage to 207,843 pets. Trupanion's shares are traded on the New York Stock Exchange under the ticker symbol TRUP. The company is headquartered in Seattle, WA and can be found online at Trupanion.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to, among other things, expectations, plans, prospects and financial results for Trupanion, including, but not limited to, its expectations regarding future operating results and expenditures. These forward-looking statements are based upon the current expectations and beliefs of Trupanion's management as of the date of this press release, and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. All forward-looking statements made in this press release are based on information available to Trupanion as of the date hereof, and Trupanion has no obligation to update these forward-looking
statements.
In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the ability to achieve or maintain profitability in the future; the accuracy of assumptions used in determining appropriate member acquisition expenditures; the severity and frequency of claims; the ability to maintain high retention rates; the accuracy of assumptions used in pricing medical plan subscriptions and the ability to accurately estimate the impact of new products or offerings on claims frequency; actual claims expense exceeding estimates; regulatory and other constraints on our ability to institute, or our decision to otherwise delay, pricing modifications in response to changes in actual or estimated claims expense; the effectiveness of Territory Partners, veterinarians and other third parties in recommending medical plan subscriptions to potential members; the ability to maintain the requisite amount of risk-based capital; the ability to recognize benefits from investments in new solutions and enhancements to Trupanion's technology platform and website; and compliance with laws and regulations that apply to sale of a pet medical plan.
For a detailed discussion of these and other cautionary statements, please refer to the risk factors discussed in filings with the Securities and Exchange Commission (SEC), including but not limited to Trupanion's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 and any subsequently filed reports on Forms 10-Q and 8-K. All documents are available through the SEC's Electronic Data Gathering Analysis and Retrieval system at www.sec.gov or the investor relation section of Trupanion's website at http://investors.trupanion.com.
Non-GAAP Financial Measures
Trupanion's stated results include certain non-GAAP financial measures, including adjusted revenue, contribution margin, acquisition cost and adjusted EBITDA. Monthly adjusted revenue per pet is calculated in part based on adjusted revenue, a non-GAAP financial measure, that Trupanion defines as revenue from our subscription business segment excluding sign-up fee revenue and the change in deferred revenue between periods. Lifetime value of a pet is calculated in part based on contribution margin, a non-GAAP financial measure, that Trupanion defines as gross profit from its subscription business segment for the 12 months prior to the period end date excluding stock-based compensation expense related to cost of revenue from its subscription business segment, sign-up fee revenue and the change in deferred revenue between periods. Average pet acquisition cost is calculated in
part based on acquisition cost, a non-GAAP financial measure, that Trupanion defines as sales and marketing expenses, excluding stock-based compensation expense, net of sign-up fee revenue. Adjusted EBITDA is a non-GAAP financial measure that Trupanion defines as net loss excluding stock-based compensation expense, depreciation and amortization expense, interest income, interest expense, change in fair value of warrant liabilities and income tax expense (benefit).
Trupanion's non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in its industry as other companies in its industry may calculate or use non-GAAP financial measures differently. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on Trupanion's reported financial results. Further, stock-based compensation expense and other items used in the calculation of adjusted EBITDA have been and will continue to be for the foreseeable future significant recurring expenses in Trupanion's business. The presentation and utilization of non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Trupanion urges its investors to review the reconciliation of its non-GAAP financial measures to the most directly comparable GAAP financial measures in its consolidated financial statements, and not to rely on any single financial or operating measure to evaluate its business.
Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company's non-cash expenses, Trupanion believes that providing non-GAAP financial measures such as contribution margin, acquisition cost and adjusted EBITDA that exclude stock-based compensation expense and, in the case of adjusted EBITDA, the change in fair value of warrant liabilities allows for more meaningful comparisons between its operating results from period to period. Trupanion excludes sign-up fee revenue from the calculation of both adjusted revenue and contribution margin because it collects sign-up fee revenue from new members at the time of enrollment and consider it to be an offset to a portion of Trupanion's sales and marketing expenses. For this reason, Trupanion also nets sign-up fees with sales and marketing expenses in its calculation of acquisition cost. Trupanion excludes changes in deferred revenue from the calculation of both adjusted revenue and contribution margin in order to eliminate fluctuations caused by the timing of pet enrollment during the last month of any particular period in which such measures are being presented or utilized. Trupanion excludes the change in fair value of warrant liabilities from its calculation of adjusted EBITDA in order to eliminate fluctuations caused by changes in its stock price. Trupanion believes this allows it to calculate and present adjusted revenue, contribution margin and acquisition cost and the related financial measures it derives from them, as well as adjusted EBITDA, in a consistent manner across periods. Trupanion's non-GAAP financial measures and the related financial measures it derives from them are important tools for financial and operational decision-making and for evaluating its own operating results over different periods of time.
Trupanion has not reconciled adjusted EBITDA guidance to net income (loss) guidance because it does not provide guidance for stock-based compensation expense, depreciation and amortization, interest income, interest expense, change in fair value of warrant liabilities or income tax expense (benefit), which are reconciling items between net income (loss) and adjusted EBITDA. As items that impact net income (loss) are out of Trupanion's control and cannot be reasonably predicted, Trupanion is unable to provide such guidance. Accordingly, reconciliation to net income (loss) is not available without unreasonable effort. For a reconciliation of historical non-GAAP financial measures to the nearest comparable GAAP measures, see the reconciliation tables included in this press release.
Contacts:
Investors: Quynh Pham, Director, Investor Relations
InvestorRelations@trupanion.com
206.607.1940
Media: Britta Gidican, Director, Public Relations
MediaRelations@trupanion.com
206.607.1930
Trupanion, Inc. | |||
Condensed Consolidated Balance Sheets | |||
(in thousands, except for share data) | |||
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| SEPTEMBER 30, |
| DECEMBER 31, |
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| 2014 |
| 2013 |
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| (unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents | $ 59,069 |
| $ 14,939 |
Investments in fixed maturities, at amortized cost (fair value: $19,297 and $16,088) | 19,297 |
| 16,088 |
Accounts and other receivables | 8,598 |
| 7,771 |
Prepaid expenses and other assets | 1,386 |
| 935 |
Total current assets | 88,350 |
| 39,733 |
Restricted cash | — |
| 3,000 |
Investments in fixed maturities, at fair value (amortized cost: $1,000) | 944 |
| 832 |
Property and equipment, net | 6,355 |
| 3,124 |
Deferred offering costs | — |
| 54 |
Intangible assets, net | 4,863 |
| 4,910 |
Total assets | 100,512 |
| 51,653 |
Liabilities, redeemable convertible preferred stock, and stockholders' equity (deficit) |
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Current liabilities: |
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Accounts payable | 1,641 |
| 1,263 |
Accrued liabilities | 3,519 |
| 3,660 |
Claims reserve | 5,411 |
| 5,612 |
Deferred revenue | 9,291 |
| 8,468 |
Short-term debt | — |
| 900 |
Warrant liabilities | — |
| 4,900 |
Other payables | 1,340 |
| 1,138 |
Deferred tax liabilities | 82 |
| 82 |
Total current liabilities | 21,284 |
| 26,023 |
Long-term debt | 14,900 |
| 25,199 |
Deferred tax liabilities | 1,542 |
| 1,540 |
Other liabilities | 141 |
| 166 |
Total liabilities | 37,867 |
| 52,928 |
Redeemable convertible preferred stock: $0.00001 par value per share, 0 and 15,648,723 authorized at September 30, 2014 and December 31, 2013, respectively, and 0 and 14,857,989 issued and outstanding at September 30, 2014 and December 31, 2013, respectively. | — |
| 31,724 |
Stockholders' equity: |
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Common stock, $0.00001 par value per share, 200,000,000 and 26,000,000 shares authorized at September 30, 2014 and December 31, 2013, respectively, 28,407,957 and 27,786,978 issued and outstanding at September 30, 2014; 2,857,620 and 2,236,641 shares issued and outstanding at December 31, 2013.
| — |
| — |
Preferred stock: $0.00001 par value per share, 10,000,000 and 0 authorized at September 30, 2014 and December 31, 2013, respectively, and 0 issued and outstanding at September 30, 2014 and December 31, 2013. | — |
| — |
Special voting shares, $0.00001 par value per share, 0 and 2,500,030 shares authorized at September 30, 2014 and December 31, 2013, respectively, and 0 and 2,247,130 issued and outstanding at September 30, 2014 and December 31, 2013, respectively. | — |
| — |
Additional paid-in capital | 118,153 |
| 5,769 |
Accumulated other comprehensive loss | (3) |
| (164) |
Accumulated deficit | (52,904) |
| (36,003) |
Treasury stock, at cost: 620,979 shares at September 30, 2014 and December 31, 2013. | (2,601) |
| (2,601) |
Total stockholders' equity (deficit) | 62,645 |
| (32,999) |
Total liabilities, redeemable convertible preferred stock, and stockholders' equity (deficit) | $ 100,512 |
| $ 51,653 |
Trupanion, Inc. | |||||||
Condensed Consolidated Statement of Operations | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
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| THREE MONTHS ENDED |
| NINE MONTHS ENDED | ||||
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| SEPTEMBER 30, |
| SEPTEMBER 30, | ||||
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| 2014 |
| 2013 |
| 2014 |
| 2013 |
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Revenue: |
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Subscription business | $ 27,517 |
| $ 20,007 |
| $ 75,965 |
| $ 55,392 |
Other business | 2,795 |
| 2,127 |
| 8,077 |
| 4,426 |
Total revenue | 30,312 |
| 22,134 |
| 84,042 |
| 59,818 |
Cost of revenue: |
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Subscription business (1) | 23,404 |
| 16,117 |
| 62,524 |
| 44,289 |
Other business | 2,463 |
| 1,898 |
| 7,167 |
| 3,973 |
Total cost of revenue | 25,867 |
| 18,015 |
| 69,691 |
| 48,262 |
Gross profit: |
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Subscription business | 4,113 |
| 3,890 |
| 13,441 |
| 11,103 |
Other business | 332 |
| 229 |
| 910 |
| 453 |
Total gross profit | 4,445 |
| 4,119 |
| 14,351 |
| 11,556 |
Operating expenses: |
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Sales and marketing (1) | 2,934 |
| 2,013 |
| 8,390 |
| 6,853 |
Technology and development (1) | 2,532 |
| 1,156 |
| 7,285 |
| 3,191 |
General and administrative (1) | 4,385 |
| 2,033 |
| 10,463 |
| 5,982 |
Total operating expenses | 9,851 |
| 5,202 |
| 26,138 |
| 16,026 |
Operating loss | (5,406) |
| (1,083) |
| (11,787) |
| (4,470) |
Interest expense | 5,155 |
| 154 |
| 6,623 |
| 420 |
Other (income) expense, net | (2,066) |
| (13) |
| (1,545) |
| 168 |
Loss before income taxes | (8,495) |
| (1,224) |
| (16,865) |
| (5,058) |
Income tax expense (benefit) | 14 |
| (2) |
| 36 |
| (86) |
Net loss | $ (8,509) |
| $ (1,222) |
| $ (16,901) |
| $ (4,972) |
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(1) Includes stock-based compensation expense as follows: |
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| THREE MONTHS ENDED |
| NINE MONTHS ENDED | ||||
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| SEPTEMBER 30, |
| SEPTEMBER 30, | ||||
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| 2014 |
| 2013 |
| 2014 |
| 2013 |
Cost of revenue | $ 78 |
| $ 56 |
| $ 223 |
| $ 144 |
Sales and marketing | 115 |
| 147 |
| 408 |
| 492 |
Technology and development | 110 |
| 84 |
| 306 |
| 249 |
General and administrative | 1,698 |
| 191 |
| 2,257 |
| 479 |
Total stock-based compensation expense | $ 2,001 |
| $ 478 |
| $ 3,194 |
| $ 1,364 |
Trupanion, Inc. | |||
Condensed Consolidated Statements of Cash Flows | |||
(in thousands) | |||
(unaudited) | |||
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| NINE MONTHS ENDED | ||
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| SEPTEMBER 30, | ||
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| 2014 |
| 2013 |
Operating activities |
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Net loss | $ (16,901) |
| $ (4,972) |
Adjustments to reconcile net loss to cash used in operating activities: |
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Depreciation and amortization | 1,234 |
| 663 |
Amortization of prepaid loan fee | 108 |
| — |
Amortization of debt discount | 4,925 |
| 14 |
Loss on disposal of equipment | 48 |
| — |
Warrant (income) expense | (1,574) |
| 129 |
Stock-based compensation expense | 3,194 |
| 1,364 |
Loss from equity method investment | — |
| 52 |
Net amortization on bonds | 8 |
| 12 |
Changes in operating assets and liabilities: |
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Accounts receivable | (828) |
| (5,460) |
Prepaid expenses and other current assets | (456) |
| 98 |
Accounts payable | 151 |
| 128 |
Accrued liabilities | (398) |
| (41) |
Claims reserve | (201) |
| 2,565 |
Deferred revenue | 823 |
| 4,276 |
Other payables | 167 |
| 106 |
Net cash used in operating activities | (9,700) |
| (1,066) |
Investing activities |
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Purchases of investment securities, held-to-maturity | (26,455) |
| (15,697) |
Maturities of investment securities, held-to-maturity | 23,239 |
| 15,055 |
Purchases of property and equipment | (4,013) |
| (1,416) |
Other | — |
| (18) |
Net cash used in investing activities | (7,229) |
| (2,076) |
Financing activities |
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Restricted cash | 3,000 |
| — |
Proceeds from exercise of stock options | 161 |
| 434 |
Proceeds from line of credit and debt financing | 17,000 |
| 3,700 |
Payment of loan fee | (103) |
| — |
Repayment of debt financing | (32,000) |
| — |
Net proceeds from initial public offering | 72,946 |
| — |
Net cash provided by financing activities | 61,004 |
| 4,134 |
Effect of foreign exchange rates on cash, net | 55 |
| 53 |
Net change in cash and cash equivalents | 44,130 |
| 1,045 |
Cash and cash equivalents at beginning of period | 14,939 |
| 4,234 |
Cash and cash equivalents at end of period | $ 59,069 |
| $ 5,279 |
Supplemental disclosures |
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Income taxes paid | 9 |
| — |
Interest paid | 1,372 |
| 406 |
Noncash investing and financing activities: |
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Warrants issued in conjunction with debt issuance | 1,123 |
| 43 |
Exchange of stock for equity method investment | — |
| 448 |
Increase in payables for property and equipment | 488 |
| 139 |
Increase in payables for deferred financing costs | 136 |
| — |
Cashless exercise of preferred stock warrants | 1,270 |
| — |
The following tables set forth our key financial and operating metrics for our subscription business on a year over year and quarterly sequential basis: | |||||||||||||||
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| SEPTEMBER 30, |
| SEPTEMBER 30, |
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| 2014 |
| 2013 |
| 2014 |
| 2013 |
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Total pets enrolled (at period end) | 207,843 |
| 160,065 |
| 207,843 |
| 160,065 |
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Monthly adjusted revenue per pet | $ 44.98 |
| $ 42.59 |
| $ 44.04 |
| $ 42.37 |
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Lifetime value of a pet (LVP) | $ 584 |
| $ 617 |
| $ 584 |
| $ 617 |
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Average pet acquisition cost (PAC) | $ 113 |
| $ 80 |
| $ 112 |
| $ 102 |
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Average monthly retention | 98.67% |
| 98.64% |
| 98.67% |
| 98.64% |
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| PERIOD ENDED | ||||||||||||||
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| DEC. 31, 2012 |
| MAR. 31, 2013 |
| JUN. 30, 2013 |
| SEPT. 30, 2013 |
| DEC. 31, 2013 |
| MAR. 31, 2014 |
| JUN. 30, 2014 |
| SEPT. 30, 2014 |
Total Pets Enrolled (at period end) | 125,387 |
| 136,027 |
| 147,868 |
| 160,065 |
| 169,570 |
| 181,634 |
| 194,617 |
| 207,843 |
Monthly adjusted revenue per pet | $ 42.43 |
| $ 42.30 |
| $ 42.21 |
| $ 42.59 |
| $ 43.07 |
| $ 43.12 |
| $ 43.90 |
| $ 44.98 |
Lifetime value of a pet | $ 557 |
| $ 604 |
| $ 641 |
| $ 617 |
| $ 611 |
| $ 610 |
| $ 605 |
| $ 584 |
Average pet acquisition cost | $ 134 |
| $ 132 |
| $ 99 |
| $ 80 |
| $ 105 |
| $ 111 |
| $ 113 |
| $ 113 |
Average monthly retention | 98.51% |
| 98.56% |
| 98.62% |
| 98.64% |
| 98.65% |
| 98.65% |
| 98.65% |
| 98.67% |
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The following tables reflect the reconciliation of adjusted revenue to revenue: | |||||||||||||||
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| NINE MONTHS ENDED, |
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| SEPTEMBER 30, |
| SEPTEMBER 30, |
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| 2014 |
| 2013 |
| 2014 |
| 2013 |
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Revenue | $ 30,312 |
| $ 22,134 |
| $ 84,042 |
| $ 59,818 |
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Excluding: |
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Other business revenue | (2,795) |
| (2,127) |
| (8,077) |
| (4,426) |
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Change in deferred revenue | 385 |
| 314 |
| 731 |
| 656 |
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Sign-up fee revenue | (425) |
| (386) |
| (1,209) |
| (1,074) |
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Adjusted revenue | $ 27,477 |
| $ 19,935 |
| $ 75,487 |
| $ 54,974 |
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| THREE MONTHS ENDED | ||||||||||||||
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| DEC. 31, 2012 |
| MAR. 31, 2013 |
| JUN. 30, 2013 |
| SEPT. 30, 2013 |
| DEC. 31, 2013 |
| MAR. 31, 2014 |
| JUN. 30, 2014 |
| SEPT. 30, 2014 |
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Revenue | $ 15,863 |
| $ 17,842 |
| $ 19,842 |
| $ 22,134 |
| $ 24,011 |
| $ 25,640 |
| $ 28,090 |
| $ 30,312 |
Excluding: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other business revenue | (178) |
| (825) |
| (1,474) |
| (2,127) |
| (2,585) |
| (2,551) |
| (2,731) |
| (2,795) |
Change in deferred revenue | 218 |
| 124 |
| 218 |
| 314 |
| 452 |
| 262 |
| 84 |
| 385 |
Sign-up fee revenue | (282) |
| (332) |
| (356) |
| (386) |
| (345) |
| (377) |
| (407) |
| (425) |
Adjusted revenue | $ 15,621 |
| $ 16,809 |
| $ 18,230 |
| $ 19,935 |
| $ 21,533 |
| $ 22,974 |
| $ 25,036 |
| $ 27,477 |
|
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|
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| |||||||||||||||
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The following table reflects the reconciliation of contribution margin to gross profit: | |||||||||||||||
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TWELVE MONTHS ENDED | ||||||||||||||
|
| DEC. 31, 2012 |
| MAR. 31, 2013 |
| JUN. 30, 2013 |
| SEPT. 30, 2013 |
| DEC. 31, 2013 |
| MAR. 31, 2014 |
| JUN. 30, 2014 |
| SEPT. 30, 2014 |
|
| (in thousands) | ||||||||||||||
Gross profit | $ 11,211 |
| $ 12,841 |
| $ 14,263 |
| $ 14,788 |
| $ 15,644 |
| $ 16,792 |
| $ 18,113 |
| $ 18,439 |
Excluding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense | 109 |
| 123 |
| 143 |
| 171 |
| 229 |
| 270 |
| 287 |
| 309 |
Other business segment gross profit | (44) |
| (108) |
| (267) |
| (496) |
| (730) |
| (935) |
| (1,086) |
| (1,189) |
Change in deferred revenue | 767 |
| 725 |
| 761 |
| 874 |
| 1,108 |
| 1,246 |
| 1,111 |
| 1,183 |
Sign-up fee revenue | (1,189) |
| (1,229) |
| (1,285) |
| (1,356) |
| (1,419) |
| (1,464) |
| (1,514) |
| (1,554) |
Contribution margin | $ 10,854 |
| $ 12,352 |
| $ 13,615 |
| $ 13,981 |
| $ 14,832 |
| $ 15,909 |
| $ 16,911 |
| $ 17,188 |
|
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| |||||||||||||||
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The following table reflects the reconciliation of acquisition cost to sales and marketing expenses: | |||||||||||||||
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| |||||||||||||||
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|
|
|
|
|
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|
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|
|
|
|
|
|
| THREE MONTHS ENDED | ||||||||||||||
|
| DEC. 31, 2012 |
| MAR. 31, 2013 |
| JUN. 30, 2013 |
| SEPT. 30, 2013 |
| DEC. 31, 2013 |
| MAR. 31, 2014 |
| JUN. 30, 2014 |
| SEPT. 30, 2014 |
|
| (in thousands) | ||||||||||||||
Sales and marketing expenses | $ 2,161 |
| $ 2,572 |
| $ 2,268 |
| $ 2,013 |
| $ 2,238 |
| $ 2,646 |
| $ 2,810 |
| $ 2,934 |
Excluding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense | (104) |
| (143) |
| (202) |
| (147) |
| (185) |
| (149) |
| (144) |
| (115) |
Net of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sign-up fee revenue | (282) |
| (332) |
| (356) |
| (386) |
| (345) |
| (377) |
| (407) |
| (425) |
Acquisition cost | $ 1,775 |
| $ 2,097 |
| $ 1,710 |
| $ 1,480 |
| $ 1,708 |
| $ 2,120 |
| $ 2,259 |
| $ 2,394 |
|
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| |||||||||||||||
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The following table reflects the reconciliation of adjusted EBITDA to net loss: | |||||||||||||||
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|
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|
|
|
|
|
|
|
|
| THREE MONTHS ENDED, |
| NINE MONTHS ENDED, |
|
|
|
|
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| ||||
|
| SEPTEMBER 30, |
| SEPTEMBER 30, |
|
|
|
|
|
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| ||||
|
| 2014 |
| 2013 |
| 2014 |
| 2013 |
|
|
|
|
|
|
|
|
|
| (in thousands) |
|
|
|
|
|
|
|
| ||||||
Net loss | $ (8,509) |
| $ (1,222) |
| $ (16,901) |
| $ (4,972) |
|
|
|
|
|
|
|
|
Excluding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense | 2,001 |
| 478 |
| 3,194 |
| 1,364 |
|
|
|
|
|
|
|
|
Depreciation and amortization expense | 505 |
| 243 |
| 1,234 |
| 663 |
|
|
|
|
|
|
|
|
Interest income | (20) |
| (32) |
| (56) |
| (89) |
|
|
|
|
|
|
|
|
Interest expense | 5,155 |
| 154 |
| 6,623 |
| 420 |
|
|
|
|
|
|
|
|
Change in fair value of warrant liabilities | (2,054) |
| 3 |
| (1,574) |
| 129 |
|
|
|
|
|
|
|
|
Income tax expense (benefit) | 14 |
| (2) |
| 36 |
| (86) |
|
|
|
|
|
|
|
|
Adjusted EBITDA | $ (2,908) |
| $ (378) |
| $ (7,444) |
| $ (2,571) |
|
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