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Exhibit 99.1

 

LOGO

Imprivata Achieves Record Fourth Quarter, Full-Year Revenues

Revenue Growth of 34% for the Fourth Quarter, 36% for the Full-Year

Highlights:

 

  Q4 2014 Financial Results

 

    Revenue: $29.0 million

 

    Net loss per share: $(0.07) GAAP; $(0.04) non-GAAP

 

  Full Year 2014 Financial Results

 

    Revenue: $97.0 million

 

    Net loss per share: $(1.37) GAAP; $(1.08) non-GAAP

Lexington, Mass. — (BUSINESS WIRE) — February 24, 2015 — Imprivata® (NYSE: IMPR), the healthcare IT security company, today announced financial results for the fourth quarter and full year of fiscal 2014. Revenues for the fourth quarter were $29.0 million, an increase of 34% from revenues of $21.6 million for the same period in 2013. Revenues for the twelve months ended December 31, 2014 were $97.0 million, an increase of 36% from revenues of $71.1 million for the same period in 2013.

“Our record fourth quarter was a great end to what was a very successful year for Imprivata. We were able to broaden our product portfolio while continuing to execute and expand our core market,” said Omar Hussain, president and CEO of Imprivata. “Imprivata OneSign, Imprivata Cortext, and Imprivata Confirm ID, along with other products in our development pipeline, will continue to build on Imprivata’s reputation as a healthcare IT security leader. I believe we are very well positioned as we execute our growth strategy in 2015 and beyond.”

Net loss for the fourth quarter of 2014 was $1.7 million, or $(0.07) per basic and diluted share attributable to common stockholders, as compared to a net loss of $3.3 million, or $(1.26) per basic and diluted share attributable to common stockholders for the same period in 2013. Net loss for the twelve months ended December 31, 2014 was $16.7 million, or $(1.37) per basic and diluted share attributable to common stockholders, as compared to a net loss of $5.5 million, or $(3.12) per basic and diluted share attributable to common stockholders for the same period in 2013.

Jeff Kalowski, CFO of Imprivata, commented, “We are pleased that our continued investments in sales, marketing, research and development continue to grow our top line revenue and enhance our product offerings. Additionally, our strategic investments are allowing Imprivata to capture additional market share, as we continue to bolster our overall market leadership position.”

Adjusted EBITDA(1) for the fourth quarter of 2014 was a loss of $34,000, as compared to a loss of $2.4 million for the same period in 2013. Non-GAAP net loss (2) for the fourth quarter of 2014 was $1.0 million, or $(0.04) per basic and diluted share, as compared to non-GAAP net loss of $3.0 million, or $(0.84) per basic share and diluted share, for the same period in 2013. Adjusted EBITDA for the twelve months ended December 31, 2014 was a loss of $11.5 million, as compared to a loss of $3.4 million for the same period in 2013. Non-GAAP net loss for the twelve months ended December 31, 2014 was $15.0 million, or $(1.08) per basic and diluted share, as compared to non-GAAP net loss of $5.2 million, or $(1.56) per basic and diluted share, for the same period in 2013. A reconciliation of GAAP to these 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.”

 

(1) Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization adjusted for foreign currency gains (losses), stock based-compensation and the impact of the fair value revaluation on our contingent liability.
(2) Non-GAAP net income (loss) and non-GAAP net income (loss) per share excludes amortization of purchased intangible assets, stock-based compensation and the impact of the fair value revaluation on our contingent liability.


First Quarter and Full-Year 2015 Financial Outlook

For the full-year, we expect revenue between $120.0 million and $122.0 million and Adjusted EBITDA to be between a loss of $7.9 million and $6.6 million. In terms of earnings per share, we expect GAAP loss to be between $0.58 per share and $0.52 per share and non-GAAP loss, which adjusts for stock-based compensation, amortization of purchased intangible assets and the contingent liability revaluation, to be between $0.49 per share and $0.45 per share. Our annual EPS estimates are based on an estimated weighted average-share count of 24.0 million.

For the first quarter, we expect revenue between $24.0 million and $24.5 million and Adjusted EBITDA to be between a loss of $6.6 million and $6.3 million. In terms of earnings per share, we expect GAAP loss to be approximately $0.34 per share or $0.33 per share and non-GAAP loss, which adjusts for stock-based compensation, amortization of purchased intangible assets and the contingent liability revaluation, to be approximately $0.32 per share or $0.31 per share. Our annual EPS estimates are based on an estimated weighted average-share count of 23.7 million.

Conference Call Information

Imprivata management will host a conference call at 5:00 pm (Eastern Time) on Tuesday, February 24, 2015 to discuss the Company’s fourth quarter and full year ended December 31, 2014 results, its business outlook and other matters. The conference call will be accessible by dialing 719-325-2376 or 888-417-8516 for international callers, and referencing conference ID number 1796517. A live webcast of the conference call will also be available on the investor relations section of the company’s website at http://investor.imprivata.com/.

An audio replay of the conference call will be available approximately one hour after conclusion of the call and will be accessible through March 10, 2015. The replay can be accessed by dialing 888-203-1112, or 719-457-0820 for international callers, and providing access code 1796517.

About Imprivata

Imprivata, Inc. (NYSE: IMPR) headquartered in Lexington, Massachusetts, a leading provider of authentication and access management solutions for the healthcare industry. Imprivata’s single sign-on, authentication management and secure communications solutions enable fast, secure and more efficient access to healthcare information technology systems to address multiple security challenges and improve provider productivity for better focus on patient care. For more information, please visit www.imprivata.com.

 

Investor relations: Media contact:
Westwicke Partners Imprivata
Bob East / Asher Dewhurst John Hallock
443-213-0503 Vice President, Corporate Communications
imprivata@westwicke.com 781-761-1921
jhallock@IMPRIVATA.com

All Imprivata products are trademarks of Imprivata, Inc. in the USA and other countries. All other product or company names mentioned are the property of their respective owners.


Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the anticipated opportunity and trends for growth in our customer base and our overall business, our market opportunity, our goal to maintain market leadership and our expected financial results for Q1 2015 and the full fiscal year 2015. All statements other than statements of historical fact contained in this press release are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “could,” “increases,” “improves,” “reduces,” “implements,” “results,” “addresses,” or the negative of these terms or other comparable terminology. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Imprivata’s control. Imprivata’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, our ability to successfully develop and introduce new solutions and products for existing solutions; our ability to attract new customers and retain and increase sales to existing customers; developments in the healthcare industry or regulatory environment; seasonal variations in the purchasing patterns of our customers; the lengthy and unpredictable sales cycles for new customers; our ability to maintain successful relationships with our channel partners and technology alliance partners; our dependency on sole source suppliers and a contract manufacturer for hardware components of our Imprivata OneSign solution; our ability to manage our growth effectively; our ability to respond to competitive pressures; potential liability related to privacy and security of protected health information; our ability to protect our intellectual property rights, and the other risks detailed in Imprivata’s risk factors discussed in filings with the U.S. Securities and Exchange Commission (“SEC”), including but not limited to Imprivata’s Registration Statement on Form S-1 declared effective by the SEC on June 24, 2014, as well as other documents that may be filed by Imprivata from time to time with the SEC. The forward-looking statements included in this press release represent Imprivata’s views as of the date of this press release. Imprivata undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures

Imprivata has provided in this release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. This information includes Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net income (loss) per share. These non-GAAP financial measures are not in accordance with, or an alternative for, GAAP and may be different from similar non-GAAP financial measures used by other companies. Imprivata believes that the use of these non-GAAP financial measures provides supplementary information for investors to use in evaluating operating performance and in comparing its financial measures with other companies in Imprivata’s industry, many of which present similar non-GAAP financial measures. Adjusted EBITDA (EBITDA adjusted for foreign currency gains (losses), stock based-compensation and the impact of the fair value revaluation on our contingent liability), non-GAAP net income (loss) and non-GAAP net income (loss) per share exclude amortization expense associated with our purchased intangible assets, stock-based compensation and the impact of the re-measurement to fair value of our contingent liability. Non-GAAP financial measures that Imprivata uses may differ from measures that other companies may use. These non-GAAP financial measures disclosed by Imprivata are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP, and should be viewed in conjunction with, GAAP financial measures. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.


Imprivata, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2014     2013     2014     2013  

Revenue

        

Product

   $ 16,532      $ 12,201      $ 52,164      $ 39,124   

Maintenance and services

     12,496        9,433        44,815        31,987   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

  29,028      21,634      96,979      71,111   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenue

Product

  3,388      2,926      12,310      7,849   

Maintenance and services

  4,732      3,495      17,678      11,020   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenue

  8,120      6,421      29,988      18,869   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit

  20,908      15,213      66,991      52,242   

Operating expenses

Research and development

  6,529      6,233      25,781      19,609   

Sales and marketing

  12,239      9,711      45,003      30,538   

General and administrative

  3,566      2,483      12,052      7,619   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

  22,334      18,427      82,836      57,766   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

  (1,426   (3,214   (15,845   (5,524

Other income (expense)

Foreign currency exchange (loss) gain

  (169   (63   (576   229   

Interest and other (expense) income, net

  (18   52      (146   (120
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

  (1,613   (3,225   (16,567   (5,415

Income taxes

  50      34      169      108   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

$ (1,663 $ (3,259 $ (16,736 $ (5,523

Accretion of preferred stock

  —        (1,238   (2,442   (4,952
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to common shareholders

$ (1,663 $ (4,497 $ (19,178 $ (10,475
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share attributable to common stockholders

Basic and diluted

$ (0.07 $ (1.26 $ (1.37 $ (3.12
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding used in computing net loss per share attributable to common stockholders

Basic and diluted

  23,730      3,570      13,950      3,359   
  

 

 

   

 

 

   

 

 

   

 

 

 


Imprivata, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

     December 31,  
     2014     2013  

Assets

    

Current Assets:

    

Cash and cash equivalents

   $ 78,524      $ 13,284   

Accounts receivable, net of allowances

     25,335        19,754   

Prepaid expenses and other current assets

     3,516        2,541   
  

 

 

   

 

 

 

Total current assets

  107,375      35,579   

Property and equipment, net

  7,640      6,682   

Goodwill

  1,560      1,560   

Intangible assets, net

  1,499      2,000   

Other assets

  105      649   
  

 

 

   

 

 

 

Total Assets

$ 118,179    $ 46,470   
  

 

 

   

 

 

 

Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

Current liabilities:

Accounts payable

$ 2,498    $ 3,586   

Accrued expenses and other current liabilities

  10,565      9,149   

Current portion of capital lease obligations and long-term debt

  625      313   

Current portion of other long-term liabilities

  288      249   

Current portion of deferred revenue

  33,120      25,084   

Current portion of contingent purchase price liability

  152      —     
  

 

 

   

 

 

 

Total current liabilities

  47,248      38,381   

Deferred revenue, net of current portion

  4,021      3,490   

Capital lease obligations, long-term debt and royalty obligations, net of current portion

  619      410   

Other long-term liabilities, net of current portion

  1,535      1,181   

Contingent purchase price liability, net of current portion

  480      1,008   
  

 

 

   

 

 

 

Total liabilities

  53,903      44,470   

Commitments and contingencies

Redeemable convertible preferred stock

  —        91,607   

Stockholders’ equity (deficit):

Undesignated preferred stock

  —     

Common stock

  24      4   

Additional paid-in capital

  171,903      —     

Accumulated other comprehensive loss

  (100   (145

Accumulated deficit

  (107,551   (89,466
  

 

 

   

 

 

 

Total stockholders’ equity (deficit)

  64,276      (89,607
  

 

 

   

 

 

 

Total Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

$ 118,179    $ 46,470   
  

 

 

   

 

 

 


Imprivata, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

     Twelve Months Ended
December 31,
 
     2014     2013  

Cash flows from operating activities:

    

Net loss

   $ (16,736   $ (5,523

Adjustments to reconcile net loss to net cash used in operating activities:

    

Depreciation and amortization expense

     3,075        2,397   

Provision for doubtful accounts and sales allowance

     99        61   

Stock-based compensation

     1,612        640   

Loss on disposal of fixed assets

     75        80   

Change in value of contingent purchase price liability

     (376     (877

Changes in operating assets and liabilities

    

Accounts receivable

     (5,680     (3,248

Prepaid expenses and other current assets

     (593     (1,124

Other assets

     (7     (6

Deferred revenue

     8,567        6,818   

Accounts payable

     (1,010     47   

Accrued expenses and other current liabilities

     2,689        1,836   

Other liabilities

     185        (353
  

 

 

   

 

 

 

Net cash (used in) provided by operating activities

  (8,100   748   
  

 

 

   

 

 

 

Cash flows from investing activities:

Purchases of property and equipment

  (3,187   (3,413

Restricted cash

  —        97   
  

 

 

   

 

 

 

Net cash used in investing activities

  (3,187   (3,316
  

 

 

   

 

 

 

Cash flows from financing activities:

Proceeds from initial public offering, net of underwriting discounts and commissions

  80,213      —     

Deferred offering costs

  (3,405   (20

Repayments for capital lease obligations, long-term debt and other

  (674   (317

Proceeds from exercise of stock options

  476      916   
  

 

 

   

 

 

 

Net cash provided by financing activities

  76,610      579   
  

 

 

   

 

 

 

Effect of exchange rates on cash and cash equivalents

  (83   (137
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

  65,240      (2,126

Cash and cash equivalents, beginning of year

  13,284      15,410   
  

 

 

   

 

 

 

Cash and cash equivalents, end of year

$ 78,524    $ 13,284   
  

 

 

   

 

 

 


Imprivata, Inc.

Non-GAAP Financial Measures

(in thousands, except per share amounts)

(unaudited)

Reconciliation of GAAP Net Loss to Adjusted EBITDA

 

     Three Months
Ended

December 31,
    Twelve Months
Ended

December 31,
 
     2014     2013     2014     2013  

GAAP net loss

   $ (1,663   $ (3,259   $ (16,736   $ (5,523

Adjustments to reconcile to Adjusted EBITDA:

        

Income tax expense

     50        34        169        108   

Depreciation and amortization

     834        650        3,075        2,397   

Other expense (income), net

     187        11        722        (109

Stock-based compensation

     486        231        1,612        640   

Change in fair value of contingent liability

     72        (93     (376     (877
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

$ (34 $ (2,426 $ (11,534 $ (3,364
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of GAAP Net Loss to Non-GAAP Net Loss and Non-GAAP Net Loss Per Share (a)

 

     Three Months
Ended
December 31,
    Twelve Months
Ended

December 31,
 
     2014     2013     2014     2013  

GAAP net loss

   $ (1,663   $ (3,259   $ (16,736   $ (5,523

Adjustments to reconcile to Non-GAAP net income:

        

Amortization of purchased intangible assets

     116        128        501        521   

Stock-based compensation

     486        231        1,612        640   

Change in fair value of contingent liability

     72        (93     (376     (877
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss

$ (989 $ (2,993 $ (14,999 $ (5,239
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss per share

Basic and diluted

$ (0.04 $ (0.84 $ (1.08 $ (1.56
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding used in computing non-GAAP net loss per share

Basic and diluted

  23,730      3,570      13,950      3,359   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) The Company reconciles non-GAAP net loss per share beginning with GAAP net loss instead of GAAP net loss attributable to common stockholders in order to eliminate the effect of the accretion of preferred stock on the calculation.