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8-K - FORM 8-K - Imprivata Incd82327d8k.htm

Exhibit 99.1

 

LOGO

Imprivata Achieves Record Revenue of $30.0 Million

for the Second Quarter of 2015

Highlights

 

    Revenue of $30.0 million

 

    Adjusted EBITDA loss of $2.2 million

 

    Net loss per share: $(0.22) GAAP; $(0.15) non-GAAP

 

    Completed HT Systems Acquisition on April 30, 2015

Lexington, Mass. — (BUSINESS WIRE) — July 29, 2015 — Imprivata® (NYSE: IMPR), a leading provider of IT security and identity solutions to the healthcare industry, today announced financial results for three and six months ended June 30, 2015. Revenues for the three months ended June 30, 2015 were $30.0 million, an increase of 29% from revenues of $23.2 million for the same period in 2014. Revenues for the six months ended June 30, 2015 were $55.6 million, an increase of 30% from revenues of $42.7 million for the same period in 2014.

“The second quarter marks the one year anniversary since our IPO, and I am very proud of our performance,” said Omar Hussain, President and CEO of Imprivata. “We have shown strong revenue growth, expanded our product platform, and completed a key acquisition. We have driven growth through both the acquisition of new customers, and strong add-on business to our existing customers. I am especially excited about the launch of our PatientSecure product, which expands our market to address frustrations faced by patients and registrars. PatientSecure will solidify our leadership as a security platform for healthcare, solving critical workflow challenges for electronic health records, communications, electronic prescribing, and patient identification.”

Financial Results

Net loss for the three months ended June 30, 2015 was $5.4 million, or $(0.22) per basic and diluted share attributable to common stockholders, as compared to a net loss of $4.8 million, or $(1.08) per basic and diluted share attributable to common stockholders for the same period in 2014. Net loss for the six months ended June 30, 2015 was $12.1 million, or $(0.51) per basic and diluted share attributable to common stockholders, as compared to a net loss of $13.1 million, or $(3.25) per basic and diluted share attributable to common stockholders for the same period in 2014. Consistent with our operating results for the first quarter of 2015, the second quarter loss represents our continued strategic investments in the business.

Adjusted EBITDA(1) for the three months ended June 30, 2015 was a loss of $2.2 million, as compared to a loss of $2.8 million for the same period in 2014. Non-GAAP net loss (2) for the three months ended June 30, 2015 was $3.5 million, or $(0.15) per basic and diluted share, as compared to non-GAAP net loss of $3.6 million, or $(0.81) per basic and diluted share, for the same period in 2014. Adjusted EBITDA for the six months ended June 30, 2015 was a loss of $6.7 million, as compared to a loss of $8.7 million for the same period in 2014. Non-GAAP net loss (2) for the six months ended June 30, 2015 was $9.3 million, or $(0.39) per basic and diluted share, as compared to non-GAAP net loss of $10.2 million, or $(2.53) per basic and diluted share, for the same period in 2014. 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, transaction costs associated with business acquisitions, shelf registration costs 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, transaction costs associated with business acquisitions, shelf registration costs and the impact of the fair value revaluation on our contingent liability.


Third Quarter and Full-Year 2015 Financial Outlook

For the full-year, we expect revenue between $124.0 million and $126.0 million and Adjusted EBITDA to be between a loss of $10.0 million and $8.5 million. In terms of earnings per share, we expect GAAP loss to be between $(0.82) per share and $(0.76) per share and non-GAAP net loss, which adjusts for stock-based compensation, amortization of purchased intangible assets, transaction costs associated with business acquisitions, transaction costs associated with offerings of our common stock and the contingent liability revaluation, to be between $(0.60) per share and $(0.54) per share. Our annual EPS estimates are based on an estimated weighted average-share count of 24.2 million.

For the third quarter, we expect revenue between $31.0 million and $31.5 million and Adjusted EBITDA to be between a loss of $4.2 million and $3.9 million. In terms of earnings per share, we expect GAAP loss to be between $(0.27) per share and $(0.25) per share and non-GAAP net loss, which adjusts for stock-based compensation, amortization of purchased intangible assets, transaction costs associated with business acquisitions, transaction costs associated with offerings of our common stock and the contingent liability revaluation, to be between $(0.22) per share and $(0.20) per share. Our third quarter EPS estimates are based on an estimated weighted average-share count of 24.3 million.

Conference Call Information

Imprivata management will host a conference call at 4:30 pm (Eastern Time) on Wednesday, July 29, 2015 to discuss the Company’s quarter ended June 30, 2015 results, its business outlook and other matters. The conference call will be accessible by dialing 888-427-9419 or 719-325-2361 for international callers, and referencing conference ID number 1338195. 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 August 12, 2015. The replay can be accessed by dialing 888-203-1112, or 719-457-0820 for international callers, and providing access code 1338195.


About Imprivata

Imprivata, Inc. (NYSE: IMPR) headquartered in Lexington, Massachusetts, is a leading provider of IT security and identity solutions to the healthcare industry that help providers securely and efficiently access, communicate and transact patient information. The Company’s security and identity solutions provide authentication management, fast access to patient information, secure communications and positive patient identification to address critical security and compliance challenges faced by hospitals and other healthcare organizations, while improving provider productivity and the patient experience. 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 Q3 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 and Imprivata PatientSecure solutions; our ability to manage our growth effectively; our ability to respond to competitive pressures; our ability to successfully integrate HT Systems and other businesses and assets that we may acquire; 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 Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 11, 2015, 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, transaction costs associated with business acquisitions, shelf registration costs 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, transaction costs associated with business acquisitions, shelf registration costs 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 Balance Sheets

(in thousands)

(unaudited)

 

     June 30,     December 31,  
     2015     2014  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 54,673      $ 78,524   

Accounts receivable, net of allowances

     24,639        25,335   

Prepaid expenses and other current assets

     4,178        3,516   
  

 

 

   

 

 

 

Total current assets

     83,490        107,375   

Property and equipment, net

     7,367        7,640   

Goodwill

     14,766        1,560   

Intangible assets, net

     4,951        1,499   

Other assets

     668        105   
  

 

 

   

 

 

 

Total assets

   $ 111,242      $ 118,179   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 3,936      $ 2,498   

Accrued expenses and other current liabilities

     7,693        10,565   

Current portion of capital lease obligations and long-term debt

     549        625   

Current portion of other long-term liabilities

     240        288   

Current portion of deferred revenue

     34,954        33,120   

Current portion of contingent purchase price liability

     374        152   
  

 

 

   

 

 

 

Total current liabilities

     47,746        47,248   

Deferred revenue, net of current portion

     4,737        4,021   

Deferred tax liability

     694        —     

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

     374        619   

Other long-term liabilities, net of current portion

     1,862        1,535   

Contingent purchase price liability, net of current portion

     308        480   
  

 

 

   

 

 

 

Total liabilities

     55,721        53,903   

Stockholders’ equity:

    

Undesignated preferred stock

     —          —     

Common stock

     24        24   

Additional paid-in capital

     175,266        171,903   

Accumulated other comprehensive loss

     (93     (100

Accumulated deficit

     (119,676     (107,551
  

 

 

   

 

 

 

Total stockholders’ equity

     55,521        64,276   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 111,242      $ 118,179   
  

 

 

   

 

 

 


Imprivata, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2015     2014     2015     2014  

Revenue

        

Product

   $ 16,305      $ 12,225      $ 29,218      $ 21,499   

Maintenance and services

     13,663        11,008        26,386        21,175   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     29,968        23,233        55,604        42,674   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenue

        

Product

     4,088        2,475        7,511        4,635   

Maintenance and services

     5,296        4,400        10,223        8,593   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenue

     9,384        6,875        17,734        13,228   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     20,584        16,358        37,870        29,446   

Operating expenses

        

Research and development

     7,840        6,291        14,711        12,827   

Sales and marketing

     12,999        11,216        25,018        21,635   

General and administrative

     4,590        2,311        9,170        5,324   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     25,429        19,818        48,899        39,786   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (4,845     (3,460     (11,029     (10,340

Other income (expense)

        

Foreign currency exchange gain (loss)

     150        4        (312     (127

Interest and other income (expense), net

     (4     (35     (20     (65
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (4,699     (3,491     (11,361     (10,532

Income taxes

     727        61        764        87   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (5,426   $ (3,552   $ (12,125   $ (10,619

Accretion of redeemable convertible preferred stock

     —          (1,204     —          (2,442
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to common shareholders

   $ (5,426   $ (4,756   $ (12,125   $ (13,061
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share attributable to common stockholders

        

Basic and diluted

   $ (0.22   $ (1.08   $ (0.51   $ (3.25
  

 

 

   

 

 

   

 

 

   

 

 

 

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

        

Basic and diluted

     24,144        4,410        24,007        4,021   
  

 

 

   

 

 

   

 

 

   

 

 

 


Imprivata, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

     June 30,  
     2015     2014  

Cash flows from operating activities:

    

Net loss

   $ (12,125   $ (10,619

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

    

Depreciation and amortization expense

     1,684        1,458   

Provision for doubtful accounts

     (19     13   

Stock-based compensation

     1,781        665   

Loss on disposal of fixed assets

     14        12   

Change in value of contingent purchase price liability

     50        (464

Deferred income taxes

     694        —     

Changes in operating assets and liabilities:

    

Accounts receivable

     4,479        5,763   

Prepaid expenses and other current assets

     (616     (544

Deferred revenue

     604        1,338   

Accounts payable

     1,028        (897

Accrued expenses and other current liabilities

     (2,955     (1,549

Other liabilities

     279        82   
  

 

 

   

 

 

 

Net cash used in operating activities

     (5,102     (4,742
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of property and equipment

     (644     (1,354

Purchases of intangible assets

     (437     —     

Acquisition of business

     (18,886     —     
  

 

 

   

 

 

 

Net cash used in investing activities

     (19,967     (1,354
  

 

 

   

 

 

 

Cash flows from financing activities:

    

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

     —          80,213   

Deferred offering costs

     —          (1,748

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

     (322     (348

Proceeds from employee stock purchase plan

     684        —     

Proceeds from exercise of stock options

     853        389   
  

 

 

   

 

 

 

Net cash provided by financing activities

     1,215        78,506   
  

 

 

   

 

 

 

Effect of exchange rates on cash and cash equivalents

     3        100   
  

 

 

   

 

 

 

Net (decrease) increase in cash and cash equivalents

     (23,851     72,510   

Cash and cash equivalents, beginning of year

     78,524        13,284   
  

 

 

   

 

 

 

Cash and cash equivalents, end of year

   $ 54,673      $ 85,794   
  

 

 

   

 

 

 


Imprivata, Inc.

Non-GAAP Financial Measures

(in thousands, except per share amounts)

(unaudited)

Reconciliation of GAAP Net Loss to Adjusted EBITDA

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  

(in thousands, except per share amounts)

   2015     2014     2015     2014  

GAAP net loss

   $ (5,426   $ (3,552   $ (12,125   $ (10,619

Adjustments to reconcile to Adjusted EBITDA:

        

Income tax expense

     727        61        764        87   

Depreciation and amortization

     905        763        1,684        1,458   

Other expense (income), net

     (146     31        332        192   

Stock-based compensation

     1,080        367        1,781        665   

Change in fair value of contingent liability

     29        (509     50        (464

Acquisition costs

     546        —          709        —     

Shelf registration costs

     57        —          57        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ (2,228   $ (2,839   $ (6,748   $ (8,681
  

 

 

   

 

 

   

 

 

   

 

 

 

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

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2015     2014     2015     2014  

GAAP net loss

   $ (5,426   $ (3,552   $ (12,125   $ (10,619

Adjustments to reconcile to Non-GAAP net income:

        

Amortization of purchased intangible assets

     184        128        276        257   

Stock-based compensation

     1,080        367        1,781        665   

Change in fair value of contingent liability

     29        (509     50        (464

Acquisition costs

     546        —          709        —     

Shelf registration costs

     57        —          57        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss

   $ (3,530   $ (3,566   $ (9,252   $ (10,161
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss per share

        

Basic and diluted

   $ (0.15   $ (0.81   $ (0.39   $ (2.53
  

 

 

   

 

 

   

 

 

   

 

 

 

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

        

Basic and diluted

     24,144        4,410        24,007        4,021   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(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.