E2open Parent Holdings, Inc. (ETWO) SEC Filing 8-K Material Event for the period ending Wednesday, April 27, 2022

 

Exhibit 99.1

 

 

 

E2open Announces Fiscal 2022 Fourth Quarter and Full Year Financial Results

Exceeded Guidance for Fiscal Year 2022

Accelerated Subscription Growth Rate in Fiscal 2022

Increases Long-Term Organic Growth Rate from 10%+ to 12%+

 

AUSTIN, Texas – April 27, 2022 –

E2open Parent Holdings, Inc. (NYSE: ETWO), a leading network-based provider of a cloud-based, mission-critical, end-to-end supply chain management platform, today announced financial results for its fiscal fourth quarter and full year ended February 28, 2022.

 

"We are proud that the E2open platform is playing a critical role in improving the health and resiliency of the world’s most important supply chains," said Michael Farlekas, chief executive officer at E2open. "E2open’s unified network-based platform that combines data with AI-driven applications is the centerpiece of large, complex digital supply chain transformations."

 

"We are pleased to report strong fourth quarter and fiscal 2022 results, exceeding our annual revenue guidance. We added significant talent and capabilities in transportation and logistics with the acquisition and integration of BluJay Solutions," continued Farlekas. "In fiscal 2023, our non-GAAP subscription revenue growth rate is expected to increase from 9.8% to 11.4% from a base of $354 million in fiscal 2022 as compared to a base of $493 million in fiscal 2023, continuing our pattern of organic growth rate acceleration as we scale. Over 90% of fiscal 2023 subscription revenue is contracted, the net subscription retention has reached 108%, and as a result we are confident that our organic growth rate will again accelerate in 2023, as our guidance indicates."

 

"E2open achieved our long-term organic revenue growth target of over 10% earlier than expected, and as a result, we are increasing the long-term organic growth target to over 12%," said Farlekas. "We are leaning into the very strong demand environment and making incremental go-to-market investments to further increase our growth trajectory and build on the success of our existing growth initiatives and the very long-term nature of our client relationships."

 

Fiscal Fourth Quarter 2022 Financial Highlights

 

NOTE: Refer to Reconciliation of pro forma and non-GAAP Information Tables at the end of this press release for more detail regarding revenue, gross margin, adjusted earnings per share and adjusted EBITDA.

 

 

 

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Fiscal Year 2022 Financial Highlights

 

NOTE: Refer to Reconciliation of pro forma and non-GAAP Information Tables at the end of this press release for more detail regarding revenue, gross margin, unlevered free cash flow, adjusted earnings per share and adjusted EBITDA.

 

 

 

 

 

 

 

 

 

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Recent Business Highlights

 

 

 

 

Financial Outlook for Fiscal Year 2023

 

NOTE: E2open is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable effort, and therefore no reconciliation of certain forward-looking non-GAAP financial measures is included.

 

As of April 27, 2022, E2open is providing guidance for its fiscal year 2023, which ends February 28, 2023, as follows:

Fiscal 2023 GAAP Subscription Revenue

(in millions)	FY 2022	FY2023 Guidance (2)
GAAP subscription revenue (1)	$389.1	$545 - $553 +41.1%
Actual Growth Rate
Proforma subscription revenue (3)	$492.9	$545 - $553 +11.4%
Organic Growth Rate
(1) Fiscal year 2022 subscription revenue is reflected as non-GAAP for comparability purposes. (2) Beginning in fiscal 2023, there will not be a GAAP to Non-GAAP revenue adjustment associated with amortization of the purchase accounting fair value adjustment to deferred revenue resulting from the business combination with CC Neuberger Principal Holdings I (CCNB1). (3) Includes BluJay and Logistyx pre-acquisition subscription revenue. See Table VI for further detail.

 

Fiscal 2023 GAAP Revenue

 

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(in millions)	FY 2022	FY2023 Guidance (2)
GAAP revenue (1)	$479.1	$681 - $689 +43.0%
Actual growth rate
Proforma revenue (3)	$615.9	$681 - $689 +11.2%
Organic growth rate
(1) Fiscal year 2022 revenue is reflected as non-GAAP for comparability purposes. (2) Beginning in fiscal 2023, there will not be a GAAP to Non-GAAP revenue adjustment associated with amortization of the purchase accounting fair value adjustment to deferred revenue resulting from the business combination with CCNB1. (3) Includes BluJay and Logistyx pre-acquisition revenue. See Table VI for further detail.

 

Fiscal First Quarter 2023 GAAP Subscription Revenue

(in millions)	Q1 2022	FY2023 Guidance (2)
GAAP subscription revenue (1)	$73.5	$129 - $131 +76.8%
Actual Growth Rate
Proforma subscription revenue (3)	$117.0	$129 - $131 +11.1%
Organic Growth Rate
(1) Q1 2022 revenue is reflected as non-GAAP for comparability purposes. (2) Beginning in fiscal 2023, there will not be a GAAP to Non-GAAP revenue adjustment associated with amortization of the purchase accounting fair value adjustment to deferred revenue resulting from the business combination with CCNB1. (3) Includes BluJay and Logistyx pre-acquisition subscription revenue. See Table VI for further detail.

 

Fiscal 2023 Non-GAAP Gross Profit Margin

 

Fiscal 2023 Adjusted EBITDA

(in millions)	FY 2022	FY2023 Guidance
Adjusted EBITDA (excl investment spend)	$162.5	$237- $243
Adjusted EBITDA margin (excl investment spend)	33.9%	35% – 36%
Strategic investments sales & marketing		$(20)
Proforma Adjusted EBITDA(1) (incl. $20m investment spend)	$196.3	$217 - $223
Proforma Adjusted EBITDA margin	31.9%	32% – 33%
(1) Includes BluJay and Logistyx pre-acquisition Adjusted EBITDA

 

 

 

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Quarterly Conference Call

 

E2open will host a video webinar today at 5:00 p.m. ET to discuss fiscal 2022 fourth quarter and full year financial results, in addition to discussing the Company’s outlook for the full fiscal year 2023. The video webinar will be available live on the Investor Relations section of the Company's website at www.e2open.com. A replay will be available within 12 hours after the conclusion of the live event.

 

About E2open

 

At E2open, we’re creating a more connected, intelligent supply chain. It starts with sensing and responding to real-time demand, supply and delivery constraints. Bringing together data from clients, distribution channels, suppliers, contract manufacturers and logistics partners, our collaborative and agile supply chain platform enables companies to use data in real time, with artificial intelligence and machine learning to drive smarter decisions. All this complex information is delivered in a single view that encompasses your demand, supply, logistics and global trade ecosystems. E2open is changing everything. Demand. Supply. Delivered.TM Visit www.e2open.com.

 

E2open and the E2open logo are registered trademarks of E2open, LLC. Demand. Supply. Delivered. is a trademark of E2open, LLC.

 

Non-GAAP Financial Measures

 

This press release includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”) including non-GAAP revenue, non-GAAP subscription revenue, non-GAAP professional services and other revenue, adjusted EBITDA, adjusted EBITDA margin, non-GAAP gross profit, non-GAAP net income, non-GAAP gross margin, adjusted earnings per share, and unlevered free cash flow. These non-GAAP financial measures are not a measure of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company’s financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity, or performance under GAAP. You should be aware that the Company’s presentation of these measures may not be comparable to similarly titled measures used by other companies.

 

The Company believes this non-GAAP measure of financial results provides useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in comparing the Company’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures.

 

Safe Harbor Statement

 

Certain statements in this press release are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. These statements relate to future events or the Company's future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In particular, statements about the Company's expectations, beliefs, plans,

 

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objectives, assumptions, future events or future performance contained in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential," "outlook," "guidance" or the negative of those terms or other comparable terminology.

 

Please see the Company's documents filed or to be filed with the Securities and Exchange Commission, including the annual report filed on Form 10-K, and any amendments thereto for a discussion of certain important risk factors that relate to forward-looking statements contained in this press release. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company's control. These and other important factors may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements are made only as of the date hereof, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Investor Contact

Adam Rogers

AVP Investor Relations, E2open

adam.rogers@e2open.com

515-556-1162

 

Media Contact

5W PR for E2open

e2open@5wpr.com

718-757-6144

 

Corporate Contact
Kristin Seigworth
VP Communications, E2open
kristin.seigworth@e2open.com

 

 

 

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E2OPEN PARENT HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FISCAL 2022 YEAR

 

		Successor									Predecessor
(In thousands, except per share amounts)		Fiscal Year Ended February 28, 2022				February 4, 2021 through February 28, 2021					March 1, 2020 through February 3, 2021
		(Unaudited)
Revenue
Subscriptions		$	335,532			$	14,117				$	259,707
Professional services and other			90,029				7,248					48,940
Total revenue			425,561				21,365					308,647
Cost of Revenue
Subscriptions			93,072				7,823					55,602
Professional services and other			56,103				4,324					40,466
Amortization of acquired intangible assets			73,801				4,037					18,921
Total cost of revenue			222,976				16,184					114,989
Gross Profit			202,585				5,181					193,658
Operating Expenses
Research and development			79,700				10,458					53,788
Sales and marketing			60,265				8,788					46,034
General and administrative			69,922				23,123					37,355
Acquisition-related expenses			64,360				4,317					14,348
Amortization of acquired intangible assets			46,358				1,249					31,275
Total operating expenses			320,605				47,935					182,800
(Loss) income from operations			(118,020	)			(42,754	)				10,858
Other income (expense)
Interest and other expense, net			(33,663	)			(1,928	)				(65,469	)
Change in tax receivable agreement liability			(154	)			—					—
Gain from change in fair value of warrant liability			1,633				23,187					—
Gain (loss) from change in fair value of contingent     consideration			(69,760	)			33,740					—
Total other expenses (income)			(101,944	)			54,999					(65,469	)
Income (loss) before income tax benefit			(219,964	)			12,245					(54,611	)
Income tax benefit			30,050				612					6,681
Net income (loss)			(189,914	)			12,857				$	(47,930	)
Less: Net income (loss) attributable to noncontrolling     interest			(24,138	)			2,057
Net income (loss) attributable to E2open Parent     Holdings, Inc.		$	(165,776	)		$	10,800
Weighted-average common shares outstanding:
Basic			245,454				187,051
Diluted			245,454				222,688
Net income (loss) attributable to E2open Parent Holdings,     Inc. common shareholders per share:
Basic		$	(0.68	)		$	0.06
Diluted		$	(0.68	)		$	0.06

 

 

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E2OPEN PARENT HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FISCAL FOURTH QUARTER 2022

(Unaudited)

 

		Successor									Predecessor
(In thousands, except per share amounts)		Three Months Ended February 28, 2022				February 4, 2021 through February 28, 2021					December 1, 2020 through February 3, 2021
		(Unaudited)
Revenue
Subscriptions		$	115,804			$	14,117				$	50,694
Professional services and other			28,349				7,248					8,931
Total revenue			144,153				21,365					59,625
Cost of Revenue
Subscriptions			30,155				7,823					11,036
Professional services and other			17,409				4,324					7,675
Amortization of acquired intangible assets			24,916				4,037					3,468
Total cost of revenue			72,480				16,184					22,179
Gross Profit			71,673				5,181					37,446
Operating Expenses
Research and development			22,791				10,458					10,576
Sales and marketing			18,476				8,788					8,759
General and administrative			19,933				23,123					7,318
Acquisition-related expenses			14,192				4,317					2,994
Amortization of acquired intangible assets			19,515				1,249					5,910
Total operating expenses			94,907				47,935					35,557
(Loss) income from operations			(23,234	)			(42,754	)				1,889
Other income (expense)
Interest and other expense, net			(11,659	)			(1,928	)				(12,214	)
Change in tax receivable agreement liability			4,452				—					—
Gain from change in fair value of warrant liability			50,081				23,187					—
Gain (loss) from change in fair value of contingent     consideration			21,420				33,740					—
Total other expenses (income)			64,294				54,999					(12,214	)
Income (loss) before income tax benefit			41,060				12,245					(10,325	)
Income tax benefit			26,658				612					30,754
Net income (loss)			67,718				12,857				$	20,429
Less: Net income (loss) attributable to noncontrolling     interest			11,502				2,057
Net income (loss) attributable to E2open Parent     Holdings, Inc.		$	56,216			$	10,800
Weighted-average common shares outstanding:
Basic			301,273				187,051
Diluted			301,273				222,688
Net income (loss) attributable to E2open Parent Holdings,     Inc. common shareholders per share:
Basic		$	0.19			$	0.06
Diluted		$	0.19			$	0.06

 

 

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E2OPEN PARENT HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

 

		Successor
		February 28,
(In thousands, except share amounts)		2022				2021
		(Unaudited)
Assets
Cash and cash equivalents		$	155,481			$	194,717
Restricted cash			19,073				12,825
Accounts receivable, net			155,341				112,657
Prepaid expenses and other current assets			26,243				12,643
Total current assets			356,138				332,842
Long-term investments			208				224
Goodwill			3,756,871				2,628,646
Intangible assets, net			1,181,390				824,851
Property and equipment, net			65,937				44,198
Operating lease right-of-use assets			28,102				—
Other noncurrent assets			16,809				7,416
Total assets		$	5,405,455			$	3,838,177
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities		$	131,246			$	70,233
Incentive program payable			19,073				12,825
Deferred revenue			190,992				89,691
Acquisition-related obligations			—				2,000
Current portion of notes payable			89,097				4,405
Current portion of operating lease obligations			7,652				—
Current portion of financing lease obligations			2,307				4,827
Total current liabilities			440,367				183,981
Long-term deferred revenue			1,141				482
Operating lease obligations			21,202				—
Financing lease obligations			1,950				6,588
Notes payable			863,577				502,800
Tax receivable agreement liability			66,590				50,114
Warrant liability			67,139				68,772
Contingent consideration			45,568				150,808
Deferred taxes			413,038				396,217
Other noncurrent liabilities			712				1,057
Total liabilities			1,921,284				1,360,819
Commitments and Contingencies
Stockholders' Equity
Class A common stock			31				19
Class V common stock			—				—
Series B-1 common stock			—				—
Series B-2 common stock			—				—
Additional paid-in capital			3,362,219				2,071,206
Accumulated other comprehensive (loss) income			(19,019	)			2,388
(Accumulated deficit) retained earnings			(154,976	)			10,800
Treasury stock, at cost			(2,473	)			—
Total E2open Parent Holdings, Inc. equity			3,185,782				2,084,413
Noncontrolling interest			298,389				392,945
Total stockholders' equity			3,484,171				2,477,358
Total liabilities and stockholders' equity		$	5,405,455			$	3,838,177

 

 

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E2OPEN PARENT HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		Successor									Predecessor
(In thousands)		Fiscal Year Ended February 28, 2022				February 4, 2021 through February 28, 2021					March 1, 2020 through February 3, 2021
		(Unaudited)
Cash flows from operating activities
Net (loss) income		$	(189,914	)		$	12,857				$	(47,930	)
Adjustments to reconcile net (loss) income to net cash from operating activities:
Depreciation and amortization			142,609				6,394					63,263
Amortization of deferred commissions			1,560				34					3,937
Provision for credit losses			1,018				21					113
Amortization of debt issuance costs			3,444				206					4,007
Amortization of operating lease right-of-use assets			15,649				—					—
Share-based and unit-based compensation			10,639				33,000					7,277
Change in tax receivable agreement liability			154				—					—
Loss from change in fair value of warrant liability			(1,633	)			(23,187	)				—
Loss from change in fair value of earn-out liability			—				—					—
Loss from change in fair value of contingent consideration			69,760				(33,740	)				—
(Gain) loss on disposal of property and equipment			(211	)			9					33
Changes in operating assets and liabilities:
Accounts receivable			(9,881	)			11,493					(5,508	)
Prepaid expenses and other current assets			(9,333	)			3,622					(3,611	)
Other noncurrent assets			(6,669	)			11,017					(5,410	)
Accounts payable and accrued liabilities			15,744				(6,648	)				12,456
Incentive program payable			6,248				1,328					(17,437	)
Deferred revenue			62,678				(8,733	)				4,808
Changes in other liabilities			(60,708	)			(1,872	)				(7,344	)
Net cash provided by operating activities			51,154				5,801					8,654
Cash flows from investing activities
Proceeds withdrawn from Trust Account			—				414,053					—
Payments for acquisitions - net of cash acquired			(774,232	)			(879,907	)				—
Capital expenditures			(31,776	)			(1,470	)				(13,990	)
Investment in unconsolidated entity			(2,500	)			—					—
Proceeds from disposal of property and equipment			—				49					—
Net cash used in investing activities			(808,508	)			(467,275	)				(13,990	)
Cash flows from financing activities
Proceeds from PIPE investment			300,000				—					627,500
Offering costs related to issuance of common stock in connection with     PIPE investment			(7,100	)			—					—
Proceeds from sale of membership units			—				—					3,501
Repurchase of membership units, net			—				—					—
Proceeds from warrant exercise			1				—					—
Proceeds from indebtedness			475,000				—					23,377
Repayments of indebtedness			(21,139	)			—					(21,891	)
Repayments of financing lease obligations			(6,457	)			(468	)				(6,038	)
Repurchase of common stock			(2,473	)			—					—
Repurchase of common units			(16,767	)			—					—
Payments of debt issuance costs			(10,357	)			—					—
Net cash provided by (used in) financing activities			710,708				(468	)				626,449