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Sps Commerce Inc (SPSC) SEC Filing 10-Q Quarterly report for the period ending Sunday, September 30, 2018

Sps Commerce Inc

CIK: 1092699 Ticker: SPSC

EXHIBIT 99

SPS Commerce Reports Third Quarter 2018 Financial Results

Company delivers 71st consecutive quarter of topline growth, with 13% growth in recurring revenue over the third quarter of 2017

MINNEAPOLIS, Oct. 25, 2018 (GLOBE NEWSWIRE) -- SPS Commerce, Inc. (NASDAQ: SPSC), a leader in retail cloud services, today announced financial results for the third quarter ended September 30, 2018.

Revenue was $62.9 million in the third quarter of 2018, compared to $56.1 million in the third quarter of 2017, reflecting 12% growth in revenue from the third quarter 2017. Recurring revenue grew 13% from the third quarter of 2017. Current and prior period financial results reflect the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606).

Net income in the third quarter of 2018 was $8.1 million or $0.45 per diluted share, compared to net income of $2.2 million, or $0.13 per diluted share, in the third quarter of 2017. Non-GAAP income per diluted share was $0.52, compared to non-GAAP income per diluted share of $0.25 in the third quarter of 2017.

Adjusted EBITDA for the third quarter of 2018 increased 70% to $14.4 million, compared to the third quarter of 2017.

“SPS Commerce is committed to offering our customers technology-leading solutions,” said Archie Black, President and CEO of SPS Commerce. “Over the years, we have grown our network and portfolio of comprehensive supply chain management products to help our customers scale their business by enabling them to connect efficiently and seamlessly with various retailers and logistics providers.”

“While the retail environment continues to shift to embrace omnichannel dynamics, SPS Commerce continues to extend our leadership, and we remain confident in our ability to achieve our 2020 goals and long-term financial targets.” said Kim Nelson, CFO of SPS Commerce. 

Guidance

For the fourth quarter of 2018, revenue is expected to be in the range of $63.4 to $64.1 million.  Fourth quarter net income per diluted share is expected to be in the range of $0.27 to $0.29 with fully diluted weighted average shares outstanding of approximately 17.8 million shares.  Non-GAAP income per diluted share is expected to be in the range of $0.44 to $0.46. Adjusted EBITDA is expected to be in the range of $13.5 to $14 million.  Non-cash, share-based compensation expense is expected to be approximately $3.3 million, depreciation expense is expected to be approximately $2.4 million and amortization expense is expected to be approximately $1.2 million.

For the full year of 2018, revenue is expected to be in the range of $246.5 to $247.2 million, representing approximately 12% growth over 2017. Full year net income per diluted share is expected to be in the range of $1.22 to $1.24 with fully diluted weighted average shares outstanding of approximately 17.6 million shares.   Non-GAAP income per diluted share is expected to be in the range of $1.84 to $1.86. Adjusted EBITDA is expected to be in the range of $50.9 to $51.4 million. Non-cash, share-based compensation expense is expected to be approximately $13.3 million, depreciation expense is expected to be approximately $8.7 million, and amortization expense is expected to be approximately $4.3 million. 

Quarterly Conference Call

SPS Commerce will discuss its quarterly results today via teleconference at 3:30 p.m. CT (4:30 p.m. ET). To access the call, please dial (877) 312-7508, or outside the U.S. (253) 237-1184, with Conference ID # 1288779 at least five minutes prior to the 3:30 p.m. CT start time.  A live webcast of the call will also be available at http://investors.spscommerce.com under the Events and Presentations menu.  The replay will also be available on our website at http://investors.spscommerce.com.

About SPS Commerce

SPS Commerce perfects the power of trading partner relationships with the industry's most broadly adopted, retail cloud services platform. As a leader in cloud-based supply chain management solutions, we provide proven integrations and comprehensive retail performance analytics to thousands of customers worldwide. SPS Commerce has achieved 71 consecutive quarters of revenue growth and is headquartered in Minneapolis. For additional information, please contact SPS Commerce at 866-245-8100 or visit www.spscommerce.com.

SPS COMMERCE, SPS, SPS logo, RETAIL UNIVERSE, 1=INFINITY logo, AS THE NETWORK GROWS, SO DOES YOUR OPPORTUNITY, INFINITE RETAIL POWER, RETAIL UNIVERSE are marks of SPS Commerce, Inc. and Registered in the U.S. Patent and Trademark Office. RSX, IN:FLUENCE, and others are further marks of SPS Commerce, Inc. These marks may be registered or otherwise protected in other countries.

SPS-F

Use of Non-GAAP Financial Measures

To supplement its financial statements, SPS Commerce also provides investors with Adjusted EBITDA and Non-GAAP income per share, both of which are non-GAAP financial measures. SPS Commerce believes that these non-GAAP measures provide useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. SPS Commerce's management uses these non-GAAP measures to compare the company's performance to that of prior periods for trend analyses and planning purposes. It uses Adjusted EBITDA for purposes of determining executive and senior management incentive compensation. These measures are also presented to the company's board of directors.

Adjusted EBITDA consists of net income adjusted for depreciation and amortization, interest expense, interest income, income tax expense, and stock-based compensation expense. SPS Commerce uses Adjusted EBITDA as a measure of operating performance because it assists the company in comparing performance on a consistent basis, as it removes from operating results the impact of the company's capital structure. SPS Commerce believes Adjusted EBITDA is useful to an investor in evaluating the company's operating performance because it is widely used to measure a company's operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of corporate performance exclusive of the company's capital structure and the method by which assets were acquired.

Non-GAAP income per share consists of net income plus stock-based compensation expense, amortization expense related to intangible assets, and income tax effects of adjustments, divided by the weighted average number of shares of common stock outstanding during each period.  SPS Commerce includes an adjustment to non-GAAP income to reflect the income tax effects of the adjustments to GAAP net income. To quantify these tax effects, SPS Commerce recalculates income tax expense excluding the direct book and tax effects of the specific items constituting the non-GAAP adjustments (e.g., stock-based compensation expense). The difference between this recalculated income tax expense and GAAP income tax expense is presented as the income tax effect of the non-GAAP adjustments.

SPS Commerce believes non-GAAP income per share is useful to an investor because it is widely used to measure a company's operating performance.  These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with generally accepted accounting principles in the United States. These non-GAAP financial measures exclude significant expenses and income that are required by GAAP to be recorded in the company's financial statements and are subject to inherent limitations. SPS Commerce urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures that are included in this press release.

Forward-Looking Statements

This press release may contain forward-looking statements, including information about management's view of SPS Commerce's future expectations, plans and prospects, including our views regarding future execution within our business, the opportunity we see in the retail supply chain world and our performance for the fourth quarter and full year of 2018, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors which may cause the results of SPS Commerce to be materially different than those expressed or implied in such statements. Certain of these risk factors and others are included in documents SPS Commerce files with the Securities and Exchange Commission, including but not limited to, SPS Commerce's Annual Report on Form 10-K for the year ended December 31, 2017, as well as subsequent reports filed with the Securities and Exchange Commission. Other unknown or unpredictable factors also could have material adverse effects on SPS Commerce's future results. The forward-looking statements included in this press release are made only as of the date hereof. SPS Commerce cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, SPS Commerce expressly disclaims any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

  
SPS COMMERCE, INC. 
CONDENSED CONSOLIDATED BALANCE SHEETS 
(Unaudited; in thousands, except share amounts) 
         
  September 30,  December 31, 
  2018  2017 
ASSETS        
CURRENT ASSETS        
Cash and cash equivalents $144,748  $123,127 
Short-term investments  44,654   40,192 
Accounts receivable, less allowance for doubtful accounts of $1,199 and $763, respectively  27,289   24,897 
Deferred costs  33,134   29,966 
Other current assets  6,613   6,149 
Total current assets  256,438   224,331 
PROPERTY AND EQUIPMENT, net  19,368   16,856 
GOODWILL  50,502   51,613 
INTANGIBLE ASSETS, net  13,491   16,529 
INVESTMENTS  4,921   5,206 
OTHER ASSETS        
Deferred costs  10,597   9,967 
Deferred income tax asset  11,433   13,697 
Other assets  1,710   1,539 
Total assets $368,460  $339,738 
LIABILITIES AND STOCKHOLDERS’ EQUITY        
CURRENT LIABILITIES        
Accounts payable $3,853  $4,463 
Accrued compensation  15,498   15,228 
Accrued expenses  3,976   4,712 
Deferred revenue  24,948   17,863 
Deferred rent  1,399   1,679 
Total current liabilities  49,674   43,945 
OTHER LIABILITIES        
Deferred revenue  2,685   2,731 
Deferred rent  3,979   3,064 
Deferred income tax liability  1,551   1,887 
Total liabilities  57,889   51,627 
COMMITMENTS and CONTINGENCIES        
STOCKHOLDERS’ EQUITY        
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding      
Common stock, $0.001 par value; 55,000,000 shares authorized; 17,644,364 and 17,249,153 shares issued; and 17,302,572 and 17,127,006 outstanding, respectively  18   17 
Treasury stock, at cost; 341,792 and 122,147 shares, respectively  (19,682)  (5,815)
Additional paid-in capital  323,539   301,863 
Retained earnings (accumulated deficit)  8,120   (8,611)
Accumulated other comprehensive (loss) income  (1,424)  657 
Total stockholders’ equity  310,571   288,111 
Total liabilities and stockholders’ equity $368,460  $339,738 
         
Subject to reclassification        
         



  
SPS COMMERCE, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME 
(Unaudited; in thousands, except per share amounts) 
                 
  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2018  2017  2018  2017 
Revenues $62,868  $56,057  $183,051  $162,028 
Cost of revenues  20,411   18,645   60,571   54,166 
Gross profit  42,457   37,412   122,480   107,862 
Operating expenses                
Sales and marketing  16,952   17,638   54,023   52,981 
Research and development  5,146   6,549   15,571   17,023 
General and administrative  11,174   8,743   31,278   24,709 
Amortization of intangible assets  928   1,128   3,086   3,460 
Total operating expenses  34,200   34,058   103,958   98,173 
Income from operations  8,257   3,354   18,522   9,689 
Other income (expense)                
Interest income, net  628   272   1,589   704 
Other expense, net  (219)  (195)  (541)  (356)
Total other income, net  409   77   1,048   348 
Income before income taxes  8,666   3,431   19,570   10,037 
Income tax expense  605   1,255   2,839   2,908 
Net income $8,061  $2,176  $16,731  $7,129 
                 
Net income per share                
Basic $0.47  $0.13  $0.97  $0.42 
Diluted $0.45  $0.13  $0.95  $0.41 
                 
Weighted average common shares used to compute net income per share                
Basic  17,219   17,223   17,167   17,192 
Diluted  17,741   17,410   17,557   17,394 
                 


  
SPS COMMERCE, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(Unaudited; in thousands) 
  Nine Months Ended 
  September 30, 
  2018  2017 
Cash flows from operating activities        
Net income $16,731  $7,129 
Reconciliation of net income to net cash provided by operating activities        
Deferred income taxes  1,934   2,240 
Depreciation and amortization of property and equipment  6,308   5,261 
Amortization of intangible assets  3,086   3,460 
Provision for doubtful accounts  1,780   1,365 
Stock-based compensation  9,978   6,833 
Other, net  (255)  (19)
Changes in assets and liabilities        
Accounts receivable  (4,279)  (4,476)
Deferred costs  (3,813)  (5,188)
Other current and non-current assets  (681)  1,135 
Accounts payable  382   632 
Accrued compensation  (592)  (1,517)
Accrued expenses  (718)  469 
Deferred revenue  7,039   5,270 
Deferred rent  647   (622)
Net cash provided by operating activities  37,547   21,972 
Cash flows from investing activities        
Purchases of property and equipment  (9,875)  (5,242)
Purchases of investments  (64,434)  (29,819)
Maturities of investments  60,000   23,029 
Acquisitions of businesses and intangible assets, net of cash acquired  (381)  (500)
Net cash used in investing activities  (14,690)  (12,532)
Cash flows from financing activities        
Repurchases of common stock  (13,867)   
Net proceeds from exercise of options to purchase common stock  11,800   1,307 
Net proceeds from employee stock purchase plan  836   1,011 
Net cash (used in) provided by financing activities  (1,231)  2,318 
Effect of foreign currency exchange rate changes  (5)  1,349 
Net increase in cash and cash equivalents  21,621   13,107 
Cash and cash equivalents at beginning of period  123,127   115,877 
Cash and cash equivalents at end of period $144,748  $128,984 
         
Subject to reclassification        
         


  
SPS COMMERCE, INC. 
NON-GAAP RECONCILIATION 
(Unaudited; in thousands) 
                 
  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2018  2017  2018  2017 
Net income $8,061  $2,176  $16,731  $7,129 
Depreciation and amortization of property                
and equipment  2,132   1,830   6,308   5,261 
Amortization of intangible assets  928   1,128   3,086   3,460 
Interest income, net  (628)  (272)  (1,589)  (705)
Income tax expense  605   1,255   2,839   2,908 
Stock-based compensation expense  3,266   2,347   9,978   6,833 
Adjusted EBITDA $14,364  $8,464  $37,353  $24,886 
                 
Net income $8,061  $2,176  $16,731  $7,129 
Stock-based compensation expense  3,266   2,347   9,978   6,833 
Amortization of intangible assets  928   1,128   3,086   3,460 
Income tax effects of adjustments  (3,008)  (1,254)  (5,188)  (4,609)
Non-GAAP income $9,247  $4,397  $24,607  $12,813 
                 
Shares used to compute non-GAAP income per share                
Basic  17,219   17,223   17,167   17,192 
Diluted  17,741   17,410   17,557   17,394 
                 
Non-GAAP income per share                
Basic $0.54  $0.26  $1.43  $0.75 
Diluted $0.52  $0.25  $1.40  $0.74 
                 

Contact:
Investor Relations
The Blueshirt Group
Irmina Blaszczyk
Lisa Laukkanen
SPSC@blueshirtgroup.com
415-217-4962

 


The following information was filed by Sps Commerce Inc (SPSC) on Thursday, October 25, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Sps Commerce Inc's 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical)
Condensed Consolidated Statements Of Cash Flows (Unaudited)
Condensed Consolidated Statements Of Comprehensive Income (Unaudited)
Condensed Consolidated Statements Of Comprehensive Income (Unaudited) (Parenthetical)
Commitments And Contingencies
Commitments And Contingencies (Tables)
Commitments And Contingencies - Future Minimum Payments Under Operating Leases (Detail)
Financial Instruments
Financial Instruments (Tables)
Financial Instruments - Summary Of Cash Equivalents And Short And Long-Term Investments (Detail)
Financial Instruments - Summary Of Financial Assets Measured At Fair Value On A Recurring Basis (Detail)
General
General (Policies)
General (Tables)
General - Additional Information (Detail)
General - Condensed Consolidated Balance Sheet (Detail)
General - Summary Of Deferred Costs And Amortization Of Set-Up Fees (Detail)
General - Summary Of Deferred Revenue Liability Relating To Set-Up Fees (Detail)
General - Summary Of Revenues By Revenue Stream (Detail)
General - Unaudited Condensed Consolidated Statement Of Cash Flows (Detail)
General - Unaudited Condensed Consolidated Statement Of Operations (Detail)
Goodwill And Intangible Assets, Net
Goodwill And Intangible Assets, Net (Tables)
Goodwill And Intangible Assets, Net - Additional Information (Detail)
Goodwill And Intangible Assets, Net - Estimated Annual Amortization Expense Related To Intangible Assets Subject To Amortization (Detail)
Goodwill And Intangible Assets, Net - Intangible Assets Subject To Amortization (Detail)
Goodwill And Intangible Assets, Net - Schedule Of Changes In Net Carrying Amount Of Goodwill (Detail)
Income Taxes
Income Taxes - Additional Information (Detail)
Net Income Per Share
Net Income Per Share (Tables)
Net Income Per Share - Components Of Computation Of Basic And Diluted Net Income Per Share (Detail)
Stock-Based Compensation
Stock-Based Compensation (Tables)
Stock-Based Compensation - Additional Information (Detail)
Stock-Based Compensation - Fair Value Estimation Of Common Stock Using Black-Scholes Option Pricing Model, Assumptions (Detail)
Stock-Based Compensation - Performance Share Units And Restricted Stock Units (Detail)
Stock-Based Compensation - Restricted Stock Awards (Detail)
Stock-Based Compensation - Stock Option Activity (Detail)
Stock-Based Compensation - Stock-Based Compensation Expense (Detail)
Stock-Based Compensation - Weighted Average Grant Date Fair Value Of Options Granted, Assumptions (Detail)

Material Contracts, Statements, Certifications & more

Sps Commerce Inc provided additional information to their SEC Filing as exhibits

Ticker: SPSC
CIK: 1092699
Form Type: 10-Q Quarterly Report
Accession Number: 0001564590-18-025262
Submitted to the SEC: Fri Oct 26 2018 12:07:10 PM EST
Accepted by the SEC: Fri Oct 26 2018
Period: Sunday, September 30, 2018
Industry: Prepackaged Software

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