E2open Announces Third Quarter of Fiscal Year 2015 Results

FOSTER CITY, Calif., Jan. 8, 2015 /PRNewswire/ -- E2open, Inc. (NASDAQ: EOPN), the leading provider of strategic, cloud-based software solutions for collaborative planning and execution across global trading networks, today announced financial results for the quarter ended November 30, 2014.

"We were pleased to deliver results at or above the high end of our previous guidance," said Mark Woodward, E2open's President and CEO.  "While our pipeline activity remains robust, recent sales execution challenges have caused us to lower our expectations for both revenue and bookings for the balance of the year.  We have taken steps to correct these issues and we remain confident in the market opportunity in front of the company."

Third Quarter Financial Highlights:

• GAAP Revenue:  Total GAAP revenue was $20.2 million for the third quarter of fiscal 2015; subscriptions and support revenue was $16.7 million and professional services revenue was $3.5 million. 
• Non-GAAP Revenue:  Total non-GAAP revenue for the third quarter of fiscal 2015 included $0.5 million from the impact of a previous contract amendment that accelerated revenue from future periods to the second quarter of fiscal 2013, and $0.1 million from the impact of purchase accounting adjustments to deferred revenue in connection with the acquisition of ICON in the second quarter of fiscal 2014 and Serus in the second quarter of fiscal 2015. Total non-GAAP revenue was $20.8 million, an increase of 10% compared to $18.9 million for the third quarter of fiscal 2014 and flat compared to $20.8 million for the second quarter of fiscal 2015. Subscriptions and support revenue was $16.9 million, an increase of 15% compared to $14.7 million for the third quarter of fiscal 2014 and a decrease of 1% compared to $17.1 million for the second quarter of fiscal 2015. Professional services revenue was $3.9 million, a decrease of 8% compared to $4.3 million for the third quarter of fiscal 2014 and an increase of 6% compared to $3.7 million for the second quarter of fiscal 2015.
• GAAP Loss from Operations:  GAAP loss from operations was ($8.4) million compared to ($7.1) million for the third quarter of fiscal 2014 and ($9.2) million for the second quarter of fiscal 2015.
• Non-GAAP Loss from Operations:  Non-GAAP loss from operations was ($4.0) million compared to ($3.9) million for the third quarter of fiscal 2014 and ($3.3) million for the second quarter of fiscal 2015.
• GAAP Net Loss:  GAAP net loss was ($9.1) million compared to ($7.4) million for the third quarter of fiscal 2014 and ($9.3) million for the second quarter of fiscal 2015. GAAP net loss per share was ($0.31), based on 29.3 million weighted-average shares outstanding, compared to ($0.28) per share, based on 26.5 million weighted-average shares outstanding, for the third quarter of fiscal 2014 and ($0.32) per share, based on 29.1 million weighted-average shares outstanding, for the second quarter of fiscal 2015.
• Non-GAAP Net Loss:  Non-GAAP net loss was ($4.7) million compared to ($4.4) million for the third quarter of fiscal 2014 and ($3.3) million for the second quarter of fiscal 2015. Non-GAAP net loss per share was ($0.15), based on 30.5 million weighted-average shares outstanding, compared to ($0.16), based on 28.1 million weighted-average shares outstanding, for the third quarter of fiscal 2014 and ($0.11), based on 30.9 million weighted-average shares outstanding, for the second quarter of fiscal 2015.
• Adjusted EBITDA:  Adjusted EBITDA was ($3.3) million compared to ($3.3) million for the third quarter of fiscal 2014 and ($2.7) million for the second quarter of fiscal 2015.
• Cash Flow:  Cash flow from operations was ($9.2) million and free cash flow was ($9.0) million after deducting $0.2  million of capital expenditures and adding back payments for acquisition-related expenses of $0.4 million. This compares to cash flow from operations of ($8.0) million and free cash flow of ($7.6) million after deducting $0.1 million of capital expenditures and adding back payment for acquisition-related expenses of $0.5 million for the third quarter of fiscal 2014.
• Balance Sheet:  Cash and investments was $25.1 million, a decrease of $11.0 million compared to $36.1 million at the end of the second quarter of fiscal 2015.

Third Quarter & Recent Business Highlights:

• Partnered with Esri, the leading provider of GIS and location intelligence software, to enhance supply chain performance with real-time, map-based track and trace capabilities for improved logistics monitoring and visibility.
• Presented at the 2014 Consumer Goods Business and Technology Leadership Conference, the 2014 Open Applications (OAGi) Plenary Meeting, and the American Supply Chain and Logistics Summit.
• Earned Drummond Certification in the Fall 2014 AS2 Interoperability Test Event, extending interoperability certifications across AS2 Reliability and AS2 Restart profiles.
• Added 5 new customers during the quarter and expanded our relationship with several existing customers.
• Ended the quarter with 129 enterprise customers, 41,130 unique registered trading partners, and 140,041 unique registered users on the E2open Business Network.

A reconciliation of GAAP to 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."

Guidance:

As of January 8, 2015, E2open is providing guidance for its fourth quarter of fiscal 2015 as well as the full fiscal year 2015.

• Full Year Fiscal 2015 Guidance: Total GAAP revenue is expected to be in the range of $78.4 million to $78.9 million, including a $2.1 million impact to revenue, due to the aforementioned acceleration of revenue in the second quarter of fiscal 2013 in connection with a contract amendment and the impact of purchase accounting adjustments to deferred revenue related to acquisitions.  Excluding the aforementioned contract amendment and the purchase accounting adjustments to deferred revenue, total non-GAAP revenue is expected to be in the range of $80.5 million to $81.0 million.  Non-GAAP loss from operations is expected to be in the range of ($18.1) million to ($17.6) million.  Non-GAAP loss per share is expected to be in the range of ($0.63) to ($0.61) based on approximately 30.5 million weighted-average shares outstanding.  Adjusted EBITDA is expected to be in the range of ($15.7) million to ($15.2) million.  Free cash flow is expected to be in the range of ($15.5) million to ($14.5) million.  New and upsell subscriptions and support bookings are expected to be in the range of $71.0 million to $75.0 million, representing growth of approximately 0% to 6% compared to fiscal 2014.
• Fourth Quarter Fiscal 2015 Guidance: Total GAAP revenue is expected to be in the range of $19.2 million to $19.7 million. Total non-GAAP revenue is expected to be in the range of $19.3 million to $19.8 million, which includes a $0.1 million impact to revenue, due to the aforementioned acceleration of revenue in the second quarter of fiscal 2013 in connection with a contract amendment and the impact of purchase accounting adjustments to deferred revenue related to acquisitions. Non-GAAP loss from operations is expected to be in the range of ($6.6) million to ($6.1) million. Non-GAAP loss per share is expected to be in the range of ($0.22) to ($0.20) based on approximately 31.6 million weighted-average shares outstanding. Adjusted EBITDA is expected to be in the range of ($6.1) million to ($5.6) million.

With respect to the Company's expectations under "Guidance" above, the Company has not reconciled non-GAAP loss from operations or non-GAAP loss per share to GAAP loss from operations and GAAP loss per share because these items cannot be reasonably predicted.

Conference Call Details:

• What:  E2open financial results for the third quarter of fiscal 2015 and outlook for the fourth quarter of fiscal 2015 and the full year of fiscal 2015
• When:  January 8, 2015 at 2:00 P.M. Pacific Time (5:00 P.M. Eastern Time) 
• Dial in:  To access the call in the U.S., please dial (877) 407-3982, and for international callers, please dial (201) 493-6780. Callers may provide confirmation number 13597069 to access the call more quickly, and are encouraged to dial into the call 10 to 15 minutes prior to the start to prevent any delay in joining.
• Webcast:  http://investor.e2open.com/ (live and replay)
• Replay:  A replay of the call will be available via telephone for seven days, beginning two hours after the call. To listen to the telephone replay in the U.S., please dial (877) 870-5176, and for international callers, please dial (858) 384-5517 and enter access code 13597069.

About E2open

E2open (NASDAQ: EOPN) is the leading provider of cloud-based, on-demand software solutions enabling enterprises to procure, manufacture, sell, and distribute products more efficiently through collaborative planning and execution across global trading networks. Enterprises use E2open solutions to gain visibility into and control over their trading networks through the real-time information, integrated business processes, and advanced analytics that E2open provides. E2open customers include Avnet, Celestica, Cisco, HP, IBM, Lenovo, L'Oreal, Motorola Solutions, Seagate, and Vodafone. E2open is headquartered in Foster City, California with operations worldwide. For more information, visit www.e2open.com.

"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements about expected total GAAP revenue, the effect of the acceleration of revenue in connection with a contract amendment, the impact of purchase accounting adjustments to deferred revenue related to acquisitions, total non-GAAP revenue, non-GAAP loss from operations, non-GAAP loss per share, weighted-average shares outstanding, and adjusted EBITDA for the fourth quarter of fiscal 2015 and the full fiscal year, and free cash flow and new and upsell subscriptions and support bookings for the full fiscal year. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company's results could differ materially from the results expressed or implied by the forward-looking statements we make.

The risks and uncertainties referred to above include, but are not limited to, risks associated with the Company's growth strategy; the Company's plans for future products; the Company's operating results; the Company's ability to anticipate future market demands and future needs of its customers; the Company's customer concentration; the Company's ability to effectively manage its growth; the Company's expectations regarding expenses, sales and operations; anticipated trends and challenges in the markets in which the Company operates; the Company's competition; the Company's ability to successfully enter new markets and manage its international expansion; the Company's acquisitions; and the Company's intellectual property. 

Further information on these and other factors that could affect the Company's financial results is included in the filings made with the Securities and Exchange Commission, including the Company's annual report on Form 10-K and the Company's quarterly report on Form 10-Q. These documents are available on the SEC Filings section of the Investor Relations section of the Company's website at: http://investor.e2open.com.

E2open, Inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

Non-GAAP Financial Measures

Our reported results include certain non-GAAP financial measures, including total non-GAAP revenue, non-GAAP loss from operations, non-GAAP net loss, weighted-average shares outstanding, non-GAAP net loss per share, adjusted EBITDA, and free cash flow. Non-GAAP loss from operations and non-GAAP net loss exclude expenses related to stock-based compensation expense, amortization of acquired intangibles, acquisition-related expenses, and non-cash income taxes, as they are often excluded by other companies to help investors understand the operational performance of their business and, in the case of stock-based compensation, can be difficult to predict. In addition, stock-based compensation expense varies from period to period and company to company due to such things as differing valuation methodologies and changes in stock price.  Non-GAAP revenue, non-GAAP loss from operations and non-GAAP net loss also exclude the impact of certain accelerated revenue recognized in connection with a contract amendment in the second quarter of fiscal 2013 and the impact of purchase accounting adjustments to deferred revenue related to acquisitions.  Adjusted EBITDA is defined as net income (loss), adjusted for accelerated revenue from a contract amendment, the impact of purchase accounting adjustments to deferred revenue related to acquisitions, depreciation and amortization, stock-based compensation expense, interest and other income (expense), net, benefit from (provision for) income taxes, amortization of acquired intangibles, and acquisition-related expenses.  Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures, adjusted for payment of acquisition-related expenses.  Reconciliation tables are provided in this press release.  Management believes that the use of non-GAAP financial measures provides consistency and comparability with our past financial performance, facilitates period to period comparisons of results of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.  Non-GAAP results are presented for supplemental informational purposes only for understanding our operating results. The non-GAAP results should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies.

ICR
Greg Kleiner, 650-645-6675
Investor Relations
[email protected]

SOURCE E2open, Inc.

Related Links

http://www.e2open.com