Fourth fiscal quarter highlights include:
- Q4 revenue from continuing operations of $48.3 million, an increase of 12% year over year
- First quarter of positive operating cash flow since IPO
AUSTIN, Texas, June 10, 2015 (GLOBE NEWSWIRE) -- Bazaarvoice, Inc. (Nasdaq:BV), the network connecting brands and retailers to the authentic voices of consumers wherever they shop, reported its financial results for the fourth fiscal quarter and fiscal year ended April 30, 2015.
"For the fourth quarter, I am pleased that we delivered 12% revenue growth and for the first time since our IPO, positive operating cash flow. In addition, our international teams continued to improve their performance and we are seeing good momentum with our new product offerings," said Gene Austin, chief executive officer and president. "We are well on our way to expanding our product offerings beyond ratings and reviews into a full set of consumer generated content solutions and services for our clients and prospects."
Fourth Fiscal Quarter of 2015 Financial Details
The divestiture of PowerReviews was completed on July 2, 2014. The terms of the transaction were approved by the Department of Justice on June 26, 2014. As a result, PowerReviews revenues, related expenses and loss on disposal, net of tax, are components of "Loss from discontinued operations, net of tax" in the Condensed Consolidated Statements of Operations since our fourth fiscal quarter of 2014 and all comparative fiscal quarters presented. The Statement of Cash Flows is reported on a combined basis without separately presenting cash flows from discontinued operations for all periods presented.
Summary data below describes results from continuing operations and excludes results from discontinued operations.
Revenue from continuing operations: Bazaarvoice reported revenue of $48.3 million for the fourth fiscal quarter of 2015, up 12% from the fourth fiscal quarter of 2014, and consisted of SaaS revenue of $46.2 million and net media revenue of $2.1 million.
Adjusted EBITDA from continuing operations: Adjusted EBITDA for the fourth fiscal quarter of 2015 was a loss of $3.6 million, a significant improvement compared with a loss of $7.6 million for the fourth fiscal quarter of 2014.
GAAP net loss and net loss per share from continuing operations: GAAP net loss was $8.8 million, compared to a GAAP net loss of $12.2 million for the fourth fiscal quarter of 2014. GAAP net loss per share was $0.11 based upon weighted average shares outstanding of 79.7 million, compared to $0.16 for the fourth fiscal quarter of 2014 based upon weighted average shares outstanding of 77.2 million.
Non-GAAP net loss and net loss per share from continuing operations: Non-GAAP net loss was $4.4 million, compared to a non-GAAP net loss of $8.4 million for the fourth fiscal quarter of 2014. Non-GAAP net loss per share was $0.06 based upon weighted average shares outstanding of 79.7 million, compared to $0.11 for the fourth fiscal quarter of 2014 based upon weighted average shares outstanding of 77.2 million.
Fiscal Year 2015 Financial Details
Revenue from continuing operations: Bazaarvoice reported revenue of $191.2 million for the fiscal year ended April 30, 2015, up 14% from the fiscal year ended April 30, 2014, and consisted of SaaS revenue of $182.1 million and net media revenue of $9.1 million.
Adjusted EBITDA from continuing operations: Adjusted EBITDA for the fiscal year 2015 was a loss of $8.7 million, a significant improvement from a loss of $21.9 million for the fiscal year 2014.
GAAP net loss and net loss per share from continuing operations: GAAP net loss was $33.2 million, compared to a GAAP net loss of $52.8 million for the fiscal year 2014. GAAP net loss per share was $0.42 based upon weighted average shares outstanding of 78.6 million, compared to GAAP net loss per share of $0.70 for the fiscal year 2014 based upon weighted average shares outstanding of 75.6 million.
Non-GAAP net loss and net loss per share from continuing operations: Non-GAAP net loss was $15.0 million, compared to a non-GAAP net loss of $25.8 million for fiscal year 2014. Non-GAAP net loss per share was $0.19 based upon weighted average shares outstanding of 78.6 million, compared to non-GAAP net loss per share of $0.34 for the fiscal year 2014 based upon weighted average shares outstanding of 75.6 million.
Clients: The number of active clients at the end of the fourth fiscal quarter and fiscal year 2015 was 1,353 and the number of network clients at the end of the fourth fiscal quarter and fiscal year 2015 was over 3,800. Annualized SaaS revenue per average active client for the fiscal year 2015 was approximately $149,000.
Number of Active Clients: Beginning as of our fourth fiscal quarter of 2014, we define an active client as an organization from which we are currently recognizing recurring revenue, and we count organizations that are closely related as one client, even if they have signed separate contractual agreements. We believe that our ability to increase our active client base is a leading indicator of our ability to grow revenue.
Due to the presentation of the PowerReviews business as discontinued operations, we have separated our active clients into two categories: 1) active clients from continuing operations and 2) active clients from discontinued operations. As a result, each category could include a common client for which we recognized recurring revenue who has organizations that have separate contractual agreements.
All periods prior to the fourth fiscal quarter of 2014 discussed in this press release or presented in the accompanying financial tables have been revised to conform to this definition of an active client.
Number of Network Clients:
We define a network client as an organization that does not have recurring revenue. We count organizations that are closely related as one client, even if they have signed separate contractual agreements. We believe that our network client base in combination with our active client base is an indicator of the reach of our network.
Quarterly Conference Call
Bazaarvoice will host a conference call today at 4:30 p.m. Eastern Time to review the Company's financial results for the fourth fiscal quarter of 2015. To access this call, dial (877) 407-3982 from the United States or (201) 493-6780 internationally with conference ID 13608719. A live webcast of the conference call can be accessed from the investor relations page of Bazaarvoice's company website at investors.bazaarvoice.com. Following the completion of the call, a recorded replay will be available on the Company's website, and a telephone replay will be available through June 24, 2015 by dialing (877) 870-5176 from the United States or (858) 384-5517 internationally with recording access code 13608719.
About Bazaarvoice
Bazaarvoice powers a network that connects brands and retailers to the authentic voices of people where they shop. Each month, more than 600 million people view and share authentic opinions, questions, and experiences about tens of millions of products in the Bazaarvoice network. The company's technology platform amplifies these voices into the places that influence purchase decisions. Network analytics help marketers and advertisers provide more engaging experiences that drive brand awareness, considerations, sales and loyalty. Headquartered in Austin, Texas, Bazaarvoice has offices across North American, Europe and Asia-Pacific. For more information, visit http://www.bazaarvoice.com, read the blog at www.bazaarvoice.com/blog, and follow on Twitter at www.twitter.com/bazaarvoice.
Non-GAAP Financial Measures
Adjusted EBITDA for continuing operations discussed in this press release is defined as our GAAP net loss from continuing operations adjusted for stock-based expense, contingent consideration related to acquisition, adjusted depreciation and amortization (which excludes amortization of capitalized internal-use software development costs), integration and other costs related to acquisitions, other non-business costs and benefits, income tax expense and other (income) expense, net.
Adjusted EBITDA for discontinued operations presented in the accompanying financial tables is defined as our GAAP net loss from discontinued operations adjusted for stock-based expense, adjusted depreciation and amortization (which excludes amortization of capitalized internal-use software development costs), impairment of acquired intangibles, integration and other costs related to the acquisition and the divestiture of PowerReviews, estimated loss on disposal of discontinued operations, other non-business costs and benefits, income tax expense and other (income) expense, net.
Non-GAAP net loss for continuing operations, which is used to calculate non-GAAP net loss per share for continuing operations, is defined as our GAAP net loss from continuing operations, adjusted to exclude stock-based expense, contingent consideration related to acquisition, amortization of acquired intangible assets, integration and other costs related to acquisitions, and other non-business costs and benefits along with the associated income tax effect of these adjustments.
Non-GAAP net loss for discontinued operations, which is used to calculate non-GAAP net loss per share for discontinued operations, is defined as our GAAP net loss from discontinued operations adjusted to exclude stock-based expense, amortization of acquired intangible assets, impairment of acquired intangibles, integration and other costs related to the acquisition and divestiture of PowerReviews, estimated loss on disposal of discontinued operations and other non-business costs and benefits along with the associated income tax effect of these adjustments.
Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of core operating performance. Further, management has presented these non-GAAP financial measures separately for discontinued operations as it may prove useful to securities analysts and investors in evaluating the impact of the divestiture of PowerReviews on the Company's continuing operating performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company's operating performance against prior periods and the effectiveness of our business strategies, the preparation of operating budgets and to determine appropriate levels of operating and capital investments, as well as in communications with our board of directors concerning our financial performance. Management also believes that the non-GAAP financial measures provide additional insight for securities analysts and investors in evaluating the Company's financial and operational performance without regard to items that can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired. However, these non-GAAP financial measures have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP. Furthermore, these non-GAAP financial measures may not be comparable to similarly titled measures of other organizations because other organizations may not calculate these non-GAAP financial measures in the same manner. We intend to provide these non-GAAP financial measures as part of our future financial results discussions; therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.
Forward-looking Statements
This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, and objectives of management are forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "will," "would," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about management's belief that we are well positioned to return to higher revenue growth rates over the long-term, management's estimates regarding future revenue and financial performance, the ability to continue developing network solutions to leverage our consumer audience reach, content and data to create incremental value for clients, and other statements about management's beliefs, intentions or goals. We may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to, our expectations regarding our revenue, expenses, sales and operations; our limited operating history; our ability to operate in a new and unproven market; our ability to effectively manage growth; our ability to develop and launch new products; our ability to retain our existing customers and satisfy their obligations and needs and upsell to existing clients; our ability to maintain pricing for our products and services, our ability to manage expansion into international markets and new vertical industries; our ability to successfully identify, manage and integrate potential acquisitions; and other risks and potential factors that could affect our business and financial results identified in our Form 10-K for the fiscal year ended April 30, 2014 as filed with the Securities and Exchange Commission on June 26, 2014 and our Form 10-Q for the fiscal quarter ended January 31, 2015 as filed with the Securities and Exchange Commission on March 6, 2015. Additional information will also be set forth in our future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend and undertake no duty to release publicly any updates or revisions to any forward-looking statements contained herein.
| Bazaarvoice, Inc. | ||
| Condensed Consolidated Balance Sheets | ||
| (in thousands) | ||
| (unaudited) | ||
| April 30, | April 30, | |
| 2015 | 2014 | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 54,041 | $ 31,934 |
| Restricted cash | -- | 604 |
| Short-term investments | 52,730 | 40,700 |
| Accounts receivable, net | 49,532 | 39,099 |
| Prepaid expenses and other current assets | 12,977 | 8,212 |
| Assets held for sale | -- | 33,745 |
| Total current assets | 169,280 | 154,294 |
| Property, equipment and capitalized internal-use software development costs, net | 19,054 | 17,005 |
| Goodwill | 139,155 | 139,155 |
| Acquired intangible assets, net | 11,498 | 13,388 |
| Other non-current assets | 4,710 | 3,428 |
| Total assets | $ 343,697 | $ 327,270 |
| Liabilities and stockholders' equity | ||
| Current liabilities: | ||
| Accounts payable | $ 3,539 | $ 3,346 |
| Accrued expenses and other current liabilities | 27,397 | 27,071 |
| Revolving line of credit | -- | 27,000 |
| Deferred revenue | 60,400 | 54,951 |
| Liabilities held for sale | -- | 3,621 |
| Total current liabilities | 91,336 | 115,989 |
| Long-term liabilities: | ||
| Revolving line of credit | 57,000 | -- |
| Deferred revenue less current portion | 2,530 | 1,722 |
| Deferred tax liability, long-term | 817 | 1,730 |
| Other liabilities, long-term | 631 | 1,367 |
| Total liabilities | 152,314 | 120,808 |
| Stockholders' equity: | ||
| Common stock | 8 | 8 |
| Additional paid-in capital | 418,509 | 398,201 |
| Accumulated other comprehensive income (loss) | (638) | 328 |
| Accumulated deficit | (226,496) | (192,075) |
| Total stockholders' equity | 191,383 | 206,462 |
| Total liabilities and stockholders' equity | $ 343,697 | $ 327,270 |
| Bazaarvoice, Inc. | ||||
| Condensed Consolidated Statements of Operations | ||||
| (in thousands, except net loss per share data) | ||||
| (unaudited) | ||||
| Three Months | Twelve Months | |||
| Ended April 30, | Ended April 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Revenue | $ 48,317 | $ 43,078 | $ 191,181 | $ 168,145 |
| Cost of revenue | 18,148 | 14,522 | 69,906 | 52,905 |
| Gross profit | 30,169 | 28,556 | 121,275 | 115,240 |
| Operating expenses: | ||||
| Sales and marketing | 19,492 | 23,884 | 77,438 | 86,482 |
| Research and development | 9,880 | 9,832 | 37,695 | 37,585 |
| General and administrative | 8,517 | 6,521 | 31,442 | 26,370 |
| Acquisition-related and other expense | 815 | 366 | 4,046 | 16,184 |
| Amortization of acquired intangible assets | 309 | 288 | 1,237 | 1,135 |
| Total operating expenses | 39,013 | 40,891 | 151,858 | 167,756 |
| Operating loss | (8,844) | (12,335) | (30,583) | (52,516) |
| Other income (expense), net: | ||||
| Interest income | 52 | 7 | 95 | 143 |
| Interest expense | (433) | (158) | (1,451) | (190) |
| Other expense | (140) | (165) | (1,171) | (783) |
| Total other expense net | (521) | (316) | (2,527) | (830) |
| Loss from continuing operations before income taxes | (9,365) | (12,651) | (33,110) | (53,346) |
| Income tax expense (benefit) | (540) | (418) | 54 | (500) |
| Net loss from continuing operations attributable to common stockholders | (8,825) | (12,233) | (33,164) | (52,846) |
| Loss from discontinued operations, net of tax | -- | (11,448) | (1,257) | (10,320) |
| Net loss applicable to common stockholders | $ (8,825) | $ (23,681) | $ (34,421) | $ (63,166) |
| Basic and diluted loss per share: | ||||
| Continuing operations | $ (0.11) | $ (0.16) | $ (0.42) | $ (0.70) |
| Discontinued operations | -- | (0.15) | $ (0.02) | (0.14) |
| Basic and diluted loss per share: | $ (0.11) | $ (0.31) | $ (0.44) | $ (0.84) |
| Basic and diluted weighted average number of shares outstanding | 79,668 | 77,165 | 78,645 | 75,564 |
| Bazaarvoice, Inc. | ||||
| Condensed Consolidated Statements of Cash Flows | ||||
| (in thousands) | ||||
| (unaudited) | ||||
| Three Months | Twelve Months | |||
| Ended April 30, | Ended April 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Operating activities: | ||||
| Net loss | $ (8,825) | $ (23,681) | $ (34,421) | $ (63,166) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||
| Depreciation and amortization expense | 3,284 | 3,901 | 12,453 | 15,068 |
| Impairment of acquired intangible assets | -- | 2,500 | -- | 2,500 |
| Loss on disposal of discontinued operations, net of tax | -- | 9,192 | 1,537 | 9,192 |
| Stock-based expense | 3,113 | 3,472 | 12,802 | 14,468 |
| Revaluation of contingent consideration | -- | -- | -- | (3,270) |
| Bad debt expense | 1,029 | 469 | 3,155 | 1,902 |
| Excess tax benefit related to stock-based expense | (4) | (120) | (6) | (216) |
| Amortization of deferred financing costs | 59 | -- | 98 | -- |
| Other non-cash expense | 6 | 286 | 151 | 480 |
| Changes in operating assets and liabilities: | ||||
| Accounts receivable | 5,168 | 3,721 | (13,589) | (12,081) |
| Prepaid expenses and other current assets | 1,435 | (1,176) | (165) | (1,551) |
| Other non-current assets | (804) | (130) | (916) | (1,603) |
| Accounts payable | (1,141) | (3,570) | (297) | (3,095) |
| Accrued expenses and other current liabilities | 1,097 | (409) | (1,294) | (2,623) |
| Deferred revenue | (552) | 3,225 | 6,258 | 2,040 |
| Other liabilities, long-term | (798) | (585) | (1,731) | (1,512) |
| Net cash provided by (used in) operating activities | 3,067 | (2,905) | (15,965) | (43,467) |
| Investing activities: | ||||
| Acquisitions, net of cash acquired, and purchase of intangible asset | -- | (8,946) | -- | (9,616) |
| Proceeds from sale of discontinued operations | -- | -- | 25,500 | -- |
| Purchases of property, equipment and capitalized internal-use software development costs | (2,789) | (2,155) | (12,039) | (10,661) |
| Decrease in restricted cash | -- | -- | 500 | -- |
| Purchases of short-term investments | (3,634) | (25,575) | (82,770) | (60,092) |
| Proceeds from maturities of short-term investments | 9,914 | 13,068 | 65,681 | 58,478 |
| Proceeds from sales of short-term investments | -- | -- | 5,012 | 31,098 |
| Net cash provided by (used in) investing activities | 3,491 | (23,608) | 1,884 | 9,207 |
| Financing activities: | ||||
| Proceeds from employee stock compensation plans | 1,330 | 2,460 | 7,545 | 13,499 |
| Proceeds from revolving line of credit | -- | 27,000 | 57,000 | 27,000 |
| Payments on revolving line of credit | -- | -- | (27,000) | -- |
| Deferred financing costs | -- | -- | (706) | -- |
| Excess tax benefit related to stock-based expense | 4 | 120 | 6 | 216 |
| Net cash provided by financing activities | 1,334 | 29,580 | 36,845 | 40,715 |
| Effect of exchange rate fluctuations on cash and cash equivalents | 362 | 175 | (657) | 434 |
| Net change in cash and cash equivalents | 8,254 | 3,242 | 22,107 | 6,889 |
| Cash and cash equivalents at beginning of period | 45,787 | 28,692 | 31,934 | 25,045 |
| Cash and cash equivalents at end of period | $ 54,041 | $ 31,934 | $ 54,041 | $ 31,934 |
| Supplemental disclosure of other cash flow information: | ||||
| Cash paid for income taxes, net of refunds | $ 70 | $ 763 | $ 902 | $ 1,493 |
| Cash paid for interest | 529 | 137 | 1,418 | 137 |
| Supplemental disclosure of non-cash investing and financing activities: | ||||
| Purchase of fixed assets recorded in accounts payable | $ 282 | $ -- | $ 282 | $ -- |
| Asset retirement obligation recorded in accrued expenses and other current liabilities and other liabilities, long-term | 532 | -- | 532 | -- |
| These Condensed Consolidated Statements of Cash Flows include combined cash flows from continuing operations along with discontinued operations. | ||||
| Bazaarvoice, Inc. | ||||
| Reconciliation of GAAP to Non-GAAP Financial Measures for Continuing Operations | ||||
| (in thousands, except net loss per share data) | ||||
| (unaudited) | ||||
| Three Months | Twelve Months | |||
| Ended April 30, | Ended April 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Non-GAAP net loss and net loss per share from continuing operations: | ||||
| GAAP net loss from continuing operations | $ (8,825) | $ (12,233) | $ (33,164) | $ (52,846) |
| Stock-based expense (1) | 3,113 | 3,333 | 12,678 | 13,825 |
| Contingent consideration related to acquisition (2) | -- | -- | -- | (3,860) |
| Amortization of acquired intangible assets | 472 | 317 | 1,890 | 1,164 |
| Acquisition-related and other expense | 815 | 366 | 4,046 | 16,184 |
| Other stock-related benefit (4) | -- | -- | (430) | -- |
| Income tax adjustment for non-GAAP items | (6) | (191) | (8) | (239) |
| Non-GAAP net loss from continuing operations | $ (4,431) | $ (8,408) | $ (14,988) | $ (25,772) |
| GAAP basic and diluted shares | 79,668 | 77,165 | 78,645 | 75,564 |
| Non-GAAP basic and diluted net loss per share from continuing operations | $ (0.06) | $ (0.11) | $ (0.19) | $ (0.34) |
| Adjusted EBITDA from continuing operations: | ||||
| GAAP net loss from continuing operations | $ (8,825) | $ (12,233) | $ (33,164) | $ (52,846) |
| Stock-based expense (1) | 3,113 | 3,333 | 12,678 | 13,825 |
| Contingent consideration related to acquisition (2) | -- | -- | -- | (3,860) |
| Adjusted depreciation and amortization (3) | 1,349 | 1,081 | 5,609 | 4,492 |
| Acquisition-related and other expense | 815 | 366 | 4,046 | 16,184 |
| Other stock-related benefit (4) | -- | -- | (430) | -- |
| Income tax expense (benefit) | (540) | (418) | 54 | (500) |
| Total other expense, net | 521 | 316 | 2,527 | 830 |
| Adjusted EBITDA from continuing operations: | $ (3,567) | $ (7,555) | $ (8,680) | $ (21,875) |
| (1) Stock-based expense includes the following: | ||||
| Cost of revenue | $ 294 | $ 316 | $ 1,517 | $ 1,155 |
| Sales and marketing | 950 | 1,072 | 3,923 | 4,496 |
| Research and development | 707 | 747 | 2,561 | 2,817 |
| General and administrative | 1,162 | 1,198 | 4,677 | 5,357 |
| Stock-based expense | $ 3,113 | $ 3,333 | $ 12,678 | $ 13,825 |
| (2) Contingent consideration related to acquisition includes the following: | ||||
| (a) Revaluation of contingent consideration | ||||
| General and administrative | $ -- | $ -- | $ -- | $ (3,270) |
| (b) Contingent consideration included in compensation expense | ||||
| General and administrative | -- | -- | -- | (295) |
| Sales and marketing | -- | -- | -- | (295) |
| Contingent consideration related to acquisition | $ -- | $ -- | $ -- | $ (3,860) |
| Revaluation of contingent consideration is the decrease in fair value of the liability-classified contingent consideration related to the acquisition of Longboard Media, Inc. Contingent consideration included in compensation expense relates to certain Longboard Media, Inc. employees whose right to receive such compensation is forfeited if they terminate their employment prior to the required service period. The contingent consideration was payable on Longboard Media's achievement of certain performance goals for the period from January 1, 2013 to December 31, 2013. On October 31, 2013, the Company determined that the probability of the attainment of the underlying performance goals was remote and the resultant payout was estimated to be zero. As a result, the fair value of the liability-classified contingent consideration and the liability accrued for contingent consideration included in compensation expense were reduced to zero. On January 31, 2014, the Company concluded that the underlying performance goals were not met and the payout was zero. The Company excludes these items from its non-GAAP financial measures in order to facilitate the comparison of post-acquisition operating results. | ||||
| (3) Adjusted depreciation and amortization includes the following: | ||||
| Cost of revenue | $ 405 | $ 244 | $ 1,713 | $ 937 |
| Sales and marketing | 220 | 275 | 1,002 | 1,112 |
| Research and development | 181 | 189 | 786 | 813 |
| General and administrative | 234 | 85 | 871 | 495 |
| Amortization of acquired intangible assets | 309 | 288 | 1,237 | 1,135 |
| Adjusted depreciation and amortization | $ 1,349 | $ 1,081 | $ 5,609 | $ 4,492 |
| (4) Other stock-related expense includes the following: | ||||
| General and administrative | $ -- | $ -- | $ (430) | $ -- |
| Other stock-related expense | $ -- | $ -- | $ (430) | $ -- |
| Other stock-related expense represents an estimated liability for taxes and related items in connection with the treatment of certain stock option grants. Since the estimated liability directly relates to stock option grants and as stock-based expenses are consistently excluded from the non-GAAP financial measures, the Company excluded this estimated liability. During the fiscal year ended April 30, 2015, the Company recorded a benefit of $0.4 million due to a reduction of this estimated liability. | ||||
| Bazaarvoice, Inc. | ||||
| Reconciliation of GAAP to Non-GAAP Financial Measures for Discontinued Operations | ||||
| (in thousands, except net loss per share data) | ||||
| (unaudited) | ||||
| Three Months | Twelve Months | |||
| Ended April 30, | Ended April 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Non-GAAP net income and net earnings per share from discontinued operations: | ||||
| GAAP net loss from discontinued operations | $ -- | $ (11,448) | $ (1,257) | $ (10,320) |
| Stock-based expense (1) | -- | 139 | 124 | 643 |
| Amortization of acquired intangible assets | -- | 1,472 | -- | 5,888 |
| Impairment of acquired intangible assets (4) | -- | 2,500 | -- | 2,500 |
| Acquisition-related, divestiture-related and other expenses | -- | 819 | 682 | 819 |
| Loss on disposal of discontinued operations, net of tax (3) | -- | 9,192 | 1,537 | 9,192 |
| Non-GAAP net income from discontinued operations | $ -- | $ 2,674 | $ 1,086 | $ 8,722 |
| GAAP basic weighted average shares outstanding: | 79,668 | 77,165 | 78,645 | 75,564 |
| GAAP diluted weighted average shares outstanding: | 80,448 | 78,492 | 79,793 | 78,006 |
| Non-GAAP basic earnings per share from discontinued operations | $ -- | $ 0.03 | $ 0.01 | $ 0.12 |
| Non-GAAP diluted earnings per share from discontinued operations | $ -- | $ 0.03 | $ 0.01 | $ 0.11 |
| Adjusted EBITDA from discontinued operations: | ||||
| GAAP net loss from discontinued operations | $ -- | $ (11,448) | $ (1,257) | $ (10,320) |
| Stock-based expense (1) | -- | 139 | 124 | 643 |
| Adjusted depreciation and amortization (2) | -- | 1,482 | -- | 5,983 |
| Impairment of acquired intangible assets (4) | -- | 2,500 | -- | 2,500 |
| Acquisition-related, divestiture-related and other expenses | -- | 819 | 682 | 819 |
| Income tax expense (benefit) | -- | (660) | 23 | 22 |
| Total other income | -- | -- | -- | (4) |
| Estimated loss on disposal of discontinued operations, net of tax (3) | -- | 9,192 | 1,537 | 9,192 |
| Adjusted EBITDA from discontinued operations: | $ -- | $ 2,024 | $ 1,109 | $ 8,835 |
| (1) Stock-based expense includes the following: | ||||
| Cost of revenue | $ -- | $ 127 | $ 115 | $ 567 |
| Sales and marketing | -- | -- | -- | 7 |
| Research and development | -- | 6 | 4 | 55 |
| General and administrative | -- | 6 | 5 | 14 |
| Stock-based expense | $ -- | $ 139 | $ 124 | $ 643 |
| (2) Adjusted depreciation and amortization includes the following: | ||||
| Cost of revenue | $ -- | $ 450 | $ -- | $ 1,800 |
| General and administrative | -- | 10 | -- | 95 |
| Amortization of acquired intangible assets | -- | 1,022 | -- | 4,088 |
| Adjusted depreciation and amortization | $ -- | $ 1,482 | $ -- | $ 5,983 |
| (3) On July 2, 2014, the Company completed the sale of PowerReviews for a total cash consideration of $30.0 million. Of the $30.0 million sales price, $4.5 million was placed into escrow as partial security for the Company's indemnification obligations. The Company incurred a total loss of $10.7 million on the sale of PowerReviews. The loss on disposal of discontinued operations was determined by offsetting the total consideration from selling the PowerReviews business by any associated transaction costs and the net carrying value of the assets and liabilities held for sale as of July 2, 2014. Of the $10.7 million loss on disposal of discontinued operations, $9.2 million was recognized as an estimated loss on disposal of discontinued operations during the three months ended April 30, 2014 resulting in the incremental loss of $1.5 million being recognized during the fiscal year ended April 30, 2015. | ||||
| (4) During the fourth fiscal quarter of 2014, the Company reported the results of operations and financial position of PowerReviews as "discontinued operations." On the Condensed Consolidated Balance Sheet as of April 30, 2014, the assets and liabilities of PowerReviews are presented as "Assets held for sale" and "Liabilities held for sale." The Company compared the carrying value of the asset group included in "assets held for sale" to the undiscounted cash flows to be generated by the asset group. The carrying value of the asset group exceeded the undiscounted cash flows and, as a result, the Company recorded an impairment charge of $2.5 million for the three months ended April 30, 2014. | ||||
| Bazaarvoice, Inc. | ||||||||
| Selected Quarterly Financial and Operational Metrics for Continuing and Discontinued Operations | ||||||||
| (in thousands, except active enterprise clients and full-time employees data) | ||||||||
| (unaudited) | ||||||||
| Three Months Ended | ||||||||
| Jul 31, | Oct 31, | Jan 31, | Apr 30, | Jul 31, | Oct 31, | Jan 31, | Apr 30, | |
| 2013 | 2013 | 2014 | 2014 | 2014 | 2014 | 2015 | 2015 | |
| Continuing Operations: | ||||||||
| Revenue (1) | $ 40,319 | $ 41,148 | $ 43,600 | $ 43,078 | $ 45,977 | $ 47,325 | $ 49,562 | $ 48,317 |
| Cost of revenue | 12,117 | 12,508 | 13,758 | 14,522 | 16,356 | 17,414 | 17,988 | 18,148 |
| Gross profit | 28,202 | 28,640 | 29,842 | 28,556 | 29,621 | 29,911 | 31,574 | 30,169 |
| Operating expenses: | ||||||||
| Sales and marketing (3) | 20,996 | 20,837 | 20,765 | 23,884 | 20,995 | 18,931 | 18,020 | 19,492 |
| Research and development | 8,924 | 9,793 | 9,036 | 9,832 | 9,730 | 9,306 | 8,779 | 9,880 |
| General and administrative (3) | 8,536 | 3,639 | 7,674 | 6,521 | 7,893 | 8,100 | 6,932 | 8,517 |
| Acquisition-related and other expense | 7,504 | 8,283 | 31 | 366 | 492 | 2,326 | 413 | 815 |
| Amortization of acquired intangible assets | 282 | 283 | 282 | 288 | 309 | 310 | 309 | 309 |
| Total operating expenses | 46,242 | 42,835 | 37,788 | 40,891 | 39,419 | 38,973 | 34,453 | 39,013 |
| Operating loss | (18,040) | (14,195) | (7,946) | (12,335) | (9,798) | (9,062) | (2,879) | (8,844) |
| Total other income (expense), net | 3 | (249) | (268) | (316) | (498) | (588) | (920) | (521) |
| Loss before income taxes | (18,037) | (14,444) | (8,214) | (12,651) | (10,296) | (9,650) | (3,799) | (9,365) |
| Income tax expense (benefit) | (391) | 130 | 179 | (418) | 12 | 258 | 324 | (540) |
| Net loss from continuing operations | (17,646) | (14,574) | (8,393) | (12,233) | (10,308) | (9,908) | (4,123) | (8,825) |
| Stock-based expense (2) | 3,807 | 3,467 | 3,218 | 3,333 | 3,122 | 3,343 | 3,100 | 3,113 |
| Contingent consideration related to acquisition (3) | 370 | (4,230) | -- | -- | -- | -- | -- | -- |
| Adjusted depreciation and amortization (4) | 1,053 | 1,202 | 1,156 | 1,081 | 1,334 | 1,598 | 1,328 | 1,349 |
| Acquisition-related and other expense | 7,504 | 8,283 | 31 | 366 | 492 | 2,326 | 413 | 815 |
| Other stock-related benefit (5) | -- | -- | -- | -- | (430) | -- | -- | -- |
| Income tax expense (benefit) | (391) | 130 | 179 | (418) | 12 | 258 | 324 | (540) |
| Total other (income) expense, net | (3) | 249 | 268 | 316 | 498 | 588 | 920 | 521 |
| Adjusted EBITDA from continuing operations | $ (5,306) | $ (5,473) | $ (3,541) | $ (7,555) | $ (5,280) | $ (1,795) | $ 1,962 | $ (3,567) |
| Income (loss) from discontinued operations | $ 278 | $ 420 | $ 430 | $ (11,448) | $ (1,257) | $ -- | $ -- | $ -- |
| Stock-based expense (2) | 201 | 181 | 122 | 139 | 124 | -- | -- | -- |
| Adjusted depreciation and amortization (4) | 1,506 | 1,503 | 1,492 | 1,482 | -- | -- | -- | -- |
| Impairment of acquired intangible assets (7) | -- | -- | -- | 2,500 | -- | -- | -- | -- |
| Acquisition-related, divestiture-related and other expenses | -- | -- | -- | 819 | 682 | -- | -- | -- |
| Income tax expense (benefit) | 168 | 253 | 261 | (660) | 23 | -- | -- | -- |
| Total other income, net | (4) | -- | -- | -- | -- | -- | -- | -- |
| Estimated loss on disposal of discontinued operations, net of tax (8) | -- | -- | -- | 9,192 | 1,537 | -- | -- | -- |
| Adjusted EBITDA from discontinued operations | $ 2,149 | $ 2,357 | $ 2,305 | $ 2,024 | $ 1,109 | $ -- | $ -- | $ -- |
| Number of active clients from continuing operations (at period end) (6) | 922 | 980 | 1,011 | 1,133 | 1,197 | 1,258 | 1,315 | 1,353 |
| Number of active clients from discontinued operations (at period end) (6) | 398 | 389 | 368 | 341 | -- | -- | -- | -- |
| Full-time employees including employees attributable to discontinued operations (at period end) | 776 | 798 | 794 | 799 | 787 | 814 | 825 | 826 |
| Full-time employees attributable to discontinued operations (at period end) | 28 | 27 | 25 | 24 | -- | -- | -- | -- |
| (1) Revenue from continuing operations includes the following: | ||||||||
| SaaS | $ 38,863 | $ 39,896 | $ 40,645 | $ 41,924 | $ 44,324 | $ 45,199 | $ 46,429 | $ 46,173 |
| Media | 1,456 | 1,252 | 2,955 | 1,154 | 1,653 | 2,126 | 3,133 | 2,144 |
| Revenue | $ 40,319 | $ 41,148 | $ 43,600 | $ 43,078 | $ 45,977 | $ 47,325 | $ 49,562 | $ 48,317 |
| Revenue from discontinued operations includes the following: | ||||||||
| SaaS | $ 4,179 | $ 4,335 | $ 4,338 | $ 3,947 | $ 2,517 | $ -- | $ -- | $ -- |
| Media | 73 | 55 | 59 | 25 | 18 | -- | -- | -- |
| Revenue | $ 4,252 | $ 4,390 | $ 4,397 | $ 3,972 | $ 2,535 | $ -- | $ -- | $ -- |
| Total revenue: | ||||||||
| SaaS | $ 43,042 | $ 44,231 | $ 44,983 | $ 45,871 | $ 46,841 | $ 45,199 | $ 46,429 | $ 46,173 |
| Media | 1,529 | 1,307 | 3,014 | 1,179 | 1,671 | 2,126 | 3,133 | 2,144 |
| Revenue | $ 44,571 | $ 45,538 | $ 47,997 | $ 47,050 | $ 48,512 | $ 47,325 | $ 49,562 | $ 48,317 |
| Bazaarvoice, Inc. | ||||||||
| Selected Quarterly Financial and Operational Metrics for Continuing and Discontinued Operations (continued) | ||||||||
| (in thousands, except active enterprise clients and full-time employees data) | ||||||||
| (unaudited) | ||||||||
| Three Months Ended | ||||||||
| Jul 31, | Oct 31, | Jan 31, | Apr 30, | Jul 31, | Oct 31, | Jan 31, | Apr 30, | |
| 2013 | 2013 | 2014 | 2014 | 2014 | 2014 | 2015 | 2015 | |
| (2) Stock-based expense from continuing operations includes the following: | ||||||||
| Cost of revenue | $ 318 | $ 236 | $ 285 | $ 316 | $ 314 | $ 458 | $ 451 | $ 294 |
| Sales and marketing | 1,227 | 1,324 | 873 | 1,072 | 944 | 1,162 | 867 | 950 |
| Research and development | 805 | 662 | 603 | 747 | 647 | 522 | 685 | 707 |
| General and administrative | 1,457 | 1,245 | 1,457 | 1,198 | 1,217 | 1,201 | 1,097 | 1,162 |
| Stock-based expense from continuing operations | $ 3,807 | $ 3,467 | $ 3,218 | $ 3,333 | $ 3,122 | $ 3,343 | $ 3,100 | $ 3,113 |
| Stock-based expense from discontinued operations includes the following: | ||||||||
| Cost of revenue | $ 174 | $ 160 | $ 106 | $ 127 | $ 115 | $ -- | $ -- | $ -- |
| Sales and marketing | 4 | 2 | 1 | -- | -- | -- | -- | -- |
| Research and development | 19 | 17 | 13 | 6 | 4 | -- | -- | -- |
| General and administrative | 4 | 2 | 2 | 6 | 5 | -- | -- | -- |
| Stock-based expense from discontinued operations | $ 201 | $ 181 | $ 122 | $ 139 | $ 124 | $ -- | $ -- | $ -- |
| (3) Contingent consideration related to acquisition includes the following: | ||||||||
| (a) Revaluation of contingent consideration | ||||||||
| General and administrative | $ -- | $ (3,270) | $ -- | $ -- | $ -- | $ -- | $ -- | $ -- |
| (b) Contingent consideration included in compensation expense | ||||||||
| General and administrative | 185 | (480) | -- | -- | -- | -- | -- | -- |
| Sales and marketing | 185 | (480) | -- | -- | -- | -- | -- | -- |
| Contingent consideration related to acquisition | $ 370 | $ (4,230) | $ -- | $ -- | $ -- | $ -- | $ -- | $ -- |
| Revaluation of contingent consideration is the decrease in fair value of the liability-classified contingent consideration related to the acquisition of Longboard Media, Inc. Contingent consideration included in compensation expense relates to certain Longboard Media, Inc. employees whose right to receive such compensation is forfeited if they terminate their employment prior to the required service period. The contingent consideration was payable on Longboard Media's achievement of certain performance goals for the period from January 1, 2013 to December 31, 2013. On October 31, 2013, the Company determined that the probability of the attainment of the underlying performance goals was remote and the resultant payout was estimated to be zero. As a result, the fair value of the liability-classified contingent consideration and the liability accrued for contingent consideration included in compensation expense were reduced to zero. On January 31, 2014, the Company concluded that the underlying performance goals were not met and the payout was zero. The Company excludes these items from its non-GAAP financial measures in order to facilitate the comparison of post-acquisition operating results. | ||||||||
| Three Months Ended | ||||||||
| Jul 31, | Oct 31, | Jan 31, | Apr 30, | Jul 31, | Oct 31, | Jan 31, | Apr 30, | |
| 2013 | 2013 | 2014 | 2014 | 2014 | 2014 | 2015 | 2015 | |
| (4) Adjusted depreciation and amortization from continuing operations includes the following: | ||||||||
| Cost of revenue | $ 226 | $ 238 | $ 229 | $ 244 | $ 427 | $ 481 | $ 400 | $ 405 |
| Sales and marketing | 221 | 318 | 298 | 275 | 258 | 303 | 221 | 220 |
| Research and development | 189 | 226 | 209 | 189 | 199 | 242 | 164 | 181 |
| General and administrative | 135 | 137 | 138 | 85 | 141 | 262 | 234 | 234 |
| Amortization of acquired intangible assets | 282 | 283 | 282 | 288 | 309 | 310 | 309 | 309 |
| Adjusted depreciation and amortization from continuing operations | $ 1,053 | $ 1,202 | $ 1,156 | $ 1,081 | $ 1,334 | $ 1,598 | $ 1,328 | $ 1,349 |
| Adjusted depreciation and amortization from discontinued operations includes the following: | ||||||||
| Cost of revenue | $ 450 | $ 450 | $ 450 | $ 450 | $ -- | $ -- | $ -- | $ -- |
| General and administrative | 34 | 31 | 20 | 10 | -- | -- | -- | -- |
| Amortization of acquired intangible assets | 1,022 | 1,022 | 1,022 | 1,022 | -- | -- | -- | -- |
| Adjusted depreciation and amortization from discontinued operations | $ 1,506 | $ 1,503 | $ 1,492 | $ 1,482 | $ -- | $ -- | $ -- | $ -- |
| (5) Other stock-related benefit from continuing operations includes the following: | ||||||||
| General and administrative | $ -- | $ -- | $ -- | $ -- | $ (430) | $ -- | $ -- | $ -- |
| Other stock-related benefit | $ -- | $ -- | $ -- | $ -- | $ (430) | $ -- | $ -- | $ -- |
| Other stock-related expense represents an estimated liability for taxes and related items in connection with the treatment of certain stock option grants. Since the estimated liability directly relates to stock option grants and as stock-based expenses are consistently excluded from the non-GAAP financial measures, the Company excluded this estimated liability. During the three months ended July 31, 2014, the Company recorded a benefit of $0.4 million due to a reduction of this estimated liability. | ||||||||
|
(6) Beginning as of the fourth fiscal quarter of 2014, the Company defines an active client as an organization from which the Company is currently recognizing recurring revenue, and the Company counts organizations that are closely related as one client, even if they have signed separate contractual agreements. The Company believes that the ability to increase its active client base is a leading indicator of the Company's ability to grow revenue. Due to the presentation of the PowerReviews business as discontinued operations, the Company has separated the active clients into two categories: 1) active clients from continuing operations and 2) active clients from discontinued operations. As a result, each category could include a common client for which the Company has recognized recurring revenue who has organizations that have separate contractual agreements. All periods prior to the fourth fiscal quarter of 2014 discussed in this press release or presented in the accompanying financial tables have been revised to conform to this definition of an active client. |
||||||||
| (7) During the fourth fiscal quarter of 2014, the Company reported the results of operations and financial position of PowerReviews as "discontinued operations." On the Condensed Consolidated Balance Sheet as of April 30, 2014, the assets and liabilities of PowerReviews were presented as "Assets held for sale" and "Liabilities held for sale." The Company compared the carrying value of the asset group included in "assets held for sale" to the undiscounted cash flows to be generated by the asset group. The carrying value of the asset group exceeded the undiscounted cash flows and, as a result, the Company recorded an impairment charge of $2.5 million for the three months ended April 30, 2014. | ||||||||
| (8) On July 2, 2014, the Company completed the sale of PowerReviews for a total cash consideration of $30.0 million. Of the $30.0 million sales price, $4.5 million was placed into escrow as partial security for the Company's indemnification obligations. The Company incurred a total loss of $10.7 million on the sale of PowerReviews. The loss on disposal of discontinued operations was determined by offsetting the total consideration from selling the PowerReviews business by any associated transaction costs and the net carrying value of the assets and liabilities held for sale as of July 2, 2014. Of the $10.7 million loss on disposal of discontinued operations, $9.2 million was recognized as an estimated loss on disposal of discontinued operations during the three months ended April 30, 2014 resulting in the incremental loss of $1.5 million being recognized in the three months ended July 31, 2014. | ||||||||