UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

 


 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 1, 2018

 


 

Control4 Corporation

(Exact name of registrant as specified in its charter)

 


 

Delaware

 

001-36017

 

42-1583209

(State or other jurisdiction of
incorporation)

 

(Commission
File Number)

 

(I.R.S. Employer
Identification No.)

 

11734 S. Election Road
Salt Lake City, Utah 84020

(Address of principal executive offices) (Zip Code)

 

(801) 523-3100

(Registrant’s telephone number, including area code)

 

Not applicable

(Former name or former address, if changed since last report)

 


 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company   x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

 

 

 


 

Item 2.02 Results of Operations and Financial Condition.

 

On November 1, 2018, Control4 Corporation (the “Company”) issued a press release announcing unaudited financial results for its quarter ended September 30, 2018. A copy of the press release is attached as Exhibit 99.1.

 

In accordance with General Instruction B.2 on Form 8-K, certain of the information in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished under Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to the liability of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.

 

Description of Exhibits

99.1

 

Press release dated November 1, 2018

 

2


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: November 1, 2018

 

 

 

 

CONTROL4 CORPORATION

 

 

 

 

 

 

 

By:

/s/ Mark Novakovich

 

Mark Novakovich

 

Chief Financial Officer

 

3


Exhibit 99.1

 

 

Control4 Reports Record Revenues for Third Quarter 2018

Continued Growth in Connected-Home Opportunities and New Products

 

SALT LAKE CITY — November 1, 2018 4:05 PM EST — Control4 Corporation (NASDAQ: CTRL), a leading global provider of smart-home and networking solutions, today announced financial results for its third quarter ended September 30, 2018.

 

Revenue for the third quarter of 2018 was $71.6 million, compared to revenue of $64.6 million for the third quarter of 2017, representing quarterly year-over-year growth of 11%.

 

Net Income on a GAAP basis for the third quarter of 2018 was $5.7 million, or $0.21 per diluted share, compared to Net Income in the third quarter of 2017 of $5.0 million, or $0.19 per diluted share.

 

Non-GAAP Net Income for the third quarter of 2018 was $10.5 million, or $0.38 per diluted share, compared to Non-GAAP Net Income in the third quarter of 2017 of $9.4 million, or $0.35 per diluted share. A reconciliation of GAAP to non-GAAP financial information is contained in the attached tables.

 

Unrestricted cash and net investments increased to $91.2 million as of September 30, 2018, compared to $83.1 million as of June 30, 2018.  During the third quarter of 2018, the company generated cash flows from operations of $9.9 million, paid the final holdback of $1.1 million related to the Triad acquisition, purchased $2.1 million of capital assets, repurchased 150,000 shares of Control4 stock on the open market for $4.9 million and paid $1.8 million in lieu of issuing additional shares of stock related to the net settlement of restricted stock units that vested during the quarter.

 

“We are pleased with our performance in the past quarters and are continuing our focus to drive growth and execute on our strategies to be the preferred choice for home automation,” said Martin Plaehn, chairman and chief executive officer of Control4. “Our recently introduced Certified Showroom Program, our #C4YourselfDay events, and our Production Builder Program are all gaining visibility and momentum, and our new products introduced at the CEDIA industry tradeshow in September are well received and expected to contribute to year-end business and to the first-half of 2019”.

 

Commenting on the company’s financial results, Mark Novakovich, chief financial officer of Control4, added: “Year-over-year, we delivered another quarter of double-digit revenue growth.  Our expanding net income margin and positive cash flow generation put us in a good position to continue to maintain our leadership in the professionally installed whole-home automation market.

 

Q4 and 2018 Guidance

 

Control4 expects revenue for the full year 2018 to be between $272 million and $274 million and expects Non-GAAP Net Income for the full year to be between $39.0 million and $40.0 million or $1.42 and $1.45 per diluted share, based on an expected 27.6 million weighted average shares outstanding.  Control4 expects revenue in the fourth quarter of 2018 to be between $72 million and $74 million and expects non-GAAP Net Income for the fourth quarter of 2018 to be between $11.3 million and $12.3 million or $0.41 and $0.45 per diluted share, based on an expected 27.6 million weighted average shares outstanding.

 


 

Control4 Announces Third Quarter 2018 Financial Results

 

Control4 does not provide guidance on GAAP Net Income because certain non-GAAP adjustments are inherently difficult to forecast, whereas others relate to the amortization or expensing of items tied to historical events.  The following table highlights our estimates of non-GAAP stock-based compensation and the amortization of intangible assets reflected in our non-GAAP net income guidance for the fourth quarter of 2018:

 

Expense ($ mm)

 

4Q 2018

 

Stock-based compensation expense

 

3.5

 

Amortization of intangible assets

 

1.4

 

Total

 

4.9

 

 

Additional Financial and Operational Metrics

 

Revenue ($ mm)

 

3Q 2018

 

2Q 2018

 

3Q 2017

 

North America Core Revenue

 

54.0

 

52.4

 

48.6

 

International Core Revenue

 

15.8

 

15.1

 

14.0

 

Other Revenue(1)

 

1.8

 

1.7

 

2.0

 

Total Revenue

 

71.6

 

69.2

 

64.6

 

 


(1) Primarily consists of Hospitality Revenue

 

 

 

3Q 2018

 

2Q 2018

 

3Q 2017

 

Dealer Adds(2)

 

 

 

 

 

 

 

North America

 

90

 

81

 

69

 

International

 

59

 

72

 

61

 

Total Dealer Adds

 

149

 

153

 

130

 

 

 

 

 

 

 

 

 

Active Dealers(2), (3)

 

 

 

 

 

 

 

North America

 

3,217

 

3,150

 

3,019

 

International

 

1,226

 

1,232

 

1,148

 

Total Active Dealers

 

4,443

 

4,382

 

4,167

 

 

 

 

 

 

 

 

 

Total Dealers(2)

 

 

 

 

 

 

 

North America

 

3,356

 

3,280

 

3,139

 

International

 

1,462

 

1,410

 

1,283

 

Total Dealers

 

4,818

 

4,690

 

4,422

 

 

 

 

 

 

 

 

 

Controller Shipments

 

31,017

 

28,871

 

26,814

 

 


(2) These dealer figures only include dealers authorized to sell and install the full Control4 line of products and exclude approximately 980 active dealers that are currently authorized to sell only the Pakedge and or Triad brand of products.

 

(3) We define an active, authorized dealer (“active dealer”) as one that has placed an order with us in the trailing 12-month period.

 

2


 

Control4 Announces Third Quarter 2018 Financial Results

 

Conference Call

 

On November 1, 2018, Control4 Corporation (NASDAQ: CTRL) will host an investor conference call and will webcast the event beginning at 3:00 p.m. Mountain Time (5:00 p.m. Eastern Time). To access the conference call, dial 647-484-0478 or 800-514-8435 (toll free) and enter passcode 9656400.

 

The webcast and replay will be accessible on Control4’s investor relations website at http://investor.control4.com/.  A replay of the conference call will be available within two hours of the conclusion of the conference through November 15, 2018.  To access the replay, please dial 719-457-0820 or 888-203-1112 and enter passcode 9656400.

 

About Control4 Corporation:

 

Control4 [NASDAQ: CTRL] is a leading global provider of automation and networking systems for homes and businesses, offering personalized control of lighting, music, video, comfort, security, communications, and more into a unified smart home system that enhances the daily lives of its consumers. Control4 unlocks the potential of connected devices, making networks more robust, entertainment systems easier to use, homes more comfortable and energy efficient, and provides families more peace of mind. Today, every home and business needs automation horsepower and a high-performance network to manage the increasing number of connected devices. The Control4 platform interoperates with more than 12,500 third-party consumer electronics products, ensuring an ever-expanding ecosystem of devices will work together. Control4 is now available in over 100 countries. Leveraging a professional channel that includes over 5,700 custom integrators, retailers, and distributors authorized to sell Control4 products, Pakedge branded networking solutions and Triad branded speakers, Control4 is delivering intelligent solutions for consumers, major consumer electronics companies, hotels, and businesses around the world.

 

Forward-Looking Statements

 

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding Control4’s financial outlook. All statements other than statements of historical fact contained in this press release are forward-looking statements. These forward-looking statements are made as of the date they were first issued, and were based on the then-current expectations, estimates, forecasts, and projections, as well as the beliefs and assumptions of management. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Control4’s control. Control4’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in Control4’s most recent Annual Report on Form 10-K, as well as subsequent reports and documents filed with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent Control4’s views as of the date of this press release. The company anticipates that subsequent events and developments may cause its views to change. Except as required by law, Control4 has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. These forward-looking statements should not be relied upon as representing Control4’s views as of any date subsequent to the date of this press release.

 

3


 

Control4 Announces Third Quarter 2018 Financial Results

 

Non-GAAP Financial Measures

 

Control4’s stated results include certain non-GAAP financial measures, including non-GAAP gross margin, non-GAAP gross margin percentage, non-GAAP income (loss) from operations, non-GAAP operating income percentage, non-GAAP net income (loss), and non-GAAP net income (loss) per diluted share. Non-GAAP gross margin excludes non-cash expenses related to stock-based compensation, amortization of intangible assets, and acquisition-related costs. We further exclude expenses related to executive severance and litigation settlements from non-GAAP income from operations and non-GAAP net income.

 

Management believes that it is useful to exclude stock-based compensation expense because the amount of such expense in any specific period may not directly correlate to the underlying performance of the business operations.

 

The company has recently completed acquisitions that resulted in operating expenses that would not have otherwise been incurred. Management has provided supplementary non-GAAP financial measures, which exclude acquisition-related expense items, to allow more accurate comparisons of the financial results to historical operations, forward-looking guidance and the financial results of less acquisitive peer companies. Management considers these types of costs and adjustments, to a great extent, to be unpredictable and dependent on a significant number of factors that are outside of the company’s control. Furthermore, the company does not consider these acquisition-related costs and adjustments to be related to the organic continuing operations of the acquired businesses and are generally not relevant to assessing or estimating the long-term performance of the acquired assets. In addition, the size, complexity and/or volume of past acquisitions, which often drives the magnitude of acquisition-related costs, may not be indicative of the size, complexity and/or volume of future acquisitions. By excluding acquisition-related costs and adjustments from the non-GAAP measures, management is better able to evaluate the ability to utilize its existing assets and estimate the long-term value that acquired assets will generate. The company believes that providing a supplemental non-GAAP measure which excludes these items allows management and investors to consider the ongoing operations of the business both with, and without, such expenses.

 

These acquisition-related costs are included in the following categories: (i) professional service fees, recorded in operating expenses, which include third-party costs related to the acquisition, and legal and other professional service fees associated with diligence, entity formation, and corporate structuring, disputes and regulatory matters related to acquired entities; (ii) transition and integration costs, recorded in operating expenses, which include retention payments, transitional employee costs, earn-out payments treated as compensation expense, as well as the costs of integration-related services provided by third parties; and (iii) acquisition-related adjustments which include adjustments to acquisition-related items such as being required to record acquired inventory at its fair value, resulting in a step-up in the inventory value, and having to reverse part of our valuation allowance in order to offset the deferred tax liability that was recorded based on differences between the book and tax basis of assets acquired and liabilities assumed. The step-up in inventory is recorded through cost of goods sold when the inventory is sold, resulting in a negative impact to our gross margin. Although these expenses are not recurring with respect to past acquisitions, the company will generally incur these expenses in connection with any future acquisitions.

 

The company excludes the amortization of acquired intangible assets from non-GAAP measures. These amounts are inconsistent in amount and frequency and are significantly impacted by the timing and size of acquisitions. Providing a supplemental measure which excludes these charges allows management

 

4


 

Control4 Announces Third Quarter 2018 Financial Results

 

and investors to evaluate results “as-if” the acquired intangible assets had been developed internally rather than acquired. Although the company excludes amortization of acquired intangible assets from non-GAAP measures, management believes that it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Future acquisitions may result in the amortization of additional intangible assets.

 

Furthermore, we believe it is useful to exclude expenses related to litigation settlements and executive severance because of the variable and unpredictable nature of these expenses which are not indicative of past or future operating performance. We believe that past and future periods are more comparable if we exclude those expenses.

 

Management believes these adjustments provide useful comparative information to investors. Non-GAAP results are presented for supplemental informational purposes only for understanding the 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. The non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the industry, as other companies in the industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. Management urges investors to review the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measure to evaluate the business.

 

CONTACT:

Investor Relations

Lauren Sloane

The Blueshirt Group

Tel: +1 415-217-2632

lauren@blueshirtgroup.com

 

Source: Control4

 

5


 

Control4 Announces Third Quarter 2018 Financial Results

 

CONTROL4 CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

 

September 30,

 

December 31,

 

 

 

2018

 

2017

 

 

 

(unaudited)

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

35,373

 

$

29,761

 

Restricted cash

 

264

 

273

 

Short-term investments

 

54,544

 

44,057

 

Accounts receivable, net

 

34,157

 

29,925

 

Inventories

 

41,621

 

37,171

 

Prepaid expenses and other current assets

 

5,058

 

4,369

 

Total current assets

 

171,017

 

145,556

 

Property and equipment, net

 

8,684

 

7,337

 

Long-term investments

 

1,085

 

12,038

 

Intangible assets, net

 

21,962

 

26,081

 

Goodwill

 

21,598

 

21,867

 

Other assets

 

1,330

 

1,618

 

Total assets

 

$

225,676

 

$

214,497

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

26,932

 

$

25,654

 

Accrued liabilities

 

8,431

 

10,835

 

Current portion of deferred revenue

 

5,121

 

4,538

 

Total current liabilities

 

40,484

 

41,027

 

Other long-term liabilities

 

4,500

 

3,942

 

Total liabilities

 

44,984

 

44,969

 

Commitments and contingencies

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock, $0.0001 par value; 500,000,000 shares authorized; 26,707,025 and 25,832,895 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively

 

3

 

3

 

Additional paid-in capital

 

240,394

 

242,281

 

Accumulated deficit

 

(58,908

)

(72,225

)

Accumulated other comprehensive loss

 

(797

)

(531

)

Total stockholders’ equity

 

180,692

 

169,528

 

Total liabilities and stockholders’ equity

 

$

225,676

 

$

214,497

 

 

6


 

Control4 Announces Third Quarter 2018 Financial Results

 

CONTROL4 CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2018

 

2017

 

2018

 

2017

 

 

 

(unaudited)

 

(unaudited)

 

Revenue

 

$

71,594

 

$

64,583

 

$

199,971

 

$

176,043

 

Cost of revenue

 

34,484

 

31,520

 

95,760

 

86,572

 

Gross margin

 

37,110

 

33,063

 

104,211

 

89,471

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

11,144

 

10,347

 

32,595

 

30,246

 

Sales and marketing

 

13,520

 

12,692

 

38,608

 

36,082

 

General and administrative

 

6,913

 

5,109

 

19,534

 

16,413

 

Total operating expenses

 

31,577

 

28,148

 

90,737

 

82,741

 

Income from operations

 

5,533

 

4,915

 

13,474

 

6,730

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

Interest, net

 

327

 

125

 

819

 

224

 

Other income (expense), net

 

(82

)

79

 

(864

)

183

 

Total other income (expense), net

 

245

 

204

 

(45

)

407

 

Income before income taxes

 

5,778

 

5,119

 

13,429

 

7,137

 

Income tax expense (benefit)

 

67

 

85

 

112

 

(2,459

)

Net income

 

$

5,711

 

$

5,034

 

$

13,317

 

$

9,596

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.22

 

$

0.20

 

$

0.51

 

$

0.39

 

Diluted

 

$

0.21

 

$

0.19

 

$

0.48

 

$

0.36

 

Weighted-average number of shares:

 

 

 

 

 

 

 

 

 

Basic

 

26,397

 

25,050

 

26,116

 

24,551

 

Diluted

 

27,671

 

27,122

 

27,489

 

26,393

 

 

Stock-based compensation included in the consolidated statement of operations data (unaudited):

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2018

 

2017

 

2018

 

2017

 

Cost of revenue

 

$

59

 

$

66

 

$

182

 

$

185

 

Research and development

 

1,115

 

1,031

 

3,233

 

3,210

 

Sales and marketing

 

941

 

883

 

2,877

 

2,831

 

General and administrative

 

1,314

 

1,048

 

3,793

 

2,965

 

Total stock-based compensation expense

 

$

3,429

 

$

3,028

 

$

10,085

 

$

9,191

 

 

7


 

Control4 Announces Third Quarter 2018 Financial Results

 

CONTROL4 CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2018

 

2017

 

 

 

(unaudited)

 

Operating activities

 

 

 

 

 

Net income

 

$

13,317

 

$

9,596

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation expense

 

2,852

 

2,703

 

Amortization of intangible assets

 

4,286

 

3,885

 

Loss (gain) on disposal of fixed assets

 

5

 

(1

)

Provision for doubtful accounts

 

760

 

491

 

Investment discount and premium amortization

 

(349

)

(57

)

Stock-based compensation

 

10,085

 

9,191

 

Tax benefit from business acquisition

 

 

(2,415

)

Changes in assets and liabilities:

 

 

 

 

 

Accounts receivable, net

 

(5,353

)

(4,890

)

Inventories

 

(5,015

)

(5,347

)

Prepaid expenses and other current assets

 

(644

)

390

 

Other assets

 

255

 

(1,018

)

Accounts payable

 

1,816

 

3,495

 

Accrued liabilities

 

(1,223

)

(1,675

)

Deferred revenue

 

574

 

870

 

Other long-term liabilities

 

622

 

171

 

Net cash provided by operating activities

 

21,988

 

15,389

 

Investing activities

 

 

 

 

 

Purchases of available-for-sale investments

 

(51,538

)

(52,472

)

Proceeds from sales of available-for-sale investments

 

1,000

 

1,950

 

Proceeds from maturities of available-for-sale investments

 

51,350

 

34,580

 

Purchases of property and equipment

 

(3,914

)

(3,003

)

Business acquisitions, net of cash acquired

 

(1,411

)

(7,881

)

Net cash used in investing activities

 

(4,513

)

(26,826

)

Financing activities

 

 

 

 

 

Proceeds from exercise of options for common stock

 

10,729

 

11,290

 

Payments for withholding taxes related to net share settlement of equity awards

 

(6,378

)

(4,591

)

Repurchase of common stock

 

(15,957

)

(1,821

)

Payment of debt issuance costs

 

(113

)

 

Net cash (used in) provided by financing activities

 

(11,719

)

4,878

 

Effect of exchange rate changes on cash and cash equivalents

 

(153

)

397

 

Net change in cash and cash equivalents

 

5,603

 

(6,162

)

Unrestricted and restricted cash and cash equivalents at beginning of period

 

30,034

 

35,060

 

Unrestricted and restricted cash and cash equivalents at end of period

 

$

35,637

 

$

28,898

 

Supplemental disclosure of cash flow information

 

 

 

 

 

Cash paid for interest

 

$

105

 

$

65

 

Cash paid for taxes

 

988

 

1,120

 

Supplemental schedule of non-cash investing and financing activities

 

 

 

 

 

Business acquisitions holdback liability

 

 

1,068

 

Purchases of property and equipment financed by accounts payable

 

689

 

396

 

Net unrealized gains (losses) on available-for-sale investments

 

(3

)

3

 

 

8


 

Control4 Announces Third Quarter 2018 Financial Results

 

CONTROL4 CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2018

 

2017

 

2018

 

2017

 

 

 

(in thousands, except percentages and per share data)

 

Reconciliation of Gross Margin to Non-GAAP Gross Margin:

 

 

 

 

 

 

 

 

 

Gross margin

 

$

37,110

 

$

33,063

 

$

104,211

 

$

89,471

 

Stock-based compensation expense in cost of revenue

 

59

 

66

 

182

 

185

 

Amortization of intangible assets in cost of revenue

 

888

 

802

 

2,733

 

2,367

 

Acquisition-related costs in cost of revenue

 

 

37

 

 

165

 

Non-GAAP gross margin

 

$

38,057

 

$

33,968

 

$

107,126

 

$

92,188

 

Revenue

 

$

71,594

 

$

64,583

 

$

199,971

 

$

176,043

 

Gross margin percentage

 

51.8

%

51.2

%

52.1

%

50.8

%

Non-GAAP gross margin percentage

 

53.2

%

52.6

%

53.6

%

52.4

%

 

 

 

 

 

 

 

 

 

 

Reconciliation of Income (Loss) from Operations to Non-GAAP Income (Loss) from Operations:

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

5,533

 

$

4,915

 

$

13,474

 

$

6,730

 

Stock-based compensation expense

 

3,429

 

3,028

 

10,085

 

9,191

 

Amortization of intangible assets

 

1,401

 

1,334

 

4,286

 

3,885

 

Acquisition-related costs

 

 

17

 

16

 

446

 

Non-GAAP income (loss) from operations

 

$

10,363

 

$

9,294

 

$

27,861

 

$

20,252

 

Revenue

 

$

71,594

 

$

64,583

 

$

199,971

 

$

176,043

 

Operating margin percentage

 

7.7

%

7.6

%

6.7

%

3.8

%

Non-GAAP operating margin percentage

 

14.5

%

14.4

%

13.9

%

11.5

%

 

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income (Loss) to Non-GAAP Net Income:

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

5,711

 

$

5,034

 

$

13,317

 

$

9,596

 

Stock-based compensation expense

 

3,429

 

3,028

 

10,085

 

9,191

 

Amortization of intangible assets

 

1,401

 

1,334

 

4,286

 

3,885

 

Acquisition-related costs

 

 

17

 

16

 

(1,969

)

Non-GAAP net income (loss) (1)

 

$

10,541

 

$

9,413

 

$

27,704

 

$

20,703

 

Non-GAAP net income (loss) (1) per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.40

 

$

0.38

 

$

1.06

 

$

0.84

 

Diluted

 

$

0.38

 

$

0.35

 

$

1.01

 

$

0.78

 

Weighted-average number of shares:

 

 

 

 

 

 

 

 

 

Basic

 

26,397

 

25,050

 

26,116

 

24,551

 

Diluted

 

27,671

 

27,122

 

27,489

 

26,393

 

 


(1) Excludes the calculated effect of non-GAAP adjustments on income tax expense of $0.3 million and $0.8 million for the three and nine months ended September 30, 2018, respectively.

 

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