AUSTIN, Texas--(BUSINESS WIRE)--E2open Parent Holdings, Inc. (NYSE: ETWO) (“e2open” or the “Company”), the connected supply chain SaaS platform with the largest multi-enterprise network, today announced financial results for its fiscal third quarter ended November 30, 2023.
“In my first three months leading e2open, I have seen first-hand the unique capabilities of our product offering and the significant value that our solutions are delivering for some of the world’s largest and best-known companies,” said Andrew Appel, e2open’s interim chief executive officer. “Although our revenue growth has been below our potential, we are intently focused on returning to sustainable growth by implementing specific action plans to improve sales execution, deepen client engagement, and deliver flawless implementations. While this change process will take several quarters to materially impact our top line, our teams are excited by the client-centric approach, the early signs of progress we saw during the fiscal third quarter, and the tremendous opportunity we have in front of us to create value for our clients and shareholders.”
“In the third fiscal quarter, e2open delivered subscription revenue near the high end of our guidance and maintained strong adjusted EBITDA margins,” said Marje Armstrong, chief financial officer of e2open. “We exited the quarter with better sales execution in both subscription and professional services as evidenced by large deal closings with major new and existing clients across a range of industry sectors. Although we still have work to do to transform our go-to-market and client engagement model, and conditions in some end-markets remain uncertain, our improved third quarter execution gives us confidence in the steps we are taking to re-accelerate e2open’s growth.”
Fiscal Third Quarter 2024 Financial Highlights
-
Revenue
- GAAP subscription revenue for the third quarter of 2024 was $132.8 million, a decrease of 1.5% from the year-ago comparable period and 84.3% of total revenue. Subscription revenue decreased 2.2% on a constant currency basis.
- Total GAAP revenue for the third quarter of 2024 was $157.5 million, a decrease of 4.5% from the year-ago comparable period. Total revenue decreased 5.2% on a constant currency basis.
- GAAP gross profit for the third quarter of 2024 was $78.6 million, a decrease of 6.6% from the year-ago comparable period. Non-GAAP gross profit was $109.7 million, down 3.4% and 4.0% on a constant currency basis.
- GAAP gross margin for the third quarter of 2024 was 49.9% compared to 51.0% from the year-ago comparable period. Non-GAAP gross margin was 69.6% on an organic basis and 69.7% on a constant currency basis compared to 68.9% from the comparable year-ago period.
- GAAP Net loss for the third quarter of 2024 was $740.0 million compared to a net income of $5.5 million from the year-ago comparable period. Adjusted EBITDA for the third quarter of 2024 was $55.4 million, a decrease of 1.4% and 1.5% on a constant currency basis from the year-ago comparable period. Adjusted EBITDA margin was 35.1% and 35.4% on a constant currency basis versus 34.1% from the comparable year-ago period.
- GAAP EPS for the third quarter of 2024 was a loss of $2.20. Adjusted EPS for the third quarter of 2024 was $0.04.
-
Cash flow
- GAAP operating cash flow on a year-to-date basis was $56.7 million compared to $43.2 million from the year-ago comparable period, inclusive of non-recurring expenses.
- Adjusted operating cash flow on a year-to-date basis, exclusive of non-recurring expenses, was $79.0 million, which represents 47.8% of year-to-date adjusted EBITDA.
Recent Business Highlights
- Selected by Scan Global Logistics (SGL) to optimize the global freight forwarder’s operations across multiple modes of transportation and an expansive geography in what the client called “the single largest and most important IT project in SGL’s history.” The multi-year agreement helps SGL reduce freight and operational costs, increase transportation efficiency, and enhance its end-user and customer experience.
- Closed new logo business including one of the world’s largest commercial vehicle manufacturers that selected e2open’s global screening solution to reduce compliance risk for over 2.5 million partners; and an international designer and manufacturer of sustainable plastic packaging that chose e2open’s Transportation Management and Logistics as a Service to optimize its logistics operations and realize transportation cost savings.
- Implemented a large project with NORTERA, a leading North American food manufacturer of canned and frozen fruits and vegetables. With e2open’s Transportation Management, positioned as a Leader by Gartner, NORTERA gains network visibility, automated invoicing processes, and world-class transportation execution and reporting to increase efficiency, reduce freight costs, and improve service levels.
- Expanded business with existing major clients across a variety of industry sectors. These large cross-sell wins included a Fortune 500 multinational conglomerate that has been an e2open client since 2015, and a leading provider of enterprise software, each of which selected e2open for its proven ability to deliver a comprehensive and scalable Channel Data Management solution for complex partner ecosystems.
- Implemented a new project with existing client Vertiv, a global leader in critical digital infrastructure technologies. The project brought synergies around reusing the common master data and established a single feed across all applications, an example of e2open's connected supply chain capabilities. This implementation has contributed to lower partner management costs and a better user experience for Vertiv.
- Presented annual client awards at Connect 2023 conference, recognizing customers who have achieved remarkable results in supply chain and channel innovation utilizing e2open solutions. Award winners were Vertiv, QSC, Tapestry, Inc., Ball Corporation, and High Liner Foods.
Financial Outlook for Fiscal Year 2024
As of January 9, 2024, e2open is updating full year 2024 guidance previously provided on October 10, 2023, and providing fourth quarter 2024 guidance as follows:
Fiscal 2024 Subscription GAAP Revenue
- GAAP subscription revenue for fiscal 2024 is expected to be in the range of $533 million to $536 million (versus prior guidance of $530 million to $538 million), reflecting a 0.3% organic growth rate at the mid-point.
Fiscal 2024 Total GAAP Revenue
- Total GAAP revenue for fiscal 2024 is expected to be in the range of $628 million to $633 million (versus prior guidance of $625 million to $635 million), reflecting a 3.3% year-over-year decrease at the mid-point.
Fiscal Fourth Quarter 2024 GAAP Subscription Revenue
- GAAP subscription revenue for the fiscal fourth quarter of 2024 is expected to be in the range of $131 million to $134 million, reflecting a 3.2% year-over-year decrease at the mid-point.
Fiscal 2024 Non-GAAP Gross Profit Margin
- Non-GAAP gross profit margin for fiscal 2024 is still expected to be in the range of 68% to 70%.
Fiscal 2024 Adjusted EBITDA
- Adjusted EBITDA for fiscal 2024 is still expected to be in the range of $215 million to $220 million, reflecting an implied adjusted EBITDA margin in the range of 34% to 35%.
NOTE: E2open is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures for non-GAAP gross profit margin or adjusted EBITDA without unreasonable effort, and therefore no reconciliation of certain forward-looking non-GAAP financial measures for non-GAAP gross profit margin or adjusted EBITDA is included.
Quarterly Conference Call
E2open will host a conference call today at 5:00 p.m. ET to review fiscal third quarter 2024 financial results, in addition to discussing the Company’s outlook for the full fiscal year 2024. To access this call, dial 888-506-0062 (domestic) or 973-528-0011 (international). The conference ID is 740053. A live webcast of the conference call will be accessible in the “Investor Relations” section of e2open’s website at www.e2open.com. A replay of this conference call can also be accessed through January 23, 2024, at 877-481-4010 (domestic) or 919-882-2331 (international). The replay passcode is 49575. An archived webcast of this conference call will also be available after the completion of the call in the “Investor Relations” section of the Company’s website at www.e2open.com.
About e2open
E2open is the connected supply chain software platform that enables the world’s largest companies to transform the way they make, move, and sell goods and services. With the broadest cloud-native global platform purpose-built for modern supply chains, e2open connects more than 480,000 manufacturing, logistics, channel, and distribution partners as one multi-enterprise network tracking over 15 billion transactions annually. Our SaaS platform anticipates disruptions and opportunities to help companies improve efficiency, reduce waste, and operate sustainably. Moving as one.™ Learn More: www.e2open.com.
E2open and “Moving as one.” are the registered trademarks of E2open, LLC. All other trademarks, registered trademarks and service marks are the property of their respective owners.
Non-GAAP Financial Measures
This press release includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”) including non-GAAP revenue, non-GAAP subscription revenue, non-GAAP professional services and other revenue, adjusted EBITDA, adjusted EBITDA margin, non-GAAP gross profit, non-GAAP net income, non-GAAP gross margin, adjusted free cash flow and adjusted earnings per share. These non-GAAP financial measures are not a measure of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company’s financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity, or performance under GAAP. You should be aware that the Company’s presentation of these measures may not be comparable to similarly titled measures used by other companies.
The Company believes this non-GAAP measure of financial results provides useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in comparing the Company’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures.
Safe Harbor Statement
Certain statements in this press release are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. These statements relate to future events or the Company's future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In particular, statements about the Company's expectations, beliefs, plans, objectives, assumptions, future events or future performance contained in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential," "outlook," "guidance" or the negative of those terms or other comparable terminology.
Please see the Company's documents filed or to be filed with the Securities and Exchange Commission, including the annual report filed on Form 10-K, and any amendments thereto for a discussion of certain important risk factors that relate to forward-looking statements contained in this press release. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company's control. These and other important factors may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements are made only as of the date hereof, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
E2OPEN PARENT HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
||||||||
Three Months Ended November 30, |
||||||||
(In thousands, except per share amounts) |
|
2023 |
|
|
2022 |
|
||
Revenue |
||||||||
Subscriptions |
$ |
132,800 |
|
$ |
134,884 |
|
||
Professional services and other |
|
24,697 |
|
|
30,009 |
|
||
Total revenue |
|
157,497 |
|
|
164,893 |
|
||
Cost of Revenue |
||||||||
Subscriptions |
|
36,689 |
|
|
35,931 |
|
||
Professional services and other |
|
17,642 |
|
|
20,417 |
|
||
Amortization of acquired intangible assets |
|
24,590 |
|
|
24,402 |
|
||
Total cost of revenue |
|
78,921 |
|
|
80,750 |
|
||
Gross Profit |
|
78,576 |
|
|
84,143 |
|
||
Operating Expenses |
||||||||
Research and development |
|
24,937 |
|
|
24,939 |
|
||
Sales and marketing |
|
22,583 |
|
|
20,448 |
|
||
General and administrative |
|
24,739 |
|
|
23,073 |
|
||
Acquisition-related expenses |
|
9 |
|
|
1,969 |
|
||
Amortization of acquired intangible assets |
|
20,014 |
|
|
19,965 |
|
||
Goodwill impairment |
|
687,700 |
|
|
— |
|
||
Intangible asset impairment |
|
30,000 |
|
|
— |
|
||
Total operating expenses |
|
809,982 |
|
|
90,394 |
|
||
Loss from operations |
|
(731,406 |
) |
|
(6,251 |
) |
||
Other income (expense) |
||||||||
Interest and other expense, net |
|
(24,643 |
) |
|
(21,270 |
) |
||
Gain from change in tax receivable agreement liability |
|
2,888 |
|
|
2,697 |
|
||
Gain from change in fair value of warrant liability |
|
2,617 |
|
|
16,150 |
|
||
Gain from change in fair value of contingent consideration |
|
5,100 |
|
|
6,300 |
|
||
Total other (expense) income |
|
(14,038 |
) |
|
3,877 |
|
||
Loss before income tax provision |
|
(745,444 |
) |
|
(2,374 |
) |
||
Income tax benefit |
|
5,413 |
|
|
7,877 |
|
||
Net (loss) income |
|
(740,031 |
) |
|
5,503 |
|
||
Less: Net (loss) income attributable to noncontrolling interest |
|
(72,475 |
) |
|
698 |
|
||
Net (loss) income attributable to E2open Parent Holdings, Inc. |
$ |
(667,556 |
) |
$ |
4,805 |
|
||
|
||||||||
Weighted-average common shares outstanding: |
||||||||
Basic |
|
303,848 |
|
|
302,201 |
|
||
Diluted |
|
303,848 |
|
|
302,359 |
|
||
Net (loss) income attributable to E2open Parent Holdings, Inc. common shareholders per share: |
||||||||
Basic |
$ |
(2.20 |
) |
$ |
0.02 |
|
||
Diluted |
$ |
(2.20 |
) |
$ |
0.02 |
|
||
E2OPEN PARENT HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||||
(In thousands) |
November 30, 2023 |
February 28, 2023 |
||||||
Assets |
||||||||
Cash and cash equivalents |
$ |
110,279 |
|
$ |
93,032 |
|
||
Restricted cash |
|
19,659 |
|
|
11,310 |
|
||
Accounts receivable, net |
|
127,330 |
|
|
174,809 |
|
||
Prepaid expenses and other current assets |
|
30,483 |
|
|
25,200 |
|
||
Total current assets |
|
287,751 |
|
|
304,351 |
|
||
Goodwill |
|
1,846,263 |
|
|
2,927,807 |
|
||
Intangible assets, net |
|
886,315 |
|
|
1,051,124 |
|
||
Property and equipment, net |
|
70,024 |
|
|
72,476 |
|
||
Operating lease right-of-use assets |
|
21,580 |
|
|
18,758 |
|
||
Other noncurrent assets |
|
28,559 |
|
|
25,659 |
|
||
Total assets |
$ |
3,140,492 |
|
$ |
4,400,175 |
|
||
Liabilities and Stockholders' Equity |
||||||||
Accounts payable and accrued liabilities |
$ |
83,196 |
|
$ |
97,491 |
|
||
Channel client deposits payable |
|
19,659 |
|
|
11,310 |
|
||
Deferred revenue |
|
176,253 |
|
|
203,824 |
|
||
Current portion of notes payable |
|
11,122 |
|
|
11,144 |
|
||
Current portion of operating lease obligations |
|
7,317 |
|
|
7,622 |
|
||
Current portion of financing lease obligations |
|
1,120 |
|
|
2,582 |
|
||
Income taxes payable |
|
1,721 |
|
|
2,190 |
|
||
Total current liabilities |
|
300,388 |
|
|
336,163 |
|
||
Long-term deferred revenue |
|
2,833 |
|
|
2,507 |
|
||
Operating lease obligations |
|
17,959 |
|
|
15,379 |
|
||
Financing lease obligations |
|
3,188 |
|
|
1,049 |
|
||
Notes payable |
|
1,038,908 |
|
|
1,043,636 |
|
||
Tax receivable agreement liability |
|
59,663 |
|
|
69,745 |
|
||
Warrant liability |
|
10,830 |
|
|
29,616 |
|
||
Contingent consideration |
|
14,188 |
|
|
29,548 |
|
||
Deferred taxes |
|
66,038 |
|
|
144,529 |
|
||
Other noncurrent liabilities |
|
721 |
|
|
1,083 |
|
||
Total liabilities |
|
1,514,716 |
|
|
1,673,255 |
|
||
Commitments and Contingencies |
||||||||
Stockholders' Equity |
||||||||
Class A common stock |
|
30 |
|
|
30 |
|
||
Class V common stock |
|
— |
|
|
— |
|
||
Series B-1 common stock |
|
— |
|
|
— |
|
||
Series B-2 common stock |
|
— |
|
|
— |
|
||
Additional paid-in capital |
|
3,395,158 |
|
|
3,378,633 |
|
||
Accumulated other comprehensive loss |
|
(45,892 |
) |
|
(68,603 |
) |
||
Accumulated deficit |
|
(1,831,502 |
) |
|
(803,679 |
) |
||
Treasury stock, at cost |
|
(2,473 |
) |
|
(2,473 |
) |
||
Total E2open Parent Holdings, Inc. equity |
|
1,515,321 |
|
|
2,503,908 |
|
||
Noncontrolling interest |
|
110,455 |
|
|
223,012 |
|
||
Total stockholders' equity |
|
1,625,776 |
|
|
2,726,920 |
|||
Total liabilities and stockholders' equity |
$ |
3,140,492 |
|
$ |
4,400,175 |
|||
E2OPEN PARENT HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||
Nine Months Ended November 30, |
||||||||
(In thousands) |
2023 |
|
2022 |
|||||
Cash flows from operating activities |
||||||||
Net loss |
$ |
(1,139,544 |
) |
$ |
(416,703 |
) |
||
Adjustments to reconcile net loss to net cash from operating activities: |
||||||||
Depreciation and amortization |
|
160,758 |
|
|
159,831 |
|
||
Amortization of deferred commissions |
|
4,452 |
|
|
2,878 |
|
||
Provision for credit losses |
|
2,657 |
|
|
315 |
|
||
Amortization of debt issuance costs |
|
3,961 |
|
|
3,783 |
|
||
Amortization of operating lease right-of-use assets |
|
5,454 |
|
|
5,813 |
|
||
Share-based compensation |
|
18,728 |
|
|
13,139 |
|
||
Deferred income taxes |
|
(79,791 |
) |
|
(143,012 |
) |
||
Right-of-use assets impairment charge |
|
619 |
|
|
4,137 |
|
||
Goodwill impairment charge |
|
1,097,741 |
|
|
514,816 |
|
||
Indefinite-lived intangible asset impairment charge |
|
34,000 |
|
|
— |
|
||
Gain from change in tax receivable agreement liability |
|
(8,355 |
) |
|
(9,089 |
) |
||
Gain from change in fair value of warrant liability |
|
(18,786 |
) |
|
(36,764 |
) |
||
Gain from change in fair value of contingent consideration |
|
(15,360 |
) |
|
(17,760 |
) |
||
Gain on operating lease termination |
|
(187 |
) |
|
— |
|
||
(Gain) loss on disposal of property and equipment |
|
(16 |
) |
|
537 |
|
||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
|
44,822 |
|
|
10,876 |
|
||
Prepaid expenses and other current assets |
|
(3,972 |
) |
|
4,311 |
|
||
Other noncurrent assets |
|
(7,351 |
) |
|
(4,094 |
) |
||
Accounts payable and accrued liabilities |
|
(16,712 |
) |
|
(12,946 |
) |
||
Channel client deposits payable |
|
8,349 |
|
|
(5,943 |
) |
||
Deferred revenue |
|
(27,244 |
) |
|
(26,899 |
) |
||
Changes in other liabilities |
|
(7,568 |
) |
|
(4,075 |
) |
||
Net cash provided by operating activities |
|
56,655 |
|
|
43,151 |
|
||
Cash flows from investing activities |
||||||||
Payments for acquisitions - net of cash acquired |
|
— |
|
|
(179,243 |
) |
||
Capital expenditures |
|
(22,301 |
) |
|
(40,473 |
) |
||
Minority investment in private firm |
|
— |
|
|
(3,000 |
) |
||
Net cash used in investing activities |
|
(22,301 |
) |
|
(222,716 |
) |
||
Cash flows from financing activities |
||||||||
Proceeds from indebtedness |
|
— |
|
|
215,000 |
|
||
Repayments of indebtedness |
|
(8,366 |
) |
|
(103,174 |
) |
||
Repayments of financing lease obligations |
|
(2,432 |
) |
|
(2,312 |
) |
||
Repurchase of common units |
|
— |
|
|
(1,397 |
) |
||
Payments of debt issuance costs |
|
— |
|
|
(4,766 |
) |
||
Net cash (used in) provided by financing activities |
|
(10,798 |
) |
|
103,351 |
|
||
Effect of exchange rate changes on cash and cash equivalents |
|
2,040 |
|
|
478 |
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
25,596 |
|
|
(75,736 |
) |
||
Cash, cash equivalents and restricted cash at beginning of period |
|
104,342 |
|
|
174,554 |
|
||
Cash, cash equivalents and restricted cash at end of period |
$ |
129,938 |
|
$ |
98,818 |
|
||
E2OPEN PARENT HOLDINGS, INC. RECONCILIATION OF PRO FORMA INFORMATION TABLE I |
||||
Fiscal Third Quarter 2024 |
||||
(in millions) |
Q3 |
Q3 |
$ Var |
% Var |
FY2024 |
FY2023 |
|||
PRO FORMA REVENUE RECONCILIATION |
|
|
|
|
Total GAAP Revenue |
157.5 |
164.9 |
(7.4) |
(4.5%) |
Constant currency FX impact (1) |
(1.1) |
- |
(1.1) |
n/m |
Total non-GAAP revenue (constant currency basis) (2) |
$156.4 |
$164.9 |
($8.5) |
(5.2%) |
|
|
|
|
|
GAAP Subscription Revenue |
132.8 |
134.9 |
(2.1) |
(1.5%) |
Constant currency FX impact (1) |
(0.8) |
- |
(0.8) |
n/m |
Non-GAAP subscription revenue (constant currency basis) (2) |
$132.0 |
$134.9 |
($2.9) |
(2.2%) |
|
|
|
|
|
GAAP Professional Services and other revenue |
24.7 |
30.0 |
(5.3) |
(17.7%) |
Constant currency FX impact (1) |
(0.3) |
- |
(0.3) |
n/m |
Non-GAAP professional services and other revenue (constant currency basis) (2) |
$24.4 |
$30.0 |
($5.6) |
(18.6%) |
|
|
|
|
|
PRO FORMA GROSS PROFIT RECONCILIATION |
|
|
|
|
GAAP Gross profit |
78.6 |
84.1 |
(5.6) |
(6.6%) |
Depreciation and amortization |
28.7 |
28.4 |
0.3 |
1.0% |
Share-based compensation (3) |
1.3 |
0.5 |
0.8 |
142.6% |
Non-recurring/non-operating costs (4) |
1.1 |
0.5 |
0.6 |
115.7% |
Non-GAAP gross profit |
$109.7 |
$113.6 |
($3.9) |
(3.4%) |
Non-GAAP Gross Margin % |
69.6% |
68.9% |
|
|
Constant currency FX impact (1) |
(0.6) |
- |
(0.6) |
n/m |
Total non-GAAP gross profit (constant currency basis) (2) |
$109.1 |
$113.6 |
($4.5) |
(4.0%) |
Non-GAAP Gross Margin % (constant currency basis) (2) |
69.7% |
68.9% |
|
|
|
|
|
|
|
PRO FORMA ADJUSTED EBITDA RECONCILIATION |
|
|
|
|
Net income (loss) |
(740.0) |
5.5 |
(745.5) |
n/m |
Interest expense, net |
24.9 |
19.5 |
5.4 |
27.8% |
Income tax benefit |
(5.4) |
(7.9) |
2.5 |
(31.3%) |
Depreciation and amortization |
53.6 |
52.5 |
1.1 |
2.2% |
EBITDA |
($666.9) |
$69.6 |
($736.5) |
n/m |
Share-based compensation (3) |
6.8 |
4.8 |
2.0 |
42.5% |
Non-recurring/non-operating costs (4) |
8.3 |
3.2 |
5.1 |
158.6% |
Acquisition-related adjustments (5) |
0.0 |
2.0 |
(2.0) |
(99.5%) |
Change in tax receivable agreement liability (6) |
(2.9) |
(2.7) |
(0.2) |
7.0% |
Change in fair value of warrant liability (7) |
(2.6) |
(16.2) |
13.5 |
(83.8%) |
Change in fair value of contingent consideration (8) |
(5.1) |
(6.3) |
1.2 |
(19.0%) |
Goodwill impairment |
687.7 |
0.0 |
687.7 |
n/m |
Right-of-use assets & Intangible impairment charge |
30.1 |
1.8 |
28.3 |
1,608.5% |
Adjusted EBITDA |
$55.4 |
$56.2 |
($0.8) |
(1.4%) |
Adjusted EBITDA Margin % |
35.1% |
34.1% |
|
|
Constant currency FX impact (1) |
(0.0) |
- |
(0.0) |
n/m |
Total adjusted EBITDA (constant currency basis) (2) |
$55.3 |
$56.2 |
($0.8) |
(1.5%) |
Adjusted EBITDA Margin % (constant currency basis) (2) |
35.4% |
34.1% |
|
|
(1) Constant Currency refers to pro-forma amounts excluding the impact of translating foreign currencies into U.S. dollars. To calculate foreign currency translation on a constant currency basis, operating results for the current year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period) |
(2) Constant Currency refers to pro forma amounts excluding translation and transactional impacts from foreign currency exchange rates. |
(3) Reflects non-cash, long-term share-based compensation expense. |
(4) Primarily includes other non-recurring expenses such as systems integrations and consulting, advisory fees and certain severance costs. |
(5) Primarily includes advisory, consulting, accounting and legal expenses incurred in connection with mergers and acquisitions activity, including related valuation, negotiation and integration costs and capital-raising activities for costs related to the BluJay and Logistyx acquisitions. |
(6) Represents the expense related to the change in the fair value of the tax receivable agreement liability, including interest. |
(7) Represents the fair value adjustment at each balance sheet date of the warrant liability related to the public, private placement, and forward purchase warrants. |
(8) Represents the fair value adjustment at each balance sheet date of the contingent consideration liability related to the restricted Series B-2 common stock and Series 2 RCUs. |
E2OPEN PARENT HOLDINGS, INC. RECONCILIATION OF NON-GAAP EXPENSES TABLE II |
|||||||
Fiscal Third Quarter 2024 |
|
|
|
|
|
|
|
(in millions) |
GAAP |
Non-recurring(1) |
Impairment
|
Depreciation & Amortization |
Share-Based Compensation |
Non-GAAP (Adjusted) |
% of Revenue |
COST OF GOODS |
|
|
|
|
|
|
|
Subscriptions |
36.7 |
(0.3) |
- |
(3.9) |
(0.7) |
31.7 |
23.9% |
Professional services and other |
17.6 |
(0.8) |
- |
(0.2) |
(0.6) |
16.1 |
65.3% |
Amortization of intangibles |
24.6 |
- |
- |
(24.6) |
- |
- |
|
Total cost of revenue |
$78.9 |
($1.1) |
- |
($28.7) |
($1.3) |
$47.8 |
30.4% |
|
|
|
|
|
|
|
|
Gross Profit |
$78.6 |
$1.1 |
- |
$28.7 |
$1.3 |
$109.7 |
69.6% |
|
|
|
|
|
|
|
|
OPERATING COSTS |
|
|
|
|
|
|
|
Research & development |
24.9 |
(0.3) |
- |
(4.2) |
(1.7) |
18.8 |
11.9% |
Sales & marketing |
22.6 |
(0.3) |
- |
(0.3) |
(1.6) |
20.4 |
12.9% |
General & administrative |
24.7 |
(6.8) |
(0.1) |
(0.4) |
(2.3) |
15.1 |
9.6% |
Acquisition related expenses |
0.0 |
(0.0) |
- |
- |
- |
- |
|
Amortization of intangibles |
20.0 |
- |
- |
(20.0) |
- |
- |
|
Intangible impairment |
30.0 |
- |
(30.0) |
- |
- |
- |
|
Goodwill impairment |
687.7 |
- |
(687.7) |
- |
- |
- |
|
Total operating expenses |
$810.0 |
($7.5) |
($717.8) |
($24.9) |
($5.5) |
$54.3 |
34.5% |
(1) Primarily includes other non-recurring expenses such as systems integrations and consulting, advisory fees, and certain severance costs. |
(2) The company recognized a right-of-use asset impairment charge of $0.1M in G&A, Intangible impairment of $30.0M and $687.7M Goodwill impairment in Q3 FY24. |
E2OPEN PARENT HOLDINGS, INC. RECONCILIATION OF ADJUSTED EARNINGS PER SHARE TABLE III |
|
Fiscal Third Quarter 2024 |
|
(in millions, except per share amounts) |
Q3 24 |
GAAP Net loss |
(740.0) |
Interest expense, net |
24.9 |
Income taxes benefit |
(5.4) |
Depreciation & amortization |
53.6 |
EBITDA |
($666.9) |
Share-based compensation |
6.8 |
Non-recurring/non-operating costs |
8.3 |
Acquisition-related adjustments |
0.0 |
Change in tax receivable agreement liability |
(2.9) |
Change in fair value of warrant liability |
(2.6) |
Change in fair value of contingent consideration |
(5.1) |
Goodwill impairment |
687.7 |
Right-of-use assets & Intangible impairment charge |
30.1 |
Adjusted EBITDA |
$55.4 |
Depreciation |
(9.0) |
Interest and other expense, net |
(24.9) |
Adjusted EBIT |
$21.4 |
Normalized income taxes (1) |
(5.1) |
Adjusted Net Income |
$16.3 |
Adjusted basic shares outstanding |
388.0 |
Adjusted earnings per share |
$0.04 |
(1) Income taxes calculated using 24% effective rate. |
|
E2OPEN PARENT HOLDINGS, INC. ADJUSTED FREE CASH FLOW TABLE IV |
||||
Fiscal Third Quarter 2024 |
||||
(in millions) |
Q1 24 |
Q2 24 |
Q3 24 |
Q3 YTD |
GAAP operating cash flow |
36.5 |
14.8 |
5.4 |
56.7 |
|
|
|
|
|
Add: Non-recurring cash payments (1) |
3.4 |
1.9 |
25.5 |
30.7 |
Add: Change in channel client deposits payable (2) |
(2.5) |
(8.9) |
3.1 |
(8.3) |
Adjusted operating cash flow |
$37.3 |
$7.7 |
$34.0 |
$79.0 |
|
|
|
|
|
Capital expenditures |
(6.6) |
(9.5) |
(6.2) |
(22.3) |
Adjusted free cash flow |
$30.8 |
($1.8) |
$27.7 |
$56.7 |
(1) Primarily includes cash payment of a $17.8 million legal settlement for the previously disclosed unfavorable arbitration ruling related to a 2014 contract between Kewill (a predecessor of BluJay), as well as other non-recurring costs. |
(2) Channel Client Deposits Payable represents client deposits for the incentive payment program associated with the Company's channel shaping application. The Company offers services to administer incentive payments to partners on behalf of the Company’s clients. The Company’s clients deposit these funds into a restricted cash account with an offset included as a liability in incentive program payable in the Consolidated Balance Sheets |
E2OPEN PARENT HOLDINGS, INC. CONSOLIDATED CAPITAL TABLE V |
|||
Fiscal Third Quarter 2024 |
|||
Description |
Shares (000's) |
Notes |
|
Shares outstanding as of November 30, 2023 |
304,388 |
|
Shares outstanding |
Common Units |
32,723 |
Units issued in the Business Combination that have not been converted from common units to Class A common stock (Common units are represented by Class V shares). |
|
Series B-2 Shares (unvested) |
3,372 |
|
Represents the right to acquire shares of Class A common stock when the 20-day VWAP reaches $15.00 per share. |
Restricted Common Units Series 2 (unvested) |
2,628 |
Represents the right in E2open Holdings, LLC that converts into common units when the 20-day VWAP reaches $15.00. Upon conversion to common units, the holders can elect to convert the common units to Class A common stock. |
|
Adjusted Basic Shares |
343,111 |
|
|
|
|||
Warrants |
29,080 |
|
Outstanding warrants with an exercise price of $11.50. |
Options (vested/unreleased and unvested) |
2,116 |
Options issued to management under the long-term incentive plan. |
|
Restricted Shares (vested/unreleased and unvested) |
13,702 |
|
Restricted shares issued to employees, management and directors under the long-term incentive plan. |
Fully Converted Shares |
388,009 |
||
