Tangoe, Inc. Announces First Quarter 2013 Financial Results *Total revenue of $44.9 million, up 31% year-over-year *GAAP operating income of $0.9 million; non-GAAP operating income of $6.2 million *GAAP EPS of $0.03; non-GAAP EPS of $0.15, up 67% year-over-year *Adjusted EBITDA of $6.7 million, a quarterly adjusted EBITDA margin of 15% and up 65% year-over-year Business Wire ORANGE, Conn. -- May 09, 2013 Tangoe, Inc. (NASDAQ: TNGO), a leading global provider of communications lifecycle management (CLM) software and related services, today announced financial results for its first quarter ended March 31, 2013. “We are pleased with the company’s execution during the first quarter, which led to results that exceeded our expectations across each key operating metric,” stated Al Subbloie, president and CEO of Tangoe. “Our increased investments in sales and marketing have contributed to an acceleration in new account wins during recent quarters. In addition, we are seeing increased cross-sell and up-sell activity within our base of acquired customers. Tangoe’s continued market share gains are evidence that our strategy is working, and we believe that we are still at the early stages of a significant market opportunity.” First Quarter 2013 Financial Highlights *Revenue: Total revenue for the first quarter was $44.9 million, an increase of 31% on a year-over-year basis. Recurring technology and services revenue was $40.0 million, an increase of 30% on a year-over-year basis. Strategic consulting, software licenses and other services revenue contributed the remaining $4.8 million of total revenue for the first quarter of 2013. *Operating Income: GAAP operating income for the first quarter was $0.9 million, compared to a GAAP operating income of $0.6 million for the first quarter of 2012. Non-GAAP operating income for the first quarter was $6.2 million, compared to $3.6 million for the first quarter of 2012. *Net Income: GAAP net income for the first quarter was $1.1 million, compared to $0.2 million of net income for the same period last year. GAAP diluted income per share for the first quarter was $0.03, based on 40.5 million weighted-average diluted shares outstanding, compared to income per share of $0.00, based on 39.4 million weighted-average diluted shares outstanding, for the same period last year. Non-GAAP net income for the first quarter was $6.0 million, up 77% compared to $3.4 million for the first quarter of 2012. Non-GAAP diluted net income per share for the first quarter was $0.15 based on 40.5 million weighted-average diluted shares outstanding compared to $0.09 per share based on 39.4 million weighted-average diluted shares outstanding for the same period last year. *Adjusted EBITDA: Adjusted EBITDA for the first quarter was $6.7 million, an increase of 65% compared to $4.1 million for the first quarter of 2012. Adjusted EBITDA margin was a 15.0% for the first quarter of 2013, an increase compared to an 11.9% margin for the same period last year. *Cash and Cash Flow: As of March 31, 2013, Tangoe had cash and cash equivalents of $43.6 million, a decrease of $6.7 million from the end of the prior quarter due primarily to the payment of deferred purchase price obligations for acquisitions and the repurchase of common shares during the quarter. The company generated $5.8 million in net cash from operations for the first quarter of 2013, compared to $3.5 million during the first quarter of 2012. The company generated $5.6 million in unlevered free cash flow for the quarter, compared to $3.1 million during the first quarter of 2012. A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.” Financial Outlook As of May 9, 2013, Tangoe is providing guidance for its second quarter and full year 2013: *Second Quarter 2013 Guidance: Total revenue is expected to be in the range of $45.6 million to $46.1 million. Adjusted EBITDA is expected to be in the range of $7.1 million to $7.3 million. Non-GAAP net income per share is expected to be approximately $0.16 based on approximately 40.5 million weighted-average diluted shares outstanding. *Full Year 2013 Guidance: Total revenue is expected to be in the range of $188.5 million to $191.5 million. Adjusted EBITDA is expected to be in the range of $31.0 million to $32.0 million. Non-GAAP net income per share is expected to be in the range of $0.67 to $0.70 based on approximately 41.0 million weighted-average diluted shares outstanding. Quarterly Conference Call Tangoe will host a conference call today at 5:00 p.m. EST to review the company's financial results for the first quarter 2013 and business outlook. To access this call, dial 888.215.7015 (United States), or 913.312.0687 (international), with conference ID #9677389. A live webcast of the conference call will be accessible from the investor relations page of Tangoe's website at http://investor.tangoe.com, and a recording will be archived and accessible at http://investor.tangoe.com/events.cfm. A recording of this conference call will also be available through May 23, 2013, by dialing 877.870.5176 (United States), or 858.384.5517 (international). The recording access code is #9677389. About Tangoe Tangoe (NASDAQ:TNGO) is a leading global provider of Communications Lifecycle Management (CLM) software and services to a wide range of global enterprises. CLM encompasses the entire lifecycle of an enterprise’s communications assets and services, including planning and sourcing, procurement and provisioning, inventory and usage management, mobile device management, invoice processing, expense allocation and accounting, and asset decommissioning and disposal. Tangoe’s Communications Management Platform (CMP) is an on-demand suite of software designed to manage and optimize the complex processes and expenses associated with this lifecycle for both fixed and mobile communications assets and services. Tangoe’s customers can also manage their communications assets and services by engaging Tangoe’s client service group. Additional information about Tangoe can be found at www.tangoe.com. Tangoe is a registered trademark of Tangoe, Inc. Non-GAAP Financial Measures Adjusted EBITDA discussed in this press release is defined as net income plus interest expense, income tax provision, depreciation and amortization, amortization of marketing agreement intangible assets, stock-based compensation expense and, for 2013 only, restructuring charge; less amortization of leasehold interest, interest income and, for 2013 only, other income. Non-GAAP operating income excludes stock-based compensation expense, amortization of intangible assets and, for 2013 only, restructuring charge. Non-GAAP net income excludes stock-based compensation expense, amortization of intangible assets, amortization of debt discount, and, for 2013 only, restructuring charge and other income. Unlevered free cash flow is defined as net cash provided by operating activities plus net interest payments, less capital expenditures. Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the company's performance against prior periods, the preparation of operating budgets and determination of appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company's financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, 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," "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 our estimates regarding future revenue and financial performance. We may not actually achieve the expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the expectations disclosed in the forward-looking statements we make. More information about potential factors that could affect our business and financial results is contained in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 18, 2013. 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. TANGOE, Inc. Consolidated Statements of Operations (unaudited) (in thousands, except per share amounts) Three Months Ended March 31, 2012 2013 Revenue: Recurring technology and services $ 30,756 $ 40,048 Strategic consulting, software licenses and 3,391 4,812 other Total revenue 34,147 44,860 Cost of revenue: Recurring technology and services 14,316 18,755 Strategic consulting, software licenses and 1,458 2,061 other Total cost of revenue 15,774 20,816 Gross profit 18,373 24,044 Operating expenses: Sales and marketing 5,544 7,392 General and administrative 6,701 8,127 Research and development 3,689 4,945 Depreciation and amortization 1,875 2,489 Restructuring charge - 155 Income from operations 564 936 Other income (expense), net Interest expense (235 ) (162 ) Interest income 17 19 Other income - 563 Income before income tax provision 346 1,356 Income tax provision 154 231 Net income $ 192 $ 1,125 Net income per common share: Basic $ 0.01 $ 0.03 Diluted $ 0.00 $ 0.03 Weighted average number of common share: Basic 33,826 37,547 Diluted 39,431 40,459 TANGOE, INC. Consolidated Balance Sheets (in thousands) December 31, March 31, 2012 2013 ASSETS (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 50,211 $ 43,554 Accounts receivable - net 38,309 37,785 Prepaid expenses and other current assets 3,384 3,591 Total current assets 91,904 84,930 COMPUTERS, FURNITURE AND EQUIPMENT-NET 3,999 3,762 OTHER ASSETS: Intangible assets-net 44,249 41,918 Goodwill 65,825 65,505 Security deposits and other non-current 1,291 1,196 assets TOTAL ASSETS $ 207,268 $ 197,311 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 9,128 $ 10,626 Accrued expenses 12,035 8,045 Deferred revenue-current portion 9,648 9,032 Notes payable-current portion 22,443 13,112 Other current liabilities 305 305 Total current liabilities 53,559 41,120 OTHER LIABILITIES: Deferred rent and other non-current 3,543 3,542 liabilities Deferred revenue-less current portion 1,415 1,751 Notes payable-less current portion 131 53 Total liabilities 58,648 46,466 COMMITMENT AND CONTINGENCIES STOCKHOLDERS' EQUITY Common Stock 4 4 Additional paid-in capital 191,581 193,448 Warrants for common stock 10,610 10,610 Accumulated deficit (53,757 ) (52,632 ) Other comprehensive gain (loss) 182 (585 ) Total stockholders' equity 148,620 150,845 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 207,268 $ 197,311 TANGOE, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) (in thousands) For the Three Months Ended March 31, 2012 2013 Operating activities: Net income $ 192 $ 1,125 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of debt discount 191 136 Amortization of leasehold interest (24 ) (24 ) Depreciation and amortization 1,875 2,489 Increase (decrease) in deferred rent liability 43 (15 ) Amortization of marketing agreement intangible 32 55 assets Allowance for doubtful accounts - 23 Deferred income taxes 6 111 Foreign exchange adjustment - (138 ) Stock based compensation expense 1,624 3,099 Decrease in fair value of contingent - (517 ) consideration Changes in assets and liabilities, net of acquisitions: Accounts receivable 190 452 Prepaid expenses and other assets - (198 ) Other assets 10 35 Accounts payable 928 1,529 Accrued expenses (1,112 ) (2,052 ) Deferred revenue (426 ) (268 ) Net cash provided by operating activities 3,529 5,842 Investing activities: Purchases of computers, furniture and equipment (426 ) (273 ) Cash paid in connection with acquisitions, net (8,577 ) (8,789 ) of cash received Net cash used in investing activities (9,003 ) (9,062 ) Financing activities: Repayment of debt (1,544 ) (307 ) Proceeds from repayment of notes receivable 70 - Repurchase of common stock - (3,235 ) Proceeds from exercise of stock options and 1,396 306 stock warrants Net cash used in financing activities (78 ) (3,236 ) Effect of exchange rate on cash 11 (201 ) Net decrease in cash and cash equivalents (5,541 ) (6,657 ) Cash and cash equivalents, beginning of period 43,407 50,211 Cash and cash equivalents, end of period $ 37,866 $ 43,554 TANGOE, Inc. Calculation of Non-GAAP Operating Income (Unaudited) (in thousands) Three Months Ended March 31, 2012 2013 % of % of Amount Revenue Amount Revenue Income from operations $ 564 1.7 % $ 936 2.1 % Add: Stock based compensation 1,624 4.8 % 3,099 6.9 % expense Restructuring charge - 0.0 % 155 0.3 % Amortization of intangibles 1,378 4.0 % 2,024 4.5 % Non-GAAP income from $ 3,566 10.4 % $ 6,214 13.9 % operations TANGOE, Inc. Reconciliation of Net income to Adjusted EBITDA (Unaudited) (in thousands) Three Months Ended March 31, 2012 2013 % of % of Amount Revenue Amount Revenue Net income $ 192 0.6 % $ 1,125 2.5 % Interest expense 235 0.7 % 162 0.4 % Other income - 0.0 % (563 ) -1.3 % Interest income (17 ) 0.0 % (19 ) 0.0 % Income tax provision 154 0.5 % 231 0.5 % Depreciation and 1,875 5.5 % 2,489 5.5 % amortization Amortization of marketing agreement intangible 32 0.1 % 55 0.1 % assets Amortization of leasehold (24 ) -0.1 % (24 ) -0.1 % interest Stock based compensation 1,624 4.8 % 3,099 6.9 % expense Restructuring charge - 0.0 % 155 0.3 % Adjusted EBITDA $ 4,071 11.9 % $ 6,710 15.0 % TANGOE, Inc. Calculation of Non-GAAP Net Income and Non-GAAP Net Income per Share (Unaudited) (in thousands, except per share data) Three Months Ended March 31, 2012 2013 Net income $ 192 $ 1,125 Add: Stock based compensation expense 1,624 3,099 Restructuring charge - 155 Amortization of intangibles 1,378 2,024 Amortization of debt discount 191 136 Other income - (563 ) Non-GAAP net income $ 3,385 $ 5,976 Non-GAAP net income per share: diluted $ 0.09 $ 0.15 Fully diluted weighted average shares 39,431 40,459 outstanding TANGOE, Inc. Stock Based Compensation Expense (Unaudited) (in thousands) Three Months Ended March 31, 2012 2013 Cost of revenue $ 250 $ 554 Sales and marketing 366 813 General and administrative 915 1,472 Research and development 93 260 Total $ 1,624 $ 3,099 TANGOE, Inc. Calculation of Unlevered Free Cash Flow (Unaudited) (in thousands) Three Months Ended March 31, 2012 2013 Net cash provided by operating activities $ 3,529 $ 5,842 Add: Interest payments, net 36 21 Subtract: Capital Expenditures 426 273 Unlevered Free Cash Flow $ 3,139 $ 5,590 Contact: Investor Contact: ICR, Inc. Seth Potter, 512-344-0277 email@example.com or Media Contact: PAN Communications, Inc. Kristin Conforti, 617-502-4300 firstname.lastname@example.org
Tangoe, Inc. Announces First Quarter 2013 Financial Results
Press spacebar to pause and continue. Press esc to stop.