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E2open Announces Fiscal Third Quarter 2023 Financial Results

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Press release content from Business Wire. The AP news staff was not involved in its creation.
January 9, 2023 GMT

AUSTIN, Texas--(BUSINESS WIRE)--Jan 9, 2023--

E2open Parent Holdings, Inc. (NYSE: ETWO), the connected supply chain SaaS platform with the largest multi-enterprise network, today announced financial results for its fiscal third quarter ended November 30, 2022.

“We are pleased with our third quarter results, delivering subscription revenue above our guidance range while also delivering record adjusted EBITDA,” said Michael Farlekas, chief executive officer of e2open. “In nearly two years as a public company, we have consistently grown subscription revenue accompanied by strong profitability, a testament to the strength of our durable growth, long-term client relationships, disciplined operations, and talented global team.”

“This quarter also highlights that our platform and network give us multiple growth levers,” continued Farlekas. “We were recently selected by a well-known global retailer and a large agribusiness innovator for several applications across our platform, helping demonstrate the diversity of our end markets. Both companies noted the breadth of our connected supply chain platform as e2open’s primary differentiator. Additionally, our network of over 400,000 entities connected to e2open’s platform provides opportunities for innovation as we continue to build a broader supply chain ecosystem.”

Fiscal Third Quarter 2023 Financial Highlights

  • Revenue
    • GAAP subscription revenue for the third quarter of 2023 was $134.9 million, an increase of 26.1% from the year-ago comparable period and 81.8% of total revenue. Organic subscription revenue growth was 8.0% or 10.2% on a constant currency basis.
    • Total GAAP revenue for the third quarter of 2023 was $164.9 million, an increase of 20.4% from the year-ago comparable period. Total organic revenue growth was 4.4% or 6.7% on a constant currency basis.
  • GAAP gross profit for the third quarter of 2023 was $84.1 million, an increase of 31.0% from the year-ago comparable period. Non-GAAP gross profit was $113.6 million, up 4.9% or 6.1% on a constant currency basis.
  • GAAP gross margin for the third quarter of 2023 was 51.0% compared to 46.9% from the year-ago comparable period. Non-GAAP gross margin was 68.9% or 68.2% on a constant currency basis compared to 68.6% from the year-ago comparable period.
  • Adjusted EBITDA for the third quarter of 2023 was $56.2 million, an increase of 22.4% or 19.3% on a constant currency basis from the year-ago comparable period. Adjusted EBITDA margin was 34.1% or 32.6% on a constant currency basis versus 29.1% from the comparable year-ago period. The third quarter of 2023 adjusted EBITDA includes an approximate $6 million of previously disclosed strategic investments in marketing, sales and systems integrators partnerships that e2open did not have in the comparable year-ago period.
  • Net income for the third quarter of 2023 was $5.5 million compared to a net loss of $64.3 million from the year-ago comparable period. GAAP and adjusted earnings per share for the third quarter of 2023 were $0.02 and $0.06 respectively
  • Cash flow
    • GAAP cash flow from operations year to date was $43.2 million compared to $28.2 million from the year-ago comparable period, inclusive of M&A-related expenses.
    • Adjusted unlevered free cash flow for the third quarter, adjusted for M&A, was $50.4 million, which represents 89.7% of adjusted EBITDA.

NOTE: Refer to Reconciliation of Pro Forma and Non-GAAP Information Tables at the end of this press release for more detail regarding revenue, gross margin, adjusted EBITDA margin, net loss, adjusted earnings per share, adjusted unlevered free cash flow and adjusted EBITDA. Prior year comparisons of non-GAAP measures include e2open and Logistyx, as if Logistyx were acquired on March 1, 2021.

Recent Business Highlights

  • Further expanded our artificial intelligence/machine learning capabilities to supply planning through Supply Sensing, enhancing the use of sensing technologies beyond demand sensing to the supply side of e2open’s platform.
  • Expanded partnership with several digital freight brokerages providing real-time pricing and routing guide optimization for companies that ship goods over the road.
  • Introduced e2open Carrier Marketplace as part of e2open’s broader strategy to expand its network ecosystems, offering carrier partners and shippers powerful new capabilities, including access to enhanced and timely data allowing both carriers and shippers to make better, pro-active decisions.
  • Hosted Leaders Forum, a gathering of e2open clients and partners committed to a connected way of thinking about supply chain, where leaders across industries shared their best practices, confident moves made in the face of headwinds, and how they create sustainable competitive advantage by producing, moving, and selling goods with less cost and waste.
  • Named award-winner for Enterprise Service of the Year and Most Innovative Service of the Year through Best in Biz Awards.

Financial Outlook for Fiscal Year 2023

As of January 9, 2023, e2open is providing updated guidance for the remainder of fiscal year 2023, which ends February 28, 2023, as follows:

Fiscal 2023 GAAP Subscription Revenue

  • GAAP subscription revenue for fiscal 2023 is expected to be in the range of $533 million to $536 million versus prior guidance of $535 million to $543 million, including an approximate $2 million positive impact from foreign exchange rate fluctuations when compared to our prior guidance.
  • GAAP subscription revenue for fiscal 2023 on a constant currency basis is expected to be in the range of $542 million to $545 million versus prior guidance of $545 million to $553 million.

Fiscal 2023 Total GAAP Revenue

  • Total GAAP revenue is expected to be in the range of $655 million to $660 million versus prior guidance of $668 million to $676 million, including an approximate $2 million positive impact from foreign exchange rate fluctuations when compared to our prior guidance.
  • Total GAAP revenue on a constant currency basis is expected to be in the range of $667 million to $672 million versus prior guidance of $681 million to $689 million.

Fiscal Fourth Quarter 2023 GAAP Subscription Revenue

  • GAAP subscription revenue for the fiscal fourth quarter of 2023 is expected to be in the range of $137 million to $140 million including an approximate $2 million negative year-over-year impact from foreign exchange rate fluctuations.

Fiscal 2023 Non-GAAP Gross Profit Margin

  • Non-GAAP gross profit margin is reaffirmed in the range of 68% to 70%.

Fiscal 2023 Adjusted EBITDA

  • Adjusted EBITDA is reaffirmed in the range of $217 million to $223 million reflecting an implied adjusted EBITDA margin of approximately 33% to 34%.

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 2023 third quarter financial results, in addition to discussing the Company’s outlook for the full fiscal year 2023. To access this call, dial 888-506-0062 (domestic) or 973-528-0011 (international). The conference ID is 256486. 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, 2023, at 877-481-4010 (domestic) or 919-882-2331 (international). The replay pass code is 47266. 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.

Presentation slides to accompany the conference call are available for download under “Events & Presentations” in the “Investors” 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 400,000 manufacturing, logistics, channel, and distribution partners as one multi-enterprise network tracking over 13 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 unlevered 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)

 

2022

 

2021

Revenue

 

 

 

 

Subscriptions

 

$

134,884

 

 

$

106,969

 

Professional services and other

 

 

30,009

 

 

 

30,033

 

Total revenue

 

 

164,893

 

 

 

137,002

 

Cost of Revenue

 

 

 

 

Subscriptions

 

 

35,931

 

 

 

30,163

 

Professional services and other

 

 

20,417

 

 

 

17,587

 

Amortization of acquired intangible assets

 

 

24,402

 

 

 

25,036

 

Total cost of revenue

 

 

80,750

 

 

 

72,786

 

Gross Profit

 

 

84,143

 

 

 

64,216

 

Operating Expenses

 

 

 

 

Research and development

 

 

24,939

 

 

 

25,000

 

Sales and marketing

 

 

20,448

 

 

 

18,101

 

General and administrative

 

 

23,073

 

 

 

22,871

 

Acquisition-related expenses

 

 

1,969

 

 

 

33,216

 

Amortization of acquired intangible assets

 

 

19,965

 

 

 

19,470

 

Goodwill impairment

 

 

 

 

 

 

Total operating expenses

 

 

90,394

 

 

 

118,658

 

Loss from operations

 

 

(6,251

)

 

 

(54,442

)

Other income (expense)

 

 

 

 

Interest and other expense, net

 

 

(21,270

)

 

 

(10,769

)

Gain (loss) from change in tax receivable agreement liability

 

 

2,697

 

 

 

(1,470

)

Gain (loss) from change in fair value of warrant liability

 

 

16,150

 

 

 

(7,232

)

Gain (loss) from change in fair value of contingent consideration

 

 

6,300

 

 

 

(1,140

)

Total other income (expense)

 

 

3,877

 

 

 

(20,611

)

Loss before income tax provision

 

 

(2,374

)

 

 

(75,053

)

Income tax benefit

 

 

7,877

 

 

 

10,764

 

Net income (loss)

 

 

5,503

 

 

 

(64,289

)

Less: Net income (loss) attributable tononcontrolling interest

 

 

698

 

 

 

(5,072

)

Net income (loss) attributable to E2openParent Holdings, Inc.

 

$

4,805

 

 

$

(59,217

)

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

Basic

 

 

302,201

 

 

 

308,132

 

Diluted

 

 

302,359

 

 

 

308,132

 

Net income (loss) attributable to E2open Parent Holdings, Inc. Common shareholders per share:

 

 

 

 

Basic

 

$

0.02

 

 

$

(0.19

)

Diluted

 

$

0.02

 

 

$

(0.19

)

E2OPEN PARENT HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(In thousands, except share amounts)

 

November 30, 2022

 

February 28, 2022

 

 

(Unaudited)

 

 

Assets

 

 

 

 

Cash and cash equivalents

 

$

85,688

 

 

$

155,481

 

Restricted cash

 

 

13,130

 

 

 

19,073

 

Accounts receivable - net of allowance of $5,003 and $3,055 as of November 30, 2022 and February 28, 2022, respectively

 

 

149,457

 

 

 

155,341

 

Prepaid expenses and other current assets

 

 

26,461

 

 

 

26,243

 

Total current assets

 

 

274,736

 

 

 

356,138

 

Goodwill

 

 

3,306,233

 

 

 

3,756,871

 

Intangible assets, net

 

 

1,095,762

 

 

 

1,181,390

 

Property and equipment, net

 

 

73,104

 

 

 

65,937

 

Operating lease right-of-use assets

 

 

21,022

 

 

 

28,102

 

Other noncurrent assets

 

 

21,525

 

 

 

17,017

 

Total assets

 

$

4,792,382

 

 

$

5,405,455

 

Liabilities and Stockholders' Equity

 

 

 

 

Accounts payable and accrued liabilities

 

$

111,202

 

 

$

128,544

 

Channel client deposits payable

 

 

13,130

 

 

 

19,073

 

Deferred revenue

 

 

173,580

 

 

 

190,992

 

Payable to Logistyx sellers

 

 

1,068

 

 

 

 

Current portion of notes payable

 

 

20,962

 

 

 

89,097

 

Current portion of operating lease obligations

 

 

8,093

 

 

 

7,652

 

Current portion of financing lease obligations

 

 

2,002

 

 

 

2,307

 

Income taxes payable

 

 

9,768

 

 

 

2,702

 

Total current liabilities

 

 

339,805

 

 

 

440,367

 

Long-term deferred revenue

 

 

2,400

 

 

 

1,141

 

Operating lease obligations

 

 

17,462

 

 

 

21,202

 

Financing lease obligations

 

 

 

 

 

1,950

 

Notes payable

 

 

1,042,459

 

 

 

863,577

 

Tax receivable agreement liability

 

 

58,176

 

 

 

66,590

 

Warrant liability

 

 

30,375

 

 

 

67,139

 

Contingent consideration

 

 

27,808

 

 

 

45,568

 

Deferred taxes

 

 

255,207

 

 

 

413,038

 

Other noncurrent liabilities

 

 

973

 

 

 

712

 

Total liabilities

 

 

1,774,665

 

 

 

1,921,284

 

Commitments and Contingencies (Note 27)

 

 

 

 

Stockholders' Equity

 

 

 

 

Class A common stock; $0.0001 par value, 2,500,000,000 shares authorized; 302,452,552 and 301,536,621 issued and 302,275,898 and 301,359,967 outstanding as of November 30, 2022 and February 28, 2022, respectively

 

 

30

 

 

 

31

 

Class V common stock; $0.0001 par value; 42,747,890 shares authorized; 33,092,007 and 33,560,839 issued and outstanding as of November 30, 2022 and February 28, 2022, respectively

 

 

 

 

 

 

Series B-1 common stock; $0.0001 par value; 9,000,000 shares authorized; 94 shares issued and outstanding

 

 

 

 

 

 

Series B-2 common stock; $0.0001 par value; 4,000,000 shares authorized; 3,372,184 issued and outstanding

 

 

 

 

 

 

Additional paid-in capital

 

 

3,374,388

 

 

 

3,362,219

 

Accumulated other comprehensive loss

 

 

(77,732

)

 

 

(19,019

)

Accumulated deficit

 

 

(530,215

)

 

 

(154,976

)

Treasury stock, at cost: 176,654 shares

 

 

(2,473

)

 

 

(2,473

)

Total E2open Parent Holdings, Inc. equity

 

 

2,763,998

 

 

 

3,185,782

 

Noncontrolling interest

 

 

253,719

 

 

 

298,389

 

Total stockholders' equity

 

 

3,017,717

 

 

 

3,484,171

 

Total liabilities and stockholders' equity

 

$

4,792,382

 

 

$

5,405,455

 

E2OPEN PARENT HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

Nine Months Ended November 30,

(In thousands)

 

2022

 

2021

Cash flows from operating activities

 

 

 

 

Net loss

 

$

(416,703

)

 

$

(257,632

)

Adjustments to reconcile net loss to net cash from operating activities:

 

 

 

 

Depreciation and amortization

 

 

159,831

 

 

 

91,496

 

Amortization of deferred commissions

 

 

2,878

 

 

 

861

 

Provision for credit losses

 

 

315

 

 

 

527

 

Amortization of debt issuance costs

 

 

3,783

 

 

 

2,389

 

Amortization of operating lease right-of-use assets

 

 

5,813

 

 

 

8,290

 

Share-based compensation

 

 

13,139

 

 

 

8,534

 

Deferred income taxes

 

 

(143,012

)

 

 

(17,768

)

Right-of-use assets impairment charge

 

 

4,137

 

 

 

 

Goodwill impairment charge

 

 

514,816

 

 

 

 

Gain (loss) from change in tax receivable agreement liability

 

 

(9,089

)

 

 

4,606

 

(Gain) loss from change in fair value of warrant liability

 

 

(36,764

)

 

 

48,448

 

(Gain) loss from change in fair value of contingent consideration

 

 

(17,760

)

 

 

91,180

 

Loss (gain) on disposal of property and equipment

 

 

537

 

 

 

(233

)

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

10,876

 

 

 

41,320

 

Prepaid expenses and other current assets

 

 

4,311

 

 

 

(7,586

)

Other noncurrent assets

 

 

(4,094

)

 

 

(4,489

)

Accounts payable and accrued liabilities

 

 

(12,946

)

 

 

(6,892

)

Channel client deposits payable

 

 

(5,943

)

 

 

2,222

 

Deferred revenue

 

 

(26,899

)

 

 

19,927

 

Changes in other liabilities

 

 

(4,075

)

 

 

2,982

 

Net cash provided by operating activities

 

 

43,151

 

 

 

28,182

 

Cash flows from investing activities

 

 

 

 

Payments for acquisitions - net of cash acquired

 

 

(179,243

)

 

 

(774,232

)

Capital expenditures

 

 

(40,473

)

 

 

(24,627

)

Minority investment in private firm

 

 

(3,000

)

 

 

 

Net cash used in investing activities

 

 

(222,716

)

 

 

(798,859

)

Cash flows from financing activities

 

 

 

 

Proceeds from PIPE investment

 

 

 

 

 

300,000

 

Offering costs related to issuance of common stock in connection with
PIPE investment

 

 

 

 

 

(7,100

)

Proceeds from warrant exercise

 

 

 

 

 

1

 

Proceeds from indebtedness

 

 

215,000

 

 

 

395,000

 

Repayments of indebtedness

 

 

(103,174

)

 

 

(18,860

)

Repayments of financing lease obligations

 

 

(2,312

)

 

 

(6,457

)

Repurchase of common stock

 

 

 

 

 

(2,473

)

Repurchase of Common Units

 

 

(1,397

)

 

 

(16,767

)

Payments of debt issuance costs

 

 

(4,766

)

 

 

(10,357

)

Net cash provided by financing activities

 

 

103,351

 

 

 

632,987

 

Effect of exchange rate changes on cash and cash equivalents

 

 

478

 

 

 

1,657

 

Net decrease in cash, cash equivalents and restricted cash

 

 

(75,736

)

 

 

(136,033

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

174,554

 

 

 

207,542

 

Cash, cash equivalents and restricted cash at end of period

 

$

98,818

 

 

$

71,509

 

 

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash:

 

 

 

 

Cash and cash equivalents

 

$

85,688

 

 

$

56,462

 

Restricted cash

 

 

13,130

 

 

 

15,047

 

Total cash, cash equivalents and restricted cash

 

$

98,818

 

 

$

71,509

 

E2OPEN PARENT HOLDINGS, INC.

RECONCILIATION OF PRO FORMA INFORMATION

TABLE I

 

(in millions)

Q3
FY2023

Q3
FY2022 (1)

$ Var

% Var

PRO FORMA REVENUE RECONCILIATION

 

 

 

 

Total GAAP Revenue

164.9

137.0

27.9

20.4%

Deferred revenue purchase accounting adjustment (2)

-

10.4

(10.4)

n/m

Logistyx pre-acquisition revenue

-

10.6

(10.6)

n/m

Total non-GAAP revenue

164.9

157.9

6.9

4.4%

Constant currency FX impact (3)

3.6

-

3.6

n/m

Total non-GAAP revenue (constant currency basis) (4)

$168.5

$157.9

$10.6

6.7%

 

 

 

 

 

GAAP Subscription Revenue

134.9

107.0

27.9

26.1%

Deferred revenue purchase accounting adjustment (2)

-

10.4

(10.4)

n/m

Logistyx pre-acquisition revenue

-

7.5

(7.5)

n/m

Non-GAAP subscription revenue

134.9

124.9

10.0

8.0%

Constant currency FX impact (3)

2.7

-

2.7

n/m

Non-GAAP subscription revenue (constant currency basis) (4)

$137.6

$124.9

$12.7

10.2%

 

 

 

 

 

GAAP Professional Services and other revenue

30.0

30.0

0.0

-0.1%

Logistyx pre-acquisition revenue

-

3.0

(3.0)

n/m

Non-GAAP professional services and other revenue

30.0

33.1

(3.0)

-9.2%

Constant currency FX impact (3)

0.9

-

0.9

n/m

Non-GAAP professional services and other revenue (constant currency basis) (4)

$30.9

$33.1

($2.2)

-6.6%

 

 

 

 

 

PRO FORMA GROSS PROFIT RECONCILIATION

 

 

 

 

GAAP Gross profit

84.1

64.2

19.9

31.0%

Deferred revenue purchase accounting adjustment (2)

-

10.4

(10.4)

n/m

Depreciation and amortization

28.4

27.8

0.6

n/m

Share-based compensation (5)

0.5

0.5

0.1

n/m

Non-recurring/non-operating costs (6)

0.5

0.5

0.0

n/m

Non-GAAP gross profit

$113.6

$103.4

$10.2

9.9%

Logistyx pre-acquisition gross profit

-

4.9

(4.9)

n/m

Total non-GAAP gross profit

$113.6

$108.3

$5.3

4.9%

Non-GAAP Gross Margin %

68.9%

68.6%

 

 

Constant currency FX impact (3)

1.3

-

1.3

n/m

Total non-GAAP gross profit (constant currency basis) (4)

$114.9

$108.3

$6.6

6.1%

Non-GAAP Gross Margin % (constant currency basis) (4)

68.2%

68.6%

 

 

 

 

 

 

 

PRO FORMA ADJUSTED EBITDA RECONCILIATION

 

 

 

 

Net income (loss)

5.5

(64.3)

69.8

n/m

Interest expense, net

19.5

10.0

9.5

95.5%

Income tax benefit

(7.9)

(10.8)

2.9

n/m

Depreciation and amortization

52.5

50.5

2.0

3.9%

EBITDA

$69.6

($14.6)

$84.2

n/m

Deferred revenue purchase accounting adjustment (2)

-

10.4

(10.4)

n/m

Share-based compensation (5)

4.8

4.0

0.8

19.1%

Non-recurring/non-operating costs (6)

3.2

3.0

0.2

n/m

Acquisition-related adjustments (7)

2.0

33.2

(31.2)

n/m

Change in tax receivable agreement liability (8)

(2.7)

1.5

(4.2)

n/m

Change in fair value of warrant liability (9)

(16.2)

7.2

(23.4)

n/m

Change in fair value of contingent consideration (10)

(6.3)

1.1

(7.4)

n/m

Right-of-use assets impairment charge

1.8

0.0

1.8

n/m

Adjusted EBITDA

$56.2

$45.9

$10.3

22.4%

Logistyx pre-acquisition EBITDA and other

-

0.1

(0.1)

n/m

Total adjusted EBITDA

$56.2

$46.0

$10.2

22.1%

Adjusted EBITDA Margin %

34.1%

29.1%

 

 

Constant currency FX impact (3)

(1.3)

-

(1.3)

n/m

Total adjusted EBITDA(constant currency basis) (4)

$54.9

$46.0

$8.9

19.3%

Adjusted EBITDA Margin % (constant currency basis) (4)

32.6%

29.1%

 

 

 

 

 

 

 

(1)Non-GAAP pro forma inclusive of Logistyx, as if acquired on March 1, 2021.

(2)Non-GAAP revenue adds back amortization of the purchase accounting fair value adjustment to deferred revenue resulting for the business combination as required by GAAP. This is no longer required beginning in fiscal year 2023.

(3)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)

(4)Constant Currency refers to pro forma amounts excluding translation and transactional impacts from foreign currency exchange rates.

(5)Reflects non-cash, long-term share-based compensation expense, primarily related to senior management.

(6)Primarily includes other non-recurring expenses such as systems integrations, legal entity rationalization and consulting and advisory fees.

(7)Primarily includes advisory, consulting, accounting and legal expenses incurred in connection with mergers and acquisitions activities, including related valuation, negotiation and integration costs and capital-raising activities, including costs related to the business combination, as well as the BluJay and Logistyx acquisitions.

(8)Represents the expense related to the change in the fair value of the tax receivable agreement liability, including interest.

(9)Represents the fair value adjustment at each balance sheet date of the warrant liability related to the public, private placement and forward purchase warrants.

(10)Represents the fair value adjustment at each balance sheet date of the contingent consideration liability related to the restricted Series B-2 common stock.

E2OPEN PARENT HOLDINGS, INC.

RECONCILIATION OF NON-GAAP EXPENSES

TABLE II

 

Fiscal Third Quarter 2023

(in millions, except per share amounts)

GAAP

M&A Related(1)
&
Non-recurring(2)

Impairment
Charges (3)

Depreciation
&
Amortization

Share-Based
Compensation

Non-GAAP
(Adjusted)

% of
Revenue

COST OF GOODS

 

 

 

 

 

 

 

Subscriptions

35.9

(0.3)

-

(3.7)

(0.3)

31.6

23.5%

Professional services and other

20.4

(0.2)

-

(0.3)

(0.3)

19.7

65.6%

Amortization of intangibles

24.4

-

-

(24.4)

-

-

 

Total cost of revenue

$80.8

($0.5)

-

($28.4)

($0.5)

$51.3

31.1%

 

 

 

 

 

 

 

 

Gross Profit

$84.1

$0.5

$0.0

$28.4

$0.5

$113.6

68.9%

 

 

 

 

 

 

 

 

OPERATING COSTS

 

 

 

 

 

 

 

Research & development

24.9

(0.0)

-

(3.1)

(0.9)

20.9

12.7%

Sales & marketing

20.5

(0.3)

-

(0.3)

(0.9)

19.0

11.5%

General & administrative (3)

23.1

(0.6)

(1.8)

(0.7)

(2.4)

17.6

10.7%

Acquisition related expenses

2.0

(2.0)

-

-

-

-

 

Amortization of intangibles

20.0

-

-

(20.0)

-

-

 

Total operating expenses

$90.4

($2.9)

($1.8)

($24.1)

($4.3)

$57.5

34.8%

 

 

 

 

 

 

 

 

(1) Expense adjustments primarily related to advisory, consulting, accounting and legal expenses incurred in connection with mergers and acquisitions activities, including related valuation, negotiation and integration costs and capital-raising activities, including the business combination and the BluJay and Logistyx acquisitions.

(2) Primarily includes other non-recurring expenses such as systems integrations and consulting, advisory fees, and executive severance costs.

(3) The company recognized a right-of-use asset impairment charge of $1.8M in G&A in Q3 FY23.

E2OPEN PARENT HOLDINGS, INC.

RECONCILIATION OF ADJUSTED EARNINGS PER SHARE

TABLE III

 

Fiscal Third Quarter 2023

 

GAAP Net Income

5.5

Interest Expense

19.5

Income Taxes Provision

(7.9)

Depreciation & Amortization

52.5

EBITDA

$69.6

Share-based compensation

4.8

Non-recurring/non-operating costs

3.2

Acquisition-related adjustments

2.0

Change in tax receivable agreement liability

(2.7)

Change in fair value of warrant liability

(16.2)

Change in fair value of contingent consideration

(6.3)

Right-of-use assets impairment charge

1.8

Adjusted EBITDA

$56.2

Depreciation

(8.1)

Interest and other expense, net

(19.5)

Adjusted EBT

$28.6

Normalized income taxes (1)

(6.9)

Adjusted net income

$21.7

Adjusted basic shares outstanding

341.4

Adjusted earnings per share

$0.06

 

 

1. Income taxes calculated using 24% effective rate

E2OPEN PARENT HOLDINGS, INC.

ADJUSTED UNLEVERED FREE CASH FLOW CONVERSION (1)

TABLE IV

 

(in millions)

Q3 FY23

Adjusted EBITDA

$56.2

Normalized capital expenditures

($5.8)

Adjusted Unlevered Free Cash Flow

$50.4

 

 

GAAP Revenue

$164.9

 

 

Free Cash Flow % of GAAP revenue

30.5%

Free Cash Flow % of adjusted EBITDA

89.7%

 

 

Capital expenditures

($8.9)

Less M+A related capital expenditures (2)

$3.1

Normalized capital expenditures

($5.8)

 

 

1. Adjusted unlevered free cash flow is a performance metric that illustrates the cash available through the operations of the business after normalized capital expenditures excluding interest, taxes, acquisition-related expenses and non-recurring/non-operating costs. Non-cash expenses are also excluded from this metric. Non-cash expenses include changes in the tax receivable agreement liability, changes in the fair value of warrants, changes in the fair value of contingent consideration and share-based compensation.

2. Primarily includes hardware and software purchases for integrating data center operations of newly acquired companies

 

Net Income to Adjusted EBITDA

($ in millions)

Q3 FY23

GAAP Net Income

5.5

Interest Expense

19.5

Income Tax Benefit

(7.9)

Depreciation & Amortization

$52.5

EBITDA

$69.6

Share-based compensation

4.8

Non-recurring/non-operating costs

3.2

Acquisition-related adjustments

2.0

Change in tax receivable agreement liability

(2.7)

Change in fair value of warrant liability

(16.2)

Change in fair value of contingent consideration

(6.3)

Right-of-use assets impairment charge

1.8

Adjusted EBITDA

$56.2

E2OPEN PARENT HOLDINGS, INC.

CONSOLIDATED CAPITAL

TABLE V

 

Description

 

Shares (000’s)

 

Notes

Shares outstanding as of November 30, 2022

 

302,275

 

Shares outstanding as of third quarter fiscal 2023

Common Units

 

33,092

 

Units issued in the business combination that have not yet been converted from common units in the LLC to Class A shares of E2open Parent Holdings, Inc. (Common units yet to be converted are represented by class V shares)

Series B-2 shares (unvested)

 

3,372

 

Series B-2 shares issued in the Business Combination that vest when the 20-day VWAP reaches $15.00

Series 2 common units (unvested)

 

2,628

 

Represent rights in the LLC that convert into common units when the 20-day VWAP reaches $15.00. Upon conversion to common units, the holder can elect to convert into Class A common stock

Adjusted Basic Shares

 

341,367

 

 

 

 

 

 

 

Warrants

 

29,080

 

Warrants outstanding as of third quarter fiscal 2023 with an exercise price of $11.50

Incentive plan options (unvested)

 

4,833

 

Options issued to management and directors under E2open’s long-term incentive plan

Incentive plan restricted shares (unvested)

 

6,618

 

Restricted shares issued to management and directors under E2open’s long-term incentive plan

Fully converted shares

 

381,898

 

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20230109005769/en/

CONTACT: Investor Contact

Adam Rogers

AVP Investor Relations, e2open

adam.rogers@e2open.com

515-556-1162Media Contact

5W PR for e2open

e2open@5wpr.com

718-757-6144Corporate Contact

Kristin Seigworth

VP Communications, e2open

kristin.seigworth@e2open.com

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SOURCE: E2open Parent Holdings, Inc.

Copyright Business Wire 2023.

PUB: 01/09/2023 04:15 PM/DISC: 01/09/2023 04:16 PM

http://www.businesswire.com/news/home/20230109005769/en