-
Third quarter revenue of $29.9 million, exceeding the high end of
guidance, an increase of 19% over the third quarter of 2011.
-
GAAP operating income of $1.8 million for the third quarter.
-
Non-GAAP operating income for the third quarter was $4.3 million.
-
GAAP earnings per share for the third quarter of $0.05, and non-GAAP
earnings per share of $0.11.
HOUSTON--(BUSINESS WIRE)--Nov. 1, 2012--
PROS Holdings, Inc. (NYSE: PRO), a world leader in pricing and
revenue management software, today announced financial results for the
third quarter ended September 30, 2012.
Total revenue for the third quarter of 2012 was $29.9 million and
represented an increase of 19% over the third quarter of 2011, exceeding
the high end of our guided range.
CEO Andres Reiner stated, “Our results this quarter exceeded
expectations as the market increasingly recognizes our ability to
improve sales effectiveness through our big data applications. We have
successfully extended our big data science expertise to more than 30
sub-industries, resulting in an expanding set of customers looking to
PROS to increase sales performance. The strong momentum we are seeing in
our business is enabling us to raise our guidance for the full year.”
For the quarter ended September 30, 2012, GAAP operating income was $1.8
million, compared with $2.7 million in the third quarter of 2011. GAAP
net income in the quarter was $1.4 million, or $0.05 per share, compared
with $1.9 million, or $0.07 per share, in the third quarter of 2011.
For the quarters ended September 30, 2012 and 2011, non-GAAP operating
income was $4.3 million, respectively. Non-GAAP net income for the third
quarter of 2012 was $3.2 million, or $0.11 per share, compared with $3.0
million, or $0.11 per share, in the third quarter of 2011.
Recent Business Highlights
-
Signed new customers across several industries, such as Hewlett
Packard, Ecolab, Nexidia and Zimmer, among others.
-
Continued to set the pace of innovation in big data software with new
capabilities that help companies improve sales effectiveness, such as
intelligent quoting for large bid and tender deals.
-
Achieved another level of product certifications from SAP for
integration of PROS Pricing Solution Suite with SAP ERP and SAP CRM,
continuing to provide the most complete and seamless integration
experience.
Executive Vice President and Chief Financial Officer Charles Murphy
stated, “We are pleased with our third quarter performance with revenue
increasing 19% period over period and non-GAAP EPS of 11 cents. Our
strong performance, especially given the challenging macroeconomic
environment, was the result of continued execution of our growth
strategies which also provides us with confidence to slightly increase
our revenue expectations for the full year to the range of $116.5 to
$117.1 million, which represents approximately 21% growth from 2011 at
the midpoint. Our balance sheet remains strong with $72.6 million in
cash and continued positive cash flow. We also plan to continue on our
stated path of investing in support of the growth of the business in
order to capture the opportunity we see in front of us while continuing
to deliver solid profitability.”
The attached table provides a reconciliation of GAAP to non-GAAP income
from operations and net income as well as net income per share available
to common stockholders for the quarter and nine months ended September
30, 2012 and 2011.
Financial Outlook
Based on information as of today, PROS anticipates the following:
-
Total revenue for the fourth quarter of 2012 in the range of $31.4
million to $32.0 million and total revenue for the full year ending
December 31, 2012 in the range of $116.5 million to $117.1 million
-
GAAP income from operations of $1.5 million to $2.0 million and GAAP
earnings per share of $0.02 to $0.03 for the fourth quarter of 2012
-
Non-GAAP income from operations of $4.2 million to $4.7 million and
non-GAAP earnings per share of $0.09 to $0.10, which exclude estimated
non-cash share-based compensation charges of approximately $2.7
million for the fourth quarter of 2012
-
GAAP and non-GAAP estimated tax rate of approximately 45% and 35%,
respectively, for the fourth quarter of 2012
-
Estimated weighted average of 28.8 million diluted shares outstanding
for the fourth quarter of 2012
Conference Call
In conjunction with this announcement, PROS Holdings, Inc. will
host a conference call on November 1, 2012, at 4:30 p.m. (ET) to discuss
the company’s financial results. To access this call, dial (866)
831-6272 (domestic) or (617) 213-8859 (international). The pass code for
the call is 86324529. Additionally, a live webcast of the conference
call will be available in the “Investor Relations” section of the
Company’s web site at www.prospricing.com.
Following the conference call, a replay will be available at (888)
286-8010 (domestic) or (617) 801-6888 (international). The replay pass
code is 97602711. An archived web cast of this conference call will also
be available in the “Investor Relations” section of the Company’s web
site at www.prospricing.com.
About PROS
PROS Holdings, Inc. (NYSE: PRO) is a leading provider of prescriptive
pricing and revenue management software for companies in the
manufacturing, distribution, services and travel industries. PROS gives
customers far greater confidence and agility in their pricing strategies
by providing data-driven insights into transaction profitability,
forecasting demand, recommending optimal prices for each product and
deal, and streamlining pricing processes with enhanced controls and
compliance. With more than $460 billion in revenues under management,
PROS has implemented more than 500 solutions in more than 50 countries.
The PROS team comprises more than 600 professionals, including 100 with
advanced degrees and 25 with Ph.D.s. To learn more, visit www.prospricing.com.
Forward-looking Statements
This press release contains forward-looking statements, including
statements about PROS’ momentum and future financial performance,
positioning of PROS, in the enterprise and mid-market sectors, the
confidence and optimism of PROS management, customer successes, the
growth and reach of PROS’ reseller network, awareness of PROS pricing
optimization solutions, the demands for PROS solutions, the
predictability of the PROS business and PROS’ effective tax rate and the
continued reinstatement of the R&E tax credit. The forward-looking
statements contained in this press release are based upon PROS’
historical performance and its current plans, estimates and expectations
and are not a representation that such plans, estimates or expectations
will be achieved. Factors that could cause actual results to differ
materially from those described herein include risks related to: (a) the
impact that a slowdown in the world or any particular economy has on
PROS’ business sales cycles, prospects’ and customers’ spending
decisions and timing of implementation decisions, (b) the challenges
associated with PROS’ selling its solutions and successfully installing
and delivering the products and services, (c) the difficulties and risks
associated with developing and selling complex new products and
enhancements with the technical specifications and functionality desired
by customers, (d) the risk that the market for PROS’ pricing and margin
optimization software does not grow as anticipated, (e) the difficulties
of making accurate estimates necessary to complete a project and
recognize revenue and risk that PROS’ revenue model will not continue to
provide predictability of the PROS business, (f) the risk that PROS’
will not be able to maintain historical maintenance renewal rates, (g)
personnel and other risks associated with growing a business generally
(h) the risk that modification or negotiation of contractual
arrangements will be necessary during PROS’ implementations of its
solutions, (i) the impact of currency fluctuations on PROS’ results of
operations, (j) the risk that reseller and other relationships do not
increase sales of PROS’ solutions and (k) civil and political unrest in
regions in which PROS’ operate. Additional information relating to the
uncertainty affecting the PROS business are contained in PROS’ filings
with the Securities and Exchange Commission. These forward-looking
statements represent PROS’ expectations as of the date of this press
release. Subsequent events may cause these expectations to change, and
PROS disclaims any obligations to update or alter these forward-looking
statements in the future, whether as a result of new information, future
events or otherwise.
Non-GAAP Financial Measures
PROS has provided in this release certain financial information that has
not been prepared in accordance with GAAP. This information includes
non-GAAP income from operations, net income and diluted earnings per
share. PROS uses these non-GAAP financial measures internally in
analyzing its financial results and believes they are useful to
investors, as a supplement to GAAP measures, in evaluating PROS’ ongoing
operational performance.
Non-GAAP financial measures should not be considered in isolation from,
or as a substitute for, financial information prepared in accordance
with GAAP. Investors are encouraged to review the reconciliation of
these non-GAAP measures to their most directly comparable GAAP financial
measure as detailed above. A reconciliation of GAAP to the non-GAAP
financial measures has been provided in the tables included as part of
this press release. PROS use of non-GAAP financial measures may not be
consistent with the presentations by similar companies in PROS industry.
|
|
|
PROS Holdings, Inc.
|
|
Condensed Consolidated Balance Sheets
|
|
(In thousands, except share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
December 31, 2011
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
72,644
|
|
|
$
|
68,457
|
|
|
Accounts and unbilled receivables, net of allowance of $860 and
$1,130, respectively
|
|
46,953
|
|
|
33,864
|
|
|
Prepaid and other current assets
|
|
4,816
|
|
|
8,353
|
|
|
Total current assets
|
|
124,413
|
|
|
110,674
|
|
|
Restricted cash
|
|
329
|
|
|
329
|
|
|
Property and equipment, net
|
|
10,698
|
|
|
4,703
|
|
|
Other long term assets, net
|
|
5,708
|
|
|
5,553
|
|
|
Total assets
|
|
$
|
141,148
|
|
|
$
|
121,259
|
|
|
Liabilities and Stockholders’ Equity:
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
5,931
|
|
|
$
|
4,915
|
|
|
Accrued liabilities
|
|
3,881
|
|
|
1,667
|
|
|
Accrued payroll and other employee benefits
|
|
5,913
|
|
|
4,790
|
|
|
Deferred revenue
|
|
37,957
|
|
|
33,094
|
|
|
Total current liabilities
|
|
53,682
|
|
|
44,466
|
|
|
Long-term deferred revenue
|
|
2,774
|
|
|
2,850
|
|
|
Total liabilities
|
|
56,456
|
|
|
47,316
|
|
|
Stockholders' equity:
|
|
|
|
|
|
Preferred stock, $0.001 par value, 5,000,000 shares authorized none
issued
|
|
—
|
|
|
—
|
|
|
Common stock, $0.001 par value, 75,000,000 shares authorized;
31,872,766 and 31,432,430 shares issued, respectively; 27,455,181
and 27,014,845 shares outstanding, respectively
|
|
32
|
|
|
31
|
|
|
Additional paid-in capital
|
|
85,139
|
|
|
77,934
|
|
|
Treasury stock, 4,417,585 common shares, at cost
|
|
(13,938
|
)
|
|
(13,938
|
)
|
|
Accumulated other comprehensive loss
|
|
(11
|
)
|
|
(11
|
)
|
|
Retained earnings
|
|
13,470
|
|
|
9,927
|
|
|
Total stockholders’ equity
|
|
84,692
|
|
|
73,943
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
141,148
|
|
|
$
|
121,259
|
|
|
PROS Holdings, Inc.
|
|
Condensed Consolidated Statements of Comprehensive Income
|
|
(In thousands, except share and per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
September 30,
|
|
For the Nine Months Ended
September 30,
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
License and implementation
|
|
$
|
19,494
|
|
|
$
|
16,560
|
|
|
$
|
55,466
|
|
|
$
|
45,435
|
|
|
Maintenance and support
|
|
10,419
|
|
|
8,648
|
|
|
29,602
|
|
|
24,964
|
|
|
Total revenue
|
|
29,913
|
|
|
25,208
|
|
|
85,068
|
|
|
70,399
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
License and implementation
|
|
6,547
|
|
|
4,755
|
|
|
18,090
|
|
|
14,221
|
|
|
Maintenance and support
|
|
2,122
|
|
|
1,578
|
|
|
6,017
|
|
|
4,931
|
|
|
Total cost of revenue
|
|
8,669
|
|
|
6,333
|
|
|
24,107
|
|
|
19,152
|
|
|
Gross profit
|
|
21,244
|
|
|
18,875
|
|
|
60,961
|
|
|
51,247
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Selling, marketing, general and administrative
|
|
12,383
|
|
|
9,352
|
|
|
34,524
|
|
|
26,320
|
|
|
Research and development
|
|
7,049
|
|
|
6,843
|
|
|
20,518
|
|
|
18,952
|
|
|
Income from operations
|
|
1,812
|
|
|
2,680
|
|
|
5,919
|
|
|
5,975
|
|
|
Other (expense) income, net
|
|
(15
|
)
|
|
(90
|
)
|
|
(121
|
)
|
|
(33
|
)
|
|
Income before income tax provision
|
|
1,797
|
|
|
2,590
|
|
|
5,798
|
|
|
5,942
|
|
|
Income tax provision
|
|
441
|
|
|
658
|
|
|
2,256
|
|
|
1,713
|
|
|
Net income
|
|
$
|
1,356
|
|
|
$
|
1,932
|
|
|
$
|
3,542
|
|
|
$
|
4,229
|
|
|
Net earnings per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.05
|
|
|
$
|
0.07
|
|
|
$
|
0.13
|
|
|
$
|
0.16
|
|
|
Diluted
|
|
$
|
0.05
|
|
|
$
|
0.07
|
|
|
$
|
0.13
|
|
|
$
|
0.15
|
|
|
Weighted average number of shares:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
27,426,269
|
|
|
26,928,195
|
|
|
27,322,940
|
|
|
26,783,812
|
|
|
Diluted
|
|
28,362,582
|
|
|
27,842,057
|
|
|
28,320,181
|
|
|
27,689,804
|
|
|
PROS Holdings, Inc.
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
For the Nine Months Ended September 30,
|
|
|
|
|
|
|
2012
|
|
2011
|
|
Operating activities:
|
|
|
|
|
|
Net income
|
|
$
|
3,542
|
|
|
$
|
4,229
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
1,546
|
|
|
1,189
|
|
|
Share-based compensation
|
|
6,962
|
|
|
5,008
|
|
|
Excess tax benefits on share-based compensation
|
|
(1,715
|
)
|
|
(1,241
|
)
|
|
Tax benefit from share-based compensation
|
|
1,621
|
|
|
1,210
|
|
|
Deferred income tax
|
|
344
|
|
|
(521
|
)
|
|
Provision for doubtful accounts
|
|
(257
|
)
|
|
(2
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Accounts and unbilled receivables
|
|
(12,832
|
)
|
|
(336
|
)
|
|
Prepaid expenses and other assets
|
|
3,276
|
|
|
(2,027
|
)
|
|
Accounts payable
|
|
137
|
|
|
2,087
|
|
|
Accrued liabilities
|
|
2,334
|
|
|
326
|
|
|
Accrued payroll and other employee benefits
|
|
1,123
|
|
|
1,875
|
|
|
Deferred revenue
|
|
4,788
|
|
|
(712
|
)
|
|
Net cash provided by operating activities
|
|
10,869
|
|
|
11,085
|
|
|
Investing activities:
|
|
|
|
|
|
Purchases of property and equipment
|
|
(6,769
|
)
|
|
(1,932
|
)
|
|
Increase in restricted cash
|
|
—
|
|
|
(36
|
)
|
|
Increase in short-term investment
|
|
—
|
|
|
73
|
|
|
Net cash used in investing activities
|
|
(6,769
|
)
|
|
(1,895
|
)
|
|
Financing activities:
|
|
|
|
|
|
Exercise of stock options
|
|
1,033
|
|
|
1,737
|
|
|
Excess tax benefits on share-based compensation
|
|
1,715
|
|
|
1,241
|
|
|
Tax withholding related to net share settlement of restricted stock
units
|
|
(2,411
|
)
|
|
(1,610
|
)
|
|
Debt issuance costs related to credit facility
|
|
(250
|
)
|
|
—
|
|
|
Net cash provided by financing activities
|
|
87
|
|
|
1,368
|
|
|
Net increase in cash and cash equivalents
|
|
4,187
|
|
|
10,558
|
|
|
Cash and cash equivalents:
|
|
|
|
|
|
Beginning of period
|
|
68,457
|
|
|
55,845
|
|
|
End of period
|
|
$
|
72,644
|
|
|
$
|
66,403
|
|
|
PROS HOLDINGS, INC.
|
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
|
|
(Dollars and shares in thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We use these non-GAAP financial measures to assist in the management
of the Company because we believe that this information provides a
more consistent and complete understanding of the underlying results
and trends of the ongoing business due to the uniqueness of these
charges.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
September 30,
|
|
Quarter
over
Quarter
%
change
|
|
For the Nine Months Ended
September 30,
|
|
Year
over
Year
% change
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
|
GAAP gross profit
|
|
$
|
21,244
|
|
|
$
|
18,875
|
|
|
13
|
%
|
|
$
|
60,961
|
|
|
$
|
51,247
|
|
|
19
|
%
|
|
Non-GAAP adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP share-based compensation
|
|
335
|
|
|
282
|
|
|
|
|
966
|
|
|
894
|
|
|
|
|
Non-GAAP gross profit
|
|
$
|
21,579
|
|
|
$
|
19,157
|
|
|
13
|
%
|
|
$
|
61,927
|
|
|
$
|
52,141
|
|
|
19
|
%
|
|
Non-GAAP gross margin
|
|
72.1
|
%
|
|
76.0
|
%
|
|
|
|
72.8
|
%
|
|
74.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP selling, marketing, general and administrative
|
|
$
|
12,383
|
|
|
$
|
9,352
|
|
|
32
|
%
|
|
$
|
34,524
|
|
|
$
|
26,320
|
|
|
31
|
%
|
|
Non-GAAP adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP share-based compensation
|
|
1,662
|
|
|
967
|
|
|
|
|
4,565
|
|
|
2,971
|
|
|
|
|
Non-GAAP selling, marketing, general and administrative
|
|
$
|
10,721
|
|
|
$
|
8,385
|
|
|
28
|
%
|
|
$
|
29,959
|
|
|
$
|
23,349
|
|
|
28
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development
|
|
$
|
7,049
|
|
|
$
|
6,843
|
|
|
3
|
%
|
|
$
|
20,518
|
|
|
$
|
18,952
|
|
|
8
|
%
|
|
Non-GAAP adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP share-based compensation
|
|
493
|
|
|
398
|
|
|
|
|
1,431
|
|
|
1,143
|
|
|
|
|
Non-GAAP research and development
|
|
$
|
6,556
|
|
|
$
|
6,445
|
|
|
2
|
%
|
|
$
|
19,087
|
|
|
$
|
17,809
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
$
|
1,812
|
|
|
$
|
2,680
|
|
|
(32
|
)%
|
|
$
|
5,919
|
|
|
$
|
5,975
|
|
|
(1
|
)%
|
|
Non-GAAP adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP share-based compensation
|
|
2,490
|
|
|
1,647
|
|
|
|
|
6,962
|
|
|
5,008
|
|
|
|
|
Non-GAAP income from operations
|
|
$
|
4,302
|
|
|
$
|
4,327
|
|
|
(1
|
)%
|
|
$
|
12,881
|
|
|
$
|
10,983
|
|
|
17
|
%
|
|
Non-GAAP income from operations % of total revenue
|
|
14.4
|
%
|
|
17.2
|
%
|
|
|
|
15.1
|
%
|
|
15.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
$
|
1,356
|
|
|
$
|
1,932
|
|
|
(30
|
)%
|
|
$
|
3,542
|
|
|
$
|
4,229
|
|
|
(16
|
)%
|
|
Non-GAAP adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP share-based compensation
|
|
2,490
|
|
|
1,647
|
|
|
|
|
6,962
|
|
|
5,008
|
|
|
|
|
Tax impact related to non-GAAP adjustments
|
|
(691
|
)
|
|
(550
|
)
|
|
|
|
(1,840
|
)
|
|
(1,695
|
)
|
|
|
|
Non-GAAP net income
|
|
$
|
3,155
|
|
|
$
|
3,029
|
|
|
4
|
%
|
|
$
|
8,664
|
|
|
$
|
7,542
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted earnings per share
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
|
|
|
$
|
0.31
|
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing non-GAAP earnings per share
|
|
28,363
|
|
|
27,842
|
|
|
|
|
28,320
|
|
|
27,690
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Detail of GAAP share-based compensation expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
$
|
335
|
|
|
$
|
282
|
|
|
|
|
$
|
966
|
|
|
$
|
894
|
|
|
|
|
Selling, marketing, general and administrative
|
|
1,662
|
|
|
967
|
|
|
|
|
4,565
|
|
|
2,971
|
|
|
|
|
Research and development
|
|
493
|
|
|
398
|
|
|
|
|
1,431
|
|
|
1,143
|
|
|
|
|
Total share-based compensation expense
|
|
$
|
2,490
|
|
|
$
|
1,647
|
|
|
|
|
$
|
6,962
|
|
|
$
|
5,008
|
|
|
|
Source: PROS Holdings, Inc.
Investor Contact:
PROS Investor Relations
Staci
Strauss-Mortenson, 646-277-1200
Staci.Mortenson@icrinc.com
or
Media
Contact:
PROS Public Relations
Yvonne Donaldson,
713-335-5310
ydonaldson@prospricing.com
|
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