Borderfree (Nasdaq:BRDR), a market leader in global ecommerce,
today announced financial results for the quarter ended March 31,
2015. The company also announced that it signed a definitive
agreement to be acquired by Pitney Bowes Inc. (NYSE:PBI) for $14.00
per share in cash.
Pitney Bowes Acquisition of Borderfree
"Over the last eight years, we've built Borderfree into a market
leader in global ecommerce," said Michael DeSimone, Chief Executive
Officer of Borderfree. "We're excited to join forces with Pitney
Bowes, a global technology company offering innovative products and
solutions that enable commerce globally. Pitney Bowes' technology,
commerce and logistics expertise will help accelerate our growth
and the ability for our combined businesses to realize our full
potential as a leader in the dynamic global ecommerce market."
"The combination of Borderfree's cross-border ecommerce
capabilities with our own solutions expands our portfolio of
offerings and extends our global reach," said Marc B. Lautenbach,
President and Chief Executive Officer, Pitney Bowes. "We've had a
long-standing relationship with Borderfree and know the company
well. Together, we have a significant opportunity to help our
clients expand and grow by providing a comprehensive range of
complementary, cross-border ecommerce solutions in the fast-growing
global ecommerce marketplace."
The board of directors of both companies approved the
transaction, which is subject to customary closing conditions,
including regulatory approval. Until the transaction is closed,
both companies will continue to operate independently.
First Quarter 2015 Financial Results
In light of the pending acquisition by Pitney Bowes, Inc., the
previously scheduled conference call to discuss first quarter 2015
financial results has been canceled.
"We are making excellent progress against our 2015 strategic
priorities and continue to position our business for long-term
growth," said Michael DeSimone, Chief Executive Officer of
Borderfree. "Our expansion into Europe is ahead of schedule and we
continue to see a strong response to BFX in both the US and UK
markets. We are expanding our relationship with Alipay to make
ePass available to the Borderfree network of retailers and maximize
the opportunity for our customers in China."
Key Metrics |
|
|
Three Months
Ended |
|
March
31, |
|
2015 |
2014 |
|
(Dollars in
thousands) |
Gross merchandise volume |
$ 100,025 |
$ 112,947 |
Number of customer ecommerce sites |
173 |
161 |
Revenue
Revenue for the first quarter of 2015 was $24.8 million, a 7%
decrease as compared to $26.5 million in the first quarter of 2014,
and exceeding the high end of our financial guidance for the
quarter.
- Ecommerce services revenue decreased 5% to $12.7 million from
the first quarter of 2014 ecommerce services revenue of $13.5
million.
- Fulfillment services revenue decreased 8% to $12.0 million from
the first quarter of 2014 fulfillment services revenue of $13.1
million.
Net Loss
Net loss on a GAAP basis for the first quarter of 2015 was $4.6
million as compared to net loss of $2.0 million in the first
quarter of 2014. Basic and diluted net loss per share on a
GAAP basis was $0.14 based on 32.0 million weighted average basic
and diluted shares outstanding for the first quarter of
2015. This compares to net loss per share of $0.27 based on
7.6 million weighted average basic and diluted shares outstanding
for the first quarter of 2014. On a pro forma basis, as if all
preferred shares converted to common shares outstanding as of
January 1, 2014, GAAP basic and diluted net loss per share for the
first quarter of 2014 was $0.08 based on 26.2 million weighted
average basic and diluted shares outstanding.
Non-GAAP net loss for the first quarter of 2015 was $2.9 million
as compared to non-GAAP net loss of $0.1 million in the first
quarter of 2014. Non-GAAP basic and diluted net loss per share
was $0.09 based on 32.0 million weighted average basic and diluted
shares outstanding for the first quarter of 2015. On a pro
forma basis, as if all preferred shares converted to common shares
outstanding as of January 1, 2014, non-GAAP basic and diluted net
loss per share for the first quarter of 2014 was $0.00 based on
26.2 million weighted average basic and diluted shares
outstanding.
Adjusted EBITDA
Adjusted EBITDA for the first quarter of 2015 was a loss of $1.4
million compared to $0.7 million in the first quarter of
2014. Adjusted EBITDA as a percentage of revenue for the first
quarter of 2015 was a loss of 5.6% compared to 2.8% for the first
quarter of 2014.
A description of non-GAAP net income (loss), adjusted EBITDA and
other non-GAAP calculations and reconciliation to comparable GAAP
measures is provided in the financial statement tables included at
the end of this press release. An explanation of these
measures is also included below under the heading "Non-GAAP
Financial Measures".
Cash
Borderfree's cash balance was $72.3 million as of March 31, 2015
as compared to $121.4 million as of March 31, 2014. Borderfree held
investments in marketable securities of $20.4 million as of March
31, 2015, and did not hold investments in marketable securities as
of March 31, 2014. Borderfree had no bank debt as of March 31,
2015.
For the first quarter of 2015 Borderfree used $10.9 million in
cash from operations and invested $1.1 million in purchases of
property and equipment and capitalization of internal use software,
resulting in negative free cash flow of $12.0 million. Borderfree
used $5.5 million in cash from operations and invested $1.8 million
in purchases of property and equipment and capitalization of
internal use software, leading to negative free cash flow for the
first quarter of 2014 of $7.3 million.
On January 26, 2015, the Company utilized $22.0 million of its
available cash to purchase Bundle Tech Limited, the operator of
DutyCalculator, a provider of cloud-based global trade and customs
compliance data services.
Non-GAAP Financial Measures
Borderfree has provided in this release financial information
that has not been prepared in accordance with GAAP. Borderfree 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 Borderfree's ongoing
operational performance. Borderfree 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
and in comparing its financial results with other companies in
Borderfree's industry, many of which present similar non-GAAP
financial measures to investors. This information includes adjusted
EBITDA, adjusted EBITDA as a percentage of revenue, non-GAAP net
income (loss) and non-GAAP net income (loss) per share, pro forma
non-GAAP net income (loss) per share, and free cash flow.
Borderfree defines adjusted EBITDA as net income (loss) before
income taxes, interest income (expense), depreciation and
amortization, loss on change in fair value of warrants, stock-based
compensation expense, market based royalties and outsourcing
servicing fees earned as a result of the sale of Global Settlements
Service, which we refer to as other income-GSS, costs related to
acquisitions, including amortization of acquired intangible assets,
and other one-time items; non-GAAP net income (loss) as net income
(loss) excluding non-cash stock-based compensation, loss on change
in fair value of warrants, other income-GSS, costs related to
acquisitions, including amortization of acquired intangible assets,
and other one-time items; and free cash flow as cash provided by
(used in) operating activities adjusted for purchases of property
and equipment and capitalized internal use software. Non-GAAP
financial measures that Borderfree uses may differ from measures
that other companies may use. 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.
A reconciliation of GAAP to non-GAAP financial measures has been
provided in the tables included as part of this press release.
Earnings press releases containing such non-GAAP reconciliations
can be found on the Investors section of the Company's web site at
http://www.borderfree.com.
About Borderfree
New York City-based Borderfree is a market leader in global
ecommerce, operating a technology and services platform that the
world's most iconic brands rely on to expand globally and transact
with customers in more than 100 countries and territories in more
than 60 currencies worldwide. Borderfree manages all aspects of the
international online shopping experience, including: global
marketing solutions, optimized website localization, international
trade compliance, multi-currency pricing and payments, cross border
logistics, and multi-lingual customer care while fully maintaining
the integrity of our retailers' brand, enabling them to
deliver a truly local consumer shopping experience. For more
information, visit www.borderfree.com
About Pitney Bowes
Pitney Bowes (NYSE:PBI) is a global technology company offering
innovative products and solutions that enable commerce in the areas
of customer information management, location intelligence, customer
engagement, shipping and mailing, and global ecommerce. More
than 1.5 million clients in approximately 100 countries around the
world rely on products, solutions and services from Pitney Bowes.
For additional information, visit Pitney Bowes at
www.pitneybowes.com.
Safe Harbor Provision
This press release includes certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements concerning our financial guidance for
the second fiscal quarter of 2015 and full year 2015, our position
to execute on our growth strategy, our ability to decrease
fulfillment costs and our ability to increase our
profitability. These forward-looking statements include, but
are not limited to, plans, objectives, expectations and intentions
and other statements contained in this press release that are not
historical facts and statements identified by words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates" or words of similar meaning. These
forward-looking statements reflect our current views about our
plans, intentions, expectations, strategies and prospects, which
are based on the information currently available to us and on
assumptions we have made. Although we believe that our plans,
intentions, expectations, strategies and prospects as reflected in
or suggested by those forward-looking statements are reasonable, we
can give no assurance that the plans, intentions, expectations or
strategies will be attained or achieved. Furthermore, actual
results may differ materially from those described in the
forward-looking statements and will be affected by a variety of
risks and factors that are beyond our control including, without
limitation, fluctuations in exchange rates of foreign currencies
and our ability to predict such fluctuations, our history of
losses, our limited operating history; our ability to retain
existing customers and attract new customers; our ability to
successfully optimize and operate our logistics network; our
ability to keep up with the rapid technological change required to
remain competitive in our industry, our ability to manage our
growth effectively and successfully recruit additional
highly-qualified personnel; and the price volatility of our common
stock, and other risks set forth under the caption "Risk Factors"
in our Form 10-K filed on February 27, 2015. We assume no
obligation to update any forward-looking statements contained in
this document as a result of new information, future events or
otherwise.
Additional Information
The tender offer by Pitney Bowes Inc. and BrickBreaker
Acquisition Corp. for the outstanding common stock of Borderfree,
Inc. has not yet commenced. This document is for informational
purposes only and is neither an offer to purchase nor a
solicitation of an offer to sell securities. At the time the tender
offer is commenced, Pitney Bowes Inc. and BrickBreaker Acquisition
Corp. will file a Tender Offer Statement on Schedule TO with the
U.S. Securities and Exchange Commission (the "SEC") and Borderfree,
Inc. will thereafter file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 related to
the tender offer. The Tender Offer Statement (including an Offer to
Purchase, a related Letter of Transmittal and other tender offer
documents) and the Solicitation/Recommendation Statement will
contain important information that should be read carefully before
any decision is made with respect to the tender offer. The offer to
purchase shares of Borderfree common stock will only be made
pursuant to the Offer to Purchase, the Letter of Transmittal and
related documents filed as a part of the Schedule TO. INVESTORS AND
SECURITY HOLDERS ARE URGED TO READ BOTH THE TENDER OFFER STATEMENT
AND THE SOLICITATION/RECOMMENDATION STATEMENT REGARDING THE OFFER,
AS THEY MAY BE AMENDED FROM TIME TO TIME, WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. These
documents (and all other offer documents filed with the SEC) will
be available at no charge on the SEC's website at www.sec.gov.
Copies of Borderfree's filings with the SEC may be obtained free of
charge at the "Investors" section of Borderfree's website at
www.borderfree.com.
|
|
|
|
BORDERFREE,
INC. |
|
CONSOLIDATED STATEMENTS
OF OPERATIONS |
|
(Unaudited, in
thousands except share and per share data) |
|
|
|
|
|
|
Three Months
Ended March 31, |
|
|
2015 |
2014 |
|
|
|
|
|
Revenue |
$ 24,784 |
$ 26,514 |
|
Operating Expenses: |
|
|
|
Cost of Revenue |
15,431 |
17,187 |
|
Technology and operations |
4,193 |
2,765 |
|
Research and development |
2,599 |
1,789 |
|
Sales and marketing |
3,137 |
2,577 |
|
General and administrative |
3,973 |
3,358 |
|
Total operating expenses |
29,333 |
27,676 |
|
Loss from operations |
(4,549) |
(1,162) |
|
Interest and other income, net |
57 |
138 |
|
Loss on change in fair value of warrants |
-- |
(964) |
|
Loss before income
taxes |
(4,492) |
(1,988) |
|
Provision for income taxes |
108 |
53 |
|
Net loss |
$ (4,600) |
$ (2,041) |
|
|
|
|
|
Net loss per share: |
|
|
|
Basic |
$ (0.14) |
$ (0.27) |
|
Diluted |
$ (0.14) |
$ (0.27) |
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
Basic |
31,985,667 |
7,626,102 |
|
Diluted |
31,985,667 |
7,626,102 |
|
|
|
|
|
GAAP pro forma loss per share: (1) |
|
|
|
Basic |
$ (0.14) |
$ (0.08) |
|
Diluted |
$ (0.14) |
$ (0.08) |
|
|
|
|
|
GAAP pro forma weighted average common shares
outstanding: |
|
|
|
Basic |
31,985,667 |
26,179,557 |
|
Diluted |
31,985,667 |
26,179,557 |
|
|
|
|
|
(1) Pro forma net loss per share
and pro forma weighted average common shares outstanding assume
preferred stock converted to common stock as of January 1,
2014 |
|
|
BORDERFREE,
INC. |
CONSOLIDATED BALANCE
SHEETS |
(Unaudited, in
thousands except par value and share data) |
|
|
|
|
At March 31, |
At December 31, |
|
2015 |
2014 |
|
|
|
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 72,301 |
$ 99,188 |
Investments |
20,430 |
27,555 |
Trade receivables, net |
12,131 |
18,031 |
Prepaid expenses and other |
3,247 |
3,736 |
Total current assets |
108,109 |
148,510 |
Restricted cash and deposits |
458 |
482 |
Property and equipment, net |
10,513 |
10,310 |
Goodwill |
10,318 |
265 |
Intangible assets, net |
14,952 |
957 |
Other assets |
1,202 |
1,193 |
Total assets |
$ 145,552 |
$ 161,717 |
Liabilities, convertible preferred
stock and stockholders' equity |
|
|
Current liabilities: |
|
|
Trade payables |
$ 17,648 |
$ 30,483 |
Accrued expenses and other |
9,200 |
11,181 |
Deferred revenue |
1,121 |
1,781 |
Total current liabilities |
27,969 |
43,445 |
Deferred income tax liability |
2,353 |
-- |
Other long term liabilities |
1,970 |
1,845 |
Total liabilities |
32,292 |
45,290 |
Stockholders' equity: |
|
|
Common stock, $0.01 par value; 200,000,000
shares authorized at March 31, 2015 and December 31, 2014,
respectively; 32,290,250 and 32,187,236 shares issued at March 31,
2015 and December 31, 2014, respectively; 32,050,730 and
31,947,716 outstanding at March 31, 2015 and December 31,
2014, respectively |
323 |
322 |
Additional paid in capital |
137,672 |
136,260 |
Accumulated other comprehensive income
(loss) |
1 |
(19) |
Treasury stock, at cost |
(600) |
(600) |
Accumulated deficit |
(24,136) |
(19,536) |
Total stockholders'
equity |
113,260 |
116,427 |
Total liabilities, convertible
preferred stock and stockholders' equity |
$ 145,552 |
$ 161,717 |
|
|
BORDERFREE,
INC. |
CONSOLIDATED STATEMENTS
OF CASH FLOWS |
(Unaudited, in
thousands) |
|
|
|
|
Three Months
Ended March 31, |
|
2015 |
2014 |
|
|
|
Cash flow from operating
activities |
|
|
Net loss |
$ (4,600) |
$ (2,041) |
Adjustments to reconcile net loss to net cash
from operating activities: |
|
|
Stock-based compensation |
1,289 |
562 |
Forgiveness of notes receivable from
stockholders |
-- |
396 |
Loss on change in fair value of warrants |
-- |
964 |
Depreciation and amortization |
1,643 |
710 |
Gain on employee rights upon retirement
funds |
(11) |
-- |
Changes in operating assets and
liabilities: |
|
|
Decrease in trade receivables |
5,900 |
4,310 |
(Increase) decrease in prepaid expenses
and other |
254 |
(732) |
Decrease in trade payables |
(12,872) |
(8,245) |
Decrease in accrued expenses and
other |
(2,580) |
(1,493) |
Increase in liability for employee rights
upon retirement |
41 |
36 |
Net cash used in operating activities |
(10,936) |
(5,533) |
Cash flows from investing
activities |
|
|
Decrease (increase) in restricted cash
and deposits |
24 |
(14) |
Purchase of property and equipment |
(191) |
(479) |
Acquired business, net of cash
acquired |
(21,957) |
-- |
Maturity of investments |
7,000 |
-- |
Payment for intangible asset |
(231) |
-- |
Capitalized internal use software |
(954) |
(1,298) |
Amounts funded in respect of employee
rights upon retirement, net |
(24) |
(26) |
Proceeds from sale of business |
287 |
181 |
Net cash used in investing activities |
(16,046) |
(1,636) |
Cash flows from financing
activities |
|
|
Proceeds from initial public offering,
net of underwriting discounts and commissions |
-- |
85,561 |
Deferred offering costs |
-- |
(636) |
Proceeds from exercise of stock
options |
100 |
1 |
Repayments of notes receivable from
stockholder |
-- |
33 |
Payments of capital leases |
(5) |
(18) |
Net cash provided by financing
activities |
95 |
84,941 |
Increase (decrease) in cash and cash
equivalents |
(26,887) |
77,772 |
Balance of cash and cash equivalents
at beginning of period |
99,188 |
43,599 |
Balance of cash and cash equivalents
at end of period |
$ 72,301 |
$ 121,371 |
Supplemental disclosure of cash flow
information |
|
|
Cash paid for interest |
$ -- |
$ 3 |
Cash paid for taxes |
$ 142 |
$ 150 |
Non-cash capital expenditures |
$ 195 |
$ 45 |
Deferred offering costs included in accrued
expenses and trade payables |
$ -- |
$ 758 |
|
|
|
|
BORDERFREE,
INC. |
|
CALCULATION OF NON-GAAP
NET LOSS, |
|
NON-GAAP NET LOSS PER
SHARE AND |
|
NON-GAAP PRO FORMA NET
LOSS PER SHARE |
|
(Unaudited, in
thousands except per share data) |
|
|
|
|
|
|
Three Months
Ended March 31, |
|
|
2015 |
2014 |
|
Reconciliation of Net Loss to
Non-GAAP Net Loss: |
|
|
|
Net loss |
$ (4,600) |
$ (2,041) |
|
Stock-based compensation expense |
1,289 |
562 |
|
Forgiveness of notes receivable from
stockholders |
— |
629 |
|
Loss on change in fair value of
warrants |
— |
964 |
|
Amortization of acquired intangible
assets |
375 |
— |
|
Other income - GSS |
(198) |
(179) |
|
Acquisition costs |
239 |
— |
|
Non-GAAP net loss |
$ (2,895) |
$ (65) |
|
|
|
|
|
Non-GAAP net loss per share: |
|
|
|
Basic |
$ (0.09) |
$ (0.01) |
|
Diluted |
$ (0.09) |
$ (0.01) |
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
Basic |
31,985,667 |
7,626,102 |
|
Diluted |
31,985,667 |
7,626,102 |
|
|
|
|
|
Non-GAAP pro forma net loss per share:
(2) |
|
|
|
Basic |
$ (0.09) |
$ 0.00 |
|
Diluted |
$ (0.09) |
$ 0.00 |
|
|
|
|
|
Non-GAAP pro forma weighted average common
shares outstanding: |
|
|
|
Basic |
31,985,667 |
26,179,557 |
|
Diluted |
31,985,667 |
26,179,557 |
|
|
|
|
|
(2) Pro forma non-GAAP net loss
per share and pro forma weighted average common shares outstanding
assume preferred stock converted to common stock as of January 1,
2014 |
|
|
BORDERFREE,
INC. |
CALCULATION OF ADJUSTED
EBITDA |
(Unaudited, in
thousands) |
|
|
|
|
Three Months
Ended March 31, |
|
2015 |
2014 |
Reconciliation of Net Loss to
Adjusted EBITDA: |
|
|
Net loss |
$ (4,600) |
$ (2,041) |
Depreciation and amortization |
1,268 |
710 |
Interest expense, net |
141 |
40 |
Provision for income taxes |
108 |
53 |
Stock-based compensation expense |
1,289 |
562 |
Forgiveness of notes receivable from
stockholders |
-- |
629 |
Loss on change in fair value of
warrants |
-- |
964 |
Amortization of acquired intangible
assets |
375 |
-- |
Acquisition costs |
239 |
-- |
Other income - GSS |
(198) |
(179) |
Adjusted EBITDA |
$ (1,378) |
$ 738 |
CONTACT: Investor Relations:
Denise Garcia
ICR
investors@borderfree.com
Media Relations:
Jennifer Raezer
jennifer@borderfree.com
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