|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
|
7372
(Primary Standard Industrial
Classification code number)
|
|
81-1001640
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
|
o
|
|
Accelerated filer
|
o
|
|
Non-accelerated filer
|
ý
|
|
Smaller reporting company
|
o
|
|
|
Series A
|
Series B
|
Series C
|
Commercehub, Inc. common stock:
|
|
13,522,288
|
711,992
|
28,468,562
|
|
|
|
|
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
6,949
|
|
|
$
|
19,337
|
|
Accounts receivable, net of allowances of $188 and $239, respectively
|
10,447
|
|
|
16,472
|
|
||
Due from Parent
|
7,234
|
|
|
—
|
|
||
Prepaid income taxes
|
738
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
1,525
|
|
|
1,048
|
|
||
Total current assets
|
26,893
|
|
|
36,857
|
|
||
Note receivable—Parent
|
—
|
|
|
36,107
|
|
||
Capitalized software, net
|
8,234
|
|
|
7,189
|
|
||
Deferred integration costs
|
5,251
|
|
|
4,956
|
|
||
Property and equipment, net
|
8,414
|
|
|
6,706
|
|
||
Intangibles, net
|
875
|
|
|
1,750
|
|
||
Goodwill
|
21,410
|
|
|
21,410
|
|
||
Deferred income taxes
|
19,612
|
|
|
38,825
|
|
||
Other long-term assets
|
1,227
|
|
|
—
|
|
||
Total assets
|
$
|
91,916
|
|
|
$
|
153,800
|
|
Liabilities and Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued expenses
|
$
|
3,553
|
|
|
$
|
3,982
|
|
Accrued payroll and related expenses
|
4,670
|
|
|
5,538
|
|
||
Due to Parent
|
—
|
|
|
9,112
|
|
||
Deferred revenue
|
4,423
|
|
|
4,490
|
|
||
Share-based compensation liability
|
13,243
|
|
|
94,427
|
|
||
Total current liabilities
|
25,889
|
|
|
117,549
|
|
||
Note payable - Parent
|
28,664
|
|
|
—
|
|
||
Deferred revenue, long-term
|
7,886
|
|
|
7,532
|
|
||
Share-based compensation liability, long-term
|
—
|
|
|
1,786
|
|
||
Total liabilities
|
62,439
|
|
|
126,867
|
|
||
Equity:
|
|
|
|
|
|
||
Parent investment
|
22,894
|
|
|
22,784
|
|
||
Retained earnings
|
6,583
|
|
|
4,149
|
|
||
Total equity
|
29,477
|
|
|
26,933
|
|
||
Total liabilities and equity
|
$
|
91,916
|
|
|
$
|
153,800
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue, including related party revenue of $1,862, $1,688, $3,270, and $3,078, respectively (note 8)
|
$
|
23,103
|
|
|
$
|
19,857
|
|
|
$
|
45,193
|
|
|
$
|
38,648
|
|
Cost of revenue
|
5,320
|
|
|
5,389
|
|
|
11,425
|
|
|
9,845
|
|
||||
Gross profit
|
17,783
|
|
|
14,468
|
|
|
33,768
|
|
|
28,803
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
3,444
|
|
|
4,029
|
|
|
8,314
|
|
|
7,638
|
|
||||
Sales and marketing
|
2,384
|
|
|
2,532
|
|
|
6,001
|
|
|
5,026
|
|
||||
General and administrative
|
4,675
|
|
|
9,731
|
|
|
15,199
|
|
|
20,026
|
|
||||
Total operating expenses
|
10,503
|
|
|
16,292
|
|
|
29,514
|
|
|
32,690
|
|
||||
Income (loss) from operations
|
7,280
|
|
|
(1,824
|
)
|
|
4,254
|
|
|
(3,887
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(44
|
)
|
|
—
|
|
|
(44
|
)
|
|
—
|
|
||||
Interest income
|
107
|
|
|
139
|
|
|
273
|
|
|
276
|
|
||||
Total other income (expense)
|
63
|
|
|
139
|
|
|
229
|
|
|
276
|
|
||||
Income (loss) before income taxes
|
7,343
|
|
|
(1,685
|
)
|
|
4,483
|
|
|
(3,611
|
)
|
||||
Income tax expense (benefit)
|
2,919
|
|
|
(625
|
)
|
|
2,049
|
|
|
(1,126
|
)
|
||||
Net income (loss)
|
4,424
|
|
|
(1,060
|
)
|
|
2,434
|
|
|
(2,485
|
)
|
||||
Total comprehensive income (loss)
|
$
|
4,424
|
|
|
$
|
(1,060
|
)
|
|
$
|
2,434
|
|
|
$
|
(2,485
|
)
|
|
|
|
|
|
|
|
|
||||||||
Pro Forma earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.10
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.06
|
|
|
$
|
(0.06
|
)
|
Diluted
|
$
|
0.10
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.06
|
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
||||||||
Pro Forma shares used in computing earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
42,703
|
|
|
42,703
|
|
|
42,703
|
|
|
42,703
|
|
||||
Diluted
|
42,703
|
|
|
42,703
|
|
|
42,703
|
|
|
42,703
|
|
|
Six Months Ended
June 30, |
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
2,434
|
|
|
$
|
(2,485
|
)
|
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
4,862
|
|
|
3,723
|
|
||
Share-based compensation expense
|
6,560
|
|
|
16,818
|
|
||
Deferred income taxes
|
19,214
|
|
|
(7,061
|
)
|
||
Bad debt expense
|
255
|
|
|
147
|
|
||
Accrued interest income
|
(273
|
)
|
|
(276
|
)
|
||
Loss on disposal of long-term assets
|
160
|
|
|
—
|
|
||
Change in operating assets and liabilities, net of acquisition:
|
|
|
|
||||
Accounts receivable
|
5,919
|
|
|
6,264
|
|
||
Prepaid expenses and other assets
|
(420
|
)
|
|
(525
|
)
|
||
Prepaid income taxes
|
(738
|
)
|
|
—
|
|
||
Deferred costs
|
(295
|
)
|
|
(544
|
)
|
||
Deferred revenue
|
(31
|
)
|
|
1,639
|
|
||
Accounts payable and accrued expenses
|
231
|
|
|
(2,140
|
)
|
||
Accrued payroll and related expenses
|
(867
|
)
|
|
1,002
|
|
||
Share-based compensation liability payments
|
(85,930
|
)
|
|
(2,194
|
)
|
||
Parent receivables and payables, net
|
(16,346
|
)
|
|
(2,338
|
)
|
||
Net cash (used in) provided by operating activities
|
(65,265
|
)
|
|
12,030
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(4,136
|
)
|
|
(2,472
|
)
|
||
Additions to capitalized software
|
(3,504
|
)
|
|
(2,286
|
)
|
||
Acquisition of business, net of cash acquired
|
—
|
|
|
(20,225
|
)
|
||
Collection of note receivable - Parent
|
36,380
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
28,740
|
|
|
(24,983
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Purchase of treasury stock
|
(3,600
|
)
|
|
(164
|
)
|
||
Borrowings on note payable - Parent
|
28,664
|
|
|
—
|
|
||
Cash paid for debt issuance costs
|
(1,000
|
)
|
|
—
|
|
||
Cash received from exercise of stock options
|
73
|
|
|
20
|
|
||
Net cash provided by (used in) financing activities
|
24,137
|
|
|
(144
|
)
|
||
Currency effect on cash and cash equivalents
|
—
|
|
|
(1
|
)
|
||
Net decrease in cash and cash equivalents
|
(12,388
|
)
|
|
(13,098
|
)
|
||
|
|
|
|
||||
Cash and cash equivalents, beginning of period
|
19,337
|
|
|
26,385
|
|
||
Cash and cash equivalents, end of period
|
$
|
6,949
|
|
|
$
|
13,287
|
|
|
|
|
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
||||
Contractual obligations for acquisition of fixed assets
|
$
|
126
|
|
|
$
|
71
|
|
Contractual obligations for debt issuance costs
|
$
|
100
|
|
|
$
|
—
|
|
Cash
|
$
|
41
|
|
Accounts receivable
|
2,559
|
|
|
Prepaid expenses
|
87
|
|
|
Property and equipment
|
336
|
|
|
Customer relationships
|
2,000
|
|
|
Developed software technology
|
1,500
|
|
|
Deferred tax assets
|
3,580
|
|
|
Goodwill
|
12,390
|
|
|
Accounts payable and accrued expenses
|
(2,015
|
)
|
|
Deferred revenue
|
(212
|
)
|
|
|
20,266
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
Capitalized software costs
|
$
|
44,624
|
|
|
$
|
41,120
|
|
Less accumulated amortization
|
(36,390
|
)
|
|
(33,931
|
)
|
||
Capitalized software costs, net
|
$
|
8,234
|
|
|
$
|
7,189
|
|
Remainder of 2016
|
$
|
2,445
|
|
2017
|
4,048
|
|
|
2018
|
1,603
|
|
|
2019
|
138
|
|
|
2020 and thereafter
|
—
|
|
|
|
$
|
8,234
|
|
June 30, 2016
|
Weighted Average
Life (Years) |
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
||||||
Developed technology
|
2.0
|
|
$
|
1,500
|
|
|
$
|
(1,125
|
)
|
|
$
|
375
|
|
Customer relationships
|
2.0
|
|
2,000
|
|
|
(1,500
|
)
|
|
500
|
|
|||
Total
|
|
|
$
|
3,500
|
|
|
$
|
(2,625
|
)
|
|
$
|
875
|
|
December 31, 2015
|
Weighted Average
Life (Years) |
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
||||||
Developed technology
|
2.0
|
|
$
|
1,500
|
|
|
$
|
(750
|
)
|
|
$
|
750
|
|
Customer relationships
|
2.0
|
|
2,000
|
|
|
(1,000
|
)
|
|
1,000
|
|
|||
Total
|
|
|
$
|
3,500
|
|
|
$
|
(1,750
|
)
|
|
$
|
1,750
|
|
|
1999 Plan
|
|||||||||||
|
Number of
Options |
|
Weighted
average exercise price |
|
Weighted
average remaining contractual life |
|
Aggregate
intrinsic value |
|||||
|
|
|
|
|
(in years)
|
|
(in thousands)
|
|||||
Outstanding, January 1, 2016
|
495,781
|
|
|
$
|
3.52
|
|
|
|
|
|
|
|
Exercised
|
(22,000
|
)
|
|
$
|
3.32
|
|
|
|
|
|
|
|
Tendered*
|
(426,331
|
)
|
|
$
|
3.52
|
|
|
|
|
|
|
|
Forfeited
|
(2,000
|
)
|
|
$
|
3.16
|
|
|
|
|
|
||
Outstanding and exercisable at June 30, 2016
|
45,450
|
|
|
$
|
3.64
|
|
|
2.1
|
|
$
|
1,454
|
|
|
SAR Plan
|
|||||||||||
|
Number of
SARs |
|
Weighted
average exercise price |
|
Weighted
average remaining contractual life |
|
Aggregate
intrinsic value |
|||||
|
|
|
|
|
(in years)
|
|
(in thousands)
|
|||||
Outstanding, January 1, 2016
|
3,586,475
|
|
|
$
|
9.16
|
|
|
|
|
|
|
|
Granted
|
1,208,550
|
|
|
$
|
35.60
|
|
|
|
|
|
|
|
Exercised
|
(2,539,055
|
)
|
|
$
|
6.90
|
|
|
|
|
|
|
|
Forfeited
|
(213,750
|
)
|
|
$
|
25.27
|
|
|
|
|
|
||
Outstanding at June 30, 2016
|
2,042,220
|
|
|
$
|
25.93
|
|
|
8.3
|
|
$
|
16,316
|
|
Exercisable at June 30, 2016
|
112,733
|
|
|
$
|
10.29
|
|
|
5.6
|
|
$
|
2,858
|
|
Remainder of 2016
|
$
|
454
|
|
2017
|
1,119
|
|
|
2018
|
2,455
|
|
|
2019
|
2,528
|
|
|
2020
|
2,601
|
|
|
Thereafter
|
2,642
|
|
|
|
$
|
11,799
|
|
•
|
Borrowed
$50.0 million
under our credit facility to fund cash outflows described below;
|
•
|
Fully repaid our note payable due to Liberty, including accrued interest, of
$28.7 million
and amounts due for state taxes paid of
$1.3 million
;
|
•
|
Paid a dividend of
$18.9 million
to the holders of CTI common stock, including Parent, and
$0.9 million
to a Parent, as holders of CTI preferred shares on the record date for the Spin-Off;
|
•
|
Collected amounts due from Liberty for federal tax benefits of
$8.5 million
; and
|
•
|
Received a contribution from Liberty of
$6.0 million
to compensate us for the dilution associated with Parent equity awards.
|
•
|
customer demand for products and services and the ability of our company to adapt to changes in demand;
|
•
|
competitor responses to products and services;
|
•
|
the levels of online traffic to our customer’s websites and their ability to convert visitors into customers;
|
•
|
the growth of the e-commerce industry and the SaaS enterprise application software market in general and particularly in our markets;
|
•
|
the growth of non-traditional e-commerce devices and platforms, including mobile devices and social networking applications;
|
•
|
the achievement of advances in and expansion of our platform and our solutions;
|
•
|
our ability to predict future commerce trends and technology;
|
•
|
the impact of changes in search engine algorithms and dynamics or search engine disintermediation;
|
•
|
changes to technologies used in our platform or new versions or upgrades of operating systems and internet browsers impacting the process by which merchants and customers interface with our platform;
|
•
|
uncertainties inherent in the development and integration of new business lines and business strategies;
|
•
|
our future financial performance, including availability, terms and deployment of capital;
|
•
|
our ability to successfully integrate and recognize anticipated efficiencies and benefits from the businesses we acquire;
|
•
|
the ability of suppliers and vendors to deliver products, equipment, software and services;
|
•
|
availability of qualified personnel;
|
•
|
changes in, or failure or inability to comply with, government regulations, including, without limitation, adverse outcomes from regulatory proceedings;
|
•
|
changes in the nature of key strategic relationships with partners and vendors;
|
•
|
general economic and business conditions and industry trends including the current economic downturn;
|
•
|
consumer spending levels, including the availability and amount of individual consumer debt;
|
•
|
costs related to the maintenance and enhancement of brand awareness by our subsidiaries;
|
•
|
advertising spending levels;
|
•
|
rapid technological changes;
|
•
|
the regulatory and competitive environment of the industries in which our company operates; and
|
•
|
fluctuations in foreign currency exchange rates and threatened terrorist attacks, political and economic unrest in international markets and ongoing military action around the world.
|
•
|
Supply Solutions
: enable retailers to expand their product offerings without the economic and logistical limitations or risks typically associated with carrying physical inventory;
|
•
|
Demand Solutions
: provide retailers and suppliers with a single platform to gain greater access to shopper demand through a single connection to retail channels, marketplaces, paid search, social and advertising channels; and
|
•
|
Delivery Solutions
: facilitate rapid, cost-efficient, on-time delivery with greater control of, and visibility into, the consumer experience by leveraging our solutions to allow our customers to coordinate more effectively with delivery providers.
|
(amounts in thousands)
|
|
Three Months Ended
June 30, |
Change
|
||||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Usage revenue
|
|
$
|
15,171
|
|
|
$
|
12,912
|
|
|
$
|
2,259
|
|
|
17
|
%
|
Subscription revenue
|
|
6,390
|
|
|
5,899
|
|
|
491
|
|
|
8
|
%
|
|||
Set-up and professional services
|
|
1,542
|
|
|
1,046
|
|
|
496
|
|
|
47
|
%
|
|||
Total revenue
|
|
$
|
23,103
|
|
|
$
|
19,857
|
|
|
$
|
3,246
|
|
|
16
|
%
|
(amounts in thousands)
|
|
Three Months Ended
June 30, |
Change
|
||||||||||||
|
|
2016
|
|
2015
|
|
$
|
%
|
||||||||
Cost of revenue
|
|
$
|
5,320
|
|
|
$
|
5,389
|
|
|
$
|
(69
|
)
|
|
(1
|
)%
|
Gross profit
|
|
$
|
17,783
|
|
|
$
|
14,468
|
|
|
$
|
3,315
|
|
|
23
|
%
|
Gross profit %
|
|
77
|
%
|
|
73
|
%
|
|
4
|
%
|
|
|
(amounts in thousands)
|
|
Three Months Ended
June 30, |
|
Change
|
|||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Research and development
|
|
$
|
3,444
|
|
|
$
|
4,029
|
|
|
$
|
(585
|
)
|
|
(15
|
)%
|
Sales and marketing
|
|
2,384
|
|
|
2,532
|
|
|
(148
|
)
|
|
(6
|
)%
|
|||
General and administrative
|
|
4,675
|
|
|
9,731
|
|
|
(5,056
|
)
|
|
(52
|
)%
|
|||
Total operating expenses
|
|
$
|
10,503
|
|
|
$
|
16,292
|
|
|
$
|
(5,789
|
)
|
|
(36
|
)%
|
(amounts in thousands)
|
|
Three Months Ended
June 30, |
|
Change
|
|||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Interest expense
|
|
$
|
(44
|
)
|
|
$
|
—
|
|
|
$
|
(44
|
)
|
|
100
|
%
|
Interest income
|
|
107
|
|
|
139
|
|
|
(32
|
)
|
|
(23
|
)%
|
|||
Total other income (expense)
|
|
$
|
63
|
|
|
$
|
139
|
|
|
$
|
(76
|
)
|
|
(55
|
)%
|
(amounts in thousands)
|
|
Three Months Ended
June 30, |
|
Change
|
||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
%
|
||||||
Income tax expense (benefit)
|
|
$
|
2,919
|
|
|
$
|
(625
|
)
|
|
$
|
3,544
|
|
|
nm
|
Effective tax rate
|
|
40
|
%
|
|
37
|
%
|
|
3
|
%
|
|
|
(amounts in thousands)
|
|
Three Months Ended
June 30, |
|
Change
|
|||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
|
$
|
4,424
|
|
|
$
|
(1,060
|
)
|
|
$
|
5,484
|
|
|
nm
|
|
Depreciation and amortization
|
|
2,539
|
|
|
1,922
|
|
|
617
|
|
|
32
|
%
|
|||
Interest (income) expense
|
|
(63
|
)
|
|
(139
|
)
|
|
76
|
|
|
(55
|
)%
|
|||
Income tax expense (benefit)
|
|
2,919
|
|
|
(625
|
)
|
|
3,544
|
|
|
nm
|
|
|||
Share-based compensation expense
|
|
(3,477
|
)
|
|
8,201
|
|
|
$
|
(11,678
|
)
|
|
(142
|
)%
|
||
Adjusted EBITDA
|
|
$
|
6,342
|
|
|
$
|
8,299
|
|
|
$
|
(1,957
|
)
|
|
(24
|
)%
|
(amounts in thousands)
|
|
Six Months Ended
June 30, |
Change
|
||||||||||||
|
|
2016
|
|
2015
|
|
$
|
%
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Usage revenue
|
|
$
|
29,466
|
|
|
$
|
24,967
|
|
|
$
|
4,499
|
|
|
18
|
%
|
Subscription revenue
|
|
12,754
|
|
|
11,733
|
|
|
1,021
|
|
|
9
|
%
|
|||
Set-up and professional
|
|
2,973
|
|
|
1,948
|
|
|
1,025
|
|
|
53
|
%
|
|||
Total revenue
|
|
$
|
45,193
|
|
|
$
|
38,648
|
|
|
$
|
6,545
|
|
|
17
|
%
|
(amounts in thousands)
|
|
Six Months Ended
June 30, |
Change
|
||||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Cost of revenue
|
|
$
|
11,425
|
|
|
$
|
9,845
|
|
|
$
|
1,580
|
|
|
16
|
%
|
Gross profit
|
|
$
|
33,768
|
|
|
$
|
28,803
|
|
|
$
|
4,965
|
|
|
17
|
%
|
Gross profit %
|
|
75
|
%
|
|
75
|
%
|
|
—
|
%
|
|
|
(amounts in thousands)
|
|
Six Months Ended
June 30, |
|
Change
|
|||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Research and development
|
|
$
|
8,314
|
|
|
$
|
7,638
|
|
|
$
|
676
|
|
|
9
|
%
|
Sales and marketing
|
|
6,001
|
|
|
5,026
|
|
|
975
|
|
|
19
|
%
|
|||
General and administrative
|
|
15,199
|
|
|
20,026
|
|
|
(4,827
|
)
|
|
(24
|
)%
|
|||
Total operating expenses
|
|
$
|
29,514
|
|
|
$
|
32,690
|
|
|
$
|
(3,176
|
)
|
|
(10
|
)%
|
(amounts in thousands)
|
|
Six Months Ended
June 30, |
|
Change
|
|||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Interest expense
|
|
$
|
(44
|
)
|
|
$
|
—
|
|
|
$
|
(44
|
)
|
|
100
|
%
|
Interest income
|
|
273
|
|
|
276
|
|
|
(3
|
)
|
|
(1
|
)%
|
|||
Total other income (expense)
|
|
$
|
229
|
|
|
$
|
276
|
|
|
$
|
(47
|
)
|
|
(17
|
)%
|
(amounts in thousands)
|
|
Six Months Ended
June 30, |
|
Change
|
|||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
|
$
|
2,434
|
|
|
$
|
(2,485
|
)
|
|
$
|
4,919
|
|
|
nm
|
|
Depreciation and amortization
|
|
4,862
|
|
|
3,723
|
|
|
1,139
|
|
|
31
|
%
|
|||
Interest (income) expense
|
|
(229
|
)
|
|
(276
|
)
|
|
47
|
|
|
(17
|
)%
|
|||
Income tax expense (benefit)
|
|
2,049
|
|
|
(1,126
|
)
|
|
3,175
|
|
|
nm
|
|
|||
Share-based compensation expense
|
|
6,560
|
|
|
16,818
|
|
|
(10,258
|
)
|
|
(61
|
)%
|
|||
Adjusted EBITDA
|
|
$
|
15,676
|
|
|
$
|
16,654
|
|
|
$
|
(978
|
)
|
|
(6
|
)%
|
(amounts in thousands)
|
|
Six Months Ended
June 30, |
Change
|
|||||||||||
|
|
2016
|
|
2015
|
$
|
%
|
||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
|
|||
Operating activities
|
|
$
|
(65,265
|
)
|
|
$
|
12,030
|
|
|
$
|
(77,295
|
)
|
|
nm
|
Investing activities
|
|
28,740
|
|
|
(24,983
|
)
|
|
53,723
|
|
|
nm
|
|||
Financing activities
|
|
$
|
24,137
|
|
|
$
|
(144
|
)
|
|
$
|
24,281
|
|
|
nm
|
|
|
June 30, 2016
|
|||||
|
|
Historical
|
As Adjusted
|
||||
Cash and cash equivalents (1)
|
|
$
|
6,949
|
|
$
|
21,034
|
|
Due from Parent (2)
|
|
7,234
|
|
—
|
|
||
Deferred income taxes (3)
|
|
19,612
|
|
11,712
|
|
||
All other assets (4)
|
|
58,121
|
|
58,121
|
|
||
Total assets
|
|
$
|
91,916
|
|
$
|
90,867
|
|
|
|
|
|
||||
Share-based compensation liability (5)
|
|
$
|
13,243
|
|
$
|
—
|
|
Note payable - Parent (2)
|
|
28,664
|
|
—
|
|
||
Long-term debt (6)
|
|
—
|
|
50,000
|
|
||
All other liabilities (4)
|
|
20,532
|
|
20,532
|
|
||
Total liabilities
|
|
62,439
|
|
70,532
|
|
||
Common stock
|
|
—
|
|
427
|
|
||
Additional paid-in capital (7)
|
|
—
|
|
13,325
|
|
||
Parent investment (7)
|
|
22,894
|
|
—
|
|
||
Retained earnings
|
|
6,583
|
|
6,583
|
|
||
Total equity
|
|
29,477
|
|
20,335
|
|
||
Total liabilities and equity
|
|
$
|
91,916
|
|
$
|
90,867
|
|
Cash and cash equivalents as of June 30, 2016
|
|
$
|
6,949
|
|
Borrowings under our credit facility
|
|
50,000
|
|
|
Repayment of Note payable - Parent
|
|
(28,664
|
)
|
|
Payment of dividend to common shareholders
|
|
(18,854
|
)
|
|
Payment of dividend to preferred shareholders
|
|
(876
|
)
|
|
Collection of amounts due from Parent
|
|
7,234
|
|
|
Contribution from Parent
|
|
6,000
|
|
|
Payment of stock compensation exercise obligations (8)
|
|
(755
|
)
|
|
As Adjusted cash and cash equivalents
|
|
$
|
21,034
|
|
Parent's investment as of June 30, 2016
|
|
$
|
22,894
|
|
Common stock issued (par value)
|
|
(427
|
)
|
|
Remaining share-based compensation liability (8)
|
|
12,488
|
|
|
NOLs forfeited under tax sharing agreement with Parent
|
|
(7,900
|
)
|
|
Contribution from Parent
|
|
6,000
|
|
|
Dividends paid
|
|
(19,730
|
)
|
|
As Adjusted additional paid-in capital balance
|
|
$
|
13,325
|
|
Exhibit
Number
|
Exhibit Description
|
Ex. 4.1
|
Credit Agreement, dated as of June 28, 2016, among Commerce Technologies, Inc. (to be merged into Commerce Technologies, LLC), Holdings party thereto, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Wells Fargo Bank, National Association, SunTrust Bank and KeyBank National Association, as Co-Syndication Agents (incorporated by reference to Exhibit 4.4 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 (File No. 333-210508), as filed on July 14, 2016 (the “S-1/A No. 3”)).
|
Ex. 4.2
|
Joinder Agreement, dated July 22, 2016, between CommerceHub, Inc. and JPMorgan Chase Bank, N.A.*
|
Ex. 10.1
|
Executive Employment Agreement, dated effective as of June 28, 2016, by and between Commerce Technologies, Inc. and Francis Poore (incorporated by reference to Exhibit 10.11 to the S-1/A No. 3).
|
Ex. 10.2
|
Release and Separation Agreement by and between Commerce Technologies, Inc. and Bob Marro (incorporated by reference to Exhibit 10.14 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-210508), as filed on June 28, 2016 (the “S-1/A No. 2”)).
|
Ex. 10.3
|
Offer Letter, dated May 23, 2016, between Commerce Technologies, Inc. and Mark Greenquist (incorporated by reference to Exhibit 10.15 to the S-1/A No. 2).
|
Ex. 31.1
|
Certification pursuant to Rule 13a-14(a) or 15d-14 under the Securities Exchange Act of 1934.*
|
Ex. 31.2
|
Certification pursuant to Rule 13a-14(a) or 15d-14 under the Securities Exchange Act of 1934.*
|
Ex. 32.1
|
Certification of Chief Executive Officer pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
|
Ex. 32.2
|
Certification of Chief Financial Officer pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
|
Ex. 101.INS
|
XBRL Instance Document*
|
Ex. 101.SCH
|
XBRL Taxonomy Extension Schema Document*
|
Ex. 101.CAL
|
XBRL Taxonomy Calculation Linkbase Document*
|
Ex. 101.LAB
|
XBRL Taxonomy Label Linkbase Document*
|
Ex. 101.PRE
|
XBRL Taxonomy Presentation Linkbase Document*
|
Ex. 101.DEF
|
XBRL Taxonomy Definition Document*
|
|
|
|
|
COMMERCEHUB, INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
|
August 22, 2016
|
|
/ S / FRANCIS POORE
|
|
|
|
|
Francis Poore
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
|
Date:
|
|
August 22, 2016
|
|
/ S / MARK GREENQUIST
|
|
|
|
|
Mark Greenquist
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
|
|
Date:
|
|
August 22, 2016
|
|
/ S / MICHAEL TRIMARCHI
|
|
|
|
|
Michael Trimarchi
Chief Accounting Officer
(Principal Accounting Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of CommerceHub, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|||
|
|
|
|
Date:
|
August 22, 2016
|
By:
|
/s/ Francis Poore
|
|
|
|
Francis Poore
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of CommerceHub, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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|||
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Date:
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August 22, 2016
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By:
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/s/ Mark Greenquist
|
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Mark Greenquist
|
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|
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Chief Financial Officer
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|
|
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(Principal Financial Officer)
|
|
|||
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|
|
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Date:
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August 22, 2016
|
By:
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/s/ Francis Poore
|
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|
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Francis Poore
|
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|
|
President and Chief Executive Officer
|
|
|
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(Principal Executive Officer)
|
|
|||
|
|
|
|
Date:
|
August 22, 2016
|
By:
|
/s/ Mark Greenquist
|
|
|
|
Mark Greenquist
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|