Cerence Inc. (NASDAQ: CRNC), AI for a world in motion, today
announced that Tom Beaudoin has been appointed Executive Vice
President and Chief Financial Officer, effective immediately. Mr.
Beaudoin is a Cerence director and an industry veteran with nearly
40 years of relevant financial and industry experience.
“With his deep knowledge of the automotive industry, software
markets, and Cerence, and as a public company CFO for nearly two
decades, Tom is expected to bring immediate and long-lasting value
to Cerence, its operations, and finance function,” said Stefan
Ortmanns, Chief Executive Officer, Cerence.
Beaudoin has served on Cerence’s board since October 2019 and is
the former CFO and Chief Transformation Officer of Nuance
Communications, where he led the Cerence spin-off. Most recently,
he served as Chief Transformation Officer of Qualifacts.
Previously, Mr. Beaudoin served as Chief Financial Officer for
SimpliVity, where he helped orchestrate its successful sale to
Hewlett Packard Enterprise, and served as Executive Vice President
and CFO at Nuance for seven years, where he led all financial, IT
and administrative functions. He earned both his Bachelor of Arts
and Master of Business Administration degrees from Babson
College.
“I am excited to take on this opportunity,” said Tom Beaudoin.
“I know Cerence, the team and the market extremely well and have
strong conviction in the many opportunities that lie ahead for the
business. I look forward to broadening my work with leadership and
the board as we focus on our goal of realizing the full potential
for Cerence.”
Mr. Beaudoin replaces Marc Montagner, who resigned from the
company. Mr. Montagner advised the company that his decision to
resign did not involve any disagreement with the company on any
matter relating to its accounting policies or internal
controls.
Former Intel Executive and Influential Automated Driving
Leader Joins Cerence BoardCerence today also announced
that Doug Davis has been appointed to Cerence’s board as an
independent director. With Mr. Davis’s appointment, Cerence’s board
will increase from seven to eight directors. Mr. Davis most
recently served as Senior Vice President of Intel’s Automated
Driving Group, where he formed the company’s automated driving
business, established Intel as a leading supplier of chip
technology for autonomous vehicles, and led the company’s
acquisition of Mobileye.
“Doug is a renowned and respected leader within the automotive,
autonomous driving and IoT industries, having had an impressive
career at Intel Corporation for the last 35 years,” said Arun
Sarin, Chairman of Cerence’s board. “Doug has built deep
relationships with nearly every major automotive OEM, automotive
technology innovators, and Tier 1 suppliers, and we greatly look
forward to leveraging his vast expertise.”
Prior to his role as head of the Automated Driving Group, Mr.
Davis served as Senior Vice President of Intel’s IoT Group, where
he was responsible for the embedded computing business and
alignment of IoT technologies across Intel. Mr. Davis currently
serves on two public company boards as an independent director.
Since 2019, he has been a director for Verra Mobility, serving on
the Nominating and Governance and Compensation committees. In 2021,
he joined the Oshkosh board and serves on the Audit and Human
Resources committees.
“I am thrilled to join the Cerence Board of Directors at this
exciting time in the company’s history,” said Doug Davis. “I am
passionate about Cerence’s vision for a safer, more enjoyable
journey for everyone, and I look forward to helping Cerence take
advantage of the myriad of opportunities to transform the
automotive and digital cabin experience.”
Company Provides Preliminary Q2 Fiscal 2022 Results and
Affirms Fiscal Year 2022 GuidanceIn conjunction with
today’s leadership announcements, the company announced preliminary
results for the second quarter of fiscal year 2022 and affirmed its
previous fiscal year 2022 guidance issued on February 7, 2022.
Based on preliminary financial data for its fiscal second
quarter 2022, Cerence expects to report:
- Revenue between $85.5 million and $86.5 million
- Bookings of $448.1 million in the first half of 2022
- GAAP net income between ($0.02) and ($0.01) per share
- Non-GAAP net income between $0.32 and $0.33 per diluted
share
- Adjusted EBITDA between $23.4 million and $24.5 million
- GAAP gross margin between 71.5% and 72.0%
- Non-GAAP gross margin between 74.4% and 75.0%On February 7,
2022, Cerence provided guidance for its fiscal second quarter 2022
of revenue between $82 million and $86 million; GAAP net income
between $0.03 and $0.06 per share; non-GAAP net income between
$0.31 and $0.38 per share; adjusted EBITDA between $22 million and
$26 million; GAAP gross margin between 71% and 73%; and non-GAAP
gross margin between 74% and 75%.
These preliminary results are subject to change until the
company reports its full second quarter fiscal 2022 financial
results which is scheduled for Tuesday, May 10, 2022.
Discussion of Non-GAAP Financial
Measures We believe that providing the non-GAAP
information in addition to the GAAP presentation, allows investors
to view the financial results in the way management views the
operating results. We further believe that providing this
information allows investors to not only better understand our
financial performance, but more importantly, to evaluate the
efficacy of the methodology and information used by management to
evaluate and measure such performance. The non-GAAP information
should not be considered superior to, or a substitute for,
financial statements prepared in accordance with GAAP.
We utilize a number of different financial measures, both GAAP
and non-GAAP, in analyzing and assessing the overall performance of
the business, for making operating decisions and for forecasting
and planning for future periods. While our management uses these
non-GAAP financial measures as a tool to enhance their
understanding of certain aspects of our financial performance, our
management does not consider these measures to be a substitute for,
or superior to, the information provided by GAAP financial
statements.
Consistent with this approach, we believe that disclosing
non-GAAP financial measures to the readers of our financial
statements provides such readers with useful supplemental data
that, while not a substitute for GAAP financial statements, allows
for greater transparency in the review of our financial and
operational performance. In assessing the overall health of the
business during the three months ended March 31, 2022, our
management has either included or excluded the following items in
general categories, each of which is described below.
Adjusted EBITDA.Adjusted EBITDA is defined as net income
attributable to Cerence Inc. before net income (loss) attributable
to income tax (benefit) expense, other income (expense) items, net,
depreciation and amortization expense, and excluding
acquisition-related costs, amortization of acquired intangible
assets, stock-based compensation, and restructuring and other
costs, net or impairment charges related to fixed and intangible
assets and gains or losses on the sale of long-lived assets, if
any. From time to time we may exclude from Adjusted EBITDA the
impact of events, gains, losses or other charges (such as
significant legal settlements) that affect the period-to-period
comparability of our operating performance. Other income (expense)
items, net include interest expense, interest income, and other
income (expense), net (as stated in our Condensed Consolidated
Statement of Operations). Our management and Board of Directors use
this financial measure to evaluate our operating performance. It is
also a significant performance measure in our annual incentive
compensation programs. Restructuring and other costs,
net. Restructuring and other charges, net include
restructuring expenses as well as other charges that are unusual in
nature, are the result of unplanned events, and arise outside the
ordinary course of our business such as employee severance costs,
costs for consolidating duplication facilities, and separation
costs directly attributable to the Cerence business becoming a
standalone public company.
Acquisition-related costs, net. In the past, we have
completed a number of acquisitions, which result in operating
expenses, which would not otherwise have been incurred. We provide
supplementary non-GAAP financial measures, which exclude certain
transition, integration and other acquisition-related expense items
resulting from acquisitions, to allow more accurate comparisons of
the financial results to historical operations, forward looking
guidance and the financial results of less acquisitive peer
companies. We consider these types of costs and adjustments, to a
great extent, to be unpredictable and dependent on a significant
number of factors that are outside of our control. Furthermore, we
do not consider these acquisition-related costs and adjustments to
be related to the organic continuing operations of the acquired
businesses and are generally not relevant to assessing or
estimating the long-term performance of the acquired assets. In
addition, the size, complexity and/or volume of past acquisitions,
which often drives the magnitude of acquisition related costs, may
not be indicative of the size, complexity and/or volume of future
acquisitions. By excluding acquisition-related costs and
adjustments from our non-GAAP measures, management is better able
to evaluate our ability to utilize our existing assets and estimate
the long-term value that acquired assets will generate for us. We
believe that providing a supplemental non-GAAP measure, which
excludes these items allows management and investors to consider
the ongoing operations of the business both with, and without, such
expenses.
These acquisition-related costs fall into the following
categories: (i) transition and integration costs; (ii) professional
service fees and expenses; and (iii) acquisition-related
adjustments. Although these expenses are not recurring with respect
to past acquisitions, we generally will incur these expenses in
connection with any future acquisitions. These categories are
further discussed as follows:
- Transition and integration costs. Transition and integration
costs include retention payments, transitional employee costs, and
earn-out payments treated as compensation expense, as well as the
costs of integration-related activities, including services
provided by third parties.
- Professional service fees and expenses. Professional service
fees and expenses include financial advisory, legal, accounting and
other outside services incurred in connection with acquisition
activities, and disputes and regulatory matters related to acquired
entities.
- Acquisition-related adjustments. Acquisition-related
adjustments include adjustments to acquisition-related items that
are required to be marked to fair value each reporting period, such
as contingent consideration, and other items related to
acquisitions for which the measurement period has ended, such as
gains or losses on settlements of pre-acquisition
contingencies.
Amortization of acquired intangible assets.We exclude the
amortization of acquired intangible assets from non-GAAP expense
and income measures. These amounts are inconsistent in amount and
frequency and are significantly impacted by the timing and size of
acquisitions. Providing a supplemental measure which excludes these
charges allows management and investors to evaluate results “as-if”
the acquired intangible assets had been developed internally rather
than acquired and, therefore, provides a supplemental measure of
performance in which our acquired intellectual property is treated
in a comparable manner to our internally developed intellectual
property. Although we exclude amortization of acquired intangible
assets from our non-GAAP expenses, we believe that it is important
for investors to understand that such intangible assets contribute
to revenue generation. Amortization of intangible assets that
relate to past acquisitions will recur in future periods until such
intangible assets have been fully amortized. Future acquisitions
may result in the amortization of additional intangible assets.
Non-cash expenses. We provide non-GAAP information relative
to the following non-cash expenses: (i) stock-based compensation;
and (ii) non-cash interest. These items are further discussed as
follows:
- Stock-based compensation. Because of varying valuation
methodologies, subjective assumptions and the variety of award
types, we exclude stock-based compensation from our operating
results. We evaluate performance both with and without these
measures because compensation expense related to stock-based
compensation is typically non-cash and awards granted are
influenced by the Company’s stock price and other factors such as
volatility that are beyond our control. The expense related to
stock-based awards is generally not controllable in the short-term
and can vary significantly based on the timing, size and nature of
awards granted. As such, we do not include such charges in
operating plans. Stock-based compensation will continue in future
periods.
- Non-cash interest. We exclude non-cash interest because we
believe that excluding this expense provides management, as well as
other users of the financial statements, with a valuable
perspective on the cash-based performance and health of the
business, including the current near-term projected liquidity.
Non-cash interest expense will continue in future
periods.
Other expenses. We exclude certain other expenses that
result from unplanned events outside the ordinary course of
continuing operations, in order to measure operating performance
and current and future liquidity both with and without these
expenses. By providing this information, we believe management and
the users of the financial statements are better able to understand
the financial results of what we consider to be our organic,
continuing operations. Included in these expenses are items such as
other charges (credits), net, losses from extinguishment of debt,
and changes in indemnification assets corresponding with the
release of pre-spin liabilities for uncertain tax
positions.
Bookings.Bookings is defined as the amount of revenue we expect
to earn from an agreement with our customers for products and
services. To count as a booking, we expect there to be persuasive
evidence of an arrangement, which may be evidenced by a legally
binding document or documents, and that the collectability of the
amounts payable under the arrangement are reasonably assured. The
revenue we may actually recognize from our estimated bookings is
subject to multiple factors, including but not limited to the
timing of satisfying performance obligations, potential
terminations, or changes in the scope of programs utilizing our
technology and currency fluctuations. There is no comparable GAAP
financial measure.
See the tables at the end of this press release for non-GAAP
reconciliations to the most directly comparable GAAP
measures.
About Cerence Inc.Cerence (NASDAQ: CRNC) is the
global industry leader in creating unique, moving experiences for
the mobility world. As an innovation partner to the world’s leading
automakers and mobility OEMs, it is helping advance the future of
connected mobility through intuitive, powerful interaction between
humans and their cars, two-wheelers, and even elevators, connecting
consumers’ digital lives to their daily journeys no matter where
they are. Cerence’s track record is built on more than 20 years of
knowledge and more than 400 million cars shipped with Cerence
technology. Whether it’s connected cars, autonomous driving,
e-vehicles, or buildings, Cerence is mapping the road ahead. For
more information, visit www.cerence.com.
Forward Looking StatementsStatements in this
press release that are not statements of historical fact, including
statements regarding Cerence’s preliminary results for the second
quarter of fiscal year 2022 (which remain subject to change), the
changes in Cerence’s leadership team, future expectations
(including, without limitation, fiscal year 2022 guidance),
beliefs, goals, opportunities, plans or prospects, constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Any statements containing
the words “believes,” “plans,” “anticipates,” “expects,” “intends”
or “estimates” or similar expressions should also be considered to
be forward-looking statements. Forward-looking statements involve
known and unknown risk, uncertainties and other factors, which may
cause actual results or performance of Cerence to be materially
different from any future results or performance expressed or
implied by such forward-looking statements including but not
limited to: Cerence’s quarter-end closing and review
process developments; impacts of the COVID-19 pandemic on
our and our customer’s businesses; the highly competitive and
rapidly changing market in which we operate; adverse conditions in
the automotive industry, the related supply chain, or the global
economy more generally; our ability to control and successfully
manage our expenses and cash position; our strategy to increase
cloud offerings; escalating pricing pressures from our customers;
our failure to win, renew or implement service contracts; the loss
of business from any of our largest customers; effects of customer
defaults; our inability to successfully introduce new products,
applications and services; the inability to recruit and retain
qualified personnel; cybersecurity and data privacy incidents;
fluctuating currency rates; disruptions arising from transitions in
management personnel; and the other factors discussed in our most
recent Annual Report on Form 10-K, quarterly reports on
Form 10-Q, and other filings with the Securities and
Exchange Commission. We disclaim any obligation to update any
forward-looking statements as a result of developments occurring
after the date of this document.
Reconciliation of GAAP Financial Measures to Non-GAAP
Financial Measures (unaudited - in
thousands)
|
|
Q2 2022 |
|
|
Low |
|
High |
GAAP revenue |
|
$ |
85,500 |
|
|
$ |
86,500 |
|
|
|
|
|
|
GAAP gross
profit |
|
$ |
61,170 |
|
|
$ |
62,300 |
|
Stock-based compensation |
|
|
1,550 |
|
|
|
1,650 |
|
Amortization of intangible assets |
|
|
850 |
|
|
|
950 |
|
Non-GAAP gross
profit |
|
$ |
63,570 |
|
|
$ |
64,900 |
|
GAAP gross
margin |
|
|
71.5 |
% |
|
|
72.0 |
% |
Non-GAAP gross
margin |
|
|
74.4 |
% |
|
|
75.0 |
% |
|
|
|
|
|
GAAP net
income |
|
$ |
(800 |
) |
|
$ |
(300 |
) |
Stock-based compensation |
|
|
10,800 |
|
|
|
11,000 |
|
Amortization of intangible assets |
|
|
3,900 |
|
|
|
4,100 |
|
Restructuring and other costs, net |
|
|
500 |
|
|
|
500 |
|
Depreciation |
|
|
2,300 |
|
|
|
2,350 |
|
Total other income (expense), net |
|
|
(3,300 |
) |
|
|
(3,350 |
) |
Provision for income taxes |
|
|
3,400 |
|
|
|
3,500 |
|
Adjusted
EBITDA |
|
$ |
23,400 |
|
|
$ |
24,500 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Financial Measures to Non-GAAP
Financial Measures (continued) (unaudited - in
thousands)
|
|
Q2 2022 |
|
|
Low |
|
High |
GAAP net income |
|
$ |
(800 |
) |
|
$ |
(300 |
) |
Stock-based compensation |
|
|
10,800 |
|
|
|
11,000 |
|
Amortization of intangibles |
|
|
3,900 |
|
|
|
4,100 |
|
Restructuring and other costs, net |
|
|
500 |
|
|
|
500 |
|
Non-cash interest expense |
|
|
1,300 |
|
|
|
1,300 |
|
Adjustments to income tax expense |
|
|
(2,600 |
) |
|
|
(2,850 |
) |
Non-GAAP net
income |
|
$ |
13,100 |
|
|
$ |
13,750 |
|
|
|
|
|
|
Adjusted
EPS: |
|
|
|
|
GAAP Numerator: |
|
|
|
|
Net income attributed to common shareholders |
|
$ |
(800 |
) |
|
$ |
(300 |
) |
Interest on Convertible Senior Notes, net of tax |
|
|
- |
|
|
|
- |
|
Net income attributed to common shareholders - diluted |
|
$ |
(800 |
) |
|
$ |
(300 |
) |
|
|
|
|
|
Non-GAAP Numerator: |
|
|
|
|
Net income attributed to common shareholders |
|
$ |
13,100 |
|
|
$ |
13,750 |
|
Interest on Convertible Senior Notes, net of tax |
|
|
1,000 |
|
|
|
1,000 |
|
Net income attributed to common shareholders - diluted |
|
$ |
14,100 |
|
|
$ |
14,750 |
|
|
|
|
|
|
GAAP Denominator: |
|
|
|
|
Weighted-average common shares outstanding - basic |
|
|
39,200 |
|
|
|
39,200 |
|
Adjustment for diluted shares |
|
|
- |
|
|
|
- |
|
Weighted-average common shares outstanding - diluted |
|
|
39,200 |
|
|
|
39,200 |
|
|
|
|
|
|
Non-GAAP Denominator: |
|
|
|
|
Weighted-average common shares outstanding- basic |
|
|
39,200 |
|
|
|
39,200 |
|
Adjustment for diluted shares |
|
|
4,970 |
|
|
|
4,970 |
|
Weighted-average common shares outstanding - diluted |
|
|
44,170 |
|
|
|
44,170 |
|
|
|
|
|
|
GAAP net income per share - diluted |
|
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
Non-GAAP net income per share - diluted |
|
$ |
0.32 |
|
|
$ |
0.33 |
|
Contact Information
Investors: Rich Yerganian | Tel: 617-987-4799 |
Email: richard.yerganian@cerence.com
Media: Kate Hickman | Tel: 339-215-4583 |
Email: kate.hickman@cerence.com
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/ba288b40-16d3-4295-a719-da5dc72bec47
Cerence (NASDAQ:CRNC)
Historical Stock Chart
From Apr 2024 to May 2024
Cerence (NASDAQ:CRNC)
Historical Stock Chart
From May 2023 to May 2024