SEATTLE, Aug. 3, 2017 /PRNewswire/ --Onvia, Inc.
(NASDAQ: ONVI), a leading provider of sales intelligence and
acceleration technologies for businesses selling to the public
sector, announced its financial results for the second quarter
ended on June 30, 2017.
Q2 2017 Financial Highlights
- Subscription revenue up 6% to $5.9
million compared to $5.6
million in Q2 2016.
- Total revenue up 2% to $6.1
million compared to $6 million
in Q2 2016.
- Net loss of $748,000 compared to
net loss of $125,000 in Q2 2016.
- Adjusted EBITDA of $215,000
compared to $439,000 in Q2 2016. Q2
2017 Adjusted EBITDA includes $302,000 in unusual expenses, such as CEO
transition costs, compared to $123,000 of prior CEO transition costs included
in Q2 2016. Adjusted EBITDA is a non-GAAP Financial measure. See
"Use of Non-GAAP Financial Information" below.
Q2 2017 Operational Performance
Summary
|
Q2
17
|
|
Q1
17
|
|
Change
%
|
|
Q2
16
|
|
Change
%
|
Annual Contract Value
(ACV) (in millions)
|
$
23.1
|
|
$
23.1
|
|
0%
|
|
$
22.1
|
|
5%
|
Client
Count
|
2,825
|
|
2,850
|
|
-1%
|
|
2,910
|
|
-3%
|
Annual Contract Value
per Client (ACVC)
|
$8,164
|
|
$8,119
|
|
1%
|
|
$7,590
|
|
8%
|
Content Licenses (in
millions)
|
$
0.4
|
|
$
0.4
|
|
0%
|
|
$
1.5
|
|
-73%
|
For more information about ACV and ACVC, see "Key Metric
Definitions" below.
Second Quarter 2017 Results
For the twelve months ended June 30,
2017, dollar retention was 89% compared to 86% in the same
period last year. Dollar retention is a measurement of how
effectively the Client Success team has retained and expanded
existing subscription contracts. For more information about
dollar retention, see "Key Metric Definitions" below.
Subscription revenue for the quarter ended June 30, 2017 grew 6% to $5.9 million compared to the same period in 2016.
Subscription revenue includes the revenue generated from both our
inbound sales channel and from our self-service channel.
Total revenues increased 2% to $6.1
million compared to $6.0
million last year due to the increase in subscription
revenue partially offset by the decline in content license
revenue. Content license revenue declined due to the
non-renewal of a significant content license partner in Q1 2017.
The decline in content license revenue effectively reduced our
revenue growth rate from 5% had the contract renewed, to 2%
overall. Year over year content license revenue will continue to be
lower throughout 2017 as a result of losing this contract.
Operating expenses in the second quarter of 2017 increased 15%
to $6.2 million from $5.4 million in the same period of 2016. Current
quarter operating expenses include $565,000 in unusual costs that are not expected
to be material in the future. These unusual costs include CEO
transition costs of $315,000,
including stock compensation expense, $100,000 in recruiting costs to hire our new
in-house development team, and accelerated software amortization of
$150,000 expected to be complete by
Q3 2017. In comparison, we incurred CEO transition costs of
$123,000 in Q2 2016.
For the six months ended June 30,
2017, operating expenses were $12.4
million, 16% higher than the same period last year.
Year to date we have incurred unusual operating costs of
approximately $1.4 million.
Unusual costs include total CEO transition costs of $623,000, including stock compensation expense,
costs associated with the company reorganization in March 2017 of $328,000, software engineer recruiting fees of
$100,000, and accelerated software
amortization of $366,000. In
comparison, we incurred CEO transition costs of $129,000 in the first six months of
2016.
Adjusted EBITDA (Earnings before Interest, Taxes, Depreciation
and Amortization, and non-cash stock-based compensation) for the
quarter ended June 30, 2017 decreased
to $215,000 from $439,000 in Q2 2016. Adjusted EBITDA
in Q2 17 included unusual costs of $302,000, excluding stock compensation and
software amortization, compared to $123,000 included in Q2
2016. For the six months ended June
30, 2017, Adjusted EBITDA of $265,000 included unusual costs of $865,000 compared to Adjusted EBITDA of
$1.0 million for the same period in
2016 which included $129,000 in CEO
transition costs. For comparison, second quarter and year to
date 2017 Adjusted EBITDA, excluding unusual items, would have
been consistent with Adjusted EBITDA for the same periods in
2016. Adjusted EBITDA is a non-GAAP financial measure.
At June 30, 2017, cash, cash
equivalents and available for sale investments decreased to
$6.1 million compared to $7.1 million at the end 2016.
Outlook
As we mentioned last quarter, we prioritized
two core initiatives for the balance of 2017. First, we
are focused on the development and launch of Onvia 8, our new
flagship platform. Onvia 8 is mobile friendly, improves the user
interface of the platform, and adds critical workflows, such as
project sharing, designed to help clients accelerate their public
sector sales process. To accelerate the development of Onvia 8, we
redeployed resources to move our product development team to
Seattle from India. As of June
30, 2017, the hiring of our in-house development team was
complete. As part of our Onvia 8 launch, Onvia will be holding
workshops across the country this summer and fall. You can
find more information about our tour at
https://www.onvia.com/onvia-on-tour.
Our second initiative is to improve the productivity of our
sales and marketing organization. We reduced the size of our
sales force and redeployed resources to support marketing programs,
such as increased inbound demand generation support of the upcoming
Onvia 8 launch. In addition, we recently hired
Terri DePaoli as our new VP of
Sales, who has both SaaS and data sales leadership experience from
her prior roles with Concur and Payscale. Although we experienced
some variability in results during the quarter as a result of the
changes to our sales team, we believe that the productivity of our
reorganized sales force has begun to improve.
We expect that these initiatives should begin to yield positive
improvements by the end of 2017 and be evident in the financial
results by Q1 2018.
Conference Call
Onvia will hold a conference call
later today (August 3, 2017) to
discuss its second quarter results. Onvia's CEO, Russ Mann, and CFO, Cameron Way, will host the call starting at
4:30 p.m. Eastern Time. A question
and answer session will follow management's presentation.
To participate in the call, dial the appropriate number 5-10
minutes prior to the start time, request the Onvia conference call
and provide the conference ID:
Date: Thursday, August 3, 2017
Time: 4:30 p.m. Eastern time
(1:30 p.m. Pacific time)
Dial-In Number: 1-877-876-9174
International: 1-785-424-1669
Conference ID#: ONVIA
The conference call will be broadcast simultaneously and
available for replay via the investor section of Onvia's website at
http://www.onvia.com/company/investor-relations. If you have
any difficulty connecting with the conference call, please contact
Amy Osler at 206-373-9228.
A replay of the call will be available after 7:30 p.m. Eastern Time on the same day and until
September 2, 2017:
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay pass-code: 125712
Use of Non-GAAP Financial Information
Adjusted EBITDA
is not a financial measure calculated and presented in accordance
with U.S. generally accepted accounting principles ("GAAP") and
should not be considered as an alternative to net income, operating
income or any other financial measures so calculated and presented,
nor as an alternative to cash flow from operating activities as a
measure of the company's liquidity. Onvia defines Adjusted EBITDA
as net income / (loss) before interest expense and other non-cash
financing costs; interest and miscellaneous income; taxes;
depreciation; amortization; and non-cash stock-based
compensation. Other companies (including Onvia's competitors)
may define Adjusted EBITDA differently. Onvia presents Adjusted
EBITDA because it believes Adjusted EBITDA to be an important
supplemental measure of performance that is commonly used by
securities analysts, investors and other interested parties in the
evaluation of companies in similar industries and size. Management
also uses this information internally for forecasting and
budgeting. It may not be indicative of the historical operating
results of Onvia nor is it intended to be predictive of potential
future results. Investors should not consider Adjusted EBITDA in
isolation or as a substitute for analysis of results as reported
under GAAP. See "Reconciliation of GAAP (Net Loss)/Income to
Adjusted EBITDA" below for further information on this non-GAAP
measure and for a reconciliation of GAAP Net (Loss)/Income to
Adjusted EBITDA for the periods indicated.
Onvia,
Inc.
|
Reconciliation of
GAAP Net Loss to Adjusted EBITDA
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP net
income/(loss)
|
$
(748)
|
|
$
(125)
|
|
$
(1,574)
|
|
$
(106)
|
|
|
|
|
|
|
|
|
Reconciling items
from GAAP to adjusted EBITDA
|
|
|
|
|
|
|
|
Interest and other
income, net
|
(11)
|
|
(8)
|
|
(21)
|
|
(15)
|
Depreciation and
amortization
|
763
|
|
516
|
|
1,532
|
|
1,017
|
Amortization of
stock-based compensation
|
211
|
|
56
|
|
328
|
|
104
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
215
|
|
$
439
|
|
$
265
|
|
$
1,000
|
Key Metric Definitions
Onvia also supplements its
financial statements in this release and in its annual report on
Form 10-K and quarterly reports on Form 10-Q with a calculation of
Annual Contract Value (ACV) and dollar retention. These
metrics are not financial measures calculated and presented in
accordance with U.S. generally accepted accounting principles
("GAAP") and should not be considered as an alternative to revenue
or any other financial measures so calculated. Management uses this
information as a basis for planning and forecasting core business
activity for future periods and believes it is useful in
understanding the results of its operations.
ACV represents the annualized aggregate revenue value of all
subscription contracts as of the end of the quarter. ACV is driven
by Annual Contract Value per Client (ACVC) and the number of
clients. Most of Onvia's revenues are generated from subscription
contracts, which are typically prepaid and have a minimum term of
one year, with revenues recognized ratably over the term of the
subscription. Onvia also receives revenue from multi-year content
distribution partnerships, stand-alone management reports, document
download services, and list rental services, which are not included
in the calculation of ACV.
Dollar retention is calculated on a percentage basis by dividing
the contract value of subscription contracts renewed, including the
value of contract upgrades, during the most recent twelve-month
period by the total value of subscription contracts expiring over
the same period. Dollar retention measures the percentage of
dollars retained from the population of expiring contracts over a
twelve-month period.
Forward-Looking Statements
In addition to the
historical information, this release contains "forward-looking
statements" as defined in the Private Securities Litigation Reform
Act of 1995. Words such as "believe," "intend," "plan," "expect,"
"should," "indicate" or the negative of these and similar
expressions are intended to identify forward-looking statements,
but the absence of these words does not necessarily mean that a
statement is not a forward-looking statement. Forward-looking
statements contained in this release may relate to, but are not
limited to, statements regarding Onvia's future results of
operations, the productivity of our reorganized sales force,
expected benefits of our initiatives and the timing of those
benefits, expected growth in subscription revenue, Onvia's future
financial flexibility and future cash flows and Onvia's future
product and content offerings. Such statements are based on current
expectations that involve a number of known and unknown risks,
uncertainties and other factors, which may cause actual events to
be materially different from those expressed or implied by such
forward-looking statements.
The following factors, among others, could cause actual results
to differ materially from those described in the forward-looking
statements: Onvia fails to increase and retain contract value
of customers; Onvia fails to execute properly on new products, or
customers fail to adopt these products or services; Onvia's
investment in the Onvia platform and new content fail to improve
sales penetration and client retention rates; and changes made to
Onvia's technology infrastructure fail to handle the increased
demands on its infrastructure caused by increasing network traffic
and the volume of aggregated data. Additional information on
factors that may impact these forward-looking statements can be
found in the "Business," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Risk Factors"
sections, as applicable, in Onvia's Annual Report on Form 10-K for
the year December 31, 2016.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
release. Factors or events that could cause Onvia's actual results
to differ may emerge from time to time, and it is not possible for
Onvia to anticipate all of them. Onvia assumes no obligation
(and expressly disclaims any such obligation) to update any
forward-looking statements contained in this presentation as a
result of new information or future events or developments, except
as may be required by law.
About Onvia
Onvia (NASDAQ: ONVI) is a leading provider of sales
intelligence and acceleration technologies at the core of the
business-to-government (B2G) marketplace. Applying advanced
technologies and domain expertise, Onvia curates data about
millions of exchanged contracts, agencies and decision makers,
vendors and channels, projects and investment plans, awards records
and market trends. Our B2G Intelligence System (B2GIS) delivers
quality leads, process agility and strategic foresight, equipping
companies of all sizes to grow their public sector business and
government agencies to gain procurement efficiency. Resolving the
friction in this vital, complex, multi-trillion-dollar marketplace,
allows us to create mutual value for private and public sectors,
taxpayers and society at large.
Visit https://www.onvia.com to explore what makes
business, government and media trust Onvia for B2G market
insights.
Onvia,
Inc.
|
|
Condensed
Consolidated Statements of Operations
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
(In thousands,
except per share data)
|
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
Subscription
|
$
5,941
|
|
$
5,621
|
|
$
11,851
|
|
$
11,215
|
|
Content
license
|
105
|
|
318
|
|
209
|
|
722
|
|
Management
information reports
|
53
|
|
37
|
|
82
|
|
53
|
|
Other
|
39
|
|
44
|
|
91
|
|
92
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
6,138
|
|
6,020
|
|
12,233
|
|
12,082
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and amortization included
below)
|
695
|
|
742
|
|
1,395
|
|
1,506
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
5,443
|
|
5,278
|
|
10,838
|
|
10,576
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
2,774
|
|
2,960
|
|
5,773
|
|
5,851
|
|
Technology and
development
|
1,922
|
|
1,425
|
|
3,753
|
|
2,904
|
|
General and
administrative
|
1,506
|
|
1,026
|
|
2,907
|
|
1,942
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
6,202
|
|
5,411
|
|
12,433
|
|
10,697
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(759)
|
|
(133)
|
|
(1,595)
|
|
(121)
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income, net
|
11
|
|
8
|
|
21
|
|
15
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
(748)
|
|
$
(125)
|
|
$
(1,574)
|
|
$
(106)
|
|
|
|
|
|
|
|
|
|
|
Unrealized
gain/(loss) on available-for-sale securities
|
(1)
|
|
-
|
|
(1)
|
|
3
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
(749)
|
|
$
(125)
|
|
$
(1,575)
|
|
$
(103)
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per
common share
|
$
(0.10)
|
|
$
(0.02)
|
|
$
(0.22)
|
|
$
(0.01)
|
|
|
|
|
|
|
|
|
|
|
Diluted net loss per
common share
|
$
(0.10)
|
|
$
(0.02)
|
|
$
(0.22)
|
|
$
(0.01)
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
7,254
|
|
7,129
|
|
7,220
|
|
7,127
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
7,254
|
|
7,129
|
|
7,220
|
|
7,127
|
|
Onvia,
Inc.
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
June 30,
2017
|
|
December 31,
2016
|
|
|
(Unaudited)
|
|
|
(In thousands,
except share data)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
Cash and cash
equivalents
|
$
796
|
|
$
2,306
|
|
Short-term
investments, available-for-sale
|
5,242
|
|
4,817
|
|
Accounts receivable,
net of allowance for doubtful accounts of $47 and $34
|
1,551
|
|
1,543
|
|
Prepaid expenses and
other current assets
|
1,018
|
|
1,035
|
|
|
|
|
|
|
Total current
assets
|
8,607
|
|
9,701
|
|
|
|
|
|
|
LONG TERM
ASSETS:
|
|
|
|
|
Property and
equipment, net of accumulated depreciation
|
730
|
|
844
|
|
Internal use
software, net of accumulated amortization
|
5,754
|
|
5,480
|
|
Long-term
investments, available-for-sale
|
93
|
|
-
|
|
Other long-term
assets
|
238
|
|
263
|
|
|
|
|
|
|
Total long term
assets
|
6,815
|
|
6,587
|
|
|
|
|
|
|
TOTAL
ASSETS
|
$
15,422
|
|
$
16,288
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Accounts
payable
|
$
833
|
|
$
851
|
|
Accrued
expenses
|
1,379
|
|
1,534
|
|
Unearned revenue,
current portion
|
9,937
|
|
9,500
|
|
Other current
liabilities
|
146
|
|
134
|
|
|
|
|
-
|
|
Total current
liabilities
|
12,295
|
|
12,019
|
|
|
|
|
|
|
LONG TERM
LIABILITIES:
|
|
|
|
|
Unearned revenue, net
of current portion
|
33
|
|
41
|
|
Deferred rent, net of
current portion
|
464
|
|
529
|
|
Other long-term
liabilities
|
2
|
|
16
|
|
|
|
|
|
|
Total long term
liabilities
|
499
|
|
586
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
12,794
|
|
12,605
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES (Note 9)
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY:
|
|
|
|
|
|
|
|
|
|
Preferred stock;
$.0001 par value: 2,000,000 shares authorized; no shares issued or
outstanding
|
-
|
|
-
|
|
Common stock; $.0001
par value: 11,000,000 shares authorized; 8,890,197 and 8,730,152
shares issued; and 7,297,893 and 7,137,848 shares
outstanding
|
1
|
|
1
|
|
Treasury stock, at
cost: 1,592,304 and 1,592,304 shares
|
(5,446)
|
|
(5,446)
|
|
Additional paid in
capital
|
354,968
|
|
354,448
|
|
Accumulated other
comprehensive income/( loss)
|
(1)
|
|
-
|
|
Accumulated
deficit
|
(346,894)
|
|
(345,320)
|
|
|
|
|
|
|
Total stockholders'
equity
|
2,628
|
|
3,683
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
15,422
|
|
$
16,288
|
|
Onvia,
Inc.
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
2017
|
|
2016
|
|
|
(Unaudited)
|
|
|
(In
thousands)
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Net loss
|
$ (1,574)
|
|
$
(106)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
1,532
|
|
1,017
|
|
Stock-based
compensation
|
328
|
|
104
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
(8)
|
|
24
|
|
Prepaid expenses and
other assets
|
42
|
|
161
|
|
Accounts
payable
|
27
|
|
138
|
|
Accrued
expenses
|
(154)
|
|
(81)
|
|
Unearned
revenue
|
430
|
|
776
|
|
Deferred
rent
|
(55)
|
|
27
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
568
|
|
2,060
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Additions to property
and equipment
|
(150)
|
|
(84)
|
|
Additions to internal
use software
|
(1,601)
|
|
(875)
|
|
Purchases of
investments
|
(4,029)
|
|
(2,851)
|
|
Sales of
investments
|
499
|
|
-
|
|
Maturities of
investments
|
3,011
|
|
3,071
|
|
|
|
|
|
|
Net cash used in
investing activities
|
(2,270)
|
|
(739)
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Proceeds from
issuance of stock
|
111
|
|
-
|
|
Proceeds from
exercise of stock options and purchases under employee stock
purchase plan
|
81
|
|
17
|
|
|
|
|
|
|
Net cash provided by
financing activities
|
192
|
|
17
|
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents
|
(1,510)
|
|
1,338
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
2,306
|
|
1,483
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
$
796
|
|
$ 2,821
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL SCHEDULE
OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
Property and
equipment additions in accounts payable
|
(16)
|
|
(3)
|
|
Internal use software
additions in accounts payable
|
(191)
|
|
(190)
|
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/onvia-inc-reports-second-quarter-2017-results-300499430.html
SOURCE Onvia, Inc.