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Ellie Mae Reports Third Quarter 2012 Results

Stocks in this article: ELLI

Quarterly Conference Call

Ellie Mae will discuss its third quarter 2012 results today, October 31, 2012, via teleconference at 5:00 p.m. Eastern Time. To access the call, please dial 877-941-2068 or 480-629-9712 at least five minutes prior to the 5:00 p.m. Eastern Time start time. A live webcast of the call will be available on the Investor Relations section of the Company’s website at http://ir.elliemae.com. An audio replay of the call will be available through November 14, 2012 by dialing 800-406-7325 or 303-590-3030 and entering access code 4569719.

About Ellie Mae

Ellie Mae, Inc. is a leading provider of on-demand automation solutions for the mortgage industry. The Company offers an end-to-end solution, delivered using a Software-as-a-Service model that serves as the core operating system for mortgage originators and spans customer relationship management, loan origination and business management. The Company also hosts the Ellie Mae Network™ that allows Encompass users to electronically conduct business transactions with the lenders and settlement service providers they work with to process and fund loans. The Company's offerings include the Encompass ®, Encompass360 ® and DataTrac ® mortgage management software systems.

Ellie Mae was founded in 1997 and is based in Pleasanton, California. To learn more about Ellie Mae, visit www.EllieMae.com or call 877.355.4362.

© 2012 Ellie Mae, Inc. Ellie Mae ® , Encompass ® , Encompass360 ® , DataTrac ® , Ellie Mae Network and the Ellie Mae logo are registered trademarks or trademarks of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

Forward-Looking Statements

This press release contains forward-looking statements under the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These forward-looking statements include discussions regarding projected revenue, net income, adjusted EBITDA and adjusted net income for the fourth quarter and fiscal year 2012 and 2013 revenue growth. These statements involve known and unknown risks, uncertainties and other factors which may cause Ellie Mae’s results to be materially different than those expressed or implied in such statements. Such differences may be based on factors such as changes in strategic planning decisions by management, reallocation of internal resources, changes in the volume of residential mortgage volume in the United States, the risk that the anticipated benefits, growth prospects and synergies expected from the Del Mar Datatrac acquisition may not be fully realized or may take longer to realize than expected; the possibility that economic benefits of future opportunities in an emerging industry may never materialize, including unexpected variations in market growth and demand for the acquired products and technologies; delays, disruptions, including changing relationships with partners, customers, employees or suppliers; the amount of costs incurred in connection with the supporting and integrating new customers and partners; ongoing personnel and logistical challenges of managing a larger organization; changes in other macroeconomic factors affecting the residential real estate industry and other risk factors included in documents that Ellie Mae has filed with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K for the year ended December 31, 2011, Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 and Current Report on Form 8-K filed with the Securities and Exchange Commission on August 15, 2012. Other unknown or unpredictable factors also could have material adverse effects on Ellie Mae’s future results. The forward-looking statements included in this press release are made only as of the date hereof. Ellie Mae cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Ellie Mae expressly disclaims any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances.

 
ELLIE MAE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share and per share amounts)
           
September 30, December 31,
  2012     2011  
 
Assets
Current assets
Cash and cash equivalents $ 90,306 $ 23,732
Short-term investments 3,558 1,933

Accounts receivable, net of allowances for doubtful accounts of $99 and $47, as of September 30, 2012 and December 31, 2011, respectively

10,498 6,819
Prepaid expenses and other 4,568 1,381
Deferred tax asset 2,716 -
Note receivable   1,000     1,000  
Total current assets 112,646 34,865
Property and equipment, net 8,800 5,539
Deposits and other assets 135 135
Note receivable 12 15
Other intangibles, net 6,940 8,166
Goodwill   51,051     51,051  
Total assets $ 179,584   $ 99,771  
 
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 1,891 $ 2,255
Accrued and other current liabilities 7,497 4,931
Acquisition holdback, net of discount 2,927 2,948
Deferred revenue 4,526 4,548
Deferred rent 242 212
Leases payable   5     6  
Total current liabilities 17,088 14,900
Deferred revenue, net of current portion 35 62
Deferred rent, net of current portion 439 624
Acquisition holdback, net of current portion and discount 1,898 4,725
Deferred tax liability 2,062 -
Other long-term liabilities 360 598
Leases payable, net of current portion   -     4  
Total liabilities   21,882     20,913  
 
Stockholders' equity:

Common stock, $0.0001 par value per share; 140,000,000 authorized shares, 25,511,199 and 21,019,590 shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively

3 2
Additional paid-in capital 179,385 116,012
Accumulated deficit   (21,686 )   (37,156 )
Total stockholders' equity   157,702     78,858  
Total liabilities and stockholders' equity $ 179,584   $ 99,771  
 
ELLIE MAE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except share and per share amounts)
                   
Three months ended September 30, Nine months ended September 30,
  2012     2011     2012     2011  
 
Revenues $ 27,456 $ 14,673 $ 71,931 $ 36,740
Cost of revenues   6,049     4,045     16,589     10,920  
Gross profit 21,407 10,628 55,342 25,820
Operating expenses:
Sales and marketing 4,347 3,047 12,579 7,995
Research and development 4,756 3,452 13,188 8,862
General and administrative   6,023     3,376     14,195     9,103  
Total operating expenses   15,126     9,875     39,962     25,960  
Income (loss) from operations 6,281 753 15,380 (140 )
Other income (expense), net   23     16     (15 )   95  
Income (loss) before income taxes 6,304 769 15,365 (45 )
Income tax benefit   (525 )   (1,895 )   (105 )   (1,870 )
Net income $ 6,829   $ 2,664   $ 15,470   $ 1,825  
 
Net income per share of common stock:
Basic $ 0.27   $ 0.13   $ 0.68   $ 0.13  
Diluted $ 0.25   $ 0.12   $ 0.63   $ 0.09  
 

Weighted average common shares used in computing net income per share of common stock:

Basic   25,201,404     20,707,275     22,747,911     13,871,955  
Diluted   27,408,711     21,966,326     24,483,578     20,170,075  
 
ELLIE MAE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
                   
Nine months ended September 30,
  2012     2011  
 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 15,470 $ 1,825

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 2,257 1,385
Provision for uncollectible accounts receivable 52 436
Amortization of intangible assets 1,226 481
Amortization of discount related to holdback 152 26
Stock-based compensation 3,643 1,133
Loss on sale of property and equipment 20 -
Change in deferred taxes (654 ) (1,654 )
Excess tax benefit from exercise of stock options (1,191 ) -
Changes in operating assets and liabilities:
Accounts receivable (3,731 ) (2,313 )
Prepaid expenses and other (2,933 ) (627 )
Deposits and other assets - 524
Accounts payable (805 ) 911
Accrued and other liabilities 3,519 31
Deferred revenue (49 ) (127 )
Deferred rent   (155 )   (129 )
Net cash provided by operating activities   16,821     1,902  
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (5,744 ) (3,351 )
Proceeds from sale of property and equipment 10 -
Purchase of short-term investments (5,406 ) (5,006 )
Maturities of short-term investments 3,781 5,026
Acquisition, net of cash acquired - (18,188 )
Payment of holdback from acquisition (2,907 ) -
Other investing activities, net   3     (16 )
Net cash used in investing activities   (10,263 )   (21,535 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net of issuance costs 55,821 23,076
Payment of capital lease obligations (5 ) (115 )
Proceeds from issuance of common stock under employee stock plans 3,009 551
Excess tax benefit from exercise of stock options   1,191     -  
Net cash provided by financing activities   60,016     23,512  
NET INCREASE IN CASH AND CASH EQUIVALENTS 66,574 3,879
CASH AND CASH EQUIVALENTS, Beginning of period   23,732     14,349  
CASH AND CASH EQUIVALENTS, End of period $ 90,306   $ 18,228  
 
Supplemental disclosure of non-cash investing and financing activities:
Property and equipment purchases not yet paid $ 151 $ 221
Deferred offering costs not yet paid $ 290 $ -
Conversion of preferred stock to common stock $ - $ 82,670
 
ELLIE MAE, INC.
NON-GAAP RECONCILIATION
(UNAUDITED)
           
Three Months Ended Nine Months Ended
September 30, September 30,
  2012     2011     2012     2011  
(in thousands, except share and per share amounts)
 
Net income $ 6,829 $ 2,664 $ 15,470 $ 1,825
 
Depreciation and amortization 895 547 2,257 1,385
Amortization of intangible assets 408 258 1,226 481
Other (expense) income , net (23 ) (16 ) 15 (95 )
Income tax benefit   (525 )   (1,895 )   (105 )   (1,870 )
EBITDA 7,584 1,558 18,863 1,726
 
Acquisition costs - 351 - 351
Non-cash, stock-based compensation expenses   2,248     376     3,643     1,133  
Adjusted EBITDA $ 9,832   $ 2,285   $ 22,506   $ 3,210  
 
Net income $ 6,829 $ 2,664 $ 15,470 $ 1,825
Non-cash, stock-based compensation expenses 2,248 376 3,643 1,133
Acquisition costs - 351 - 351
Amortization of intangible assets 408 258 1,226 481
Acquisition related deferred tax assets   -     (1,654 )   -     (1,654 )
Adjusted net income $ 9,485   $ 1,995   $ 20,339   $ 2,136  
 
Shares used to compute non-GAAP net income per share
Basic 25,201,404 20,707,275 22,747,911 13,871,955
Diluted 27,408,711 21,966,326 24,483,578 20,170,075
 
Adjust net income per share
Basic $ 0.38 $ 0.10 $ 0.89 $ 0.15
Diluted $ 0.35 $ 0.09 $ 0.83 $ 0.11
 
ELLIE MAE, INC.
NON-GAAP RECONCILIATION
(UNAUDITED)
    (in thousands, except share and per share amounts)
       
Fourth Quarter 2012 Projected Range Fiscal 2012 Projected Range
 
Net Income $ 1,500 $ 1,900 $ 17,000 $ 17,400
 
Depreciation and amortization 1,100 1,200 3,400 3,500
Amortization of intangible assets 400 400 1,600 1,600
Income tax provision/other   200   300   100   200
EBITDA 3,200 3,800 22,100 22,700
 
Non-cash, stock-based compensation expenses   3,000   3,100   6,600   6,700
Adjusted EBITDA $ 6,200 $ 6,900 $ 28,700 $ 29,400
 
Net Income $ 1,500 $ 1,900 $ 17,000 $ 17,400
Non-cash, stock-based compensation expenses 3,000 3,100 6,600 6,700
Amortization of intangible assets   400   400   1,600   1,600
Adjusted net income $ 4,900 $ 5,400 $ 25,200 $ 25,700
 

Shares used to compute non-GAAP net income per share

Diluted 27,800,000 27,800,000 25,000,000 25,000,000
 
Projected net income per share
Diluted $ 0.05 $ 0.07 $ 0.68 $ 0.70
 
Adjusted net income per share
Diluted $ 0.18 $ 0.19 $ 1.01 $ 1.03




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