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8-K - FORM 8-K - Imprivata Incd918508d8k.htm
EX-99.1 - EXHIBIT 99.1 - Imprivata Incd918508dex991.htm

Exhibit 99.2

 

LOGO

Imprivata Achieves Revenue Growth of 32% for the First Quarter of 2015 and

Raises Annual Guidance

Lexington, Mass. — (BUSINESS WIRE) — May 4, 2015 — Imprivata® (NYSE: IMPR), the healthcare IT security company, today announced financial results for the first quarter of fiscal 2015. Revenues for the first quarter of 2015 were $25.6 million, an increase of 32% from revenues of $19.4 million for the same period in 2014.

“The strong business momentum we saw in 2014 continued in the first quarter and demand for our products remains strong across all geographies,” said Omar Hussain, President and CEO of Imprivata. “The macro driver for our business continues to be the need to improve clinician productivity and streamline workflows as providers are frustrated with using technology in the delivery of care. In addition, hospitals are increasingly focused on security and compliance with government regulations.”

Mr. Hussain continued, “Our acquisition of HT Systems reinforces our long term vision to be the healthcare IT security company. Our vision has always been around delivering innovative security products that increase provider productivity, enable patient engagement, and improve patient satisfaction. HT Systems currently has more than 60 customers and we share over 25 joint customers and also have relationships with Epic, Cerner and McKesson. We are excited about introducing this product to new customers as well as our existing 1,200 global healthcare customers through Imprivata’s existing distribution channels.”

Recent Product Highlights

 

    Launched Imprivata Confirm ID our solution for Electronic Prescribing of Controlled Substances (“EPCS”);

 

    Introduced Imprivata’s new patented hands-free authentication solution at the annual HIMSS Conference; and

 

    Imprivata had a significant presence as its products were also showcased by 24 of our strategic partners.

Financial Results

Net loss for the first quarter of 2015 was $6.7 million, or $(0.28) per basic and diluted share attributable to common stockholders, as compared to a net loss of $8.3 million, or $(2.29) per basic and diluted share attributable to common stockholders for the same period in 2014. Our quarterly loss represents continued strategic investments in the business.

Adjusted EBITDA(1) for the first quarter of 2015 was a loss of $4.5 million, as compared to a loss of $5.8 million for the same period in 2014. Non-GAAP net loss (2) for the first quarter of 2015 was $5.7 million, or $(0.24) per basic and diluted share, as compared to non-GAAP net loss of $6.6 million, or $(1.82) per basic share and diluted share, for the same period in 2014. A reconciliation of GAAP to these non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

 

(1) Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization adjusted for foreign currency gains (losses), stock based-compensation, transaction costs associated with business acquisitions and the impact of the fair value revaluation on our contingent liability.
(2) Non-GAAP net income (loss) and non-GAAP net income (loss) per share excludes amortization of purchased intangible assets, stock-based compensation, transaction costs associated with business acquisitions and the impact of the fair value revaluation on our contingent liability.


Second Quarter and Full-Year 2015 Financial Outlook

For the full-year, we expect revenue between $123.5 million and $126.0 million and Adjusted EBITDA to be between a loss of $10.0 million and $8.5 million. In terms of earnings per share, we expect GAAP loss to be between $0.78 per share and $0.72 per share and non-GAAP loss, which adjusts for stock-based compensation, amortization of purchased intangible assets, transaction costs associated with business acquisitions and the contingent liability revaluation, to be between $0.59 per share and $0.52 per share. Our annual EPS estimates are based on an estimated weighted average-share count of 24.1 million.

For the second quarter, we expect revenue between $28.5 million and $29.5 million and Adjusted EBITDA to be between a loss of $4.4 million and $3.9 million. In terms of earnings per share, we expect GAAP loss to be between $0.29 per share and $0.27 per share and non-GAAP loss, which adjusts for stock-based compensation, amortization of purchased intangible assets, transaction costs associated with business acquisitions and the contingent liability revaluation, to be between $0.22 per share and $0.20 per share. Our annual EPS estimates are based on an estimated weighted average-share count of 24.1 million.

Conference Call Information

Imprivata management will host a conference call at 5:00 pm (Eastern Time) on Monday, May 4, 2015 to discuss the Company’s quarter ended March 31, 2015 results, its business outlook and other matters. The conference call will be accessible by dialing 888-359-3627 or 719-325-2432 for international callers, and referencing conference ID number 8355662. A live webcast of the conference call will also be available on the investor relations section of the company’s website at http://investor.imprivata.com/.

An audio replay of the conference call will be available approximately one hour after conclusion of the call and will be accessible through May 18, 2015. The replay can be accessed by dialing 888-203-1112, or 719-457-0820 for international callers, and providing access code 8355662.

About Imprivata

Imprivata, Inc. (NYSE: IMPR) headquartered in Lexington, Massachusetts, a leading provider of authentication and access management solutions for the healthcare industry. Imprivata’s single sign-on, authentication management and secure communications solutions enable fast, secure and more efficient access to healthcare information technology systems to address multiple security challenges and improve provider productivity for better focus on patient care. For more information, please visit www.imprivata.com.

 

Investor relations: Media contact:
Westwicke Partners Imprivata
Bob East / Asher Dewhurst John Hallock
443-213-0503 Vice President, Corporate Communications
imprivata@westwicke.com 781-761-1921
jhallock@IMPRIVATA.com

All Imprivata products are trademarks of Imprivata, Inc. in the USA and other countries. All other product or company names mentioned are the property of their respective owners.


Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the anticipated opportunity and trends for growth in our customer base and our overall business, our market opportunity, our goal to maintain market leadership and our expected financial results for Q1 2015 and the full fiscal year 2015. All statements other than statements of historical fact contained in this press release are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “could,” “increases,” “improves,” “reduces,” “implements,” “results,” “addresses,” or the negative of these terms or other comparable terminology. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Imprivata’s control. Imprivata’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, our ability to successfully develop and introduce new solutions and products for existing solutions; our ability to attract new customers and retain and increase sales to existing customers; developments in the healthcare industry or regulatory environment; seasonal variations in the purchasing patterns of our customers; the lengthy and unpredictable sales cycles for new customers; our ability to maintain successful relationships with our channel partners and technology alliance partners; our dependency on sole source suppliers and a contract manufacturer for hardware components of our Imprivata OneSign solution; our ability to manage our growth effectively; our ability to respond to competitive pressures; potential liability related to privacy and security of protected health information; our ability to protect our intellectual property rights, and the other risks detailed in Imprivata’s risk factors discussed in filings with the U.S. Securities and Exchange Commission (“SEC”), including but not limited to Annual Report on Form 10-K filed with the SEC on March 11, 2015, as well as other documents that may be filed by Imprivata from time to time with the SEC. The forward-looking statements included in this press release represent Imprivata’s views as of the date of this press release. Imprivata undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures

Imprivata has provided in this release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. This information includes Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net income (loss) per share. These non-GAAP financial measures are not in accordance with, or an alternative for, GAAP and may be different from similar non-GAAP financial measures used by other companies. Imprivata believes that the use of these non-GAAP financial measures provides supplementary information for investors to use in evaluating operating performance and in comparing its financial measures with other companies in Imprivata’s industry, many of which present similar non-GAAP financial measures. Adjusted EBITDA (EBITDA adjusted for foreign currency gains (losses), stock based-compensation, transaction costs associated with business acquisitions and the impact of the fair value revaluation on our contingent liability), non-GAAP net income (loss) and non-GAAP net income (loss) per share exclude amortization expense associated with our purchased intangible assets, stock-based compensation, transaction costs associated with business acquisitions and the impact of the re-measurement to fair value of our contingent liability. Non-GAAP financial measures that Imprivata uses may differ from measures that other companies may use. These non-GAAP financial measures disclosed by Imprivata are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP, and should be viewed in conjunction with, GAAP financial measures. 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 the non-GAAP financial measures has been provided in the tables included as part of this press release.


Imprivata, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

     March 31,
2015
    December 31,
2014
 

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 75,377      $ 78,524   

Accounts receivable, net of allowances

     19,073        25,335   

Prepaid expenses and other current assets

     4,693        3,516   
  

 

 

   

 

 

 

Total current assets

  99,143      107,375   

Property and equipment, net

  7,286      7,640   

Goodwill

  1,560      1,560   

Intangible assets, net

  1,407      1,499   

Other assets

  98      105   
  

 

 

   

 

 

 

Total assets

$ 109,494    $ 118,179   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$ 2,929    $ 2,498   

Accrued expenses and other current liabilities

  6,632      10,565   

Current portion of capital lease obligations and long-term debt

  571      625   

Current portion of other long-term liabilities

  196      288   

Current portion of deferred revenue

  33,102      33,120   

Current portion of contingent purchase price liability

  236      152   
  

 

 

   

 

 

 

Total current liabilities

  43,666      47,248   

Deferred revenue, net of current portion

  4,004      4,021   

Capital lease obligations, long-term debt and royalty obligations, net of current portion

  490      619   

Other long-term liabilities, net of current portion

  1,634      1,535   

Contingent purchase price liability, net of current portion

  417      480   
  

 

 

   

 

 

 

Total liabilities

  50,211      53,903   

Stockholders’ equity:

Undesignated preferred stock

  —        —     

Common stock

  24      24   

Additional paid-in capital

  173,654      171,903   

Accumulated other comprehensive loss

  (145   (100

Accumulated deficit

  (114,250   (107,551
  

 

 

   

 

 

 

Total stockholders’ equity

  59,283      64,276   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

$ 109,494    $ 118,179   
  

 

 

   

 

 

 


Imprivata, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

     Three Months Ended March 31,  
     2015     2014  

Revenue

    

Product

   $ 12,913      $ 9,274   

Maintenance and services

     12,723        10,166   
  

 

 

   

 

 

 

Total revenue

  25,636      19,440   
  

 

 

   

 

 

 

Cost of revenue

Product

  3,423      2,160   

Maintenance and services

  4,927      4,193   
  

 

 

   

 

 

 

Total cost of revenue

  8,350      6,353   
  

 

 

   

 

 

 

Gross profit

  17,286      13,087   

Operating expenses

Research and development

  6,872      6,536   

Sales and marketing

  12,018      10,419   

General and administrative

  4,580      3,013   
  

 

 

   

 

 

 

Total operating expenses

  23,470      19,968   
  

 

 

   

 

 

 

Loss from operations

  (6,184   (6,881

Other income (expense)

Foreign currency exchange loss

  (462   (131

Interest and other income (expense), net

  (16   (29
  

 

 

   

 

 

 

Loss before income taxes

  (6,662   (7,041

Income taxes

  37      26   
  

 

 

   

 

 

 

Net loss

$ (6,699 $ (7,067

Accretion of redeemable convertible preferred stock

  —        (1,238
  

 

 

   

 

 

 

Net loss attributable to common shareholders

$ (6,699 $ (8,305
  

 

 

   

 

 

 

Net loss per share attributable to common stockholders

Basic and diluted

$ (0.28 $ (2.29
  

 

 

   

 

 

 

Weighted average common shares outstanding used in computing net loss per share attributable to common stockholders

Basic and diluted

  23,868      3,627   
  

 

 

   

 

 

 


Imprivata, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

     Three Months Ended
March 31,
 
     2015     2014  

Cash flows from operating activities:

    

Net loss

   $ (6,699   $ (7,067

Adjustments to reconcile net loss to net cash used in operating activities:

    

Depreciation and amortization expense

     780        695   

Stock-based compensation

     701        298   

Loss on disposal of fixed assets

     14        12   

Change in value of contingent purchase price liability

     21        45   

Changes in operating assets and liabilities:

    

Accounts receivable

     6,262        6,264   

Prepaid expenses and other current assets

     (857     (330

Deferred revenue

     (35     (410

Accounts payable

     412        (1,783

Accrued expenses and other current liabilities

     (4,145     (3,367

Other liabilities

     5        (62
  

 

 

   

 

 

 

Net cash used in operating activities

  (3,541   (5,705
  

 

 

   

 

 

 

Cash flows from investing activities:

Purchases of property and equipment

  (371   (655
  

 

 

   

 

 

 

Net cash used in investing activities

  (371   (655
  

 

 

   

 

 

 

Cash flows from financing activities:

Deferred offering costs

  —        (1,154

Repayments for capital lease obligations, long-term debt and other

  (180   (220

Proceeds from employee stock purchase plan

  684      —     

Proceeds from exercise of stock options

  330      294   
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

  834      (1,080
  

 

 

   

 

 

 

Effect of exchange rates on cash and cash equivalents

  (69   84   
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

  (3,147   (7,356

Cash and cash equivalents, beginning of period

  78,524      13,284   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

$ 75,377    $ 5,928   
  

 

 

   

 

 

 


Imprivata, Inc.

Non-GAAP Financial Measures

(in thousands, except per share amounts)

(unaudited)

Reconciliation of GAAP Net Loss to Adjusted EBITDA

 

     Three Months Ended
March 31,
 

(in thousands, except per share amounts)

   2015     2014  

GAAP net loss

   $ (6,699   $ (7,067

Adjustments to reconcile to Adjusted EBITDA:

    

Income tax expense

     37        26   

Depreciation and amortization

     780        695   

Other expense (income), net

     478        160   

Stock-based compensation

     701        298   

Change in fair value of contingent liability

     21        45   

Transaction costs associated with business acquisitions

     163        —     
  

 

 

   

 

 

 

Adjusted EBITDA

$ (4,519 $ (5,843
  

 

 

   

 

 

 

Reconciliation of GAAP Net Loss to Non-GAAP Net Loss and Non-GAAP Net Loss Per Share (a)

 

     Three Months Ended
March 31,
 
     2015     2014  

GAAP net loss

   $ (6,699   $ (7,067

Adjustments to reconcile to Non-GAAP net income:

    

Amortization of purchased intangible assets

     92        128   

Stock-based compensation

     701        298   

Change in fair value of contingent liability

     21        45   

Transaction costs associated with business acquisitions

     163        —     
  

 

 

   

 

 

 

Non-GAAP net loss

$ (5,722 $ (6,596
  

 

 

   

 

 

 

Non-GAAP net loss per share

Basic and diluted

$ (0.24 $ (1.82
  

 

 

   

 

 

 

Weighted average common shares outstanding used in computing non-GAAP net loss per share

Basic and diluted

  23,868      3,627   
  

 

 

   

 

 

 

 

(a) The Company reconciles non-GAAP net loss per share beginning with GAAP net loss instead of GAAP net loss attributable to common stockholders in order to eliminate the effect of the accretion of preferred stock on the calculation.