Achieves $6.5 Billion Gross New Enrollment in Q2
Company Announces New Provider Relationship with Wells Fargo
SUNNYVALE, Calif.--(BUSINESS WIRE)--Aug. 5, 2015--
Financial Engines (NASDAQ:FNGN), America’s largest independent
investment advisori, today reported financial results for its
second quarter ended June 30, 2015.
Financial results for the second quarter of 2015 compared to the
second quarter of 2014:ii
-
Revenue increased 12% to $78.2 million for the second quarter of 2015
from $69.8 million for the second quarter of 2014.
-
Professional management revenue increased 15% to $69.7 million for the
second quarter of 2015 from $60.7 million for the second quarter of
2014.
-
Net income was $8.5 million, or $0.16 per diluted share, for the
second quarter of 2015 compared to $10.1 million, or $0.19 per diluted
share, for the second quarter of 2014.
-
Non-GAAP Adjusted EBITDAii decreased 14% to $22.7 million
for the second quarter of 2015 from $26.2 million for the second
quarter of 2014.
-
Non-GAAP Adjusted Net Incomeii decreased 7% to $12.3
million for the second quarter of 2015 from $13.2 million for the
second quarter of 2014.
-
Non-GAAP Adjusted Earnings Per Shareii decreased 8% to
$0.23 for the second quarter of 2015 from $0.25 for the second quarter
of 2014.
Key operating metrics as of June 30, 2015:iii
-
Assets under contract (“AUC”) were $1.014 trillion.
-
Assets under management (“AUM”) were $114.5 billion.
-
Members in Professional Management were over 891,000.
-
Asset enrollment rates for companies where services have been
available for 26 months or more averaged 13.3%iv.
The Company also announced that it had entered into a provider
relationship with Wells Fargo in July. “We are excited to be working
with Wells Fargo and to have the opportunity to deliver our independent
advisory service to the 3+ million plan participants they proudly
serve,” said Larry Raffone, president and chief executive officer of
Financial Engines. “Everyone deserves access to high-quality,
unconflicted retirement advice and management, and we believe by working
collaboratively with provider partners, plan sponsors and policymakers
we can better serve the people who need it the most.”
Review of Financial Results for the Second Quarter of 2015
Revenue increased 12% to $78.2 million for the second quarter of 2015
from $69.8 million for the second quarter of 2014. The increase in
revenue was driven primarily by the growth in professional management
revenue, which increased 15% to $69.7 million for the second quarter of
2015 from $60.7 million for the second quarter of 2014.
Costs and expenses increased 24% to $66.2 million for the second quarter
of 2015 from $53.2 million for the second quarter of 2014. This was due
primarily to increases in fees paid to plan providers for connectivity
to plan and plan participant data, wages, benefits, and employer payroll
taxes due primarily to increased headcount and higher compensation, and
cash incentive compensation expense.
As a percentage of revenue, cost of revenue (exclusive of amortization
of internal use software) was 43% for the second quarter of 2015
compared to 39% for the second quarter of 2014.
Income from operations was $12.0 million for the second quarter of 2015
compared to $16.6 million for the second quarter of 2014. As a
percentage of revenue, income from operations was 15% for the second
quarter of 2015 compared to 24% for the second quarter of 2014.
Net income was $8.5 million, or $0.16 per diluted share, for the second
quarter of 2015 compared to net income of $10.1 million, or $0.19 per
diluted share, for the second quarter of 2014.
On a non-GAAP basis, Adjusted Net Incomeii was $12.3 million
and Adjusted Earnings Per Shareii was $0.23 for the second
quarter of 2015 compared to Adjusted Net Income of $13.2 million and
Adjusted Earnings Per Share of $0.25 for the second quarter of 2014.
“During the quarter, we added $6.5 billion of gross new enrollment,
matching our previous high,” said Ray Sims, chief financial officer of
Financial Engines. “We believe that our growth in provider and plan
sponsor adoption, as well as participant enrollment, confirms the value
of and need for professional management and advice.”
Assets Under Contract and Assets Under Management
AUC was $1.014 trillion as of June 30, 2015, an increase of 17% from
$869 billion as of June 30, 2014, due primarily to new employers making
our services available, contributions, and market performance. AUC for
plans in which the Income+ service has been made available was $269
billion as of June 30, 2015, an increase of 43% from $188 billion as of
June 30, 2014.
AUM increased by 16% year over year to $114.5 billion as of June 30,
2015, from $98.4 billion as of June 30, 2014. The increase in AUM was
driven primarily by net new enrollment into the Professional Management
service, contributions, and market performance.
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Q3'14
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Q4'14
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Q1'15
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Q2'15
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(In billions)
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AUM, beginning of period
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$
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98.4
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$
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101.9
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$
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104.4
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$
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109.2
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New Enrollment(1)
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6.5
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3.9
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4.6
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6.5
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Voluntary Cancellations(2)
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(1.5
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)
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(2.6
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)
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(1.9
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)
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(1.6
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)
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Involuntary Cancellations(3)
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(1.2
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)
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(1.9
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)
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(1.6
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)
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(1.7
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)
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Contributions(4)
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1.6
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1.7
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1.7
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1.8
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Market Movement and Other(5)
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(1.9
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)
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1.4
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2.0
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0.3
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AUM, end of period
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$
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101.9
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$
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104.4
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$
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109.2
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$
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114.5
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(1)
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The aggregate amount of assets under management, at the time of
enrollment, of new members who enrolled in our Professional
Management service within the period.
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(2)
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The aggregate amount of assets, at the time of cancellation, for
voluntary cancellations from the Professional Management service
within the period.
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(3)
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The aggregate amount of assets, as of the last available positive
account balance, for involuntary cancellations occurring when the
member’s 401(k) plan account balance has been reduced to zero or
when the cancellation of a plan sponsor contract for the
Professional Management service has become effective within the
period.
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(4)
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Employer and employee contributions are estimated each quarter from
annual contribution rates based on data received from plan providers
or plan sponsors. The data presented in the table above differ from
data provided in filings prior to September 30, 2012, as the
previously reported contributions data represented only that subset
of members for whom we received salary data.
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(5)
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Other factors affecting assets under management include estimated
market movement, plan administrative fees, participant loans and
hardship withdrawals, and timing differences.
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For further information on the AUM data above, please refer to our Form
10-Q to be filed for the period ended June 30, 2015.
Aggregate Investment Style Exposure for Portfolios Under Management
As of June 30, 2015, the approximate aggregate investment style exposure
of the portfolios we managed was as follows:
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Cash
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2
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%
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Bonds
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26
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%
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Domestic Equity
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45
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%
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International Equity
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27
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%
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Total
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100
|
%
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Quarterly Dividend
On July 28, 2015, Financial Engines’ Board of Directors declared a
regular quarterly cash dividend of $0.07 per share of the Company’s
common stock. The cash dividend will be paid on October 6, 2015 to
stockholders of record as of the close of business on September 22, 2015.
Stock Repurchase Program
On November 5, 2014, Financial Engines’ Board of Directors approved a 12
month stock repurchase program under which the Company may buy up to $50
million of its common stock. During the second quarter of 2015, the
Company purchased 378,000 shares for $16 million on the open market.
When combined with prior purchases, the Company has bought a total of
933,000 shares for $36.5 million on the open market.
Outlook
Financial Engines’ growth strategy includes focusing on increasing
penetration within existing Professional Management plan sponsors,
enhancing and extending services to individuals entering and in
retirement, and expanding the number of plan sponsors.
Based on financial markets remaining at July 31, 2015 levels, the
Company estimates that its 2015 revenue will be in the range of $314
million and $320 million and 2015 non-GAAP adjusted EBITDA will be in
the range of $96 million to $100 million.
Conference Call
The Company will host a conference call to discuss second quarter 2015
financial results today at 5:00 PM ET. Hosting the call will be Larry
Raffone, president and chief executive officer, and Ray Sims, chief
financial officer. The conference call can be accessed live over the
phone by dialing (888) 348-6435, or for international callers, (412)
902-4238. A replay will be available beginning approximately one hour
after the call and can be accessed by dialing (877) 870-5176 or (858)
384-5517 for international callers. The conference ID is 10068667. The
replay will remain available until Wednesday, August 12, 2015, and an
archived replay will be available at http://ir.financialengines.com/
for 30 calendar days after the call.
About Non-GAAP Financial Measures
This press release and its attachments include certain non-GAAP
financial measures. The presentation of this financial information is
not intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with U.S.
generally accepted accounting principles (GAAP). These non-GAAP measures
include non-GAAP Adjusted Net Income, non-GAAP Adjusted Earnings Per
Share and non-GAAP Adjusted EBITDA. Non-GAAP Adjusted Net Income is
defined as net income before non-cash stock-based compensation expense,
net of tax, and certain other items such as the income tax benefit from
the release of valuation allowances, if applicable for the period.
Non-GAAP Adjusted Earnings Per Share is defined as non-GAAP Adjusted Net
Income divided by the weighted-average of dilutive common share
equivalents outstanding. Non-GAAP Adjusted EBITDA is defined as net
income before net interest income, income tax expense (benefit),
depreciation, amortization of internal use software, amortization of
direct response advertising, amortization of deferred commissions, and
non-cash stock-based compensation. Further information regarding the
non-GAAP financial measures included in this press release is contained
in the attachments.
To supplement the Company’s consolidated financial statements presented
on a GAAP basis, management believes that these non-GAAP measures
provide useful information about the Company’s core operating results
and thus are appropriate to enhance the overall understanding of the
Company’s past financial performance and its prospects for the future.
These adjustments to the Company’s GAAP results are made with the intent
of providing both management and investors a more complete understanding
of the Company’s underlying operational results, trends and performance.
About Financial Engines
Financial Engines is America’s largest independent investment advisor.
We help people make the most of their retirement assets by providing
professional investment management and advice.
Headquartered in Sunnyvale, CA, Financial Engines was co-founded in 1996
by Nobel Prize-winning economist Bill Sharpe. Today, we offer retirement
help to more than nine million employees across over 600 companies
nationwide (including 143 of the Fortune 500). Our investment
methodology, combined with powerful online services, dedicated advisor
center and personal attention allow us to help more Americans get on the
path to a secure retirement.
For more information, visit www.financialengines.com.
All advisory services provided by Financial Engines Advisors L.L.C., a
federally registered investment advisor and wholly-owned subsidiary of
Financial Engines, Inc. Financial Engines does not guarantee future
results.
Forward-Looking Statements
This press release and its attachments contain forward-looking
statements that involve risks and uncertainties. These forward-looking
statements may be identified by terms such as “plan to,” “designed to,”
“will,” “can,” “expect,” “estimates,” “believes,” “intends,” “may,”
“continues,” “to be” or the negative of these terms, and similar
expressions intended to identify forward-looking statements. These
forward-looking statements include, but are not limited to, statements
regarding the opportunity presented by our new provider relationship,
the value of and need for our services, Financial Engines’ expected
financial performance and outlook, including factors which may impact
our outlook, benefits of our services, objectives and growth strategy,
including our focus on increasing penetration within existing
Professional Management plan sponsors, enhancing and extending services
to individuals in retirement and expanding the number of plan sponsors,
investments in our services, , the benefits of our non-GAAP financial
measures, and the anticipated amount, duration, methods, timing and
other aspects of our stock repurchase program. These statements involve
known and unknown risks, uncertainties and other factors which may cause
actual results, performance or achievements to differ materially from
those expressed or implied by such forward-looking statements, and
reported results should not be considered as an indication of future
performance. These risks and uncertainties include, but are not limited
to, our reliance on fees earned on the value of assets we manage for a
substantial portion of our revenue, the impact of the financial markets
on our revenue and earnings, unanticipated delays in rollouts of our
services, our ability to increase enrollment, our ability to correctly
identify and invest appropriately in growth opportunities, our ability
to introduce new services and accurately estimate the impact of any
future services on our business, the risk that the anticipated benefits
of our investments in these services or in growth opportunities may not
outweigh the resources and costs associated with these investments or
the liabilities associated with the operation of these services, our
relationships with plan providers and plan sponsors, the fees we can
charge for our Professional Management service, our reliance on accurate
and timely data from plan providers and plan sponsors, system failures,
errors or unsatisfactory performance of our services, our reputation,
our ability to protect the confidentiality of plan provider, plan
sponsor and plan participant data and other privacy concerns,
acquisition activity involving plan providers or plan sponsors, our
ability to compete, our regulatory environment, and risks associated
with our fiduciary obligations. In addition, the timing and amount of
future stock repurchases, if any, will be made as management deems
appropriate and will depend on a variety of factors, including stock
price, market conditions, corporate and regulatory requirements, and any
additional constraints related to material inside information the
Company may possess. Further, any negative impact on our operating
results and financial condition as a result of the foregoing or other
risks, including any unforeseen need for capital which may require us to
divert funds we may have otherwise used for the stock repurchase
program, may in turn negatively impact our ability to administer the
repurchase of our common stock. More information regarding these and
other risks, uncertainties and factors is contained in the Company’s
Form 10-K for the year ended December 31, 2014, as filed with the SEC,
and in other reports filed by the Company with the SEC from time to
time. You are cautioned not to unduly rely on these forward-looking
statements, which speak only as of the date of this press release. All
information in this press release and its attachments is as of the date
stated or August 5, 2015 and unless required by law, Financial Engines
undertakes no obligation to publicly revise any forward-looking
statement to reflect circumstances or events after the date of this
press release or to report the occurrence of unanticipated events.
Our investment advisory and management services are provided through our
subsidiary, Financial Engines Advisors L.L.C., a federally registered
investment advisor. References in this press release to “Financial
Engines,” “our company,” “the Company,” “we,” “us” and “our” refer to
Financial Engines, Inc. and its consolidated subsidiaries during the
periods presented unless the context requires otherwise.
###
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Financial Tables
|
|
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
|
Unaudited Consolidated Balance Sheets
|
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|
|
December 31,
|
|
|
June 30,
|
|
|
|
2014
|
|
|
2015
|
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|
|
(In thousands, except per share data)
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
126,564
|
|
|
$
|
107,415
|
|
Short-term investments
|
|
|
179,885
|
|
|
|
209,736
|
|
Accounts receivable, net
|
|
|
66,001
|
|
|
|
70,653
|
|
Prepaid expenses
|
|
|
3,763
|
|
|
|
3,929
|
|
Deferred tax assets
|
|
|
7,932
|
|
|
|
10,148
|
|
Other current assets
|
|
|
5,445
|
|
|
|
5,440
|
|
Total current assets
|
|
|
389,590
|
|
|
|
407,321
|
|
Property and equipment, net
|
|
|
20,723
|
|
|
|
20,063
|
|
Internal use software, net
|
|
|
6,421
|
|
|
|
6,358
|
|
Long-term deferred tax assets
|
|
|
6,844
|
|
|
|
5,857
|
|
Direct response advertising, net
|
|
|
8,202
|
|
|
|
7,844
|
|
Other assets
|
|
|
3,265
|
|
|
|
2,799
|
|
Total assets
|
|
$
|
435,045
|
|
|
$
|
450,242
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
21,678
|
|
|
$
|
25,381
|
|
Accrued compensation
|
|
|
10,103
|
|
|
|
11,300
|
|
Deferred revenue
|
|
|
5,840
|
|
|
|
6,799
|
|
Dividend payable
|
|
|
3,113
|
|
|
|
3,613
|
|
Other current liabilities
|
|
|
1,161
|
|
|
|
1,122
|
|
Total current liabilities
|
|
|
41,895
|
|
|
|
48,215
|
|
Long-term deferred revenue
|
|
|
427
|
|
|
|
313
|
|
Long-term deferred rent
|
|
|
8,689
|
|
|
|
8,912
|
|
Non-current tax liabilities
|
|
|
3,672
|
|
|
|
2,206
|
|
Other liabilities
|
|
|
151
|
|
|
|
292
|
|
Total liabilities
|
|
|
54,834
|
|
|
|
59,938
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value - 10,000 authorized as of
December 31, 2014 and June 30, 2015; None issued or outstanding as
of December 31, 2014 and June 30, 2015
|
|
|
-
|
|
|
|
-
|
|
Common stock, $0.0001 par value - 500,000 authorized as of December
31, 2014 and June 30, 2015; 52,224 and 52,633 shares issued and
51,944 and 51,700 shares outstanding as of December 31, 2014 and
June 30, 2015, respectively
|
|
|
5
|
|
|
|
5
|
|
Additional paid-in capital
|
|
|
404,908
|
|
|
|
433,141
|
|
Treasury stock, at cost (280 shares and 933 shares as of December
31, 2014 and June 30, 2015, respectively)
|
|
|
(9,182
|
)
|
|
|
(36,482
|
)
|
Accumulated deficit
|
|
|
(15,520
|
)
|
|
|
(6,360
|
)
|
Total stockholders’ equity
|
|
|
380,211
|
|
|
|
390,304
|
|
Total liabilities and stockholders’ equity
|
|
$
|
435,045
|
|
|
$
|
450,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2014
|
|
2015
|
|
|
2014
|
|
2015
|
|
|
|
(In thousands, except per share data)
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional management
|
|
$
|
60,735
|
|
$
|
69,693
|
|
|
$
|
117,804
|
|
$
|
136,276
|
|
Platform
|
|
|
8,222
|
|
|
7,735
|
|
|
|
16,512
|
|
|
15,625
|
|
Other
|
|
|
832
|
|
|
811
|
|
|
|
1,350
|
|
|
1,284
|
|
Total revenue
|
|
|
69,789
|
|
|
78,239
|
|
|
|
135,666
|
|
|
153,185
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue (exclusive of amortization of internal use
software)
|
|
|
27,178
|
|
|
33,691
|
|
|
|
53,156
|
|
|
64,582
|
|
Research and development
|
|
|
7,011
|
|
|
8,839
|
|
|
|
14,932
|
|
|
17,784
|
|
Sales and marketing
|
|
|
11,823
|
|
|
16,107
|
|
|
|
23,700
|
|
|
30,722
|
|
General and administrative
|
|
|
5,576
|
|
|
6,282
|
|
|
|
11,446
|
|
|
13,440
|
|
Amortization of internal use software
|
|
|
1,623
|
|
|
1,281
|
|
|
|
3,135
|
|
|
2,457
|
|
Total costs and expenses
|
|
|
53,211
|
|
|
66,200
|
|
|
|
106,369
|
|
|
128,985
|
|
Income from operations
|
|
|
16,578
|
|
|
12,039
|
|
|
|
29,297
|
|
|
24,200
|
|
Interest income, net
|
|
|
41
|
|
|
82
|
|
|
|
77
|
|
|
144
|
|
Other income (expense), net
|
|
|
-
|
|
|
(17
|
)
|
|
|
3
|
|
|
(17
|
)
|
Income before income taxes
|
|
|
16,619
|
|
|
12,104
|
|
|
|
29,377
|
|
|
24,327
|
|
Income tax expense
|
|
|
6,565
|
|
|
3,604
|
|
|
|
11,506
|
|
|
7,926
|
|
Net and comprehensive income
|
|
$
|
10,054
|
|
$
|
8,500
|
|
|
$
|
17,871
|
|
$
|
16,401
|
|
Dividends declared per share of common stock
|
|
$
|
0.06
|
|
$
|
0.07
|
|
|
$
|
0.12
|
|
$
|
0.14
|
|
Net income per share attributable to holders of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.20
|
|
$
|
0.16
|
|
|
$
|
0.35
|
|
$
|
0.32
|
|
Diluted
|
|
$
|
0.19
|
|
$
|
0.16
|
|
|
$
|
0.34
|
|
$
|
0.31
|
|
Shares used to compute net income per share attributable to
holders of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
51,523
|
|
|
51,780
|
|
|
|
51,313
|
|
|
51,851
|
|
Diluted
|
|
|
53,275
|
|
|
53,194
|
|
|
|
53,270
|
|
|
53,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
|
2014
|
|
|
2015
|
|
|
|
(In thousands)
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
17,871
|
|
|
$
|
16,401
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
2,232
|
|
|
|
2,945
|
|
Amortization of internal use software
|
|
|
2,953
|
|
|
|
2,294
|
|
Stock-based compensation
|
|
|
9,850
|
|
|
|
12,716
|
|
Amortization of deferred sales commissions
|
|
|
804
|
|
|
|
764
|
|
Amortization and impairment of direct response advertising
|
|
|
3,097
|
|
|
|
2,726
|
|
Amortization of premium (discount) on short-term investments
|
|
|
1
|
|
|
|
(147
|
)
|
Provision for doubtful accounts
|
|
|
356
|
|
|
|
500
|
|
Deferred tax
|
|
|
3,365
|
|
|
|
(2,696
|
)
|
Loss (gain) on fixed asset disposal
|
|
|
(8
|
)
|
|
|
-
|
|
Excess tax benefit associated with stock-based compensation
|
|
|
(8,109
|
)
|
|
|
(10,048
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(555
|
)
|
|
|
(5,153
|
)
|
Prepaid expenses
|
|
|
(478
|
)
|
|
|
(166
|
)
|
Direct response advertising
|
|
|
(1,749
|
)
|
|
|
(2,367
|
)
|
Other assets
|
|
|
413
|
|
|
|
(293
|
)
|
Accounts payable
|
|
|
7,631
|
|
|
|
14,209
|
|
Accrued compensation
|
|
|
(7,287
|
)
|
|
|
1,197
|
|
Deferred revenue
|
|
|
(243
|
)
|
|
|
845
|
|
Deferred rent
|
|
|
(35
|
)
|
|
|
190
|
|
Net cash provided by operating activities
|
|
|
30,109
|
|
|
|
33,917
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(3,234
|
)
|
|
|
(2,549
|
)
|
Sale of property and equipment
|
|
|
8
|
|
|
|
-
|
|
Capitalization of internal use software
|
|
|
(1,922
|
)
|
|
|
(2,211
|
)
|
Purchases of short-term investments
|
|
|
(89,902
|
)
|
|
|
(119,704
|
)
|
Maturities of short-term investments
|
|
|
60,000
|
|
|
|
90,000
|
|
Net cash used in investing activities
|
|
|
(35,050
|
)
|
|
|
(34,464
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Payments on capital lease obligations
|
|
|
(50
|
)
|
|
|
(58
|
)
|
Excess tax benefit associated with stock-based compensation
|
|
|
8,109
|
|
|
|
10,048
|
|
Net share settlements for minimum tax withholdings
|
|
|
(128
|
)
|
|
|
(587
|
)
|
Repurchase of common stock
|
|
|
-
|
|
|
|
(27,301
|
)
|
Proceeds from issuance of common stock
|
|
|
7,903
|
|
|
|
6,037
|
|
Cash dividend payments
|
|
|
(5,616
|
)
|
|
|
(6,741
|
)
|
Net cash provided by (used in) financing activities
|
|
|
10,218
|
|
|
|
(18,602
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
5,277
|
|
|
|
(19,149
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
126,003
|
|
|
|
126,564
|
|
Cash and cash equivalents, end of period
|
|
$
|
131,280
|
|
|
$
|
107,415
|
|
Supplemental cash flows information:
|
|
|
|
|
|
|
|
|
Income taxes paid, net of refunds
|
|
$
|
211
|
|
|
$
|
1,449
|
|
Interest paid
|
|
$
|
6
|
|
|
$
|
5
|
|
Non-cash operating, investing and financing activities:
|
|
|
|
|
|
|
|
|
Purchase of property and equipment under capital lease
|
|
$
|
169
|
|
|
$
|
194
|
|
Unpaid purchases of property and equipment
|
|
$
|
444
|
|
|
$
|
660
|
|
Capitalized stock-based compensation for internal use software
|
|
$
|
142
|
|
|
$
|
183
|
|
Capitalized stock-based compensation for direct response advertising
|
|
$
|
36
|
|
|
$
|
44
|
|
Dividends declared but not yet paid
|
|
$
|
3,097
|
|
|
$
|
3,613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
|
Reconciliation of GAAP to Non-GAAP Operating Results
|
|
The table below sets forth a reconciliation of net income to
non-GAAP Adjusted EBITDA based on our historical results:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
Non-GAAP Adjusted EBITDA
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
|
(In thousands, unaudited)
|
|
Net income
|
|
$
|
10,054
|
|
|
$
|
8,500
|
|
|
$
|
17,871
|
|
|
$
|
16,401
|
|
Interest income, net
|
|
|
(41
|
)
|
|
|
(82
|
)
|
|
|
(77
|
)
|
|
|
(144
|
)
|
Income tax expense
|
|
|
6,565
|
|
|
|
3,604
|
|
|
|
11,506
|
|
|
|
7,926
|
|
Depreciation and amortization
|
|
|
1,116
|
|
|
|
1,488
|
|
|
|
2,232
|
|
|
|
2,945
|
|
Amortization of internal use software
|
|
|
1,528
|
|
|
|
1,195
|
|
|
|
2,953
|
|
|
|
2,294
|
|
Amortization and impairment of direct response advertising
|
|
|
1,555
|
|
|
|
1,366
|
|
|
|
3,097
|
|
|
|
2,726
|
|
Amortization of deferred sales commissions
|
|
|
381
|
|
|
|
396
|
|
|
|
804
|
|
|
|
764
|
|
Stock-based compensation
|
|
|
5,070
|
|
|
|
6,192
|
|
|
|
9,850
|
|
|
|
12,716
|
|
Non-GAAP Adjusted EBITDA
|
|
$
|
26,228
|
|
|
$
|
22,659
|
|
|
$
|
48,236
|
|
|
$
|
45,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below sets forth a reconciliation of net income to non-GAAP
Adjusted Net Income and non-GAAP Adjusted Earnings Per Share based on
our historical results:
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
June 30,
|
|
|
June 30,
|
Non-GAAP Adjusted Net Income
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
(In thousands, except per share data, unaudited)
|
Net income
|
|
$
|
10,054
|
|
|
$
|
8,500
|
|
|
$
|
17,871
|
|
|
$
|
16,401
|
Stock-based compensation, net of tax (1)
|
|
|
3,133
|
|
|
|
3,826
|
|
|
|
6,087
|
|
|
|
7,858
|
Non-GAAP Adjusted Net Income
|
|
$
|
13,187
|
|
|
$
|
12,326
|
|
|
$
|
23,958
|
|
|
$
|
24,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted Earnings Per Share
|
|
$
|
0.25
|
|
|
$
|
0.23
|
|
|
$
|
0.45
|
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of common stock outstanding
|
|
|
51,523
|
|
|
|
51,780
|
|
|
|
51,313
|
|
|
|
51,851
|
Dilutive stock options, RSUs and PSUs
|
|
|
1,752
|
|
|
|
1,414
|
|
|
|
1,957
|
|
|
|
1,390
|
Non-GAAP adjusted common shares outstanding
|
|
|
53,275
|
|
|
|
53,194
|
|
|
|
53,270
|
|
|
|
53,241
|
(1) For the calculation of non-GAAP Adjusted Net Income, an estimated
statutory tax rate of 38.2% has been applied to non-cash stock-based
compensation for all periods presented.
i For independence methodology and ranking, see
InvestmentNews RIA Data Center. (http://data.investmentnews.com/ria/).
ii Please see “About Non-GAAP Financial Measures” for
definitions of the terms Adjusted Net Income, Adjusted Earnings Per
Share, and Adjusted EBITDA.
iii Operating metrics include both advised and subadvised
relationships.
iv Information regarding enrollment rates and the component
AUC can be found in the section entitled “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in the
Company’s Securities and Exchange Commission (“SEC”) filings, including
the Form 10-K for the year ended December 31, 2014.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150805006645/en/
Source: Financial Engines
Financial Engines Amy Conley, 617-556-2305 aconley@financialengines.com or Don
Duffy, 408-498-6040 ir@financialengines.com
|