Exhibit 99.1

 

Envestnet Reports Fourth Quarter 2015 Financial Results and Authorization

of Share Repurchase Program

 

Chicago, IL — February 25, 2016 — Envestnet (NYSE: ENV), a leading provider of unified wealth management technology and services to financial advisors and enterprises, today reported financial results for its fourth quarter and full year ended December 31, 2015.

 

Fourth Quarter Highlights:

 

·                  Adjusted Revenues(1) increased 23% to $118.6 million for the fourth quarter of 2015 from $96.8 million for the fourth quarter of 2014.

·                  Operating expenses increased 35% to $120.9 million in the fourth quarter of 2015 from $89.7 million in the fourth quarter of 2014. Cost of revenues increased 1% to $39.1 million in the fourth quarter of 2015 from $38.6 million in the fourth quarter of 2014.

·                  Adjusted EBITDA(1) increased 35% to $22.4 million for the fourth quarter of 2015 compared to $16.6 million for the fourth quarter of 2014.

·                  Adjusted Net Income(1) was $11.3 million, or $0.28 per diluted share, for the fourth quarter of 2015 compared to $8.6 million, or $0.23 per diluted share, for the fourth quarter of 2014.

·                  Net income (loss) attributable to Envestnet, Inc. was ($3.9) million, or ($0.10) per diluted share, for the fourth quarter of 2015 compared to $3.7 million, or $0.10 per diluted share, for the fourth quarter of 2014.

·                  Recurring revenue for the fourth quarter of 2015 was 96% of total revenue.  Recurring revenue mix for the fourth quarter of 2015 was 73% in AUM/A revenue and 27% in subscription and licensing revenue.

 

Full Year 2015 Highlights:

 

·                  Adjusted Revenues(1) increased 21% to $421.2 million for 2015 from $348.7 million for 2014.

·                  Operating expenses increased 23% to $401.9 million for 2015 from $327.5 million for 2014. Cost of revenues increased 7% to $161.3 million for 2015 from $150.1 million for 2014.

·                  Adjusted EBITDA(1) increased 36% to $76.1 million for 2015 compared to $55.9 million for 2014.

·                  Adjusted Net Income(1) was $37.7 million, or $0.98 per diluted share, for 2015 compared to $29.5 million, or $0.80 per diluted share, for 2014.

·                  Net income attributable to Envestnet, Inc. was $4.4 million, or $0.12 per diluted share, for 2015 compared to $14.2 million, or $0.38 per diluted share, for 2014.

·                  Recurring revenue for 2015 was 97% of total revenue.  Recurring revenue mix for 2015 was 82% in AUM/A revenue and 18% in subscription and licensing revenue.

 

“2015 was a transformational year for Envestnet. We are well-positioned to be the preeminent enabling technology in wealth management, empowering the advisor of the future with a deeply integrated end-to-end platform and enabling advisors and enterprises to deliver better financial outcomes for their clients,” said Jud Bergman, Chairman and CEO.

 

“Perhaps even more important, the merger with Yodlee broadens our business opportunity beyond wealth management to include financial technology and data analytics, significantly expanding our addressable market and providing additional sources for growth,” concluded Mr. Bergman.

 



 

SEGMENT RESULTS

 

Envestnet

 

Financial Results for the Fourth Quarter of 2015

 

·                  Adjusted revenues (1) increased 8% to $104.3 million for the fourth quarter of 2015 from $96.8 million for the fourth quarter of 2014.

·                  Adjusted EBITDA(1) increased 14% to $21.8 million for the fourth quarter of 2015 compared to $19.0 million for the fourth quarter of 2014.

 

Financial Results for the Full Year of 2015

 

·                  Adjusted revenues (1) increased 17% to $407.0 million for 2015 from $348.7 million for 2014.

·                  Adjusted EBITDA(1) increased 27% to $83.1 million for 2015 compared to $65.5 million for 2014.

 

Key Operating Metrics (AUM/A Only) as of and for the Quarter and Year Ended December 31, 2015:

 

·                  Assets: $289.7 billion, up 18% from December 31, 2014

·                  Accounts: 1,298,179, up 33% from December 31, 2014

·                  Advisors: 33,775, up 18% from December 31, 2014

·                  Gross sales — fourth quarter 2015: $49.9 billion, resulting in net flows of $34.1 billion

·                  Gross sales — full year 2015: $114.9 billion, resulting in net flows of $55.4 billion

 

The following table summarizes the changes in AUM and AUA for the quarter ended December 31, 2015:

 

In Millions Except Accounts

 

9/30/2015

 

Gross
Sales

 

Redemptions

 

Net
Flows

 

Market
Impact

 

Reclass

 

12/31/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets under Management (AUM)

 

$

73,164

 

$

16,586

 

$

(4,968

)

$

11,618

 

$

823

 

$

6,954

 

$

92,559

 

Assets under Administration (AUA)

 

177,121

 

33,353

 

(10,860

)

22,493

 

4,517

 

(6,954

)

197,177

 

Total AUM/A

 

$

250,285

 

$

49,939

 

$

(15,828

)

$

34,111

 

$

5,340

 

$

 

$

289,736

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee-Based Accounts

 

1,062,958

 

 

 

 

 

235,221

 

 

 

 

 

1,298,179

 

 

The above AUM/A gross sales figures include $27.6 billion in new client conversions. The Company onboarded an additional $13.5 billion in licensing conversions during the fourth quarter, bringing total conversions for the quarter to $41.1 billion.

 

The following table summarizes the changes in AUM and AUA for the year ended December 31, 2015:

 

In Millions Except Account Data

 

12/31/2014

 

Gross
Sales

 

Redemptions

 

Net
Flows

 

Market
Impact

 

Reclass

 

12/31/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets under Management (AUM)

 

$

72,120

 

$

35,995

 

$

(18,170

)

$

17,825

 

$

(4,340

)

$

6,954

 

$

92,559

 

Assets under Administration (AUA)

 

174,249

 

78,944

 

(41,347

)

37,597

 

(4,577

)

(10,092

)

197,177

 

Total AUM/A

 

$

246,369

 

$

114,939

 

$

(59,517

)

$

55,422

 

$

(8,917

)

$

(3,138

)

$

289,736

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee-Based Accounts

 

977,625

 

 

 

 

 

330,361

 

 

 

(9,807

)

1,298,179

 

 

The above AUM/A gross sales figures include $31.9 billion in new client conversions. The Company onboarded an additional $98.5 billion in licensing conversions during 2015, bringing total conversions for the year to $130.4 billion.

 

Envestnet | Yodlee

 

Financial Results for the period from November 19, 2015 (date of acquisition) to December 31, 2015

 

·                  Adjusted revenues were $14.3 million for the period.

·                  Adjusted EBITDA(1) was $3.4 million for the period.

 

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Nonsegment

 

·                  Nonsegment expenses totaled $10.7 million for the fourth quarter of 2015 from $2.4 million for the fourth quarter of 2014.  Nonsegment expenses were 9% of consolidated operating expenses for the fourth quarter of 2015 compared to 3% of consolidated operating expenses for the fourth quarter of 2014. The increase is due primarily to transaction costs associated with the acquisition of Yodlee.

 

·                  Nonsegment expenses totaled $21.3 million for the full year of 2015 from $11.6 million for the full year of 2014.  Nonsegment expenses were 5% of consolidated operating expenses for the full year of 2015 compared to 4% of consolidated operating expenses for the full year of 2014. The increase is due primarily to transaction costs associated with the acquisition of Yodlee as well as other 2015 acquisitions.

 

Cash Flow and Financial Position

 

At December 31, 2015, Envestnet had $51.7 million in cash and cash equivalents compared to $209.8 million at December 31, 2014.

 

Total debt was $300.1 million at December 31, 2015, compared to $145.2 million at December 31, 2014. The increase in debt is due to the acquisition of Yodlee. Our revolving credit facility was undrawn with $100 million available as of December 31, 2015.

 

Share Repurchase Authorization

 

Envestnet also announced that its Board of Directors has authorized a share repurchase program under which the company may repurchase up to 2,000,000 shares of its common stock. The timing and volume of share repurchases will be determined by the company’s management based on its ongoing assessments of the capital needs of the business, the market price of its common stock and general market conditions. No time limit has been set for the completion of the repurchase program, and the program may be suspended or discontinued at any time. The repurchase program authorizes the company to purchase its common stock from time to time in the open market (including pursuant to a “Rule 10b5-1 plan”), in block transactions, in privately negotiated transactions, through accelerated stock repurchase programs, through option or other forward transactions or otherwise, all in compliance with applicable laws and other restrictions.

 

Conference Call

 

Envestnet will host a conference call to discuss fourth quarter 2015 financial results today at 5:00 p.m. ET. The live webcast can be accessed from Envestnet’s investor relations website at http://ir.envestnet.com/. The call can also be accessed live over the phone by dialing (888) 437-9445, or for international callers (719) 457-2645. A replay will be available 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 4472117.  The dial-in replay will be available for one week and the webcast replay will be available for one month following the date of the conference call.

 

About Envestnet

 

Envestnet, Inc. (NYSE: ENV) is a leading provider of unified wealth management technology and services to investment advisors. Our open-architecture platforms unify and fortify the wealth management process, delivering unparalleled flexibility, accuracy, performance, and value. Envestnet solutions enable the transformation of wealth management into a transparent, independent, objective, and fully-aligned standard of care, and empower advisors to deliver better outcomes.

 

Envestnet’s Advisor Suite® software empowers financial advisors to better manage client outcomes and strengthen their practices. Envestnet provides institutional-quality research and advanced portfolio solutions through our Portfolio Management Consultants group, Envestnet | PMC®. Envestnet | Tamarac provides leading rebalancing, reporting, and practice management software.

 

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Envestnet | Yodlee is a leading data aggregation and data analytics platform powering dynamic, cloud-based innovation for digital financial services. More than 950 companies, including 12 of the 20 largest U.S. banks and hundreds of Internet services companies, subscribe to the Envestnet | Yodlee platform to power personalized financial apps and services for millions of consumers. Envestnet | Yodlee solutions help improve the speed and delivery of financial innovation, improve digital customer experiences, and drive better outcomes for our clients and their customers.

 

For more information on Envestnet, please visit www.envestnet.com and follow @ENVintel (https://twitter.com/envintel).

 

(1) Non-GAAP Financial Measures

 

“Adjusted revenues” exclude the effect of purchase accounting on the fair value of acquired deferred revenue.  Under United States generally accepted accounting principles (GAAP), we record at fair value the acquired deferred revenue for contracts in effect at the time the entities were acquired.  Consequently, revenue related to acquired entities for periods subsequent to the acquisition does not reflect the full amount of revenue that would have been recorded by these entities had they remained stand-alone entities.

 

“Adjusted EBITDA” represents net income before deferred revenue fair value adjustment, interest income, interest expense, accretion on contingent consideration, income tax provision (benefit), depreciation and amortization, non-cash compensation expense, restructuring charges and transaction costs, severance, fair market value adjustment on contingent consideration, litigation related expense, other (income) loss and pre-tax loss attributable to non-controlling interest.

 

“Adjusted net income” represents net income before deferred revenue fair value adjustment, accretion on contingent consideration, non-cash interest expense, non-cash compensation expense, restructuring charges and transaction costs, severance, amortization of acquired intangibles, fair market value adjustment on contingent consideration, litigation related expense, other (income) loss and net loss attributable to non-controlling interest. Reconciling items are tax effected using the income tax rates noted in the reconciliation table found in this release.

 

“Adjusted net income per share” represents adjusted net income divided by the diluted number of weighted-average shares outstanding.

 

See reconciliation of Non-GAAP Financial Measures at the end of this press release. These measures should not be viewed as a substitute for revenues, net income or net income per share determined in accordance with GAAP.

 

Cautionary Statement Regarding Forward-Looking Statements

 

The forward-looking statements made in this press release and its attachments concerning, among other things, Envestnet, Inc.’s (the “Company”) expected financial performance and outlook, its strategic operational plans and growth strategy are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties and the Company’s actual results could differ materially from the results expressed or implied by such forward-looking statements.  Furthermore, reported results should not be considered as an indication of future performance. The potential risks, uncertainties and other factors that could cause actual results to differ from those expressed by the forward-looking statements in this press release include, but are not limited to, difficulty in sustaining rapid revenue growth, which may place significant demands on the Company’s administrative, operational and financial resources, fluctuations in the Company’s revenue, the concentration of nearly all of the Company’s revenues from the delivery of investment solutions and services to clients in the financial advisory industry, the Company’s reliance on a limited number of clients for a material portion of its revenue, the renegotiation of fee percentages or termination of the Company’s services by its clients, the Company’s ability to identify potential acquisition candidates, complete acquisitions and successfully integrate acquired companies, the impact of market and economic conditions on the Company’s revenues, compliance failures, regulatory actions against the Company, the

 

4



 

failure to protect the Company’s intellectual property rights, the Company’s inability to successfully execute the conversion of its clients’ assets from their technology platform to the Company’s technology platform in a timely and accurate manner, general economic conditions, changes to the Company’s previously reported financial information as a result of political and regulatory conditions, as well as management’s response to these factors. More information regarding these and other risks, uncertainties and factors is contained in the Company’s filings with the Securities and Exchange Commission (“SEC”) which are available on the SEC’s website at www.sec.gov or the Company’s Investor Relations website at http://ir.envestnet.com/. 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 February 25, 2016 and, unless required by law, the Company 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.

 

Contacts

 

 

Investor Relations

 

Media Relations

investor.relations@envestnet.com

 

mediarelations@envestnet.com

(312) 827-3940

 

 

 

5



 

Envestnet, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

December 31,

 

 

 

2015

 

2014

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

51,718

 

$

209,754

 

Fees and other receivables, net

 

46,756

 

20,345

 

Prepaid expenses and other current assets

 

15,175

 

7,242

 

Total current assets

 

113,649

 

237,341

 

 

 

 

 

 

 

Property and equipment, net

 

28,681

 

16,629

 

Internally developed software, net

 

9,897

 

7,023

 

Intangible assets, net

 

292,675

 

58,654

 

Goodwill

 

421,273

 

104,976

 

Deferred tax assets, net

 

2,688

 

5,219

 

Other non-current assets

 

16,702

 

9,516

 

Total assets

 

$

885,565

 

$

439,358

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accrued expenses and other liabilities

 

$

83,411

 

$

48,247

 

Accounts payable

 

10,420

 

4,869

 

Contingent consideration

 

2,537

 

6,405

 

Deferred revenue

 

15,089

 

5,159

 

Total current liabilities

 

111,457

 

64,680

 

 

 

 

 

 

 

Convertible notes

 

150,133

 

145,203

 

Term notes

 

150,000

 

 

Contingent consideration

 

1,506

 

7,462

 

Deferred revenue

 

14,378

 

6,954

 

Deferred rent

 

5,548

 

3,588

 

Lease incentive

 

5,428

 

5,550

 

Other non-current liabilities

 

6,288

 

2,430

 

Total liabilities

 

444,738

 

235,867

 

 

 

 

 

 

 

Redeemable units in ERS

 

900

 

1,500

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

Stockholders’ equity

 

439,529

 

201,435

 

Non-controlling interest

 

398

 

556

 

Total liabilities and equity

 

$

885,565

 

$

439,358

 

 

6



 

Envestnet, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share information)

(unaudited)

 

 

 

Three Months Ended

 

Year ended

 

 

 

December 31,

 

December 31,

 

 

 

2015

 

2014

 

2015

 

2014

 

Revenues:

 

 

 

 

 

 

 

 

 

Assets under management or administration

 

$

83,212

 

$

81,516

 

$

333,684

 

$

294,223

 

Subscription and licensing

 

30,094

 

13,868

 

75,280

 

48,787

 

Professional services and other

 

5,129

 

1,419

 

11,955

 

5,738

 

Total revenues

 

118,435

 

96,803

 

420,919

 

348,748

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Cost of revenues

 

39,101

 

38,564

 

161,309

 

150,067

 

Compensation and benefits

 

43,594

 

30,008

 

139,756

 

104,457

 

General and administration

 

27,322

 

15,807

 

72,227

 

54,321

 

Depreciation and amortization

 

10,747

 

5,361

 

27,962

 

18,651

 

Restructuring charges

 

155

 

 

673

 

 

Total operating expenses

 

120,919

 

89,740

 

401,927

 

327,496

 

Income (loss) from operations

 

(2,484

)

7,063

 

18,992

 

21,252

 

Other income (expense)

 

(3,204

)

(654

)

(10,004

)

1,255

 

Income (loss) before income tax provision (benefit)

 

(5,688

)

6,409

 

8,988

 

22,507

 

Income tax provision (benefit)

 

(1,775

)

2,716

 

4,552

 

8,528

 

Net income (loss)

 

(3,913

)

3,693

 

4,436

 

13,979

 

Add: Net loss attributable to non-controlling interest

 

 

 

 

195

 

Net income (loss) attributable to Envestnet, Inc.

 

$

(3,913

)

$

3,693

 

$

4,436

 

$

14,174

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to Envestnet, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.10

)

$

0.11

 

$

0.12

 

$

0.41

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

$

(0.10

)

$

0.10

 

$

0.12

 

$

0.38

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

39,019,123

 

34,890,566

 

36,500,843

 

34,559,558

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

39,019,123

 

37,242,598

 

38,386,873

 

36,877,599

 

 

7



 

Envestnet, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Year Ended

 

 

 

December 31,

 

 

 

2015

 

2014

 

OPERATING ACTIVITIES:

 

 

 

 

 

Net income

 

$

4,436

 

$

13,979

 

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

 

 

 

 

 

Depreciation and amortization

 

27,962

 

18,651

 

Deferred rent and lease incentive

 

1,819

 

275

 

Provision for doubtful accounts

 

176

 

15

 

Deferred income taxes

 

(11,918

)

(4,640

)

Stock-based compensation expense

 

15,161

 

11,423

 

Excess tax benefits from stock-based compensation expense

 

(17,607

)

(8,848

)

Interest expense

 

10,271

 

626

 

Accretion on contingent consideration

 

888

 

1,472

 

Fair market value adjustment on contingent consideration

 

(4,153

)

(1,432

)

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

Fees and other receivables, net

 

(9,297

)

1,788

 

Prepaid expenses and other current assets

 

15,965

 

9,733

 

Other non-current assets

 

(6,025

)

(873

)

Accrued expenses and other liabilities

 

(13,654

)

9,784

 

Accounts payable

 

3,128

 

(659

)

Deferred revenue

 

10,906

 

4,677

 

Other non-current liabilities

 

(3,630

)

26

 

Net cash provided by operating activities

 

24,428

 

55,997

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

Purchase of property and equipment

 

(9,184

)

(6,177

)

Capitalization of internally developed software

 

(5,532

)

(3,382

)

Investment in private company

 

(1,500

)

 

Purchase of ERS units

 

(100

)

 

Acquisition of businesses, net of cash acquired

 

(328,305

)

(59,570

)

Net cash used in investing activities

 

(344,621

)

(69,129

)

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

Proceeds from issuance of convertible notes

 

 

172,500

 

Convertible notes issuance costs

 

 

(5,533

)

Proceeds from borrowings of term notes

 

160,000

 

 

Repayment of term notes

 

(10,000

)

 

 

Proceeds from borrowings on revolving credit facility

 

10,000

 

30,000

 

Payment on revolving credit facility

 

(10,000

)

(30,000

)

Payments of contingent consideration

 

(7,219

)

(6,000

)

Issuance of ERS redeemable units

 

900

 

1,500

 

Payment of promissory note

 

 

(1,500

)

Proceeds from exercise of stock options

 

8,279

 

5,190

 

Issuance of restricted stock

 

2

 

1

 

Purchase of treasury stock for stock-based minimum tax withholdings

 

(7,412

)

(2,062

)

Excess tax benefits from stock-based compensation expense

 

17,607

 

8,848

 

Net cash provided by financing activities

 

162,157

 

172,944

 

 

 

 

 

 

 

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

(158,036

)

159,812

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

209,754

 

49,942

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

51,718

 

$

209,754

 

 

8



 

Envestnet, Inc.

Reconciliation of Non-GAAP Financial Measures

(in thousands, except share and per share information)

(unaudited)

 

 

 

Three Months Ended

 

Year Ended

 

 

 

December 31,

 

December 31,

 

 

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

118,435

 

$

96,803

 

$

420,919

 

$

348,748

 

Deferred revenue fair value adjustment

 

188

 

 

322

 

 

Adjusted revenues

 

$

118,623

 

$

96,803

 

$

421,241

 

$

348,748

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(3,913

)

$

3,693

 

$

4,436

 

$

13,979

 

Add (deduct):

 

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment

 

188

 

 

322

 

 

Interest income

 

(50

)

(38

)

(338

)

(139

)

Interest expense

 

3,190

 

604

 

10,271

 

626

 

Accretion on contingent consideration

 

94

 

363

 

888

 

1,472

 

Income tax provision (benefit)

 

(1,775

)

2,716

 

4,552

 

8,528

 

Depreciation and amortization

 

10,746

 

5,361

 

27,962

 

18,651

 

Non-cash compensation expense

 

5,004

 

2,980

 

15,160

 

11,423

 

Restructuring charges and transaction costs

 

8,054

 

1,008

 

13,495

 

2,672

 

Severance

 

818

 

717

 

1,695

 

735

 

Fair market value adjustment on contingent consideration

 

(361

)

(1,090

)

(4,153

)

(1,432

)

Litigation related expense

 

65

 

 

65

 

18

 

Other (income) loss

 

64

 

 

72

 

(1,825

)

Pre-tax loss attributable to non-controlling interest

 

338

 

295

 

1,643

 

1,230

 

Adjusted EBITDA

 

$

22,462

 

$

16,609

 

$

76,070

 

$

55,938

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(3,913

)

$

3,693

 

$

4,436

 

$

13,979

 

Add (deduct):

 

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment

 

113

 

 

193

 

 

Accretion on contingent consideration

 

57

 

218

 

533

 

883

 

Non-cash interest expense

 

1,061

 

195

 

3,837

 

195

 

Non-cash compensation expense

 

3,003

 

1,788

 

9,097

 

6,854

 

Restructuring charges and transaction costs

 

6,011

 

777

 

9,428

 

2,025

 

Severance

 

491

 

430

 

1,017

 

440

 

Amortization of acquired intangibles

 

4,460

 

2,013

 

10,581

 

6,385

 

Fair market value adjustment on contingent consideration

 

(218

)

(655

)

(2,492

)

(859

)

Litigation related expense

 

39

 

 

39

 

11

 

Other (income) loss

 

16

 

 

40

 

(1,095

)

Net loss attributable to non-controlling interest

 

203

 

177

 

986

 

719

 

Adjusted net income

 

$

11,323

 

$

8,636

 

$

37,695

 

$

29,537

 

 

 

 

 

 

 

 

 

 

 

Basic number of weighted-average shares outstanding

 

39,019,123

 

34,890,566

 

36,500,843

 

34,559,558

 

Effect of dilutive shares:

 

 

 

 

 

 

 

 

 

Options to purchase common stock

 

1,396,145

 

2,101,240

 

1,700,248

 

2,165,808

 

Unvested restricted stock units

 

39,518

 

250,792

 

185,782

 

152,233

 

Diluted number of weighted-average shares outstanding

 

40,454,786

 

37,242,598

 

38,386,873

 

36,877,599

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income per share - diluted

 

$

0.28

 

$

0.23

 

$

0.98

 

$

0.80

 

 

Note:    Adjustments, excluding non-deductible transaction costs, are tax effected using an income tax rate of 40.0% for 2015 and 2014, respectively.  Pre-tax loss attributable to non-controlling interest assumes losses are allocated to Envestnet Retirement Solutions, LLC (“ERS”) members pro-rata based on ownership percentage.

 

9



 

Envestnet, Inc.

Reconciliation of Non-GAAP Financial Measures

Segment Information

(in thousands)

(unaudited)

 

 

 

For the Three Months Ended December 31, 2015

 

 

 

Envestnet

 

Envestnet | Yodlee

 

Non-Segment

 

Total

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

104,354

 

$

14,081

 

$

 

$

118,435

 

Deferred revenue fair value adjustment

 

(17

)

205

 

 

188

 

Adjusted revenues

 

$

104,337

 

$

14,286

 

$

 

$

118,623

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

11,175

 

$

(2,963

)

$

(10,696

)

$

(2,484

)

Add (deduct):

 

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment

 

(17

)

205

 

 

188

 

Accretion on contingent consideration

 

94

 

 

 

94

 

Depreciation and amortization

 

6,154

 

4,592

 

 

10,746

 

Non-cash compensation expense

 

3,047

 

1,569

 

388

 

5,004

 

Restructuring charges and transaction costs

 

155

 

 

7,899

 

8,054

 

Severance

 

804

 

14

 

 

818

 

Fair market value adjustment on contingent consideration

 

 

 

(361

)

(361

)

Litigation related expense

 

 

 

65

 

65

 

Pre-tax loss attributable to non-controlling interest

 

338

 

 

 

338

 

Adjusted EBITDA

 

$

21,750

 

$

3,417

 

$

(2,705

)

$

22,462

 

 

 

 

For the Three Months Ended December 31, 2014

 

 

 

Envestnet

 

Envestnet | Yodlee

 

Non-Segment

 

Total

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

96,803

 

$

 

$

 

$

96,803

 

Deferred revenue fair value adjustment

 

 

 

 

 

Adjusted revenues

 

$

96,803

 

$

 

$

 

$

96,803

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

9,497

 

$

 

$

(2,434

)

$

7,063

 

Add (deduct):

 

 

 

 

 

Deferred revenue fair value adjustment

 

 

 

 

 

Accretion on contingent consideration

 

363

 

 

 

363

 

Depreciation and amortization

 

5,361

 

 

 

5,361

 

Non-cash compensation expense

 

2,767

 

 

213

 

2,980

 

Restructuring charges and transaction costs

 

 

 

1,008

 

1,008

 

Severance

 

717

 

 

 

717

 

Fair market value adjustment on contingent consideration

 

 

 

(1,090

)

(1,090

)

Other income

 

 

 

(88

)

(88

)

Pre-tax loss attributable to non-controlling interest

 

295

 

 

 

295

 

Adjusted EBITDA

 

$

19,000

 

$

 

$

(2,391

)

$

16,609

 

 

10



 

Envestnet, Inc.

Reconciliation of Non-GAAP Financial Measures

Segment Information

(in thousands)

(unaudited)

 

 

 

 

For the Year Ended December 31, 2015

 

 

 

Envestnet

 

Envestnet | Yodlee

 

Non-Segment

 

Total

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

406,838

 

$

14,081

 

$

 

$

420,919

 

Deferred revenue fair value adjustment

 

117

 

205

 

 

322

 

Adjusted revenues

 

$

406,955

 

$

14,286

 

$

 

$

421,241

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

43,255

 

$

(2,963

)

$

(21,300

)

$

18,992

 

Add (deduct):

 

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment

 

117

 

205

 

 

322

 

Accretion on contingent consideration

 

888

 

 

 

888

 

Depreciation and amortization

 

23,369

 

4,592

 

 

27,961

 

Non-cash compensation expense

 

12,141

 

1,569

 

1,451

 

15,161

 

Restructuring charges and transaction costs

 

 

 

13,430

 

13,430

 

Severance

 

1,681

 

14

 

 

1,695

 

Fair market value adjustment on contingent consideration

 

 

 

(4,152

)

(4,152

)

Litigation related expense

 

 

 

65

 

65

 

Other loss

 

 

 

65

 

65

 

Pre-tax loss attributable to non-controlling interest

 

1,643

 

 

 

1,643

 

Adjusted EBITDA

 

$

83,094

 

$

3,417

 

$

(10,441

)

$

76,070

 

 

 

 

For the Year Ended December 31, 2014

 

 

 

Envestnet

 

Envestnet | Yodlee

 

Non-Segment

 

Total

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

348,748

 

$

 

$

 

$

348,748

 

Deferred revenue fair value adjustment

 

 

 

 

 

Adjusted revenues

 

$

348,748

 

$

 

$

 

$

348,748

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

32,854

 

$

 

$

(11,602

)

$

21,252

 

Add (deduct):

 

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment

 

 

 

 

 

Accretion on contingent consideration

 

1,472

 

 

 

1,472

 

Depreciation and amortization

 

18,651

 

 

 

18,651

 

Non-cash compensation expense

 

10,572

 

 

851

 

11,423

 

Restructuring charges and transaction costs

 

 

 

2,672

 

2,672

 

Severance

 

735

 

 

 

735

 

Fair market value adjustment on contingent consideration

 

 

 

(1,432

)

(1,432

)

Litigation related expense

 

 

 

18

 

18

 

Other income

 

 

 

(83

)

(83

)

Pre-tax loss attributable to non-controlling interest

 

1,230

 

 

 

1,230

 

Adjusted EBITDA

 

$

65,514

 

$

 

$

(9,576

)

$

55,938

 

 

11



 

Envestnet, Inc.

Historical Assets, Accounts and Advisors

(in millions, except accounts and advisors)

(unaudited)

 

 

 

As of

 

 

 

December 31,
2014

 

March 31,
2015

 

June 30,
2015

 

September 30,
2015

 

December 31,
2015

 

Platform Assets

 

 

 

 

 

 

 

 

 

 

 

Assets Under Management (AUM)

 

$

72,120

 

$

74,643

 

$

75,922

 

$

73,164

 

$

92,559

 

Assets Under Administration (AUA)

 

174,249

 

181,239

 

181,922

 

177,121

 

197,177

 

Subtotal AUM/A

 

246,369

 

255,882

 

257,844

 

250,285

 

289,736

 

Licensing

 

466,982

 

493,284

 

534,674

 

538,271

 

561,699

 

Total Platform Assets

 

$

713,351

 

$

749,166

 

$

792,518

 

$

788,556

 

$

851,435

 

 

 

 

 

 

 

 

 

 

 

 

 

Platform Accounts

 

 

 

 

 

 

 

 

 

 

 

AUM

 

310,351

 

319,896

 

332,738

 

344,321

 

490,471

 

AUA

 

667,274

 

679,753

 

695,463

 

718,637

 

807,708

 

Subtotal AUM/A

 

977,625

 

999,649

 

1,028,201

 

1,062,958

 

1,298,179

 

Licensing

 

1,881,352

 

1,982,773

 

2,044,355

 

2,140,672

 

2,176,068

 

Total Platform Accounts

 

2,858,977

 

2,982,422

 

3,072,556

 

3,203,630

 

3,474,247

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisors

 

 

 

 

 

 

 

 

 

 

 

AUM/A

 

28,605

 

29,023

 

29,541

 

30,177

 

33,775

 

Licensing

 

11,632

 

12,306

 

12,870

 

13,409

 

13,553

 

Total Advisors

 

40,237

 

41,329

 

42,411

 

43,586

 

47,328

 

 

12