Company Announces $60 Million Stock Repurchase
Program
Financial Engines (NASDAQ: FNGN), America’s largest independent
investment advisori, today reported financial results for its third
quarter ended September 30, 2017.
Financial results for the third quarter of 2017 compared to
the third quarter of 2016:ii
- Revenue increased 9% to $122.2 million
for the third quarter of 2017 from $112.4 million for the third
quarter of 2016.
- Professional management revenue
increased 11% to $114.1 million for the third quarter of 2017 from
$102.6 million for the third quarter of 2016.
- Net income increased 116% to $15.4
million for the third quarter of 2017 from $7.1 million for the
third quarter of 2016.
- Diluted earnings per share increased
118% to $0.24 per share for the third quarter of 2017 from $0.11
per share for the third quarter of 2016.
- Non-GAAP adjusted EBITDAii increased
17% to $42.4 million for the third quarter of 2017 from $36.3
million for the third quarter of 2016.
- Non-GAAP adjusted net incomeii
increased 20% to $23.3 million for the third quarter of 2017 from
$19.4 million for the third quarter of 2016.
- Non-GAAP adjusted earnings per shareii
increased 16% to $0.36 for the third quarter of 2017 from $0.31 for
the third quarter of 2016.
Key operating metrics as of September 30,
2017:iii
- Assets under contract (“AUC”) were
$1.18 trillion.
- Assets under management (“AUM”) were
$160.2 billion.
- Professional management clients were
approximately 1,040,000.
- The asset enrollment rate across all
employer plans was 12.5%iv.
“Our unwavering mission for over 20 years has been to provide
all Americans access to the high-quality, unconflicted investment
advice they deserve,” said Larry Raffone, president and chief
executive officer of Financial Engines. “Our strategic focus is to
develop deeper relationships with clients to help them with their
total financial lives, across all markets, and expand our total
addressable market. We are encouraged by our strong execution and
the leading indicators to continue to prudently invest in our
long-term strategy.”
Review of Financial Results for the Third Quarter of
2017
Revenue increased 9% to $122.2 million for the third quarter of
2017 from $112.4 million for the third quarter of 2016, driven
primarily by the growth in professional management revenue which
increased 11% to $114.1 million for the third quarter of 2017 from
$102.6 million for the third quarter of 2016.
Costs and expenses decreased 4% to $97.2 million for the third
quarter of 2017 from $100.9 million for the third quarter of 2016.
This decrease was due primarily to a loss on reacquired franchisee
rights incurred in the third quarter of 2016. Increases in
employee-related costs, including wages and cash incentive
compensation, driven by headcount growth and higher compensation,
were mostly offset by decreases in consulting and professional
services expenses, as well as decreases in a variety of other
expenses. As a percentage of revenue, cost of revenue was 44% for
the third quarter of 2017 compared to 45% for the third quarter of
2016.
Income from operations was $25.1 million for the third quarter
of 2017 compared to income from operations of $11.6 million for the
third quarter of 2016. As a percentage of revenue, income from
operations was 21% for the third quarter of 2017 compared to 10%
for the third quarter of 2016.
The Company’s effective tax rate for the third quarter of 2017
was 39% compared to an effective tax rate of 38% in the third
quarter of 2016. Net income was $15.4 million, or $0.24 per diluted
share, for the third quarter of 2017 compared to net income of $7.1
million, or $0.11 per diluted share, for the third quarter of 2016.
On a non-GAAP basis, adjusted net incomeii was $23.3 million and
adjusted earnings per shareii were $0.36 for the third quarter of
2017 compared to adjusted net income of $19.4 million and adjusted
earnings per share of $0.31 for the third quarter of 2016.
“Our strong cash position allows us the luxury of investing for
growth and provides value back to our stockholders through a stock
repurchase program,” said Craig Foster, chief financial officer
of Financial Engines.
Assets Under Contract and Assets Under Management
Workplace AUC increased by 14% year-over-year to $1.18 trillion
as of September 30, 2017 from $1.04 trillion as of September 30,
2016, due primarily to market performance, contributions, and new
employers making the Company’s services available, partially offset
by cancellations and withdrawals.
AUM increased by 19% year-over-year to $160.2 billion as of
September 30, 2017 from $134.4 billion as of September 30, 2016.
The increase in AUM was driven primarily by new assets from new and
existing clients and market performance, partially offset by
cancellations and withdrawals.
Q4'16 Q1'17
Q2'17 Q3'17 (In billions)
AUM, beginning of period $ 134.4 $ 138.0 $
144.4 $ 151.8 New assets - new clients(1) 5.9 3.4 5.3 5.4
New assets - existing clients(2) 2.1 2.4 2.4 2.5 Asset
cancellations -voluntary(3) (2.3 ) (2.1 ) (1.6 ) (1.6 ) Asset
cancellations - involuntary(4) (2.1 ) (2.7 ) (3.3 ) (1.9 ) Assets
withdrawn - existing clients(5)
(0.2
)
(0.2 ) (0.1 ) (0.2 ) Net new assets 3.4
0.8 2.7 4.2 Market
movement and other(6) 0.2 5.6
4.7 4.2
AUM, end of period $
138.0 $ 144.4 $
151.8 $ 160.2
(1) New assets from new clients represents the aggregate amount
of new AUM, measured at or near the end of the quarter, from new
clients who enrolled in its professional management service.
(2) New assets from existing clients represents the aggregate
amount of new AUM within the quarter from existing clients who
originally enrolled in its professional management service during a
prior period, including employee and employer contributions of $2.2
billion for the current period. Employer and employee contributions
are estimated each quarter from annual contribution rates based on
data received from plan providers or plan sponsors.
(3) Voluntary cancellations represent the aggregate amount of
assets, measured at or near the start of the quarter, for clients
who have voluntarily terminated their professional management
service relationship within the period.
(4) Involuntary cancellations represent the aggregate amount of
defined contribution assets, measured at or near the start of the
quarter, for clients whose professional management service
relationship was terminated within the quarter period for reasons
other than a voluntary termination.
(5) Assets withdrawn represents the amount of voluntary
withdrawals from IRA and taxable accounts by existing clients.
(6) Market movement and other represents factors affecting AUM
including estimated market movement, plan administrative and
investment advisory fees, client loans, hardship and other defined
contribution account withdrawals, and timing differences for the
data feeds for clients enrolled in its professional management
service throughout the period.
For further information on the AUM data above, please refer to
the Company’s Form 10-Q to be filed for the period ended September
30, 2017.
Aggregate Investment Style Exposure for Portfolios Under
Management
As of September 30, 2017, the approximate aggregate investment
style exposure of the portfolios we managed was as follows:
Domestic equity 45 % International
equity 29 % Bonds 23 % Cash and uncategorized assets(1) 3 %
Total 100 %
(1) Uncategorized assets may include CDs, options, warrants and
other vehicles not currently categorized.
Quarterly Dividend
On October 31, 2017, 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
January 5, 2018 to stockholders of record as of the close of
business on December 14, 2017.
Stock Repurchase Program
On October 24, 2017, Financial Engines’ Board of Directors
approved a stock repurchase program under which the Company may
begin purchasing up to $60 million of its Common Stock over the
next twelve months.
Any stock repurchases may be made through open market and
privately negotiated transactions, at the times and in such amounts
as management deems appropriate, and may or may not be made
pursuant to one or more Rule 10b5-1 trading plans adopted in
accordance with Rule 10b5-1 of the Securities Exchange Act of 1934.
Under a Rule 10b5-1 trading plan, the Company may repurchase its
shares regardless of any subsequent possession of material
nonpublic information. The timing and amount of stock repurchased,
if any, will depend on a variety of factors including stock price,
market conditions, corporate and regulatory requirements (including
applicable securities laws and regulations and the rules of The
NASDAQ Stock Market), any additional constraints related to
material inside information the Company may possess, and capital
availability. The Company has no commitment to make any
repurchases. The repurchase program may be modified, extended or
terminated by the board of directors at any time and there is no
guarantee as to the exact number of shares, if any, that will be
repurchased under the program. The repurchase is expected to be
funded by available working capital.
Outlook
Financial Engines’ growth strategy includes increasing
professional management usage within the workplace, providing more
holistic financial services to individual investors and workplace
participants, and expanding the number of plan sponsors.
Based on the closing level of financial markets on October 27,
2017 and under typical market conditions, the Company estimates
that 2017 revenue will be in the range of $479 million to $483
million, 2017 GAAP net income will be approximately $56 million and
2017 non-GAAP adjusted EBITDA will be approximately $158 million
plus or minus $1 million.
Based upon current indications and taking into account industry
trends, the Company estimates its 2018 revenue growth may be in the
range of 5-8%, and the Company plans to maintain its non-GAAP
adjusted EBITDA margins in 2018.
Please refer to the tables included in this release that
reconcile GAAP net income to non-GAAP adjusted EBITDA, non-GAAP
adjusted net income and non-GAAP adjusted earnings per share.
Conference Call
The Company will host a conference call to discuss its third
quarter 2017 financial results as well as its 2017 and 2018 outlook
on Thursday, November 2, 2017 at 5:00 p.m. ET. The live webcast and
presentation can be accessed from the Company's investor relations
website at www.financialengines.com. The conference call can also
be accessed live over the phone by dialing (888) 348-6435, or (412)
902-4238 for international callers. A replay will be available
beginning approximately one hour after the call and can be accessed
from the Company’s investor relations website, or by dialing (844)
512-2921, or (412) 317-6671 for international callers; the
conference ID is 10113317. The conference call replay will be
available until November 9, 2017.
About Non-GAAP Financial Measures
This press release and its attachments include certain non-GAAP
supplemental performance 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 EBITDA, non-GAAP adjusted net income, and non-GAAP
adjusted earnings per share. Adjusted EBITDA represents net income
before net interest expense (income), income tax expense (benefit),
depreciation, amortization of intangible assets, including internal
use software, amortization and impairment of direct response
advertising, amortization of deferred sales commissions, non-cash
stock-based compensation expense and expenses related to the
closing and integration of acquisitions, if applicable for the
period. Adjusted net income represents net income before non-cash
stock-based compensation expense, amortization of intangible assets
related to assets acquired, including customer relationships, trade
names and trademarks, expenses related to the closing and
integration of acquisitions and certain other items such as the
income tax benefit from the release of valuation allowances, if
applicable for the period, partially offset by the related tax
impact of these items. Adjusted earnings per share is defined as
adjusted net income divided by the weighted average of dilutive
common share equivalents outstanding. Further information regarding
the non-GAAP performance measures included in this press release,
including a reconciliation of non-GAAP financial measures to the
most directly comparable GAAP measures, is contained in the
financial tables and will be contained in the Company’s Form 10-Q
to be filed for the quarter ended September 30, 2017.
To supplement the Company’s consolidated financial statements
presented on a GAAP basis, management believes that these non-GAAP
measures provide its Board of Directors, management and investors
with additional information and greater transparency with respect
to our performance and decision-making. We feel these performance
measures provide investors and others with a better understanding
and ability to evaluate our operating results and future prospects,
and provides the same performance measurement information as
utilized by management. 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.
Our management uses non-GAAP adjusted EBITDA, adjusted net
income and adjusted earnings per share as measures of operating
performance, for planning purposes, including the preparation of
annual budgets, to allocate resources to enhance the financial
performance of our business, to evaluate the effectiveness of our
business strategies and in communications with our Board of
Directors concerning our financial performance. In addition,
management currently uses non-GAAP measures in determining cash
incentive compensation.
About Financial Engines
With roots in Silicon Valley, Financial
Engines is the nation’s largest independent investment
advisor. We believe that all Americans -- not just the wealthy --
should have access to high-quality, unbiased financial help and our
client’s best interests should always come first. Today, more than
700 of the nation’s most respected employers trust Financial
Engines to deliver professional financial help to more than
nine million employees nationwide.
For more information, visit www.financialengines.com.
©1998-2017 Financial Engines, Inc. All rights reserved.
Financial Engines® is a registered trademark of Financial Engines,
Inc. All advisory services provided by Financial Engines
Advisors L.L.C. 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,” “allow,” “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: our
strategic focus; investment and growth strategy; our stock
repurchase program; Financial Engines’ expected financial
performance and outlook, including reconciliation information
related thereto and factors which may impact our outlook; the
benefits and anticipated uses 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 risks related to the acquisition of
The Mutual Fund Store, including our ability to fully realize the
anticipated benefits of the transaction, the effect of the
integration of the acquisition of The Mutual Fund Store on our
business, financial condition and operating results, including our
revenue and expenses; 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, industry
trends and pricing pressures; changes in our pricing policies or
those of our competitors; our regulatory environment, and risks
associated with our fiduciary obligations. In addition, 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-Q
for the quarter ended September 30, 2017, as filed with the SEC,
and in other reports filed by the Company with the SEC from time to
time, including the Company’s 10-K filed for the year ended
December 31, 2016. 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 November 2, 2017 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.
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.
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, 2016.
FINANCIAL ENGINES, INC. AND
SUBSIDIARIES
Unaudited Consolidated Balance
Sheets
December 31, September 30,
2016 2017 (In thousands, except per share
data) Assets Current assets: Cash and cash equivalents $
134,246 $ 197,708 Accounts receivable, net 103,256 114,037 Prepaid
expenses 7,370 7,739 Other current assets 3,468 4,466
Total current assets 248,340 323,950 Property and equipment, net
24,532 25,446 Intangible assets, net 205,751 199,992 Goodwill
312,020 312,020 Long-term deferred tax assets 40,504 47,564 Direct
response advertising, net 5,849 4,757 Other assets 3,140
2,237 Total assets $ 840,136 $ 915,966
Liabilities and
Stockholders’ Equity Current liabilities: Accounts payable $
36,780 $ 27,622 Accrued compensation 27,667 20,470 Deferred revenue
4,701 5,185 Dividend payable 4,350 4,423 Other current liabilities
4,343 2,392 Total current liabilities 77,841 60,092
Long-term deferred rent 12,269 11,059 Long-term tax liabilities
2,207 — Other liabilities 488 491 Total liabilities
92,805 71,642 Contingencies Stockholders’ equity:
Preferred stock, $0.0001 par value - 10,000 authorized as of
December 31, 2016 and
September 30, 2017; None issued or
outstanding as of December 31, 2016 and
September 30, 2017
— — Common stock, $0.0001 par value - 500,000 authorized as of
December 31, 2016 and
September 30, 2017; 63,476 and 64,498
shares issued and 62,199 and 63,221 shares
outstanding as of December 31, 2016 and
September 30, 2017, respectively
6 6 Additional paid-in capital 782,079 828,699 Treasury stock, at
cost (1,277 shares and 1,277 shares as of December 31, 2016 and
September 30, 2017, respectively)
(47,637 ) (47,637 ) Retained Earnings 12,883 63,256
Total stockholders’ equity 747,331 844,324 Total
liabilities and stockholders’ equity $ 840,136 $ 915,966
FINANCIAL ENGINES, INC. AND
SUBSIDIARIES
Unaudited Consolidated Statements of
Income
Three Months Ended
Nine Months Ended September 30, September 30,
2016 2017 2016
2017 (In thousands, except per share data) Revenue:
Professional management $ 102,641 $ 114,088 $ 281,518 $ 331,488
Platform 7,035 6,528 21,306 20,206 Other 2,748 1,631
7,891 3,122 Total revenue 112,424
122,247 310,715 354,816 Costs and expenses: Cost of
revenue 50,230 53,253 136,101 158,064 Research and development
9,599 10,771 27,833 32,458 Sales and marketing 21,743 19,933 61,892
60,437 General and administrative 11,189 8,941 35,598 29,701
Amortization of intangible assets, including
internal use software
4,012 4,289 11,137 12,683 Loss on reacquired franchisee rights
4,092 — 4,092 — Total costs and
expenses 100,865 97,187 276,653 293,343
Income from operations 11,559 25,060 34,062 61,473 Interest income,
net 149 351 133 614 Other income (expense), net (185 )
(29 ) (645 ) (201 ) Income before income taxes
11,523 25,382 33,550 61,886 Income tax expense 4,376
9,963 14,031 21,490 Net and comprehensive income $
7,147 $ 15,419 $ 19,519 $ 40,396 Dividends declared per share of
common stock $ 0.07 $ 0.07 $ 0.21 $ 0.21 Net income per share
attributable to holders of
common stock
Basic $ 0.12 $ 0.24 $ 0.32 $ 0.64 Diluted $ 0.11 $ 0.24 $ 0.32 $
0.62 Shares used to compute net income per share
attributable to holders of common
stock
Basic 61,838 63,181 60,608 62,877 Diluted 63,001 64,642 61,657
64,660
FINANCIAL ENGINES, INC. AND
SUBSIDIARIES
Unaudited Consolidated Statements of
Cash Flows
Nine Months Ended September 30,
2016 2017 (In thousands) Cash
flows from operating activities: Net income $ 19,519 $ 40,396
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 6,670 6,312
Amortization of intangible assets 10,819 12,273 Stock-based
compensation 24,307 26,617 Amortization of deferred sales
commissions 1,244 805 Amortization and impairment of direct
response advertising 3,547 2,828 Amortization of discount on
short-term investments (5 ) — Provision for doubtful accounts 689
450 Write-off of notes receivable 290 — Deferred tax 3,937 17,968
Loss on fixed asset disposal 200 155 Loss on sale of short-term
investments 18 — Changes in operating assets and liabilities, net
of acquired assets and liabilities: Accounts receivable (7,976 )
(11,231 ) Prepaid expenses (998 ) (452 ) Direct response
advertising (2,778 ) (1,751 ) Other assets (908 ) (2,060 ) Accounts
payable 572 (10,560 ) Accrued compensation (988 ) (7,197 ) Deferred
revenue 274 420 Deferred rent 948 (531 ) Other liabilities
(480) (22) Net cash provided by operating activities
58,901 74,420 Cash flows from investing activities: Purchase
of property and equipment (5,497 ) (5,574 ) Capitalization of
internal use software (5,295 ) (6,213 ) Sale of short-term
investments 39,923 — Cash paid for acquisitions, net of cash
acquired (262,405) — Net cash used in investing
activities (233,274 ) (11,787) Cash flows from
financing activities: Payments on capital lease obligations (80 )
(100 ) Payments related to business combinations (1,771 ) (2,845 )
Net share settlements for minimum tax withholdings (688 ) (3,788 )
Proceeds from issuance of common stock 3,371 20,726 Cash dividend
payments (12,869) (13,164) Net cash (used in)
provided by financing activities (12,037) 829 Net
(decrease) increase in cash and cash equivalents (186,410 ) 63,462
Cash and cash equivalents, beginning of period 305,216
134,246 Cash and cash equivalents, end of period $ 118,806 $
197,708 Supplemental cash flows information: Income taxes paid, net
of refunds $ 2,927 $ 6,175 Interest paid $ 10 $ 61 Non-cash
operating, investing and financing activities: Issuance of common
stock related to acquisition $ 267,018 $ — Unpaid purchases of
property and equipment $ 760 $ 1,596 Purchase of property and
equipment with noncash tenant improvement allowance $ 1,952 $ 162
Purchase of property and equipment under capital lease $ — $ 243
Capitalized stock-based compensation for internal use software $
569 $ 711 Capitalized stock-based compensation for direct response
advertising $ 68 $ 56 Dividends declared but not yet paid $ 3,713 $
4,423
FINANCIAL ENGINES, INC. AND
SUBSIDIARIESReconciliation of GAAP to Non-GAAP Operating
Results
The table below sets forth a
reconciliation of GAAP net income to non-GAAP adjusted EBITDA based
on ourhistorical results:
Three Months Ended
September 30,
Nine Months Ended
September 30,
Non-GAAP adjusted EBITDA 2016 2017
2016 2017 (In thousands, unaudited)
GAAP net income $ 7,147 $ 15,419 $ 19,519 $ 40,396 Interest income,
net (149 ) (351 ) (133 ) (614 ) Income tax expense 4,376 9,963
14,031 21,490 Depreciation and amortization 2,363 2,110 6,670 6,312
Amortization of intangible assets (excluding
internal use software)
2,710 2,795 7,301 8,388 Amortization of internal use software 1,187
1,348 3,518 3,885 Amortization and impairment of direct
response advertising
1,122 877 3,547 2,828 Amortization of deferred sales commissions
413 230 1,244 805 Non-GAAP EBITDA
19,169 32,391 55,697 83,490 Stock-based
compensation 9,580 9,015 24,307 26,617 Acquisition-related expenses
3,484 967 13,958 4,877 Loss on reacquired franchisee rights
4,092 — 4,092 — Non-GAAP adjusted EBITDA $
36,325 $ 42,373 $ 98,054 $ 114,984
The table below sets forth a reconciliation of GAAP net income
to non-GAAP adjusted net income based on our historical
results:
Three Months Ended
September 30,
Nine Months Ended
September 30,
Non-GAAP adjusted net income 2016 2017
2016 2017 (In thousands, unaudited)
GAAP net income $ 7,147 $ 15,419 $ 19,519 $ 40,396 Stock-based
compensation 9,580 9,015 24,307 26,617 Amortization of intangible
assets (excluding
internal use software)
2,710 2,795 7,301 8,388 Acquisition-related expenses 3,484 967
13,958 4,877 Loss on reacquired franchisee rights 4,092 — 4,092 —
Income tax expense from non-deductible
transaction expenses(1)
— — 1,162 — Tax-effect of adjustments(2) (7,588)
(4,881) (18,969) (15,235) Non-GAAP adjusted net
income $ 19,425 $ 23,315 $ 51,370 $ 65,043
(1) This amount represents estimated additional income tax
expense incurred in the period for non-deductible transaction
expenses related to acquisition activity.
(2) An estimated statutory tax rate of 38.2% has been applied to
eliminate the tax-effect for all periods presented.
The table below sets forth a reconciliation of GAAP diluted
earnings per share to non-GAAP adjusted earnings per share based on
our historical results:
Three Months Ended
September 30,
Nine Months Ended
September 30,
Non-GAAP adjusted earnings per share 2016
2017 2016 2017 (In thousands, except
per share data, unaudited) GAAP diluted earnings per share $
0.11 $ 0.24 $ 0.32 $ 0.62 Stock-based compensation 0.15 0.14 0.39
0.41 Amortization of intangible assets (excluding
internal use software)
0.04 0.04 0.12 0.13 Acquisition-related expenses 0.06 0.02 0.22
0.08 Loss on reacquired franchisee rights 0.07 — 0.07 — Income tax
expense from non-deductible
transaction expenses(1)
— — 0.02 — Tax-effect of adjustments(2) (0.12) (0.08)
(0.31) (0.23) Non-GAAP adjusted earnings per share $
0.31 $ 0.36 $ 0.83 $ 1.01 Shares of common stock outstanding 61,838
63,181 60,608 62,877 Dilutive stock options, RSUs and PSUs
1,163 1,461 1,049 1,783 Non-GAAP adjusted
common shares outstanding 63,001 64,642 61,657
64,660
(1) This amount represents estimated additional income tax
expense incurred in the period for non-deductible transaction
expenses related to acquisition activity.
(2) An estimated statutory tax rate of 38.2% has been applied to
eliminate the tax-effect for all periods presented.
The table below sets forth a reconciliation of our 2017 outlook
for GAAP net income to our 2017 outlook for non-GAAP adjusted
EBITDA:
Outlook for Fiscal 2017
as of October 27, 2017
Non-GAAP adjusted EBITDA outlook Low
High (In millions, unaudited) GAAP net income outlook
$ 55 $ 57 Estimated interest income, net(1) (1 ) (1 ) Estimated
income tax expense(1) 31 31 Estimated depreciation and
amortization(1) 8 8 Estimated amortization of intangible assets
(excluding internal use software)(1) 11 11 Estimated amortization
of internal use software(1) 5 5 Estimated amortization and
impairment of direct response advertising(1) 4 4 Estimated
amortization of deferred sales commissions(1) 1 1
Non-GAAP EBITDA 114 116 Estimated stock-based
compensation(1) 38 38 Estimated acquisition-related expenses(1)
5 5 Non-GAAP adjusted EBITDA outlook $ 157 $ 159
(1) The estimated items are provided solely for the purpose of
reconciling our 2017 outlook for GAAP net income to our 2017
outlook for non-GAAP adjusted EBITDA and are not intended and
should not be construed as part of the Company’s outlook for 2017,
which outlook is limited to revenue, net income and non-GAAP
adjusted EBITDA. These items are subject to a number of
variables which make them inherently difficult to estimate
accurately. In addition, actual amounts for such items have
historically varied and may continue to vary significantly from
period to period. Any variances in these estimates may in turn
have a significant impact on our 2017 outlook and future GAAP
results.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171102006461/en/
For Financial EnginesAmy Conley,
617-556-2305aconley@financialengines.comorDon Duffy,
408-498-6040ir@financialengines.com
Financial Engines, Inc. (delisted) (NASDAQ:FNGN)
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