Bazaarvoice, Inc.
Mar 1, 2016

Bazaarvoice, Inc. Announces its Financial Results for the Third Fiscal Quarter of 2016

Third fiscal quarter highlights include: 

AUSTIN, Texas, March 01, 2016 (GLOBE NEWSWIRE) -- Bazaarvoice, Inc. (Nasdaq:BV), the world's largest network of active shoppers, reported its financial results for the third fiscal quarter ended January 31, 2016.

"While Bazaarvoice is transforming as a company, I am generally pleased with the results we delivered in the third quarter.  For the second consecutive quarter we delivered positive Adjusted EBITDA and positive operating cash flow and we expect to drive further improvements in profitability in fiscal year 2017," said Gene Austin, chief executive officer and president. "We believe that Bazaarvoice is in a unique position with our strong client base, our broad Consumer Generated Content offerings, and our Shopper Advertising initiative to monetize our network and drive revenue growth over the long term."

Third Fiscal Quarter of 2016 Financial Details

Revenue from continuing operations: Bazaarvoice reported revenue of $50.3 million for the third fiscal quarter of 2016, up 1.4% from the third fiscal quarter of 2015, which consisted of SaaS revenue of $47.9 million and net advertising revenue, formerly referred to as media revenue, of $2.4 million.

Adjusted EBITDA from continuing operations: Adjusted EBITDA for the third fiscal quarter of 2016 was $3.1 million compared to $2.0 million for the third fiscal quarter of 2015.

GAAP net loss and net loss per share from continuing operations: GAAP net loss was $3.1 million, compared to a GAAP net loss of $4.1 million for the third fiscal quarter of 2015. GAAP net loss per share was $0.04 based upon weighted average shares outstanding of 81.1 million, compared to a loss of $0.05 for the third fiscal quarter of 2015 based upon weighted average shares outstanding of 78.9 million.

Non-GAAP net income and earnings per share from continuing operations: Non-GAAP net income was $1.6 million, compared to a non-GAAP net loss of $0.1 million for the third fiscal quarter of 2015. Non-GAAP earnings per share was $0.02 based upon weighted average shares outstanding of 81.1 million, compared to earnings per share of $0.00 for the third fiscal quarter of 2015 based upon weighted average shares outstanding of 78.9 million.

Clients: The number of active clients at the end of the third fiscal quarter of 2016 was 1,383 and the number of network clients at the end of the third fiscal quarter of 2016 was over 4,900. Annualized SaaS revenue per average active client for the third fiscal quarter of 2016 was approximately $140,000.

Active Clients

We define an active client as an organization for which we have a contract and the client is launched as of the last day of the quarter, and we count organizations that are closely related as one client, even if they have signed separate contractual agreements.

Network Clients

We define a network client as an organization that does not have recurring revenue. We count organizations that are closely related as one client, even if they have signed separate contractual agreements. We believe that our network client base in combination with our active client base is an indicator of the reach of our network.

Quarterly Conference Call

Bazaarvoice will host a conference call today at 4:30 p.m. Eastern Time to review the Company's financial results for the third fiscal quarter of 2016. To access this call, dial (877) 407-3982 from the United States or (201) 493-6780 internationally with conference ID 13629382. A live webcast of the conference call can be accessed from the investor relations page of Bazaarvoice's company website at investors.bazaarvoice.com. Following the completion of the call, a recorded replay will be available on the Company's website, and a telephone replay will be available through March 15, 2016 by dialing (877) 870-5176 from the United States or (858) 384-5517 internationally with recording access code 13629382.

About Bazaarvoice

Bazaarvoice is the world's largest network of active shoppers, connecting more than one-half billion consumers to thousands of retailers and brands that represent tens of millions of products and services. Online, in-store, and on mobile devices, Bazaarvoice's technology platform engages consumers, increases sales, and protects loyalty through authentic ratings and reviews, Q&A, and brand-relevant photos, videos, and social posts. Interactions across the Bazaarvoice network yield insights on past, present, and future shopping behavior, enabling marketers to identify competitive advantage. For more information, visit http://www.bazaarvoice.com, read the blog at www.bazaarvoice.com/blog, and follow on Twitter at www.twitter.com/bazaarvoice.

Discontinued Operations

The divestiture of PowerReviews was completed on July 2, 2014. The terms of the transaction were approved by the Department of Justice on June 26, 2014. As a result, PowerReviews revenues, related expenses and loss on disposal, net of tax, are components of "Loss from discontinued operations, net of tax" in the Condensed Consolidated Statements of Operations since our fourth fiscal quarter of 2014 and for all comparative fiscal quarters presented. The Statement of Cash Flows is reported on a combined basis without separately presenting cash flows from discontinued operations for all periods presented.

Non-GAAP Financial Measures

Adjusted EBITDA for continuing operations discussed in this press release is defined as our GAAP net loss from continuing operations adjusted for stock-based expense, contingent consideration related to acquisitions, adjusted depreciation and amortization (which excludes amortization of capitalized internal-use software development costs), integration and other costs related to acquisitions, other non-business costs and benefits, income tax expense and other (income) expense, net.

Adjusted EBITDA for discontinued operations presented in the accompanying financial tables is defined as our GAAP net loss from discontinued operations adjusted for stock-based expense, adjusted depreciation and amortization (which excludes amortization of capitalized internal-use software development costs), impairment of acquired intangibles, integration and other costs related to the acquisition and the divestiture of PowerReviews, estimated loss on disposal of discontinued operations, other non-business costs and benefits, income tax expense and other (income) expense, net.

Non-GAAP net loss for continuing operations, which is used to calculate non-GAAP net loss per share for continuing operations, is defined as our GAAP net loss from continuing operations, adjusted to exclude stock-based expense, contingent consideration related to acquisitions, amortization of acquired intangible assets, integration and other costs related to acquisitions, and other non-business costs and benefits along with the associated income tax effect of these adjustments.

Non-GAAP net loss for discontinued operations, which is used to calculate non-GAAP net loss per share for discontinued operations, is defined as our GAAP net loss from discontinued operations adjusted to exclude stock-based expense, amortization of acquired intangible assets, impairment of acquired intangibles, integration and other costs related to the acquisition and divestiture of PowerReviews, estimated loss on disposal of discontinued operations and other non-business costs and benefits along with the associated income tax effect of these adjustments.

Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of core operating performance. Further, management has presented these non-GAAP financial measures separately for discontinued operations as it may prove useful to securities analysts and investors in evaluating the impact of the divestiture of PowerReviews on the Company's continuing operating performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company's operating performance against prior periods and the effectiveness of our business strategies, the preparation of operating budgets and to determine appropriate levels of operating and capital investments, as well as in communications with our board of directors concerning our financial performance. Management also believes that the non-GAAP financial measures provide additional insight for securities analysts and investors in evaluating the Company's financial and operational performance without regard to items that can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired. However, these non-GAAP financial measures have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP. Furthermore, these non-GAAP financial measures may not be comparable to similarly titled measures of other organizations because other organizations may not calculate these non-GAAP financial measures in the same manner. We intend to provide these non-GAAP financial measures as part of our future financial results discussions; therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.

Forward-looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, and objectives of management are forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "will," "would," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about driving future improvements in profitability, monetizing the Bazaarvoice network and driving revenue growth over the long term and other statements about management's beliefs, intentions or goals. We may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to, our expectations regarding our revenue, expenses, sales and operations; changes in accounting standards; our ability to realize efficiencies and to execute on our strategic initiatives; our limited operating history; our ability to operate in a new and unproven market; our ability to effectively manage growth; our ability to develop and launch new products; risks associated with the uncertainty of market acceptance of our new products; our ability to retain our existing customers and satisfy their obligations and needs and upsell to existing clients; our ability to attract and retain employees; our ability to maintain pricing for our products and services; our ability to manage expansion into new vertical industries; risks and challenges associated with international sales; our ability to successfully identify, manage and integrate potential acquisitions; the impact of the Department of Justice stipulation regarding PowerReviews on our business; and other risks and potential factors that could affect our business and financial results identified in our Form 10-K for the fiscal year ended April 30, 2015 as filed with the Securities and Exchange Commission on June 25, 2015. Additional information will also be set forth in our future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend and undertake no duty to release publicly any updates or revisions to any forward-looking statements contained herein.

Bazaarvoice, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
 January 31, April 30 ,
  2016  2015
Assets   
Current assets:   
Cash and cash equivalents$57,944  $54,041 
Short-term investments50,975  52,730 
Accounts receivable, net39,082  49,532 
Prepaid expenses and other current assets9,030  12,977 
Total current assets157,031  169,280 
Property, equipment and capitalized internal-use software development costs, net30,117  19,054 
Goodwill139,155  139,155 
Acquired intangible assets, net10,080  11,498 
Other non-current assets4,683  3,974 
Total assets$341,066  $342,961 
Liabilities and stockholders' equity   
Current liabilities:   
Accounts payable$5,620  $3,539  
Accrued expenses and other current liabilities22,800  27,397 
Deferred revenue60,759  60,400 
Total current liabilities89,179  91,336 
Long-term liabilities:   
Revolving line of credit57,000  57,000 
Deferred revenue less current portion2,397  2,530 
Other liabilities, long-term5,833  712  
Total liabilities154,409  151,578 
Commitments and contingencies   
Stockholders' equity:    
Common stock8  8 
Additional paid-in capital432,552  418,509 
Accumulated other comprehensive loss(1,197) (638)
Accumulated deficit(244,706) (226,496)
Total stockholders' equity186,657  191,383 
Total liabilities and stockholders' equity$341,066  $342,961 


Bazaarvoice, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except net loss per share data)
(unaudited)
    
 Three Months Ended January 31, Nine Months Ended January 31,
 2016 2015 2016 2015
Revenue$50,255  $49,562  $149,057  $142,864 
Cost of revenue18,920  17,988  57,614  51,758 
Gross profit31,335  31,574  91,443  91,106 
Operating expenses:       
Sales and marketing16,113  18,020  51,781  57,946 
Research and development10,199  8,779  31,086  27,815 
General and administrative6,940  6,932  22,821  22,925 
Acquisition-related and other332  413  1,258  3,231 
Amortization of acquired intangible assets309  309  928  928 
Total operating expenses33,893  34,453  107,874  112,845 
Operating loss(2,558) (2,879) (16,431) (21,739)
Other income (expense), net:       
Interest income124  27  275  43 
Interest expense(596) (536) (1,628)  (1,018)
Other expense(247) (411) (553) (1,031)
Total other expense, net(719) (920) (1,906) (2,006)
Loss from continuing operations before income taxes(3,277) (3,799) (18,337) (23,745)
Income tax expense (benefit)(163) 324  (127) 594 
Net loss from continuing operations$(3,114) $(4,123) $(18,210) $(24,339)
Loss from discontinued operations, net of tax       (1,257)
Net loss applicable to common stockholders$(3,114) $(4,123) $(18,210) $(25,596)
Net loss per share applicable to common stockholders:       
Continuing operations$(0.04) $(0.05) $(0.23)  $(0.31)
Discontinued operations      (0.02)
Basic and diluted loss per share$(0.04) $(0.05)  $(0.23) $(0.33)
Basic and diluted weighted average number of shares outstanding81,096  78,898  80,649  78,315 


Bazaarvoice, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
    
 Three Months Ended January 31, Nine Months Ended January 31,
 2016 2015 2016 2015
Operating activities:       
Net loss$(3,114) $(4,123) $(18,210) $(25,596)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:       
Depreciation and amortization expense3,509  3,119  10,487  9,169 
Loss on disposal of discontinued operations, net of tax      1,537 
Stock-based expense3,892  3,100  11,850  9,689 
Bad debt expense(326) 903  (265) 2,126 
Excess tax benefit related to stock-based expense  (1)   (2)
Amortization of deferred financing costs58  39  176  39 
Other non-cash expense37  (84) 82  145 
Changes in operating assets and liabilities:       
Accounts receivable (1,227) (16,601) 10,715  (18,757)
Prepaid expenses and other current assets(1,456) (1,092) (479) (1,600)
Other non-current assets(38) 93  (968) (112)
Accounts payable(352) 389  1,797   844 
Accrued expenses and other current liabilities870  (1,036) (5,138) (2,391 )
Deferred revenue4,075  8,604  225  6,810 
Other liabilities, long-term2,079  (197) 5,039  (933)
Net cash provided by (used in) operating activities8,007  (6,887) 15,311  (19,032)
Investing activities:        
Proceeds from sale of discontinued operations    4,501  25,500 
Purchases of property, equipment and capitalized internal-use software development costs(9,333) (3,012) (19,788) (9,250)
Decrease in restricted cash  1,000    500 
Purchases of short-term investments(13,612) (38,089) (53,467) (79,136)
Proceeds from maturities of short-term investments14,500  27,752  55,017  55,767 
Proceeds from sale of short-term investments       5,012 
Net cash used in investing activities(8,445) (12,349) (13,737) (1,607)
Financing activities:       
Proceeds from employee stock compensation plans664  3,416  2,777  6,215 
Proceeds from revolving line of credit  57,000    57,000 
Payments on revolving line of credit  (27,000)   (27,000)
Deferred financing costs  (706)   (706)
Excess tax benefit related to stock-based expense  1    2 
Net cash provided by financing activities664  32,711  2,777  35,511 
Effect of exchange rate fluctuations on cash and cash equivalents(354) (543) (448) (1,019)
Net change in cash and cash equivalents(128) 12,932   3,903  13,853 
Cash and cash equivalents at beginning of period58,072  32,855  54,041  31,934 
Cash and cash equivalents at end of period$57,944  $45,787  $57,944  $45,787 
Supplemental disclosure of non-cash investing and financing activities:       
Purchase of fixed assets recorded in accounts payable$318  $  $318  $ 
Asset retirement obligation costs incurred$100  $  $100  $ 


Bazaarvoice, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures for Continuing Operations
(in thousands, except net loss per share data)
(unaudited)
 Three Months Ended January 31, Nine Months Ended January 31,
 2016 2015 2016 2015
Non-GAAP net income (loss) and net income (loss) per share from continuing operations:       
GAAP net loss from continuing operations$(3,114) $(4,123) $(18,210) $(24,339)
Stock-based expense (1)3,892  3,100  11,850  9,565 
Amortization of acquired intangible assets473  473  1,418  1,418 
Acquisition-related and other expense332  413  1,258  3,231 
Other stock-related benefit (3)      (430)
Income tax adjustment for non-GAAP items  (3)   (2)
Non-GAAP net income (loss) from continuing operations$1,583  $(140) $(3,684) $(10,557)
GAAP basic and diluted shares81,096  78,898  80,649  78,315 
Non-GAAP basic and diluted net income (loss) per share from continuing operations$0.02  $  $(0.05) $(0.13)
Adjusted EBITDA from continuing operations:       
GAAP net loss from continuing operations$(3,114) $(4,123) $(18,210) $(24,339)
Stock-based expense (1)3,892  3,100  11,850  9,565 
Adjusted depreciation and amortization (2)1,409  1,328  4,264  4,260 
Acquisition-related and other expense332  413  1,258  3,231 
Other stock-related benefit (3)      (430)
Income tax expense (benefit)(163) 324  (127) 594 
Total other expense, net719  920  1,906  2,006 
Adjusted EBITDA from continuing operations$3,075  $1,962  $941  $(5,113)
                
(1)
Stock-based expense includes the following:
       
Cost of revenue$585  $451  $1,664  $1,223 
Sales and marketing686   867  2,413  2,973 
Research and development916  685  2,593  1,854 
General and administrative1,705  1,097  5,180  3,515 
Stock-based expense$3,892  $3,100  $11,850  $9,565 
                
(2)
Adjusted depreciation and amortization includes the following:
       
Cost of revenue$456  $400  $1,371  $ 1,308 
Sales and marketing210  221  756  782 
Research and development228  164  612  605 
General and administrative206   234  597  637 
Amortization of acquired intangible assets309  309   928  928 
Adjusted depreciation and amortization$1,409  $1,328  $4,264  $4,260 
 
(3)  Other stock-related expense represents an estimated liability for taxes and related items in connection with the treatment of certain stock option grants. Since the estimated liability directly relates to stock option grants and as stock-based expenses are consistently excluded from the non-GAAP financial measures, the Company excluded this estimated liability. During the nine months ended January 31, 2015, the Company recorded a benefit of $0.4 million due to a reduction of this estimated liability. Other stock-related expense includes the following:
 
General and administrative$  $  $  $(430)
Other stock-related expense$  $  $  $(430)
 


Bazaarvoice, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures for Discontinued Operations
(in thousands, except net loss per share data)
(unaudited)
 Three Months Ended January 31, Nine Months Ended January 31,
 2016 2015 2016 2015
Non-GAAP net income and net earnings per share from discontinued operations:       
GAAP net loss from discontinued operations$   $  $  $(1,257)
Stock-based expense (1)      124 
Acquisition-related, divestiture-related and other expenses      682 
Loss on disposal of discontinued operations, net of tax (2)      1,537 
Non-GAAP net income from discontinued operations$  $  $  $1,086 
GAAP basic weighted average shares outstanding      78,315 
GAAP diluted weighted average shares outstanding       79,536 
Non-GAAP basic earnings per share from discontinued operations$  $  $  $0.01 
Non-GAAP diluted earnings per share from discontinued operations$  $  $  $0.01 
Adjusted EBITDA from discontinued operations:       
GAAP net loss from discontinued operations$  $  $  $(1,257)
Stock-based expense (1)      124 
Acquisition-related, divestiture-related and other expenses      682 
Income tax expense (benefit)      23 
Estimated loss on disposal of discontinued operations, net of tax (2)      1,537 
Adjusted EBITDA from discontinued operations$  $  $  $1,109 
        
(1)
Stock-based expense includes the following:
       
Cost of revenue$  $  $  $115 
Research and development      4 
General and administrative      5 
Adjusted depreciation and amortization$  $  $  $124 
 
(2)  On July 2, 2014, the Company completed the sale of PowerReviews for a total cash consideration of $30.0 million. Of the $30.0 million sales price, $4.5 million was placed into escrow as partial security for the Company's indemnification obligations. The Company recognized a loss on the disposal of PowerReviews of $1.5 million for the nine months ended January 31, 2015.


Bazaarvoice, Inc.
Selected Quarterly Financial and Operational Metrics for Continuing and Discontinued Operations
(in thousands, except active enterprise clients and full-time employees data)
(unaudited)
 
 Three Months Ended
 Apr 30, Jul 31, Oct 31, Jan 31, Apr 30, Jul 31, Oct 31, Jan 31,
 2014 2014 2014 2015 2015 2015 2015 2016
Continuing Operations:               
Revenue (1)$43,078  $45,977  $47,325  $49,562  $48,317  $48,876  $49,926  $50,255 
Cost of revenue14,522  16,356  17,414  17,988  18,148  19,548  19,146  18,920 
Gross profit28,556  29,621  29,911  31,574  30,169  29,328  30,780  31,335 
Operating expenses:               
Sales and marketing23,884  20,995  18,931  18,020  20,427  19,166  16,502  16,113 
Research and development9,832  9,730  9,306  8,779  9,880  10,533  10,354  10,199 
General and administrative6,521  7,893  8,100  6,932  7,582  8,238  7,643  6,940 
Acquisition-related and other expense366  492  2,326   413  815  702  224  332 
Amortization of acquired intangible assets288  309  310  309  309  309  310  309 
Total operating expenses40,891  39,419  38,973  34,453  39,013  38,948  35,033  33,893 
Operating loss(12,335) (9,798) (9,062) (2,879) (8,844) (9,620) (4,253) (2,558)
Total other expense, net(316) (498) (588) (920) (521) (712) (475) (719)
Loss before income taxes(12,651) (10,296) (9,650) (3,799) (9,365) (10,332) (4,728) (3,277)
Income tax expense (benefit)(418) 12  258  324  (540) (88) 124  (163)
Net loss from continuing operations$(12,233) $(10,308) $(9,908) $(4,123) $(8,825) $(10,244) $(4,852) $(3,114)
Stock-based expense (2)$3,333  $3,122  $3,343  $3,100  $3,113  $4,049  $3,909  $3,892 
Adjusted depreciation and amortization (3)1,081  1,334  1,598  1,328  1,349  1,600  1,255  1,409 
Acquisition-related and other expense366  492  2,326  413  815   702  224  332 
Other stock-related benefit (4)  (430)             
Income tax expense (benefit)(418) 12  258  324  (540) (88) 124  (163)
Total other expense, net316  498  588  920  521  712  475  719 
Adjusted EBITDA from continuing operations$(7,555 ) $(5,280) $(1,795) $1,962   $(3,567) $(3,269) $1,135  $3,075 
Loss from discontinued operations$(11,448) $(1,257) $  $  $  $  $  $ 
Stock-based expense (2)139  124             
Adjusted depreciation and amortization (3)1,482               
Impairment of acquired intangible assets (6)2,500               
Acquisition-related, divestiture-related and other expenses819  682             
Income tax expense (benefit)(660)  23             
Estimated loss on disposal of discontinued operations, net of tax  (7)9,192  1,537             
Adjusted EBITDA from discontinued operations$2,024  $1,109  $  $  $  $  $  $ 
Number of active clients from continuing operations (at period end) (5)1,096  1,189  1,243   1,292  1,331  1,337  1,360  1,383 
Number of active clients from discontinued operations (at period end) (5)341               
Full-time employees including employees attributable to discontinued operations (at period end)799  787  814  825  826  834   855  817 
Full-time employees attributable to discontinued operations (at period end)24               
                                
 (1):                               
 Three Months Ended
 Apr 30,  Jul 31, Oct 31, Jan 31, Apr 30, Jul 31, Oct 31, Jan 31,
 2014 2014 2014 2015 2015 2015 2015  2016
Revenue from continuing operations includes the following:               
SaaS$41,924  $44,324  $45,199  $46,429  $46,173  $46,830  $47,671  $47,884 
Advertising1,154  1,653  2,126  3,133  2,144  2,046  2,255  2,371 
Revenue$43,078  $45,977  $47,325  $49,562  $48,317  $48,876  $49,926  $50,255 
Revenue from discontinued operations includes the following:               
SaaS$3,947  $2,517  $  $  $  $  $  $ 
Advertising25  18             
Revenue$3,972  $2,535  $  $  $  $  $  $ 
Total revenue:               
SaaS$45,871  $46,841  $45,199  $46,429  $46,173  $46,830  $47,671  $47,884 
Advertising1,179  1,671  2,126  3,133  2,144  2,046  2,255  2,371 
Revenue$47,050  $48,512  $47,325  $49,562  $ 48,317  $48,876  $49,926  $50,255 
                                
(2)
Stock-based expense from continuing operations includes the following:
               
Cost of revenue$316  $314  $458  $451  $294  $472  $607  $585 
Sales and marketing1,072  944  1,162  867  950  1,084  643  686 
Research and development747  647  522  685  707  757  920  916 
General and administrative1,198  1,217  1,201  1,097  1,162   1,736  1,739  1,705 
Stock-based expense from continuing operations$3,333  $3,122  $3,343  $3,100  $3,113  $4,049  $ 3,909  $3,892 
Stock-based expense from discontinued operations includes the following:               
Cost of revenue$127  $115  $  $  $  $  $  $ 
Sales and marketing               
Research and development6  4             
General and administrative6  5             
Stock-based expense from discontinued operations$139  $124  $  $  $  $  $  $ 
                                  
 (3):                                
 Three Months Ended
 Apr 30, Jul 31, Oct 31, Jan 31, Apr 30, Jul 31, Oct 31, Jan 31,
  2014 2014 2014 2015 2015 2015  2015 2016
Adjusted depreciation and amortization from continuing operations includes the following:               
Cost of revenue$244  $427  $481  $400  $405  $514  $401  $456 
Sales and marketing275  258  303  221  220  349  197  210 
Research and development189  199  242  164  181  209  175  228 
General and administrative85  141  262  234  234  220  171   206 
Amortization of acquired intangible assets288  309  310  309  309  308  311  309 
Adjusted depreciation and amortization from continuing operations$1,081  $1,334  $1,598  $1,328  $1,349  $1,600  $1,255  $1,409 
Adjusted depreciation and amortization from discontinued operations includes the following:                
Cost of revenue$450  $  $  $   $  $  $  $ 
General and administrative10               
Amortization of acquired intangible assets1,022                
Adjusted depreciation and amortization from discontinued operations$1,482  $  $  $  $  $  $  $ 
                                
(4)
Other stock-related benefit from continuing operations includes the following:
               
General and administrative$  $(430) $  $  $  $  $  $ 
Other stock-related benefit$  $(430) $  $  $  $  $  $ 
 
(5) Beginning as of our first fiscal quarter of 2016, we define an active client as an organization for which we have a contract and the client is launched as of the last day of the quarter, and we count organizations that are closely related as one client, even if they have signed separate contractual agreements.
 
Due to the presentation of the PowerReviews business as discontinued operations, we have separated our active clients into two categories: 1) active clients from continuing operations and 2) active clients from discontinued operations. As a result, each category could include a common client for which we recognized recurring revenue who has organizations that have separate contractual agreements.
 
All periods prior to the first fiscal quarter of 2016 discussed in this press release or presented in the accompanying financial tables have been revised to conform to this definition of an active client.
 
(6) During the fourth fiscal quarter of 2014, the Company reported the results of operations and financial position of PowerReviews as "discontinued operations." On the Condensed Consolidated Balance Sheet as of April 30, 2014, the assets and liabilities of PowerReviews were presented as "Assets held for sale" and "Liabilities held for sale." The Company compared the carrying value of the asset group included in "assets held for sale" to the undiscounted cash flows to be generated by the asset group. The carrying value of the asset group exceeded the undiscounted cash flows and, as a result, the Company recorded an impairment charge of $2.5 million for the three months ended April 30, 2014.
 
(7) On July 2, 2014, the Company completed the sale of PowerReviews for a total cash consideration of $30.0 million. Of the $30.0 million sales price, $4.5 million was placed into escrow as partial security for the Company's indemnification obligations. The Company incurred a total loss of $10.7 million on the sale of PowerReviews. The loss on disposal of discontinued operations was determined by offsetting the total consideration from selling the PowerReviews business by any associated transaction costs and the net carrying value of the assets and liabilities held for sale as of July 2, 2014. Of the $10.7 million loss on disposal of discontinued operations, $9.2 million was recognized as an estimated loss on disposal of discontinued operations during the three months ended April 30, 2014 resulting in the incremental loss of $1.5 million being recognized in the three months ended July 31, 2014.


Investor Relations Contact:

Linda Wells

Bazaarvoice, Inc.

415-872-3612

linda.wells@bazaarvoice.com



Media Contact:

Andy North

Bazaarvoice, Inc.

512-551-6502

andy.north@bazaarvoice.com

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Source: Bazaarvoice, Inc.

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