Business Wire | Aug 12, 2021 04:06PM EDT

CCC Intelligent Solutions Inc. Announces Second Quarter Fiscal 2021 Financial Results

Aug. 12, 2021

CHICAGO--(BUSINESS WIRE)--Aug. 12, 2021--CCC Intelligent Solutions Inc. (CCC) (NYSE: CCCS), a leading SaaS platform for the Property & Casualty insurance economy, today announced its financial results for the three months ended June 30, 2021.

"We saw continued adoption of digital and AI solutions that accelerated top-line performance in the second quarter. Our continuous focus on innovation and customer success has CCC in a terrific position to support the digitization of the P&C insurance economy by delivering the differentiated solutions our customers want to improve their business," said Githesh Ramamurthy, Chairman & CEO of CCC.

Ramamurthy continued, "We are excited by the successful completion of our business combination with Dragoneer Growth Opportunity Corp. and our return to the public markets. We have increased flexibility to expand how we invest in the business that will benefit our customers and provide additional growth opportunities for CCC to meet or exceed our long-term growth objectives."

Second Quarter 2021 Financial Highlights

Revenue

* Total revenue was $166.8 million for the second quarter of 2021, compared to $150.7 million for the second quarter of 2020. Adjusted for the impact of the divestiture of a portion of our professional services casualty solution in December 2020, total revenue grew 16% in the second quarter of 2021.

Profitability

* GAAP gross profit was $121.3 million, representing a gross margin of 73%, for the second quarter of 2021, compared with GAAP gross profit of $100.7 million, representing a gross margin of 67%, for the second quarter of 2020. Adjusted gross profit was $128.0 million, representing an adjusted gross margin of 77%, for the second quarter of 2021, compared with adjusted gross profit of $107.3 million, representing an adjusted gross margin of 74%, for the second quarter of 2020. * GAAP operating income was $22.0 million for the second quarter of 2021, compared with GAAP operating income of $15.6 million for the second quarter of 2020. Adjusted operating income was $54.8 million for the second quarter of 2021, compared with adjusted operating income of $42.5 million for the second quarter of 2020. * GAAP net income was $3.8 million for the second quarter of 2021, compared with GAAP net loss of $2.0 million for the second quarter of 2020. Adjusted net income was $26.3 million for the second quarter of 2021, compared with adjusted net income of $17.5 million for the second quarter of 2020. * Adjusted EBITDA was $60.1 million for the second quarter of 2021, compared with adjusted EBITDA of $46.9 million for the second quarter of 2020. Adjusted EBITDA grew 28% in the second quarter of 2021 as compared to the second quarter of 2020.

Liquidity

* CCC had $58.5 million in cash and cash equivalents and $1.3 billion of total debt at June 30, 2021. The Company generated $21.6 million in cash from operating activities and had free cash flow of $13.1 million during the second quarter of 2021, compared with $14.7 million generated in cash from operating activities and had $7.6 million in free cash flow in the second quarter of 2020.

The information presented above includes non-GAAP financial measures such as "adjusted EBITDA," "adjusted net income," "adjusted operating income," "adjusted gross margin," and "free cash flow." Refer to "Non-GAAP Financial Measures" for a discussion of these measures and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

2nd Quarter and Recent Business Highlights

* Successfully completed our business combination with Dragoneer Growth Opportunities Corp and began trading under the ticker "CCCS" on the New York Stock Exchange on August 2, 2021. CCC received net proceeds from this transaction of more than $600 million. * Announced CCC ONE(r) Estimating-IQ, which will enhance the AI capabilities on the CCC ONE(r) platform for repair facilities, will be released in the third quarter. Incorporation of advanced AI will accelerate estimating for the tens of thousands of collision repairers using the CCC ONE platform. * Announced a partnership with Buckle, an inclusive tech-enabled financial services company, to digitize auto claims for its community of rideshare and delivery drivers. This win reinforces the opportunity we see to expand our solutions to emerging parts of the auto economy ecosystem. * Announced the new corporate name CCC Intelligent Solutions Inc. The new name reflects the company's focus on applying AI, IoT, and advanced analytics to power mission-critical workflows, commerce, and connections across the multi-trillion-dollar insurance economy. The CCC Cloud platform connects insurers, collision repairers, automakers, lenders, suppliers, and more to support the industry's digital transformation.

Business Outlook

Based on information as of today, August 12, 2021, the Company is issuing the following financial guidance:

Third Quarter Fiscal 2021 Full Year Fiscal 2021

Revenue $172.5 million to $174.5 million $677 million to $682 million



Adjusted EBITDA $61 million to $63 million $244 million to $249 million

Year-over-year revenue growth for the third quarter of 2021 is forecasted to be 9% - 10%, or 15% - 16% when adjusted for the impact of the divestiture of a portion of our casualty solution (specifically, First Party Clinical Services) in December 2020. Year-over-year revenue growth for the full year 2021 is forecasted to be 7% - 8%, or 13% - 14% on an adjusted basis. First Party Clinical Services revenue was $7.8 million and $34.7 million for our fiscal third quarter and year end 2020, respectively.

Conference Call Information

CCC will host a conference call today, August 12, 2021, at 5:00 p.m. (Eastern Time) to discuss the Company's financial results and financial guidance. To access this call, dial 844-200-6205 (domestic) or 44-208-0682-558 (international). The conference ID number is 941788. A live webcast of this conference call will be available on the "Investor Relations" page ( https://ir.cccis.com/home/default.aspx.) and a replay will be archived on the website as well.

About CCC Intelligent Solutions

CCC Intelligent Solutions Inc. (CCC) (NYSE: CCCS) is a leading SaaS platform for the multi-trillion-dollar P&C insurance economy powering operations for insurers, repairers, automakers, part suppliers, lenders, and more. CCC cloud technology connects more than 30,000 businesses digitizing mission-critical workflows, commerce, and customer experiences. A trusted leader in AI, IoT, customer experience, network and workflow management, CCC delivers innovations that keep people's lives moving forward when it matters most. Learn more about CCC at www.cccis.com.

Forward Looking Statements

This press release contains forward-looking statements that are based on beliefs and assumptions and on information currently available. In some cases, you can identify forward-looking statements by the following words: "may," "will," "could," "would," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "project," "potential," "continue," "ongoing" or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements regarding future events, goals, plans and projections regarding the company's financial position, results of operations, market position, product development and business strategy. Such differences may be material. We cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward looking statements are subject to a number of risks and uncertainties, including, among others, the general economic, political, business and competitive conditions; the ability to recognize the anticipated benefits of the business combination (the "business combination") of CCC's parent corporation and Dragoneer Growth Opportunities Corp. ; the impact of COVID-19 on CCC's business and/or the ability of the parties to complete the business combination; failure to realize the anticipated benefits of the business combination, ; costs related to the business combination; the ability of the Company to grow and manage growth profitably and retain its key employees; the risk that the expansion of CCC Payments and launch of CCC Estimate are not as successful as anticipated or do not occur on the expected timing; the inability to maintain CCC's listing of securities on the NYSE; changes in applicable laws or regulations; and other risks and uncertainties, including those included under the header "Risk Factors" in the definitive proxy statement/prospectus filed by Dragoneer Growth Opportunities Corp. with the Securities and Exchange Commission ("SEC") on July 6, 2021, which can be obtained, without charge, at the SEC's website (www.sec.gov). The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.

Non-GAAP Financial Measures

This press release includes certain financial measures not presented in accordance with generally accepted accounting principles in the U.S. ("GAAP"), including, but not limited to, "adjusted EBITDA," "adjusted net income," "adjusted operating income," "adjusted gross margin," and "free cash flow" in each case presented on a non-GAAP basis, and certain ratios and other metrics derived therefrom. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company's financial results. Therefore, these measures should not be considered in isolation or as an alternative to other measures of profitability, liquidity or performance under GAAP. You should be aware that the Company's calculation of these non-GAAP measures may not be comparable to similarly-titled measures used by other companies.

The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company's financial condition and results of operations. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in and in comparing the Company's financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures, Please refer to the reconciliations of these measures below to what the Company believes are the most directly comparable measures evaluated in accordance with GAAP.

This press release also includes certain projections of non-GAAP financial measures. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included.

CYPRESS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

June 30, December 31,

2021 2020

(Unaudited) (Audited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 58,506 $ 162,118

Accounts receivable-Net of allowances of $4,218and $4,224 for June 30, 2021 and December 31, 81,817 74,107 2020, respectively

Income taxes receivable 1,244 2,037

Deferred contract costs 12,681 11,917

Other current assets 33,524 31,586

Total current assets 187,772 281,765

SOFTWARE, EQUIPMENT, AND PROPERTY-Net 108,640 101,438

OPERATING LEASE ASSETS 41,859 -

INTANGIBLE ASSETS-Net 1,262,608 1,311,917

GOODWILL 1,466,884 1,466,884

DEFERRED FINANCING FEES, REVOLVER-Net 598 746

DEFERRED CONTRACT COSTS 15,986 14,389

EQUITY METHOD INVESTMENT 10,228 -

OTHER ASSETS 16,684 18,416

TOTAL $ 3,111,259 $ 3,195,555

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS'EQUITY

CURRENT LIABILITIES:

Accounts payable $ 16,826 $ 13,164

Accrued expenses 58,393 52,987

Income taxes payable 4,293 5,129

Current portion of long-term debt 13,846 25,381

Current portion of long-term licensing 2,620 2,540 agreement-Net

Operating lease liabilities 9,546 -

Deferred revenues 28,824 26,514

Interest rate swap derivatives 11,993 -

Total current liabilities 146,341 125,715

FIRST LIEN TERM LOAN-Net 1,299,774 1,292,597

DEFERRED INCOME TAXES-Net 311,280 322,348

LONG-TERM LICENSING AGREEMENT-Net 35,001 36,331

OPERATING LEASE LIABILITIES 41,338 -

OTHER LIABILITIES 11,711 32,770

Total liabilities 1,845,445 1,809,761

COMMITMENTS AND CONTINGENCIES (Notes 20 and 21)

MEZZANINE EQUITY:

Redeemable non-controlling interests 14,179 14,179

STOCKHOLDERS' EQUITY:

Preferred stock, $0.001 par; 1,500,000 shares - - authorized; no shares issued and outstanding

Common stock-Series A, $0.001 par; 3,000,000shares authorized; 1,450,978 shares issued and 1 1outstanding at June 30, 2021 and December 31,2020

Common stock-Series B, $0.001 par; 500,000shares authorized; 33,178 and 29,785 shares - -issued and outstanding at June 30, 2021 andDecember 31, 2020, respectively

Additional paid-in capital 1,517,123 1,501,255

Accumulated deficit (265,189 ) (129,370 )

Accumulated other comprehensive loss (300 ) (271 )

Total stockholders' equity 1,251,635 1,371,615

TOTAL $ 3,111,259 $ 3,195,555

See notes to condensed consolidated financial statements.

CYPRESS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except share and per share data)

(Unaudited)

For the Three Months Ended

For the Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

REVENUES

$

166,789

$

150,716

$

324,578

$

309,924

COST OF REVENUES

Cost of revenues, exclusive of amortization of acquired technologies

38,932

43,408

76,945

91,795

Amortization of acquired technologies

6,580

6,574

13,160

13,149

Total cost of revenues

45,512

49,982

90,105

104,944

GROSS PROFIT

121,277

100,734

234,473

204,980

OPERATING EXPENSES:

Research and development

31,253

27,772

61,877

55,315

Selling and marketing

21,551

17,702

40,968

39,181

General and administrative

28,394

21,566

66,233

44,566

Amortization of intangible assets

18,078

18,078

36,155

36,155

Total operating expenses

99,276

85,118

205,233

175,217

OPERATING INCOME

22,001

15,616

29,240

29,763

INTEREST EXPENSE

(18,903

)

(18,643

)

(37,669

)

(37,800

)

GAIN (LOSS) ON CHANGE IN FAIR VALUE OF INTEREST RATE SWAPS

3,089

620

6,366

(20,527

)

LOSS ON EARLY EXTINGUISHMENT OF DEBT

-

-

-

(8,615

)

OTHER INCOME-Net

4

115

91

255

PRETAX INCOME (LOSS)

6,191

(2,292

)

(1,972

)

(36,924

)

INCOME TAX (PROVISION) BENEFIT

(2,375

)

331

704

9,711

NET INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST

3,816

(1,961

)

(1,268

)

(27,213

)

Less: net income (loss) attributable to non-controlling interest

-

-

-

-

NET INCOME (LOSS) ATTRIBUTABLE TO CYPRESS HOLDINGS, INC.

$

3,816

$

(1,961

)

$

(1,268

)

$

(27,213

)

Net income (loss) per share attributable to Class A and Class B common stockholders:

Basic

$

2.57

$

(1.32

)

$

(0.85

)

$

(18.39

)

Diluted

$

2.48

$

(1.32

)

$

(0.85

)

$

(18.39

)

Weighted-average shares used in computing net income (loss) per share attributable to Class A and Class B common stockholders:

Basic

1,484,156

1,480,262

1,483,634

1,479,918

Diluted

1,537,767

1,480,262

1,483,634

1,479,918

COMPREHENSIVE INCOME (LOSS):

Net income (loss) including non-controlling interest

3,816

(1,961

)

(1,268

)

(27,213

)

Other comprehensive loss-Foreign currency translation adjustment

(36

)

(1

)

(29

)

(18

)

COMPREHENSIVE INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST

3,780

(1,962

)

(1,297

)

(27,231

)

Less: comprehensive income (loss) attributable to non-controlling interest

-

-

-

-

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CYPRESS HOLDINGS, INC.

$

3,780

$

(1,962

)

$

(1,297

)

$

(27,231

)

See notes to condensed consolidated financial statements.

CYPRESS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except share and per share data)

(Unaudited)

For the Three Months Ended For the Six Months Ended

June 30, June 30,

2021 2020 2021 2020

REVENUES $ 166,789 $ 150,716 $ 324,578 $ 309,924

COST OF REVENUES

Cost ofrevenues,exclusive of 38,932 43,408 76,945 91,795 amortization ofacquiredtechnologies

Amortization ofacquired 6,580 6,574 13,160 13,149 technologies

Total cost of 45,512 49,982 90,105 104,944 revenues

GROSS PROFIT 121,277 100,734 234,473 204,980

OPERATINGEXPENSES:

Research and 31,253 27,772 61,877 55,315 development

Selling and 21,551 17,702 40,968 39,181 marketing

General and 28,394 21,566 66,233 44,566 administrative

Amortization ofintangible 18,078 18,078 36,155 36,155 assets

Total operating 99,276 85,118 205,233 175,217 expenses

OPERATING INCOME 22,001 15,616 29,240 29,763

INTEREST EXPENSE (18,903 ) (18,643 ) (37,669 ) (37,800 )

GAIN (LOSS) ONCHANGE IN FAIRVALUE OF 3,089 620 6,366 (20,527 )INTEREST RATESWAPS

LOSS ON EARLYEXTINGUISHMENT - - - (8,615 )OF DEBT

OTHER INCOME-Net 4 115 91 255

PRETAX INCOME 6,191 (2,292 ) (1,972 ) (36,924 )(LOSS)

INCOME TAX(PROVISION) (2,375 ) 331 704 9,711 BENEFIT

NET INCOME(LOSS) INCLUDING 3,816 (1,961 ) (1,268 ) (27,213 )NON-CONTROLLINGINTEREST

Less: net income(loss)attributable to - - - - non-controllinginterest

NET INCOME(LOSS)ATTRIBUTABLE TO $ 3,816 $ (1,961 ) $ (1,268 ) $ (27,213 )CYPRESSHOLDINGS, INC.

Net income(loss) per shareattributable toClass A andClass B commonstockholders:

Basic $ 2.57 $ (1.32 ) $ (0.85 ) $ (18.39 )

Diluted $ 2.48 $ (1.32 ) $ (0.85 ) $ (18.39 )

Weighted-averageshares used incomputing netincome (loss)per shareattributable toClass A andClass B commonstockholders:

Basic 1,484,156 1,480,262 1,483,634 1,479,918

Diluted 1,537,767 1,480,262 1,483,634 1,479,918

COMPREHENSIVEINCOME (LOSS):

Net income(loss) including 3,816 (1,961 ) (1,268 ) (27,213 )non-controllinginterest

Othercomprehensiveloss-Foreign (36 ) (1 ) (29 ) (18 )currencytranslationadjustment

COMPREHENSIVEINCOME (LOSS)INCLUDING 3,780 (1,962 ) (1,297 ) (27,231 )NON-CONTROLLINGINTEREST

Less:comprehensiveincome (loss) - - - - attributable tonon-controllinginterest

COMPREHENSIVEINCOME (LOSS)ATTRIBUTABLE TO $ 3,780 $ (1,962 ) $ (1,297 ) $ (27,231 )CYPRESSHOLDINGS, INC.

See notes to condensed consolidated financial statements.

CYPRESS HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

For the Six Months Ended

June 30,

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$

(1,268

)

$

(27,213

)

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

Depreciation and amortization of software, equipment, and property

10,472

8,543

Amortization of intangible assets

49,315

49,304

Deferred income taxes

(11,068

)

(16,685

)

Stock-based compensation

15,537

5,601

Amortization of deferred financing fees

2,321

2,146

Amortization of discount on debt

392

327

Change in fair value of interest rate swaps

(6,366

)

20,527

Loss on early extinguishment of debt

-

8,615

Non-cash lease expense

3,667

-

Other

34

13

Changes in:

Accounts receivable-Net

(7,749

)

(9,834

)

Deferred contract costs

(765

)

128

Other current assets

(1,937

)

2,757

Deferred contract costs-Non-current

(1,597

)

(941

)

Other assets

1,699

(10,254

)

Operating lease assets

3,410

-

Income taxes

(43

)

7,256

Accounts payable

3,613

(115

)

Accrued expenses

4,031

(17,324

)

Operating lease liabilities

(3,900

)

-

Deferred revenues

2,303

1,127

Other liabilities

(2,281

)

(202

)

Net cash provided by operating activities

59,820

23,776

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of software, equipment, and property

(13,158

)

(12,512

)

Purchase of equity method investment

(10,189

)

-

Purchase of intangible asset

(49

)

(560

)

Net cash used in investing activities

(23,396

)

(13,072

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of non-controlling interest in subsidiary

-

14,179

Principal payments on long-term debt

(6,923

)

(381,923

)

Proceeds from issuance of long-term debt, net of fees paid to lender

-

369,792

Proceeds from borrowings on revolving lines of credit

-

65,000

Repayment of borrowings on revolving lines of credit

-

(65,000

)

Proceeds from issuance of Series B common stock

1,007

-

Payment of fees associated with early extinguishment of long-term debt

-

(29

)

Proceeds from exercise of stock options

503

242

Repurchases of Series B common stock

-

(101

)

Dividend to stockholders

(134,549

)

-

Net cash used in financing activities

(139,962

)

2,160

NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

(74

)

(46

)

NET CHANGE IN CASH AND CASH EQUIVALENTS

(103,612

)

12,818

CASH AND CASH EQUIVALENTS:

Beginning of period

162,118

93,201

End of period

$

58,506

$

106,019

NONCASH INVESTING AND FINANCING ACTIVITIES:

Unpaid liability related to software, equipment, and property

$

5,752

$

-

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid for interest

$

35,020

$

35,470

Cash received (paid) for income taxes-Net

$

(10,409

)

$

283

CYPRESS HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

For the Six Months Ended

June 30,

2021 2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss $ (1,268 ) $ (27,213 )

Adjustments to reconcile net loss to net cashprovided by operating activities:

Depreciation and amortization of software, 10,472 8,543 equipment, and property

Amortization of intangible assets 49,315 49,304

Deferred income taxes (11,068 ) (16,685 )

Stock-based compensation 15,537 5,601

Amortization of deferred financing fees 2,321 2,146

Amortization of discount on debt 392 327

Change in fair value of interest rate swaps (6,366 ) 20,527

Loss on early extinguishment of debt - 8,615

Non-cash lease expense 3,667 -

Other 34 13

Changes in:

Accounts receivable-Net (7,749 ) (9,834 )

Deferred contract costs (765 ) 128

Other current assets (1,937 ) 2,757

Deferred contract costs-Non-current (1,597 ) (941 )

Other assets 1,699 (10,254 )

Operating lease assets 3,410 -

Income taxes (43 ) 7,256

Accounts payable 3,613 (115 )

Accrued expenses 4,031 (17,324 )

Operating lease liabilities (3,900 ) -

Deferred revenues 2,303 1,127

Other liabilities (2,281 ) (202 )

Net cash provided by operating activities 59,820 23,776

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of software, equipment, and property (13,158 ) (12,512 )

Purchase of equity method investment (10,189 ) -

Purchase of intangible asset (49 ) (560 )

Net cash used in investing activities (23,396 ) (13,072 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of non-controlling interest - 14,179 in subsidiary

Principal payments on long-term debt (6,923 ) (381,923 )

Proceeds from issuance of long-term debt, net of - 369,792 fees paid to lender

Proceeds from borrowings on revolving lines of - 65,000 credit

Repayment of borrowings on revolving lines of - (65,000 )credit

Proceeds from issuance of Series B common stock 1,007 -

Payment of fees associated with early - (29 )extinguishment of long-term debt

Proceeds from exercise of stock options 503 242

Repurchases of Series B common stock - (101 )

Dividend to stockholders (134,549 ) -

Net cash used in financing activities (139,962 ) 2,160

NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND (74 ) (46 )CASH EQUIVALENTS

NET CHANGE IN CASH AND CASH EQUIVALENTS (103,612 ) 12,818

CASH AND CASH EQUIVALENTS:

Beginning of period 162,118 93,201

End of period $ 58,506 $ 106,019

NONCASH INVESTING AND FINANCING ACTIVITIES:

Unpaid liability related to software, equipment, $ 5,752 $ - and property

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid for interest $ 35,020 $ 35,470

Cash received (paid) for income taxes-Net $ (10,409 ) $ 283

CYPRESS HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT

(In thousands, except profit margin percentage data)

(Unaudited)

Three months ended June 30,

Six months ended June 30,

(amounts in thousands)

2021

2020

2021

2020

Gross Profit

$

121,277

$

100,734

$

234,473

$

204,980

First Party Clinical Services-Gross Profit

-

(141

)

-

(2,390

)

Amortization of acquired technologies

6,580

6,574

13,160

13,149

Stock-based compensation

176

160

394

239

Adjusted Gross Profit

$

128,033

$

107,327

$

248,027

$

215,978

Gross Profit Margin Percentage

73

%

67

%

72

%

66

%

Adjusted Gross Profit Margin Percentage

77

%

74

%

76

%

70

%

CYPRESS HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT

(In thousands, except profit margin percentage data)

(Unaudited)

Three months ended June Six months ended June 30, 30,



(amounts in thousands) 2021 2020 2021 2020

Gross Profit $ 121,277 $ 100,734 $ 234,473 $ 204,980

First Party Clinical - (141 ) - (2,390 )Services-Gross Profit

Amortization of acquired 6,580 6,574 13,160 13,149 technologies

Stock-based compensation 176 160 394 239

Adjusted Gross Profit $ 128,033 $ 107,327 $ 248,027 $ 215,978

Gross Profit Margin 73 % 67 % 72 % 66 %Percentage

Adjusted Gross Profit 77 % 74 % 76 % 70 %Margin Percentage

CYPRESS HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP OPERATING INCOME TO ADJUSTED OPERATING INCOME

(In thousands)

(Unaudited)

Three months ended June 30,

Six months ended June 30,

(dollar amounts in thousands)

2021

2020

2021

2020

GAAP Operating Income

$

22,001

$

15,616

$

29,240

$

29,763

Stock-based compensation expense

2,883

2,371

15,537

5,601

Lease abandonment

925

-

1,850

-

Lease overlap costs

909

-

1,817

-

Net costs related to divestiture

1,494

-

2,266

-

Business combination transaction costs

1,953

-

4,955

-

Amortization of intangible assets

18,078

18,078

36,155

36,155

Amortization of acquired technologies-Cost of revenue

6,580

6,574

13,160

13,149

First Party Clinical Services-Revenue

-

(6,603

)

-

(18,255

)

First Party Clinical Services-Cost of revenue

-

6,462

-

15,865

Adjusted Operating Income

$

54,823

$

42,498

$

104,980

$

82,278

CYPRESS HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP OPERATING INCOME TO ADJUSTED OPERATING INCOME

(In thousands)

(Unaudited)

Three months ended Six months ended June June 30, 30,



(dollar amounts in thousands) 2021 2020 2021 2020

GAAP Operating Income $ 22,001 $ 15,616 $ 29,240 $ 29,763

Stock-based compensation 2,883 2,371 15,537 5,601 expense

Lease abandonment 925 - 1,850 -

Lease overlap costs 909 - 1,817 -

Net costs related to 1,494 - 2,266 - divestiture

Business combination 1,953 - 4,955 - transaction costs

Amortization of intangible 18,078 18,078 36,155 36,155 assets

Amortization of acquired 6,580 6,574 13,160 13,149 technologies-Cost of revenue

First Party Clinical - (6,603 ) - (18,255 )Services-Revenue

First Party Clinical - 6,462 - 15,865 Services-Cost of revenue

Adjusted Operating Income $ 54,823 $ 42,498 $ 104,980 $ 82,278

CYPRESS HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(In thousands)

(Unaudited)

Three months ended June 30,

Six months ended June 30,

(dollar amounts in thousands)

2021

2020

2021

2020

Net income (loss)

$

3,816

$

(1,961

)

$

(1,268

)

$

(27,213

)

Interest expense

18,903

18,643

37,669

37,800

Income tax provision (benefit)

2,375

(331

)

(704

)

(9,711

)

Amortization of intangible assets

18,078

18,078

36,155

36,155

Amortization of acquired technologies-Cost of revenue

6,580

6,574

13,160

13,149

Depreciation and amortization related to software, equipment and property

5,314

4,243

10,467

8,543

EBITDA

55,066

45,246

95,479

58,723

(Gain) loss on change in fair value of interest rate swaps

(3,089

)

(620

)

(6,366

)

20,527

Stock-based compensation expense

2,883

2,371

15,537

5,601

Loss on early extinguishment of debt

-

-

-

8,615

Business combination transaction costs

1,953

-

4,955

-

Lease abandonment

925

-

1,850

-

Lease overlap costs

909

-

1,817

-

Net costs related to divestiture

1,494

-

2,266

-

First Party Clinical Services-Revenue

-

(6,603

)

-

(18,255

)

First Party Clinical Services-Cost of revenue

-

6,462

-

15,865

Adjusted EBITDA

$

60,141

$

46,856

$

115,538

$

91,076

CYPRESS HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(In thousands)

(Unaudited)

Three months ended June Six months ended June 30, 30,



(dollar amounts in 2021 2020 2021 2020thousands)

Net income (loss) $ 3,816 $ (1,961 ) $ (1,268 ) $ (27,213 )

Interest expense 18,903 18,643 37,669 37,800

Income tax provision 2,375 (331 ) (704 ) (9,711 )(benefit)

Amortization of intangible 18,078 18,078 36,155 36,155 assets

Amortization of acquiredtechnologies-Cost of 6,580 6,574 13,160 13,149 revenue

Depreciation andamortization related to 5,314 4,243 10,467 8,543 software, equipment andproperty

EBITDA 55,066 45,246 95,479 58,723

(Gain) loss on change infair value of interest (3,089 ) (620 ) (6,366 ) 20,527 rate swaps

Stock-based compensation 2,883 2,371 15,537 5,601 expense

Loss on early - - - 8,615 extinguishment of debt

Business combination 1,953 - 4,955 - transaction costs

Lease abandonment 925 - 1,850 -

Lease overlap costs 909 - 1,817 -

Net costs related to 1,494 - 2,266 - divestiture

First Party Clinical - (6,603 ) - (18,255 )Services-Revenue

First Party Clinical - 6,462 - 15,865 Services-Cost of revenue

Adjusted EBITDA $ 60,141 $ 46,856 $ 115,538 $ 91,076

CYPRESS HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME

(In thousands)

(Unaudited)

Three months ended June 30,

Six months ended June 30,

(dollar amounts in thousands)

2021

2020

2021

2020

GAAP Net Income (Loss)

$

3,816

$

(1,961

)

$

(1,268

)

$

(27,213

)

Stock-based compensation expense

2,883

2,371

15,537

5,601

Lease abandonment

925

-

1,850

-

Lease overlap costs

909

-

1,817

-

Net costs related to divestiture

1,494

-

2,266

-

Business combination transaction costs

1,953

-

4,955

-

(Gain) loss on change in fair value of interest rate swaps

(3,089

)

(620

)

(6,366

)

20,527

Loss on early extinguishment of debt

-

-

-

8,615

Amortization of intangible assets

18,078

18,078

36,155

36,155

Amortization of acquired technologies-Cost of revenue

6,580

6,574

13,160

13,149

First Party Clinical Services-Revenue

-

(6,603

)

-

(18,255

)

First Party Clinical Services-Cost of revenue

-

6,462

-

15,865

Tax effect of adjustments

(7,223

)

(6,828

)

(16,774

)

(21,231

)

Adjusted Net Income

$

26,326

$

17,473

$

51,332

$

33,213

CYPRESS HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME

(In thousands)

(Unaudited)

Three months ended June Six months ended June 30, 30,



(dollar amounts in 2021 2020 2021 2020thousands)

GAAP Net Income (Loss) $ 3,816 $ (1,961 ) $ (1,268 ) $ (27,213 )

Stock-based compensation 2,883 2,371 15,537 5,601 expense

Lease abandonment 925 - 1,850 -

Lease overlap costs 909 - 1,817 -

Net costs related to 1,494 - 2,266 - divestiture

Business combination 1,953 - 4,955 - transaction costs

(Gain) loss on change infair value of interest (3,089 ) (620 ) (6,366 ) 20,527 rate swaps

Loss on early - - - 8,615 extinguishment of debt

Amortization of intangible 18,078 18,078 36,155 36,155 assets

Amortization of acquiredtechnologies-Cost of 6,580 6,574 13,160 13,149 revenue

First Party Clinical - (6,603 ) - (18,255 )Services-Revenue

First Party Clinical - 6,462 - 15,865 Services-Cost of revenue

Tax effect of adjustments (7,223 ) (6,828 ) (16,774 ) (21,231 )

Adjusted Net Income $ 26,326 $ 17,473 $ 51,332 $ 33,213

CYPRESS HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF NET CASH FLOW FROM OPERATING ACTIVITIES TO FREE CASH FLOW

(In thousands)

(Unaudited)

Three months ended June 30,

Six months ended June 30,

(amounts in thousands)

2021

2020

2021

2020

Net cash provided by operating activities

$

21,586

$

14,675

$

59,820

$

23,776

Less: Purchases of software, equipment, and property

(8,521

)

(7,068

)

(13,158

)

(12,512

)

Less: Purchase of intangible assets

-

-

(49

)

(560

)

Free Cash Flow

$

13,065

$

7,607

$

46,613

$

10,704

View source version on businesswire.com: https://www.businesswire.com/news/home/20210812005829/en/

CONTACT: Investor: Brian Denyeau ICR, LLC 646-277-1251 IR@cccis.com

CONTACT: Media: Michael Nothnagel CCC Intelligent Solutions Inc. michael.nothnagel@teamlewis.com