2015 Q2 Form 10-Q Financial Statement

#000137128515000044 Filed on August 05, 2015

View on sec.gov

Income Statement

Concept 2015 Q2 2014 Q2
Revenue $35.59M $28.09M
YoY Change 26.69% 41.57%
Cost Of Revenue $29.80M $22.90M
YoY Change 30.13% 43.13%
Gross Profit $5.786M $5.150M
YoY Change 12.35% 34.5%
Gross Profit Margin 16.26% 18.33%
Selling, General & Admin $7.529M $6.102M
YoY Change 23.39% 42.24%
% of Gross Profit 130.12% 118.49%
Research & Development $2.900M $2.553M
YoY Change 13.59% 121.61%
% of Gross Profit 50.12% 49.57%
Depreciation & Amortization $560.0K $420.0K
YoY Change 33.33% 100.0%
% of Gross Profit 9.68% 8.16%
Operating Expenses $10.41M $8.655M
YoY Change 20.25% 59.04%
Operating Profit -$4.622M -$3.505M
YoY Change 31.87% 117.3%
Interest Expense $40.00K $726.0K
YoY Change -94.49% 407.69%
% of Operating Profit
Other Income/Expense, Net $15.00K $759.0K
YoY Change -98.02% -1139.73%
Pretax Income -$4.647M -$3.472M
YoY Change 33.84% 89.83%
Income Tax -$22.00K $7.000K
% Of Pretax Income
Net Earnings -$4.600M -$3.479M
YoY Change 32.22% 90.73%
Net Earnings / Revenue -12.93% -12.39%
Basic Earnings Per Share
Diluted Earnings Per Share -$166.7K -$131.6K
COMMON SHARES
Basic Shares Outstanding 28.25M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2015 Q2 2014 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $47.70M $23.40M
YoY Change 103.85%
Cash & Equivalents $26.16M $9.288M
Short-Term Investments $21.50M $14.10M
Other Short-Term Assets $1.700M $1.100M
YoY Change 54.55%
Inventory
Prepaid Expenses
Receivables $8.800M $8.100M
Other Receivables $0.00 $0.00
Total Short-Term Assets $58.16M $32.51M
YoY Change 78.87%
LONG-TERM ASSETS
Property, Plant & Equipment $9.131M $5.167M
YoY Change 76.72%
Goodwill
YoY Change
Intangibles $4.815M $4.880M
YoY Change -1.33%
Long-Term Investments $2.500M $900.0K
YoY Change 177.78%
Other Assets $23.00K $5.300M
YoY Change -99.57%
Total Long-Term Assets $16.49M $16.24M
YoY Change 1.56%
TOTAL ASSETS
Total Short-Term Assets $58.16M $32.51M
Total Long-Term Assets $16.49M $16.24M
Total Assets $74.65M $48.75M
YoY Change 53.12%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.218M $4.179M
YoY Change -70.85%
Accrued Expenses $3.720M $4.372M
YoY Change -14.91%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $1.200M
YoY Change -100.0%
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $21.37M $28.69M
YoY Change -25.5%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $25.00M
YoY Change -100.0%
Other Long-Term Liabilities $112.0K $792.0K
YoY Change -85.86%
Total Long-Term Liabilities $112.0K $25.79M
YoY Change -99.57%
TOTAL LIABILITIES
Total Short-Term Liabilities $21.37M $28.69M
Total Long-Term Liabilities $112.0K $25.79M
Total Liabilities $22.98M $56.02M
YoY Change -58.98%
SHAREHOLDERS EQUITY
Retained Earnings -$66.74M -$44.40M
YoY Change 50.33%
Common Stock
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost) $2.601M $2.601M
YoY Change 0.0%
Treasury Stock Shares
Shareholders Equity $51.67M -$40.00M
YoY Change
Total Liabilities & Shareholders Equity $74.65M $48.75M
YoY Change 53.12%

Cashflow Statement

Concept 2015 Q2 2014 Q2
OPERATING ACTIVITIES
Net Income -$4.600M -$3.479M
YoY Change 32.22% 90.73%
Depreciation, Depletion And Amortization $560.0K $420.0K
YoY Change 33.33% 100.0%
Cash From Operating Activities -$3.990M -$2.490M
YoY Change 60.24% 632.35%
INVESTING ACTIVITIES
Capital Expenditures -$1.050M -$1.250M
YoY Change -16.0% 400.0%
Acquisitions
YoY Change
Other Investing Activities -$1.840M $880.0K
YoY Change -309.09% -180.0%
Cash From Investing Activities -$2.890M -$380.0K
YoY Change 660.53% -71.85%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 440.0K 1.560M
YoY Change -71.79% 23.81%
NET CHANGE
Cash From Operating Activities -3.990M -2.490M
Cash From Investing Activities -2.890M -380.0K
Cash From Financing Activities 440.0K 1.560M
Net Change In Cash -6.440M -1.310M
YoY Change 391.6% 204.65%
FREE CASH FLOW
Cash From Operating Activities -$3.990M -$2.490M
Capital Expenditures -$1.050M -$1.250M
Free Cash Flow -$2.940M -$1.240M
YoY Change 137.1% 1277.78%

Facts In Submission

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us-gaap Sharebased Compensation Arrangement By Sharebased Payment Award Compensation Cost1
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us-gaap Technology Services Costs
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us-gaap Nature Of Operations
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Nature of Operations and Summary of Significant Accounting Policies</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Description of Business</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Trupanion, Inc. (collectively with its wholly-owned subsidiaries, the Company) is a direct-to-consumer monthly subscription service provider of a medical plan for cats and dogs throughout the United States, Canada and Puerto Rico.</font></div><div style="line-height:120%;padding-top:6px;font-size:12pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Basis of Presentation</font><font style="font-family:inherit;font-size:12pt;"> </font></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The consolidated balance sheet data as of December 31, 2014 was derived from audited consolidated financial statements. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited consolidated financial statements and notes should be read in conjunction with the Company&#8217;s audited consolidated financial statements and accompanying notes for the year ended December 31, 2014 included in the Company&#8217;s Annual Report on Form 10-K, filed with the U.S Securities and Exchange Commission on February&#160;24, 2015. The accompanying unaudited consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the Company&#8217;s financial position and results of its operations, as of and for the periods presented. Operating results for the three and six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015, or for any other period.</font></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Reclassifications </font></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certain prior year amounts have been reclassified within the Company&#8217;s consolidated financial statements from their original presentation to conform to the current period presentation. In addition, amounts in note 8 related to segments have been recast to reflect a change in the composition of the Company&#8217;s segments as described in note 8.</font></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies and the reported amounts of revenue and expenses. Significant items subject to such estimates and assumptions include the valuation of deferred tax assets, stock-based compensation, claims reserve and useful lives of software developed for internal use. Actual results could differ from the estimates used in preparing the consolidated financial statements.</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Advertising</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Advertising costs are expensed as incurred, with the exception of television advertisements, which are expensed the first time advertisement is aired.</font></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Accumulated Other Comprehensive Loss</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">There were </font><font style="font-family:inherit;font-size:10pt;">no</font><font style="font-family:inherit;font-size:10pt;"> reclassifications out of accumulated other comprehensive loss during the three and six months ended June 30, 2015 and 2014.</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Insurance Operations</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Effective January 1, 2015, the Company formed a segregated account in Bermuda as part of Wyndham Insurance Company (SAC) Limited (WICL), and entered into a revised fronting and reinsurance arrangement with Omega General Insurance Company (Omega) to include its newly formed segregated account. The Company maintains all risk with the business written in Canada and consolidates the entity in its financial statements. Contractual requirements restrict dividends from this entity until after 2016, at which time dividends will be allowed subject to the Segregated Accounts Company Act of 2000, which allows for dividends only to the extent that the entity remains solvent and the value of its assets remain greater than the aggregate of its liabilities and its issued share capital and share premium accounts. </font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Recent Accounting Pronouncements</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2014, the Financial Accounting Standards Board (FASB) issued an Accounting Standard Update (ASU) amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Insurance contracts are excluded from the scope of this new guidance. The guidance is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption prohibited, and must be applied retrospectively or modified retrospectively.&#160;The Company does not believe this ASU will have a material impact on its consolidated financial statements.</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2015, the FASB issued an ASU amending short-term insurance contracts disclosures and requiring more detailed disclosures to enable users of financial statements to understand information relating to liabilities for unpaid claims and claims adjustment expenses. Additionally, the amendments will also require insurance entities to disclose information about significant changes in methodologies and assumptions used to calculate these liabilities. This guidance is effective for annual reporting periods beginning after December 15, 2015 and interim periods beginning after December 15, 2016. Early adoption of this guidance is permitted, and must be applied retrospectively by providing comparative disclosures for each period presented. We plan to adopt this guidance in 2016.</font></div></div>
us-gaap Prior Period Reclassification Adjustment Description
PriorPeriodReclassificationAdjustmentDescription
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Reclassifications </font></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certain prior year amounts have been reclassified within the Company&#8217;s consolidated financial statements from their original presentation to conform to the current period presentation. In addition, amounts in note 8 related to segments have been recast to reflect a change in the composition of the Company&#8217;s segments as described in note 8.</font></div></div>
us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies and the reported amounts of revenue and expenses. Significant items subject to such estimates and assumptions include the valuation of deferred tax assets, stock-based compensation, claims reserve and useful lives of software developed for internal use. Actual results could differ from the estimates used in preparing the consolidated financial statements.</font></div></div>

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