ETWO E2open Parent Holdings Inc

Delaware

001-39272

86-1874570

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

9600 Great Hills Trail, Suite 300E

Austin, TX

(address of principal executive offices)

78759

(zip code)

866-432-6736

(Registrant’s telephone number, including area code)

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, par value $0.0001 per share

ETWO

New York Stock Exchange

Warrants to purchase one share of Class A Common Stock

ETWO-WT

New York Stock Exchange

Exhibit

Number

Description

99.1*

—

Press release, dated July 10, 2024

104

—

Cover Page Interactive Data File (formatted in Inline XBRL)

E2open Parent Holdings, Inc.

Date: July 10, 2024

By:

/s/ Susan E. Bennett

Susan E. Bennett

Interim Executive Vice President and General Counsel

Three Months Ended May 31,

(In thousands, except per share amounts)

2024

2023

Revenue

Subscriptions

  $ 131,404

  $ 134,903

Professional services and other

19,759

25,217

Total revenue

151,163

160,120

Cost of Revenue

Subscriptions

37,099

36,544

Professional services and other

16,752

19,528

Amortization of acquired intangible assets

24,652

24,630

Total cost of revenue

78,503

80,702

Gross Profit

72,660

79,418

Operating Expenses

Research and development

24,797

25,866

Sales and marketing

20,996

19,558

General and administrative

23,343

22,125

Acquisition-related expenses

283

389

Amortization of acquired intangible assets

20,086

20,128

Goodwill impairment

—

410,041

Intangible asset impairment

—

4,000

Total operating expenses

89,505

502,107

Loss from operations

(16,845)

(422,689)

Other income (expense)

Interest and other expense, net

(25,373)

(25,726)

Loss from change in tax receivable agreement liability

(3,974)

(2,460)

Gain from change in fair value of warrant liability

3,761

14,680

(Loss) gain from change in fair value of contingent consideration

(2,280)

9,000

Total other expense

(27,866)

(4,506)

Loss before income tax benefit

(44,711)

(427,195)

Income tax benefit

1,923

66,311

Net loss

(42,788)

(360,884)

Less: Net loss attributable to noncontrolling interest

(3,926)

(35,489)

Net loss attributable to E2open Parent Holdings, Inc.

  $ (38,862)

  $ (325,395)

Weighted-average common shares outstanding:

Basic

306,732

302,502

Diluted

306,732

302,502

Net loss attributable to E2open Parent Holdings, Inc. common
    shareholders per share:

Basic

  $ (0.13)

  $ (1.08)

Diluted

  $ (0.13)

  $ (1.08)

(In thousands)

May 31, 2024

February 29, 2024

Assets

Cash and cash equivalents

  $ 160,203

  $ 134,478

Restricted cash

15,737

14,560

Accounts receivable, net

111,359

161,556

Prepaid expenses and other current assets

33,072

28,843

Total current assets

320,371

339,437

Goodwill

1,845,209

1,843,477

Intangible assets, net

796,551

841,031

Property and equipment, net

65,638

67,177

Operating lease right-of-use assets

19,629

21,299

Other noncurrent assets

29,669

29,234

Total assets

  $ 3,077,067

  $ 3,141,655

Liabilities, Redeemable Share-Based Awards and Stockholders' Equity

Accounts payable and accrued liabilities

  $ 85,112

  $ 90,594

Channel client deposits payable

15,737

14,560

Deferred revenue

187,197

213,138

Current portion of notes payable

11,277

11,272

Current portion of operating lease obligations

6,996

7,378

Current portion of financing lease obligations

1,473

1,448

Income taxes payable

5,748

584

Total current liabilities

313,540

338,974

Long-term deferred revenue

1,615

2,077

Operating lease obligations

15,799

17,372

Financing lease obligations

3,248

3,626

Notes payable

1,036,007

1,037,623

Tax receivable agreement liability

72,394

67,927

Warrant liability

10,952

14,713

Contingent consideration

20,308

18,028

Deferred taxes

49,767

55,586

Other noncurrent liabilities

1,052

602

Total liabilities

1,524,682

1,556,528

Commitments and Contingencies

Redeemable share-based awards

930

—

Stockholders' Equity

Class A common stock

31

31

Class V common stock

—

—

Series B-1 common stock

—

 —

Series B-2 common stock

—

—

Additional paid-in capital

3,415,627

3,407,694

Accumulated other comprehensive loss

(44,341)

(46,835)

Accumulated deficit

(1,912,565)

(1,873,703)

Treasury stock, at cost

(2,473)

(2,473)

Total E2open Parent Holdings, Inc. equity

1,456,279

1,484,714

Noncontrolling interest

95,176

100,413

Total stockholders' equity

1,551,455

1,585,127

Total liabilities, redeemable share-based awards and stockholders' equity

  $ 3,077,067

  $ 3,141,655

Three Months Ended May 31,

(In thousands)

2024

2023

Cash flows from operating activities

Net loss

  $ (42,788)

  $ (360,884)

Adjustments to reconcile net loss to net cash from operating activities:

Depreciation and amortization

53,605

53,319

Amortization of deferred commissions

2,109

1,344

Provision for credit losses

151

69

Amortization of debt issuance costs

1,320

1,320

Amortization of operating lease right-of-use assets

1,722

1,946

Share-based compensation

11,787

4,445

Deferred income taxes

(5,972)

(67,833)

Right-of-use assets impairment charge

—

362

Goodwill impairment charge

—

410,041

Indefinite-lived intangible asset impairment charge

—

4,000

Loss from change in tax receivable agreement liability

3,974

2,460

Gain from change in fair value of warrant liability

(3,761)

(14,680)

Loss (gain) from change in fair value of contingent consideration

2,280

(9,000)

Loss (gain) on disposal of property and equipment

79

(154)

Changes in operating assets and liabilities:

Accounts receivable

50,047

48,176

Prepaid expenses and other current assets

(3,905)

(1,304)

Other noncurrent assets

(2,544)

(1,772)

Accounts payable and accrued liabilities

(10,702)

(12,228)

Channel client deposits payable

1,177

2,539

Deferred revenue

(26,403)

(23,401)

Changes in other liabilities

3,740

(2,306)

Net cash provided by operating activities

35,916

36,459

Cash flows from investing activities

Capital expenditures

(6,084)

(6,552)

Net cash used in investing activities

(6,084)

(6,552)

Cash flows from financing activities

Repayments of indebtedness

(2,808)

(2,741)

Repayments of financing lease obligations

(353)

(223)

Proceeds from exercise of stock options

155

—

Net cash used in financing activities

(3,006)

(2,964)

Effect of exchange rate changes on cash and cash equivalents

76

2,105

Net increase in cash, cash equivalents and restricted cash

26,902

29,048

Cash, cash equivalents and restricted cash at beginning of period

149,038

104,342

Cash, cash equivalents and restricted cash at end of period

  $ 175,940

  $ 133,390

(in millions)

Q1

Q1

$ Var

% Var

 FY2025

 FY2024

PRO FORMA REVENUE RECONCILIATION

Total GAAP Revenue

151.2

160.1

(9.0)

(5.6%)

Constant currency FX impact (1)

0.1

-

0.1

n/m

Total non-GAAP revenue (constant currency basis) (2)

$151.2

$160.1

($8.9)

(5.6%)

GAAP Subscription Revenue

131.4

134.9

(3.5)

(2.6%)

Constant currency FX impact (1)

-

-

-

n/m

Non-GAAP subscription revenue (constant currency basis) (2)

$131.4

$134.9

($3.5)

(2.6%)

GAAP Professional Services and other revenue

19.8

25.2

(5.5)

(21.6%)

Constant currency FX impact (1)

-

-

-

n/m

Non-GAAP professional services and other revenue (constant currency basis) (2)

$19.8

$25.2

($5.5)

(21.6%)

PRO FORMA GROSS PROFIT RECONCILIATION

GAAP Gross profit

72.7

79.4

(6.8)

(8.5%)

Depreciation and amortization

28.5

28.6

(0.1)

(0.5%)

Share-based compensation (3)

1.2

0.6

0.6

92.1%

Non-recurring/non-operating costs (4)

0.2

1.7

(1.5)

(88.5%)

Non-GAAP gross profit

$102.6

$110.4

($7.9)

(7.1%)

Non-GAAP Gross Margin %

67.8%

69.0%

Constant currency FX impact (1)

(0.1)

-

(0.1)

n/m

Total non-GAAP gross profit (constant currency basis) (2)

$102.4

$110.4

($8.0)

(7.2%)

Non-GAAP Gross Margin % (constant currency basis) (2)

67.7%

69.0%

PRO FORMA ADJUSTED EBITDA RECONCILIATION

Net loss

(42.8)

(360.9)

318.1

n/m

Interest expense, net

24.7

24.3

0.4

1.8%

Income tax benefit

(1.9)

(66.3)

64.4

(97.1%)

Depreciation and amortization

53.6

53.3

0.3

0.5%

EBITDA

$33.6

($349.6)

$383.2

n/m

Share-based compensation (3)

11.8

4.5

7.3

164.3%

Non-recurring/non-operating costs (4)

2.6

5.3

(2.8)

(52.0%)

Acquisition-related adjustments (5)

0.3

0.4

(0.1)

(28.2%)

Change in tax receivable agreement liability (6)

4.0

2.5

1.5

61.4%

Change in fair value of warrant liability (7)

(3.8)

(14.7)

10.9

(74.4%)

Change in fair value of contingent consideration (8)

2.3

(9.0)

11.3

n/m

Goodwill impairment (9)

-

410.0

(410.0)

n/m

Intangible asset impairment charge (10)

-

4.0

(4.0)

n/m

Right-of-use assets impairment charge (11)

-

0.4

(0.4)

n/m

Adjusted EBITDA

$50.7

$53.8

($3.0)

(5.7%)

Adjusted EBITDA Margin %

33.6%

33.6%

Constant currency FX impact (1)

(0.3)

-

(0.3)

n/m

Total adjusted EBITDA (constant currency basis) (2)

$50.4

$53.8

($3.3)

(6.2%)

Adjusted EBITDA Margin % (constant currency basis) (2)

33.4%

33.6%

(1) Constant Currency refers to pro-forma amounts excluding the impact of translating foreign currencies into U.S. dollars. To calculate foreign currency translation on a constant currency basis, operating results for the current year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).

(2) Constant Currency refers to pro forma amounts excluding translation and transactional impacts from foreign currency exchange rates.

(3) Reflects non-cash, long-term share-based compensation expense.

(4) Primarily includes other non-recurring expenses such as non-acquisition related severance, foreign currency transaction gains and losses, systems integrations, legal entity rationalization, expenses related to retention of key employees from acquisitions and non-recurring consulting and advisory fees.

(5) Primarily includes advisory, consulting, accounting and legal expenses and severance incurred in connection with mergers and acquisitions activities, including related valuation, negotiation and integration costs and capital-raising activities, related to the Business Combination, acquisitions of BluJay and Logistyx and the strategic review.

(6) Represents the fair value adjustment at each balance sheet date for the Tax Receivable Agreement along with the associated interest.

(7) Represents the fair value adjustment at each balance sheet date of the warrant liability related to our warrants.

(8) Represents the fair value adjustment at each balance sheet date of the contingent consideration liability related to the restricted Series B-1 and B-2 common stock and Sponsor Side Letter and Series 1 and 2 RCUs. The Series B-1 common stock, Sponsor Side Letter and Series 1 RCUs were automatically converted into our Class A Common Stock on a one-to-one basis as of June 8, 2021.

(9) Represents the goodwill impairment taken in the first quarter of fiscal 2024.

(10) Represents the indefinite-lived trademark/trade name impairment taken in the first quarter of fiscal 2024.

(11) Represents the impairment on our operating lease ROU assets and leasehold improvements due to vacating certain facilities.

Fiscal First Quarter 2025

(in millions)

GAAP

Non-Recurring(1)

Depreciation & Amortization

Share-Based Compensation

Non-GAAP (Adjusted)

% of Revenue

COST OF GOODS

Subscriptions

37.1

(0.0)

(3.6)

(0.7)

32.7

24.9%

Professional services and other

16.8

(0.2)

(0.2)

(0.5)

15.9

80.5%

Amortization of intangibles

24.7

-

(24.7)

0.0

-

Total cost of revenue

$78.5

($0.2)

($28.5)

(1.2)

$48.6

32.2%

Gross Profit

$72.7

$0.2

$28.5

$1.20

$102.5

67.8%

OPERATING COSTS

Research & development

24.8

(0.1)

(4.5)

(1.9)

18.2

12.0%

Sales & marketing

21.0

(0.8)

(0.3)

(1.6)

18.3

12.1%

General & administrative

23.3

(0.8)

(0.2)

(7.1)

15.3

10.1%

Acquisition related expenses

0.3

(0.3)

-

-

 -

Amortization of intangibles

20.1

-

(20.1)

-

-

Total operating expenses

$89.5

($2.0)

($25.1)

($10.6)

$51.8

34.3%

(1) Primarily includes other non-recurring expenses such as non-acquisition related severance, foreign currency transaction gains and losses, systems integrations, legal entity rationalization, expenses related to retention of key employees from acquisitions and non-recurring consulting and advisory fees.

(in millions, except per share amounts)

Q1 25

GAAP Net loss

(42.8)

Interest expense, net

24.7

Income taxes benefit

(1.9)

Depreciation & amortization

53.6

EBITDA

$33.6

Share-based compensation

11.8

Non-recurring/non-operating costs

2.6

Acquisition-related adjustments

0.3

Change in tax receivable agreement liability

4.0

Change in fair value of warrant liability

(3.8)

Change in fair value of contingent consideration

2.3

Adjusted EBITDA

$50.7

Depreciation

(8.9)

Interest and other expense, net

(24.7)

Normalized income taxes (1)

(4.1)

Adjusted Net Income

$13.0

Adjusted basic shares outstanding

344.4

Adjusted earnings per share

$0.04

(1) Income taxes calculated using 24% effective rate.

(in millions)

Q1 25

GAAP operating cash flow

35.9

Add: Non recurring cash payments (1)

4.3

Add: Change in channel client deposits payable (2)

(1.2)

Adjusted operating cash flow

$39.1

Capital expenditures

(6.1)

Adjusted free cash flow

$33.0

(1)  Primarily includes other non-recurring expenses such as non-acquisition related severance, foreign currency transaction gains and losses, systems integrations, legal entity rationalization, expenses related to retention of key employees from acquisitions and non-recurring consulting and advisory fees.

(2)   Channel Client Deposits Payable represents client deposits for the incentive payment program associated with the Company's channel shaping application. The Company offers services to administer incentive payments to partners on behalf of the Company’s clients. The Company’s clients deposit these funds into a restricted cash account with an offset included as a liability in incentive program payable in the Consolidated Balance Sheets.

Description

Shares (000's)

Notes

Shares outstanding as of May 31, 2024

307,516

Shares outstanding

Common Units

30,919

Units issued in the Business Combination that have not been converted from common units to Class A common stock (Common units are represented by Class V shares).

Series B-2 Shares (unvested)

3,372

Represents the right to acquire shares of Class A common stock when the 20-day VWAP reaches $15.00 per share.

Restricted Common Units Series 2 (unvested)

2,628

Represents the right in E2open Holdings, LLC that converts into common units when the 20-day VWAP reaches $15.00. Upon conversion to common units, the holders can elect to convert the common units to Class A common stock.

Adjusted Basic Shares

344,435

Warrants

29,080

Outstanding warrants with an exercise price of $11.50.

Options (vested/unreleased and unvested)

6,322

Options issued to management under the long-term incentive plan.

Restricted Shares (vested/unreleased and unvested)

16,779

Restricted shares issued to employees, management and directors under the long-term incentive plan.

Fully Converted Shares

396,616