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Summary

  • Enables customers to enjoy significantly lower supply chain costs compared to legacy systems.
  • 2013 top line revenue was up 21% compared to 2012.
  • Recurring revenue retention (as defined by AMBR) is 102%.

Based in East Rutherford, NJ, Amber Road (NYSE:AMBR) scheduled a $75 million IPO on the NYSE with a market capitalization of $286 million at a price range midpoint of $11.50 for Friday, March 21, 2014.

The full IPO calendar is available at IPOpremium.

SEC Documents
Manager, Joint managers: Stifel

Co-Managers: Pacific Crest, Canaccord Genuity, Needham & Co., Raymond James

End of lockup (180 days): Wednesday, September 17, 2014

End of 25-day quiet period: Tuesday, April 15, 2014

Summary
AMBR enables its customers to enjoy significantly lower supply chain costs compared to legacy systems.

2013 top line revenue was up 21% compared to 2012. 2012 revenue was up 15% compared to 2011; okay, but not great top line revenue rate of growth.

Recurring revenue retention (as defined by AMBR) is 102%, which is very good.

26% of the IPO is for selling shareholders.

Valuation

Glossary

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

% offered

2013yr

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

Amber Road

$286

5.5

-20

4.7

8.1

26%

Conclusion
The rating on AMBR is positive. To be more interesting, AMBR needs to increase its rate of growth in top line revenue.

To put the conclusions and observations in context, the following is reorganized, edited and summarized from the full S-1 referenced above.

Business

AMBR is a leading provider of cloud-based global trade management (GTM) solutions.

AMBR automates import and export processes to enable goods to flow across international borders in the most efficient, compliant and profitable way.

AMBR's solution combines enterprise-class software, trade content sourced from government agencies and transportation providers in 125 countries, and a global supply chain network connecting its customers with their trading partners, including suppliers, freight forwarders, customs brokers and transportation carriers.

Customer Benefits

AMBR's solution reduces transportation costs, optimizes logistics, leverages trade agreements, provides shipment tracking, and ensures compliance with import and export regulations. By automating more GTM processes, AMBR enables its customers to enjoy significantly lower supply chain costs compared to legacy systems.

AMBR delivers its GTM solution using a Software-as-a-Service (SAAS) model and leverages a highly flexible technology framework to quickly and efficiently meet its customers' unique requirements around the world.

Subscription-based

In 2013, AMBR processed over 600 million transactions and supply chain messages on its network. AMBR generates revenue from annual subscription fees for its solution and by providing related professional services.

Growth

Sustained increases in international trade volumes are driving demand for AMBR's solution.

Selling to new customers has driven its growth to date, and AMBR believes that the GTM automation market is greatly under-penetrated and remains a significant growth opportunity for the company.

To achieve this growth, AMBR will continue to invest in its sales and marketing efforts worldwide.

Customer Concentration

In 2013, one customer accounted for 11.5% of AMBR's total revenue and no other customer accounted for more than 10%.

During 2013, revenue from international customers accounted for 11% of total revenue.

Sales

AMBR sells its solution primarily through a direct sales force, both domestically and internationally, including via its recently acquired Chinese subsidiary EasyCargo.

Dividend Policy

No dividends are planned.

Intellectual Property

AMBR has a number of registered and unregistered trademarks and no pending patent applications or issued patents.

Competition

AMBR competes with the large, enterprise resource planning software companies such as Oracle Corporation and SAP AG.

These companies are extremely well financed, have prominent brands, and have extensive coverage of the enterprise software market across business functions.

AMBR also competes with focused global trade management - GTM vendors. These vendors provide one or more functions, including import management, export management, trade content, supply chain visibility, or free trade agreement management.

They generally do not have the solution breadth that AMBR provides, but may have superior capabilities in the functions they provide and they may have lower pricing than AMBR does.

5% stockholders

Cross Atlantic 34.8%

Goldman Sachs & Co 15.6%

NJTC Investment Fund 7.1%

Updata Partners 18.6%

James W. Preuninger 11.5%

John W. Preuninger 10.8%

Use of proceeds

26% of the IPO is for selling shareholders. AMBR itself expects to net $47.5 million from its IPO. Proceeds are allocated as follows:

  • for general corporate and working capital purposes, which may include hiring additional personnel, investing in sales and marketing, research and development and infrastructure, although AMBR has not currently determined with certainty any specific allocation of its proceeds with respect to these items.

AMBR may also use a portion of the net proceeds to acquire or invest in complementary businesses, products, services, technologies or other assets.

Disclaimer: This AMBR IPO report is based on a reading and analysis of AMBR's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Source: IPO Preview: Amber Road