Decolar Financial Statements Q2 2017 Revised ?· the unaudited condensed consolidated financial statements…

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<p>UnauditedcondensedconsolidatedFinancialStatementsasof</p> <p>June30,2017andDecember31,2016andforthesix-monthperiodsended</p> <p>June30,2017and2016</p> <p>Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.</p> <p>2</p> <p>Despegar.com,Corp.</p> <p>UnauditedConsolidatedBalanceSheetsasofJune30,2017andDecember31,2016</p> <p>(inthousandsU.S.dollars)</p> <p> AsofJune30, AsofDecember31, 2017 2016 ASSETS Currentassets Cashandcashequivalents 92,107 75,968</p> <p>Restrictedcashandcashequivalents 39,186 22,738</p> <p>Shortterminvestments 238 -</p> <p>Accountsreceivable,netofallowances 158,287 121,098</p> <p>Relatedpartyreceivable 3,626 2,240Othercurrentassetsandprepaidexpenses 26,425 27,184Totalcurrentassets $ 319,869 $ 249,228 Non-currentassets Restrictedcashandcashequivalents 10,000 20,459Propertyandequipment,net 14,719 13,717Intangibleassets,net 33,960 31,412Goodwill 39,615 38,894Totalnon-currentassets $ 98,294 $ 104,482TOTALASSETS $ 418,163 $ 353,710 LIABILITIESANDSHAREHOLDERSDEFICIT Currentliabilities Accountspayableandaccruedexpenses 38,736 25,335Travelsupplierspayable 115,915 102,237Relatedpartypayable 81,214 71,006Loansandotherfinancialliabilities 13,882 7,179DeferredRevenue 23,242 29,095Otherliabilities 54,879 49,686Contingentliabilities 4,002 3,613Totalcurrentliabilities $ 331,870 $ 288,151 Non-currentliabilities Otherliabilities 1,633 409Contingentliabilities 20,847 22,413Relatedpartyliability 125,000 125,000Totalnon-currentliabilities $ 147,480 $ 147,822TOTALLIABILITIES $ 479,350 $ 435,973 CommitmentsandContingencies(SeeNote13) SHAREHOLDERSDEFICIT Commonstock(1) 6 6Additionalpaid-incapital 314,261 312,155Otherreserves (728) (728)Accumulatedothercomprehensiveincome 16,455 16,286Accumulatedlosses (391,181) (409,982)TotalDeficitattributabletoDespegar.com,Corp. $ (61,187) $ (82,263) TOTALLIABILITIESANDSHAREHOLDERSDEFICIT $ 418,163 $ 353,710</p> <p>(1) 58,518sharesissuedandoutstandingatJune30,2017andDecember31,2016.</p> <p>Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.</p> <p>3</p> <p>Despegar.com,Corp.</p> <p>UnauditedConsolidatedStatementsofOperationsforthesix-monthperiodendedJune30,2017and2016</p> <p>(inthousandsU.S.dollars)</p> <p> Six-monthperiodendedJune30, 2017 2016 Revenue</p> <p>(1) 248,461 193,912 </p> <p>Costofrevenue (66,227) (67,246) </p> <p>Grossprofit $ 182,234 $ 126,666 Operatingexpenses Sellingandmarketing (78,835) (57,710) Generalandadministrative (37,487) (29,146) Technologyandproductdevelopment (33,052) (31,503) Totaloperatingexpenses $ (149,374) $ (118,359) Operatingincome $ 32,860 $ 8,307 Financialincome 915 3,923 Financialexpense (8,682) (7,962) Incomebeforeincometaxes $ 25,093 $ 4,268 Incometaxexpense (6,292) (4,824) Netincome/(loss) $ 18,801 $ (556) </p> <p>(1) Includes$18,900and$13,300forrelatedpartytransactionsfortheperiodsendedJune30,2017and2016,respectively.Seenote14.</p> <p> 2017 2016Earningspershareavailabletocommonstockholders: Basic 0.32 (0.01)</p> <p>Diluted 0.32 (0.01)</p> <p>Sharesusedincomputingearningspershare(inthousands):</p> <p>Basic 58,518 58,518</p> <p>Diluted 58,609 58,518</p> <p>Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.</p> <p>4</p> <p>Despegar.com,Corp.</p> <p>UnauditedConsolidatedStatementsofComprehensiveIncome/(Loss)forthesix-monthperiodendedJune30,2017and2016</p> <p>(inthousandsU.S.dollars)</p> <p> Six-monthperiodendedJune30, 2017 2016 </p> <p>Netincome/(loss) $ 18,801 $ (556) </p> <p>Othercomprehensiveincome/(loss),netoftax Foreigncurrencytranslationadjustment</p> <p>(1) 169 (16,249) </p> <p>Comprehensiveincome/(loss) $ 18,970 $ (16,805) </p> <p>(1) Notaximpact</p> <p>Theaccompanyingnotesareanintegralpartofthesecondensedfinancialstatements.5</p> <p>Despegar.com,Corp.</p> <p>UnauditedConsolidatedStatementsofChangesinShareholdersDeficitfortheperiodendedJune30,2017andDecember31,2016</p> <p>(inthousandsU.S.dollars)</p> <p> CommonstockAdditionalpaid-</p> <p>incapitalOther</p> <p>reserves</p> <p>Accumulatedother</p> <p>comprehensiveincome</p> <p>AccumulatedLosses TotalDeficit</p> <p>Numberofshares(inthousands)</p> <p>Amount</p> <p>BalanceasofDecember31,2015 58,518 6 311,581 (728) 33,787 (427,779) (83,133) Stock-basedcompensationexpense - - 100 - - - 100Foreigncurrencytranslationadjustment - - - - (16,249) - (16,249)</p> <p>Netlossfortheperiod - - - - - (556) (556)BalanceasofJune30,2016 58,518 6 311,681 (728) 17,538 (428,335) (99,838) BalanceasofDecember31,2016 58,518 6 312,155 (728) 16,286 (409,982) (82,263) Stock-basedcompensationexpense - - 2,106 - - - 2,106Foreigncurrencytranslationadjustment - - - - 169 - 169</p> <p>Netincomefortheperiod - - - - - 18,801 18,801BalanceasofJune30,2017 58,518 6 314,261 (728) 16,455 (391,181) (61,187)</p> <p>Theaccompanyingnotesareanintegralpartofthesecondensedfinancialstatements.6</p> <p>Despegar.com,Corp.</p> <p>UnauditedStatementsofCashFlowsforthesix-monthperiodendedJune30,2017and2016</p> <p>(inthousandsU.S.dollars)</p> <p> 2017 2016 Cashflowsfromoperatingactivities: Netincome/(loss) $ 18,801 $ (556)Adjustmentstoreconcilenetincome/(loss)tonetcashflowsfromoperatingactivities: </p> <p>Unrealizedforeigncurrencytranslationlosses 686 994Depreciationexpense 2,705 2,528Amortizationofintangibleassets 3,556 3,646Stockbasedcompensationexpense 2,106 100Interestandpenalties 454 356Incometaxes 2,795 709Allowancefordoubtfulaccounts 743 1,397Provision(recovery)forcontingencies 779 (123) </p> <p>Changesinassetsandliabilities,netofnon-cashtransactions: (Increase)/Decreaseinaccountsreceivable,netofallowances (40,544) (33,667)(Increase)/Decreaseinrelatedpartyreceivables (1,386) (110)(Increase)/Decreaseinotherassetsandprepaidexpenses 430 3,407Increase/(Decrease)inaccountspayableandaccruedexpenses 13,621 (12,348)Increase/(Decrease)intravelsupplierspayable 14,251 (33,836)Increase/(Decrease)inotherliabilities 2,528 (2,791)Increase/(Decrease)incontingencies (637) 4,901Increase/(Decrease)inrelatedpartyliabilities 10,208 22,878Increase/(Decrease)indeferredrevenue (5,815) (5,137)</p> <p>Netcashflowsprovidedby/(usedin)operatingactivities $ 25,281 $ (47,652)Cashflowsfrominvestingactivities: </p> <p>(Increase)/Decreaseinshort-terminvestments (238) 40,013Acquisitionofpropertyandequipment (4,122) (1,875)Increaseofintangibleassets,includinginternal-usesoftwareandwebsitedevelopment (6,157) (5,683)(Increase)/Decreaseinrestrictedcashandcashequivalents (5,473) (458)</p> <p>Netcashflows(providedby)/usedininvestingactivities $ (15,990) $ 31,997Cashflowsfromfinancingactivities: </p> <p>Increaseinloansandotherfinancialliabilities 9,318 2,000Decreaseinloansandotherfinancialliabilities (2,642) (1,000)</p> <p>Netcashflowsprovidedbyfinancingactivities $ 6,676 $ 1,000Effectofexchangeratechangesoncashandcashequivalents 172 (1,892)Netincrease/(decrease)incashandcashequivalents $ 16,139 $ (16,547)Cashandcashequivalentsasofbeginningoftheyear $ 75,968 $ 102,116Cashandcashequivalentsasofendoftheperiod $ 92,107 $ 85,569</p> <p>Supplementalcashflowinformation Cashpaidforincomeandminimumnotionalincometaxes $ 7,476 $ 6,593Interestpaid $ 454 $ 356</p> <p>Despegar.com,Corp. NotestotheUnauditedFinancialStatements</p> <p>(inthousandsU.S.dollars)</p> <p>7</p> <p>1. OperationsoftheCompany</p> <p>OnMay3,2017,thestockholdersofDecolar.com,Inc.,exchangedtheirsharesforordinarysharesofDespegar.com,Corp.tocreateanewBritishVirginIslandholdingcompany.Followingtheexchange,theCompanysshareholdersownsharesofDespegar.com,Corp.andDecolar.com,Inc. isawholly-ownedsubsidiaryofDespegar.com,Corp.TheauditedconsolidatedfinancialstatementsasofandfortheyearendedDecember31,2016andtheunauditedcondensedconsolidatedfinancialstatementsasofJune30,2017andforthesixmonthsendedJune30,2017and2016totheextentrelatedtotheeventsandperiodspriortoMay3,2017are the consolidated financial statements of Decolar.com, Inc., which is our predecessor foraccountingpurposes.Despegar.com,Corp.(formerlyDecolar.com,Inc.),isanonlinetravelagency,whichprovidesleisureandbusinesstravelersthetoolsandinformationtheyneedtomaketravelreservationswithprovidersoftravelproductsaroundtheworld. Despegar.comistheleadingonlinetravelagencyinLatinAmericaandincludesboththeDecolarandDespegarbrands.Withapresencein20countries,Despegarswebsitesandmobileappshelpleisureandbusinesstravelerstobookhotelrooms,airlinetickets,packages,rentalcars,cruises,destinationservices and travel insurance around the world. The Company operates primarily under theDespegar.combrandforSpanishandEnglishspeakingcustomersandtheDecolar.combrandforPortuguesespeakingcustomers.TheCompanyalsogeneratesadditionalrevenuethroughthesaleofadvertisingonitswebsites.Despegar.com provides its customers with multiple ways to save on travel-related products andmultiplealternativestopayforsuchproducts.2. Basisofconsolidation</p> <p>In the opinion of the Company, the accompanying unaudited condensed consolidated financialstatementscontainalladjustments,consistingofonlynormalrecurringadjustments,necessaryforafair statementof its financialpositionasof June30,2017,and its resultsofoperations for thesixmonthsendedJune30,2017,and2016,andcashflowsforthesixmonthsendedJune30,2017,and2016.ThecondensedconsolidatedbalancesheetatDecember31,2016,wasderivedfromauditedannual financial statements but does not contain all of the footnote disclosures from the annualfinancialstatements.TheunauditedcondensedconsolidatedfinancialstatementsincludetheaccountsoftheCompanyanditssubsidiaries.ThefollowingaretheCompanysmainoperatingsubsidiaries(allwholly-owned):</p> <p>Despegar.com,Corp. NotestotheUnauditedFinancialStatements</p> <p>(inthousandsU.S.dollars)</p> <p>8</p> <p>NameoftheSubsidiary CountryofIncorporationDespegar.com.arS.A. ArgentinaDecolar.comLTDA. BrazilDespegar.comChileSpA ChileDespegarColombiaS.A.S. ColombiaDespegarEcuadorS.A. EcuadorDespegar.comMxicoS.A.deC.V. MexicoDespegar.comPeruS.A.C. PeruDespegar.comUSA,Inc. UnitedStatesTravelReservationsS.R.L. Uruguay</p> <p>The consolidated financial statements have beenprepared in accordancewith generally acceptedaccountingprinciplesintheUnitedStatesofAmerica("U.S.GAAP").Althoughthesubsidiariestransactthemajorityoftheirbusinessesintheirlocalcurrencies,theCompanyhasselectedtheUnitedStatesdollar("U.S.dollar")asitsreportingcurrency.Allsignificantintercompanyaccountsandtransactionshavebeeneliminated.ForeigncurrencytranslationThe Companys foreign subsidiaries (except for Travel Reservations S.R.L in Uruguay and othersubsidiaries in the United States, Ecuador and Venezuela, which use the U.S. dollar as functionalcurrency)havedeterminedthelocalcurrencytobetheirfunctionalcurrency.AssetsandliabilitiesaretranslatedfromtheirlocalcurrenciesintoU.S.dollarsattheend-of-the-periodexchangerates,andrevenueandexpensesaretranslatedataveragemonthlyratesineffectduringtheperiod.Translationadjustmentsareincludedintheconsolidatedstatementofcomprehensiveincome/(loss).Gainsandlossesresultingfromtransactionsinnon-functionalcurrenciesarerecognizeddirectlyintheunauditedconsolidatedstatementsofoperationsunderthecaptionFinancialincome/(expense).3. RecentlyissuedaccountingpronouncementsTheCompanyprovidesbelowadescriptionofthosestandardswhicharerelevanttotheCompanysbusinessonlyandtheimpactoftheiradoptionifany.In May 2014, the Financial Accounting Standards Board (FASB) issued an Accounting StandardUpdate(ASU)amendingrevenuerecognitionguidanceandrequiringmoredetaileddisclosurestoenableusersof financial statements tounderstand thenature,amount, timinganduncertaintyofrevenueandcashflowsarisingfromcontractswithcustomers. InAugust2015,theFASBissuedanASUdeferring the effective date of the revenue standard so itwould be effective for annual andinterimreportingperiodsbeginningafterDecember15,2017.Inaddition,theFASBhasalsoissuedseveralamendmentstothestandardwhichclarifycertainaspectsoftheguidance,includingprincipalversusagentconsiderationandidentifyingperformanceobligations.The guidance permits two methods of adoption: retrospectively to each prior reporting periodpresented(full retrospective),orretrospectivelywiththecumulativeeffectof initiallyapplyingtheguidancerecognizedatthedateofinitialapplication(modifiedretrospective).Wecurrentlyanticipateadopting the new guidance effective January 1, 2018 using the modified retrospective method,</p> <p>Despegar.com,Corp. NotestotheUnauditedFinancialStatements</p> <p>(inthousandsU.S.dollars)</p> <p>9</p> <p>however,thisdecisionisnotfinalandissubjecttothecompletionofouranalysisoftheguidance.Whileweareevaluatingthefullimpactofthenewstandardonourconsolidatedfinancialstatements,wehavedeterminedthenewguidancewillnotchangeourpreviousconclusionsonnetpresentation.Throughthedateofadoption,wewillcontinuetoupdateourassessmentoftheeffectthatthenewrevenueguidancewillhaveonourconsolidatedfinancialstatements,andwilldisclosefurthermaterialeffects,ifany,whenknown.In January 2017, the FASB issued ASU No. 2017-04. To simplify the subsequentmeasurement ofgoodwill,theamendmentseliminateStep2fromthegoodwillimpairmenttest.Theannual,orinterim,goodwillimpairmenttestisperformedbycomparingthefairvalueofareportingunitwithitscarryingamount.Animpairmentchargeshouldberecognizedfortheamountbywhichthecarryingamountexceeds the reporting units fair value; however, the loss recognized should not exceed the totalamount of goodwill allocated to that reporting unit. In addition, income tax effects from any taxdeductible goodwill on the carrying amount of the reporting unit should be considered whenmeasuring the goodwill impairment loss, if applicable. The amendments also eliminate therequirementsforanyreportingunitwithazeroornegativecarryingamounttoperformaqualitativeassessmentand,ifitfailsthatqualitativetest,toperformStep2ofthegoodwillimpairmenttest.Anentitystillhastheoptiontoperformthequalitativeassessmentforareportingunittodetermineifthequantitativeimpairmenttestisnecessary.ApublicbusinessentityshouldadopttheamendmentsforitsannualoranyinterimgoodwillimpairmenttestsinfiscalyearsbeginningafterDecember15,2019.ApublicbusinessentitythatisnotanSECfilershouldadopttheamendmentsforitsannualorany interimgoodwill impairmenttests in fiscalyearsbeginningafterDecember15,2020.AllotherentitiesshoulddosofortheirannualoranyinterimgoodwillimpairmenttestsinfiscalyearsbeginningafterDecember15,2021.EarlyadoptionispermittedforinterimorannualgoodwillimpairmenttestsperformedontestingdatesafterJanuary1,2017.TheadoptionofthisstandardisnotexpectedtohaveamaterialimpactontheCompanysfinancialstatements.</p> <p>4. CashandcashequivalentsCashandcashequivalentsconsistofthefollowing:</p> <p> AsofJune30,2017</p> <p> AsofDecember31,2016</p> <p>Cash 10 10Banks 39,682 22,681Timedeposits 51,077 50,000Moneymarketfunds 1,338 3,277 $ 92,107 $ 75,968</p> <p>Despegar.com,Corp. NotestotheUnauditedFinancialStatements</p> <p>(inthousandsU.S.dollars)</p> <p>10</p> <p>5. Accountsreceivable,netofallowancesAccountsreceivable,netofallowancesconsistofthefollowing:</p> <p> AsofJune30,2017</p> <p> AsofDecember31,2016</p> <p>Accountsrece...</p>