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Borderfree's brdr ceo michael desimone on q4 2014 results Greetings, and welcome to the borderfree fourth quarter and full year 2014 earnings conference call.[Operator instructions.] I would now like to turn the conference over to your host, DeniseGarcia, Investor Relations.Thank you, ms.Garcia.You may begin. Thanks, op [ph].Hello and welcome to borderfree's fourth quarter and full year 2014 earnings call.During this call, we will make statements related to our business that maybe considered forward looking and are made pursuant to the safe harbor provisions of the private securities litigation reform act of 1995, including statements concerning our financial guidance for the first quarter of 2015 and the full year of 2015, our position to execute on our growth strategy, our ability to predict fluctuations in foreign exchange rates, our ability to decrease fulfilment costs, our ability to increase our profitability, our ability to maintain existing and acquire new customers, our ability to launch recently signed customers on our platforms, and our ability to help our customers convert website traffic into sales. Forward looking statements may often be identified with the words such as we expect, anticipate, upcoming, or similar indications of future expectations.These statements reflect our views only as of today and should not be reflected upon as representing our views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations.For a discussion of the material risks and other important factors http://brushycreekredcross.org/members-ray-bans-wayfarer-of-the-cole.html that could affect our actual results, please refer to the section entitled risk factors in the company's most recent form 10 q filed with the securities and exchange commission on november 5, 2014. Now, i would like to turn the call over to borderfree's ceo, michael desimone. Thanks, denise, and welcome to today's conference call.With me is ed neumann, our chief financial officer.During today's call, i will take you through a high level overview of the fourth quarter and full year 2014 financial and business result.I'll also update you on more recent progress against our strategic priorities and near term growth strategies including some additional details about recent acquisition of dutycalculator.I'll then turn the call over to ed, who will walk you through details of the financial results for both the quarter and the full year.As well as provide an update on our financial outlook for the first quarter and 2015, we'll then open up the call to your questions. As http://websbookmarks.info/determine-ralph-lauren-outlet-uk-the-success/ we discuss in our last earnings call.We expect that the rapid rise in the value of the us dollar will be a headwind to our growth.As you may know, the dollar's rise accelerated in the fourth quarter with more than half the full year depreciation against the australian dollar, the canadian dollar and russian rouble occurring in q4 [indiscernible]. Despite this acceleration, our financial results in the fourth quarter were mainly in line with our revised expectation.Ecommerce revenue increased 10% to a record $20.1 million while adjusted EBITDA were $3.5 million, which matches the same figure as last year, as higher gross profit dollars were offset by increased strategic, technology and operationally related investments. Digging a bit deeper into the impact of fx in our quarterly, not surprisingly we saw the biggest impact in russia.Where sales in same currency terms contracted by 46% in the face of 29% drop in the value of the rouble.In contrast, we continue to see strong demand in markets like canada and uk, where we saw growth of 21% and 24% in same currency term.We also saw impressive growth in markets like china, singapore, south korea and across the middle east. In terms of new business, we added 25 storefronts to the platform in the fourth quarter including two of their actively piloting our new bfx technology.Last call by neiman marcus and the high end retailer bergdorf goodman.For the year, overall gross merchandise volume grew 22% to $546.7 million crossing the $500 million mark for the first time in the company's history.Ecommerce revenue increased 23% to a record $65.7 million, well adjusted EBITDA grew to yet another record level for the company at $5.8 million compared to $3.5 million in 2013. We had a strong year in terms of adding new storefronts to the platform including the fourth quarter;We added 42 storefronts in 2014, bringing the total number of storefronts in the platform to a record 171 at year end.Let me breakdown our full year storefronts numbers a bit further, while we added 42 storefronts during 2014, we also had 29 storefronts that came off the platform.Off these 21 either stopped selling online, stopped selling internationally, when out of business or were merged into their parents storefront. It's also important to note, that all but one of these 21 storefronts were considered tier 3 customers, our lowest tiers in terms of dmv contribution to the business.The challenging fx environment in the second half of 2014 aside, we made excellent progress against our key strategic initiatives for the year.As i mentioned earlier, our express implementation technology, bfx is currently in pilot with two retailers last call by neiman marcus and bergdorf goodman. The early results in both sides have been very encouraging, so much still in factor that we're expanding the pilots to include another marque brand, ralph lauren that we expect will launch in 25 countries by next month.Our logistics optimization strategy is really hitting its drive the addition of 15 new carriers combined with significant technology and operational improvements yielded at 24% reduction in average shipping cost per parcel for the quarter, which contributed to a major improvement in sales conversion at checkout and enabled increasing number of merchants to offer free and or flat rates shipping options on many orders. We expanded our business development efforts with retailers located outside the us our pipeline of uk retailers sites has now grown to 45, to several major brands and late http://graphicdesign.com.vn/the-cheap-ray-ban-sunglasses-uk-boys-scouts/ stages of contract negotiation.In parallel, we've been building out our operational footprint in europe and making the applicable technology changes to support launch of these customers by the third quarter of 2015. We anticipate that our recent acquisition of dutycalculator will accelerate our launch into the uk market.Especially given that their existing relationships with key retailers like [indiscernible], christian louboutin and [indiscernible] will now come under the borderfree platform umbrella.In addition to new customer relationships, we believe the integration of dutycalculator's technology to the borderfree platform will significantly improve checkout conversion and thus increase ecommerce revenue by incorporating a highly granular real time quoting engine and in addition lowering variable cost associated with customs classification and clearance. We're also very excited about the new revenue opportunities that dutycalculator represents in the form of providing standalone data and transactional services related to custom's classification, guaranteed tariff calculation and compliance management.Services that are in high demand in the rapidly growing global ecommerce market as well as broader commercial and import and export ramifications for businesses located in any of the over 95 countries dutycalculator support. In our q3 earnings call, i mentioned the pilot we were conducting with alipay to test the new epass, which allows hundreds of millions of chinese consumers to use their alipay http://boulevardshop.net/really-ralph-lauren-uk-stores-can-go-wrong/ accounts to easily make purchases from us retailer.The pilot was very successful especially over the black friday weekend where multiple alibaba group marketing assets were leveraged to introduce this very american shopping holiday to consumers in china. Given these early results, we've decided to expand the pilot to more customers, while we work closely with alipay to upgrade the service in anticipation of a full rollout across the network of borderfree retailers beginning the latter part of q2.Looking to the rest of the year, our strategic priorities are clear.One, accelerate new customer acquisition.The team is working quickly to move bfx from the pilot date to full production launch in the second quarter of the year, at that point bfx will become our standard integration technology in both the us and uk market. In the interim, we're also expanding our sales team to leverage the accelerated sales cycle bfx delivered significantly increasing the size of the current team by year end.Two, optimize international sales conversion, we will continue to improve our localization technology, lower logistics cost, expand payment option and http://boulevardshop.net/really-ralph-lauren-uk-stores-can-go-wrong/ leverage global partnership such as alipay to deliver the lowest possible landed cost and increasingly local shopping experience to the international consumer and three diversify our business. As i mentioned, we're making good progress in the uk as well assessing how quickly we can move into other key european markets like france and germany.As i mentioned, our acquisition of dutycalculator opens up new opportunities to offer data driven software solutions for customs classification, pay compliance and landed cost calculations for customer around the world. Well 2014 was a challenging year in terms of foreign exchange volatility, it was also a year in which we set record levels for gmv, ecommerce revenue and adjusted ebitda.Looking forward, the business is very well positioned for 2015 and beyond with an excellent team, an industry leading technology platform, a fantastic and growing customer [indiscernible] and a strong balance sheet. I believe the company is never better situated to leverage its leadership position at the intersection of two massive macro trend rapid growth in ecommerce and the long term trends towards globalization.With that, i'll now turn the call over to ed. Thanks, mike and good afternoon, everyone.As mike noted earlier, we expected the rapid strengthening and the us dollar would be headwind to our growth and although, we faced accelerative fx volatility during the latter half of the fourth quarter, we were pleased to deliver ecommerce revenue in line with our revised financial guidance and at the same time exceeded our expectations for adjusted ebitda non gaap net income. During the fourth quarter, we processed approximately $167 million of gmv in our platform representing an increase of 7% as compared to $155.8 million in the same period last year.For the year, we increased gmv 22% to a record $546.7 million compared to $447.8 million in 2013. In terms of new business, we launched 25 new ecommerce sites during the quarter bringing the total gross additions for new ecommerce site launched for the year, to 42.Keeping our focus on new customer acquisition and investments in our bfx implementation technology to accelerate the launch of new customer site, we will be streamlining our reporting going forward to focus mainly on the total number of ecommerce site added to our platform each quarter, to make it easier to follow our progress in this area. We've recognized total revenue of $36.7 million in the fourth quarter, an increase of 2% from $35.9 million in the same period last year.For the year, total revenue was $125.5 million and increased to 14% over the full year 2013.Ecommerce revenue was a record $20.1 million for the fourth quarter, an increase of 10% over the same quarter last year. For the year, ecommerce revenue was $65.7 million, an increase of 23% over the full year 2013.We focused primarily on ecommerce revenues the key indicator of the international sales volume we drive for our customers of the growth and profitability of our business.To reiterate, our operating philosophy around fulfilment is to offer the most compelling shipping quote to the consumer, to increase sales conversion which in turn increase this higher margin ecommerce revenues. Our plan is to drive ecommerce revenue growth by reducing the cost of fulfilment and passing the cost savings through to the consumer.We continue to optimize our logistics program increasing fulfilment revenues to percent to total revenue from 49% in the year ago period to 45% of total revenue in the fourth quarter of 2014. For the year, we decreased fulfilment revenue as a percentage of total revenue from 52% of total revenue in 2013, to 48% of revenue in 2014.As a result, our cost of revenue as a percentage of total revenue decreased from 68% in the fourth quarter last year, to 63% this year, as we continue to shift our revenue mix to higher margin ecommerce revenue and realized improvements in our ecommerce direct cost structure related to customer charge back and payment processing cost during the quarter.