MAM Software Group Reports Quarterly Financial Results

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Nov 01, 2010, 09:00 ET

BARNSLEY, England, Nov. 1, 2010 /PRNewswire-FirstCall/ -- MAM Software Group, Inc. (OTC Bulletin Board: MAMS), (the "Company" or "MAM"), a leading provider of business automation and ecommerce solutions for the automotive aftermarket, announced the following financial results for its quarter ended September 30, 2010, through the filing on November 1, 2010 of its Quarterly Report on Form 10-Q with the Securities and Exchange Commission:

(In thousands, except share and per share data)		For The Quarter Ended
		September 30,
		2010		2009
Revenues	$	6,602	$	6,212
Gross profit	$	3,607	$	3,265
Operating income	$	1,206	$	590
Income before provision for income tax	$	737	$	300
Net Income after taxes	$	437	$	80
Income per share attributed to common stockholders - basic and diluted	$	0.01	$	-

Weighted average shares outstanding - basic and diluted		85,712,429		83,496,491

The Company reported revenue of $6,602,000 for quarter ended September 30, 2010 as compared to $6,212,000 for the quarter ended September 30, 2009 an increase of $390,000 or 6.3%. Operating income increased $616,000 to $1,206,000 for the quarter ended September 30, 2010, as compared to income of $590,000 for September 30, 2009. Income before income taxes was $737,000 as compared to income of $300,000 in the prior year, and the net income after taxes was $437,000 for the quarter ended September 30, 2010 vs. income of $80,000 for the quarter ended September 30, 2009.

Gross margins for the quarter ended September 30, 2010 were 54.7% vs. 52.6% for the quarter ended September 30, 2009.

The Company reported revenue of $5,017,000 and $1,585,000 from its UK and US operations, respectively, for the quarter ended September 30, 2010, compared to $4,431,000 and $1,781,000, respectively, during the same period in 2009. Revenue increased 538,000GBP or 19.9% in our UK operations to 3,237,000GBP from 2,699,000GBP from organic sales growth in data services and support. The stronger US dollar resulted in dollar denominated revenue of $5,017,000 during 2010 as compared to $4,431,000 during 2009, which is an increase of $586,000. US revenue decreased $196,000 to $1,585,000 in 2010 from $1,781,000 in 2009.

Commenting on the first quarter of fiscal 2011, MAM's CEO, Michael Jamieson, said, "The Company has been able to increase revenues and profit margins while reducing operating expenses, which resulted in an increase in operating income of $616,000 to $1,206,000. MAM Software in the US and UK continues to grow both revenue and income, while Aftersoft Network N.A. experienced a decrease in revenues but remained profitable for the quarter." Mr. Jamieson also added, "The September 30, 2010 Balance Sheet does not reflect the recently completed $3.3 million equity financing, or the $2.0 million three year term debt, both of which closed in October. These two financings allowed the Company to prepay the 16% per annum $3.2 million term loan and the 13.5% per annum $1.0 million revolving credit facility. After repaying these obligations the Company added approximately $1.1 million to working capital."

About MAM Software Group, Inc.

MAM Software Group, Inc. (OTC Bulletin Board: MAMS) is a supplier of business and ERP supply chain management solutions to automotive parts manufacturers, distributors and retailers. MAM Software Group provides the automotive aftermarket with a combination of business management systems, information products, and online services that together deliver benefits for all parties involved in the timely repair of a vehicle. For further information, please visit http://www.mamsoftwaregroup.com/.

MAM SOFTWARE GROUP, INC. Condensed Consolidated Balance Sheets (In thousands, except share and per share data)
	September 30,		June 30,
	2010		2010
ASSETS	(unaudited)
Current Assets
Cash and cash equivalents	$	847	$	1,196
Accounts receivable, net of allowance of $128 and $192		2,991		2,520
Inventories		297		366
Prepaid expenses and other current assets		643		371
Total Current Assets		4,778		4,453

Property and Equipment, net		840		856

Other Assets
Goodwill		9,242		8,924
Amortizable intangible assets, net		2,621		2,757
Software development costs, net		1,508		1,520
Other long-term assets		42		49
TOTAL ASSETS	$	19,031	$	18,559

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	1,208	$	1,551
Accrued expenses and other		2,627		1,758
Payroll and other taxes		330		364
Current portion of settlement liability		332		326
Derivative liabilities		343		291
Current portion of long-term debt		3,042		5,000
Current portion of deferred revenue		412		641
Sales tax payable		703		598
Income tax payable		810		659
Total Current Liabilities		9,807		11,188

Long-Term Liabilities
Deferred revenue, net of current portion		225		345
Deferred income taxes		510		642
Settlement liability, net of current portion		440		525
Long-term debt, net of current portion		1,518		168
Other		348		359
Total Liabilities		12,848		13,227

Commitments and contingencies

Stockholders' Equity
Preferred stock: Par value $0.0001 per share; 10,000,000 shares authorized, 1,792,662 and 0 issued and outstanding, respectively		–		–
Common stock: Par value $0.0001 per share; 150,000,000 shares authorized, 85,860,185 and 84,862,880 shares issued and outstanding, respectively		9		8
Additional paid-in capital		29,582		29,503
Accumulated other comprehensive loss		(434)		(768)
Accumulated deficit		(22,974)		(23,411)
Total Stockholders' Equity		6,183		5,332
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	19,031	$	18,559

MAM SOFTWARE GROUP, INC. Condensed Consolidated Statements of Operations and Comprehensive Loss (In thousands, except share and per share data)
	For the three months ended September 30, 2010		For the three months ended September 30, 2009

Revenues	$	6,602	$	6,212
Cost of revenues		2,995		2,947
Gross Profit		3,607		3,265

Operating Expenses
Research and development		819		844
Sales and marketing		618		644
General and administrative		696		905
Depreciation and amortization		268		282
Total Operating Expenses		2,401		2,675

Operating Income		1,206		590

Other Income (Expense)
Interest expense		(417)		(378)
Gain on settlement of liability		-		50
Change in fair value of derivative liabilities		(52)		38
Total other expense, net		(469)		(290)

Income before provision for income taxes		737		300

Provision for income taxes		300		220

Net income		437		80

Foreign currency translation gain		334		126
Total comprehensive income	$	771	$	206
Income per share attributed to common stockholders: basic and diluted
Basic	$	0.01	$	-
Diluted	$	0.01	$	-
Weighted average shares outstanding:
Basic		85,712,429		83,496,491
Diluted		85,712,429		83,496,491

MAM SOFTWARE GROUP, INC.
Calculation of Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (unaudited, includes non-cash compensation and intangible asset impairment)
	For the Quarter Ended
	September 30,
(in thousands)		2010		2009

Net Income	$	437	$	80
Interest Expense		417		378
Taxes		300		220
Depreciation and amortization		268		282
Non-cash equity compensation		80		20
Change in fair value of derivative liabilities		52		(38)
Adjusted EBITDA	$	1,554	$	942

This press release contains forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the company's business including, increased competition; the ability of the company to expand its operations through either acquisitions or internal growth, to attract and retain qualified professionals, and to expand commercial relationships; technological obsolescence; general economic conditions; and other risks detailed time to time in the Company's filings with the Securities and Exchange Commission.

SOURCE MAM Software Group, Inc.