MAM Software Reports Fiscal First Quarter Results
MAM starts the fiscal year with strong results and recurring revenue of 82%
BLUE BELL, Pa., Nov. 14, 2017 /PRNewswire/ -- MAM Software Group, Inc. (NASDAQ Capital Market: MAMS) (the "Company" or "MAM"), a leading global provider of on-premise and cloud-based business management solutions for the auto parts, tire and vertical distribution industries, announced the following financial results in accordance with U.S. generally accepted accounting principles ("GAAP") for its first fiscal quarter ended September 30, 2017, through the filing on November 14, 2017 of its Quarterly Report on Form 10-Q with the Securities and Exchange Commission:
| (In thousands, except per share data) |
For the Three Months Ended |
||||
| 2017 |
2016 |
||||
| Net revenues |
$ |
8,638 |
$ |
8,062 |
|
| Gross profit |
$ |
4,831 |
$ |
4,744 |
|
| Operating income |
$ |
1,527 |
$ |
1,367 |
|
| Income before provision for income taxes |
$ |
1,423 |
$ |
1,247 |
|
| Net income |
$ |
1,114 |
$ |
1,213 |
|
| Earnings per share attributed to common stockholders – basic |
$ |
0.09 |
$ |
0.10 |
|
| Earnings per share attributed to common stockholders – diluted |
$ |
0.09 |
$ |
0.10 |
|
| Weighted average shares outstanding – basic |
11,816 |
11,699 |
|||
| Weighted average shares outstanding – diluted |
11,871 |
11,795 |
|||
Michael Jamieson, MAM's President and Chief Executive Officer commented, "Fiscal year 2018 is off to a solid start with results that were in-line with our expectations. We also continued to focus our efforts on progressing on our key development projects, including VAST Online and Autocat+."
"Our team achieved a significant milestone in October with the first installation of VAST Online at a Goodyear dealer location as part of our pilot test program," continued Jamieson. "We are pleased with the feedback that we've received so far from our customer. With this being the first location to go live we will continue to monitor it closely while preparing for the roll-out at additional locations."
First Quarter Highlights:
- Net revenues of $8.6 million were up 7.1% compared to $8.1 million for the same period last year. On a constant currency basis, revenues were up 7.4% over the same period last year.
- Recurring revenues were 82.0% of total revenues compared to 79.5% of total revenues for the same period last year.
- Total Software as a Service (SaaS) revenues increased 29% year-over-year and 7.5% sequentially.
- Operating income was $1.5 million, or 17.7% of revenues, versus $1.4 million, or 17.0% of revenues, for the same period last year.
- Adjusted EBITDA* was $1.8 million, or 20.4% of revenues, versus $1.6 million, or 19.6% of revenues, for the same period last year.
- Net income was $1.1 million as compared to $1.2 million in the same period last year.
First Quarter Financial Results:
Net revenues were $8.6 million for the quarter ended September 30, 2017 versus $8.1 million for the same period last year, an increase of $576,000 or 7.1%. On a constant currency basis, revenue was up 7.4% over the same period last year.
Recurring revenue for the quarter was $7.1 million, or 82% of total revenue, an increase of $673,000 or 10.5%, over $6.4 million, or 79.5% of total revenue, for the first quarter last year. Sequentially, recurring revenue increased $225,000, or 3.2%, compared to $6.9 million in the fiscal fourth quarter of 2017.
Total Software as a Service (SaaS) revenue for the quarter was $2.6 million, an increase of $580,000, or 29%, year-over-year and an increase of $179,000, or 7.5%, sequentially when compared to the fourth quarter of fiscal 2017. The increase in the SaaS revenue was primarily attributable to a 24.3% increase in Autowork Online (SaaS) revenue for the quarter to $1.5 million, and a 36.5% increase in Autopart Online (SaaS) revenue for the quarter to $1.1 million.
Total Data as a Service (DaaS) revenue for the quarter was $2.3 million, an increase of $72,000, or 3.2%, year over year, and $114,000, or 5.1%, sequentially when compared to the fiscal fourth quarter of 2017.
Gross profit for the quarter was $4.8 million, or 55.9% of total revenue, an increase of $87,000 compared to $4.7 million, or 58.8% of total revenue, for the same period last year.
Operating expenses for the quarter decreased by $74,000 to $3.3 million, a decrease of 2.2% as compared to $3.4 million for the same period last year. An increase in Research and Development expenses to support growth was offset by lower Sales and Marketing expenses and General and Administrative expenses.
Operating income for the quarter increased by $160,000, or 11.7%, to $1.5 million, as compared to $1.4 million for the same period last year.
Other expense for the quarter decreased by $16,000, or 13.3%, to $104,000, as compared to $120,000 for the same period last year.
Provision for income taxes increased to $0.3 million, or an effective tax rate of 22%, for the quarter, as compared to $34,000, or an effective tax rate of 3%, for the same period last year. The increase in the effective tax rate was primarily due to the partial release of our valuation allowance last year.
Net income for the quarter was $1.1 million, or $0.09 per basic and diluted share, compared to net income of $1.2 million, or $0.10 per basic and diluted share, for the same period last year.
Balance Sheet and Other Financial Highlights
- As of September 30, 2017, the Company had $2.4 million in cash and cash equivalents.
- The Company spent $0.7 million during the quarter ended September 30, 2017 on capital expenditures and capitalized software development.
- As of September 30, 2017, the Company had $7.8 million of debt outstanding under its term loan and nothing outstanding under its $2.75 million revolving facility.
- Stockholders' equity increased from $9.7 million at June 30, 2017, to $11.2 million at September 30, 2017.
- As of September 30, 2017, there were 12.3 million shares of common stock outstanding.
Business Outlook
The Company reaffirmed its expectations for fiscal year 2018 Adjusted EBITDA* in the range of $5.5 million to $6.0 million, on a constant currency basis.
Conference Call Information
The Company has scheduled a conference call for Wednesday, November 15, 2017, at 9 a.m. ET to review the results. Investors and interested parties can access the conference call by dialing:
- United States: 1-800-289-0438
- UK/international: 1-323-794-2423
- U.K. toll free: 0800 358 6377
A replay will be available until November 29, 2017 by calling 1-844-512-2921 (United States) or 1-412-317-6671 (UK/international). Please use pin number 6378993 for the replay.
A live webcast as well as a replay of the call will be accessible at the investor relations section of the Company's website, www.mamsoftware.com. The replay will be active for 60 days following the conference call.
About MAM Software Group, Inc.
MAM is a leading global provider of cloud-based business and on-premise management solutions for the auto parts, tire and vertical distribution industries. The company provides a portfolio of innovative software (SaaS and packaged), data (DaaS), and integration (iPaaS) services that enable businesses to intelligently manage core business processes, control costs and generate new profit opportunities. MAM's integrated platforms provide a wealth of rich functionality including: point-of-sale, inventory, purchasing, reporting, data and e-commerce. Wholesale, retail and installer business across North America, the U.K. and Ireland rely on MAM solutions, backed by dedicated teams of experienced service and support professionals. For further information, please visit http://www.mamsoftware.com.
*Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization adjusted to exclude non-cash equity compensation, and other special non-recurring charges. A reconciliation of net income (loss) to Adjusted EBITDA can be found at the end of the following tables. Adjusted EBITDA is commonly used by management and investors as an indicator of operating performance and liquidity. Adjusted EBITDA is not considered a measure of financial performance under GAAP and it should not be considered as an alternative to net income (loss), or other financial statement data presented in accordance with GAAP in our consolidated financial statements.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 from time to time in the Company's filings with the Securities and Exchange Commission.
| MAM SOFTWARE GROUP, INC. Condensed Consolidated Balance Sheets (In thousands, except share and per share data) |
||||||
| September 30, |
June 30, |
|||||
| 2017 |
2017 |
|||||
| ASSETS |
||||||
| Current Assets |
||||||
| Cash and cash equivalents |
$ |
2,438 |
$ |
1,260 |
||
| Accounts receivable, net of allowance of $341 and $332, respectively |
4,049 |
4,644 |
||||
| Inventories |
215 |
154 |
||||
| Prepaid expenses and other current assets |
1,420 |
1,489 |
||||
| Income tax receivable |
- |
168 |
||||
| Total Current Assets |
8,122 |
7,715 |
||||
| Property and Equipment, Net |
527 |
511 |
||||
| Other Assets |
||||||
| Goodwill |
8,364 |
8,191 |
||||
| Intangible assets, net |
637 |
639 |
||||
| Software development costs, net |
8,283 |
7,634 |
||||
| Deferred income taxes |
1,495 |
1,679 |
||||
| Other long-term assets |
332 |
283 |
||||
| TOTAL ASSETS |
$ |
27,760 |
$ |
26,652 |
||
| LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||
| Current Liabilities |
||||||
| Accounts payable |
$ |
1,146 |
$ |
1,334 |
||
| Accrued expenses and other liabilities |
1,298 |
1,137 |
||||
| Accrued payroll and related expenses |
1,392 |
1,605 |
||||
| Current portion of long-term debt |
1,792 |
1,734 |
||||
| Current portion of deferred revenue |
1,439 |
1,477 |
||||
| Sales tax payable |
782 |
761 |
||||
| Income tax payable |
634 |
506 |
||||
| Total Current Liabilities |
8,483 |
8,554 |
||||
| Long-Term Liabilities |
||||||
| Deferred revenue, net of current portion |
872 |
772 |
||||
| Deferred income taxes |
704 |
682 |
||||
| Long-term debt, net of current portion |
5,939 |
6,386 |
||||
| Other long-term liabilities |
600 |
583 |
||||
| Total Liabilities |
16,598 |
16,977 |
||||
| Commitments and Contingencies |
||||||
| Stockholders' Equity |
||||||
| Preferred stock: Par value $0.0001 per share; 2,000 shares authorized, |
- |
- |
||||
| Common stock: Par value $0.0001 per share; 18,000 shares authorized, |
1 |
1 |
||||
| Additional paid-in capital |
14,288 |
14,180 |
||||
| Accumulated other comprehensive loss |
(3,018) |
(3,283) |
||||
| Accumulated deficit |
(93) |
(1,207) |
||||
| Treasury stock at cost, 5 shares at September 30, 2017 and at |
(16) |
(16) |
||||
| Total Stockholders' Equity |
11,162 |
9,675 |
||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
27,760 |
$ |
26,652 |
||
| MAM SOFTWARE GROUP, INC. Condensed Consolidated Statements of Comprehensive Income (Unaudited) (In thousands, except share and per share data) |
|||||
| For the Three Months Ended |
|||||
| September 30, |
|||||
| 2017 |
2016 |
||||
| Net revenues |
$ |
8,638 |
$ |
8,062 |
|
| Cost of revenues |
3,807 |
3,318 |
|||
| Gross Profit |
4,831 |
4,744 |
|||
| Operating Expenses |
|||||
| Research and development |
1,003 |
895 |
|||
| Sales and marketing |
753 |
910 |
|||
| General and administrative |
1,490 |
1,510 |
|||
| Depreciation and amortization |
58 |
62 |
|||
| Total Operating Expenses |
3,304 |
3,377 |
|||
| Operating Income |
1,527 |
1,367 |
|||
| Other Income (Expense) |
|||||
| Interest expense, net |
(104) |
(120) |
|||
| Total other income (expense), net |
(104) |
(120) |
|||
| Income before provision for income taxes |
1,423 |
1,247 |
|||
| Provision for income taxes |
309 |
34 |
|||
| Net Income |
$ |
1,114 |
$ |
1,213 |
|
| Earnings per share attributed to common stockholders – basic |
$ |
0.09 |
$ |
0.10 |
|
| Earnings per share attributed to common stockholders – diluted |
$ |
0.09 |
$ |
0.10 |
|
| Weighted average common shares outstanding – basic |
11,816 |
11,699 |
|||
| Weighted average common shares outstanding – diluted |
11,871 |
11,795 |
|||
| Net Income |
$ |
1,114 |
$ |
1,213 |
|
| Foreign currency translation income (loss) |
265 |
(476) |
|||
| Total Comprehensive Income |
$ |
1,379 |
$ |
737 |
|
| MAM SOFTWARE GROUP, INC. Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) |
||||||
| For the Three Months Ended |
||||||
| September 30, |
||||||
| 2017 |
2016 |
|||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||
| Net income |
$ |
1,114 |
$ |
1,213 |
||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||
| Bad debt expense |
12 |
120 |
||||
| Depreciation and amortization |
142 |
128 |
||||
| Amortization of debt issuance costs |
11 |
12 |
||||
| Deferred income taxes |
184 |
2 |
||||
| Stock-based compensation expense |
97 |
84 |
||||
| Changes in assets and liabilities: |
||||||
| Accounts receivable |
652 |
(592) |
||||
| Prepaid expenses and other assets |
(7) |
213 |
||||
| Income tax receivable |
169 |
357 |
||||
| Accounts payable |
(205) |
24 |
||||
| Accrued expenses and other liabilities |
(87) |
(347) |
||||
| Income tax payable |
126 |
- |
||||
| Deferred revenues |
32 |
196 |
||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES |
2,240 |
1,410 |
||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||
| Purchase of property and equipment |
(42) |
(24) |
||||
| Capitalized software development costs |
(630) |
(749) |
||||
| NET CASH USED IN INVESTING ACTIVITIES |
(672) |
(773) |
||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||
| Proceeds from long-term debt |
- |
250 |
||||
| Repayment of long-term debt |
(400) |
(655) |
||||
| Common stock surrendered to pay for tax withholding |
- |
(149) |
||||
| NET CASH USED IN FINANCING ACTIVITIES |
(400) |
(554) |
||||
| Effect of exchange rate changes |
10 |
(241) |
||||
| Net change in cash and cash equivalents |
1,178 |
(158) |
||||
| Cash and cash equivalents at beginning of period |
1,260 |
491 |
||||
| Cash and cash equivalents at end of period |
$ |
2,438 |
$ |
333 |
||
The Accompanying Notes Are an Integral Part of these Condensed Consolidated Financial Statements
F-4
| MAM SOFTWARE GROUP, INC. |
||||
| Calculation of Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (Non-GAAP) |
||||
| (Unaudited) (In thousands) |
||||
| For the Three Months Ended September 30, |
||||
| 2017 |
2016 |
|||
| Net income (GAAP) |
$ |
1,114 |
$ |
1,213 |
| Interest expense, net |
104 |
120 |
||
| Provision for income taxes |
309 |
34 |
||
| Depreciation and amortization |
142 |
128 |
||
| Non-cash stock compensation |
97 |
84 |
||
| Adjusted EBITDA (Non-GAAP) |
$ |
1,766 |
$ |
1,579 |
SOURCE MAM Software Group, Inc.
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