MAM Software Reports Fiscal Third Quarter Financial Results

BARNSLEY, England, May 6, 2015 /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 fiscal quarter ended March 31, 2015, through the filing on May 6, 2015 of its Quarterly Report on Form 10-Q with the Securities and Exchange Commission:

 

"We made continued strategic progress during this quarter, which should benefit us in the long-term as we scale our SaaS and DaaS customer base and with it, our recurring revenue," said Michael Jamieson, MAM Software Group President and Chief Executive Officer. "Recurring revenues increased 10% year over year and represented 77% of total sales for the quarter, a clear indication of customer demand for cloud-based solutions and our ability to meet those demands. Unfortunately, our total reported revenue was hampered by the strengthening of the U.S. dollar compared to the Great Britain pound, which resulted in a negative impact to total revenue from foreign currency translation. On a constant currency basis, our UK revenues increased 11% and 8% for the three months and nine months ended March 31, 2015 respectively. We continue to invest in the business, focusing on building our sales and marketing infrastructure in North America, to position the company for further growth."

Jamieson continued, "We continue to expand our pipeline of opportunities and communicate the ROI potential of our cloud-based offering, and this resulted in solid top and bottom line progress in the UK. Our progress in North America slowed as customers delayed their purchasing decisions. Our pipeline continues to improve and certain deals that we expected to close in the third quarter have been pushed to the fourth quarter.  Two of those deals closed in April."

Third Quarter Highlights

• Total revenue for the third quarter decreased 3% to $7.66 million from $7.87 million in the same period last year. The strength of the U.S. dollar resulted in a $140,000 reduction in revenue. On a constant currency basis, total UK revenue increased 376,000GBP or 11% to 3,829,000GBP.  Sequentially, total revenue decreased by $213,000 or 3%.
• Total recurring revenue for the quarter increased 5% to $5.86 million from $5.57 million in the same period last year. Sequentially, total recurring revenue increased by $25,000.
  • Recurring revenue was 77% of total revenue for the quarter, compared to 71% for the same quarter last year.
• Total Software as a Service (SaaS) revenue for the quarter increased 60% to $1,285,000 from $802,000 in the same period last year. Sequentially, total SaaS revenue increased by $112,000 or 9.5%.
  • Autowork Online (SaaS) revenue for the quarter increased $284,000 or 48% to $872,000.
  • Autopart Online (SaaS) revenue for the quarter increased $199,000 or 93% to $413,000.  
• Total Data as a Service (DaaS) revenue increased by $47,000 to $2.38 million, a 2% increase over the same period last year. Sequentially, total DaaS revenue decreased by $10,000.

Third Quarter Financial Review

The Company's revenue was $7.66 million for the quarter ended March 31, 2015 compared to $7.87 million for same period last year, a decrease of $209,000 or 3%. A stronger U.S. dollar negatively impacted the U.K. revenue by $140,000. The Company's revenue from its U.S. and U.K. operations this quarter was $1.83 million and $5.83 million respectively, compared to $2.16 million and $5.71 million during the same period last year. U.S. recurring revenue increased $52,000 or 4% to $1.47 million this quarter, from $1.42 million for the same period last year. U.K. recurring revenue increased $235,000 or 6% to $4.39 million this quarter, from $4.15 million for same period last year.

Gross profit for the quarter was $4.32 million or 56.4% compared to $4.38 million or 55.7% for the same period last year. The decrease in cost of revenues for the three months ended March 31, 2015 was 4% or $142,000, when compared to the three months ended March 31, 2014. Our U.K. operations experienced an increase of 40,000GBP but the strength of the U.S. dollar resulted in a dollar denominated decrease in cost of revenues of $130,000. Also, lower perpetual license revenue in the U.S. negatively impacted margins as the Company continues to transition its business to a SaaS revenue model.  U.S. perpetual license and professional services revenues were $363,000, a decrease of $382,000 from the $745,000 reported in the third quarter of last year while SaaS revenue increased  $92,000 or 161% to $149,000 in the current quarter.

Operating income for the quarter increased by $110,000 to $966,000, an increase of 13% when compared to the $856,000 of operating income for the same period last year.

Net income for the quarter increased by $62,000 to $721,000, an increase of 9% when compared to the $659,000 of net income for the same period last year.

Basic and diluted earnings per share were $0.05 compared to basic and diluted earnings per share of $0.05 for the same period a year ago.

Year-to-Date Highlights

• Total revenue for the nine months was $23.74 million, an increase of $946,000 or 4% when compared to the same period last year. The strength of the U.S. dollar resulted in a $263,000 reduction in revenue. On a constant currency basis, total UK revenue increased 827,000GBP or 8% to 11,019,000GBP.
• Total recurring revenue for the nine months was $17.65 million, an increase of $1.55 million or 10% when compared to the same period last year.
  • Recurring revenue was 74% of total revenue for the nine months, compared to 71% for the same period last year.
• SaaS revenue for the nine months was $3.54 million, an increase of $1.43 million or 68% when compared to the same period last year.
  • Autowork Online (SaaS) revenue increased by $831,000 or 51% to $2.47 million compared to the same period last year.
  • Autopart Online (SaaS) revenue increased by $599,000 or 127% to $1.07 million compared to the same period last year.
• DaaS revenue for the nine months was $7.25 million, an increase of $530,000 or 8% when compared to the same period last year.

Balance Sheet and Other Financial Highlights

• Trailing 12 month adjusted EBITDA (non-GAAP) of $4.49 million after substantial global investments in personnel and sales and marketing expenditures.
• A cash position of $5.55 million after $1.52 million of capital expenditures and $1.0 million of repurchased treasury shares for the nine months.
• The Company has no debt outstanding.
• System backlog of $1.67 million.

Year-to-Date Financial Review

The Company's revenue was $23.74 million for the nine months ended March 31, 2015 compared to $22.79 million for the same period last year, an increase of $946,000 or 4 %. The Company's revenue from its U.S. and U.K. operations was $6.21 million and $17.5 million respectively, compared to $6.41 million and $16.38 million during the same nine month period last year. The stronger U.S. dollar negatively impacted revenue by $263,000.   On a constant currency basis UK revenue increased 827,000GBP or 8% to 11,019,000GBP.  U.S. recurring revenue increased $168,000 or 4% to $4.42 million for the nine month period, from $4.25 million for the same period last year. U.K. recurring revenue increased $1.38 million or 12% to $13.2 million from $11.9 million for the same nine month period last year.

Gross profit for the nine months ended March 31, 2015 increased $1.05 million or 8% to $13.88 million or 58% versus $12.84 million or 56% for the same period last year. The increase in gross profit was the result of increased recurring revenue when compared to last year, partially offset by a negative impact of the stronger U.S. dollar. The decrease in the cost of revenues for the nine months was $99,000 or 1%. Our U.K. operations experienced a Cost of Revenue increase of 2,000GBP to 6,712,000GBP, but the recent strength of the U.S. dollar resulted in a decrease in Cost of Revenue of $70,000. Also, lower perpetual license revenue in the U.S. negatively impacted margins as the Company transitions its business to a Software as a Service (SaaS) model.

Operating income for the nine month period increased by $644,000 to $2.91 million, an increase of 28%  when compared to the $2.26 million operating income for the same period last year.

Net income for the nine month period increased by $511,000 to $2.26 million, an increase of 29% when compared to the $1.74 million net income for the same period last year.

Basic and diluted earnings per share were $0.17 compared to basic earnings per share of $0.14 and diluted earnings per share of $0.13 for the same period a year ago.

Third Quarter and Year-to-Date Business Update

Mr. Jamieson, added, "All in all, this was a solid quarter for the Company as we continue to execute on transitioning from on-premise to SaaS products. We are pleased with the development and performance of our various cloud-based solutions, and we are encouraged by the response from customers. Our SaaS churn rate for relationships we control directly  was 2% for the quarter. This was consistent with our experience since introducing cloud-based delivery, and confirms that our platform is consistently creating tangible value for our clients, driving long-term loyalty which should benefit us as we scale. Attracting new customers to our SaaS solutions remains a high priority with continued investment in sales and marketing to further develop the MAM brand."

"We further strengthened our balance sheet during the quarter through the generation of strong operating cash flows and continue to remain debt-free," said Charles F. Trapp, Executive Vice President and Chief Financial Officer. "At the same time, we reinvested a portion of the cash into product development and sales and marketing programs. While this has impacted our short-term earnings, we expect it will help drive future growth and improve financial performance. We continue to expect to generate adjusted EBITDA of approximately $5.0 million during fiscal 2015."

The Company also reiterated that it currently has $2.35 million left on its previously approved stock buyback program, which it intends to use selectively as circumstances and market conditions warrant. As of April 30, 2015, MAM had 14.3 million shares of common stock outstanding.

Conference Call Information

Thursday, May 7, 2015, at 9 a.m. ET United States: 1-888-576-4398 UK/international 1-719-457-2664

A replay will be available until May 21, 2015 by calling 1-877-870-5176 United States or 1-858-384-5517 (UK/international). Please use pin number 5608780 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 Software is a leading global provider of on-premise and cloud-based business 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.   

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.

 

 

 

 

 

 

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SOURCE MAM Software Group, Inc.