2014

MAM Software Group Reports Second Quarter and Six Month Financial Results

TANKERSLEY BARNSLEY, England, Feb. 1, 2013 /PRNewswire/ -- MAM Software Group, Inc. (OTC Bulletin Board: MAMS), a leading provider of business automation and ecommerce solutions for the automotive aftermarket, announced the following financial results for its three and six months ended December 31, 2012, through the filing on February 1, 2013 of its Quarterly Report on Form 10-Q with the Securities and Exchange Commission:



    For The Three Months Ended


        For The Six Months Ended

(In thousands, except share and per share data)

December 31


December 31



2012


2011



2012


2011

Revenues 

$

6,754

$

6,686


$

13,237

$

12,848

Gross profit 

$

3,928

$

4,037


$

7,701

$

7,514

Operating income 

$

1,047

$

1,273


$

1,961

$

2,147

Income before provision for income taxes

$

966

$

1,351


$

1,719

$

2,322

Net income 

$

784

$

1,079


$

1,408

$

1,810

Earnings per share attributed to common stockholders - basic 

$

0.06

$

0.08


$

0.11

$

0.13

Earnings per share attributed to common stockholders - diluted

$

0.06

$

0.07


$

0.11

$

0.12

Weighted average shares outstanding - basic 


12,762,864


14,278,464



12,865,765


14,245,922

Weighted average shares outstanding - diluted 


12,982,406


14,537,439



13,048,538


14,508,953











Six Month Highlights:

  • Continued U.K. growth of Autowork Online subscribers to 2,709; representing a year-over-year subscriber growth of 7.4%.
  • Successful launch of Autopart Online and Trader Online, our UK 'Cloud' version of our business management systems.
  • A 7.3% year-over-year growth in consolidated recurring revenues to $9,380,000 or 71% of total revenue.
  • US revenue growth of $432,000 or 12% for the six months ended December 31, 2012 compared to the six months ended December 31, 2011.
  • An increase of $549,000 or 4.2% in Stockholders Equity for the six months ended December 31, 2012 after the repurchase of $1,389,000 worth of common stock.
  • System backlog of $1,705,000, a quarterly increase of $608,000, compared to $1,097,000 from September 30, 2012.
  • A cash position, net of interest bearing debt, of $1,840,000, after the repurchase of $1,389,000 worth of common stock and $475,000 worth of warrants.
  • Repurchase of 549,187 shares of common stock for approximately $1,389,000 for the six months ended December 31, 2012.

Three and Six Month Financial Review:

The Company reported revenues of $6,754,000 for the three months ended December 31, 2012, an increase of $68,000 or 1.0%, compared with revenues of $6,686,000 for the three months ended December 31, 2011. Operating income was $1,047,000 for the three months ended December 31, 2012 compared with operating income of $1,273,000 for the three months ended December 31, 2011, a decrease of $226,000 or 17.8%. Net income before income taxes was $966,000 for the three months ended December 31, 2012, which included $42,000 of expense from the Change in Fair Value of Derivative Liabilities, compared with net income before income taxes of $1,351,000 for the three months ended December 31, 2011, which included $126,000 of income from the Change in Fair Value of Derivative Liabilities. The net income was $784,000 and $1,079,000 for the three month periods ended December 31, 2012 and 2011, respectively.

The Company reported revenues of $13,237,000 for the six months ended December 31, 2012 compared with $12,848,000 for the six months ended December 31, 2011, an increase of $389,000 or 3.0%. Operating income was $1,961,000 for the six months ended December 31, 2012, compared with operating income of $2,147,000 for the six months ended December 31, 2011, a decrease of $186,000 or 8.7%. Net income before income taxes was $1,719,000 for the six months ended December 31, 2012, which included $248,000 of expense from the Change in Fair Value of Derivative Liabilities, compared with net income before income taxes of $2,322,000 for the six months ended December 31, 2011, which included $276,000 of income from the Change in Fair Value of Derivative Liabilities. The net income was $1,408,000 and $1,810,000 for the six month periods ended December 31, 2012 and 2011, respectively.

Gross margins for the three and six months ended December 31, 2012 were 58.2% and 58.2% vs. 60.4% and 58.5% for the three and six months ended December 31, 2011, respectively.  The reduction in Gross margins was the result of reduced system sales, which historically have a higher gross profit.  In place of the reduced system sales was an increase in SAAS revenue, which has a higher percentage of setup costs but lower ongoing costs to maintain.

Revenue from our U.K. operations were 2,889,000GBP for the three months ended December 31, 2012, a decrease of 32,000GBP or 1.1%, compared with revenues of 2,921,000GBP for the three months ended December 31, 2011. The weaker U.S. dollar resulted in dollar-denominated revenue of $4,639,000 for 2012 as compared to $4,594,000 during 2011, which is an increase of $45,000. For the three months ended December 31, 2012 U.K. recurring revenue increased 128,000GBP or 6.2% to 2,191,000GBP from 2,063,000GBP and system sales decreased 160,000GBP or 18.6% to 698,000GBP from 858,000GBP.  The  increase  in  recurring  revenue  is   primarily  the  result of   increased  sales  of  our   Autopart Online product, which contributed to the decrease in system sales.

Revenue from our U.K. operations were 5,772,000GBP for the six months ended December 31, 2012, an decrease of 30,000GBP or 0.5%, compared with revenues of 5,802,000GBP  for the three months ended December 31, 2011. The weaker U.S. dollar resulted in dollar-denominated revenue of $9,193,000 for 2012 as compared to $9,236,000 during 2011, which is a decrease of $43,000. For the six months ended December 31, 2012 U.K. recurring revenue increased 309,000GBP or 7.6% to 4,376,000GBP from 4,067,000GBP and system sales decreased 339,000GBP or 19.5% from 1,396,000GBP to 1,735,000GBP.  The increase in recurring revenue is primarily the result of increased sales of our Autopart Online product, which contributed to the decrease in system sales.  

Revenues for our U.S. operations were $2,115,000 for the three months ended December 31, 2012, an increase of $24,000 or 1.1%, compared with revenues of $2,091,000 for the three months ended December 31, 2011. Recurring revenue increased $92,000 or 8.1% from $1,136,000 to $1,228,000 for the three months ended December 31, 2012 when compared with the three months ended December 31, 2011.

Revenues for our U.S. operations were $4,044,000 for the six months ended December 31, 2012 an increase of $432,000 or 12.0% compared with revenues of $3,612,000 for the six months ended December 31, 2011. Recurring revenue increased $145,000 or 6.4% from $2,266,000 to $2,411,000 for the six months ended December 31, 2012 when compared with the six months ended December 31, 2011.  Operating income decreased $226,000 to $1,047,000 from $1,273,000 for the three months ended December 31, 2012 compared  to the three months ended December 31, 2011.   Gross profit was $3,928,000 for the three months ended December 31, 2012 vs. $4,037,000 for the three months ended December 31, 2011,a reduction of  $109,000, and operating expenses increased $117,000 from $2,764,000  to $2,881,000.  Operating expenses were higher because of the $131,000 increase in Sales and marketing, which resulted from an increase in salesmen and increased attendance at conferences and trade shows. Operating income decreased $186,000 to $1,961,000 from $2,147,000 for the six months ended December 31, 2012 compared  to the six months ended December 31, 2011.   Gross profit was $7,701,000 for the six months ended December 31, 2012 vs. $7,514,000 for the six months ended December 31, 2011,an increase of  $187,000.  Operating expenses increased $373,000 from $5,367,000  to $5,740,000 because of a $344,000 increase in Sales and marketing, which resulted from an increase in salesmen and increased attendance at conferences and trade shows.

Business Update:

Commenting on the quarter ending December 31, 2012 compared with the quarter ending December 31, 2011, MAM's CEO, Michael Jamieson, said, "Revenues were slightly ahead of last year. For the six months ending December 31, 2012, Revenues increased $389,000 or 3%, primarily from the $640,000 increase in recurring revenue." Mr. Jamieson further commented "I was pleased with the results we achieved with our "cloud" based application, Autowork Online in the U.K. Subscribers to Autowork Online have increased each month of this quarter and now total 2,709. Revenues from Autowork Online have increased each month of this fiscal year and totaled $345,000 for the three months and $677,000 for the six months ended December 31, 2012 as compared to $275,000 for the three months and $551,000 for the six months ended December 31, 2011, respectively. MAM Software in the U.S. and Aftersoft Network N.A.'s operations remain consistent with a positive increase in income for both quarters."

Mr. Jamieson also added, "We continued our strategic development, building on the results achieved in Fiscal 2012.  During Fiscal 2012 we commissioned a number of software development projects to support our strategic objectives. A warehouse management software module, a new business intelligence reporting tool and a U.S. version of Autowork Online were some of the major projects that were commissioned. Adding new functionality into our Trader business management software was also a key requirement, as we seek to expand our penetration into other vertical markets. During Fiscal 2013, we plan to continue investing in our business, as shown by the increased spending in Sales and Marketing, and Engineering of $174,000 and $444,000 for the three and six month periods ending December 31, 2013.   These investments include hiring additional US and UK-based Sales and Marketing staff, broadening our DAAS, SAAS and Cloud-based product offerings, penetrating deeper into the North American market with our DAAS, SAAS and Cloud-based products, continue penetrating into other vertical markets in the UK, improving our internal IT infrastructure, launching an updated version of our corporate website and increasing the depth of our leadership team to focus on growing our North American market share." Mr. Jamieson further elaborated that "the Company ended with a cash position of $2,516,000, decreased debt by $366,000 to $676,000, and increased Stockholders' Equity by 4% to $13,690,000 after the repurchase of 549,187 common shares at an approximate cost of $1,389,000."

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)



December 31,
2012


June 30,
2012



(Unaudited)




ASSETS






Current Assets






Cash and cash equivalents

$

2,516


$

3,628

Accounts receivable, net of allowance of $113 and $108


4,011



3,507

Inventories


226



358

Prepaid expenses and other current assets


1,108



957

Total Current Assets


7,861



8,450







Property and Equipment, Net


650



664







Other Assets






Goodwill


9,390



9,158

Amortizable intangible assets, net


1,018



1,361

Software development costs, net


995



1,106

Other long-term assets


38



45

TOTAL ASSETS

$

19,952


$

20,784







LIABILITIES AND STOCKHOLDERS' EQUITY






Current Liabilities






Accounts payable

$

1,157


$

1,327

Accrued expenses and other


1,629



2,011

Payroll and other taxes


590



580

Derivative liabilities


142



442

Current portion of long-term debt


676



759

Current portion of deferred revenue


426



381

Sales tax payable


749



709

Income tax payable


451



567

Total Current Liabilities


5,820



6,776







Long-Term Liabilities






Deferred revenue, net of current portion


77



130

Deferred income taxes


102



169

Long-term debt, net of current portion


-



283

Other


263



285

Total Liabilities


6,262



7,643

Commitments and Contingencies






Stockholders' Equity






Preferred stock: Par value $0.0001 per share; 2,000,000 shares authorized, none issued and outstanding


-



-

Common stock: Par value $0.0001 per share; 18,000,000 shares authorized, 14,440,185 shares issued and 13,840,132 shares outstanding at December 31, 2012 and 15,492,730 shares issued and 14,296,105 shares issued and outstanding at June 30, 2012


1



2

Additional paid-in capital


31,447



33,453

Accumulated other comprehensive loss


(635)



(930)

Accumulated deficit


(15,619)



(17,027)

Treasury stock at cost, 600,053 shares and 1,196,625 shares at December 31, 2012 and June 30, 2012, respectively


(1,504)



(2,357)

Total Stockholders' Equity


13,690



13,141

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

19,952


$

20,784

 

 

 

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


For the Six Months

Ended


December 31,


December 31,


2012


2011


2012


2011

Revenues

$

6,754


$

6,686


$

13,237


$

12,848

Cost of revenues


2,826



2,649



5,536



5,334

Gross profit


3,928



4,037



7,701



7,514













Operating expenses












Research and development


844



801



1,705



1,605

Sales and marketing


821



690



1,633



1,289

General and administrative


932



976



1,828



1,875

Depreciation and amortization


284



297



574



598

Total operating expenses


2,881



2,764



5,740



5,367













 

Operating income


1,047



1,273



1,961



2,147













Other income (expense)












Interest expense


(39)



(48)



(80)



(101)

Gain on settlement of liabilities


-



-



13



-

Gain on settlement of derivative liabilities


-



-



73



-

Change in fair value of derivative liabilities


(42)



126



(248)



276

Total other income (expense), net


(81)



78



(242)



175













 

Income before provision for income taxes


966



1,351



1,719



2,322

Provision for income taxes


182



272



311



512

Net income


784



1,079



1,408



1,810













 

Foreign currency translation income (loss)


1



(12)



296



(273)

Total comprehensive income

$

785


$

1,067


$

1,704


$

1,537













 

Earnings per share attributed to common stockholders:












Basic

$

0.06


$

0.08


$

0.11


$

0.13

Diluted

$

0.06


$

0.07


$

0.11


$

0.12

Weighted average shares outstanding:












Basic


12,762,864



14,278,464



12,865,765



14,245,922

Diluted


12,982,406



14,537,439



13,048,538



14,508,953













 

MAM SOFTWARE GROUP, INC.

Calculation of Adjusted Earnings before Interest, Taxes, Depreciation,

and Amortization (unaudited, includes non-cash compensation and 

change in value of derivative liabilities) 










For the Three Months Ended


For the Six Months Ended






December  31, 


December  31, 

(in thousands)




2012


2011


2012


2011













Net Income



$

784

$

1,079

$

1,408

$

1,810

Interest Expense




39


48


80


101

Taxes





182


272


311


512

Depreciation and amortization 



284


297


574


598

Gain on settlement of liabilities



-


-


(13)


-

Gain on settlement of derivative liabilities


-


-


(73)


-

Non-cash  equity compensation



73


88


185


132

Change in fair value of derivative liabilities


42


(126)


248


(276)

Adjusted EBITDA



$

1,404

$

1,658

$

2,720

$

2,877

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.



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http://www.mamsoftwaregroup.com

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