2014

MAM Software Group Reports Third Quarter and Nine Month Financial Results

TANKERSLEY BARNSLEY, England, May 7, 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 nine months ended March 31, 2013, through the filing on May 7, 2013 of its Quarterly Report on Form 10-Q with the Securities and Exchange Commission:  

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    For The Three Months Ended


        For The Nine Months Ended

(In thousands, except share and per share data)

                March 31



                   March 31



2013


2012



2013


2012

Revenues 

$

6,825

$

6,130


$

20,062

$

18,978

Gross profit 

$

3,918

$

3,442


$

11,619

$

10,956

Operating income 

$

1,054

$

815


$

3,015

$

2,923

Income before provision for

income taxes

$

1,055

$

673


$

2,774

$

3,052

Net income 

$

812

$

427


$

2,220

$

2,294

Earnings per share attributed to

common stockholders - basic 

$

0.07

$

0.03


$

0.17

$

0.16

Earnings per share attributed to

common stockholders - diluted

$

0.06

$

0.03


$

0.17

$

0.16

Weighted average shares

outstanding - basic 


12,459,071


13,904,582



12,732,179


14,132,970

Weighted average shares

outstanding - diluted 


12,633,359


14,173,986



12,982,100


14,397,939

Third Quarter Highlights:

  • Revenue of $6,825,000 vs. $6,130,000 for the three months ending March 31, 2013 vs. 2012, an increase of 11.3%;
  • Net income of $812,000 vs. $427,000 for the three months ending March 31, 2013 vs. 2012, an increase of 90.2%;
  • Earnings per share of $0.07 vs. $0.03 for the three months ending March 31, 2013 vs. 2012, an increase of $0.04 per share;
  • MAM U.K. three month revenue increased by 4.7% and MAM U.S. three month revenue increased by 30.6% when compared to the same three month period of 2012;
  • Autowork Online (SaaS) subscription revenue increase of 6% for the three months ending March 31, 2013 vs. 2012;
  • Autopart Online generated revenue of $90,000 vs. $0 for the three months ended March 31, 2013 vs. 2012. Autopart Online, our UK 'Cloud' version of our business management system was launched this fiscal year;
  • A cash position, net of interest bearing debt, of $2,380,000 after the repurchase of $1,631,000 of common stock, $582,000 of warrants accounted for as derivative liabilities and $62,000 of warrants accounted for as a reduction in Stockholders' Equity;
  • Repurchase of 73,628 shares during the quarter and 622,815 total shares repurchased for nine months;
  • Successful integration of our recently launched Warehouse Management Software, (WMS), an application for real-time inventory management with the VAST business management system; and
  • Successful launch of Autowork Enterprise, an innovative business management solution that combines the intuitive point-of-sale features of MAM Autowork Online garage management application with the extensive back-office functionality of the MAM Autopart management software.

Third Quarter Financial Review:

The Company reported revenues of $6,825,000 for the three months ended March 31, 2013, an increase of $695,000 or 11.3%, compared with revenues of $6,130,000 for the three months ended March 31, 2012. Operating income was $1,054,000 for the three months ended March 31, 2013 compared with operating income of $815,000 for the three months ended March 31, 2012, an increase of $239,000 or 29.3%. Net income before income taxes was $1,055,000 for the three months ended March 31, 2013, which included $23,000 of expense from the Change in Fair Value of Derivative Liabilities, compared with net income before income taxes was $673,000 for the three months ended March 31, 2012, which included $95,000 of expense from the Change in Fair Value of Derivative Liabilities. The net income was $812,000 and $427,000 for the three month periods ended March 31, 2013 and 2012, respectively.

The Company reported revenues of $20,062,000 for the nine months ended March 31, 2013 compared with $18,978,000 for the nine months ended March 31, 2012, an increase of $1,084,000 or 5.7%. Operating income was $3,015,000 for the nine months ended March 31, 2013, compared with operating income of $2,923,000 for the nine months ended March 31, 2012, an increase of $92,000 or 3.1%. Net income before income taxes was $2,774,000 for the nine months ended March 31, 2013, which included $271,000 of expense from the Change in Fair Value of Derivative Liabilities, compared with net income before income taxes was $3,052,000 for the nine months ended March 31, 2012, which included $181,000 of income from the Change in Fair Value of Derivative Liabilities. The net income was $2,220,000 and $2,294,000 for the nine month periods ended March 31, 2013 and 2012, respectively.

Revenues for our U.K. operations were 3,068,000GBP and 8,840,000GBP for the three and nine months ended March 31, 2013, respectively, an increase of 166,000GBP or 5.7% and an increase of 136,000GBP or 1.6%, respectively, compared with revenues of 2,902,000GBP and 8,704,000GBP for the three and nine months ended March 31, 2012, respectively. U.K. recurring revenue increased 179,000GBP or 8.7% to 2,271,000GBP from 2,092,000GBP and system sales decreased 13,000GBP to 797,000GBP from 810,000GBP for the three months ended March 31, 2012. U.K. recurring revenue the nine months ended March 31, 2013 increased 488,000GBP or 7.9% to 6,647,000GBP from 6,159,000GBP and system sales decreased 352,000GBP or 13.8% to 2,193,000GBP from 2,545,000GBP for the nine months ended March 31, 2012.

Revenues for our U.S. operations were $2,053,000 and $6,097,000 for the three and nine months ended March 31, 2013, respectively, an increase of 31% and an increase of 18%, compared with revenues of $1,573,000 and $5,184,000 for the three and nine months ended March 31, 2012, respectively. Recurring revenue for the three months ended March 31, 2013, increased $151,000 to $1,299,000 from $1,148,000 and system sales increased $331,000 or 78% to $755,000 from $424,000 for the three months ended March 31, 2013. Recurring revenue for the nine months ended March 31, 2013, increased $295,000 to $3,709,000 from $3,414,000 and system sales increased $618,000 to $2,388,000 from $1,770,000 for the nine months ended March 31, 2012, respectively.

Gross margins for the three and nine months ended March 31, 2013 were 57.4% and 57.9% vs. 56.2% and 57.8% for the three and nine months ended March 31, 2012, respectively.

Business Update:

Commenting on the quarter ended March 31, 2013, MAM's CEO, Michael Jamieson, said, "We were particularly pleased with the ongoing and increasing levels of interest being shown in our SaaS offerings.  This is especially important to our company as we pursue the objective of growing our recurring revenue streams." Mr. Jamieson further commented, "In the UK, our 'cloud' based solution, Autowork Online, has seen subscription levels increase in each month of the current fiscal year. The product has been localized for the North American market and we expect to see revenue being generated in fiscal year 2014." Mr. Jamieson added, "We are transitioning a significant component of our business to a SaaS model.  This transition is in keeping with the direction of our industry and the needs and wants of our customer base. Although we are pleased with our progress during the 3 and 9 month periods in the UK, there are certain realities associated with this transition, including sacrificing some portion of up front revenue normally associated with on-premise system sales.  While we believe that this migration is in the best interest of our Company and its customers, this is a reality of this transitional period.  We are also implementing the SaaS model in the US, but the impact on our revenues in the short term is not as dramatic given that we had no similar prior product offering in the US."

Mr. Jamieson added, "We continued to focus on the key area of research and development in support of our strategic objectives. During the quarter ended March 31, 2013, we announced the addition of two new product offerings, highlighting the ongoing investment that is being made in research and development.  The recently launched warehouse management software solution is being integrated into the VAST business management software solution. Historically, a VAST customer with a requirement for warehouse management software has had to look to a third party to provide this functionality.  By integrating the two solutions, MAM US can now meet this requirement in full by creating a more comprehensive offering and generating revenue and profit that would have otherwise gone elsewhere.  Additionally, we launched Autowork Enterprise, a combination of Autowork Online and Autopart, as a solution aimed at the larger service-and-repair operator and tire dealer." Mr. Jamieson concluded, "Our Company ended the quarter with a cash position of $2,884,000, decreased debt by $538,000 to $504,000, and increased Stockholders' Equity by 5.1% to $13,806,000 after the repurchase of 622,815 common shares at a cost of $1,631,000. Furthermore, the three quarters ended March 31, 2013, we produced an Adjusted EBITDA of $4,195,000 versus $4,049,000 for the three quarters ended March 31, 2012."

About MAM Software Group, Inc.

MAM Software Group, Inc. (OTC Bulletin Board: MAMS) is a supplier of business management supply chain management solutions to automotive parts manufacturers, distributors and retailers. MAM Software Group provides the automotive aftermarket with a combination of business management software solution, information products, and ecommerce solutions 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)




March 31,
2013



June 30,
2012




(Unaudited)



(Audited)


ASSETS









Current Assets









Cash and cash equivalents


$

2,884



$

3,628


Accounts receivable, net of allowance of $83 and $108



3,622




3,507


Inventories



231




358


Prepaid expenses and other current assets



1,683




957


Total Current Assets



8,420




8,450











Property and Equipment, Net




691




664












Other Assets










Goodwill



8,974




9,158


Amortizable intangible assets, net



817




1,361


Software development costs, net



1,004




1,106


Other long-term assets



204




45


TOTAL ASSETS


$

20,110



$

20,784











LIABILITIES AND STOCKHOLDERS' EQUITY









Current Liabilities









Accounts payable


$

1,248



$

1,327


Accrued expenses and other



1,726




2,011


Payroll and other taxes



600




580


Derivative liabilities



-




442


Current portion of long-term debt



504




759


Current portion of deferred revenue



620




381


Sales tax payable



736




709


Income tax payable



444




567


Total Current Liabilities



5,878




6,776











Long-Term Liabilities









Deferred revenue, net of current portion



91




130


Deferred income taxes



83




169


Long-term debt, net of current portion



-




283


Other



252




285


Total Liabilities



6,304




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,

14,767,468 shares issued and 14,093,787 shares outstanding at March  31,

2013 and 15,492,730 shares issued and 14,296,105 shares issued and

outstanding at June 30, 2012



1




2


Additional paid-in capital



31,521




33,453


Accumulated other comprehensive loss



(1,163)




(930)


Accumulated deficit



(14,807)




(17,027)


Treasury stock at cost, 673,681 shares and 1,196,625 shares at March  31,

2013 and June 30, 2012, respectively



(1,746)




(2,357)


Total Stockholders' Equity



13,806




13,141


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

20,110



$

20,784


 

 

MAM SOFTWARE GROUP, INC.

Condensed Consolidated Statements of Income and Comprehensive Income

(In thousands, except share and per share data)



For the Three Months

Ended


For the Nine Months

Ended


March  31,


March  31,


2013

2012


2013

2012

Revenues

$

6,825

$

6,130


$

20,062

$

18,978

Cost of revenues


2,907


2,688



8,443


8,022

Gross profit


3,918


3,442



11,619


10,956











Operating expenses










Research and development


850


823



2,555


2,428

Sales and marketing


810


615



2,443


1,904

General and administrative


919


889



2,747


2,803

Depreciation and amortization


285


300



859


898

Total operating expenses


2,864


2,627



8,604


8,033











 

Operating income


1,054


815



3,015


2,923











Other income (expense)










Interest expense


(34)


(47)



(114)


(148)

Gain on settlement of liabilities


-


-



13


96

Gain on settlement of derivative liabilities


58


-



131


-

Change in fair value of derivative liabilities


(23)


(95)



(271)


181

Total other income (expense), net


(1)


(142)



(241)


129







 

Income before provision for income taxes


1,055


673



2,774


3,052

Provision for income taxes


243


246



554


758

Net income


812


427



2,220


2,294











Foreign currency translation gain (loss)


(529)


381



(233)


108

Total comprehensive income

$

283

$

808


$

1,987

$

2,402











 

Earnings per share attributed to common

stockholders:










Basic

$

0.07

$

0.03


$

0.17

$

0.16

Diluted

$

0.06

$

0.03


$

0.17

$

0.16

Weighted average shares outstanding:










Basic


12,459,071


13,904,582



12,732,179


14,132,970

Diluted


12,633,359


14,173,986



12,892,100


14,397,939

 

 

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 Three Months Ended


For the Nine Months Ended




March  31, 


March  31, 

(in thousands)


2013


2012


2013


2012











Net Income

$

812

$

427

$

2,220

$

2,294

Interest Expense


34


47


114


148

Taxes



243


246


554


758

Gain on settlement of liabilities

-


-


(13)


(96)

Gain on settlement of derivative liabilities

(58)


-


(131)


-

Depreciation and amortization 

285


300


859


898

Non-cash  equity compensation

136


44


321


228

Change in fair value of derivative liabilities

23


95


271


(181)

Adjusted EBITDA

$

1,475

$

1,159

$

4,195

$

4,049

 

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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