MAM Software Group Reports Third Quarter and Nine Month Financial Results

07 May, 2013, 14:31 ET from MAM Software Group, Inc.

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.



RELATED LINKS

http://www.mamsoftwaregroup.com