MAM Software Group Reports Year End Financial Results

BARNSLEY, England, Sept. 25, 2013 /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 for its fiscal year ended June 30, 2013, through the filing on September 25, 2013 of its Annual Report on Form 10-K with the Securities and Exchange Commission:

(In thousands, except share

For The Three Months

For The Years

and per share data) 

Ended June 30, 

Ended June 30, 


2013

2012

2013

2012

Revenues 

$7,404

$7,112

$27,466

$26,090

Gross profit 

$4,455

$4,458

$16,074

$15,414

Operating income 

$994

$1,869

$4,009

$4,792

Income before provision for income tax 

$962

$1,994

$3,736

$5,046

Net income 

$793

$1,802

$3,013

$4,096

Earnings per share attributed to common stockholders - basic 

$0.06

$0.13

$0.24

$0.29

Earnings per share attributed to common stockholders - diluted 

$0.06

$0.11

$0.24

$0.29

Weighted average common shares outstanding - basic 

12,690,032

13,502,619

12,708,766

13,976,810

Weighted average common shares outstanding - diluted 

12,806,974

14,944,459

12,825,708

14,253,291

(Logo: http://photos.prnewswire.com/prnh/20130507/NY08535LOGO )

Fourth Quarter Financial Review:
The Company's revenue was $7,404,000 for the fourth quarter ended June 30, 2013 as compared to $7,112,000 for the fourth quarter ended June 30, 2012, an increase of $292,000 or 4%. Operating income for the quarter ended June 30, 2013, decreased by $875,000 to $994,000 versus operating income of $1,869,000, a decrease of 47% verses 2012. Net income for the quarter ended June 30, 2013, decreased by $1,009,000 to $793,000 versus $1,802,000, a decrease of 56% over the same period a year ago. Basic earnings per share were $0.06 versus $0.13 per share, and diluted earnings per share were $0.06 versus $0.11 per share, for the same year ago period, respectively.   

Gross margins for the three months ended June 30, 2013 were 60.2% vs. 62.7% for the three months ended June 30, 2012.  The decrease in gross margins was the result of lower perpetual license revenue as we transition our business to a Software as a Service or "SaaS" model.

The Company's revenue from its U.S. and U.K. operations was $2,489,000 and $4,915,000, respectively, compared to $2,515,000 and $4,597,000, respectively, during the same period in 2012. U.S. recurring revenue increased $234,000 or 21% to $1,371,000 for the quarter ended June 30, 2013 from $1,137,000 for the quarter ended June 30, 2012. U.K. recurring revenue increased $246,000 or 7% to $3,610,000 for the quarter ended June 30, 2013 from $3,364,000 for the quarter ended June 30, 2012.

Fiscal Year Operating Highlights:

  • Total year-over-year annual revenue increased by $1,376,000 or 5% to $27,466,000 from $26,090,000; and
  • Total year-over-year annual recurring revenue increased by $1,516,000 or 9% to $19,200,000 and year-over-year fourth quarter recurring revenue increased by $480,000 or 11% to $4,980,000; and. 
    • Recurring Revenue was 69.9% of Total Revenue.
  • Total SaaS year-over-year annual revenue increased by $532,000 or 43% to $1,758,000 and year-over-year quarterly revenue increased by $136,000 or 44% to $443,000; and
    • Autowork Online (SaaS) year-over-year annual revenue increased by $298,000 or 26% to $1,455,000, and year-over-year quarterly revenue increased by $120,000 or 39% to $425,000.
    • Autopart Online (SaaS) year-over-year annual revenue increased by $234,000 or 339% to $303,000, and year-over-year quarterly revenue increased by $94,000 or 361% to $120,000.
  • Data-as-a-Service (DaaS) year-over-year annual revenue increased by $517,000 or 9% to $6,165,000 and year-over-year quarterly revenue increased by $161,000 or 11% to $1,617,000; and.
  • Annual adjusted EBITDA of $5,572,000 after substantial global investments in personnel; and sales and marketing expenditures; and
  • A $1,163,000 or 45% increase in cash, net of interested bearing debt to $3,749,000; and
  • Repurchase of 673,681 shares of common stock for approximately $1,746,000 during the year; and
  • Shareholders' Equity year-over-year annual increase of $1,481,000 or 11% to $14,622,000.

Fiscal Year Business Highlights:

  • Successful listing onto NASDAQ Capital Market; and
  • Successful rebranding of the company's corporate identity; and
  • Successful relaunching of the company's global web presence; and
  • Hiring a President to manage and grow the US market; and
  • Promoting a CTO to manage our company's technical direction and engineering teams; and
  • Successful launching of two additional SaaS products, Autopart Online and Trader Online.

Fiscal Year Financial Review:

The Company reported revenue of $27,466,000 for the year ended June 30, 2013 as compared to $26,090,000 for the year ended June 30, 2012, an increase of $1,376,000 or 5%. Operating income decreased $783,000 or 16% to $4,009,000 for the year ended June 30, 2013, as compared to operating income of $4,792,000 for June 30, 2012. Net income decreased $1,083,000 or 26% to $3,013,000 for the year ended June 30, 2013 versus income of $4,096,000 for the year ended June 30, 2012.  Basic earnings per share were $0.24 versus earnings per share of $0.29 in the prior year and the diluted earnings per share was $0.24 versus earnings per share of $0.29 in the prior year.  The decrease in net income was the result of the transition of revenue to the SaaS model, which is initially characterized by lower up-front revenue. Other factors that contributed to the decrease in net income included lower gross margins that   were the result of increased expenses from investments to develop new products, as well as additions to staff in research and development, sales and marketing, and management.

Gross margins for the year ended June 30, 2013 were 58.5% versus 59.1% for the year ended June 30, 2012.  The decrease in gross margins was the result of lower perpetual license revenue as we transition our business to a SaaS model.

The Company reported revenue of $8,588,000 and $18,878,000 from its U.S. and U.K. operations, respectively, for the year ended June 30, 2013, compared to $7,700,000 and $18,390,000, respectively, during the same period in 2012. U.S. revenue increased $888,000 or 12% to $8,588,000 in 2013 from $7,700,000 in 2012, primarily as a result of increased recurring revenues. U.K. Revenues increased 436,000GBP or 4% primarily as a result of recurring revenue which resulted in revenues of $488,000. The stronger U.S. dollar resulted in dollar denominated revenue of $18,878,000 during 2013 as compared to $18,390,000 during 2012, an increase of $488,000.  U.S. recurring revenue increased $529,000 or 12% to $5,080,000 for the year ended June 30, 2013 from $4,551,000 for the year ended June 30, 2012. U.K. recurring revenue increased $987,000 or 8% to $14,110,000 for the year ended June 30, 2013 from $13,123,000 for the year ended June 30, 2012.

Business Update:

Commenting on the full fiscal year results, MAM's CEO, Michael Jamieson, said, "This has been a year of continued revenue improvement for our company. These improved results were achieved although we incurred the negative impact of lower perpetual license revenue, as we transition our business to a SaaS model.  Although the SaaS model will result in lower reported revenue and cash flow in the year of the sale, the SaaS model should produce an increased and more predicable future revenue stream, Our Company's U.S. subsidiary, continued to produce increased revenue, and the increased U.K. recurring revenues enabled our company to mitigate the effects of the slowing U.K. economy. Additionally, during the FY 2013, we have substantially improved our balance sheet by increasing our cash position by $433,000 to $4,061,000, decreasing our debt by $725,000 to $312,000, and increasing our Stockholders' Equity by 11% to $14,622,000. This increase in Stockholders Equity was achieved after the repurchase of 622,815 shares of common stock for approximately $1,631,000." Mr. Jamieson further elaborated that "the fiscal year produced an Adjusted EBITDA result of $5,572,000 versus $6,190,000 for the fiscal year ended June 30, 2012."

Commenting on the Company's strategic initiatives, Mr. Jamieson, said, "We continued our strategic development, building on the results achieved in FY 2012. On May 13, 2013, MAM Software Group, Inc. announced that its common stock began trading on the NASDAQ Capital Market ("NASDAQ") under the symbol "MAMS". MAM announced a new corporate identity and a new management structure for its U.S. subsidiaries as part of a global rebrand. The move brought MAM operations in the U.K. and U.S. under one unified brand to reflect its position as one of the leading providers of business management software solutions. This major initiative also merged the Group's MAM Software, Inc. and Aftersoft Network N.A., Inc. subsidiaries to create a single company with specific divisions serving the U.S. tire and auto parts aftermarkets. Operating under the new MAM Software, Inc. brand, the company is now headed by the newly appointed president, Patrick Maley

"Throughout FY 2013 we continued to increase investments in personnel in sales and marketing and administration to support our strategic goals. During 2013 we invested $130,000 to expand our research and development staff, $500,000 to expand our sales and marketing staff and $230,000 for additional management and administrative staff.  In terms of sales and marketing, we were able to further add four experienced people to our Sales Teams in North America. In addition, we created a U.S. based marketing department to execute key marketing initiatives focused on aggressively seeking customers in the U.S. marketplace.

"In the UK, we continued to make progress with our SaaS solutions. Subscribers to our Autowork Online cloud application have increased each month of this fiscal year and now total 2,807. Revenues from Autowork Online were $425,000 for the three months ended June 30, 2013, a $120,000 or 39% quarter-over-quarter revenue growth and $1,455,000 for the twelve months ended June 30, 2013. Revenues from Autopart Online were $120,000 for the three months ended June 30, 2013, a $94,000 or 361% quarter-over-quarter revenue growth and $303,000 for the twelve months ended June 30, 2013. We will continue to work hard to extend these positive trends over the coming months as more customers are introduced to the product. In addition to this, maintenance revenue generated from new system sales across the Group and increased sales of our Data-as-a-Service (DaaS) solutions in the U.K. helped to drive increased levels of recurring revenue across the business.

"For the year ending June 30, 2014, we anticipate further investment in our sales, marketing and professional services resources: increasing our marketing department and increasing overall marketing expenditures by approximately $600,000; increasing our sales department by $300,000; and increasing our professional services staff by $550,000.  We believe these expenditures will result in increased revenues in fiscal 2014, but will have a negative impact on profits and cash flow. The investments we will make in 2014 should contribute to increased growth and profitability in fiscal 2015.  Our goals for the upcoming fiscal year include further penetrating into the U.K. market with our SaaS solutions, establishing a foothold in the U.S. market  with the same 'cloud' based products, localizing our Data-as-a-Service (DaaS) solution  for introduction into the U.S. market, and increasing the number of trading partners connected to our Integration-Platform-as-a-Service (iPaaS) solution. We believe that our suite of modern business solutions, built by a team of experienced professionals using the latest technology, will continue to be the differentiating factor for the business. We are looking forward to the 2014 Fiscal Year."

The Company also reiterated that that it currently has $2,688,644 left on its previously approved stock buyback program, which it intends to use selectively as circumstances and market conditions warrant.

 

MAM SOFTWARE GROUP, INC.

Consolidated Statements of Income and Comprehensive Income

(In thousands, except share and per share data)




For the Years Ended

June 30,




2013



2012


Revenues


$

27,466



$

26,090


Cost of revenues



11,392




10,676


Gross Profit



16,074




15,414











Operating Expenses









Research and development



3,405




3,267


Sales and marketing



3,348




2,709


General and administrative



4,163




3,448


Depreciation and amortization



1,149




1,198


Total Operating Expenses



12,065




10,622











Operating Income



4,009




4,792











Other Income (Expense)









Interest expense



(146)




(191)


Change in fair value of derivative liabilities



(271)




230


Gain on settlement of derivative liabilities



131




-


Gain on settlement of liabilities



13




215


Total Other Income (Expense), net



(273)




254











Income before provision for income taxes



3,736




5,046











Provision for income taxes



723




950











Net Income



3,013




4,096











Foreign currency translation loss



(238)




(369)


Total Comprehensive Income


$

2,775



$

3,727











Earnings per share attributed to common stockholders - basic


$

0.24



$

0.29


Earnings per share attributed to common stockholders - diluted


$

0.24



$

0.29


Weighted average common shares outstanding - basic



12,708,766




13,976,810


Weighted average common shares outstanding - diluted



12,825,708




14,253,291




 

 

MAM SOFTWARE GROUP, INC.

Consolidated Balance Sheets

(In thousands, except share and per share data)




June 30,

2013



June 30,

 2012


ASSETS









Current Assets









Cash and cash equivalents


$

4,061



$

3,628


Accounts receivable, net of allowance of $114 and $108



3,511




3,507


Inventories



199




358


Prepaid expenses and other current assets



1,976




957


Total Current Assets



9,747




8,450











Property and Equipment, Net



689




664











Other Assets









Goodwill



8,983




9,158


Amortizable intangible assets, net



640




1,361


Software development costs, net



1,248




1,106


Other long-term assets



34




45


TOTAL ASSETS


$

21,341



$

20,784











LIABILITIES AND STOCKHOLDERS' EQUITY









Current Liabilities









Accounts payable


$

1,400



$

1,327


Accrued expenses and other



1,952




2,011


Payroll and other taxes



718




580


Derivative liabilities



-




442


Current portion of long-term debt



312




759


Current portion of deferred revenue



742




381


Sales tax payable



769




709


Income tax payable



352




567


Total Current Liabilities



6,245




6,776











Long-Term Liabilities









Deferred revenue, net of current portion



154




130


Deferred income taxes



79




169


Long-term debt, net of current portion



-




283


Other



241




285


Total Liabilities



6,719




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, 14,813,172 shares issued and 14,139,491 shares outstanding at June 30, 2013 and 15,492,730 shares issued and 14,296,105 outstanding at June 30, 2012



2




2


Additional paid-in capital



31,548




33,453


Accumulated other comprehensive loss



(1,168)




(930)


Accumulated deficit



(14,014)




(17,027)


Treasury stock at cost, 673,681 shares and 1,196,625 shares  at June 30, 2013 and 2012,  respectively



(1,746)




(2,357)


Total Stockholders' Equity



14,622




13,141


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

21,341



$

20,784




 

 

MAM SOFTWARE GROUP, INC.

Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization

(In thousands, except share and per share data)


 

 

MAM SOFTWARE GROUP, INC.








Calculation of Adjusted Earnings before Interest, Taxes, Depreciation,





and Amortization (unaudited, includes non-cash compensation and 





intangible asset impairment) 












For the Three Months Ended


For the Years Ended





June  30, 


June  30, 

(in thousands)




2013


2012


2013


2012













Net Income 



$

793

$

1,802


3,013

$

4,096

Interest Expense




32


43


146


191

Taxes





169


192


723


950

Depreciation and amortization 



290


300


1,149


1,198

Non-cash  equity compensation



93


(28)


414


200

Gain on settlement of  liabilities



0


0


(13)


(215)

Gain on settlement of derivative liabilities


0


0


(131)


0

Change in fair value of derivative liabilities

0


(49)


271


(230)

One-time expenses




0


0


0


0

Adjusted EBITDA



$

1,377

$

2,260


5,572

$

6,190

 

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 UK and Ireland rely on MAM solutions, backed by dedicated teams of experienced service and support professionals. For further information, please visit   http://www.mamsoftwaregroup.com.   

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 from time to time in the Company's filings with the Securities and Exchange Commission.

SOURCE MAM Software Group, Inc.



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