SEOUL, South Korea, May 15, 2019 /PRNewswire/ -- I-ON Digital Corp. ("I-ON" or the "Company"), www.i-on.net, a Seoul, South Korea based global enterprise software company focused on delivering leading digital experience, CMS, unstructured data management and digital marketing solutions to enterprises, is pleased to announce financial results for the quarter ended March 31, 2019 reflected in I-ON's current report on Form 10-Q filed with the SEC on May 15, 2019.
During the seasonally weakest first quarter, I-ON posted a 23% year over year increase in revenue to $1.6 million versus $1.3 million, which was composed primarily of customized solutions and services related to multi-layered DXP implementations and migrations, licensing from Japan and subscription revenue from South East Asia. New and ongoing engagements included clients such as Jeju Tourism, Samsung, and KEPCO. Additionally, all geographies and core product categories including sports (TAMM) and energy solutions (LAMS) as well as SaaS (eForm) contributed to the top-line. The double-digit increase was partially attributable to sequential growth and fulfilment of recent backlog and accelerated by investments in sales and marketing made toward new platform and product launches commenced in the second half of 2018 and carrying into 2019. As a result, G&A and marketing spend in the period increased 33% year over year to $0.7 million, while R&D declined 29% to $0.2 million. Similar to last year and due to seasonality and timing of revenue recognition on projects commenced and services provided, gross and operating margins came in at losses. Most DXP implementations currently ongoing are expected to be fully recognized in the back half of this year.
I-ON's pipeline and backlog as of the beginning of April stood at approximately $8 million and $4.0 million, over a third of which is tied to longer term sports and energy ICT contracts or letter of intents. The Company's balance sheet continues to remain healthy with total cash and equivalents of over $2.6 million, $4.4 million in working capital, total assets of $8.1 million, $0.4 million in long-term debt, and shareholders' equity of approximately $6.1 million. I-ON had available lines of credit with financial institutions for up to $3.6 million, of which there were no outstanding balances as of the end of March. The Company also recently announced that it had secured an equity investment of approximately $500,000 from Seoul-based venture firm UTC Investment Co. The funding is coupled with qualified R&D grants from sovereign institutions and is primarily aimed towards accelerating I-ON's speed to market within the local sports ICT community including multiple amateur and professional sports leagues.
With organic growth now being notched at a double-digit rate, I-ON continues to maintain its rolling twelve-month pro forma revenue guidance of $15 million, which assumes the consummation of at least one acquisition during 2019 and modest organic growth across its core solutions offerings. Management will continue its implementation of a multi-faceted strategy to attain a revenue run-rate goal of $25 million by 2020, which would likely reflect more international contribution and an improving revenue mix of PaaS and SaaS revenue, yielding higher y/y gross, and operating margins well above 45% and 15%, respectively.
As previously announced, the Company has changed its name to I-ON Digital Corp. from I-ON Communications Corp. The Company believes its new name better reflects the Company's overall vision of addressing the digital transformation needs of enterprises and their audiences by offering next-generation digital experience platforms and software solutions, which are expected to include more SaaS and cloud-based features across the sports and energy ICT verticals. The name change is currently effective on OTC Markets and the trading symbol remains "IONI."
About I-ON Digital Corp.
I-ON Digital Corp. (www.i-on.net/eng) is a Seoul, South Korea-based software and solutions developer as well as provider founded in 1999. After being awarded its first of six key patents by 2003, I-ON has sold to over 1,600 clients across numerous verticals in both the private and public sectors, primarily throughout South Korea, Japan and Southeast Asia. The Company's core offerings include DXP (Digital Experience Platform) and revolve around unstructured data management, Sports data software and Energy ICT solutions.
Forward Looking Statements
Statements in this document contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on many assumptions and estimates and are not guarantees of future performance. These statements may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Our actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation those set forth as "Risk Factors" in our filings with the Securities and Exchange Commission ("SEC"). There may be other factors not mentioned above or included in the Company's SEC filings that may cause actual results to differ materially from those projected in any forward-looking statement. The Company assumes no obligation to update any forward-looking statements as a result of new information, future events or developments, except as required by securities laws.
Bruce S. Lee
I-ON Digital Corp.
SOURCE I-ON Digital Corp.