MAM Software Group Inc. Reports Second Quarter and Six Month Financial Results

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Feb 08, 2011, 09:00 ET

BARNSLEY, England, Feb. 8, 2011 /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 fiscal second quarter and three and six months ended December 31, 2010, through the filing on February 8, 2011 of its Quarterly Report on Form 10-Q with the Securities and Exchange Commission:

(In thousands, except share and per share data)
		For the Three Months Ended December 31,				For the Six Months Ended December 31,
		2010		2009		2010		2009
Revenues	$	6,149	$	6,746	$	12,751	$	12,958
Gross profit	$	3,823	$	4,259	$	7,430	$	7,524
Operating income	$	1,071	$	265	$	2,277	$	855
Income before provision for income tax	$	893	$	189	$	1,630	$	489
Net income (loss)	$	663	$	(237)	$	1,100	$	(157)
Earnings per share attributed to common stockholders - basic and diluted		$0.01		-		$0.01		-
Weighted average shares outstanding :
Basic		126,009,626		83,765,095		105,861,027		83,630,793
Diluted		127,788,467		83,765,095		106,583,793		83,630,793

The Company reported revenue of $6,149,000 for the three months ended December 31, 2010, a decrease of $597,000 or 8.8%, compared with revenues of $6,746,000 for the three months ended December 31, 2009. Operating income was $1,071,000 for the three month ended December 31, 2010 compared with operating income of $265,000 for December 31, 2009. Earnings before income tax was $893,000 for the three months ended December 31, 2010 which included $112,000 of expense from the Change in Fair Value of Derivative Liabilities, compared with income of $189,000 for the three months ended December 31, 2009 which included $277,000 of income from the Change in Fair Value of Derivative Liabilities. The net income was $663,000 and loss of $237,000 for the three month periods ended December 31, 2010 and 2009 respectively.

The Company reported revenue of $12,751,000 for the six months ended December 31, 2010 compared with $12,958,000 for the six months ended December 31, 2009 a decrease of $207,000 or 1.6%. Operating income was $2,277,000 for the six month ended December 31, 2010 compared with income of $855,000 for December 31, 2009. Earnings before tax was $1,630,000 for the six months ended December 31, 2010 which included $164,000 of expense from the Change in Fair Value of Derivative Liabilities, compared with income of $489,000 for the six months ended December 31, 2009 which included $315,000 income from the Change in Fair Value of Derivative Liabilities. The Net income was $1,100,000 and loss was $157,000 for the six month periods ended December 31, 2010 and 2009 respectively.

Commenting on the three and six month periods ending December 31, 2010, MAM's CEO, Michael Jamieson, said, "We have accomplished a number of key initiatives in the first half of this fiscal year. We successfully strengthened and cleaned up our balance sheet by refinancing our $4.3 million 16% term loan with the proceeds of a 3.4% term loan and our oversubscribed Rights Offering, prepaid a 7% note with cash on hand, and generated substantial cash from operations. We are pleased with the rollout of the new Autowork Online product in the UK. Autowork Online is our software as a service (SaaS) solution, aimed at the independent service and repair business. Revenue from Autowork Online has increased each month of this fiscal year and totaled $193,000 for the three months and $358,000 for the six months ended December 31, 2010 respectively a 17% quarter-over-quarter revenue growth. We streamlined our operations and have generated two sequential quarters of positive Net Income. With a stronger and healthier company, we are now focused on growing our business in the US and UK."

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,		June 30,
	2010		2010
ASSETS	(unaudited)
Current Assets
Cash and cash equivalents	$	1,555	$	1,196
Accounts receivable, net of allowance of $136 and $192		2,605		2,520
Inventories		282		366
Prepaid expenses and other current assets		579		371
Total Current Assets		5,021		4,453

Property and Equipment, net		801		856

Other Assets
Goodwill		9,096		8,924
Amortizable intangible assets, net		2,425		2,757
Software development costs, net		1,457		1,520
Other long-term assets		96		49
TOTAL ASSETS	$	18,896	$	18,559

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	1,378	$	1,551
Accrued expenses and other		1,764		1,758
Payroll and other taxes		224		364
Current portion of settlement liability		-		326
Derivative liabilities		793		291
Current portion of long-term debt		739		5,000
Current portion of deferred revenue		509		641
Sales tax payable		682		598
Income tax payable		796		659
Total Current Liabilities		6,885		11,188

Long-Term Liabilities
Deferred revenue, net of current portion		168		345
Deferred income taxes		378		642
Settlement liability, net of current portion		-		525
Long-term debt, net of current portion		1,426		168
Other		337		359
Total Liabilities		9,194		13,227

Commitments and contingencies

Stockholders' Equity
Preferred stock: Par value $0.0001 per share; 10,000,000 shares authorized, 1,792,662 and 0 issued and outstanding, respectively		–		–
Common stock: Par value $0.0001 per share; 150,000,000 shares authorized, 138,733,246 and 84,862,880 shares issued and outstanding, respectively		14		8
Additional paid-in capital		32,728		29,503
Accumulated other comprehensive loss		(729)		(768)
Accumulated deficit		(22,311)		(23,411)
Total Stockholders' Equity		9,702		5,332
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,896	$	18,559

MAM SOFTWARE GROUP, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income (loss) (Unaudited)
(In thousands, except share and per share data)

	For the Three Months Ended				For the Six Months Ended
	December 31,				December 31,
	2010		2009		2010		2009
Revenues	$	6,149	$	6,746	$	12,751	$	12,958
Cost of revenues		2,326		2,487		5,321		5,434
Gross profit		3,823		4,259		7,430		7,524

Operating expenses
Research and development		733		763		1,552		1,607
Sales and marketing		469		620		1,087		1,264
General and administrative		1,279		2,322		1,975		3,227
Depreciation and amortization		271		289		539		571
Total operating expenses		2,752		3,994		5,153		6,669

Operating income		1,071		265		2,277		855

Other income (expense)
Interest expense		(118)		(352)		(535)		(730)
Interest income		-		-		-		-
Change in fair value of derivative liabilities		(112)		277		(164)		315
Gain on settlement of liability		52		-		52		50
Other, net		-		(1)		-		(1)
Total other expense, net		(178)		(76)		(647)		(366)

Income before provision for income taxes		893		189		1,630		489
Provision for income taxes		230		426		530		646
Net income (loss)		663		(237)		1,100		(157)

Foreign currency translation income (loss)		(295)		(234)		39		(108)
Total comprehensive income (loss)	$	368	$	(471)	$	1,139	$	(265)

Earnings (loss) per share attributed to common stockholders: Basic	$	0.01	$	-	$	0.01	$	-
Diluted	$	0.01	$	-	$	0.01	$	-

Weighted average shares outstanding : Basic		126,009,626		83,765,095		105,861,027		83,630,793
Diluted		127,788,467		83,765,095		106,583,793		83,630,793


MAM Software Group, Inc. Calculation of Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (un-audited, includes non-cash compensation and intangible asset impairment)	For the Six Months Ended December 31,
(in thousands)	2010		2009

Net Income (loss)	$ 1,100	$	(157)
Interest Expense	535		730
Income Taxes	530		646
Depreciation and amortization	539		571
Non-cash equity compensation	171		68
Change in fair value of derivation liabilities	164		(315)
Adjusted EBITDA	$ 3,039	$	1,543

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.