MAM Software Reports First Half EPS Increase by 37.5%, While Recurring Revenue Reaches 73% of Total Revenue and EBITDA Increases 13.6%

BARNSLEY, England, Feb. 11, 2015 /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 in accordance with U.S. generally accepted accounting principles (GAAP) for its fiscal quarter ended December 31, 2014, through the filing on February 11, 2015 of its Quarterly Report on Form 10-Q with the Securities and Exchange Commission:

Michael Jamieson, MAM's President and Chief Executive Officer commented, "We continue to deliver solid results which include both top line growth as well as margin expansion as we execute our plans to transition to a SaaS and DaaS-centric business model. Growing our business while developing and deploying new and enhanced modules and features to our product offerings is a dynamic proposition which requires an in-depth understanding of the market, our customers' businesses and the ability of our sales and development teams to move in tandem in order to meet the needs of our customers. Since introducing our first subscription-based service solution over the Internet, we have continually improved our products to grow our revenue from cloud-based offerings to 44.3% of our total revenue."

"I am particularly pleased with the progress we reported with Autopart Online, our SaaS, cloud-hosted business management solution for automotive parts distributors and retailers," Mr. Jamieson continued. "During our fiscal second quarter, the active user base reached 1,366. The user base of 1,366 represents an increase of 785 users or a 135% increase year over year, and an increase of 309 users or a 29.2% increase quarter over quarter.  An increasing number of our customers are choosing SaaS over the traditional perpetual licensing option, it does demonstrate the automotive market's acceptance and pursuit of cloud hosting solutions."

Second Quarter Highlights:

• Revenue increased $509,000 or 7% year-over-year to $7.87 million, up from $7.36 million; and decreased $336,000 or 4% sequentially; and
• Recurring revenue increased $504,000 or 9% year-over-year to $5.83 million up from $5.33 million, and decreased $127,000 or 2% sequentially. Recurring revenue was 74% of total revenue versus 72% for the same quarter last year; and
• Total Software as a Service (SaaS) revenue increased $497,000 or 73% year-over-year to $1.17 million, and increased by $92,000 or 9% sequentially; and
• Autowork Online (SaaS) revenue increased $300,000 or 57% year-over-year to $823,000 and increased  $50,000 or 6% sequentially; and
• Autopart Online (SaaS) revenue increased $197,000 or 129% year-over-year to $350,000 and increased  $42,000 or 14% sequentially; and
• Total Data as a Service (DaaS) revenue increased $174,000 or 8% year-over-year to $2.39 million and decreased $103,000 or 4% sequentially; and
• Adjusted EBITDA (non-GAAP) increased $470,000 or 49.6% to $1.4 million.

Second Quarter Financial Review:

The Company's revenue was $7.87 million for the quarter ended December 31, 2014 versus $7.36 million for same period last year, an increase of $509,000 or 7%. The Company's revenue from its U.S. and U.K. operations this quarter was $2.29 million and $5.58 million respectively, compared to $1.98 million and $5.38 million during the same period last year. U.S. recurring revenue increased $35,000 or 2% to $1.46 million this quarter, from $1.43 million for the same period last year. U.K. recurring revenue increased $469,000 or 12% to $4.38 million this quarter, from $3.91 million for same period last year.

Gross profit for the quarter was $4.66 million or 59% versus $4.10 million or 56% for the same period last year. The increase in gross profit was the result of higher perpetual license revenue of $273,000 in the U.S. compared to last year, in conjunction with the Company initiative to transition its business to a Software as a Service (SaaS) model.

Operating income for the quarter increased by $579,000 to $1,128,000, an increase of 106% when compared to the $549,000 operating income for the same period last year. Net income for the quarter this year increased by $532,000 to $925,000 versus $393,000, an increase of 135% over the same period a year ago. Basic and diluted earnings per share were each $0.07 per share versus $0.03 per basic and diluted share for the same period a year ago.

Year-to-Date Highlights:

• Total revenue for the six months increased $1.16 million or 8% to $16.08 million when compared to the same period last year; and
• Total recurring revenue increased by $1.26 million or 12% year-over-year to $11.79 million from $10.53 million; and
• Recurring revenue was 73% of total revenue for the six month period, versus 71% for the same period last year; and
• Total Software as a Service (SaaS) revenue increased by $947,000 or 73% year-over-year to $2.25 million; and
• Autowork Online (SaaS) revenue increased by $547,000 or 52% year-over-year to $1.60 million from $1.05 million; and
• Autopart Online (SaaS) revenue increased by $400,000 or 156% year-over-year to $658,000, up from $257,000; and
• Total Data as a Service (DaaS) revenue increased $483,000 or 11% year-over-year to $4.87 million; and
• Adjusted EBITDA (non-GAAP) increased $316,000 or 13.6% to $2.6 million: and
• Trailing 12 month adjusted EBITDA (non-GAAP) of $4.55 million after substantial global investments in personnel and sales and marketing; and
• System backlog of $1.70 million.

Year-to-Date Financial Review:

The Company's revenue was $16.08 million for the six months ended December 31, 2014 versus $14.92 million for the same period last year, an increase of $1.16 million or 8%. Operating income for the six month period increased by $534,000 to $1.94 million, an increase of 38% when compared to the $1.41 million operating income for the same period last year. Net income for the six month period increased by $449,000 to $1.53 million versus $1.09 million, an increase of 41% over the same period a year ago. Basic and diluted earnings per share were $0.11 versus $0.08 per basic and diluted share for the same period a year ago.

Gross profit for the six month period was $9.56 million or 59% versus $8.45 million or 57% for the same period last year. The increase in gross profit was the result of increased recurring revenue compared to the previous year.

The Company's revenue from its U.S. and U.K. operations was $4.38 million and $11.70 million respectively, compared to $4.25 million and $10.68 million during the same six month period last year. U.S. recurring revenue increased $116,000 or 4% to $2.95 million for the six month period, from $2.84 million for the same period last year. U.K. recurring revenue increased $1,148,000 or 15% to $8.84 million for period from $7.69 million for the same six month period last year.

Second Quarter and Year-to-Date Business Update:

Commenting on the second quarter of fiscal 2015, Michael Jamieson, MAM Software Group President and Chief Executive Officer, said, "During the second fiscal quarter, we continued to make progress towards our strategic goals, building on the results we achieved in fiscal 2014. We have maintained an on-going level of re-investment in our business as we transition our business to a cloud-based solutions provider. The success we are experiencing with our Software as a Service and Data as a Service offerings is evidenced by the positive reactions we are receiving from the market and a retention rate of approximately 98% that we have maintained since first introducing cloud-based delivery. Attracting new and existing customers to our SaaS solutions remains a priority as we progress throughout fiscal 2015 and beyond. 

"For the balance of the 2015 fiscal year we anticipate an on-going level of investment in our sales, marketing and professional services which we expect will contribute to increased growth and profitability," continued Mr. Jamieson. "We continue to expect FY 2015 Adjusted EBITDA, a non-GAAP measure, to increase approximately 20% over the $4.2 million reported in fiscal year 2014."

"Continued strong recurring revenue, solid growth from our newer cloud-based offerings, and diligent expense management helped us offset currency fluctuation impacts and deliver another solid quarter," said Charles F. Trapp, Executive Vice President and CFO. "We continued to generate cash, reinvesting a portion in certain growth initiatives to drive the future performance of our company. With the first half of the fiscal year behind us, we anticipate FY 2015 Adjusted EBITDA of approximately $5 million."

The Company currently has approximately $2.5 million left on its previously approved stock buyback program, which it intends to use selectively as circumstances and market conditions warrant. As of December 31, 2014, MAM had 14.28 million shares of common stock outstanding.

Conference Call Information

The Company has scheduled a conference call for Thursday, February 12, 2015, at 9 a.m. ET to review the results. Investors and interested parties can access the conference call by dialing 1-888-430-8694 in the United States and 1-719-325-2376 in the United Kingdom and other toll/international locations. A replay will be available until February 26, 2015 by calling 1-877-870-5176 (United States) or 1-858-384-5517 (toll/UK/international). Please use pin number 5778299 for the replay. A live webcast as well as a replay of the call will be accessible at the investor relations section of the Company's website, www.mamsoftware.com. The replay will be active for 60 days following the conference call.

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

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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.

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SOURCE MAM Software Group, Inc.

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