Research Solutions, Inc. Reports Third Quarter Fiscal Year 2014 Results

ENCINO, Calif., May 15, 2014 /PRNewswire/ -- Research Solutions, Inc. (RSSS), a pioneer in facilitating the flow of information from the publishers of scientific, technical, and medical content to enterprise customers in Life Sciences and other research intensive organizations around the world, today reported financial and operating results for its third quarter fiscal year 2014 (quarter ended March 31, 2014), which featured strong adoption and revenue growth for the emergent key business line Article Galaxy.

Third Quarter Fiscal Year 2014 Highlights:

• Article Galaxy, emergent key business line, grows to 57% of total revenue and 61% of total gross profit for the quarter; generates 11% increase in revenue and 16% increase in gross profit over same quarter last year
• $8.6 million in consolidated revenue, a 19% decrease over the same quarter last year; $6.8 million in revenue from North American operations, a 14% decrease over same quarter last year, and; $1.9 million in revenue from French subsidiary TAAG, a 33% decrease over same quarter last year
• North American revenue detail: $5 million in revenue from Article Galaxy, an 11% increase over the same quarter last year, and; $1.8 million in revenue from Reprints and ePrints, a 46% decrease over same quarter last year
• Consolidated Adjusted EBITDA of negative $442,000; Adjusted EBITDA of negative $307,000 from North American operations, and Adjusted EBITDA negative of $135,000 from TAAG

Management Commentary

"Our Article Galaxy SaaS platform continues to lead the way for us as we transition our strategic focus towards spurring adoption and paid annual licenses for this research retrieval solution," said Research Solutions President and CEO Peter Derycz.  "As our highest revenue and highest gross margin product, Article Galaxy accounted for 51% of our revenue year to date, and 57% of this quarter's revenue.  Gross margin from Article Galaxy for the quarter also grew by 16% compared to the same quarter last year. The Article Galaxy SaaS platform continues growing into new verticals such as Europe and pockets within Asia, and we are more excited than ever about its growth potential." 

Derycz added, "In other news, we announced that we have applied for a NASDAQ listing. There is no certainty that we will achieve the listing, however, we believe it would be a positive move for all shareholders if our NASDAQ application is successful. Additionally, we announced that our French subsidiary TAAG acquired the assets of one of its competitors which should help boost both the top-line and bottom line at TAAG."

Research Solutions Chief Financial Officer Alan Urban said, "Revenue from Article Galaxy saw 11% growth over the same quarter last year, while we experienced significant decreases in revenue from Reprint and ePrints, and TAAG. The same trend was true of gross margin dollars; Article Galaxy was up by 16%, while Reprint and ePrint, and TAAG gross margin dollars were both down significantly. Reprint and ePrint revenue can experience large fluctuations, as seen in this quarter's 46% decrease over the same quarter last year.  The decrease was primarily attributable to unusually large one-time orders from our largest current customers during the same quarter last year, and the termination of a historically non-performing publisher Reprint distribution agreement."

Conference Call

Research Solutions management will host a live conference call on Friday, May 16, 2014 beginning at 4:15 p.m. Eastern Time (1:15 p.m. Pacific Time) to discuss these results. To participate in the call please dial +1 (866) 516-3002 for domestic callers or +1 (253) 237-1159 for international callers, and enter Conference ID: 47130889 when prompted.

The call will also be streamed from the Company's website at www.researchsolutions.com. Listening to the webcast requires Internet access and the Windows Media Player or other compatible streaming media player. A recorded replay will also be available at www.researchsolutions.com for 60 days following the conclusion of the call.

Use of Non-GAAP Measure – Adjusted EBITDA

Research Solutions management evaluates and makes operating decisions using various financial metrics. In addition to the Company's GAAP results, management also considers the non-GAAP measure of Adjusted EBITDA. Management believes that this non-GAAP measure provides useful information about the Company's operating results.  The attached tables provide a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure.

Adjusted EBITDA is defined as net income from operations (which excludes interest and income taxes), plus depreciation and amortization, stock-based compensation, impairment of acquired intangibles and goodwill, loss on facility sublease, and (gain) loss on sale of fixed assets.

About Research Solutions®
Research Solutions, Inc. is a pioneer in facilitating the flow of information from the publishers of scientific, technical, and medical content to enterprise customers in life science and other research intensive organizations around the world. We develop products, services and systems to facilitate the re-use of published content in a manner that helps organizations achieve their research, marketing, and communication goals effectively and in compliance with copyright law and regulatory rules.  Our subsidiary companies include Reprints Desk, Inc. and Techniques Appliquees aux Arts Graphiques, S.p.A. (TAAG).  For more information, please visit www.researchsolutions.com.

Forward-Looking Statements
Certain matters discussed in this press release may be forward-looking statements.  Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; acceptance of the Company's products in the market; the Company's success in obtaining new customers; the Company's success in technology and product development; the Company's ability to execute its business model and strategic plans; the Company's success in integrating acquired entities and assets, and all the risks and related information described from time to time in the Company's filings with the Securities and Exchange Commission ("SEC"), including the financial statements and related information contained in the Company's Annual Report on Form 10-K and interim Quarterly Reports on Form 10-Q.  Examples of forward-looking statements in this release include statements related to our new strategic focus, product verticals, anticipated revenue and profitability.  The Company assumes no obligation to update the cautionary information in this release.

SOURCE Research Solutions, Inc.