Year-over-year improved gross margins and
operating results
Conference Call Wednesday, August 2 at 10:00
a.m. ET
Qumu Corporation (NASDAQ: QUMU) today reported financial results
for the second quarter 2017.
Second quarter revenue was $6.7 million, compared to $6.5
million in the second quarter 2016, and net loss was $(2.6)
million, or a loss of $(0.28) per share, compared to $(4.3)
million, or a loss of $(0.46) per share, in the second quarter
2016. Second quarter adjusted EBITDA (a non-GAAP measure) was a
loss of $(1.0) million, compared to an adjusted EBITDA loss of
$(3.1) million for the second quarter 2016.
For the six months ended June 30, 2017, revenue was $13.4
million, compared to $15.3 million last year, and net loss was
$(6.2) million, or a loss of $(0.66) per share, compared to $(8.4)
million, or a loss of $(0.91) per share, last year. For the six
months ended June 30, 2017, adjusted EBITDA was a loss of $(3.0)
million, compared to an adjusted EBITDA loss of $(6.0) million last
year.
“We continued to execute well this quarter, as adjusted EBITDA
exceeded guidance. Operational efficiency continues to improve,
even as we invest in our future. During the quarter, we announced
our Qx product solution and vision, the industry’s most extensible,
end-to-end enterprise video platform, to address the exponential
growth of video in global businesses. That strategy was validated
and enthusiastically received by analysts, prospects and customers
during the global roll out this quarter. We completed the build out
of our management team during the quarter, adding a Vice President
of Worldwide Channel and Alliances, and a Vice President of
Marketing to the senior leadership team,” said Vern Hanzlik, Qumu’s
president and CEO. "With the increasing adoption of video among our
prospects and clients, who see it as a staple of their digital
workforce, and a strong management team in place, we anticipate a
strong second half for 2017."
Other Financial Highlights
- Subscription, maintenance and support
revenue for the second quarter 2017 was $5.1 million compared to
$4.7 million for the second quarter 2016. The variance in
subscription, maintenance and support revenue primarily resulted
from growth in the customer base, as well as the timing of customer
renewals.
- Gross margin for the second quarter
2017 was 65.6% compared to 54.7% for the second quarter 2016.
- Total headcount was 119 as of June 30,
2017 compared to 145 as of March 31, 2017 and 165 as of June
30, 2016.
- Cash and marketable securities were
$9.0 million as of June 30, 2017, compared to $10.4 million as of
March 31, 2017, reflecting the second quarter operating loss and
the impact on cash from changes in working capital.
GuidanceFor the third quarter 2017, revenue is expected
to be in the range of $7.5 million to $8.5 million, compared
to $7.1 million in the third quarter last year. Total gross margin
percentage is expected to be in the mid to high 60s in the third
quarter. Third quarter net loss is expected to be in the range of
$(2.0) million to $(1.5) million, or $(0.21) to $(0.16) per diluted
share, with weighted-average shares outstanding of approximately
9.4 million shares. Adjusted EBITDA for the third quarter 2017 is
expected to be in the range of a loss of $(500,000) to breakeven,
compared to an adjusted EBITDA loss of $(1.4) million in the third
quarter 2016.
For the full year 2017, revenue is expected to be in the range
of $31.0 million to $34.0 million as the Company continues to grow
its recurring revenue base. Total gross margin percentage is
expected to improve from the low 60s early in the year to the high
60s late in the year. Net loss is expected to be in the range of
$(9.5) million to $(8.0) million, or $(1.02) to $(0.87) per diluted
share, with weighted-average shares outstanding of approximately
9.4 million shares. Adjusted EBITDA for the full year 2017 is
expected to be in the range of a loss of $(3.5) million to $(2.0)
million compared to an adjusted EBITDA loss of $(6.6) million in
fiscal 2016. The Company expects a tax benefit of $100,000 in
fiscal 2017. Additionally, the Company expects that it will be cash
flow breakeven for the fourth quarter 2017.
Conference CallThe Company has scheduled a conference
call and webcast to review its second quarter 2017 results
tomorrow, August 2, 2017 at 10:00 a.m. Eastern Time. The dial-in
number for the conference call is 877-456-6914 for domestic
participants and 929-387-3794 for international participants.
Investors can also access a webcast of the live conference call by
linking through the investor relations section of the Qumu website,
www.qumu.com. Webcasts will be archived on Qumu’s website.
Non-GAAP InformationTo supplement the Company's condensed
consolidated financial statements presented on a GAAP basis, the
Company uses adjusted EBITDA (a non-GAAP measure), which excludes
certain items from net income (loss) (a GAAP measure). Adjusted
EBITDA excludes items related to interest income and expense, the
impact of income-based taxes, depreciation and amortization,
stock-based compensation, change in fair value of warrant
liability, foreign currency gains and losses, and other
non-operating income and expenses.
The Company uses both GAAP and non-GAAP measures when planning,
monitoring, and evaluating the Company’s performance. The Company
believes that adjusted EBITDA is useful to investors because it
provides supplemental information that allows investors to review
the Company's results of operations from the same perspective as
management and the Company's board of directors. Non-GAAP results
are presented for supplemental informational purposes only for
understanding our operating results. The non-GAAP results should
not be considered a substitute for financial information presented
in accordance with generally accepted accounting principles, and
may be different from non-GAAP measures used by other
companies.
See the attached Supplemental Financial Information for a
reconciliation of net loss, a GAAP measure, to adjusted EBITDA, a
non-GAAP measure, for the three and six months ended June 30, 2017
and 2016.
Forward-Looking StatementsThis press release contains
forward-looking statements that are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. Any statements contained in this press release that are
not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, words
such as “may,” “will,” “expect,” “believe,” “anticipate,” or
“estimate” or comparable terminology are intended to identify
forward-looking statements. Such forward-looking statements
include, for example, statements about: the Company’s future
revenue and operating performance, cash balances, future product
mix or the timing of recognition of revenue, and the demand for the
Company’s products or software. The statements made by the Company
are based upon management’s current expectations and are subject to
certain risks and uncertainties that could cause the actual results
to differ materially from those described in the forward-looking
statements. These risks and uncertainties include the risk factors
described in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2016 and other factors set forth in the
Company’s filings with the Securities and Exchange Commission.
About QumuVideo is today’s document. Qumu Corporation
(NASDAQ: QUMU) provides the tools businesses need to create,
manage, secure, deliver and measure the success of their videos.
Qumu's innovative solutions release the power in video to engage
and empower employees, partners and clients. Organizations around
the world realize the greatest possible value from video they
create and publish using Qumu. Whatever the audience size, viewer
device or network configuration, Qumu solutions are how business
does video. Additional information can be found at
www.qumu.com.
QUMU CORPORATION
Condensed Consolidated Statements of
Operations
(unaudited - in thousands, except per
share data)
Three Months Ended Six Months Ended June
30, June 30, 2017 2016 2017
2016 Revenues: Software licenses and appliances $ 929
$ 836 $ 2,149 $ 2,798 Service 5,725 5,679 11,216
12,453
Total revenues
6,654 6,515 13,365 15,251 Cost of
revenues: Software licenses and appliances 368 412 862 1,369
Service 1,918 2,542 4,008 5,403 Total
cost of revenues 2,286 2,954 4,870 6,772
Gross profit 4,368 3,561 8,495 8,479
Operating expenses: Research and development 1,798 2,410
3,907 4,760 Sales and marketing 2,524 2,978 4,975 6,510 General and
administrative 2,009 2,265 4,469 5,235 Amortization of purchased
intangibles 226 227 449 453 Total
operating expenses 6,557 7,880 13,800 16,958
Operating loss (2,189 ) (4,319 ) (5,305 ) (8,479 ) Other
income (expense): Interest expense, net (334 ) (15 ) (651 ) (27 )
Change in value of warrant liability 11 — (67 ) — Other, net (124 )
(47 ) (179 ) (11 ) Total other expense, net (447 ) (62 ) (897 ) (38
) Loss before income taxes (2,636 ) (4,381 ) (6,202 ) (8,517 )
Income tax benefit (25 ) (90 ) (29 ) (94 ) Net loss $ (2,611 ) $
(4,291 ) $ (6,173 ) $ (8,423 ) Net loss per share – basic:
Net loss per share – basic $ (0.28 ) $ (0.46 ) $ (0.66 ) $ (0.91 )
Weighted average shares outstanding – basic 9,356 9,236 9,301 9,227
Net loss per share – diluted: Loss attributable to common
shareholders $ (2,622 ) $ (4,291 ) $ (6,173 ) $ (8,423 ) Net loss
per share – diluted $ (0.28 ) $ (0.46 ) $ (0.66 ) $ (0.91 )
Weighted average shares outstanding – diluted 9,357 9,236 9,301
9,227
QUMU CORPORATION
Condensed Consolidated Balance
Sheets
(in thousands)
June 30, December 31, Assets
2017
2016 Current assets:
(unaudited) Cash and cash
equivalents $ 8,982 $ 10,364 Receivables, net 5,163 7,495 Income
taxes receivable 186 317 Prepaid expenses and other current assets
2,089 2,470 Total current assets 16,420 20,646
Property and equipment, net 1,343 1,827 Intangible assets, net
7,242 8,110 Goodwill 7,112 6,749 Deferred income taxes, non-current
68 70 Other assets, non-current 4,514 4,827 Total
assets $ 36,699 $ 42,229 Liabilities and
Stockholders’ Equity Current liabilities: Accounts payable and
other accrued liabilities $ 2,580 $ 2,394 Accrued compensation
1,864 2,361 Deferred revenue 8,809 8,992 Deferred rent 280 283
Financing obligations 394 508 Warrant liability 960 893
Total current liabilities 14,887 15,431
Long-term liabilities: Deferred revenue, non-current 380 423 Income
taxes payable, non-current 3 6 Deferred tax liability, non-current
232 294 Deferred rent, non-current 567 712 Financing obligations,
non-current 31 170 Term loan, non-current 6,728 6,617
Total long-term liabilities 7,941 8,222 Total
liabilities 22,828 23,653 Stockholders’ equity:
Common stock 94 92 Additional paid-in capital 67,634 66,864
Accumulated deficit (50,646 ) (44,473 ) Accumulated other
comprehensive loss (3,211 ) (3,907 ) Total stockholders’ equity
13,871 18,576 Total liabilities and stockholders’
equity $ 36,699 $ 42,229
QUMU CORPORATION
Condensed Consolidated Statements of
Cash Flows
(unaudited - in thousands)
Six Months Ended June 30, 2017
2016 Operating activities: Net loss $ (6,173 ) $ (8,423 )
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation and amortization 1,548 1,700 Stock-based
compensation 783 740 Accretion of debt discount and issuance costs
236 — Change in value of warrant liability 67 — Deferred income
taxes (71 ) (90 ) Changes in operating assets and liabilities:
Receivables 2,425 5,192 Income taxes receivable / payable 135 241
Prepaid expenses and other assets 710 (1,171 ) Accounts payable and
other accrued liabilities 315 330 Accrued compensation (522 )
(1,113 ) Deferred revenue (368 ) (1,749 ) Deferred rent (150 ) (120
) Other non-current liabilities — (226 ) Net cash used in
operating activities (1,065 ) (4,689 ) Investing activities: Sales
and maturities of marketable securities — 6,000 Purchases of
property and equipment (20 ) (33 ) Net cash provided by (used in)
investing activities (20 ) 5,967 Financing activities:
Principal payments on financing obligations (255 ) (259 ) Payments
for debt issuance costs (125 ) — Common stock repurchases to settle
employee withholding liability (11 ) (18 ) Net cash used in
financing activities (391 ) (277 ) Effect of exchange rate changes
on cash 94 (41 ) Net increase (decrease) in cash and cash
equivalents (1,382 ) 960 Cash and cash equivalents, beginning of
period 10,364 7,072 Cash and cash equivalents, end of
period $ 8,982 $ 8,032
Supplemental Financial
Information
(unaudited - in thousands)
A summary of revenue is as follows:
Three Months Ended Six Months Ended June
30, June 30, 2017 2016 2017
2016 Software licenses and appliances $ 929 $ 836 $
2,149 $ 2,798 Service Subscription, maintenance and support 5,110
4,712 9,948 10,237 Professional services and other 615 967
1,268 2,216 Total service 5,725 5,679
11,216 12,453 Total revenue $ 6,654 $
6,515 $ 13,365 $ 15,251
A reconciliation from GAAP results to
adjusted EBITDA is as follows:
Three Months Ended Six Months Ended June
30, June 30, 2017 2016 2017
2016 Net loss $ (2,611 ) $ (4,291 ) $ (6,173 ) $ (8,423 )
Interest expense, net 334 15 651 27 Income tax benefit (25 ) (90 )
(29 ) (94 ) Depreciation and amortization expense: Depreciation and
amortization in cost of revenues 9 18 19 40 Depreciation and
amortization in operating expenses 241 280 489
562 Total depreciation and amortization expense 250
298 508 602 Amortization of intangibles
included in cost of revenues 298 323 591 645 Amortization of
intangibles included in operating expenses 226 227
449 453 Total amortization of intangibles expense 524
550 1,040 1,098 Total depreciation and
amortization expense 774 848 1,548 1,700
EBITDA (1,528 ) (3,518 ) (4,003 ) (6,790 ) Change in fair
value of warrant liability (11 ) — 67 — Other expense, net 124 47
179 11 Stock-based compensation expense: Stock-based compensation
included in cost of revenues 18 25 32 18 Stock-based compensation
included in operating expenses 352 364 751 722
Total stock-based compensation expense 370 389
783 740 Adjusted EBITDA $ (1,045 ) $ (3,082 ) $
(2,974 ) $ (6,039 )
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version on businesswire.com: http://www.businesswire.com/news/home/20170801006521/en/
Qumu CorporationInvestor Contact:Peter Goepfrich,
CFO, 612-638-9096
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