Conference Call To Be Held Today at 4:30 pm
Eastern Time
Inpixon (NASDAQ: INPX), a leading indoor positioning and data
analytics company, today reported financial results for the fourth
quarter and year ended December 31, 2016 and provided an update on
corporate developments.
Fourth Quarter 2016 Financial Highlights:
- 2016 Q4 revenue of $14.5 million
- 2016 Q4 gross margin of 31%
- 2016 Q4 GAAP net loss of $7.51 per
share
- 2016 Q4 Proforma Non-GAAP net loss1 of
$2.13 per share
- 2016 Q4 Non-GAAP Adjusted EBITDA1 loss
of $2.8 million
Full Year Financial Highlights
- 2016 revenue of $53.2 million
- 2016 gross margin of 28%
- 2016 GAAP net loss of $15.61 per
share
- 2016 Proforma Non-GAAP net loss1 of
$7.44 per share
- 2016 Non-GAAP Adjusted EBITDA1 loss of
$9.8 million
“Sysorex is now known as Inpixon. On March 1st we changed our
name from Sysorex Global to Inpixon, in connection with the
rebranding of our business to focus on growing our Indoor
Positioning Analytics products and services. We have expanded our
capabilities with these products and services beyond the security
application, which initially targeted government customers. We now
have several retail customers including in our largest deployment
to date in Q4 2016 in a flagship mall of one of the premier and
larger mall operators in the world, further establishing our
foothold in this business. Nonetheless, our financial results for
the year were impacted by the decline in our Storage &
Computing segment revenues, which we believe is based on the
industry wide softness that we have discussed on our last two
earnings calls. We have responded to this decline with the
acquisition of the Integrio business in November 2016. As a result,
we will provide a broader range of products and services primarily
to federal government customers via large long-term contracts. We
captured revenue in Q1 2017 from the acquisition but expect an
increased impact in subsequent quarters as the government buying
season kicks into gear in Q3,” said Nadir Ali, Inpixon’s CEO.
“In addition to adding revenues with long-term government
contracts that we believe can help sustain and grow this segment,
we are consolidating and cutting operational expenses and reducing
office footprints and locations. We anticipate that taking these
steps, will result in more efficient operations that coupled with
focusing our efforts to grow the Inpixon Indoor Positioning
Analytics business will address the softness in revenue that we saw
in 2016 and get us on track in 2017. We also saw net losses in 2016
of which approximately $11.7 million were a result of goodwill
write-downs and amortization of intangibles. These charges do not
impact our liquidity, cash flows from operations, compliance with
debt covenants or our ability to execute on a broader basis,” said
Kevin Harris, Inpixon’s CFO.
2016 Financial Results
Revenue: Total Revenues for the year ended December 31, 2016
were $53.2 million compared to $67.0 million for the comparable
period in the prior year. The decrease of $13.8 million, or
approximately 20.6% is primarily associated with a decline in
revenues earned by the storage and computing segment. Total 2016
revenue included Mobile, IoT & Big Data Products revenue of
$1.6 Million, compared to $1.7 million for the prior year period,
Storage and Computing revenue of $36.1 million compared to $50.0
million for the prior year period, SaaS Revenue of $3.3 million
compared to $3.7 million during the prior year period and
Professional Services Revenue of $12.2 million compared to $11.6
million during the prior year period.
Gross Profit: Total gross profit for the year ended December 31,
2016 was $14.9 million, compared to $19.3 million in 2015. The
gross profit margin for the year ended December 31, 2016 was 28%
compared to 29% for the year ended December 31, 2015. This decrease
in gross profit is based on the lower revenue in 2016. The decrease
in gross profit margin is based on a higher percentage of product
sales with lower margins than in the prior year.
Net Loss: GAAP net loss attributable to the stockholders for
2016 was $27.1 million, compared to a net loss of $11.7 million for
2015. GAAP net loss per share for 2016 was $15.61, compared to a
net loss per share of $8.30 for 2015. The increase in net loss was
primarily attributable to a decrease in gross profit of
approximately $4.4 million and an increase in operating expenses of
approximately $7.9 million which includes a non-cash goodwill
impairment charge of $7.4 million.
Non-GAAP net loss1: 2016 pro-forma non-GAAP net loss was $12.9
million, compared to a non-GAAP net loss of $4.5 million for 2015.
2016 pro-forma non-GAAP net loss per share was $7.44, compared to a
non-GAAP net loss per share of $3.20 for 2015. Non-GAAP net loss
per share is defined as net loss per basic and diluted share
adjusted for non-cash items including stock based compensation,
amortization of intangibles and one time charges including
gain/loss on the settlement of obligations, severance costs, change
in the fair value of shares to be issued, acquisition costs and the
costs associated with the public offering.
Non-GAAP adjusted EBITDA1: Total non-GAAP adjusted EBITDA for
the year ended December 31, 2016 was a loss of $9.8 million
compared to loss of $3.4 million for the year ended December 31,
2015. Non-GAAP adjusted EBITDA is defined as net income (loss)
before interest, provision for (benefit from) income taxes, and
depreciation and amortization plus adjustments for other income or
expense items, non-recurring items and non-cash stock-based
compensation.
1 A reconciliation of GAAP to non-GAAP financial measures is
provided in the financial statement tables included in this press
release. An explanation of these measures is also included under
the heading “Non-GAAP Financial Measures.”
2016 Business Highlights and Recent Developments
- Sysorex Rebrands To Inpixon, Signifying
Increased Focus On Indoor Positioning Analytics
- Inpixon Named To 2017 CRN MSP Elite 150
List
- Inpixon Appoints Soumya Das As Chief
Marketing Officer
- Inpixon Launches 3-Part "Freethinkers
Of The Retail World" Webinar Series
- Inpixon Announces Pricing Of $2.0
Million Registered Direct Offering
- Inpixon Federal Acquires Certain Assets
of Integrio Technologies Inc.
- Inpixon Announces ~$1M Contract With
Top Mall Operator
All results summarized in this press release (including the
financial statement tables) should be considered preliminary, are
qualified in their entirety by the financial statement tables
included in this press release and are subject to change. Please
refer to Inpixon’s Annual Report on Form 10-K for the year ended
December 31, 2016, which will be filed with the U.S. Securities and
Exchange Commission on or about April 17, 2017.
Conference Call Information
Management will host a conference call on Monday, April 17,
2017, at 4:30pm Eastern Time to review financial results and
corporate highlights. Following management’s formal remarks, there
will be a question and answer session.
To listen to the conference call, interested parties within the
U.S. should call 1-844-824-3831. International callers should call
+1-412-317-5141. All callers should ask for the Inpixon conference
call. The conference call will also be available through a live
webcast, which can be accessed at
http://client.irwebkit.com/inpixon.
A replay of the call will be available approximately one hour
after the end of the call through April 30, 2017. The replay can be
accessed via Inpixon’s website or by dialing 1-877-344-7529 (U.S.)
or +1-412-317-0088 (international). The replay conference playback
code is 10104105.
About Inpixon
Inpixon (NASDAQ: INPX) is a leader in Indoor Positioning and
Data Analytics. Inpixon sensors are designed to find all accessible
cellular, Wi-Fi, and Bluetooth devices anonymously. Paired with a
high performance, data analytics platform, this technology delivers
visibility, security, and business intelligence on any commercial
or government premises world-wide. Inpixon’s products,
infrastructure solutions, and professional services group help
customers take advantage of mobile, big data, analytics, and the
Internet of Things (IoT) to uncover the untold stories of the
indoors. For the latest insight on Indoor Positioning and Data
Analytics, follow Inpixon on LinkedIn and @InpixonHQ on
Twitter.
Safe Harbor Statement
All statements in this release that are not based on historical
fact are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995 and the provisions
of Section 27A of the Act, and Section 21E of the Securities
Exchange Act of 1934, as amended. While management has based any
forward-looking statements included in this release on its current
expectations, the information on which such expectations were based
may change. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
risks, uncertainties and other factors, many of which are outside
of the control of Inpixon and its subsidiaries, which could cause
actual results to materially differ from such statements. Such
risks, uncertainties, and other factors include, but are not
limited to, the fluctuation of global economic conditions, the
performance of management and employees, the Company’s ability to
obtain financing, competition, general economic conditions and
other factors that are detailed in Inpixon’s periodic and current
reports available for review at www.sec.gov. Furthermore, we
operate in a highly competitive and rapidly changing environment
where new and unanticipated risks may arise. Accordingly, investors
should not place any reliance on forward-looking statements as a
prediction of actual results. We disclaim any intention to, and
undertake no obligation to, update or revise forward-looking
statements.
Non-GAAP Financial Measures
Management believes that certain financial measures not in
accordance with generally accepted accounting principles in the
United States (“GAAP"”) are useful measures of operations. EBIDTA,
Adjusted EBITDA and pro forma net loss per share are non-GAAP
measures. Inpixon defines “EBITDA” as net income (loss) before
interest, provision for (benefit from) income taxes, and
depreciation and amortization. Management uses Adjusted EBITDA as
the matrix in which it manages the business and Inpixon defines
“Adjusted EBITDA” as EBITDA plus adjustments for other income or
expense items, non-recurring items and non-cash stock-based
compensation. Inpixon defines “pro forma net loss per share” as
GAAP net loss per share adjusted for stock-based compensation,
amortization of intangibles, change in the fair value of shares to
be issued, change in the fair value of derivative liability and
one-time non-recurring charges such as severance costs, acquisition
costs and the costs associated with the public offering.
Management provides Adjusted EBITDA and pro forma net loss per
share measures so that investors will have the same financial
information that management uses, which may assist investors in
assessing Inpixon’s performance on a period-over-period basis.
Adjusted EBITDA or pro forma net loss per share is not a measure of
financial performance under GAAP, and should not be considered an
alternative to net income (loss) or any other measure of
performance under GAAP, or to cash flows from operating, investing
or financing activities as an indicator of cash flows or as a
measure of liquidity. Adjusted EBITDA and pro forma net loss per
share have limitations as analytical tools and should not be
considered either in isolation or as a substitute for analysis of
Inpixon’s results as reported under GAAP.
INPIXON AND SUBSIDIARIES(f/k/a SYSOREX GLOBAL AND
SUBSIDIARIES)CONSOLIDATED BALANCE SHEETS(In
thousands, except number of shares and par value data)
December 31,2016 December 31,2015
ASSETS
Current assets: Cash and cash equivalents $ 1,821 $ 4,060 Accounts
receivable, net 11,788 12,209 Notes and other receivables 362 1,340
Inventory 1,061 755 Prepaid licenses and maintenance contracts
13,321 7,509 Assets held for sale 23 772 Other current assets
1,768 1,967 Total current assets 30,144
28,612 Prepaid licenses and maintenance contracts,
non-current 5,169 6,586 Property and equipment, net 1,385 1,392
Software development costs, net 2,058 1,281 Intangible assets, net
17,691 17,161 Goodwill 9,028 13,166 Other assets 998
517 Total assets $ 66,473 $ 68,715
LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities:
Accounts payable $ 23,027 $ 9,320 Accrued liabilities 4,169 2,992
Deferred revenue 15,043 9,095 Short-term debt, net 6,887 9,417
Liabilities held for sale 2,041 2,026 Total current
liabilities 51,167 32,850 Deferred revenue, non-current
5,960 7,666 Long-term debt, net 4,047 1,226 Other liabilities 371
542 Acquisition liability - Integrio 1,648 - Acquisition liability
- LightMiner 567 3,475 Total
liabilities 63,760 45,759 Commitments and contingencies
Stockholders’ equity: Preferred stock, $0.001 par value;
5,000,000 shares authorized; no shares issued -- -- or outstanding
Convertible Series 1 Preferred Stock - $1,000.00 stated value;
5,000,000 shares authorized; 2,250 and 0 issued and outstanding at
December 31, 2016 and 2015, respectively. Liquidation preference of
$2,250,000 and $0 at December 31, 2016 and 2015, respectively.
1,340 -- Common stock, $0.001 par value; 50,000,000 shares
authorized; 33 25 2,171,886 and 1,687,324 issued and 2,155,964 and
1,671,402 outstanding at December 31, 2016 and 2015, respectively
Additional paid-in capital 64,117 58,226 Treasury stock, at cost,
238,838 shares (695 ) (695 ) Due from Sysorex Consulting Inc. (666
) (666 ) Accumulated other comprehensive income (loss) 52 31
Accumulated deficit (59,473 ) (32,359 ) Stockholders’
equity attributable to Inpixon 4,708 24,562 Non-controlling
interest (1,995 ) (1,606 ) Total stockholders' equity
2,713 22,956 Total liabilities and
stockholders’ equity $ 66,473 $ 68,715
INPIXON AND SUBSIDIARIES(f/k/a SYSOREX GLOBAL AND
SUBSIDIARIES)CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS(In thousands, except per share data)
For the Years EndedDecember 31,
2016
2015
Revenues Products $ 37,510 $ 51,381 Services 15,657
15,576 Total Revenues 53,167
66,957 Cost of Revenues Products 29,025 40,763 Services
9,215 6,865 Total Cost of Revenues
38,240 47,628 Gross Profit 14,927
19,329 Operating expenses: Research and development 2,277 635 Sales
and marketing 8,500 11,531 General and administrative 15,269 14,226
Acquisition related costs 876 355 Impairment of goodwill 7,400 --
Amortization of intangibles 4,328 3,994
Total operating expenses 38,650 30,741
Loss from operations (23,723 ) (11,412 ) Other income (expense)
Interest expense (1,743 ) (448 ) Other income (expense) (266 ) 25
Change in fair value of derivative liability 51 -- Gain (loss) on
the settlement of obligation -- (85 ) Reserve for the
recoverability of note receivable (1,077 ) -- Change in fair value
of shares to be issued 13 211 Total
other income (expense) (3,022 ) (297 ) Net loss from
continuing operations (26,745 ) (11,709 ) Net loss from
discontinued operations, net of tax (758 ) (20 ) Net
loss (27,503 ) (11,729 ) Net loss attributable to non-controlling
interest (389 ) (10 ) Net loss attributable to
stockholders of Inpixon $ (27,114 ) $ (11,719 ) Comprehensive loss
Net Loss (27,503 ) (11,729 ) Unrealized foreign exchange
gain/(loss) from cumulative translation adjustments 21
49 Comprehensive loss $ (27,482 ) $ (11,680 )
Loss from continuing operations attributable to common stockholders
$ (15.40 ) $ (8.29 ) Loss from discontinued operations, net of tax
$ (0.21 ) $ (0.01 ) Net loss per basic and diluted common share $
(15.61 ) $ (8.30 ) Weighted average common shares outstanding:
Basic and Diluted 1,737,120 1,412,094
INPIXON AND SUBSIDIARIES(f/k/a SYSOREX
GLOBAL AND SUBSIDIARIES)CONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands) For the Years
EndedDecember 31,
2016
2015
Cash flows from operating activities: Net loss $ (27,503 ) $
(11,729 ) Adjustment to reconcile net loss to net cash used in
operating activities: Depreciation and amortization 1,333 653
Amortization of intangible assets 4,328 3,994 Impairment of
goodwill 7,400 -- Stock based compensation 1,377 1,424 Change in
fair value of shares to be issued (13 ) (211 ) Change in fair value
of derivative liability (51 ) -- Amortization of deferred financing
costs -- 23 Amortization of debt discount 491 -- Compensation
expense, note receivable related party -- 90 Provision for doubtful
accounts 93 1,032 Reserve for settlement of bond 749 -- Reserve for
note receivable 1,077 -- Amortization of technology 133 -- Other 64
19 (Gain)/Loss on settlement of obligations (1,541 ) 85 Treasury
shares received upon settlement of escrow -- (695 ) Changes in
operating assets and liabilities: Accounts receivable and other
receivables 2,968 (5,066 ) Inventory (305 ) (145 ) Other current
assets 67 (510 ) Prepaid licenses and maintenance contracts (232 )
(744 ) Other assets (711 ) 69 Accounts payable 6,907 1,944 Accrued
liabilities 623 586 Deferred revenue (10 ) 1,127 Other liabilities
(29 ) (147 ) Total Adjustments 24,718 3,528 Net Cash
Used in Operating Activities (2,785 ) (8,201 ) Cash Flows Used in
Investing Activities: Purchase of property and equipment (526 )
(355 ) Investment in capitalized software (1,576 ) (1,176 )
Investment in LightMiner -- (19 ) Cash acquired in Integrio
Technologies acquisition 189 -- Cash paid for the acquisition of
Integrio Technologies (753 ) -- Net Cash Flows
Used in Investing Activities (2,665 ) (1,550 ) Cash Flows provided
by Financing Activities Advances (repayment) of lines of credit
(1,863 ) 4,682 Advances from term loan -- 2,000 Repayment of term
loan (1,611 ) (764 ) Proceeds from debenture and convertible
preferred stock 5,000 -- Net proceeds from the issuance of common
stock and warrants 1,734 -- Advances to related party (3 ) --
Advances from related party 3 2 Net proceeds from issuance of
common stock -- 4,685 Repayment of notes payable (70 )
(71 ) Net Cash Provided by Financing Activities 3,190 10,534
Effect of Foreign Exchange Rate on Changes on Cash 21 49 Net
(Decrease) Increase in Cash and Cash Equivalents (2,239 ) 832 Cash
and Cash Equivalents - Beginning of period 4,060
3,228 Cash and Cash Equivalents - End of period $
1,821 $ 4,060
Reconciliation of Non-GAAP Financial Measures:
(In thousands)
Years EndedDecember 31,
2016
2015
Net loss attributable to stockholders $ (27,114 ) $ (11,719 )
Adjustments: Non-recurring one-time charges: Provision for doubtful
accounts 685 1,206 Reserve for recoverability of note receivable
1,077 -- Costs associated with public offering 4 46 Acquisition
transaction/financing costs 876 355 Severance 55 307 (Gain)/Loss on
the settlement of obligations (1,541 ) 85 Change in the fair value
of shares to be issued (13 ) (211 ) Change in the fair value of
derivative liability (51 ) -- Stock-based compensation –
compensation and related benefits 1,377 1,424 Interest expense
1,743 448 Impairment of goodwill 7,400 -- Depreciation and
amortization 5,662 4,647 Adjusted
EBITDA $ (9,840 ) $ (3,412 ) (In thousands,
except share data)
Years EndedDecember 31,
2016 2015 Net loss attributable to stockholders $
(27,114 ) $ (11,719 ) Adjustments: Non-recurring one-time charges:
Provision for doubtful accounts 685 1,206 Reserve for
recoverability of note receivable 1,077 -- Costs associated with
public offering 4 46 Acquisition transaction/financing costs 876
355 Severance 55 307 (Gain)/Loss on the settlement of obligations
(1,541 ) 85 Change in the fair value of shares to be issued (13 )
(211 ) Change in the fair value of derivative liability (51 ) --
Stock-based compensation – compensation and related benefits 1,377
1,424 Impairment of goodwill 7,400 -- Amortization of intangibles
4,328 3,994 Proforma non-GAAP net loss
$ (12,917 ) $ $ (4,513 ) Proforma non-GAAP net loss per basic and
diluted common share $ (7.44 ) $ (3.20 ) Weighted average basic and
diluted common shares outstanding 1,737,120
1,412,094
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170417005832/en/
Inpixon Investor Relations:CORE IRScott Arnold,
+1-516-222-2560Managing Directorwww.coreir.comorMedia
Contact:PAN CommunicationsHilary Katulak,
+1-617-502-4347hkatulak@pancomm.com
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