Achieves record gross margins and operating
resultsProcures key enterprise transactionsContinues
to grow recurring revenue base
Conference Call Wednesday, March 1 at 10:00
a.m. ET
Qumu Corporation (NASDAQ: QUMU) today reported financial results
for the fourth quarter and year ended December 31, 2016.
Fourth quarter revenue was $9.3 million, compared to $10.1
million in the fourth quarter 2015; and net loss was $(0.3)
million, or a loss of $(0.04) per diluted share, compared to $(4.6)
million, or a loss of $(0.50) per diluted share, in the fourth
quarter 2015. Fourth quarter adjusted EBITDA (a non-GAAP measure)
was income of $0.8 million, compared to an adjusted EBITDA loss of
$(3.7) million for the fourth quarter 2015. Fourth quarter 2015
operating loss and adjusted EBITDA included severance expense
of $743,000 and a loss on a third-party license agreement of
$1.2 million.
For the full year 2016, revenue was $31.7 million, compared to
$34.5 million last year; and net loss was $(11.2) million, or a
loss of $(1.23) per diluted share, compared to $(28.7) million, or
a loss of $(3.11) per diluted share, last year. For the full year
2016, adjusted EBITDA was a loss of $(6.6) million, compared to an
adjusted EBITDA loss of $(24.5) million last year. Full year 2016
included severance expense of $563,000. Full year 2015 included
severance expense of $2.1 million, a loss on a third-party
license agreement of $1.2 million and equipment operating lease
loss of $1.0 million.
“2016 was a pivotal year for Qumu and our fourth quarter
illustrates our strong progress in several key areas. We continued
to demonstrate that we are the only vendor with a full suite of
video enterprise solutions as we gained significant ground in our
transformation from a perpetual software licensing model to a
higher-value, SaaS model. We also drove record gross margins and
adjusted EBITDA and bolstered our blue-chip customer list with
several high-value enterprise wins within new Fortune 500
organizations,” said Vern Hanzlik, Qumu’s president and CEO.
“Additionally, we achieved nearly $20 million of expense
reductions year over year, while maintaining over a 90% customer
renewal rate, a strong customer satisfaction metric . Early
adopting enterprise clients are beginning to migrate toward
cloud-based solutions, but we have also seen continued demand for
our best-in-class, behind the firewall, on-premise video solution.
During 2016, 70% of revenue came from our blue-chip on-premise
customer base and 30% came from new SaaS customers. We are in
a strong position with enterprise customers whether they seek a
highly secure on-premise solution or a more flexible SaaS solution.
We are confident that this trend will continue as we move into
2017.”
Other Financial Highlights
- Subscription, maintenance and support
revenue for the fourth quarter 2016 was $6.2 million compared to
$5.2 million for the fourth quarter 2015, and for the full year
2016 was $21.4 million compared to $18.8 million last year. Fourth
quarter 2016 revenue included subscription, maintenance and support
revenue of $1.2 million and professional service revenue of $0.4
million of previously deferred revenue contingent on a customer's
acceptance, which was received in the fourth quarter. Going
forward, subscription, maintenance and support revenue relating to
this customer is expected to be $300,000 annually.
- Gross margin for the fourth quarter
2016 was 70.7% compared to 56.9% for the fourth quarter 2015, and
for the full year 2016 was 61.0% compared to 49.2% last year. The
benefit to gross margin relating to the previously noted customer
acceptance was 6.1% and 1.8% for the fourth quarter and full year
2016, respectively.
- Total headcount was 150 as of December
31, 2016 compared to 192 as of December 31, 2015.
- Cash and marketable securities were
$10.4 million as of December 31, 2016, compared to $4.6 million as
of September 30, 2016, reflecting the fourth quarter operating
loss, the impact on cash from changes in working capital and the
term loan net proceeds of $7.5 million received in the fourth
quarter.
GuidanceFor the first quarter 2017, revenue is expected
to be in the range of $7.0 million to $8.0 million. Total
gross margin percentage is expected to be in the low 60s in the
first quarter. First quarter net loss is expected to be in the
range of $(3.6) million to $(3.1) million, or $(0.39) to $(0.34)
per diluted share, with weighted average shares outstanding of
approximately 9.25 million shares. Adjusted EBITDA for the first
quarter 2017 is expected to be in the range of a loss of $(2.2)
million to $(1.7) million, compared to an adjusted EBITDA loss of
$(3.0) million in the first 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
$(10.5) million to $(9.0) million, or $(1.12) to $(0.97) per
diluted share, with weighted average shares outstanding of
approximately 9.3 million shares. Adjusted EBITDA for the full year
2017 is expected to be in the range of a loss of $(5.0) million to
$(3.5) million compared to an adjusted EBITDA loss of $(6.6)
million in fiscal 2016. The Company expects a tax benefit of
$200,000 in fiscal 2017. Additionally, the Company expects that it
will be cash flow breakeven for the second half of 2017.
Conference CallThe Company has scheduled a conference
call and webcast to review its fourth quarter 2016 results
tomorrow, March 1, 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, other non-operating
income and expenses, and net income (loss) from discontinued
operations.
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 months and year ended December 31,
2016 and 2015.
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, 2015 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
Year Ended December 31, December 31,
2016 2015 2016
2015 Revenues: Software licenses and appliances $ 1,887 $
2,486 $ 5,839 $ 9,456 Service 7,434 7,633
25,843 24,998 Total revenues
9,321 10,119 31,682
34,454 Cost of revenues: Software licenses and
appliances 542 953 2,474 2,949 Service 2,189
3,409 9,886 14,550 Total cost of
revenues 2,731 4,362 12,360
17,499 Gross profit 6,590
5,757 19,322 16,955 Operating
expenses: Research and development 1,795 2,181 8,541 10,689 Sales
and marketing 2,584 3,720 11,529 17,994 General and administrative
2,378 4,603 9,722 16,878 Amortization of purchased intangibles
217 199 891 798
Total operating expenses 6,974 10,703
30,683 46,359 Operating loss
(384 ) (4,946 ) (11,361 ) (29,404 )
Other income (expense): Interest income (expense), net (247 ) (14 )
(287 ) 7 Change in value of warrant liability 137 — 137 — Other,
net 108 26 84 (131
) Total other income (expense), net (2 ) 12
(66 ) (124 ) Loss before income taxes (386 ) (4,934 )
(11,427 ) (29,528 ) Income tax benefit
(119
) (357 )
(252
) (839 ) Net loss from continuing operations
(267
) (4,577 )
(11,175
) (28,689 ) Net loss from discontinued operations, net of tax
— — — (10 ) Net
loss $
(267
) $ (4,577 ) $
(11,175
) $ (28,699 ) Net loss per share - basic: Net loss from
continuing operations per share - basic $
(0.03
) $ (0.50 ) $
(1.21
) $ (3.11 ) Net income from discontinued operations per share -
basic — — — —
Net loss per share - basic $
(0.03
) $ (0.50 ) $
(1.21
) $ (3.11 ) Basic weighted average shares outstanding 9,234 9,243
9,232 9,235 Net loss per share - diluted: Net loss from continuing
operations per share - diluted $
(0.04
) $ (0.50 ) $
(1.23
) $ (3.11 ) Net loss from discontinued operations per share -
diluted — — — —
Net loss per share - diluted $
(0.04
) $ (0.50 ) $
(1.23
) $ (3.11 ) Diluted weighted average shares outstanding 9,234 9,243
9,232 9,235
QUMU CORPORATION Condensed
Consolidated Balance Sheets (in thousands)
December 31, December 31, Assets
2016 2015 Current assets:
(unaudited) Cash and
cash equivalents $ 10,364 $ 7,072 Marketable securities — 6,249
Receivables, net 7,495 11,257 Income taxes receivable
317
659 Prepaid expenses and other current assets 2,470
3,392 Total current assets
20,646
28,629 Property and equipment, net 1,827 2,942 Intangible assets,
net 8,110 11,032 Goodwill 6,749 8,103 Deferred income taxes,
non-current 70 57 Other assets, non-current 4,827
3,649 Total assets $
42,229
$ 54,412 Liabilities and Stockholders’ Equity Current
liabilities: Accounts payable and other accrued liabilities $ 2,394
$ 3,864 Accrued compensation 2,361 4,014 Deferred revenue 8,992
10,413 Deferred rent 283 270 Financing obligations 508 502 Warrant
liability 893 — Current liabilities from discontinued operations
— 50 Total current liabilities
15,431 19,113 Long-term liabilities: Deferred
revenue, non-current 423 2,215 Income taxes payable, non-current 6
9 Deferred tax liability, non-current 294 575 Deferred rent,
non-current 712 998 Financing obligations, non-current 170 519 Term
loan, non-current 6,617 — Other non-current liabilities —
226 Total long-term liabilities 8,222
4,542 Total liabilities 23,653
23,655 Stockholders’ equity: Common stock 92 92
Additional paid-in capital 66,864 65,484 Accumulated deficit
(44,473
) (33,298 ) Accumulated other comprehensive loss (3,907 )
(1,521 ) Total stockholders’ equity
18,576
30,757 Total liabilities and stockholders’
equity $
42,229
$ 54,412
QUMU CORPORATION
Condensed Consolidated Statements of Cash Flows
(unaudited - in thousands) Year Ended
December 31, 2016 2015 Operating
activities: Net loss $
(11,175
) $ (28,699 ) Net loss from discontinued operations, net of tax
— (10 ) Net loss from continuing operations
(11,175
) (28,689 ) Adjustments to reconcile net loss to net cash used in
continuing operating activities: Depreciation and amortization
3,303 3,118 Stock-based compensation 1,421 1,834 Accretion of debt
discount and issuance costs 152 — Loss on disposal of property and
equipment 4 108 Change in value of warrant liability (137 ) —
Deferred income taxes (229 ) (564 ) Changes in operating assets and
liabilities: Receivables 3,244 (1,331 ) Income taxes receivable /
payable
266
(378 ) Prepaid expenses and other assets (138 ) 748 Accounts
payable and other accrued liabilities (1,406 ) 443 Accrued
compensation (1,575 ) (2,184 ) Deferred revenue (2,673 ) 2,729
Deferred rent (265 ) 48 Other non-current liabilities (226 )
226 Net cash used in continuing operating activities
(9,434 ) (23,892 ) Net cash provided by (used in) discontinued
operating activities (50 ) 665 Net cash used
in operating activities (9,484 ) (23,227 ) Investing
activities: Sales and maturities of marketable securities 6,250
27,465 Purchases of marketable securities — (10,250 ) Purchases of
property and equipment (76 ) (635 ) Proceeds from sale of property
and equipment — 43 Net cash provided by
continuing investing activities 6,174 16,623 Net cash provided by
discontinued investing activities — 2,300
Net cash provided by investing activities 6,174
18,923 Financing activities: Proceeds from
debt financing 8,000 — Payments for debt issuance costs (505 ) —
Principal payments on financing obligations (513 ) (320 ) Common
stock repurchases to settle employee withholding liability (26 )
(50 ) Proceeds from employee stock plans — 142
Net cash provided by (used in) financing activities
6,956 (228 ) Effect of exchange rate changes on cash
(354 ) (80 ) Net increase (decrease) in cash and cash
equivalents 3,292 (4,612 ) Cash and cash equivalents, beginning of
period 7,072 11,684 Cash and cash
equivalents, end of period $ 10,364 $ 7,072
QUMU CORPORATIONSupplemental Financial
Information(unaudited - in thousands)
A summary of revenue is as follows:
Three Months Ended Year
Ended December 31, December 31, 2016
2015 2016 2015
Software licenses and appliances $ 1,887 $ 2,486 $ 5,839 $ 9,456
Service Subscription, maintenance and support 6,220 5,240 21,443
18,804 Professional services and other 1,214 2,393
4,400 6,194 Total service 7,434 7,633
25,843 24,998 Total revenue $ 9,321 $ 10,119 $ 31,682
$ 34,454
A reconciliation from GAAP results to adjusted EBITDA is as
follows:
Three Months Ended Year
Ended December 31, December 31, 2016
2015 2016 2015 Net
loss $
(267
) $ (4,577 ) $
(11,175
) $ (28,699 ) Interest (income) expense, net 247 14 287 (7 ) Income
tax benefit
(119
) (357 )
(252
) (839 ) Depreciation and amortization expense: Depreciation and
amortization in cost of revenues 12 26 67 100 Depreciation and
amortization in operating expenses 261 286
1,094 952 Total depreciation and
amortization expense 273 312
1,161 1,052 Amortization of intangibles
included in cost of revenues 298 315 1,251 1,268 Amortization of
intangibles included in operating expenses 217
199 891 798 Total amortization
of intangibles expense 515 514
2,142 2,066 Total depreciation and
amortization expense 788 826
3,303 3,118 EBITDA 649 (4,094 ) (7,837 )
(26,427 ) Change in fair value of warrant liability (137 ) — (137 )
— Other expense, net (108 ) (26 ) (84 ) 131 Loss from discontinued
operations, net — — — 10 Stock-based compensation expense:
Stock-based compensation included in cost of revenues 22 44 49 159
Stock-based compensation included in operating expenses 364
360 1,372 1,675
Total stock-based compensation expense 386 404
1,421 1,834 Adjusted EBITDA $
790 $ (3,716 ) $ (6,637 ) $ (24,452 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170228006812/en/
Qumu CorporationInvestor Contact:Peter Goepfrich,
CFO, 612-638-9096
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