Year-over-year improved gross margins and
operating results
Conference Call Wednesday, May 3 at 10:00
a.m. ET
Qumu Corporation (NASDAQ: QUMU) today reported financial results
for the first quarter 2017.
First quarter revenue was $6.7 million, compared to $8.7 million
in the first quarter 2016, and net loss was $(3.6) million, or a
loss of $(0.39) per share, compared to $(4.1) million, or a loss of
$(0.45) per share, in the first quarter 2016. First quarter
adjusted EBITDA (a non-GAAP measure) was a loss of $(1.9) million,
compared to an adjusted EBITDA loss of $(3.0) million for the first
quarter 2016.
“Qumu’s first quarter 2017 was a solid start to the year as we
continue to take a long-term view of our dynamic industry. We
are successfully transitioning Qumu to a software as a service
(SaaS) provider, serving large organizations with both on-premise
and cloud video solutions. We are investing in our future with
exciting new developments to be announced later this
month about our suite of solutions. And we have validated
our strategy with our current customers and prospects, confirming
that it is directly in line with the market’s direction toward
highly collaborative video environments. The digital workforce
thrives on video, and large enterprises need solutions to
both encourage and manage that demand,” said Vern Hanzlik, Qumu’s
president and CEO.
Other Financial Highlights
- Subscription, maintenance and support
revenue for the first quarter 2017 was $4.8 million compared to
$5.5 million for the first quarter 2016. The variance in
subscription, maintenance and support revenue was primarily due to
the inclusion of approximately $700,000 of revenue in the first
quarter 2016 relating to customer acceptance and contract buyouts,
as well as to the timing of customer renewals.
- Gross margin for the first quarter 2017
was 61.5% compared to 56.3% for the first quarter 2016.
- Total headcount was 145 as of March 31,
2017 compared to 150 as of December 31, 2016 and 182 as of March
31, 2016.
- Cash and marketable securities were
$10.4 million as of March 31, 2017, compared to $10.4 million as of
December 31, 2016, reflecting the first quarter operating loss and
the impact on cash from changes in working capital.
GuidanceFor the second quarter 2017, revenue is expected
to be in the range of $6.5 million to $7.5 million. Total
gross margin percentage is expected to be in the low to mid 60s in
the second quarter. Second quarter net loss is expected to be in
the range of $(3.1) million to $(2.6) million, or $(0.33) to
$(0.28) per diluted share, with weighted-average shares outstanding
of approximately 9.3 million shares. Adjusted EBITDA for the second
quarter 2017 is expected to be in the range of a loss of $(1.6)
million to $(1.1) million, compared to an adjusted EBITDA loss of
$(3.1) million in the second 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
9.3 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 $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 first quarter 2017 results tomorrow,
May 3, 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 months ended March 31, 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 CORPORATIONCondensed
Consolidated Statements of Operations(unaudited - in
thousands, except per share data)
Three Months Ended March
31,
2017 2016 Revenues: Software licenses and
appliances $ 1,220 $ 1,962 Service 5,491 6,774
Total revenues 6,711 8,736 Cost
of revenues: Software licenses and appliances 494 957 Service
2,090 2,861 Total cost of revenues
2,584 3,818 Gross profit 4,127
4,918 Operating expenses: Research and
development 2,109 2,350 Sales and marketing 2,451 3,532 General and
administrative 2,460 2,970 Amortization of purchased intangibles
223 226 Total operating expenses
7,243 9,078 Operating loss (3,116 )
(4,160 ) Other income (expense):
Interest expense, net
(317 ) (12 ) Change in value of warrant liability (78 ) — Other,
net (55 ) 36 Total other income (expense), net
(450 ) 24 Loss before income taxes (3,566 )
(4,136 ) Income tax benefit (4 ) (4 ) Net loss $
(3,562 ) $ (4,132 ) Net loss per share – basic and diluted:
Net loss per share $ (0.39 ) $ (0.45 ) Weighted average shares
outstanding 9,245 9,218
QUMU CORPORATIONCondensed
Consolidated Balance Sheets(in thousands)
Assets
March 31, 2017
December 31, 2016
Current assets:
(unaudited) Cash and cash equivalents $
10,411 $ 10,364 Receivables, net 4,614 7,495 Income taxes
receivable 168 317 Prepaid expenses and other current assets
2,681 2,470 Total current assets 17,874 20,646
Property and equipment, net 1,584 1,827 Intangible assets, net
7,623 8,110 Goodwill 6,808 6,749 Deferred income taxes, non-current
69 70 Other assets, non-current 4,643 4,827
Total assets $ 38,601 $ 42,229 Liabilities and
Stockholders’ Equity Current liabilities: Accounts payable and
other accrued liabilities $ 1,990 $ 2,394 Accrued compensation
2,122 2,361 Deferred revenue 8,982 8,992 Deferred rent 283 283
Financing obligations 473 508 Warrant liability 971
893 Total current liabilities 14,821
15,431 Long-term liabilities: Deferred revenue,
non-current 632 423 Income taxes payable, non-current 3 6 Deferred
tax liability, non-current 260 294 Deferred rent, non-current 638
712 Financing obligations, non-current 80 170 Term loan,
non-current 6,603 6,617 Total long-term
liabilities 8,216 8,222 Total
liabilities 23,037 23,653 Stockholders’
equity: Common stock 93 92 Additional paid-in capital 67,276 66,864
Accumulated deficit (48,035 ) (44,473 ) Accumulated other
comprehensive loss (3,770 ) (3,907 ) Total
stockholders’ equity 15,564 18,576
Total liabilities and stockholders’ equity $ 38,601 $ 42,229
QUMU CORPORATIONCondensed
Consolidated Statements of Cash Flows(unaudited - in
thousands)
Three Months Ended March 31, 2017
2016 Operating activities: Net loss $ (3,562 ) $
(4,132 ) Adjustments to reconcile net loss to net cash provided by
(used in) operating activities: Depreciation and amortization 774
852 Stock-based compensation 413 351 Accretion of debt discount and
issuance costs 111 — Change in value of warrant liability 78 —
Deferred income taxes (33 ) (1 ) Changes in operating assets and
liabilities: Receivables 2,896 3,911 Income taxes receivable /
payable 148 245 Prepaid expenses and other assets (23 ) (1,170 )
Accounts payable and other accrued liabilities (367 ) (101 )
Accrued compensation (245 ) (1,006 ) Deferred revenue 178 (756 )
Deferred rent (75 ) (48 ) Other non-current liabilities —
(125 ) Net cash provided by (used in) operating
activities 293 (1,980 ) Investing activities:
Sales and maturities of marketable securities — 4,000 Purchases of
property and equipment (14 ) (12 ) Net cash provided
by (used in) investing activities (14 ) 3,988
Financing activities: Payments for debt issuance costs (125 ) —
Principal payments on financing obligations (125 ) (118 ) Common
stock repurchases to settle employee withholding liability —
(1 ) Net cash used in financing activities
(250 ) (119 ) Effect of exchange rate changes on cash
18 50 Net increase in cash and cash
equivalents 47 1,939 Cash and cash equivalents, beginning of period
10,364 7,072 Cash and cash equivalents,
end of period $ 10,411 $ 9,011
QUMU CORPORATIONSupplemental Financial
Information(unaudited - in thousands)
A summary of revenue is as follows:
Three Months Ended March
31,
2017 2016 Software licenses and appliances $
1,220 $ 1,962 Service Subscription, maintenance and support 4,838
5,525 Professional services and other 653 1,249 Total
service 5,491 6,774 Total revenue $ 6,711 $ 8,736
A reconciliation from GAAP results to adjusted EBITDA is as
follows:
Three Months Ended March 31, 2017
2016 Net loss $ (3,562 ) $ (4,132 ) Interest expense,
net 317 12 Income tax benefit (4 ) (4 ) Depreciation and
amortization expense: Depreciation and amortization in cost of
revenues 10 22 Depreciation and amortization in operating expenses
248 282 Total depreciation and
amortization expense 258 304
Amortization of intangibles included in cost of revenues 293 322
Amortization of intangibles included in operating expenses
223 226 Total amortization of intangibles
expense 516 548 Total depreciation and
amortization expense 774 852 EBITDA
(2,475 ) (3,272 ) Change in fair value of warrant liability 78 —
Other expense, net 55 (36 ) Stock-based compensation expense:
Stock-based compensation included in cost of revenues 14 (7 )
Stock-based compensation included in operating expenses 399
358 Total stock-based compensation expense
413 351 Adjusted EBITDA $ (1,929 ) $
(2,957 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170502006615/en/
Investor Contact:Qumu CorporationPeter Goepfrich, CFO,
612-638-9096
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