Xura, Inc. (“Xura”) (NASDAQ:MESG) today filed its Quarterly Report
on Form 10-Q for the third fiscal quarter ended October 31, 2015
with the Securities and Exchange Commission and regained compliance
with Nasdaq’s continued listing requirements. Except for rounding
changes, there were no changes to the preliminary estimated results
issued on December 15, 2015.
Xura is also reiterating its previously disclosed financial
guidance for fiscal 2016. For fiscal 2016, Xura continues to
expect:
- Annualized run rate revenue of approximately $400m (3Q’16
Annualized)
- Annualized Adjusted EBITDA of $100m-$120m (3Q’16
Annualized)
- Free Cash Flow to Adjusted EBITDA ratio of 75-80% in the second
half of fiscal year 2016, and cash balance (net of debt) of
approximately $100m
- Restructuring to be largely complete by the end of the second
quarter of fiscal year 2016
Jacky Wu, Executive Vice President and Chief
Financial Officer of Xura commented, “Xura delivered solid third
quarter results particularly legacy Comverse which ended the
quarter well ahead of our expected mid-point run-rate revenue of
$180 million. We are pleased with our continued improvement in
profitability and the progress we are making in our evolution to
becoming the leading provider of digital messaging services. Given
the progress made thus far and the company’s performance, we are
reiterating our financial guidance for fiscal 2016.”
The company prepares its financial information
in accordance with accounting principles generally accepted in the
United States (“U.S. GAAP” or “GAAP”). The Acision historical
financial statements for periods preceding August 6, 2015, the
closing date of the acquisition, have been prepared in accordance
with International Financial Reporting Standards ("IFRS"). The
unaudited pro forma information set forth below for the three
months ended October 31, 2015, gives effect to (i) adjustments
reflecting the inclusion of the operations of Acision for the first
five days of the quarter that preceded the completion of the
Acision acquisition that were excluded from our reported financial
results and (ii) adjustments to Acision’s IFRS financial
information made to align it with Xura’s policies and U.S.
GAAP.
|
Three Months Ended October 31.
2015 |
|
|
|
Pro Forma Adjustments |
|
|
|
Measure Prior to Adjustments |
|
5 Day Adjustment |
|
IFRS to US GAAP Adjustment |
|
Pro Forma |
|
(in millions, except per share data) |
|
(unaudited) |
GAAP
Measures |
|
|
|
|
|
|
|
Revenue |
$ |
82 |
|
|
$ |
2 |
|
|
$ |
8 |
|
|
$ |
92 |
|
Loss from
operations |
$ |
(18 |
) |
|
$ |
1 |
|
|
$ |
7 |
|
|
$ |
(10 |
) |
Loss from continuing
operations |
$ |
(22 |
) |
|
$ |
1 |
|
|
$ |
5 |
|
|
$ |
(16 |
) |
Weighted average common
shares outstanding basic and diluted |
25 |
|
|
|
|
|
|
25 |
|
Loss per share from
continuing operations |
$ |
(0.90 |
) |
|
|
|
|
|
$ |
(0.64 |
) |
Non-GAAP
Measures (1) |
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
15 |
|
|
$ |
1 |
|
|
$ |
7 |
|
|
$ |
23 |
|
Adjusted earnings
(loss) from continuing operations |
$ |
(1 |
) |
|
$ |
1 |
|
|
$ |
5 |
|
|
$ |
5 |
|
Adjusted EBITDA per share
- basic & diluted |
$ |
0.58 |
|
|
|
|
|
|
$ |
0.92 |
|
Adjusted earnings (loss)
from continuing operations per share - basic & diluted |
$ |
(0.04 |
) |
|
|
|
|
|
$ |
0.20 |
|
(1) Adjusted EBITDA, Adjusted earnings (loss) from continuing
operations, Adjusted EBITDA per share and Adjusted earnings (loss)
from continuing operations per share have not been prepared in
accordance with GAAP. See “Presentation of Non-GAAP Financial
Measures” below.
Updated Earnings
Presentation
Xura posted today an updated third quarter 2015
earnings presentation with additional slides that can be accessed
at www.Xura.com by following links to the events and presentations
page under the Investors section. A recording of the webcast of the
investor call held on December 15, 2015 is also available on the
company’s website at the same location. Xura will not
be conducting an additional conference call in respect of its third
quarter results.
Presentation of Non-GAAP Financial
Measures
We provide Adjusted EBITDA, Adjusted earnings
(loss) from continuing operations, Adjusted EBITDA per share,
Adjusted earnings (loss) from continuing operations per share and
Free Cash Flow, each of which is a non-GAAP financial measure, as
additional information for our operating results.
Adjusted EBITDA is computed by management as a
loss from operations less depreciation and expense adjustments
consisting of the following: (i) stock-based compensation expense;
(ii) amortization of intangible assets; (iii) compliance-related
professional fees; (iv) compliance-related compensation and other
expenses; (v) acquisition and integration costs (vi)
strategic-related costs (vii) write-off of property and equipment;
(viii) certain litigation settlements and related costs; (ix)
restructuring expenses; and (x) certain other gains, losses and
expenses (collectively, "Expense Adjustments"). Strategic related
costs include business strategy evaluation and mergers and
acquisition efforts.
Adjusted EBITDA per share is computed by
dividing Adjusted EBITDA by the weighted number of shares
outstanding during the period.
Adjusted earnings (loss) from continuing
operations is computed as loss from continuing operations less
depreciation and Expense Adjustments and the effect of tax at an
assumed 35% tax rate.
Adjusted earnings (loss) from continuing
operations per share - basic & diluted is computed by dividing
Adjusted earnings (loss) from continuing operations by the weighted
number of shares outstanding during the period.
Free Cash Flow is computed as cash flow from
operating activities less capital expenditures.
These measures are not in accordance with, or an
alternative for, GAAP financial measures and may be different from,
or not comparable to similarly titled or other non-GAAP financial
measures used by other companies. We believe that the presentation
of these non-GAAP financial measures provide useful information to
investors regarding certain additional financial and business
trends relating to our results of operations. These measures are
used by management in monitoring our businesses, evaluating our
financial results and for planning purposes. See “Consolidated
Reconciliation of GAAP to Non-GAAP Financial Measures” below.
About Xura, Inc.
Xura offers a portfolio of digital services
solutions that enable global communications across a variety of
mobile devices and platforms. We help communication service
providers (“CSPs”) and enterprises navigate and monetize the
digital ecosystem to create innovative, new experiences through our
cloud-based offerings. Our solutions touch more than three billion
end points, through 350+ service providers and enterprises in 140+
countries. You can find us at www.Xura.com.
Forward-Looking Statements
This press release includes “forward-looking
statements.” Forward-looking statements include financial
projections, statements of plans and objectives for future
operations, statements of future economic performance, and
statements of assumptions relating thereto. In some cases,
forward-looking statements can be identified by the use of
terminology such as “may,” “expects,” “plans,” “anticipates,”
“estimates,” “believes,” “potential,” “projects,” “forecasts,”
“intends,” or the negative thereof or other comparable terminology.
By their very nature, forward-looking statements involve known and
unknown risks, uncertainties and other important factors that could
cause actual results, performance and the timing of events to
differ materially from those anticipated, expressed or implied by
the forward-looking statements in this press release. Such risks or
uncertainties may give rise to claims or regulatory issues,
increase exposure to contingent liabilities and cause pressure on
the company's stock price. These risks and uncertainties relate to
(among other factors), financial guidance and future performance,
revenues, product bookings, operating expenses, profitability and
cash flows, and variability of our tax provision, as well as
acquisition-related, financial accounting and other risks described
in the sections entitled “Forward-Looking Statements” and Item 1A,
“Risk Factors” and elsewhere in the company's Annual Report on Form
10-K, its Quarterly Reports on Form 10-Q for the quarters ended
April 30, 2015, July 31, 2015 and October 31, 2015, or in other
subsequently filed periodic, current or other reports. We undertake
no commitment to update or revise any forward-looking statements
except as required by law.
The risks and uncertainties noted above, as well
as others, are discussed in greater detail in our filings with the
SEC. The documents and reports we file with the SEC are available
through us, or our website, www.Xura.com, or through the SEC's
Electronic Data Gathering, Analysis, and Retrieval system (EDGAR)
at www.sec.gov.
|
XURA, INC. AND
SUBSIDIARIESCONSOLIDATED RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL
MEASURES(UNAUDITED) |
|
Reconciliation
of loss from operations to Adjusted EBITDA: |
|
|
Three Months Ended October 31, |
|
Nine Months Ended October 31, |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
(in millions, except per share data)
(1) |
Loss from
operations |
$ |
(18 |
) |
|
$ |
(19 |
) |
|
$ |
(58 |
) |
|
$ |
(58 |
) |
Expense
adjustments: |
|
|
|
|
|
|
|
Stock-based compensation
expense |
2 |
|
|
2 |
|
|
7 |
|
|
7 |
|
Amortization of intangible
assets |
12 |
|
|
— |
|
|
12 |
|
|
— |
|
Compliance-related professional
fees |
— |
|
|
— |
|
|
1 |
|
|
1 |
|
Compliance-related compensation and
other expenses |
— |
|
|
— |
|
|
1 |
|
|
— |
|
Acquisition and integration
costs |
15 |
|
|
— |
|
|
15 |
|
|
— |
|
Strategic related costs |
(3 |
) |
|
— |
|
|
— |
|
|
3 |
|
Restructuring expenses |
2 |
|
|
6 |
|
|
10 |
|
|
9 |
|
Other |
1 |
|
|
2 |
|
|
1 |
|
|
2 |
|
Total expense adjustments |
29 |
|
|
10 |
|
|
46 |
|
|
22 |
|
Depreciation |
4 |
|
|
4 |
|
|
10 |
|
|
10 |
|
Adjusted EBITDA |
15 |
|
|
(5 |
) |
|
(1 |
) |
|
(26 |
) |
Weighted average common
shares outstanding basic and diluted |
25 |
|
|
22 |
|
|
23 |
|
|
22 |
|
Adjusted EBITDA per
share - basic & diluted |
$ |
0.58 |
|
|
$ |
(0.24 |
) |
|
$ |
(0.05 |
) |
|
$ |
(1.17 |
) |
(1) Amounts may not calculate due to rounding differences.
|
Reconciliation
of earnings (loss) from continuing operations to Adjusted loss from
continuing operations: |
|
|
Three Months Ended October 31, |
|
Nine Months Ended October 31, |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
(in millions, except per share data)
(1) |
Loss from continuing
operations |
$ |
(22 |
) |
|
$ |
(17 |
) |
|
$ |
(74 |
) |
|
$ |
(61 |
) |
Expense
adjustments: |
|
|
|
|
|
|
|
Stock-based compensation
expense |
2 |
|
|
2 |
|
|
7 |
|
|
7 |
|
Amortization of intangible
assets |
12 |
|
|
— |
|
|
12 |
|
|
— |
|
Compliance-related professional
fees |
— |
|
|
— |
|
|
1 |
|
|
1 |
|
Compliance-related compensation and
other expenses |
— |
|
|
— |
|
|
1 |
|
|
— |
|
Acquisition and integration
costs |
15 |
|
|
— |
|
|
15 |
|
|
— |
|
Strategic related costs |
(3 |
) |
|
— |
|
|
— |
|
|
3 |
|
Restructuring expenses |
2 |
|
|
6 |
|
|
10 |
|
|
9 |
|
Other |
1 |
|
|
2 |
|
|
1 |
|
|
2 |
|
Total expense adjustments |
29 |
|
|
10 |
|
|
46 |
|
|
22 |
|
Depreciation |
4 |
|
|
4 |
|
|
10 |
|
|
10 |
|
Total expense
adjustments and depreciation |
33 |
|
|
14 |
|
|
56 |
|
|
32 |
|
Tax effect of total
expense adjustments and depreciation (2) |
(12 |
) |
|
(5 |
) |
|
(20 |
) |
|
(11 |
) |
Adjusted loss from
continuing operations |
(1 |
) |
|
(8 |
) |
|
(38 |
) |
|
(40 |
) |
Weighted average common
shares outstanding basic and diluted |
25 |
|
|
22 |
|
|
23 |
|
|
22 |
|
Adjusted earnings
(loss) from continuing operations per share - basic &
diluted |
$ |
(0.04 |
) |
|
$ |
(0.36 |
) |
|
$ |
(1.65 |
) |
|
$ |
(1.82 |
) |
(1) Amounts may not calculate due to rounding differences.(2)
Assumes a tax rate of 35%.
CONTACT: Todd, Luke - Xura, Inc.
(781) 213-2131
Luke.Todd@Xura.com
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