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 third
quarter ended September 30, 2017 and provided an update on
corporate developments.
Third Quarter 2017 Financial Highlights:
- 2017 Q3 revenue of $11.9 million
- 2017 Q3 gross margin of 19%
- 2017 Q3 GAAP net loss of $1.56 per
share
- 2017 Q3 Proforma Non-GAAP net loss1 of
$0.46 per share
- 2017 Q3 Non-GAAP Adjusted EBITDA1 loss
of $3.1 million
“Inpixon advanced the Indoor Positioning Analytics (IPA)
products and services with a growing number of notable global
channel partners in the third quarter. We believe that these
partnerships, along with a few others that we hope to announce in
the near future, will provide for faster growth and further
commercial validation,” said Nadir Ali, Inpixon’s CEO. “We also
have pilot programs underway with large prospective clients in both
our Security and Retail segments and are encouraged by the valuable
outcomes we are demonstrating. We continue to streamline operations
and growth by separating our IPA and VAR business segments to drive
efficiencies and reduce costs. We have made reductions in field
offices and headcount which we believe will represent approximately
$6M in cost savings on an annualized basis. We are also focusing
our capital on market-driven product development projects such as
APIs, cloud infrastructure and scalability to prepare for the
scalability we will need from the growth we expect our channel
partners will bring,” Mr. Ali concluded.
Third Quarter 2017 Financial Results
Revenue: Net revenues for the three months ended
September 30, 2017 were $11.9 million compared to $11.2 million for
the comparable period in the prior year. This $700,000 increase in
revenues was primarily attributable to the acquisition of Integrio
Technologies LLC (“Integrio”) in November 2016. For the three
months ended September 30, 2017, Indoor Positioning Analytics
revenue was $871,000 compared to $1.4 million for the prior year
period. Infrastructure revenue was $11.1 million for the three
months ended September 30, 2017, and $9.9 million for the prior
year period.
Gross Profit: The gross profit margin for the three
months ended September 30, 2017 was 19% compared to 28% during the
three months ended September 30, 2016. The decrease in gross margin
was primarily attributable to lower gross margins on the Integrio
revenue, which is included in the Infrastructure segment, during
the quarter ended September 30, 2017. Indoor Positioning Analytics
gross margins for the three months ended September 30, 2017 and
2016 were 69% and 64%, respectively. Gross margins for the
Infrastructure segment for the three months ended September 30,
2017 and 2016 were 15% and 22%, respectively.
Net Loss: Net loss attributable to common stockholders
for the three months ended September 30, 2017 was $14.6 million
compared to $4.7 million for the prior year period. This increase
in net loss of $9.9 million was attributable to an impairment of
goodwill charge of $8.4 million, increase in amortization of
intangibles and depreciation costs, additional costs incurred for
the Integrio operations offset by a reduction in operating expenses
related to Inpixon USA and the lower gross profit.
Non-GAAP net loss1: Proforma non-GAAP net
loss per basic and diluted common share for the three months ended
September 30, 2017 was ($0.46) compared to ($1.92) for the prior
year period. These decreases were attributable to the changes
discussed in our operations results.
Non-GAAP adjusted EBITDA1: Adjusted EBITDA
for the three months ended September 30, 2017 was a loss of $3.1
million compared to a loss of $2.4 million for the prior year
period.
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”.
Q3 2017 Business Highlights and Recent Developments
- Inpixon announced a partnership with
GTRI, an innovator in IT consulting and services, to render
comprehensive three-dimensional physical cybersecurity solutions,
including the Inpixon Indoor Positioning Analytics (IPA) Security
Dome for physical premises, airwaves and wireless devices.
- Inpixon completed a financial agreement
with Payplant LLC (“Payplant”). The Payplant facility will allow
increased flexibility in meeting working capital needs by allowing
Inpixon to process more commercial and government purchase
orders.
- Inpixon’s subsidiary, Inpixon Federal,
received two delivery orders from the Bureau of Census totaling
$1.4 million.
- Inpixon joined the ngConnect Program to
advance the adoption and development of Indoor Positioning
Analytics and collaborate with the multi-industry open innovation
ecosystem founded by Nokia, providing an indoor positioning and
analytics platform for next generation networks, cloud and IoT
technologies.
- Inpixon signed a technology refresh
deal with a leading beverage distributor for $750K for Q2 and Q3
and will upgrade the customer’s existing infrastructure.
- Inpixon Federal expanded its offering
of RadPRO SecurPASS Security Screening System, partnering with
Virtual Imaging, Inc., a wholly owned subsidiary of Canon U.S.A.,
Inc., to improve the safety and security of federal, state and
local government correctional facilities, who has delivered over
100 RadPRO SecurPASS Security Screening Systems across the nation’s
correctional facilities. Inpixon Federal anticipates over $5.5
million in revenue from this product line by the end of 2017.
- Inpixon approved to expand its NASA
Solutions for Enterprise-Wide Procurement V (SEWP V) catalog to
include offerings that meet the requirements for the
Government-wide Strategic Solutions (GSS) for laptops and
monitors.
- Inpixon won the 2017 IoT Security
Excellence Award.
All results summarized in this press release (including the
financial statement tables) should be considered preliminary,
qualified in their entirety by the financial statement tables
included in this press release, and subject to change.
Conference Call Information
Management will host a conference call on Monday, November 20,
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/events.
A replay of the call will be available approximately one hour
after the end of the call through December 20, 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 10114477.
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 the Company’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 CONDENSED CONSOLIDATED BALANCE
SHEETS (In thousands, except number of shares and par value
data) September 30, December 31, 2017 2016
(Unaudited) (Audited)
ASSETS Current assets: Cash and cash
equivalents $ 107 $ 1,821 Accounts receivable, net 5,738 11,788
Notes and other receivables 419 362 Inventory 790 1,061 Prepaid
licenses and maintenance contracts 5,746 13,321 Assets held for
sale 23 23 Prepaid assets and other current assets 1,312
1,768 Total current assets 14,135 30,144
Prepaid licenses and maintenance contracts, non-current 2,958 5,169
Property and equipment, net 896 1,385 Software development costs,
net 2,249 2,058 Intangible assets, net 13,597 17,691 Goodwill 636
9,028 Other assets 734 998 Total assets
$ 35,205 $ 66,473
LIABILITIES AND STOCKHOLDERS’
(DEFICIT) EQUITY Current liabilities: Accounts payable $ 27,778
$ 23,027 Accrued liabilities 4,372 3,959 Deferred revenue 6,859
15,043 Short-term debt 3,519 6,887 Derivative liabilities 350 210
Liabilities held for sale 2,053 2,041
Total current liabilities 44,931 51,167 Deferred revenue,
non-current 3,440 5,960 Long-term debt 2,081 4,047 Other
liabilities 221 371 Acquisition liability - Integrio 997 1,648
Acquisition liability - LightMiner -- 567
Total liabilities 51,670 63,760 Commitments and
contingencies Stockholders’ (deficit) equity: Preferred Stock -
$0.001 par value; 5,000,000 shares authorized, 0 issued and
outstanding as of September 30, 2017 -- --
Convertible Series 1 Preferred Stock -
$1,000 stated value, 5,000,000 shares authorized; 0 issued and
outstanding at September 30, 2017 and 2,250 issued and outstanding
at December 31, 2016
Liquidation preference of $0 at September 30, 2017 and $2,250,000
at December 31, 2016. -- 1,340
Series 2 Convertible Preferred Stock -
$1,000 stated value; 4,669 shares authorized; 0 issued and
outstanding at September 30, 2017 and December 31, 2016
Liquidation preference of $0 at September 30, 2017 and December 31,
2016. -- --
Common Stock - $0.001 par value;
50,000,000 shares authorized; 15,413,769 and 2,171,886 issued and
15,397,847 and 2,155,964 outstanding at September 30, 2017 and
December 31, 2016, respectively
15 2 Additional paid-in capital 73,440 64,148 Treasury stock, at
cost, 15,922 shares (695 ) (695 ) Due from Sysorex Consulting Inc.
(666 ) (666 ) Accumulated other comprehensive income 37 52
Accumulated deficit (86,588 ) (59,473 ) Stockholders’
(deficit) equity attributable to Inpixon (14,457 ) 4,708
Non-controlling interest (2,008 ) (1,995 ) Total
stockholders' (deficit) equity (16,465 ) 2,713
Total liabilities and stockholders’ (deficit) equity $ 35,205
$ 66,473
INPIXON AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except per share data)
For the Three Months Ended For the Nine Months Ended
September 30, September 30, 2017 2016 2017 2016 (Unaudited)
(Unaudited) (Unaudited) (Unaudited)
Revenues Products $
9,566 $ 8,366 $ 31,225 $ 27,871 Services 2,358
2,874 9,277 10,788
Total
Revenues 11,924 11,240
40,502 38,659
Cost of Revenues Products
8,519 6,873 26,805 22,363 Services 1,154 1,269
4,773 5,807
Total Cost of
Revenues 9,673 8,142 31,578
28,170
Gross Profit 2,251 3,098 8,924
10,489
Operating expenses: Research and development 447 587
1,459 1,711 Sales and marketing 1,301 1,876 5,522 6,713 General and
administrative 5,378 3,699 14,633 11,116 Acquisition related costs
-- 22 5 52 Impairment of goodwill 8,392 -- 8,392 -- Amortization of
intangibles 1,327 1,056 4,094
3,169
Total operating expenses
16,845 7,240 34,105
22,761
Loss from operations (14,594 ) (4,142 )
(25,181 ) (12,272 )
Other income (expense) Interest expense
(694 ) (639 ) (2,721 ) (1,037 ) Change in fair value of shares to
be issued -- 5 -- 13 Change in fair value of derivative liability
46 41 254 41 Other income 610 15
545 54
Total other expense (38 )
(578 ) (1,922 ) (929 )
Loss from continuing
operations (14,632 ) (4,720 ) (27,103 ) (13,201 )
Loss from
discontinued operations, net of tax (9 ) --
(26 ) --
Net loss (14,641 )
(4,720 ) (27,129 ) (13,201 )
Net loss attributable to
non-controlling interest (4 ) (4 ) (13 )
(12 )
Net loss attributable to stockholders of
Inpixon $ (14,637 ) $ (4,716 ) $ (27,116 ) $ (13,189 )
Comprehensive loss Net Loss (14,641 ) (4,720 ) (27,129 )
(13,201 ) Unrealized foreign exchange gain/(loss) from cumulative
translation adjustments (5 ) 15 (15 )
34
Comprehensive loss $ (14,646 ) $ (4,705 ) $
(27,144 ) $ (13,167 )
Net loss per share - basic and diluted
$ (1.56 ) $ (2.70 ) $ (5.79 ) $ (7.77 )
Weighted average common
shares outstanding: Basic and Diluted 9,449,102
1,743,451 4,690,876 1,697,645
INPIXON AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (In thousands)
For the Nine Months Ended September 30, 2017 2016 (Unaudited)
Cash flows from operating activities: Net loss $ (27,129 ) $
(13,201 ) Adjustment to reconcile net loss to net cash provided by
(used in) operating activities: Depreciation and amortization 1,324
884 Amortization of intangible assets 4,094 3,169 Impairment of
goodwill 8,392 -- Stock based compensation 1,282 1,055 Change in
fair value of shares to be issued -- (13 ) Change in fair value of
derivative liability (254 ) (41 ) Amortization of technology 50 --
Amortization of deferred financing costs 167 -- Amortization of
debt discount 1,545 196 Provision for doubtful accounts 773 455
Other 129 22 Changes in operating assets and liabilities: Accounts
receivable and other receivables 5,223 4,016 Inventory 270 (97 )
Other current assets 455 (26 ) Prepaid licenses and maintenance
contracts 9,787 1,248 Other assets 46 (173 ) Accounts payable 4,751
850 Accrued liabilities 455 (1,205 ) Deferred revenue (10,704 )
1,915 Other liabilities (438 ) (190 ) Total
Adjustments 27,347 12,065
Net Cash Provided by (Used in)
Operating Activities 218 (1,136 )
Cash Flows From (Used in)
Investing Activities: Purchase of property and equipment (91 )
(461 ) Investment in capitalized software (1,063 )
(1,160 )
Net Cash Flows Used in Investing Activities (1,154
) (1,621 )
Cash Flows From Financing Activities Net
repayment of line of credit (3,348 ) (4,150 ) Repayment of term
loan -- (1,611 ) Advances to related party -- (3 ) Net proceeds
from issuance of common stock, preferred stock and warrants 6,117
-- Repayment of debenture (2,850 ) -- Repayment of notes payable
(20 ) (70 ) Advances from related party -- 2 Proceeds from
debenture and convertible preferred stock -- 5,000 Net proceeds
from convertible promissory notes 2,000 -- Repayment of convertible
promissory notes (2,662 ) --
Net Cash Used
in Financing Activities (763 ) (832 )
Effect of Foreign
Exchange Rate on Changes on Cash (15 ) 34
Net Decrease in
Cash and Cash Equivalents (1,714 ) (3,555 )
Cash and Cash
Equivalents - Beginning of period 1,821
4,060
Cash and Cash Equivalents - End of period $ 107
$ 505 Reconciliation of Non-GAAP Financial Measures:
(In thousands)
Three
Months Ended Nine Months Ended September
30, September 30, 2017 2016 2017
2016 Net loss attributable to common stockholders $ (14,637
) $ (4,716 ) $ (27,116 ) $ (13,189 ) Adjustments:
Non-recurring one-time charges: Acquisition transaction/financing
costs -- 22 5 52 Costs associated with public offering 159 -- 159
-- Impairment of goodwill 8,392 -- 8,392 -- Gain on earnout (561 )
-- (561 ) -- Change in the fair value of shares to be issued -- (5
) -- (13 ) Change in the fair value of derivative liability (46 )
(41 ) (254 ) (41 ) Severance -- -- 27 -- Stock based compensation -
acquisition costs -- -- 7 -- Bad debt expense 773 -- 773 --
Stock-based compensation – compensation and related benefits 288
344 1,275 1,055 Interest expense 694 639 2,721 1,037 Depreciation
and amortization 1,817 1,391
5,418 4,054 Adjusted EBITDA $ (3,121 )
$ (2,366 ) $ (9,154 ) $ (7,045 )
(In thousands, except share data)
Three Months Ended
Nine Months Ended September 30, September
30, 2017 2016 2017 2016 Net loss
attributable to common stockholders $ (14,637 ) $ (4,716 ) $
(27,116 ) $ (13,189 ) Adjustments: Non-recurring one-time charges:
Acquisition transaction/financing costs -- 22 5 52 Costs associated
with public offering 159 -- 159 -- Impairment of goodwill 8,392 --
8,392 -- Gain on earnout (561 ) -- (561 ) -- Change in the fair
value of shares to be issued -- (5 ) -- (13 ) Change in the fair
value of derivative liability (46 ) (41 ) (254 ) (41 ) Severance --
-- 27 -- Stock based compensation - acquisition costs -- -- 7 --
Bad debt expense 773 -- 773 -- Stock-based compensation –
compensation and related benefits 288 344 1,275 1,055 Amortization
of intangibles 1,327 1,056 4,094
3,169 Proforma non-GAAP net loss $ (4,305 ) $
(3,340 ) $ (13,199 ) $
(8,967 ) Proforma non-GAAP net loss per basic and diluted common
share $ (0.46 ) $ (1.92 ) $ (2.81 ) $ (5.28 )
Weighted average basic and diluted common shares outstanding
9,449,102 1,743,451 4,690,876
1,697,645
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version on businesswire.com: http://www.businesswire.com/news/home/20171120006124/en/
Inpixon Investor Relations:CORE IRScott Arnold,
+1-516-222-2560Managing Directorwww.coreir.com
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