Pennsylvania
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000-22920
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11-2948749
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(State or other jurisdiction
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(Commission File Number)
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(I.R.S. Employer
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of incorporation)
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Identification No.)
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[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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99.1
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Press Release, dated March 6, 2014
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NUMEREX CORP
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Date: March 6, 2014
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/s/ Richard A. Flynt
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Richard A. Flynt
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Chief Financial Officer
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99.1
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Press Release, dated March 6, 2014
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·
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Revenues up 20% for the full year and 25% for Q4 over prior year period
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Recurring revenue up 21% for the full year and 19% in Q4 over prior year period
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GAAP Earnings from continuing operations up 153% in Q4 over prior year period
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Adjusted EBITDA up 27% in Q4 over prior year period, 13% of revenue
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Subscription-based recurring revenue was up 21.3% during the full year 2013 and in line with our guidance; Total Subscription and support revenue was up 19.9% for the year.
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Gross margin generated by subscriptions and support revenue in the fourth quarter of 2013 was 61.9% compared to 58.1% recorded in the same period in 2012;
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GAAP income from continuing operations, net of income tax benefit, for the fourth quarter was $1.0 million, an increase of 152.7% compared to the fourth quarter of 2012;
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GAAP income from continuing operations, net of income taxes for the fourth quarter was $0.05 per diluted share compared to $0.02 during the same period last year;
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Adjusted EBITDA margin (non-GAAP) was 12.9% for the fourth quarter, up from 11.5% in the third quarter of 2013;
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Total revenue for the fourth quarter of $22.2 million, up 24.6% compared to the fourth quarter of 2012;
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Embedded devices and hardware revenue for the fourth quarter of $8.5 million, up 37.4% over the fourth quarter last year;
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Net cash generated by operating activities of continuing operations for the full year 2013 was $6.1 million;
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Total subscriptions of 2.2 million, up from the 1.7 million reported at the end of 2012, reflecting full year growth of 28%, attributable partly to the divestiture of nearly 0.15 million subscriptions and the Company’s focus on high value solution initiatives.
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Three Months Ended
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Year Ended
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December 31,
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December 31,
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Non-GAAP Measures*
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2013
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2012
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2013
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2012
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Adjusted EBITDA ($ in millions)
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$ | 2.9 | $ | 2.2 | $ | 8.4 | $ | 8.0 | ||||||||
Adjusted EBITDA as a percent of total revenue
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12.9 | % | 12.6 | % | 10.7 | % | 12.4 | % | ||||||||
Adjusted EBITDA per diluted share
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$ | 0.15 | $ | 0.14 | $ | 0.44 | $ | 0.50 | ||||||||
Net new subscriptions (units)
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63,000 | 119,000 | 485,000 | 389,000 | ||||||||||||
Total subscriptions (units)
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2,209,000 | 1,724,000 | 2,209,000 | 1,724,000 | ||||||||||||
* Refer to the section of this press release entitled "Non-GAAP (Adjusted) Financial Measures" for a discussion of
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these non-GAAP items.
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GAAP Measures
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Subscription and support revenue ($ in millions)
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$ | 13.7 | $ | 11.6 | $ | 51.6 | $ | 43.1 | ||||||||
Gross margin -- subscription and support revenue
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61.9 | % | 58.1 | % | 57.9 | % | 58.3 | % | ||||||||
Income from continuing operations, net
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of income tax expense (benefit) ($ in millions)
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$ | 1.0 | $ | 0.4 | $ | 2.0 | $ | 7.0 | ||||||||
Diluted EPS from continuing operations
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$ | 0.05 | $ | 0.02 | $ | 0.10 | $ | 0.44 |
·
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Total GAAP operating expenses for the fourth quarter of 2013 were $8.7 million compared to $6.3 million in the fourth quarter of 2012.
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o
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Sales and marketing expense was $2.6 million in the fourth quarter of 2013 compared to $2.0 million for the same period last year. The increase was primarily due to the addition of sales and marketing personnel to support demand and future growth.
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General and administrative expense in the fourth quarter increased to $3.5 million as compared to $2.7 million in the fourth quarter of 2012. The increase includes higher non-cash compensation, personnel and facility costs.
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During the fourth quarter of 2013, engineering and development costs increased to $1.3 million from $0.7 million during the same period last year to support our growing customer base and to strengthen our managed service offerings.
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o
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Operating expense includes depreciation and amortization charges of $1.3 million and $1.0 million in the fourth quarters of 2013 and 2012, respectively. The increase includes the amortization of additional internally developed software and, to a lesser extent, intangible assets from the two acquisitions completed in the fourth quarter of 2012 and the first quarter of 2013.
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·
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Adjusted EBITDA for the fourth quarter of 2013 was $2.9 million or 12.9% of total net sales, an increase from $2.5 million or 11.5% in the third quarter of 2013.
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NUMEREX CORP AND SUBSIDIARIES
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UNAUDITED CONSDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(Dollars in thousands, except per share data)
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Three Months Ended
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Change
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Year Ended
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Change
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December 31,
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Q4'13 v Q4'12
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December 31,
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2013 v 2012 | |||||||||||||||||||||||||||||
2013
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2012
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$ | % | 2013 | 2012 | $ | % | |||||||||||||||||||||||||
Net sales
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Subscription and support revenue
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$ | 13,709 | $ | 11,642 | $ | 2,067 | 17.8 | % | $ | 51,640 | $ | 43,067 | $ | 8,573 | 19.9 | % | ||||||||||||||||
Embedded devices and hardware
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8,464 | 6,159 | 2,305 | 37.4 | % | 26,192 | 21,965 | 4,227 | 19.2 | % | ||||||||||||||||||||||
Total net sales
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22,173 | 17,801 | 4,372 | 24.6 | % | 77,832 | 65,032 | 12,800 | 19.7 | % | ||||||||||||||||||||||
Cost of sales, exclusive of depreciation
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and amortization shown below:
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Subscription and support revenue
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5,222 | 4,879 | 343 | 7.0 | % | 21,754 | 17,955 | 3,799 | 21.2 | % | ||||||||||||||||||||||
Embedded devices and hardware
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7,363 | 5,707 | 1,656 | 29.0 | % | 23,938 | 19,202 | 4,736 | 24.7 | % | ||||||||||||||||||||||
Gross profit
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9,588 | 7,215 | 2,373 | 32.9 | % | 32,140 | 27,875 | 4,265 | 15.3 | % | ||||||||||||||||||||||
43.2 | % | 40.5 | % | 41.3 | % | 42.9 | % | |||||||||||||||||||||||||
Operating expense
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Sales and marketing
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2,637 | 1,993 | 644 | 32.3 | % | 9,544 | 8,242 | 1,302 | 15.8 | % | ||||||||||||||||||||||
General and administrative
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3,455 | 2,695 | 760 | 28.2 | % | 13,281 | 10,257 | 3,024 | 29.5 | % | ||||||||||||||||||||||
Engineering and development
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1,288 | 694 | 594 | 85.6 | % | 4,915 | 3,096 | 1,819 | 58.8 | % | ||||||||||||||||||||||
Depreciation and amortization
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1,334 | 952 | 382 | 40.1 | % | 4,819 | 3,313 | 1,506 | 45.5 | % | ||||||||||||||||||||||
Operating income (loss)
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874 | 881 | (7 | ) | -0.8 | % | (419 | ) | 2,967 | (3,386 | ) | -114.1 | % | |||||||||||||||||||
Interest expense
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40 | 133 | (93 | ) | -69.9 | % | 304 | 336 | (32 | ) | -9.5 | % | ||||||||||||||||||||
Other expense (income), net
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(301 | ) | 499 | (800 | ) | -160.3 | % | (319 | ) | 500 | (819 | ) | -163.8 | % | ||||||||||||||||||
Income (loss) from continuing
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operations before income taxes
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1,135 | 249 | 886 | 355.8 | % | (404 | ) | 2,131 | (2,535 | ) | -119.0 | % | ||||||||||||||||||||
Income tax expense (benefit)
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185 | (127 | ) | 312 | -245.7 | % | (2,369 | ) | (4,902 | ) | 2,533 | -51.7 | % | |||||||||||||||||||
Income from continuing operations,
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net of income taxes
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950 | 376 | 574 | 152.7 | % | 1,965 | 7,033 | (5,068 | ) | -72.1 | % | |||||||||||||||||||||
Income (loss) from discontinued
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operations, net of income taxes
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61 | 235 | (174 | ) | -74.0 | % | (1,380 | ) | 132 | (1,512 | ) |
*nm
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Net income
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$ | 1,011 | $ | 611 | $ | 400 | 65.5 | % | $ | 585 | $ | 7,165 | $ | (6,580 | ) | -91.8 | % | |||||||||||||||
Basic earnings (loss) per share:
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Income from continuing operations
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$ | 0.05 | $ | 0.02 | $ | 0.11 | $ | 0.46 | ||||||||||||||||||||||||
Income (loss) from discontinued operations
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0.00 | 0.02 | (0.08 | ) | 0.00 | |||||||||||||||||||||||||||
Net income
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$ | 0.05 | $ | 0.04 | $ | 0.03 | $ | 0.46 | ||||||||||||||||||||||||
Diluted earnings (loss) per share:
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Income from continuing operations
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$ | 0.05 | $ | 0.02 | $ | 0.10 | $ | 0.44 | ||||||||||||||||||||||||
Income (loss) from discontinued operations
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0.00 | 0.02 | (0.07 | ) | 0.01 | |||||||||||||||||||||||||||
Net income
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$ | 0.05 | $ | 0.04 | $ | 0.03 | $ | 0.45 | ||||||||||||||||||||||||
Weighted average shares outstanding used in
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computing earnings (loss) per share:
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Basic
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18,778 | 15,571 | 18,413 | 15,412 | ||||||||||||||||||||||||||||
Diluted
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19,276 | 16,249 | 18,950 | 16,014 | ||||||||||||||||||||||||||||
_______________
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* Not meaningful
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NUMEREX CORP AND SUBSIDIARIES
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
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(In thousands)
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December 31,
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December 31,
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2013
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2012
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ASSETS
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CURRENT ASSETS
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Cash and cash equivalents
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$ | 25,603 | $ | 4,948 | ||||
Accounts receivable, less allowance for doubtful accounts of $674 and $367
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9,385 | 8,466 | ||||||
Financing receivables, current
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1,223 | 512 | ||||||
Inventory, net of reserve for obsolescence of $1,110 and $332
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8,315 | 7,363 | ||||||
Prepaid expense and other current assets
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1,833 | 1,464 | ||||||
Deferred tax assets
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2,742 | 1,021 | ||||||
Assets of discontinued operations
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840 | 2,284 | ||||||
TOTAL CURRENT ASSETS
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49,941 | 26,058 | ||||||
Financing receivables
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3,029 | 1,329 | ||||||
Property and equipment, net of accumulated depreciation and
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amortization of $1,879 and $1,184
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3,125 | 2,449 | ||||||
Software, net of accumulated amortization of $3,706 and $1,815
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5,130 | 3,596 | ||||||
Other intangibles, net of accumulated amortization of $13,189 and $11,679
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6,868 | 7,057 | ||||||
Goodwill
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26,941 | 25,418 | ||||||
Deferred tax assets
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3,958 | 3,551 | ||||||
Other assets
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2,298 | 2,689 | ||||||
TOTAL ASSETS
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$ | 101,290 | $ | 72,147 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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CURRENT LIABILITIES
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Accounts payable
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$ | 9,953 | $ | 7,673 | ||||
Accrued expense and other current liabilities
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2,004 | 685 | ||||||
Deferred revenues
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1,894 | 1,823 | ||||||
Current portion of long-term debt
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633 | 2,286 | ||||||
Obligations under capital leases
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306 | - | ||||||
Liabilities of discontinued operations
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207 | 188 | ||||||
TOTAL CURRENT LIABILITIES
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14,997 | 12,655 | ||||||
Notes payable, less current portion
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475 | 6,008 | ||||||
Obligations under capital leases, less current portion
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148 | - | ||||||
Other liabilities
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1,693 | 679 | ||||||
TOTAL LIABILITIES
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17,313 | 19,342 | ||||||
COMMITMENTS AND CONTINGENCIES
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STOCKHOLDERS’ EQUITY
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Preferred stock, no par value; authorized 3,000; none issued
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- | - | ||||||
Class A common stock, no par value; authorized 30,000; 20,069 and 17,171
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issued; 18,829 and 15,609 outstanding
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- | - | ||||||
Class B common stock, no par value; authorized 5,000; none issued
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- | - | ||||||
Additional paid-in-capital
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95,777 | 68,072 | ||||||
Treasury stock, at cost, 1,241 and 1,562 shares
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(5,238 | ) | (8,136 | ) | ||||
Accumulated other comprehensive loss
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(24 | ) | (8 | ) | ||||
Accumulated deficit
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(6,538 | ) | (7,123 | ) | ||||
TOTAL STOCKHOLDERS' EQUITY
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83,977 | 52,805 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$ | 101,290 | $ | 72,147 |
·
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EBITDA is income from continuing operations, net of income tax benefit, plus depreciation and amortization, interest and other non-operating expense and income tax expense. Any other non-operating income and income tax benefit is subtracted from income from continuing operations, net of income tax benefit.
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Adjusted EBITDA is EBITDA less non-cash stock-based compensation and infrequent or unusual items further described below.
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EBITDA and Adjusted EBITDA per diluted share is EBITDA and Adjusted EBITDA divided by weighted average diluted shares outstanding.
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EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, income taxes, depreciation and amortization, which can vary substantially from company-to-company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired; and
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Investors commonly adjust EBITDA information to eliminate the effect of stock-based compensation and other unusual or infrequently occurring items which vary widely from company-to-company and impair comparability.
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as a measure of operating performance to assist in comparing performance from period-to-period on a consistent basis
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as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations; and
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in communications with the board of directors, analysts and investors concerning our financial performance.
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Three Months Ended
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Year Ended
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December 31,
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December 31,
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2013
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2012
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2013
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2012
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Income from continuing operations, net of income tax benefit (GAAP)
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$ | 950 | $ | 376 | $ | 1,965 | $ | 7,033 | ||||||||
Depreciation and amortization
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1,404 | 952 | 5,119 | 3,313 | ||||||||||||
Interest expense and other non-operating expense, net
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(261 | ) | 632 | (15 | ) | 836 | ||||||||||
Income tax expense (benefit)
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185 | (127 | ) | (2,369 | ) | (4,902 | ) | |||||||||
EBITDA (non-GAAP)
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2,278 | 1,833 | 4,700 | 6,280 | ||||||||||||
Equity-based compensation
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573 | 305 | 1,879 | 1,388 | ||||||||||||
Infrequent or unusual items
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- | 100 | 1,774 | 369 | ||||||||||||
Adjusted EBITDA (non-GAAP)
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$ | 2,851 | $ | 2,238 | $ | 8,353 | $ | 8,037 | ||||||||
Income from continuing operations, net of income tax benefit,
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per diluted share (GAAP)
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$ | 0.05 | $ | 0.02 | $ | 0.10 | $ | 0.44 | ||||||||
EBITDA per diluted share (non-GAAP)
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0.12 | 0.11 | 0.25 | 0.39 | ||||||||||||
Adjusted EBITDA per diluted share (non-GAAP)
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0.15 | 0.14 | 0.44 | 0.50 | ||||||||||||
Weighted average shares outstanding in computing diluted earnings per share
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19,276 | 16,249 | 18,950 | 16,014 |