Pennsylvania
|
000-22920
|
11-2948749
|
||
--------------
|
------------
|
----------------
|
||
(State or other jurisdiction
|
(Commission File Number)
|
(I.R.S. Employer
|
||
of incorporation)
|
Identification No.)
|
[ ]
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
[ ]
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
[ ]
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
[ ]
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
99.1
|
Press Release, dated November 4, 2015
|
NUMEREX CORP
|
|
Date: November 4, 2015
|
/s/ Richard A. Flynt
|
Richard A. Flynt
|
|
Chief Financial Officer
|
99.1
|
Press Release, dated November 4, 2015
|
·
|
Net revenues in Q3 of 2015 were $23.3 million compared to $25.7 million in Q3 of 2014.
|
·
|
Subscription and Support revenues were $15.6 million in Q3 of 2015, compared to $17.4 million in Q3 of 2014.
|
·
|
Loss from continuing operations, net of income taxes, was $16.4 million in Q3 2015, including the establishment of a $10.1 million tax valuation allowance, compared to net income of $263 thousand in Q3 of 2014.
|
·
|
Adjusted EBITDA in Q3 of 2015 was $1.7 million compared to $3.3 million in Q3 of 2014.
|
·
|
Net revenues increased to $70.7 million in 2015 compared to $69.0 million in 2014.
|
·
|
Subscription and Support revenues increased to $48.9 million in 2015 compared to $47.5 million in 2014.
|
·
|
Loss from continuing operations, net of income taxes, was $16.7 million in 2015, including the establishment of a $10.1 million tax valuation allowance, compared to income of $1.6 million in 2014, which included a $1.1 million pre-tax gain on the sale of a cost method investment in a privately-held business.
|
·
|
Adjusted EBITDA in 2015 was $7.4 million compared to $9.1 million in 2014.
|
Three Months Ended
|
Nine Months Ended
|
||||||
September 30,
|
September 30,
|
||||||
Non-GAAP Measures*
|
2015
|
2014
|
2015
|
2014
|
|||
Adjusted EBITDA ($ in millions)
|
$ 1.7
|
$ 3.3
|
$ 7.4
|
$ 9.1
|
|||
Adjusted EBITDA as a percent of total revenue
|
7.1%
|
13.0%
|
10.4%
|
13.2%
|
|||
Adjusted EBITDA per diluted share
|
$ 0.09
|
$ 0.17
|
$ 0.39
|
$ 0.47
|
|||
______________
|
|||||||
* Refer to the section of this press release entitled "Non-GAAP (Adjusted) Financial Measures" for
|
|||||||
a discussion of these non-GAAP items and a reconciliation to the most comparable GAAP measure.
|
|||||||
GAAP Measures
|
|||||||
Subscription and support revenues ($ in millions)
|
$ 15.6
|
$ 17.4
|
$ 48.9
|
$ 47.5
|
|||
Gross margin -- subscription and support revenues
|
58.2%
|
59.8%
|
59.6%
|
60.8%
|
|||
(Loss) income from continuing operations, net of
|
|||||||
income taxes ($ in millions)
|
$ (16.4)
|
$ 0.3
|
$ (16.7)
|
$ 1.6
|
|||
Diluted EPS from continuing operations
|
$ (0.86)
|
$ 0.01
|
$ (0.88)
|
$ 0.09
|
NUMEREX CORP. AND SUBSIDIARIES
|
||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
(thousands, except per share data)
|
||||||||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Net revenues:
|
||||||||||||||||
Subscription and support revenues
|
$ | 15,624 | $ | 17,429 | $ | 48,874 | $ | 47,530 | ||||||||
Embedded devices and hardware
|
7,710 | 8,234 | 21,791 | 21,483 | ||||||||||||
Total net revenues
|
23,334 | 25,663 | 70,665 | 69,013 | ||||||||||||
Cost of sales, exclusive of a portion of
|
||||||||||||||||
depreciation and amortization shown below:
|
||||||||||||||||
Subscription and support revenues
|
6,538 | 7,011 | 19,728 | 18,647 | ||||||||||||
Embedded devices and hardware
|
6,958 | 7,236 | 19,582 | 18,102 | ||||||||||||
Inventory reserves
|
1,277 | 129 | 1,547 | 415 | ||||||||||||
Impairment of other asset
|
1,275 | - | 1,275 | - | ||||||||||||
Gross profit
|
7,286 | 11,287 | 28,533 | 31,849 | ||||||||||||
Gross margin
|
31.2 | % | 44.0 | % | 40.4 | % | 46.1 | % | ||||||||
Operating expenses:
|
||||||||||||||||
Sales and marketing
|
3,047 | 3,029 | 9,136 | 9,066 | ||||||||||||
General and administrative
|
4,507 | 3,429 | 12,108 | 11,207 | ||||||||||||
Engineering and development
|
2,201 | 2,430 | 6,695 | 5,794 | ||||||||||||
Depreciation and amortization
|
2,100 | 1,597 | 5,411 | 4,570 | ||||||||||||
Impairment of goodwill and other intangible assets
|
1,250 | - | 1,250 | - | ||||||||||||
Operating (loss) income
|
(5,819 | ) | 802 | (6,067 | ) | 1,212 | ||||||||||
Interest expense
|
188 | 278 | 604 | 564 | ||||||||||||
Other income, net
|
(31 | ) | (97 | ) | (100 | ) | (1,272 | ) | ||||||||
(Loss) income from continuing
|
||||||||||||||||
operations before income taxes
|
(5,976 | ) | 621 | (6,571 | ) | 1,920 | ||||||||||
Income tax expense
|
10,404 | 358 | 10,159 | 283 | ||||||||||||
(Loss) income from continuing
|
||||||||||||||||
operations, net of income taxes
|
(16,380 | ) | 263 | (16,730 | ) | 1,637 | ||||||||||
Loss from discontinued
|
||||||||||||||||
operations, net of income taxes
|
- | - | - | (492 | ) | |||||||||||
Net (loss) income
|
$ | (16,380 | ) | $ | 263 | $ | (16,730 | ) | $ | 1,145 | ||||||
Basic earnings per share:
|
||||||||||||||||
(Loss) income from continuing operations
|
$ | (0.86 | ) | $ | 0.01 | $ | (0.88 | ) | $ | 0.09 | ||||||
Loss from discontinued operations
|
- | - | - | (0.03 | ) | |||||||||||
Net (loss) income
|
$ | (0.86 | ) | $ | 0.01 | $ | (0.88 | ) | $ | 0.06 | ||||||
Diluted earnings per share:
|
||||||||||||||||
(Loss) income from continuing operations
|
$ | (0.86 | ) | $ | 0.01 | $ | (0.88 | ) | $ | 0.09 | ||||||
Loss from discontinued operations
|
- | - | - | (0.03 | ) | |||||||||||
Net (loss) income
|
$ | (0.86 | ) | $ | 0.01 | $ | (0.88 | ) | $ | 0.06 | ||||||
Weighted average shares outstanding used
|
||||||||||||||||
in computing earnings per share:
|
||||||||||||||||
Basic
|
19,137 | 18,956 | 19,053 | 18,900 | ||||||||||||
Diluted
|
19,137 | 19,263 | 19,053 | 19,253 |
NUMEREX CORP. AND SUBSIDIARIES
|
||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||
(In thousands)
|
||||||||
September 30,
|
December 31,
|
|||||||
2015
|
2014(1)
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 12,482 | $ | 17,270 | ||||
Accounts receivable, less allowance for doubtful accounts of $2,052 and $1,106
|
14,092 | 12,287 | ||||||
Financing receivables, current
|
1,789 | 1,595 | ||||||
Inventory, net of reserve for obsolescence of $2,694 and $1,397
|
7,974 | 8,410 | ||||||
Prepaid expenses and other current assets
|
2,054 | 2,329 | ||||||
Deferred tax assets, current
|
- | 3,161 | ||||||
TOTAL CURRENT ASSETS
|
38,391 | 45,052 | ||||||
Financing receivables, less current portion
|
2,687 | 2,984 | ||||||
Property and equipment, net of accumulated depreciation
|
||||||||
and amortization of $5,981 and $3,815
|
4,492 | 4,889 | ||||||
Software, net of accumulated amortization of $8,658 and $6,409
|
6,958 | 6,106 | ||||||
Other intangible assets, net of accumulated amortization of $16,678 and $15,139
|
17,512 | 19,163 | ||||||
Goodwill
|
43,424 | 44,348 | ||||||
Deferred tax assets, less current portion
|
- | 5,816 | ||||||
Other assets
|
1,107 | 2,585 | ||||||
TOTAL ASSETS
|
$ | 114,571 | $ | 130,943 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
$ | 12,011 | $ | 12,257 | ||||
Accrued expenses and other current liabilities
|
3,062 | 2,471 | ||||||
Deferred revenues
|
2,026 | 2,258 | ||||||
Current portion of long-term debt
|
3,750 | 4,251 | ||||||
Obligations under capital lease
|
- | 148 | ||||||
TOTAL CURRENT LIABILITIES
|
20,849 | 21,385 | ||||||
Long-term debt, less current portion
|
16,537 | 19,350 | ||||||
Noncurrent deferred taxes
|
1,170 | - | ||||||
Other liabilities
|
1,759 | 1,346 | ||||||
TOTAL LIABILITIES
|
40,315 | 42,081 | ||||||
COMMITMENTS AND CONTINGENCIES
|
||||||||
SHAREHOLDERS’ EQUITY
|
||||||||
Preferred stock, no par value; 3,000 authorized; none issued
|
- | - | ||||||
Class A common stock, no par value; 30,000 authorized;
|
||||||||
20,532 and 20,284 issued; 19,225 and 18,992 outstanding
|
- | - | ||||||
Class B common stock, no par value; 5,000 authorized; none issued
|
- | - | ||||||
Additional paid-in capital
|
101,319 | 99,056 | ||||||
Treasury stock, at cost; 1,307 and 1,292 shares
|
(5,444 | ) | (5,352 | ) | ||||
Accumulated other comprehensive loss
|
(95 | ) | (48 | ) | ||||
Accumulated deficit
|
(21,524 | ) | (4,794 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY
|
74,256 | 88,862 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$ | 114,571 | $ | 130,943 | ||||
_______________________
|
||||||||
(1) The balance sheet as of December 31, 2014 has been recast to reflect a $200 measurement period adjustment
|
||||||||
between goodwill and non-current deferred tax assets. The adjustment had no effect on the statement of operations.
|
·
|
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
|
·
|
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.
|
·
|
as a measure of operating performance to assist in comparing performance from period-to-period on a consistent basis
|
·
|
as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations; and
|
·
|
in communications with the board of directors, analysts and investors concerning our financial performance.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
EBITDA and Adjusted EBITDA (non-GAAP)
|
||||||||||||||||
(Loss) income from continuing operations, net of income taxes (GAAP)
|
$ | (16,380 | ) | $ | 263 | $ | (16,730 | ) | $ | 1,637 | ||||||
Depreciation and amortization expense
|
2,381 | 1,789 | 6,163 | 4,969 | ||||||||||||
Interest expense and other non-operating expense (income), net
|
157 | 181 | 504 | (708 | ) | |||||||||||
Income tax expense
|
10,404 | 358 | 10,159 | 283 | ||||||||||||
EBITDA (non-GAAP)
|
(3,438 | ) | 2,591 | 96 | 6,181 | |||||||||||
Equity-based compensation expense
|
738 | 694 | 2,319 | 1,833 | ||||||||||||
Non-cash and other items
|
4,360 | 41 | 4,943 | 1,064 | ||||||||||||
Adjusted EBITDA (non-GAAP)
|
$ | 1,660 | $ | 3,326 | $ | 7,358 | $ | 9,078 | ||||||||
(Loss) income from continuing operations, net of income
|
||||||||||||||||
taxes, per diluted share (GAAP)
|
$ | (0.86 | ) | $ | 0.01 | $ | (0.88 | ) | $ | 0.09 | ||||||
EDITDA per diluted share (non-GAAP)
|
(0.18 | ) | 0.13 | 0.01 | 0.32 | |||||||||||
Adjusted EBITDA per diluted share (non-GAAP)
|
0.09 | 0.17 | 0.39 | 0.47 | ||||||||||||
Weighted average shares outstanding used in
|
||||||||||||||||
computing diluted per share amounts
|
19,137 | 19,263 | 19,053 | 19,253 | ||||||||||||