Delaware
|
0-20008
|
74-2415696
|
(State or other jurisdiction of incorporation or organization)
|
(Commission File No.)
|
(IRS Employer Identification No.)
|
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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EXHIBIT NUMBER
|
DESCRIPTION
|
|
99.1
|
In thousands, except per share data
|
Q3 2015 | Q3 2014 |
% Change
|
YTD Q3 2015
|
YTD Q3 2014
|
% Change
|
||||||||||||
Revenue
|
$ | 6,654 | $ | 7,030 |
down 5%
|
$ | 20,145 | $ | 20,105 |
up 0.2%
|
||||||||
Gross Margin
|
$ | 4,904 | $ | 5,435 |
down 10%
|
$ | 14,864 | $ | 15,579 |
down 5%
|
||||||||
Net income (loss)
|
$ | (574 | ) | $ | 161 |
down 457%
|
$ | (962 | ) | $ | (354 | ) |
down 172%
|
|||||
EBIDTA, excluding one-times*
|
$ | 767 | $ | 1,382 |
down 45%
|
$ | 3,125 | $ | 3,701 |
down 16%
|
||||||||
Diluted net income (loss) per share, excluding one-times*
|
$ | (0.09 | ) | $ | 0.04 | $ | (0.09 | ) | $ | 0.05 |
|
·
|
Rounded out Smart product platform by launching SmartWayTM indoor navigation mobile app in partnership with SPREO to enhance the mobile employee experience in the digital workplace.
|
|
·
|
Key strategic clients including Stanford University and Exxon Mobil expanded their resource scheduling investment with the addition of the SmartView space utilization solution. New clients include Eileen Fisher and the Museum of Contemporary Art-Chicago.
|
|
·
|
Migrated 63 clients in the third quarter and 133 clients year to date from on-premise to on-demand products, representing a 186% and 73% increase over the prior year third quarter and nine month number of conversions, respectively. Key clients migrating to on-demand include: Town of Southampton, Startek, The Nemours Foundation, and Mestek.
|
|
·
|
Strong free cash flow of $1.1 million allowed for the full repayment of $722,000 in seller notes related to our Roomtag acquisition.
|
|
·
|
Cloud bookings in the quarter increased by 160% from the third quarter of 2014. Cloud bookings year to date increased by 66%, excluding PSSI, and 8%, including PSSI, over last year to date.
|
|
·
|
Backlog as of September 30, 2015 is $3.2 million, up $968,000, or 44%, from September 30, 2014, and up $929,000, or 41% over last quarter. In 2016, we expect our enterprise clients to move through implementation, resulting in conversion from backlog to reported revenue growth.
|
|
·
|
Revenue for the quarter was $6.7 million and $20.1 million year to date as compared to $7.0 million in the third quarter of 2014 and $20.1 million last year to date, a decrease of 5% and a slight increase of 0.2%, respectively.
|
|
·
|
Recurring revenue as a percent of total revenue was 75% for the quarter as compared to 73% in the third quarter of 2014. This increase is primarily the result of strong hardware as a service revenue in the quarter.
|
|
·
|
Recurring revenue as a percent of total revenue was 74% year to date as compared to 76% last year to date.
|
|
·
|
Increased Hardware as a Service (HAAS) revenue 194% compared to the third quarter of 2014 and increased 72% year to date as compared to year to date 2014.
|
|
·
|
Gross margin for the quarter was $4.9 million or 74%, down by 10%, from $5.4 million, or 77% in the third quarter of 2014. Year to date, gross margin was $14.9 million, or 74%, down from $15.6 million, or 77% last year to date. The decrease in gross margin percentage is primarily due to new product sales which have lower margins initially. As these products mature and gain economies of scale, we anticipate a positive shift in these margins.
|
|
·
|
EBITDA* excluding one-time items* for the quarter was approximately $767,000 compared to $1.4 million in the third quarter of 2014, a decrease of 45%. Year to date, EBITDA * excluding one-time items* was approximately $3.1 million, compared to $3.7 million last year to date, a decrease of 16%.
|
|
·
|
Third quarter net (loss) income per share, excluding one-times*, was $0.09 loss compared to $0.04 income in the third quarter of 2014. Year to date net income per share, excluding one-times*, was $0.04 compared to $0.05 last year to date.
|
|
·
|
Cash flow provided by operating activities for the quarter was $1.1 million compared to $924,000 in the third quarter of 2014, representing an increase of 22%. Cash flow provided by operating activities year to date was $2.0 million, compared to $1.7 million year to date in 2014, an increase of 19%.
|
$000s
|
FY 15
|
|||
Revenue
|
$ | 27,000 – $27,500 | ||
EBITDA, excluding one-time items
|
$ | 4,200 – $4,750 | ||
Net income per share, excluding one-time items
|
$ | (0.04) – $0.04 |
|
September 30,
2015
|
December 31,
2014
|
||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
122
|
$
|
320
|
||||
Accounts receivable, net of allowance for doubtful accounts of $128 and $120 at
September 30, 2015 and December 31, 2014, respectively
|
4,248
|
5,295
|
||||||
Inventory
|
700
|
170
|
||||||
Prepaid expenses and other current assets
|
1,556
|
1,303
|
||||||
Total current assets
|
6,626
|
7,088
|
||||||
Property and equipment, net
|
2,326
|
1,539
|
||||||
Goodwill
|
17,438
|
17,500
|
||||||
Intangible assets, net
|
6,485
|
8,322
|
||||||
Other assets
|
766
|
19
|
||||||
Total assets
|
$
|
33,641
|
$
|
34,468
|
||||
Liabilities and stockholders’ equity
|
||||||||
Current liabilities:
|
||||||||
Current portion of notes payable
|
$
|
938
|
$
|
750
|
||||
Accounts payable
|
2,092
|
1,533
|
||||||
Accrued compensation and benefits
|
460
|
350
|
||||||
Other accrued liabilities
|
1,318
|
1,128
|
||||||
Deferred revenue
|
10,125
|
10,641
|
||||||
Total current liabilities
|
14,933
|
14,402
|
||||||
Long-term liabilities:
|
||||||||
Deferred revenue
|
769
|
475
|
||||||
Notes payable
|
12,938
|
14,381
|
||||||
Other liabilities
|
579
|
739
|
||||||
Total long-term liabilities
|
14,286
|
15,595
|
||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $.01 par value; 1,500 shares authorized; none issued or outstanding
|
-
|
-
|
||||||
Common stock, $.01 par value; 11,000 shares authorized; 6,674 and 6,434 shares issued,
6,290 and 6,050 shares outstanding at September 30, 2015 and December 31, 2014,
respectively
|
67
|
64
|
||||||
Treasury stock at cost, 384 shares at September 30, 2015 and December 31, 2014
|
(5,017
|
)
|
(5,017
|
)
|
||||
Additional paid-in capital
|
279,574
|
278,656
|
||||||
Accumulated deficit
|
(270,108
|
)
|
(269,146
|
)
|
||||
Accumulated other comprehensive loss
|
(94
|
)
|
(86
|
)
|
||||
Total stockholders’ equity
|
4,422
|
4,471
|
||||||
Total liabilities and stockholders’ equity
|
$
|
33,641
|
$
|
34,468
|
FOR THE
THREE MONTHS ENDED
September 30,
|
FOR THE
NINE MONTHS ENDED
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Revenues
|
$
|
6,654
|
$
|
7,030
|
$
|
20,145
|
$
|
20,105
|
||||||||
Cost of sales
|
1,750
|
1,595
|
5,281
|
4,526
|
||||||||||||
Gross margin
|
4,904
|
5,435
|
14,864
|
15,579
|
||||||||||||
Operating expenses
|
||||||||||||||||
Selling, general and administrative
|
3,866
|
3,553
|
10,926
|
10,410
|
||||||||||||
Research and development
|
786
|
868
|
2,267
|
2,444
|
||||||||||||
Amortization of intangible assets
|
505
|
494
|
1,514
|
1,488
|
||||||||||||
Total operating expenses
|
5,157
|
4,915
|
14,707
|
14,342
|
||||||||||||
Income (loss) from operations
|
(253
|
)
|
520
|
157
|
1,237
|
|||||||||||
Other income (loss)
|
||||||||||||||||
Loss on lease termination
|
-
|
-
|
(110
|
)
|
-
|
|||||||||||
Gain on settlement of note payable and litigation
|
-
|
-
|
-
|
1,034
|
||||||||||||
Loss on debt refinancing
|
(4
|
)
|
-
|
(4
|
)
|
(1,402
|
)
|
|||||||||
Foreign currency translation gain (loss)
|
(5
|
)
|
2
|
(13
|
)
|
(10
|
)
|
|||||||||
Interest expense and other
|
(266
|
)
|
(288
|
)
|
(828
|
)
|
(1,009
|
)
|
||||||||
Interest expense- amortization of original issue discount (OID)
|
(3
|
)
|
(10
|
)
|
(19
|
)
|
(64
|
)
|
||||||||
Total other loss, net
|
(278
|
)
|
(296
|
)
|
(974
|
)
|
(1,451
|
)
|
||||||||
Income (loss) from operations before income taxes
|
(531
|
)
|
224
|
(817
|
)
|
(214
|
)
|
|||||||||
Income tax provision
|
(43
|
)
|
(63
|
)
|
(145
|
)
|
(140
|
)
|
||||||||
Net income (loss)
|
$
|
(574
|
)
|
$
|
161
|
$
|
(962
|
)
|
$
|
(354
|
)
|
|||||
Other comprehensive income (loss):
|
||||||||||||||||
Foreign currency gain (loss)
|
27
|
14
|
(8
|
)
|
(4
|
)
|
||||||||||
Other comprehensive income (loss)
|
$
|
(547
|
)
|
$
|
175
|
$
|
(970
|
)
|
$
|
(358
|
)
|
|||||
Basic and diluted net income (loss) per share
|
||||||||||||||||
Basic
|
$
|
(0.09
|
)
|
$
|
0.03
|
$
|
(0.16
|
)
|
$
|
(0.06
|
)
|
|||||
Diluted
|
$
|
(0.09
|
)
|
$
|
0.03
|
$
|
(0.16
|
)
|
$
|
(0.06
|
)
|
|||||
Weighted average basic and diluted shares
|
||||||||||||||||
Basic
|
6,290,000
|
6,008,000
|
6,138,000
|
5,986,000
|
||||||||||||
Diluted
|
6,290,000
|
6,284,000
|
6,138,000
|
5,986,000
|
FOR THE
NINE MONTHS ENDED
SEPTEMBER 30,
|
||||||||
2015
|
2014
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(962
|
)
|
$
|
(354
|
)
|
||
Adjustments to reconcile net loss to net cash provided by operations:
|
||||||||
Depreciation and amortization
|
2,324
|
2,060
|
||||||
Provision for doubtful accounts
|
70
|
20
|
||||||
Share-based compensation
|
335
|
131
|
||||||
Gain on settlement of note payable and litigation
|
-
|
(1,034
|
)
|
|||||
Loss on debt refinancing
|
4
|
1,402
|
||||||
Other
|
28
|
64
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Restricted cash
|
-
|
400
|
||||||
Accounts receivable
|
977
|
182
|
||||||
Inventory
|
(530
|
)
|
(241
|
)
|
||||
Prepaid expenses and other assets
|
(927
|
)
|
(122
|
)
|
||||
Accounts payable
|
542
|
28
|
||||||
Accrued expenses and other long-term obligations
|
354
|
150
|
||||||
Deferred revenue
|
(222
|
)
|
(1,015
|
)
|
||||
Net cash provided by operating activities
|
1,993
|
1,671
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Acquisitions net of cash acquired
|
-
|
(3,111
|
)
|
|||||
Purchases of property and equipment
|
(1,290
|
)
|
(385
|
)
|
||||
Disposals of property and equipment
|
18
|
38
|
||||||
Collection/(Issuance) of note receivable
|
-
|
|
9
|
|||||
Net cash used in investing activities
|
(1,272
|
)
|
(3,449
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from notes payable
|
4,250
|
18,179
|
||||||
Payments on notes payable
|
(5,527
|
)
|
(17,723
|
)
|
||||
Payments on amendment of senior notes payable
|
(75
|
)
|
(704
|
)
|
||||
Debt financing fees
|
-
|
(565
|
)
|
|||||
Payments on capital leases
|
(147
|
)
|
(104
|
)
|
||||
Insurance proceeds for settlement of notes payable dispute, net of expenses
|
-
|
373
|
||||||
Net proceeds from exercise of stock options
|
585
|
24
|
||||||
Net cash used in financing activities
|
(914
|
)
|
(520
|
)
|
||||
Effect of foreign exchange rates
|
(5)
|
(3
|
)
|
|||||
Net decrease in cash and cash equivalents
|
(198
|
)
|
(2,301
|
)
|
||||
Cash and cash equivalents at beginning of period
|
320
|
3,938
|
||||||
Cash and cash equivalents at end of period
|
$
|
122
|
$
|
1,637
|
||||
SUPPLEMENTAL INFORMATION:
|
||||||||
Cash paid for:
|
||||||||
Interest
|
$
|
597
|
$
|
937
|
||||
Non-cash Investing and Financing Activities:
|
||||||||
Note receivable from customer
|
601
|
-
|
||||||
Accrued contingent consideration upon acquisition
|
-
|
327
|
||||||
Conversion of subordinated convertible notes payable to equity
|
-
|
249
|
||||||
Accrued purchases of property and equipment
|
17
|
-
|
$000s
|
September 30,
2015
|
September 30,
2014
|
||||||
Net income (loss)
|
(574 | ) | 161 | |||||
Interest and amortization of OID
|
269 | 298 | ||||||
Tax
|
43 | 63 | ||||||
Depreciation
|
160 | 115 | ||||||
Amortization
|
611 | 578 | ||||||
Stock Compensation
|
237 | 50 | ||||||
EBITDA
|
746 | 1,265 | ||||||
One-time items
|
21 | 117 | ||||||
EBITDA excluding one-time items
|
767 | 1,382 |
$000s | September 30,
2015
|
September 30,
2014
|
||||||
Net Loss
|
(962 | ) | (354 | ) | ||||
Interest and amortization of OID
|
847 | 1,073 | ||||||
Tax
|
145 | 140 | ||||||
Depreciation
|
492 | 337 | ||||||
Amortization
|
1,832 | 1,723 | ||||||
Stock Compensation
|
335 | 131 | ||||||
EBITDA
|
2,689 | 3,050 | ||||||
One-time items
|
436 | 651 | ||||||
EBITDA excluding one-time items
|
3,125 | 3,701 |
$000s
|
September 30,
2015
|
September 30,
2014
|
||||||
Net income (loss)
|
(574 | ) | 161 | |||||
Legal & Professional Services
|
17 | 107 | ||||||
Severance, Recruitment & Relocation
|
- | - | ||||||
Other one-time items (net)
|
4 | 10 | ||||||
Sub-total excluding Taxes
|
21 | 117 | ||||||
Sub-total one-time items
|
21 | 117 | ||||||
Net income (loss) excluding one-time items
|
(553 | ) | 278 |
$000s |
September 30,
2015
|
September 30,
2014
|
||||||
Net Loss
|
(962 | ) | (354 | ) | ||||
Loss on Debt Refinancing
|
- | 1,402 | ||||||
Gain on Settlement of Note Payable and litigation | - | (1,034 | ) | |||||
Legal & Professional Services
|
35 | 187 | ||||||
Severance, Recruitment & Relocation
|
55 | 73 | ||||||
Other one-time items (net)
|
346 | 23 | ||||||
Sub-total excluding Taxes
|
436 | 651 | ||||||
Sub-total one-time items
|
436 | 651 | ||||||
Net income(loss) excluding one-time items
|
(526 | ) | 297 |