90% of F2Q15 Revenue Was Recurring;
78% of F2Q15 Revenue from Subscriptions
EMERYVILLE, Calif., Feb. 12, 2015 (GLOBE NEWSWIRE) -- Lyris, Inc. (OTCBB:LYRI.OB), a leading global provider of digital marketing solutions, today announced financial results for the second quarter of fiscal 2015 ended December 31, 2014.
Highlights
- Fiscal second quarter revenues were $7.3 million, up 2.5% from $7.1 million in the prior quarter and down 11.0% from $8.1 million in the same period last year.
- Recurring revenue was 90% of total revenue in the fiscal second quarter compared to 90% of total revenues in the same period a year ago and 90% of revenues in the prior quarter.
- Lyris HQ Software-as-a-Service (SaaS) revenues were 65% of total revenues in the fiscal second quarter compared to 60% in the same period a year ago and 62% of total revenues in the prior quarter.
- Fiscal second quarter gross margin was 66% compared to 64% for the same period last year.
- The company recognized a charge for impairment of goodwill in the second quarter of $4.3 million.
- Fiscal second quarter loss from operations was $(3.7) million, compared to income from operations of $0.5 million in the same period last year.
- Fiscal second quarter net loss was $(4.0) million, or $(0.42) per share, compared to net income of $0.5 million, or $0.04 per diluted share, in the same period last year.
- Fiscal second quarter non-GAAP net income was $0.5 million, or $0.04 per diluted share, compared to a non-GAAP net income of $1.0 million, or $0.09 per diluted share, in the same period a year ago.
- Fiscal second quarter adjusted EBITDA was $1.0 million, compared to adjusted EBITDA of $1.4 million in the same period a year ago.
- At December 31, 2014, the Company had $1.4 million in cash. The Company also had $1.2 million available for drawdown on its $5 million loan facility with Silicon Valley Bank.
"In the fiscal second quarter of 2015, we continued on our path to transitioning Lyris to growth," stated John Philpin, president and CEO of Lyris. "As in recent quarters, our average deal size continues to increase, our pipeline is increasing and our top-tier 'Lighthouse' accounts are expanding their business with us. We remain excited about the opportunities ahead for the company and our customers."
Second Quarter Fiscal 2015 Financial Results
Total revenues of the second quarter of fiscal 2015 were $7.3 million, up 2.5% from $7.1 million in the prior quarter and down 11.0% from $8.1 million in the same period last year. Total subscription revenues were $5.7 million, or 78% of total revenues, in the second quarter of fiscal 2015, compared to $6.3 million, or 77% of total revenues, in the same period in fiscal 2014. Lyris HQ SaaS revenues were $4.7 million, or 65% of total revenues, in the second quarter of fiscal 2015, down from $4.9 million, or 60% of total revenues, in the same period a year ago.
Gross profit was $4.8 million, or 66% as a percentage of total revenues, in the second quarter of fiscal 2015, compared to $5.3 million, or 64% of total revenue, in the same period in fiscal 2014.
Second quarter loss from operations was $(3.7) million, compared to income from operations of $0.5 million in the same period last year. Second quarter net loss was $(4.0) million, or $(0.42) per share, compared to net income of $0.5 million, or $0.04 per diluted share, in the same period last year.
Conference Call Information
Lyris will hold a conference call and webcast to discuss its financial results and operating activities open to all interested parties at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time), February 12, 2015.
The teleconference can be accessed by calling 888-587-0615, passcode 5956838. Please dial in 10-15 minutes prior to the beginning of the call. The webcast will be available on the Internet at www.lyris.com.
A replay of the call will be available through February 19, 2015, at 877-870-5176, passcode 5956838, and on the company's website at www.lyris.com.
About Lyris
Lyris is a global provider of innovative email and digital marketing solutions that help companies reach customers at scale and create personalized value at every touch point. Lyris' products and services empower marketers to design, automate, and optimize experiences that facilitate superior engagement, increase conversions, and deliver measurable business value. The Lyris solutions portfolio is uniquely comprised of award- winning messaging automation software, digital marketing strategy and deliverability services, and a componentized and flexible integration framework that revolutionizes the way marketers can extend digital messaging across the enterprise. More than 5,000 companies worldwide partner with Lyris to manage connected customer communications.
Forward-Looking Statements
This press release includes forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995 (PSLRA), that reflect our current views with respect to future events and financial performance, and that are subject to many risks and uncertainties. These forward-looking statements include material in quotations from management, including our estimate of our addressable market. Statements that include word such as "expects," "intends," "plan," "believe," "project," "estimate," "may," "should," "anticipate," "will" and similar statements identify many of our forward-looking statements.
Many factors could cause actual results to differ materially from those indicated in our forward-looking statements. For example, market acceptance of our products, potential delays in product development, product offerings by our competitors, and our ability to finance anticipated growth could affect our future results. Other risk factors that could cause actual results to differ significantly from our expectations are described in our annual and quarterly reports filed with the Securities and Exchange Commission (available at www.sec.gov). Unless otherwise required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
If one or more of these risks or uncertainties materialize, or if our underlying assumptions otherwise prove to be incorrect, our actual results may vary materially from what we project. Any forward-looking statements you read in this news release reflect our views as of the date of this press release with respect to future events, and are subject to these and other risks, uncertainties and assumptions relating to our operations, financial condition, results of operations, growth strategy and liquidity. All subsequent written and oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by this paragraph.
Non-GAAP Financial Measures
In this release we present certain non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with United States generally accepted accounting principles ("GAAP"). A reconciliation between non-GAAP and GAAP measures can be found in the accompanying tables. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies.
We believe the calculation of non-GAAP net income (loss), calculated without giving effect to acquisition-related amortization charges, stock-based compensation expense and certain other amounts that we do not consider to be related to our ongoing core operating performance, provides a basis to compare our operating results across periods and against other companies in our industry. We also believe that adjusted EBITDA, which we calculate as GAAP net income (loss) less interest, taxes, depreciation, amortization, non-cash stock compensation expense and certain other financial measures, is an indicator of our cash flows. This measure is commonly used by our lenders to assess our leverage capacity, debt service ability and liquidity. These non-GAAP measures have been reconciled to the nearest GAAP measure, as required under SEC rules and regulations, in tables attached to this release.
| Lyris, Inc. | ||
| Condensed Consolidated Statements of Operations | ||
| (Unaudited) | ||
| (In thousands, except for per share data) | ||
|
Three Months Ended December 31, |
||
| 2014 | 2013 | |
| Revenue: | ||
| Subscription revenue | $ 5,662 | $ 6,270 |
| Support and maintenance revenue | 896 | 1,030 |
| Professional services revenue | 508 | 583 |
| Software revenue | 188 | 263 |
| Total revenue: | 7,254 | 8,146 |
| Cost of revenue: | ||
| Subscription, software and other services | 2,482 | 2,457 |
| Amortization of developed technology | 17 | 439 |
| Total cost of revenue | 2,499 | 2,896 |
| Gross profit | 4,755 | 5,250 |
| Operating expenses: | ||
| Sales & marketing | 2,073 | 2,409 |
| General and administrative | 1,303 | 1,424 |
| Research & development | 815 | 837 |
| Impairment of goodwill | 4,300 | -- |
| Amortization of customer relationships and trade names | -- | 50 |
| Total operating expenses | 8,491 | 4,720 |
| Income (loss) from operations | (3,736) | 530 |
| Interest expense | (29) | (39) |
| Interest income | 1 | -- |
| Other income, net | (9) | 23 |
| Income (loss) from operations before income taxes | (3,773) | 514 |
| Income tax provision | 221 | 36 |
| Net income (loss) | (3,994) | 478 |
| Net income (loss) per share | ||
| Basic | $ (0.42) | $ 0.05 |
| Diluted | $ 0.04 | |
| Weighted average shares outstanding used in calculating net income per share: | ||
| Basic | 9,568 | 9,568 |
| Diluted | 11,568 | |
| Lyris, Inc. | ||
| Condensed Consolidated Statements of Operations | ||
| (Unaudited) | ||
| (In thousands, except for per share data) | ||
|
Six Months Ended December 31, |
||
| 2014 | 2013 | |
| Revenue: | ||
| Subscription revenue | $ 11,109 | $ 12,612 |
| Support and maintenance revenue | 1,811 | 2,028 |
| Professional services revenue | 1,034 | 1,178 |
| Software revenue | 372 | 560 |
| Total revenue | 14,326 | 16,378 |
| Cost of revenue: | ||
| Subscription, software and other services | 4,960 | 5,095 |
| Amortization of developed technology | 92 | 878 |
| Total cost of revenue | 5,052 | 5,973 |
| Gross profit | 9,274 | 10,405 |
| Operating expenses: | ||
| Sales & marketing | 4,375 | 5,241 |
| General and administrative | 2,739 | 3,097 |
| Research & development | 1,599 | 1,874 |
| Impairment of goodwill | 4,300 | -- |
| Amortization of customer relationships and trade names | 4 | 101 |
| Total operating expenses | 13,017 | 10,313 |
| Income (loss) from operations | (3,743) | 92 |
| Interest expense | (59) | (77) |
| Interest income | 3 | -- |
| Other income, net | 22 | 15 |
| Income (loss) from operations before income taxes | (3,777) | 30 |
| Income tax provision | 551 | 45 |
| Net loss | $ (4,328) | $ (15) |
| Net loss per share | ||
| Basic and diluted | $ (0.45) | $ (0.00) |
| Weighted average shares outstanding used in calculating net loss per share: | ||
| Basic and diluted | 9,568 | 9,568 |
| Lyris, Inc. | ||
| Reconciliation of Net Income to Non-GAAP Net Income | ||
| (Unaudited) | ||
| (in thousands, except for per share data) | ||
|
Three Months Ended December 31, |
||
| 2014 | 2013 | |
| Net income (loss) | $ (3,994) | $ 478 |
| Stock-based compensation expense | 162 | 41 |
| Amortization of intangible assets | 17 | 489 |
| Impairment of goodwill | 4,300 | -- |
| Other (income) expense, net | 9 | (23) |
| Non-GAAP net income | $ 494 | $ 985 |
| Non-GAAP net income per share | ||
| Basic | $ 0.05 | $ 0.10 |
| Diluted | $ 0.04 | $ 0.09 |
| Shares used to compute Non-GAAP net income per share | ||
| Basic | 9,568 | 9,568 |
| Diluted | 11,568 | 11,568 |
| Non-GAAP net income excludes stock-based compensation expense, amortization of intangibles and certain other financial measures. Management believes that non-GAAP net income provides useful, supplemental information to management and investors regarding the performance of the company's business operations. Non-GAAP net income is not a measure determined in accordance with United States Generally Accepted Accounting Principles ("GAAP") and is thus susceptible to varying calculations. As presented, this measure may not be comparable to similarly titled measures that other companies may disclose. Non-GAAP net income should not be considered in isolation or construed as a substitute for other measures of profitability prepared in accordance with GAAP for purposes of analyzing our financial performance or profitability. Non-GAAP net income should be considered in addition to, and not as a substitute or as superior measure to, net income, earnings per share or other measures of financial performance prepared in accordance with GAAP. | ||
| Lyris, Inc. | ||
| Reconciliation of Net Income to Non-GAAP Net Income | ||
| (Unaudited) | ||
| (in thousands, except for per share data) | ||
|
Six Months Ended December 31, |
||
| 2014 | 2013 | |
| Net loss | $ (4,328) | $ (15) |
| Stock-based compensation expense | 301 | 156 |
| Amortization of intangible assets | 96 | 979 |
| Impairment of goodwill | 4,300 | -- |
| Other (income) expense, net | (22) | (15) |
| Non-GAAP net income | $ 347 | $ 1,105 |
| Non-GAAP net income per share | ||
| Basic | $ 0.04 | $ 0.12 |
| Diluted | $ 0.03 | $ 0.11 |
| Shares used to compute Non-GAAP net income per share: | ||
| Basic | 9,568 | 9,568 |
| Diluted | 11,568 | 10,332 |
| Non-GAAP net income excludes stock-based compensation expense, amortization of intangibles and certain other financial measures. Management believes that non-GAAP net income provides useful, supplemental information to management and investors regarding the performance of the company's business operations. Non-GAAP net income is not a measure determined in accordance with United States Generally Accepted Accounting Principles ("GAAP") and is thus susceptible to varying calculations. As presented, this measure may not be comparable to similarly titled measures that other companies may disclose. Non-GAAP net income should not be considered in isolation or construed as a substitute for other measures of profitability prepared in accordance with GAAP for purposes of analyzing our financial performance or profitability. Non-GAAP net income should be considered in addition to, and not as a substitute or as superior measure to, net income, earnings per share or other measures of financial performance prepared in accordance with GAAP. | ||
| Lyris, Inc. | ||
| Reconciliation of Net Income to Adjusted EBITDA | ||
| (Unaudited, in thousands) | ||
|
Three Months Ended December 31, |
||
| 2014 | 2013 | |
| Net income (loss) | $ (3,994) | $ 478 |
| Interest (income) / expense, net | 28 | 39 |
| Income tax (benefit) / provision | 221 | 36 |
| Depreciation and amortization | 260 | 855 |
| Total EBITDA | (3,485) | 1,408 |
| Impairment of goodwill | 4,300 | -- |
| Stock-based compensation expense | 162 | 41 |
| Other (income) expense, net | 9 | (23) |
| Total Adjusted EBITDA | $ 986 | $ 1,426 |
| Adjusted EBITDA is calculated as earnings before net interest expense, taxes, depreciation and amortization expense, stock-based compensation expense and certain other financial measures. Adjusted EBITDA is commonly used by our lenders to assess leverage capacity, debt service ability and liquidity, and the company uses adjusted EBITDA to evaluate financial performance and to award incentive compensation for certain employees, including our chief executive officer. We believe that adjusted EBITDA also provides useful measurements of liquidity and financial performance for our investors. | ||
| Lyris, Inc. | ||
| Reconciliation of Net Income to Adjusted EBITDA | ||
| (Unaudited, in thousands) | ||
|
Six Months Ended December 31, |
||
| 2014 | 2013 | |
| Net loss | $ (4,328) | $ (15) |
| Interest (income) / expense, net | 56 | 77 |
| Income tax (benefit) / provision | 551 | 45 |
| Depreciation and amortization | 668 | 1,714 |
| Total EBITDA | (3,053) | 1,821 |
| Impairment of goodwill | 4,300 | -- |
| Stock-based compensation expense | 301 | 156 |
| Other (income) expense, net | 9 | 15 |
| Total Adjusted EBITDA | $ 1,557 | $ 1,992 |
| Adjusted EBITDA is calculated as earnings before net interest expense, taxes, depreciation and amortization expense, stock-based compensation expense and certain other financial measures. Adjusted EBITDA is commonly used by our lenders to assess leverage capacity, debt service ability and liquidity, and the company uses adjusted EBITDA to evaluate financial performance and to award incentive compensation for certain employees, including our chief executive officer. We believe that adjusted EBITDA also provides useful measurements of liquidity and financial performance for our investors. | ||
| Lyris, Inc. | ||
| Condensed Consolidated Balance Sheets | ||
| (Unaudited) | ||
| (In thousands, except for per share data) | ||
| December 31, | June 30, | |
| 2014 | 2014 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 1,358 | $ 1,884 |
| Accounts receivable, less allowances of $331 and $396, respectively | 3,466 | 3,456 |
| Prepaid expenses and other current assets | 862 | 674 |
| Deferred income taxes | 646 | 1,152 |
| Total current assets | 6,332 | 7,166 |
| Property and equipment, net | 5,912 | 5,160 |
| Intangible assets, net | 4,400 | 4,404 |
| Goodwill | 5,491 | 9,791 |
| Other long-term assets | 298 | 615 |
| TOTAL ASSETS | $ 22,433 | $ 27,136 |
| LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $ 2,401 | $ 3,103 |
| Revolving line of credit | 2,580 | 2,350 |
| Capital lease obligations - short-term | 236 | 459 |
| Income taxes payable | 109 | 136 |
| Deferred revenue | 3,396 | 3,165 |
| Total current liabilities | 8,722 | 9,213 |
| Other long-term liabilities | 395 | 449 |
| Capital lease obligations - long-term | 84 | 163 |
| TOTAL LIABILITIES | 9,202 | 9,826 |
| Commitments and contingencies | ||
| Redeemable Series A convertible preferred stock; $0.01 par value, 2,000 shares authorized, issued and outstanding, liquidation preference $5,000 | 5,000 | 5,000 |
| Stockholders' equity: | ||
| Common stock, $0.15 par value; 40,000 shares authorized; 9,568 shares issued and outstanding as of December 31, 2014 and June 30, 2014 | 1,415 | 1,415 |
| Additional paid-in capital | 268,893 | 268,592 |
| Accumulated deficit | (261,931) | (257,603) |
| Treasury stock, at cost 11 shares held at December 31, 2014 and June 30, 2014 | (56) | (56) |
| Accumulated other comprehensive income | (89) | (38) |
| Total stockholders' equity | 13,231 | 12,310 |
| LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | $ 22,433 | $ 27,136 |