DALLAS, Nov. 6, 2014 (GLOBE NEWSWIRE) -- Speed Commerce, Inc. (Nasdaq:SPDC), a leading provider of omni-channel e-commerce services, reported financial results for its fiscal second quarter ended September 30, 2014. The following figures exclude results from the company's retail distribution segment, which was reclassified into discontinued operations in the fiscal fourth quarter of 2014.
Fiscal Q2 2015 Summary
- Net revenues were $23.1 million
- Adjusted EBITDA increased 35% to $2.7 million
- Appointed e-commerce veterans Paul Chisholm as vice president of operations and Mark Steele as vice president of global sales and marketing
- Added significant e-commerce and strategic marketing depth with appointment of Scott Guilfoyle and Alex Constantinople to board of directors
- Completed the sale of the company's legacy retail distribution business
Fiscal Q2 2015 Financial Results
Net revenues in the fiscal second quarter of 2015 were $23.1 million compared to $28.6 million in the year-ago quarter. The change primarily resulted from the recognition in the prior year of non-recurring pass-through licensing fees of $4.8 million.
Adjusted EBITDA (a non-GAAP measure) showed a strong increase of 35% to $2.7 million from $2.0 million in the year-ago quarter.
Adjusted gross profit margin was 23.9% compared to 24.8% in the year-ago quarter (see, "Use of Non-GAAP Financial Information," below for further discussion about this and other non-GAAP measures). The decrease was primarily driven by the ramp-up in labor costs as we prepared for new client on-boards.
Total adjusted operating expenses (a non-GAAP measure), net of depreciation and amortization, decreased by $0.6 million or 12% to $4.6 million, compared to $5.2 million in the year-ago quarter.
Net loss from continuing operations was $1.9 million or $(0.06) per diluted share, compared to a net loss from continuing operations of $1.4 million or $(0.03) per diluted share in the year-ago quarter.
First Six Months of Fiscal 2015 Financial Results
Net revenues in the first six months of fiscal 2015 were $45.1 million compared to $50.6 million in the year-ago period.
Adjusted EBITDA (a non-GAAP measure) increased 26% to $4.1 million compared to $3.3 million in the year-ago period.
Adjusted gross profit margin (a non-GAAP measure) was 25.1% compared to 26.2% in the year-ago period.
Total adjusted operating expenses (a non-GAAP measure), net of depreciation and amortization, decreased by $1.0 million or 10% to $9.4 million, compared to $10.4 million in the year-ago period.
Net loss from continuing operations was $5.3 million or $(0.12) per diluted share, compared to a net loss from continuing operations of $2.5 million or $(0.05) per diluted share in the year-ago period.
Management Commentary
"The second quarter marks our first full quarter as a pure-play e-commerce organization," said Richard Willis, president and CEO of Speed Commerce. "While the second quarter is traditionally our lowest sales quarter, our core customers grew in sales by 17% from last year and we continued to deliver double-digit adjusted EBITDA growth.
"During the quarter, we completed the build-out of our 770,000 square foot Columbus fulfillment facility and we continued to invest in our sales and marketing team, as well as in IT to support the launch of SARA X and several client onboards. Our sales pipeline, under the reigns of former Oracle VP Mark Steele, is also the strongest in our company's history with several new client agreements having been signed over the past few weeks. With the proper people and systems in place, our organization is positioned to double the overall volume handled by our fulfillment centers, which is critical as we enter the all-important holiday season."
Fiscal 2015 Outlook
Speed Commerce's guidance for fiscal 2015 remains on track with net revenues to range between $135 million to $145 million, which represents an increase of 26% to 36%. Adjusted EBITDA is expected to range between $17 and $20 million, which represents an increase of 38% to 62%.
Conference Call
Speed Commerce will host a conference call today at 11:00 a.m. Eastern time to discuss these results. President and CEO Richard Willis and CFO Terry Tuttle will host the call, followed by a question and answer period.
| Date: Thursday, November 6, 2014 |
| Time: 11:00 a.m. Eastern time (10:00 a.m. Central time) |
| Toll free dial-in number: 1-888-397-5352 |
| International dial-in number: 1-719-457-2664 |
| Conference ID: 7136038 |
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.
The conference call will be broadcast live and available for replay at http://public.viavid.com/index.php?id=111477 and via the investor relations section of the Speed Commerce website at www.speedcommerce.com.
A replay of the conference call will be available after 2:00 p.m. Eastern time on the same day through November 20, 2014.
| Toll-free replay number: 1-877-870-5176 |
| International replay number: 1-858-384-5517 |
| Replay ID: 7136038 |
About Speed Commerce
Speed Commerce, Inc. (Nasdaq:SPDC) is a single-source provider of e-commerce service solutions to leading retailers and manufacturers. The company's omni-channel capabilities unite a digital commerce strategy with traditional retail channels, creating the ultimate branded shopping experience. Services include e-commerce platform development; hosting, managed and marketing services; order and inventory management; pick, pack & ship; returns processing; and 24/7 customer care. For additional information, please visit the company's website at www.speedcommerce.com.
Use of Non-GAAP Information
In evaluating the company's financial performance and operating trends, management considers information concerning the company's net revenues, adjusted gross margins, adjusted operating expenses, and adjusted EBITDA, among other items, which are not calculated in accordance with generally accepted accounting principles ("GAAP") in the United States of America. The company's management believes these non-GAAP measures are useful to investors because they provide supplemental information that facilitates comparisons to prior periods and for the evaluation of financial results. Management uses these non-GAAP measures to evaluate its financial results, develop budgets and manage expenditures. The method the company uses to produce non-GAAP results is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a replacement for corresponding GAAP measures. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is attached to this release and can also be found on the company's website at www.speedcommerce.com.
Important Cautions Regarding Forward Looking Statements
The statements in this press release are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbors provided therein. These forward-looking statements are subject to risks and uncertainties, and the actual results that the company achieves, or reports in its Form 10-Q in connection with this period, may differ materially from these forward-looking statements due to such risks and uncertainties, including, but not limited to: difficult economic conditions that adversely affect the company or its clients; the company's revenues being derived from a small group of clients; pending or prospective litigation may subject the company to significant costs; the seasonal nature of the company's business; the company's ability to quickly and cost-effectively adapt to the changing demands of its clients; the potential for the company to incur significant costs and to experience operational and logistical difficulties in connection with its information technology systems and fulfillment infrastructure; the company's dependence on significant clients and vendors; the company's ability to meet significant working capital requirements; and the company's ability to compete effectively in the highly competitive markets that it serves. In addition to these, a detailed statement of risks and uncertainties is contained in the company's reports to the U.S. Securities and Exchange Commission (the "SEC"), including, in particular, the company's proxy materials, the company's Form 10-K filings, as well as its other SEC filings and public disclosures.
Investors and shareholders are urged to read this press release carefully. The company can offer no assurances that any projections, assumptions or forecasts made or discussed in this press release, will be met, and investors should understand the risks of investing solely due to such projections. The forward-looking statements included in this press release are made only as of the date of this report and the company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.
Investors and shareholders may obtain free copies of the public filings through the website maintained by the SEC at www.sec.gov or at one of the SEC's other public reference rooms in Washington, D.C., New York, New York or Chicago, Illinois. Please contact the SEC at 1-800-SEC-0330 for further information with respect to the SEC's public reference rooms.
| SPEED COMMERCE, INC. | ||
| Consolidated Condensed Balance Sheets | ||
| (In thousands) | ||
| (Unaudited) | (Audited) | |
| September 30, | March 31, | |
| 2014 | 2014 | |
| Assets: | ||
| Current assets: | ||
| Cash | $ 6,927 | $ 13 |
| Accounts receivable, net | 21,915 | 18,527 |
| Prepaid expenses | 2,205 | 1,000 |
| Deferred costs | 6,156 | 1,708 |
| Assets of discontinued operations | -- | 102,278 |
| Total current assets | 37,203 | 123,526 |
| Property and equipment, net | 17,153 | 15,409 |
| Goodwill and intangible assets, net | 51,589 | 50,261 |
| Assets of discontinued operations | -- | 7,578 |
| Other assets | 19,889 | 5,914 |
| Total assets | $ 125,834 | $ 202,688 |
| Liabilities and shareholders' equity: | ||
| Current liabilities: | ||
| Revolving line of credit | $ -- | $ 38,362 |
| Current portion of long-term debt | 875 | -- |
| Accounts payable | 14,716 | 12,683 |
| Accrued expenses | 7,720 | 1,730 |
| Liabilities related to assets of discontinued operations | -- | 88,388 |
| Other | 6,203 | 5,383 |
| Total current liabilities | 29,514 | 146,546 |
| Long-term liabilities: | ||
| Liabilities related to assets of discontinued operations | -- | 7 |
| Long-term debt | 34,125 | -- |
| Other liabilities | 13,523 | 4,740 |
| Total liabilities | 77,162 | 151,293 |
| Shareholders' equity | 48,672 | 51,395 |
| Total liabilities and shareholders' equity | $ 125,834 | $ 202,688 |
| SPEED COMMERCE, INC. | ||||
| Consolidated Statements of Operations and Comprehensive (Loss) | ||||
| (In thousands, except per share amounts) | ||||
| (Unaudited) | (Unaudited) | |||
| Three months ended September 30, | Six months ended September 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Net revenues | $ 23,067 | $ 28,562 | $ 45,127 | $ 50,578 |
| Cost of revenues | 17,555 | 22,935 | 34,896 | 38,946 |
| Gross profit | 5,512 | 5,627 | 10,231 | 11,632 |
| Operating expenses: | ||||
| Selling and marketing | 763 | 585 | 1,765 | 1,147 |
| General and administrative | 3,943 | 3,986 | 7,751 | 8,162 |
| Information technology | 956 | 718 | 1,800 | 1,377 |
| Depreciation and amortization | 1,845 | 1,305 | 3,614 | 2,619 |
| Total operating expenses | 7,507 | 6,594 | 14,930 | 13,305 |
| Income (loss) from operations | (1,995) | (967) | (4,699) | (1,673) |
| Other income (expense): | ||||
| Interest expense, net | (838) | (418) | (1,379) | (798) |
| Other income (expense), net | 1,070 | -- | 945 | 10 |
| Income (loss) from operations, before income tax | (1,763) | (1,385) | (5,133) | (2,461) |
| Income tax expense | (119) | (9) | (173) | (28) |
| Net loss from continuing operations | (1,882) | (1,394) | (5,306) | (2,489) |
| Discontinued operations: | ||||
| Gain on sale of discontinued operations | 3,927 | -- | 3,927 | -- |
| Income (loss) from discontinued operations, net of tax | (3,564) | (1,328) | (10,923) | (4,084) |
| Net loss | $ (1,519) | $ (2,722) | $ (12,302) | $ (6,573) |
| Basic net loss per common share | ||||
| Continuing operations | $ (0.06) | $ (0.03) | $ (0.12) | $ (0.05) |
| Discontinued operations | 0.01 | (0.02) | (0.11) | (0.07) |
| Net loss | $ (0.05) | $ (0.05) | $ (0.23) | $ (0.12) |
| Diluted net loss per common share | ||||
| Continuing operations | $ (0.06) | $ (0.03) | $ (0.12) | $ (0.05) |
| Discontinued operations | 0.01 | (0.02) | (0.11) | (0.07) |
| Net loss | $ (0.05) | $ (0.05) | $ (0.23) | $ (0.12) |
| Weighted average shares outstanding: | ||||
| Basic | 65,536 | 56,792 | 65,377 | 56,518 |
| Diluted | 65,536 | 56,792 | 65,377 | 56,518 |
| Other comprehensive loss: | ||||
| Net unrealized gain on foreign exchange rate translation, net of tax | (626) | (89) | (725) | 35 |
| Comprehensive loss | $ (2,145) | $ (2,811) | $ (13,027) | $ (6,538) |
| SPEED COMMERCE, INC. | |||||||||||
| Supplemental Information | |||||||||||
| (In thousands) | |||||||||||
| (Unaudited) | |||||||||||
| Adjusted Pro Forma (Loss) Before Income Tax for the Three Months Ended September 30, | |||||||||||
| GAAP Information | Adjusted Pro Forma Information | ||||||||||
| Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||
| 2014 | % of sales | 2013 | % of sales | 2014 | % of sales | 2013 | % of sales | ||||
| Net revenues | $ 23,067 | $ 28,562 | $ 23,067 | $ 28,562 | |||||||
| Gross profit (1) | 5,512 | 23.9% | 5,627 | 19.7% | 5,512 | 23.9% | 7,086 | 24.8% | |||
| Operating expenses (2) | 7,507 | 32.5% | 6,594 | 23.1% | 6,450 | 28.0% | 6,513 | 22.8% | |||
| Income (loss) from operations | (1,995) | (967) | (938) | 573 | |||||||
| Other expense, net | 232 | (418) | 232 | (418) | |||||||
| Income (loss) before income tax | $ (1,763) | $ (1,385) | $ (706) | $ 155 | |||||||
| Three Months Ended March 31, | |||||||||||
| 2014 | 2013 | ||||||||||
| (1) Pro forma adjustments to gross profit consist of the following: | |||||||||||
| Transaction and transition costs | $ -- | $ 1,459 | |||||||||
| Total adjustments | $ -- | $ 1,459 | |||||||||
| (2) Pro forma adjustments to operating expenses consist of the following: | |||||||||||
| Transaction and transition costs | $ 1,057 | $ 81 | |||||||||
| Total adjustments | $ 1,057 | $ 81 | |||||||||
| SPEED COMMERCE, INC. | ||||||||
| Supplemental Information | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Adjusted Pro Forma (Loss) Before Income Tax for the Six Months Ended September 30, | ||||||||
| GAAP Information | Adjusted Pro Forma Information | |||||||
| Six Months Ended September 30, | Six Months Ended September 30, | |||||||
| 2014 | % of sales | 2013 | % of sales | 2014 | % of sales | 2013 | % of sales | |
| Net revenues | $ 45,127 | $ 50,578 | $ 45,127 | $ 50,578 | ||||
| Gross profit (1) | 10,231 | 22.7% | 11,632 | 23.0% | 10,231 | 22.7% | 13,255 | 26.2% |
| Operating expenses (2) | 14,930 | 33.1% | 13,305 | 26.3% | 12,976 | 28.8% | 12,994 | 25.7% |
| Income (loss) from operations | (4,699) | (1,673) | (2,745) | 261 | ||||
| Other expense, net | (434) | (788) | (434) | (788) | ||||
| Income (loss) before income tax | $ (5,133) | $ (2,461) | $ (3,179) | $ (527) | ||||
| Three Months Ended March 31, | ||||||||
| 2014 | 2013 | |||||||
| (1) Pro forma adjustments to gross profit consist of the following: | ||||||||
| Transaction and transition costs | $ -- | $ 1,623 | ||||||
| Total adjustments | $ -- | $ 1,623 | ||||||
| (2) Pro forma adjustments to operating expenses consist of the following: | ||||||||
| Transaction and transition costs | $ 1,954 | $ 311 | ||||||
| Total adjustments | $ 1,954 | $ 311 | ||||||
| SPEED COMMERCE, INC. | ||||
| Supplemental Information | ||||
| (In thousands) | ||||
| (Unaudited) | ||||
| Reconciliation of Net Loss to Adjusted EBITDA | ||||
| Three Months | Six Months | |||
| September 30, | September 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Net loss from continuing operations, as reported | $ (1,882) | $ (1,394) | $ (5,306) | $ (2,489) |
| Interest expense, net | 838 | 418 | 1,379 | 798 |
| Income tax expense | 119 | 9 | 173 | 28 |
| Loss on early extinguishment of debt, net | 816 | -- | 816 | -- |
| Depreciation and amortization | 1,845 | 1,305 | 3,614 | 2,619 |
| Share-based compensation | 602 | 142 | 960 | 382 |
| Mark-to-market adjustment on warrants | (669) | -- | (544) | -- |
| Infrastructure expansion | -- | -- | 1,093 | -- |
| Transaction and transition costs | 1,057 | 1,540 | 1,954 | 1,934 |
| Adjusted EBITDA | $ 2,726 | $ 2,020 | $ 4,139 | $ 3,272 |