Conference Call to be Held Today at 4:30 pm Eastern Time
PALO ALTO, Calif. – Big data analytics and solutions provider Sysorex (NASDAQ: SYRX) today reported financial results for the Second Quarter ended June 30, 2015.
Second Quarter Financial Highlights:
- Q2 2015 Revenue of $17.7 Million
- Q2 2015 Gross Margin of 32%
- Q2 2015 GAAP net loss of $0.09 per share
- Proforma Non-GAAP net loss1 of $0.01 per share
- Q2 2015 Non-GAAP Adjusted EBITDA1 of $34,000
Revenue: Total revenues for the three months ended June 30, 2015 were $17.7 million compared to $17.1 million for the comparable period in the prior year. The $600,000 increase in revenues, or approximately 3.5%, was attributable to an increase in Professional Services and Storage and Computing revenues offset by lower Mobile, IoT & Big Data Products revenue. Total second quarter 2015 revenue included $13.4 million of Storage and Computing revenue, $987,000 of SaaS revenue, $233,000 of Mobile, IoT and Big Data Products revenue and $3.1 million of Professional Services revenue.
Gross Profit: Total gross profit for the three months ended June 30, 2015 was $5.7 million compared to $5.7 million for the comparable period in the prior year. The gross profit margin for the three months ended June 30, 2015 was approximately 32% compared to approximately 33% for the three months ended June 30, 2014.
Net Loss: GAAP net loss attributable to common stockholders for the three months ended June 30, 2015 was $1.7 million compared to $2.4 million for the prior year period. This decrease in net loss of $700,000 was attributable to the acquisition costs of Sysorex in the three months ended June 30, 2014 that were not in the three months ended June 30, 2015.
Non-GAAP net loss1: Pro-forma non-GAAP net loss1 for the three months ended June 30, 2015 was $225,000 compared to non-GAAP net income of $265,000 for the comparable period in the prior year. Proforma non-GAAP net loss or income per basic and diluted common share for the three months ended June 30, 2015 was ($0.01) compared to $0.01 for the prior year period. Non-GAAP net loss or income per share is defined as net loss or income per basic and diluted share adjusted for non-cash items including stock based compensation, amortization of intangibles and one time charges including acquisition costs, severance costs, change in the fair value of shares to be issued and the costs associated with the public offering.
Non-GAAP adjusted EBITDA1: Total Non-GAAP adjusted EBITDA for the three months ended June 30, 2015 was income of $34,000 compared income of $455,000 for the prior year period. Non-GAAP adjusted EBITDA is defined as net income (loss) before interest, provision for (benefit from) income taxes, and depreciation and amortization plus adjustments for other income or expense items, adjustments for one time charges including acquisition costs, severance costs, change in the fair value of shares to be issued and the costs associated with the public offering, and non-cash stock-based compensation.
1 A reconciliation of GAAP to non-GAAP financial measures is provided in the financial statement tables included in this press release. An explanation of these measures is also included under the heading “Non-GAAP Financial Measures.”
Q2 2015 Business Highlights
- Lilien Systems, a Sysorex Company, named to CRN Solution Provider 500.
- Citrix Partners with Sysorex to deliver strong mobile security.
- Sysorex named in TechTarget’s SearchVirtualDesktop.com “Best of Citrix Synergy” 2015 Award Winners.
- Leading health care provider chooses Sysorex for $1.9 million critical data infrastructure project.
- Sysorex to develop gaming analytics for CrowdStar.
- Bridge Bank increases Sysorex credit line and extends an additional term loan for up to $12 million in financing.
- Sysorex acquires assets of LightMiner Systems.
- Sysorex hires Sean Thompson as VP Sales, Professional Services – Eastern U.S.
- Sysorex awarded CIO-CS Contract.
- Lilien Systems, a Sysorex Company, named to 2015 List of CRN Tech Elite.
- Sysorex Awarded NASA SEWP V Contract
All results summarized in this press release (including the financial statement tables) should be considered preliminary, are qualified in their entirety by the financial statement tables included in this press release and are subject to change. Please refer to Sysorex’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, which will be filed with the Securities and Exchange Commission on or about August 7, 2015.
Conference Call Information
Management will host a conference call on Wednesday, August 5, 2015, at 4:30pm Eastern Time to review financial results and corporate highlights. Following management’s formal remarks, there will be a question and answer session.
To listen to the conference call, interested parties within the U.S. should call 1-866-652-5200. International callers should call +1-412-317-6060. All callers should ask for the Sysorex Global Holdings Corp. conference call. The conference call will also be available through a live webcast at sysorex.com.
A replay of the call will be available approximately one hour after the end of the call through September 5, 2015. The replay can be accessed via Sysorex’s website or by dialing 1-877-344-7529 (U.S.) or +1-412-317-0088 (international). The replay conference playback code is 10070391.
All statements in this release that are not based on historical fact are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of the control of the registrant and its subsidiaries, which could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not limited to, the fluctuation of global economic conditions, the performance of management and employees, our ability to obtain financing, competition, general economic conditions and other factors that are detailed in our periodic and current reports available for review at www.sec.gov. Furthermore, we operate in a highly competitive and rapidly changing environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. We disclaim any intention to, and undertake no obligation to, update or revise forward-looking statements.
Non-GAAP Financial Measures
Management believes that certain financial measures not in accordance with generally accepted accounting principles (“GAAP”) are useful measures of operations. EBIDTA, Adjusted EBITDA and pro forma net loss per share are non-GAAP measures. Sysorex defines “EBITDA” as net income (loss) before interest, provision for (benefit from) income taxes, and depreciation and amortization. Management uses Adjusted EBITDA as the matrix in which it manages the business and Sysorex defines “Adjusted EBITDA” as EBITDA plus adjustments for other income or expense items, adjustments for one time charges including acquisition costs, severance costs, change in the fair value of shares to be issued and the costs associated with the public offering, and non-cash stock-based compensation. Sysorex defines “pro forma net loss per share” as GAAP net loss per share adjusted for stock-based compensation, amortization of intangibles and one time non-recurring charges such as severance costs, change in the fair value of shares to be issued, acquisition and offering costs.
Management provides Adjusted EBITDA and pro forma net loss per share measures so that investors will have the same financial information that management uses, which may assist investors in assessing Sysorex’s performance on a period-over-period basis. Adjusted EBITDA or pro forma net loss per share is not a measure of financial performance under GAAP, and should not be considered an alternative to net income (loss) or any other measure of performance under GAAP, or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity. Adjusted EBITDA and pro forma net loss per share have limitations as analytical tools and should not be considered either in isolation or as a substitute for analysis of Sysorex’s results as reported under GAAP.
Sysorex (NASDAQ: SYRX) develops the systems and solutions that power the data-driven enterprise. With an innovative approach to big data, analytics and the Internet of Things (IoT), we blend virtual data from software and networks with the huge volume of physical data generated by mobile devices and Internet-connected things to open new worlds of insight. Our unique solutions are helping organizations worldwide improve decision-making, increase productivity, and fuel the discoveries of tomorrow. Headquartered in Palo Alto, California, we have regional offices in North America, South America, Europe and the Middle East. Visit Sysorex.com, follow us @SysorexGlobal and Link up on LinkedIn.
|CONSOLIDATED BALANCE SHEETS|
|(In thousands, except per share data)|
|June 30,||December 31,|
|Cash and cash equivalents||$||2,242||$||3,228|
|Accounts receivable, net||9,315||8,225|
|Note receivable, related party||0||90|
|Notes and other receivables||1,856||1,294|
|Prepaid licenses and maintenance contracts||7,300||7,151|
|Other current assets||1,753||1,463|
|Total current assets||23,358||22,061|
|Prepaid licenses and maintenance contracts||6,296||6,200|
|Property and equipment, net||1,478||1,308|
|Software development costs, net||615||278|
|Intangible assets, net||19,274||17,676|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Acquisition liability – LightMiner||3,596||—|
|Total current liabilities||30,820||24,874|
|Commitments and contingencies|
|Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding||–||–|
|Common stock, $0.001 par value; 50,000,000 shares authorized; 19,807,875 and 19,707,262 issued and outstanding||20||20|
|Additional paid-in capital||52,603||52,122|
|Due from Sysorex Consulting Inc.||(666)||(666)|
|Accumulated other comprehensive income (loss)||(22)||(18)|
|Total stockholders’ equity attributable to common stockholders||25,099||29,221|
|Total liabilities and stockholders’ equity||$||65,537||$||62,060|
|CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS|
|(In thousands, except share data)|
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Cost of Revenues|
|Total Cost of Revenues||12,001||11,465||22,076||23,435|
|Research and development||251||163||414||163|
|Sales and marketing||3,075||2,523||5,538||4,820|
|General and administrative||2,953||3,024||6,227||5,340|
|Acquisition related costs||112||1,091||188||1,195|
|Amortization of intangibles||1,000||1,249||1,881||1,577|
|Total operating expenses||7,391||8,050||14,248||13,095|
|Loss from operations||
|Other income (expense):|
|Change in fair value of shares to be issued||89||—||89||—|
|Total other income (expense)||—||
|Loss before income taxes||
|Provision for income taxes||—||—|