MINNEAPOLIS--(BUSINESS WIRE)--Qumu Corporation (NASDAQ: QUMU) today reported financial results for the second quarter ended June 30, 2016, which were slightly improved from the estimates included in its July 21, 2016 press release.
Second quarter revenue was $6.5 million, compared to $8.8 million in the second quarter 2015. Second quarter net loss was $(4.3) million, or a loss of $(0.46) per share, compared to $(6.9) million, or a loss of $(0.75) per share, in the second quarter 2015. Second quarter adjusted EBITDA (a non-GAAP measure) was a loss of $(3.1) million, compared to an adjusted EBITDA loss of $(5.8) million for the second quarter 2015.
For the six months ended June 30, 2016, revenue was $15.3 million, compared to $14.7 million last year. For the six months ended June 30, 2016, net loss was $(8.4) million, or a loss of $(0.91) per share, compared to $(16.9) million, or a loss of $(1.83) per share, last year. For the six months ended June 30, 2016, adjusted EBITDA was a loss of $(6.0) million, compared to an adjusted EBITDA loss of $(14.5) million last year.
“As previously indicated, we are disappointed with our second quarter revenue; however, we have right-sized our expense structure over the past twelve months and we remain confident in our ability to transition to more recurring revenue and a lower reliance on perpetual license sales over time. For example, in the second quarter we closed our largest number of new cloud customers in a quarter,” said Vern Hanzlik, Qumu’s president and CEO. “In the near term, due to the variability of the timing of larger perpetual license opportunities, we have revised our annual guidance. During this transition, we are continuing to focus on providing the best enterprise video content management solutions and services, as rated by industry analysts, to our customers and to the Global 5000 market.”
Other Information
- Subscription, maintenance and support revenue was $4.7 million and $4.6 million for the second quarter 2016 and 2015, respectively, and $10.2 million and $8.7 million for the six months ended June 2016 and 2015, respectively.
- Gross margin was 54.7% and 48.7% for the second quarter 2016 and 2015, respectively, and 55.6% and 43.9% for the six months ended June 2016 and 2015, respectively.
- Total headcount was 165 as of June 30, 2016 compared to 182 as of March 31, 2016 and 232 as of June 30, 2015.
- Cash and marketable securities were $8.3 million as of June 30, 2016, compared to $11.3 million as of March 31, 2016, reflecting the second quarter operating loss and the impact on cash from changes in working capital.
Guidance
For the third quarter 2016, revenue is expected to
be in the range of $7.0 million to $8.0 million. Third quarter net loss
is expected to be in the range of $(3.7) million to $(3.2) million, or
$(0.40) to $(0.35) per share, with weighted average shares outstanding
of approximately 9.25 million shares. Adjusted EBITDA for the third
quarter 2016 is expected to be in the range of a loss of $(2.5) million
to $(2.0) million, compared to an adjusted EBITDA loss of $(6.2) million
in the third quarter 2015.
For the full year of 2016, revenue is expected to be in the range of $32.0 million to $35.0 million. Gross margins are expected to improve from the mid 50s through the first half of the year to the mid to high 60s late in the year. Net loss is expected to be in the range of $(13.0) million to $(11.6) million, or $(1.40) to $(1.25) per share, with weighted average shares outstanding of approximately 9.25 million shares. Adjusted EBITDA is expected to be in the range of a loss of $(8.0) million to $(6.5) million compared to an adjusted EBITDA loss of $(24.5) million in fiscal 2015. The Company expects a tax benefit of $200,000 in fiscal 2016. Additionally, the Company expects that it will be cash flow breakeven the fourth quarter of 2016.
Conference Call
The Company has scheduled a conference call
and webcast to review its second quarter 2016 results tomorrow, August
3, 2016 at 10:00 a.m. Eastern Time. The dial-in number for the
conference call is 877-456-6914 for domestic participants and
929-387-3794 for international participants. Investors can also access a
webcast of the live conference call by linking through the investor
relations section of the Qumu website, www.qumu.com.
Webcasts will be archived on Qumu’s website.
Non-GAAP Information
To supplement the Company's condensed
consolidated financial statements presented on a GAAP basis, the Company
uses adjusted EBITDA (a non-GAAP measure), which excludes certain items
presented under GAAP. Adjusted EBITDA excludes items related to
stock-based compensation, foreign currency gains and losses, net income
(loss) from discontinued operations, depreciation and amortization,
interest income and expense, and the impact of income-based taxes.
The Company uses both GAAP and non-GAAP measures when planning, monitoring, and evaluating the Company’s performance. The Company believes that adjusted EBITDA is useful to investors because it provides supplemental information that allows investors to review the Company's results of operations from the same perspective as management and the Company's board of directors. Non-GAAP results are presented for supplemental informational purposes only for understanding our operating results. The non-GAAP results should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies.
See the attached Supplemental Financial Information for a reconciliation of operating loss, a GAAP measure, to adjusted EBITDA, a non-GAAP measure, for the three and six months ended June 30, 2016 and 2015.
Forward-Looking Statements
This press release contains
forward-looking statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Any
statements contained in this press release that are not statements of
historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as “may,” “will,” “expect,”
“believe,” “anticipate,” or “estimate” or comparable terminology are
intended to identify forward-looking statements. Such forward-looking
statements include, for example, statements about: the Company’s future
revenue and operating performance, cash balances, future product mix or
the timing of recognition of revenue, and the demand for the Company’s
products or software. The statements made by the Company are based upon
management’s current expectations and are subject to certain risks and
uncertainties that could cause the actual results to differ materially
from those described in the forward-looking statements. These risks and
uncertainties include the risk factors described in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2015 and other
factors set forth in the Company’s filings with the Securities and
Exchange Commission.
About Qumu
Video is today’s document. Qumu Corporation
(NASDAQ: QUMU) provides the tools businesses need to create, manage,
secure, deliver and measure the success of their videos. Qumu's
innovative solutions release the power in video to engage and empower
employees, partners and clients. Organizations around the world realize
the greatest possible value from video they create and publish using
Qumu. Whatever the audience size, viewer device or network
configuration, Qumu solutions are how business does video.
Additional information can be found at www.qumu.com.
| QUMU CORPORATION | ||||||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||||||
| (unaudited - in thousands, except per share data) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Software licenses and appliances | $ | 836 | $ | 2,719 | $ | 2,798 | $ | 3,703 | ||||||||||||
| Service | 5,679 | 6,045 | 12,453 | 11,030 | ||||||||||||||||
| Total revenues | 6,515 | 8,764 | 15,251 | 14,733 | ||||||||||||||||
| Cost of revenues: | ||||||||||||||||||||
| Software licenses and appliances | 412 | 706 | 1,369 | 939 | ||||||||||||||||
| Service | 2,542 | 3,786 | 5,403 | 7,328 | ||||||||||||||||
| Total cost of revenues | 2,954 | 4,492 | 6,772 | 8,267 | ||||||||||||||||
| Gross profit | 3,561 | 4,272 | 8,479 | 6,466 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Research and development | 2,410 | 2,858 | 4,760 | 5,660 | ||||||||||||||||
| Sales and marketing | 2,978 | 4,740 | 6,510 | 9,568 | ||||||||||||||||
| General and administrative | 2,265 | 3,558 | 5,235 | 7,922 | ||||||||||||||||
| Amortization of purchased intangibles | 227 | 200 | 453 | 399 | ||||||||||||||||
| Total operating expenses | 7,880 | 11,356 | 16,958 | 23,549 | ||||||||||||||||
| Operating loss | (4,319 | ) | (7,084 | ) | (8,479 | ) | (17,083 | ) | ||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest income (expense), net | (15 | ) | 15 | (27 | ) | 31 | ||||||||||||||
| Other, net | (47 | ) | (4 | ) | (11 | ) | (68 | ) | ||||||||||||
| Total other income (expense), net | (62 | ) | 11 | (38 | ) | (37 | ) | |||||||||||||
| Loss before income taxes | (4,381 | ) | (7,073 | ) | (8,517 | ) | (17,120 | ) | ||||||||||||
| Income tax benefit | (90 | ) | (146 | ) | (94 | ) | (319 | ) | ||||||||||||
| Net loss from continuing operations | (4,291 | ) | (6,927 | ) | (8,423 | ) | (16,801 | ) | ||||||||||||
| Net loss from discontinued operations, net of tax | — | (22 | ) | — | (89 | ) | ||||||||||||||
| Net loss | $ | (4,291 | ) | $ | (6,949 | ) | $ | (8,423 | ) | $ | (16,890 | ) | ||||||||
| Net loss per basic and diluted share: | ||||||||||||||||||||
| Net loss from continuing operations per share | $ | (0.46 | ) | $ | (0.75 | ) | $ | (0.91 | ) | $ | (1.83 | ) | ||||||||
| Net loss from discontinued operations per share | — | — | — | — | ||||||||||||||||
| Net loss per share | $ | (0.46 | ) | $ | (0.75 | ) | $ | (0.91 | ) | $ | (1.83 | ) | ||||||||
| Basic and diluted weighted average shares outstanding | 9,236 | 9,243 | 9,227 | 9,206 | ||||||||||||||||
| QUMU CORPORATION | ||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||
| (in thousands) | ||||||||||
| June 30, | December 31, | |||||||||
| Assets | 2016 | 2015 | ||||||||
| Current assets: | (unaudited) | |||||||||
| Cash and cash equivalents | $ | 8,032 | $ | 7,072 | ||||||
| Marketable securities | 250 | 6,249 | ||||||||
| Receivables, net | 5,826 | 11,257 | ||||||||
| Income taxes receivable | 384 | 659 | ||||||||
| Prepaid expenses and other current assets | 2,873 | 3,392 | ||||||||
| Total current assets | 17,365 | 28,629 | ||||||||
| Property and equipment, net | 2,360 | 2,942 | ||||||||
| Intangible assets, net | 9,472 | 11,032 | ||||||||
| Goodwill | 7,330 | 8,103 | ||||||||
| Other assets, non-current | 5,359 | 3,706 | ||||||||
| Total assets | $ | 41,886 | $ | 54,412 | ||||||
| Liabilities and Stockholders’ Equity | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable and other accrued liabilities | $ | 4,154 | $ | 3,864 | ||||||
| Accrued compensation | 2,881 | 4,014 | ||||||||
| Deferred revenue | 10,130 | 10,413 | ||||||||
| Deferred rent | 296 | 270 | ||||||||
| Financing obligations | 407 | 502 | ||||||||
| Current liabilities from discontinued operations | 50 | 50 | ||||||||
| Total current liabilities | 17,918 | 19,113 | ||||||||
| Long-term liabilities: | ||||||||||
| Deferred revenue, non-current | 503 | 2,215 | ||||||||
| Income taxes payable, non-current | 6 | 9 | ||||||||
| Deferred tax liability, non-current | 436 | 575 | ||||||||
| Deferred rent, non-current | 847 | 998 | ||||||||
| Financing obligations, non-current | 347 | 519 | ||||||||
| Other non-current liabilities | — | 226 | ||||||||
| Total long-term liabilities | 2,139 | 4,542 | ||||||||
| Total liabilities | 20,057 | 23,655 | ||||||||
| Stockholders’ equity: | ||||||||||
| Common stock | 92 | 92 | ||||||||
| Additional paid-in capital | 66,206 | 65,484 | ||||||||
| Accumulated deficit | (41,721 | ) | (33,298 | ) | ||||||
| Accumulated other comprehensive loss | (2,748 | ) | (1,521 | ) | ||||||
| Total stockholders’ equity | 21,829 | 30,757 | ||||||||
| Total liabilities and stockholders’ equity | $ | 41,886 | $ | 54,412 | ||||||
| QUMU CORPORATION | ||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||
| (unaudited - in thousands) | ||||||||||
| Six Months Ended | ||||||||||
| June 30, | ||||||||||
| 2016 | 2015 | |||||||||
| Cash flows used in operating activities: | ||||||||||
| Net loss | $ | (8,423 | ) | $ | (16,890 | ) | ||||
| Net loss from discontinued operations, net of tax | — | (89 | ) | |||||||
| Net loss from continuing operations | (8,423 | ) | (16,801 | ) | ||||||
| Adjustments to reconcile net loss to net cash used in continuing operating activities: | ||||||||||
| Depreciation and amortization | 1,700 | 1,503 | ||||||||
| Stock-based compensation | 740 | 1,068 | ||||||||
| Loss on disposal of property and equipment | — | 4 | ||||||||
| Deferred income taxes | (90 | ) | (170 | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||||
| Receivables | 5,192 | 3,393 | ||||||||
| Income taxes receivable / payable | 241 | (209 | ) | |||||||
| Prepaid expenses and other assets | (1,171 | ) | (2,293 | ) | ||||||
| Accounts payable and other accrued liabilities | 330 | (559 | ) | |||||||
| Accrued compensation | (1,113 | ) | (1,763 | ) | ||||||
| Deferred revenue | (1,749 | ) | 1,073 | |||||||
| Deferred rent | (120 | ) | — | |||||||
| Other non-current liabilities | (226 | ) | (69 | ) | ||||||
| Net cash used in continuing operating activities | (4,689 | ) | (14,823 | ) | ||||||
| Net cash used in discontinued operating activities | — | (397 | ) | |||||||
| Net cash used in operating activities | (4,689 | ) | (15,220 | ) | ||||||
| Cash flows provided by investing activities: | ||||||||||
| Purchases of marketable securities | — | (9,250 | ) | |||||||
| Sales and maturities of marketable securities | 6,000 | 17,965 | ||||||||
| Purchases of property and equipment | (33 | ) | (425 | ) | ||||||
| Proceeds from sale of property and equipment | — | 43 | ||||||||
| Net cash provided by investing activities | 5,967 | 8,333 | ||||||||
| Cash flows provided by (used in) financing activities: | ||||||||||
| Common stock repurchases to settle employee withholding liability | (18 | ) | (45 | ) | ||||||
| Principal payments on financing obligations | (259 | ) | (168 | ) | ||||||
| Proceeds from employee stock plans | — | 142 | ||||||||
| Net cash used in financing activities | (277 | ) | (71 | ) | ||||||
| Effect of exchange rate changes on cash | (41 | ) | 9 | |||||||
| Net increase (decrease) in cash and cash equivalents | 960 | (6,949 | ) | |||||||
| Cash and cash equivalents, beginning of period | 7,072 | 11,684 | ||||||||
| Cash and cash equivalents, end of period | $ | 8,032 | $ | 4,735 | ||||||
| QUMU CORPORATION | |||||||||||||||||
| Supplemental Financial Information | |||||||||||||||||
| (unaudited - in thousands) | |||||||||||||||||
| A summary of revenue is as follows: | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| June 30, | June 30, | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| Software licenses and appliances | $ | 836 | $ | 2,719 | $ | 2,798 | $ | 3,703 | |||||||||
| Service | |||||||||||||||||
| Subscription, maintenance and support | 4,712 | 4,592 | 10,237 | 8,704 | |||||||||||||
| Professional services and other | 967 | 1,453 | 2,216 | 2,326 | |||||||||||||
| Total service | 5,679 | 6,045 | 12,453 | 11,030 | |||||||||||||
| Total revenue | $ | 6,515 | $ | 8,764 | $ | 15,251 | $ | 14,733 | |||||||||
|
A reconciliation from GAAP results to adjusted EBITDA is as follows: |
||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Net loss | $ | (4,291 | ) | $ | (6,949 | ) | $ | (8,423 | ) | $ | (16,890 | ) | ||||||||
| Interest (income) expense, net | 15 | (15 | ) | 27 | (31 | ) | ||||||||||||||
| Income tax benefit | (90 | ) | (146 | ) | (94 | ) | (319 | ) | ||||||||||||
| Depreciation and amortization expense: | ||||||||||||||||||||
| Depreciation and amortization in cost of revenues | 18 | 26 | 40 | 48 | ||||||||||||||||
| Depreciation and amortization in operating expenses | 280 | 212 | 562 | 423 | ||||||||||||||||
| Total depreciation and amortization expense | 298 | 238 | 602 | 471 | ||||||||||||||||
| Amortization of intangibles included in cost of revenues | 323 | 317 | 645 | 633 | ||||||||||||||||
| Amortization of intangibles included in operating expenses | 227 | 200 | 453 | 399 | ||||||||||||||||
| Total amortization of intangibles expense | 550 | 517 | 1,098 | 1,032 | ||||||||||||||||
| Total depreciation and amortization expense | 848 | 755 | 1,700 | 1,503 | ||||||||||||||||
| EBITDA | (3,518 | ) | (6,355 | ) | (6,790 | ) | (15,737 | ) | ||||||||||||
| Foreign currency losses, net | 47 | 4 | 11 | 68 | ||||||||||||||||
| Loss from discontinued operations, net | — | 22 | — | 89 | ||||||||||||||||
| Stock-based compensation expense: | ||||||||||||||||||||
| Stock-based compensation included in cost of revenues | 25 | 38 | 18 | 74 | ||||||||||||||||
| Stock-based compensation included in operating expenses | 364 | 462 | 722 | 994 | ||||||||||||||||
| Total stock-based compensation expense | 389 | 500 | 740 | 1,068 | ||||||||||||||||
| Adjusted EBITDA | $ | (3,082 | ) | $ | (5,829 | ) | $ | (6,039 | ) | $ | (14,512 | ) | ||||||||
