MAM Software Group announced the following financial results for its first fiscal quarter ended Sept. 30, 2015.
Revenues were $8 million versus $8.2 million for the same period last year. On a constant currency basis, revenues were up 3 percent over the same period last year. Recurring revenues were 78 percent of total revenues compared to 73 percent of total revenues for the same period last year.
Operating income improved to $1 million, or 12.8 percent of revenues, versus $812,000, or 9.9 percent of revenues, for the same period last year. Net income increased 36 percent as compared to the same period last year.
Michael Jamieson, MAM’s president and CEO, commented, “Despite the impact from currency fluctuations, on a constant currency basis, revenue grew by 3 percent, while simultaneously we continue to invest in product development and sales and marketing to transition to a cloud-based business model. In the U.S., an important growth market for us, we grew by 6 percent over the first quarter of last year. Recurring revenue increased to 78 percent of total revenue supported by continued positive, upward trends in our Software as a Service (SaaS) and Data as a Service (DaaS) offerings. Our SaaS revenue grew 42 percent year-over-year and 9 percent, sequentially. Taking everything into account, we are pleased with the progress made during the quarter and the overall direction in which we are headed.”
Gross profit for the quarter was $4.3 million, or 54 percent of total revenues, a decrease of $557,000 compared to $4.9 million, or 60 percent of total revenues, for the same period last year. The decrease in gross profit margins was primarily the result of an increase in lower margin equipment sales in the first quarter of 2016 and higher margin special project revenue in the first quarter of last year.
MAM Software finished the quarter with $5.8 million in cash after capital expenditures and capitalized software development costs of $647,000. The company had no debt outstanding at Sept. 30, 2015.
The company discontinued its stock buyback program on Oct. 30, 2015. As of Sept. 30, 2015, MAM had 14.3 million shares of common stock outstanding.
“Affecting the leveraged recapitalization of our balance sheet subsequent to quarter-end through the recently announced tender offer underscores our commitment to returning value to our shareholders while also affirming our optimism for the future of our business,” said Brian Callahan, MAM’s executive vice president and chief financial officer. “The current interest rate environment and our stock’s recent market valuation combined with our strong business model and the successful execution of our strategic plans enable ongoing investment in our business and the delivery of meaningful returns to our shareholders. Our efforts to maintain revenue growth and a consistent level of profitability place us in a position to repurchase our shares and maintain the financial resources necessary to further grow our business.
“Going forward, our growth strategies remain unchanged,” added Callahan. “We will continue to balance our investments in the business with opportunities to return value to our shareholders. Our expectations for adjusted EBITDA in the range of $5.8 million to $6 million for fiscal 2016 also remain unchanged.”
