MAM Software Group has announced financial results for its second fiscal quarter ended Dec. 31, 2018.
Michael Jamieson, MAM’s president and CEO, commented, “Our second quarter financial results were in line with our expectations and our business outlook for the full fiscal year 2019. Our team successfully completed the installation of VAST Online at additional locations during the quarter. The feedback from our customers has been encouraging, and we expect deployment to begin accelerating over the next few months in accordance with the project timeline. We are cultivating new business opportunities and advancing discussions with potential customers as a result of the progress we are demonstrating with VAST Online.”
Net revenues were $9 million for the quarter ended Dec. 31, 2018, as compared to $8.5 million for the same period last year, an increase of $456,000 or 5.4 percent. On a constant currency basis, revenue increased 7.6 percent over the same period in the prior fiscal year.
Gross profit for the quarter was $4.9 million, or 54.6 percent of net revenues, an increase of $389,000, or 8.6 percent, as compared to $4.5 million, or 53 percent of net revenues, for the same period in the prior fiscal year.
Provision for income taxes decreased to $110,000, or an effective tax rate of 13.5 percent, for the quarter as compared to $793,000, or an effective tax rate of 111.1 percent, for the same period last year. The decrease in the effective tax rate was primarily due to the lower U.S. federal statutory rate effective Jan. 1, 2018, as per the Tax Cuts and Jobs Act, tax benefits from equity compensation, and the revaluation of the company’s net deferred tax assets at the lower U.S. federal statutory rate and the one-time repatriation tax on deemed repatriation of historical earnings on MAM’s foreign subsidiaries in the prior year, as per the Tax Cuts and Jobs Act, partially offset by lower R&D tax credits.
Net income for the quarter was $704,000, or 6 cents per basic and diluted share, as compared to a net loss of $79,000, or (1 cent) per basic and diluted share, for the same period in the prior fiscal year.
Year-to-Date Financial Results
Net revenues were $18.3 million for the six months ended Dec. 31, 2018, compared to $17.1 million for the same period last year, an increase of $1.1 million, or 6.5 percent. On a constant currency basis, revenues were up 7.8 percent over the same period in the prior fiscal year.
Provision for income taxes decreased to $413,000, or an effective tax rate of 17.7 percent, for the first six months of fiscal year 2019, as compared to $1.1 million, or an effective tax rate of 51.6 percent, for the same period in the prior fiscal year.
Net income for the first six months of fiscal year 2019 was $1.9 million, or 16 cents per basic and diluted share, compared to $1 million, or 9 cents per basic and diluted share, for the same period in the prior fiscal year.
Business Outlook
The company reiterated its expectations for continued revenue growth during fiscal year 2019 of approximately 10 percent, on a constant currency basis, and continuing improvement in profitability with 2019 Adjusted EBITDA in the range of $6.2 million to $6.7 million, on a constant currency basis. The company also expects to invest approximately $7 million in research and development, including capitalized software development costs.
