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23.06.17
ROUNDUP/Aktien Frankfurt Schluss: Gewinn­mit­nahmen sorgen für leichtes Minus

Research Solutions Reports Fiscal Second Quarter 2017 Financial Results

Dienstag, 14.02.2017 22:10 von

PR Newswire

ENCINO, Calif., Feb. 14, 2017 /PRNewswire/ -- Research Solutions, Inc. (OTCQB: RSSS), a pioneer in providing cloud-based solutions for scientific research, reported financial results for its fiscal second quarter ended December 31, 2016.

Fiscal Second Quarter 2017 Summary vs. Year-Ago Quarter

  • Total revenue was $8.5 million compared to $9.3 million.
     
  • Platform revenue was up 137% to $219,000 with a 159% increase in total platform deployments to 96. Annual recurring revenue was up 126% to $905,000.
     
  • Transaction revenue was up 3% to $5.9 million with customer count up 9% to 936. Transaction count was up 7% to approximately 193,000.
     
  • Total gross margin was up 160 basis points to 18.7%.
     
  • Net loss was $(0.8) million or $(0.04) per share, compared to a net loss of $(0.3) million or $(0.02) per share. The increased loss was due to the company's continued investment in its recurring revenue platform business.

Management Commentary

"During the second quarter, our platform business continued its strong revenue momentum, growing more than double the same quarter last year and 27% on a sequential quarterly basis," said Peter Derycz, president and CEO of Research Solutions. "Roughly two-thirds of this growth came from new customers, reaffirming the sizeable market of small-to-medium sized businesses our platform solution enables us to target.

"While customer and transaction count in our transaction business were up high-single digits, this year's holiday calendar had less work days than past seasons, slightly impacting second quarter revenue. However, transactions have historically produced fairly reliable repeat revenue.

"We continued to invest for future growth in our platform business, bolstering our U.S. field sales with two new hires covering the Mid-Atlantic and Midwest regions, as well as the addition of key technology personnel. Since our platform is essentially a virtual store that can be accessed from anywhere, 24 hours a day, seven days a week, we also strengthened our international presence with the addition of two new, European-based resellers which cover the key markets within Scandinavia and mainland Europe, including Germany, France, Switzerland, The Netherlands, and others."

"We have seen these strategic investments continue to drive the intended results," continued Derycz. "In fact, in January we signed our 100th platform customer and hit the $1 million in annual recurring revenue milestone. We plan to debut an enhanced version of the platform by the end of March, which will show expanded capabilities, features and functionality. When combined with the predictability of our transactions business, we believe the outlook for the remainder of our fiscal year is strong."

Fiscal Second Quarter 2017 Financial Results     

Total revenue was $8.5 million compared to $9.3 million in the same year-ago quarter. The decrease was primarily attributable to a 31% ($1.1 million) decline in the company's legacy Reprints and ePrints business. Order volumes often fluctuate from period-to-period depending upon customer marketing budgets and the publication of journal articles matching their requirements. While this segment is cash flow positive, it is a low margin business that requires limited resources and time.

Platform subscription revenue was up 137% to $219,000 compared to $93,000 in the year-ago quarter. The increase was due to a 159% increase in total platform deployments to 96. The quarter ended with annual recurring revenue up 126% to $905,000 (see the company's definition of annual recurring revenue below).

Transaction revenue increased 3% to $5.9 million compared to $5.7 million in the year-ago quarter, driven primarily by a 9% increase in active customer accounts to 936. In addition, transaction count was up 7% to approximately 193,000 (see the company's definition of active customer accounts and transactions below).

Total gross margin was up 160 basis points to 18.7% compared to 17.1% in the year-ago quarter. The improvement was primarily driven by increased revenue from higher margin platform sales and slightly higher margin from the company's non-core Reprints and ePrints business due to lower content costs.

Total operating expenses increased to $2.4 million compared to $1.9 million in the year-ago quarter, driven primarily by further investment in the company's sales force and, to a lesser extent, technology personnel to support increased platform sales and deployments.

Net loss in the fiscal second quarter was $(0.8) million or $(0.04) per share, compared to a net loss of $(0.3) million or $(0.02) per share in the same year-ago quarter. Adjusted EBITDA totaled $(0.5) million compared to a slight positive in the same year-ago quarter (see definition and further discussion about the presentation of Adjusted EBITDA, a non-GAAP term, below). Both the net loss and Adjusted EBITDA reflect the aforementioned personnel investments in the company's fast-growing platform business.

Cash and cash equivalents at December 31, 2016 increased 10% to $6.7 million compared to $6.1 million at June 30, 2016. There were no outstanding borrowings under the company's revolving line of credit with Silicon Valley Bank, which provides the lesser of $4 million or 80% of eligible accounts receivable. Additionally, the company had no long-term liabilities or other debt.

Further details about these results are available in the company's quarterly report on Form 10-Q, which is available in the investor relations section of the company's website at www.researchsolutions.com.

Conference Call

Research Solutions President and CEO Peter Derycz and CFO Alan Urban will host an investor conference call to discuss these quarterly results and the company's outlook, followed by a question and answer period.

Date: Tuesday, February 14, 2017
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in number: 1-855-327-6837
International dial-in number: 1-631-891-4304
Conference ID: 10002411             

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 at 1-949-574-3860.    

The conference call will be broadcast live and available for replay at http://public.viavid.com/index.php?id=122859 and via the investor relations section of the company's website at www.researchsolutions.com.   

A replay of the conference call will be available after 8:00 p.m. Eastern time on the same day through February 28, 2017.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 10002411       

Fiscal Second Quarter 2017 Financial and Operational Summary Table




Quarter Ended December 31,




2016

2015

Change

% Change


Revenue:







Platforms

$   219,137

$      92,578

$   126,559

136.7%



Transactions

5,866,562

5,702,733

163,829

2.9%



Reprints and ePrints

2,444,368

3,519,915

(1,075,547)

-30.6%


Total Revenue

8,530,067

9,315,226

(785,159)

-8.4%








Gross Profit:







Platforms

173,514

75,401

98,113

130.1%



Transactions

1,201,872

1,230,783

(28,911)

-2.3%



Reprints and ePrints

222,626

290,118

(67,492)

-23.3%


Total Gross Profit

1,598,012

1,596,302

1,710

0.1%








Gross profit as a % of revenue:







Platforms

79.2%

81.4%

-2.3%




Transactions

20.5%

21.6%

-1.1%




Reprints and ePrints

9.1%

8.2%

0.9%



Total Gross Profit

18.7%

17.1%

1.6%









Operating Expenses:







Sales and marketing

854,724

498,835

355,889

71.3%



General and administrative

1,226,181

1,092,187

133,994

12.3%



Depreciation and amortization

32,426

16,096

16,330

101.5%



Stock-based compensation

303,097

277,389

25,708

9.3%



Foreign currency transaction loss

17,631

5,805

11,826

203.7%


Total Operating Expenses

2,434,059

1,890,312

543,747

28.8%


Income (loss) from operations

(836,047)

(294,010)

(542,037)

184.4%








Other Income (Expenses):







Interest expense

(3,000)

(3,000)

-

0.0%



Other income (expense)

5,424

4,641

783

16.9%



Provision for income taxes

(9,337)

(6,056)

(3,281)

54.2%


Total Other Income (Expenses):

(6,913)

(4,415)

(2,498)

56.6%








Net income (loss)

$  (842,960)

$  (298,425)

$  (544,535)

182.5%








Adjusted EBITDA

$  (482,893)

$        5,280

$  (488,173)

9245.7%









Transactions:







Transaction count

193,490

181,135

12,355

6.8%



Corporate customers

754

719

35

4.9%



Academic customers

182

143

39

27.3%



Total customers

936

862

74

8.6%

 




Six Months Ended December 31,




2016

2015

Change

% Change


Revenue:







Platforms

$      391,209

$       151,041

$       240,168

159.0%



Transactions

11,872,961

11,269,974

602,987

5.4%



Reprints and ePrints

3,924,613

5,921,312

(1,996,699)

-33.7%


Total Revenue

16,188,783

17,342,327

(1,153,544)

-6.7%








Gross Profit:







Platforms

315,622

122,102

193,520

158.5%



Transactions

2,493,272

2,507,999

(14,727)

-0.6%



Reprints and ePrints

318,515

520,548

(202,033)

-38.8%


Total Gross Profit

3,127,409

3,150,649

(23,240)

-0.7%








Gross profit as a % of revenue:







Platforms

80.7%

80.8%

-0.2%




Transactions

21.0%

22.3%

-1.3%




Reprints and ePrints

8.1%

8.8%

-0.7%



Total Gross Profit

19.3%

18.2%

1.2%









Operating Expenses:







Sales and marketing

1,435,502

995,476

440,026

44.2%



General and administrative

2,437,189

2,155,449

281,740

13.1%



Depreciation and amortization

62,895

30,834

32,061

104.0%



Stock-based compensation

405,686

421,130

(15,444)

-3.7%



Foreign currency transaction loss

20,955

7,122

13,833

194.2%


Total Operating Expenses

4,362,227

3,610,011

752,216

20.8%


Income (loss) from operations

(1,234,818)

(459,362)

(775,456)

168.8%








Other Income (Expenses):







Interest expense

(6,000)

(7,993)

1,993

24.9%



Other income (expense)

10,134

7,410

2,724

36.8%



Provision for income taxes

(22,942)

(17,300)

(5,642)

-32.6%


Total Other Income (Expenses):

(18,808)

(17,883)

(925)

5.2%








Net income (loss)

$(1,253,626)

$     (477,245)

$     (776,381)

162.7%








Adjusted EBITDA

$   (745,282)

$             (276)

$     (745,006)

269929.7%









Platforms:







ARR (Annual recurring revenue)

$      905,157

$       401,325

$       503,832

125.5%



Deployments

96

37

59

159.5%



ASP (Average sales price)

$          9,429

$         10,847

$          (1,418)

-13.1%


Transactions:







Transaction count

384,870

352,313

32,557

9.2%



Corporate customers

759

706

53

7.5%



Academic customers

178

135

43

32.0%



Total customers

936

841

96

11.4%

 

Active Customer Accounts, Transactions and Annual Recurring Revenue

The company defines active customer accounts as the sum of the total quantity of customers per month for each month in the period divided by the respective number of months in the period. The quantity of customers per month is defined as customers with at least one transaction during the month.

A transaction is an order for a unit of copyrighted content fulfilled or managed in the platform.

The company defines annual recurring revenue as the value of contracted platform subscription recurring revenue normalized to a one-year period.

Use of Non-GAAP Measure – Adjusted EBITDA

Research Solutions' management evaluates and makes operating decisions using various financial metrics. In addition to the company's GAAP results, management also considers the non-GAAP measure of Adjusted EBITDA. Management believes that this non-GAAP measure provides useful information about the company's operating results.

The tables below provide a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure. Adjusted EBITDA is defined as net income (loss), plus interest expense, other income (expense), foreign currency transaction loss, provision for income taxes, depreciation and amortization, stock-based compensation, and other potential adjustments that may arise.

Set forth below is a reconciliation of Adjusted EBITDA to net income (loss):



Three Months Ended December 31,




2016



2015


2016-2015
$ Change

Net loss


$

(842,960)


$

(298,425)


$

(544,535)

Add (deduct):










Interest expense



3,000



3,000



-

Other (income) expense



(5,424)



(4,641)



(783)

Foreign currency transaction loss



17,631



5,805



11,826

Provision for income taxes



9,337



6,056



3,281

Depreciation and amortization



32,426



16,096



16,330

Stock-based compensation



303,097



277,389



25,708

Adjusted EBITDA


$

(482,893)


$

5,280


$

(488,173)

 



Six Months Ended December 31,




2016



2015


2016-2015
$ Change

Net loss


$

(1,253,626)


$

(477,245)


$

(776,381)

Add (deduct):










Interest expense



6,000



7,993



(1,993)

Other (income) expense



(10,134)



(7,410)



(2,724)

Foreign currency transaction loss



20,955



7,122



13,833

Provision for income taxes



22,942



17,300



5,642

Depreciation and amortization



62,895



30,834



32,061

Stock-based compensation



405,686



421,130



(15,444)

Adjusted EBITDA


$

(745,282)


$

(276)


$

(745,006)

 

About Research Solutions

Research Solutions, Inc. (OTCQB: RSSS) is a pioneer in cloud-based research intelligence and retrieval solutions for R&D-driven organizations. More than 70 percent of the top 25 pharmaceutical companies in the world rely on services delivered by Research Solutions' wholly owned subsidiary Reprints Desk. The company's Software-as-a-Service (SaaS) platform provides customers with on-demand access to, and augmented data from, tens of millions of scientific, medical, and technical (STM) documents, helping them to accelerate acquisition at the point of discovery, save time and money, and remain copyright-compliant. For more information, visit www.researchsolutions.com.

Important Cautions Regarding Forward-Looking Statements

Certain matters discussed in this press release may be forward-looking statements. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; acceptance of the company's products in the market; the company's success in obtaining new customers and new platform deployments; the company's success in technology and product development; the company's ability to execute its business model and strategic plans; the company's success in integrating acquired entities and assets, and all the risks and related information described from time to time in the company's filings with the Securities and Exchange Commission ("SEC"), including the financial statements and related information contained in the company's Securities and Exchange Commission Annual Report on Form 10-K and interim Quarterly Reports on Form 10-Q. The company assumes no obligation to update the cautionary information in this release.

Research Solutions, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets




December 31,


June 30,



2016


2016



(unaudited)



Assets





Current assets:





Cash and cash equivalents


$

6,748,627


$

6,076,875

Accounts receivable, net of allowance of $47,035 and $52,084, respectively



5,065,558



5,761,860

Prepaid expenses and other current assets



220,750



164,610

Prepaid royalties



1,217,915



173,665

Total current assets



13,252,850



12,177,010








Other assets:







Property and equipment, net of accumulated depreciation of $667,067 and $642,051, respectively



70,530



82,207

Intangible assets, net of accumulated amortization of $583,280 and $546,679, respectively



77,998



104,848

Deposits and other assets



18,968



7,594

Total assets


$

13,420,346


$

12,371,659








Liabilities and Stockholders' Equity







Current liabilities:







Accounts payable and accrued expenses


$

7,140,143


$

5,690,768

Deferred revenue



1,167,529



639,834

Total current liabilities



8,307,672



6,330,602








Commitments and contingencies














Stockholders' equity:







Preferred stock; $0.001 par value; 20,000,000 shares authorized; no shares issued and outstanding



-



-

Common stock; $0.001 par value; 100,000,000 shares authorized; 23,875,188 and 23,809,593  shares issued and outstanding, respectively



23,875



23,810

Additional paid-in capital



21,966,029



21,642,763

Accumulated deficit



(16,835,921)



(15,582,295)

Accumulated other comprehensive loss



(41,309)



(43,221)

Total stockholders' equity



5,112,674



6,041,057

Total liabilities and stockholders' equity


$

13,420,346


$

12,371,659


See notes to condensed consolidated financial statements

 

Research Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss)

(Unaudited)




Three Months Ended


Six Months Ended



December 31,


December 31,



2016


2015


2016


2015










Revenue


$

8,530,067


$

9,315,226


$

16,188,783


$

17,342,327

Cost of revenue



6,932,055



7,718,924



13,061,374



14,191,678

Gross profit



1,598,012



1,596,302



3,127,409



3,150,649














Operating expenses:













Selling, general and administrative



2,401,633



1,874,216



4,299,332



3,579,177

Depreciation and amortization



32,426



16,096



62,895



30,834

Total operating expenses



2,434,059



1,890,312



4,362,227



3,610,011

Loss from operations



(836,047)



(294,010)



(1,234,818)



(459,362)














Other income (expenses):













Interest expense



(3,000)



(3,000)



(6,000)



(7,993)

Other income



5,424



4,641



10,134



7,410

Total other income (expenses)



2,424



1,641



4,134



(583)














Loss from operations before provision for income taxes



(833,623)



(292,369)



(1,230,684)



(459,945)

Provision for income taxes



(9,337)



(6,056)



(22,942)



(17,300)














Net loss



(842,960)



(298,425)



(1,253,626)



(477,245)














Other comprehensive income (loss):



5,195



(7,066)



1,912



(5,363)

Foreign currency translation

Comprehensive loss


$

(837,765)


$

(305,491)


$

(1,251,714)


$

(482,608)














Loss per common share:













Net loss per share, basic and diluted


$

(0.04)


$

(0.02)


$

(0.05)


$

(0.03)

Weighted average common shares outstanding, basic and diluted



23,200,975



17,656,087



23,166,272



17,610,079


See notes to condensed consolidated financial statements

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/research-solutions-reports-fiscal-second-quarter-2017-financial-results-300407283.html

SOURCE Research Solutions, Inc.