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Research Solutions Reports Fiscal Third Quarter 2017 Financial Results
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PR Newswire
ENCINO, Calif., May 15, 2017
ENCINO, Calif., May 15, 2017 /PRNewswire/ -- Research Solutions, Inc. (OTCQB: RSSS), a pioneer in providing cloud-based solutions for scientific research, reported financial results for its fiscal third quarter ended March 31, 2017.
Fiscal Third Quarter 2017 Summary vs. Year-Ago Quarter
- Total revenue was $8.6 million compared to $8.7 million.
- Platform revenue was up 124% to $270,920, with a 152% increase in total Platform deployments to 116. Annual recurring revenue was up 127% to $1.1 million.
- Transaction revenue was essentially unchanged at $6.4 million, with customer count up 9% to 985. Transaction count was up 7% to 212,827.
- Total gross margin was 20.0% compared to 20.2%.
- Net loss was $(0.6) million, or $(0.03) per share, compared to net income of $32,000 or $0.00 per share. The loss was due to the company's continued investment in its fast growing, recurring revenue Platform business.
Management Commentary
"Our third quarter was yet again highlighted by rapid growth in our Platform business, with triple-digit growth in both revenue and deployments," said Peter Derycz, president and CEO of Research Solutions. "70% of our 61 fiscal year-to-date deployments are with completely new customers, further reflecting the large and growing market opportunity for our company.
"While transactions and customer count in our Transactions business accelerated from prior year, revenue was essentially flat due to declining orders from existing customers that were mostly offset by orders from new customers.
"At the end of the quarter, we launched the latest version of our cloud-based Platform solution. The upgrade showcases full mobile responsiveness, design enhancements and the introduction of 'gadgets,' or powerful apps that allow for sophisticated data augmentation of content. We believe the gadget concept will revolutionize the way research is done today. Like mobile apps, gadgets are flexible, customizable tools for scientific research that are capable of augmenting scientific documents with data, streamlining cumbersome research processes. Early customer response has been encouraging and we look forward to our expanded sales force introducing the enhanced product to an even wider audience of customers in need of this unique solution."
Fiscal Third Quarter 2017 Financial Results
Total revenue was $8.6 million compared to $8.7 million in the same year-ago quarter. The slight decrease was primarily attributable to a 10% ($0.2 million) decline in the company's legacy Reprints and ePrints business. Reprints and ePrints order volume 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 continues to be a low margin business that requires limited resources and time.
Platform subscription revenue was up 124% to $270,920 compared to $121,034 in the year-ago quarter. The increase was due to a 152% increase in total Platform deployments to 116. The quarter ended with annual recurring revenue up 127% to $1.1 million (see the company's definition of annual recurring revenue below).
Transaction revenue was essentially unchanged at $6.4 million, as orders from new customers nearly offset orders from existing customers. Total active customers increased 9% to 985 and transaction count increased 7% to 212,827 (see the company's definition of active customer accounts and transactions below).
Total gross margin was 20.0% compared to 20.2% in the year-ago quarter. The slight decrease was primarily driven by lower Transaction and Reprints and ePrints margin.
Total operating expenses increased to $2.4 million compared to $1.7 million in the year-ago quarter, driven primarily by further investment in the company's sales force and technology personnel to support increased Platform sales and deployments.
Net loss in the fiscal third quarter was $(0.6) million, or $(0.03) per share, compared to net income of $32,000, or $0.00 per share, in the year-ago quarter. Adjusted EBITDA totaled $(0.5) million compared to $0.2 million in the 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 March 31, 2017 were $5.2 million compared to $6.1 million at June 30, 2016. There were no outstanding borrowings under the company's revolving line of credit, which provides the lesser of $4 million or 80% of eligible accounts receivable. With the exception of a $445,000 office lease liability due to new accounting guidance for leases, 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: Monday, May 15, 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: 10002833
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 here 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 May 29, 2017.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 10002833
Fiscal Third Quarter 2017 Financial and Operational Summary Tables
| | | | Quarter Ended March 31, | |||
| | | | 2017 | 2016 | Change | % Change |
| | Revenue: | | | | | |
| | | Platforms | $ 270,920 | $ 121,034 | $ 149,886 | 123.8% |
| | | Transactions | 6,372,679 | 6,394,127 | (21,448) | -0.3% |
| | | Reprints and ePrints | 2,000,200 | 2,209,056 | (208,856) | -9.5% |
| | Total Revenue | 8,643,799 | 8,724,217 | (80,418) | -0.9% | |
| | | | | | | |
| | Gross Profit: | | | | | |
| | | Platforms | 212,553 | 99,477 | 113,076 | 113.7% |
| | | Transactions | 1,374,837 | 1,475,448 | (100,611) | -6.8% |
| | | Reprints and ePrints | 141,616 | 190,089 | (48,473) | -25.5% |
| | Total Gross Profit | 1,729,006 | 1,765,014 | (36,008) | -2.0% | |
| | | | | | | |
| | Gross profit as a % of revenue: | | | | | |
| | | Platforms | 78.5% | 82.2% | -3.7% | |
| | | Transactions | 21.6% | 23.1% | -1.5% | |
| | | Reprints and ePrints | 7.1% | 8.6% | -1.5% | |
| | Total Gross Profit | 20.0% | 20.2% | -0.2% | | |
| | | | | | | |
| | Operating Expenses: | | | | | |
| | | Sales and marketing | 963,784 | 525,681 | 438,103 | 83.3% |
| | | General and administrative | 1,251,807 | 1,011,670 | 240,137 Werbung Mehr Nachrichten zur Research Solutions Aktie kostenlos abonnieren
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