LOUISVILLE, Ky., Aug. 8, 2019 /PRNewswire/ -- Creative
Realities, Inc. ("Creative Realities," "CRI," or the "Company")
(NASDAQ: CREX, CREXW), a leading provider of digital marketing
solutions, announced its financial results for the three- and
six-months ended June 30,
2019.
Rick Mills, Chief Executive
Officer, remarked, "CRI achieved quarterly revenue in excess of
$9 million for the second straight
quarter. During the second quarter we improved margins resulting in
record quarterly Adjusted EBITDA of $1.1
million on an operating profit of $0.5 million. Our results for the first half of
2019 provide evidence of both the Company's strong market momentum
and ability to produce further positive results through
scale."
2019 Second Quarter Financial
Overview
- Revenues were $9.3 million
for the three-month period ended June 30,
2019, an increase of $2.1
million, or 30%, compared to the same period in
2018.
- Hardware revenue decreased approximately $1.2 million, or 42%, in the second quarter of
2019 as compared to the same period in the prior year driven by a
$1.7 million hardware-only project in
the second quarter of 2018 which did not recur in 2019, partially
offset by an increase in hardware sales to other customers. Gross
margin on hardware revenue was 20% in 2Q19 as compared to 35% in
2Q18.
- Services and other revenue grew approximately
$3.3 million, or 77%, in the second
quarter of 2019 as compared to the same period in the prior year.
Gross margin on services and other revenue increased to 51% in 2Q19
from 48% in 2Q18.
- Managed services revenue, which includes both SaaS and
help desk technical subscription services, represented
approximately $1.6
million revenue in the second quarter of 2019, an increase of
$1.1 million, or 211%, as compared to
the same period in the prior year.
- Gross profit was $4.2
million for the second quarter of 2019, an increase of
$1.1 million, or 37%, compared to the
same period in 2018. Gross margin increased to 45% in 2Q19 from 43%
in 2Q18, driven primarily by the aforementioned mix of hardware and
services and other revenue.
- The company achieved operating income of $0.5 million during 1Q19 as compared to operating
breakeven in 1Q18.
- General and administrative expenses increased
$0.5 million to $2.4 million in 2Q19 as compared to 2Q18 made up
of $0.2 million in incremental stock
compensation expense and $0.2 million
of incremental rent expense associated with the acquisition of
Allure Global Solutions, Inc. in November
2018.
- EBITDA was $0.8 million for
the second quarter of 2019 compared to $0.5
million for the same period in 2018. Adjusted EBITDA was
$1.1 million for the second quarter
of 2019 compared to $0.4 million for
the same period in 2018.
Mr. Mills concluded, "We are pleased with the continued
growth in the recurring portion of our revenue, a key focus for our
business in 2019 and 2020. We continue to believe that our
end-to-end services offering positions us well within the industry
to compete for new and growing opportunities with partners in a
variety of key verticals – a belief that is supported by an
increase in the number of invitations we have received in 2019 to
significant opportunities, measured as those opportunities in
excess of $1 million. While we are
experiencing an increase in significant opportunities, those
opportunities do tend to experience a longer lead time and sales
cycle. We remain committed to further execution of our strategy to
gain more scale and act as a key participant in what we believe
should be an industry rollup aimed at driving shareholder
value."
Conference Call Details
The Company will host a conference call to
review the results and provide additional
commentary about the Company's recent performance, which
is scheduled for Friday, August 9,
2019 at 9:00 am Eastern
Time.
Prior to the call, participants should register at
http://bit.ly/criearnings2019Q2. Once registered, participants can
use the weblink provided in the registration email to listen to the
live webcast. An archived edition of the second
quarter earnings conference call will also be posted on our website
at www.cri.com later that same day and will remain available to
interested parties via the same link for one year.
About Creative Realities,
Inc.
Creative Realities helps clients use the
latest omnichannel technologies to inspire better customer
experiences. Founded over 15 years ago, CRI designs, develops
and deploys consumer experiences for high-end enterprise level
networks, and is actively providing recurring SaaS and support
services for more than fifteen diverse vertical markets, including
but not limited to Automotive, Advertising Networks, Apparel &
Accessories, Convenience Stores, Foodservice/QSR, Gaming, Theater,
and Stadium Venues. The Company acquired Allure Global Solutions,
Inc. in November 2018, expanding the
Company's operations to five offices across North America with active installations in
more than 10 countries.
Cautionary Note on Forward-Looking
Statements
This press release contains certain
statements that would be deemed "forward-looking statements" under
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 and includes, among other things,
discussions of our business strategies, future operations and
capital resources. Words such as "may," "likely,"
"anticipate," "expect" and "believe" indicate forward-looking
statements.
These forward-looking statements may reflect management's
present expectations and estimates regarding future expenses,
revenue and profitability, trends affecting our financial condition
and results of operations, operating efficiencies, revenue
opportunities, potential new markets, and the ability of the
Company to effectively compete in a highly competitive market.
Nevertheless, and despite the fact that management's expectations
and estimates are based on assumptions management believes to be
reasonable and data management believes to be reliable, the
Company's actual results, performance, or achievements are subject
to future risks and uncertainties, any of which could materially
affect the Company's actual performance. Risks and
uncertainties that could affect such performance include, but are
not limited to: the adequacy of funds for future operations;
future expenses, revenue and profitability; trends affecting
financial condition and results of operations; ability to convert
proposals into customer orders; the ability of customers to pay for
products and services; the impact of changing customer requirements
upon revenue recognition; customer cancellations; the availability
and terms of additional capital; ability to develop new products;
dependence on key suppliers, manufacturers and strategic partners;
industry trends and the competitive environment; the impact of the
Company's financial condition upon customer and prospective
customer relationships; and the impact of losing one or more senior
executives or failing to attract additional key personnel.
These and other risk factors are discussed in Company reports filed
with the Securities and Exchange Commission.
Given these uncertainties, and the fact that
forward-looking statements represent management's estimates and
assumption as of the date of this press release, you should not
attribute undue certainty to these forward-looking
statements. We assume no obligation to update any
forward-looking statements publicly, or to update the reasons why
actual results could differ materially from those anticipated in
any forward-looking statements contained in this press release,
even if new information becomes available in the future.
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SOURCE Creative Realities, Inc.