LOUISVILLE, Ky., Nov. 7, 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 nine-months
ended September 30, 2019.
Rick Mills, Chief Executive
Officer, remarked, "First and foremost I would like to thank
Alec Machiels, who has stepped down
effective November 8, 2019 as the
Company's Chairman of the Board, for his service to the Company
over the past 5 years. Alec has provided excellent leadership for
the Board and to me as Chief Executive Officer of CRI. That said, I
am incredibly excited by the opportunity to announce Dennis McGill as Chairman of the Board effective
November 8, 2019. Dennis has had a
tremendous career assisting various public and private companies
accelerate their growth and we look forward to him joining our team
as we look to take further steps to grow this company."
Mr. Mills added, "CRI achieved quarterly revenue of $6.7 million for the three-months ended
September 30, 2019, resulting in
year-to-date revenue $25.5 million
for the nine-months ended September 30,
2019. These results represent 48% growth year-over-year for
the nine-months. The Company achieved Adjusted EBITDA of
$426 thousand in the quarter and
$1.8 million year-to-date, reflecting
the operating leverage inherent in our model as we grow
revenues."
2019 Third Quarter Financial Overview
- Revenues were $6.7 million for
the three-month period ended September 30,
2019, an increase of $0.7
million, or 12%, compared to the same period in 2018.
- Hardware revenue increased approximately $0.5 million, or 34%, in the third quarter of
2019 as compared to the same period in the prior year. Gross margin
on hardware revenue was 27% in 3Q19 as compared to 45% in
3Q18.
- Services and other revenue grew approximately $0.2 million, or 5%, in the third quarter of 2019
as compared to the same period in the prior year. Gross margin on
services and other revenue decreased to 59% in 3Q19 from 68% in
3Q18.
- Managed services revenue, which includes both SaaS and help
desk technical subscription services, represented approximately
$1.9 million revenue in the third
quarter of 2019, an increase of $1.0
million, or 126%, as compared to the same period in the
prior year.
- Gross profit was $3.3 million for
the third quarter of 2019, a decrease of $0.4 million, or 12%, compared to the same period
in 2018. Gross margin decreased to 49% in 3Q19 from 62% in 3Q18,
driven primarily by the aforementioned mix of hardware and services
and other revenue.
- The company achieved operating income of $0.1 million during 3Q19 as compared to operating
loss of $0.5 million in 3Q18.
- General and administrative expenses decreased $1.1 million to $2.1
million in 3Q19 as compared to 3Q18 made up of $1.0 million in incremental stock compensation
expense in third quarter 2018.
- Net income was $0.2 million the
three-month period ended September 30,
2019 as compared to a net loss of ($0.9) million for the same period in 2018.
EBITDA was $0.8 million for the third
quarter of 2019 compared to breakeven the same period in 2018.
Adjusting for one-time gains on the settlement of obligations and
stock based compensation in each period, Adjusted EBITDA was
$0.4 million for the third quarter of
2019, compared to $0.9 million in
Adjusted EBITDA for the same period in 2018.
Mr. Mills concluded, "Our current year results continue to
validate our thesis about the digital signage industry and the
ability of CRI to produce revenue growth without corresponding
increases in our expense structure, ultimately translating into
improved quality of earnings. We are particularly proud of our
quarterly and year-to-date operating expenses, which have
effectively remained flat despite the completion of the acquisition
of Allure Global Solutions, Inc. in November
2018. Since execution of that acquisition, the Company
continues to experience an increase in both the volume and size of
opportunities through both referrals and requests for proposal from
potential customers. 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, particularly
potential enterprise customers in a variety of key verticals. 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,
November 8, 2019 at 9:00 am Eastern
Time.
Prior to the call, participants should register at
http://bit.ly/criearnings2019Q3. 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.