Evolving Systems Reports Second Quarter 2013 Financial Results
Q2 Dynamic SIM Allocation™ (DSA) license and services bookings up 48% to $1.6 million year over year
Q2 total bookings up 6% to $6.1 million from $5.8 million
Adjusted EBITDA through six months up 31% to $3.5 million from $2.6 million
Q2 cash and cash equivalents increase to $13.4 million from $8.8 million at year-end
Third quarter dividend increased to $0.10 per share, payable September 13, 2013, to stockholders of record on August 30, 2013
Evolving Systems, Inc. (Nasdaq: EVOL), a leading provider of strategic solutions to telecom operators worldwide, today reported financial results for its second quarter and six-month period ended June 30, 2013.
“We are pleased with our profit metrics and ability to generate strong cash flows in the second quarter,” said Thad Dupper, Chairman and CEO. “However, our results for the quarter were impacted by a new DSA sale we expected in the second quarter that subsequently closed early in the third quarter. With second quarter DSA bookings up 48% and our third quarter bookings off to a strong start, we’re confident we are on track to deliver improved results for the third quarter and 2013. As a result, our Board of Directors has increased our quarterly dividend to $0.10 from $0.08 – representing the Company’s second dividend increase since the fourth quarter of 2012.”
Second Quarter Highlights
- Revenue of $5.8 million versus $6.7 million a year ago. License and services revenue was $3.5 million versus $4.5 million last year. Customer support revenue was up to $2.3 million from $2.1 million.
- Operating income of $1.3 million versus $1.6 million in the second quarter last year.
- Net income of $0.9 million versus $2.1 million in the second quarter last year. Diluted net income per share was $0.08 versus $0.19. The year-ago net income figure included a $1.0 million gain on sale plus interest on an investment in marketable debt securities.
- Adjusted EBITDA of $1.5 million versus $1.8 million in the second quarter last year.
- Cash Flow: The Company generated $2.7 million in cash from operations in the second quarter compared with ($1.7) million in cash used in operations the same quarter last year.
· Balance Sheet: Cash and cash equivalents at June 30, 2013, were $13.4 million, up from $8.8 million at 2012 year-end.
Dividend Update: The Company declared a third quarter dividend of $0.10 per share to stockholders of record on August 30, 2013, payable September 13, 2013. It is the Company’s second dividend increase in 2013.
Six Month Highlights
- Revenue of $12.5 million, down slightly from $12.6 million in the first half last year. License and services revenue was $8.0 million versus $8.3 million last year. Customer support revenue was up to $4.4 million from $4.3 million.
- Operating income increased 42% to $3.0 million from $2.1 million in the same period last year due to higher gross margins combined with a reduction in product development and general and administrative expense.
- Net income of $2.1 million compared favorably with $2.9 million a year ago when the Company recorded $1.4 million in gain on sale and related interest associated with investments in marketable debt securities. Diluted net income per share was $0.18 versus $0.25.
- Adjusted EBITDA increased to $3.5 million versus $2.6 million in the same period last year.
- Cash Flow: The Company generated $5.4 million in cash from operations in the first six months of 2013 compared with ($0.2) million in cash used in operations during the same period last year.
Bookings and Backlog Highlights
- Second quarter bookings totaled $6.1 million, up from $5.8 million in the same quarter last year and up from $5.7 million in the first quarter of this year. Second quarter bookings included $3.0 million in license and services and $3.1 million in customer support. DSA license and services bookings in the second quarter were $1.6 million, up from $1.1 million year over year. Tertio® Service Activation (TSA) license and services bookings were $1.4 million, down from $3.0 million last year. Bookings are defined as new, non-cancelable orders expected to be recognized as revenue during the following 12 months.
- Six-month bookings totaled $11.8 million, up from $11.4 million in the same period last year. License and services bookings were $6.5 million and were comprised of $3.4 million in DSA orders and $3.1 million in orders for TSA. Customer support bookings were $5.3 million.
- Total backlog at June 30, 2013, was $10.3 million, up from $9.8 million in the first quarter but down from $11.4 million at the same time last year. License and services backlog totaled $5.1 million and included of $2.9 million in DSA and $2.2 million in TSA. Customer support backlog was $5.2 million.
Conference Call
The Company will conduct a conference call and webcast today at 2:30 p.m. Mountain Time. The call-in numbers for the conference call are 1-877-303-6316 for domestic toll free and 650-521-5176 for international callers. The conference ID is 25851480. A telephone replay will be available through August 27, 2013, and can be accessed by calling 1-855-859-2056 or 1-404-537-3406. Conference ID 25851480. To access a live webcast of the call, please visit Evolving Systems’ website at www.evolving.com. A replay of the Webcast will be accessible at that website through August 27, 2013.
Non-GAAP Financial Measures
Evolving Systems reports its financial results in accordance with accounting principles generally accepted in the U.S. (GAAP). In addition, the Company is providing in this news release non-GAAP financial information in the form of net income, diluted net income per share and adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, impairment, stock compensation and gain/loss on foreign exchange transactions.) Management believes these non-GAAP financial measures are useful to investors and lenders in evaluating the overall financial health of the Company in that they allow for greater transparency of additional financial data routinely used by management to evaluate performance. Investors and financial analysts who follow the Company use non-GAAP net income and non-GAAP diluted income per share to compare the Company against other companies. Adjusted EBITDA can be useful for lenders as an indicator of earnings available to service debt. Non-GAAP financial measures should not be considered in isolation from or as an alternative to the financial information prepared in accordance with GAAP.
About Evolving Systems®
Evolving Systems, Inc. (NASDAQ: EVOL) is a provider of software solutions and services to 50 network operators in over 40 countries worldwide. The Company’s product portfolio includes market-leading activation products that address subscriber service activation, SIM card activation, mobile broadband activation as well as the activation of connected devices. Founded in 1985, the Company has headquarters in Englewood, Colorado, with offices in the United Kingdom, India and Malaysia. Further information is available on the web at www.evolving.com or follow us on Twitter: http://twitter.com/EvolvingSystems
