On March 16, 2017, Numerex Corp. (the "Company") issued a press release announcing its financial results for the fourth quarter and full year ended December 31, 2016. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The information contained in this Current Report (including Exhibit 99.1) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, or incorporated by reference in any filing by the Company under the Exchange Act or the Securities Act of 1933, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by reference in such filing
(d) Exhibits
99.1 Press Release, dated March 16, 2017
Numerex Corp |
By: | /s/ Kenneth Gayron |
Name: Kenneth Gayron | |
Title: Interim Chief Executive Officer and Chief Financial Officer |
Exhibit No.
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Description
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EX-99.1
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Press Release, dated March 16, 2017
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Three Months Ended
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Year Ended
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|||
GAAP Measures
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December 31,
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September 30,
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December 31,
|
December 31,
|
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2016
|
2016
|
2015
|
2016
|
2015
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
Subscription
and support revenues ($ in millions)
|
$13.8
|
$14.4
|
$15.5
|
$58.0
|
$64.4
|
Recurring
revenue - Subscription and support
|
|
|
|
|
|
revenues
as a percentage of total revenue
|
78.7%
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82.6%
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82.5%
|
82.1%
|
72.0%
|
Gross
margin -- subscription and support revenues
|
58.5%
|
59.5%
|
63.3%
|
60.4%
|
60.5%
|
Loss
from operations, net of
|
|
|
|
|
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income
taxes ($ in millions)
|
$(11.2)
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$(2.5)
|
$(2.4)
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$(24.3)
|
$(19.2)
|
Diluted
EPS
|
$(0.57)
|
$(0.13)
|
$(0.13)
|
$(1.25)
|
$(1.00)
|
|
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Non-GAAP Measures* (Unaudited)
|
|
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Adjusted
EBITDA ($ in millions)
|
$(0.1)
|
$0.9
|
$2.0
|
$2.3
|
$9.3
|
Adjusted
EBITDA as a percent of total revenue
|
-0.4%
|
4.9%
|
10.5%
|
3.2%
|
10.4%
|
______________
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* Refer to the section of this press release entitled "Non-GAAP
(Adjusted) Financial Measures" for
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a discussion of these non-GAAP items and a reconciliation to the
most comparable GAAP measure.
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NUMEREX CORP. AND SUBSIDIARIES
|
|||||
CONSOLIDATED STATEMENTS OF OPERATIONS
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|||||
(In thousands, except per share data)
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|||||
(Unaudited)
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|||||
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Three Months Ended
|
Year Ended
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|||
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December 31,
|
September 30,
|
December 31,
|
December 31,
|
|
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2016
|
2016
|
2015
|
2016
|
2015
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
Net revenues:
|
|
|
|
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Subscription
and support revenues
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$13,836
|
$14,388
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$15,497
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$58,019
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$64,371
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Embedded
devices and hardware
|
3,741
|
3,024
|
3,288
|
12,626
|
25,079
|
Total
net revenues
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17,577
|
17,412
|
18,785
|
70,645
|
89,450
|
Cost
of sales, exclusive of a portion of depreciation
and amortization shown below:
|
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|
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Subscription
and support revenues
|
5,744
|
5,828
|
5,682
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22,986
|
25,410
|
Embedded
devices and hardware
|
3,977
|
3,082
|
3,148
|
13,004
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22,981
|
Inventory
reserves
|
27
|
27
|
46
|
541
|
1,343
|
Impairment
of other asset
|
-
|
-
|
-
|
-
|
1,275
|
Gross
profit
|
7,829
|
8,475
|
9,909
|
34,114
|
38,441
|
Operating
expenses:
|
|
|
|
|
|
Sales
and marketing
|
3,873
|
3,229
|
3,310
|
13,318
|
12,446
|
General
and administrative
|
2,729
|
3,280
|
3,690
|
13,998
|
15,798
|
Engineering
and development
|
2,304
|
2,229
|
2,257
|
9,224
|
8,952
|
Depreciation
and amortization
|
1,549
|
1,658
|
1,703
|
6,540
|
7,116
|
Impairment
of goodwill and other intangible assets
|
7,833
|
-
|
1,462
|
12,005
|
2,712
|
Restructuring
charges
|
312
|
276
|
-
|
1,831
|
-
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Operating
loss
|
(10,771)
|
(2,197)
|
(2,513)
|
(22,802)
|
(8,583)
|
Interest
expense
|
502
|
469
|
203
|
1,698
|
806
|
Loss
on extinguishment of debt
|
-
|
-
|
-
|
290
|
-
|
Other
income, net
|
(32)
|
(33)
|
(33)
|
(130)
|
(134)
|
Loss
from operations before income taxes
|
(11,241)
|
(2,633)
|
(2,683)
|
(24,660)
|
(9,255)
|
Income
tax expense
|
(83)
|
(87)
|
(257)
|
(340)
|
9,902
|
Net
loss
|
$(11,158)
|
$(2,546)
|
$(2,426)
|
$(24,320)
|
$(19,157)
|
|
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Basic
earnings per share:
|
|
|
|
|
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Net
loss
|
$(0.57)
|
$(0.13)
|
$(0.13)
|
$(1.25)
|
$(1.00)
|
|
|
|
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Diluted
earnings per share:
|
|
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Net
loss
|
$(0.57)
|
$(0.13)
|
$(0.13)
|
$(1.25)
|
$(1.00)
|
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Weighted
average shares outstanding used in
computing earnings per share:
|
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Basic
|
19,601
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19,542
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19,305
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19,493
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19,117
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Diluted
|
19,601
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19,542
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19,305
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19,493
|
19,117
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NUMEREX CORP. AND SUBSIDIARIES
|
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CONSOLIDATED BALANCE SHEETS
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||
(In thousands)
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||
(Unaudited)
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||
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December 31,
|
December 31,
|
|
2016
|
2015
|
|
(Unaudited)
|
(Unaudited)
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ASSETS
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CURRENT
ASSETS
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Cash
and cash equivalents
|
$9,285
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$16,237
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Restricted
cash
|
221
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-
|
Accounts
receivable, less allowance for doubtful accounts of $767 and
$618
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9,436
|
9,237
|
Financing
receivables, current
|
1,778
|
1,780
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Inventory,
net of reserve for obsolescence of $2,446 and $2,706
|
9,011
|
7,617
|
Prepaid
expenses and other current assets
|
1,421
|
1,887
|
Deferred
tax assets, current
|
-
|
603
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TOTAL
CURRENT ASSETS
|
31,152
|
37,361
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Financing
receivables, less current portion
|
2,227
|
2,330
|
Property
and equipment, net of accumulated depreciation and
amortization of $9,225 and $6,632
|
6,022
|
4,795
|
Software,
net of accumulated amortization of $12,807 and $9,503
|
6,530
|
7,146
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Other
intangible assets, net of accumulated amortization of $19,185 and
$17,184
|
11,519
|
15,722
|
Goodwill
|
33,554
|
43,424
|
Deferred
tax assets, less current portion
|
-
|
-
|
Other
assets
|
474
|
409
|
TOTAL
ASSETS
|
$91,478
|
$111,187
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LIABILITIES AND SHAREHOLDERS’ EQUITY
|
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CURRENT
LIABILITIES
|
|
|
Accounts
payable
|
$15,894
|
$11,390
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Accrued
expenses and other current liabilities
|
3,209
|
2,864
|
Deferred
revenues
|
1,882
|
1,942
|
Current
portion of long-term debt
|
1,275
|
3,600
|
Obligations
under capital lease
|
291
|
-
|
TOTAL
CURRENT LIABILITIES
|
22,551
|
19,796
|
|
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Long-term
debt, less current portion
|
14,885
|
15,309
|
Capital
lease
|
797
|
-
|
Deferred
tax liabilities, noncurrent
|
468
|
1,595
|
Other
liabilities
|
1,512
|
1,891
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TOTAL
LIABILITIES
|
40,213
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38,591
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COMMITMENTS
AND CONTINGENCIES
|
|
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SHAREHOLDERS’
EQUITY
|
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Preferred
stock, no par value; 3,000 authorized; none issued
|
-
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-
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Class
A common stock, no par value; 30,000 authorized;
20,935 and 20,652 issued; 19,608 and 19,177
outstanding
|
-
|
-
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Class
B common stock, no par value; 5,000 authorized; none
issued
|
-
|
-
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Additional
paid-in capital
|
105,112
|
102,108
|
Treasury
stock, at cost; 1,327 and 1,316 shares
|
(5,466)
|
(5,444)
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Accumulated
other comprehensive loss
|
(110)
|
(117)
|
Accumulated
deficit
|
(48,271)
|
(23,951)
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TOTAL
SHAREHOLDERS' EQUITY
|
51,265
|
72,596
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$91,478
|
$111,187
|
|
Three Months Ended
|
Year Ended
|
|||
|
December 31,
|
September 30,
|
December 31,
|
December 31,
|
|
|
2016
|
2016
|
2015
|
2016
|
2015
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
EBITDA and Adjusted EBITDA (non-GAAP) (Unaudited)
|
|
|
|
|
|
Net
Loss (GAAP)
|
$(11,158)
|
$(2,546)
|
$(2,426)
|
$(24,320)
|
$(19,157)
|
Depreciation
and amortization expense
|
1,960
|
2,029
|
2,054
|
7,958
|
8,217
|
Impairment
of goodwill and other assets
|
7,833
|
-
|
1,462
|
12,005
|
3,987
|
Interest
expense and loss on extinguishment of debt, net
|
470
|
436
|
170
|
1,858
|
672
|
Income
tax (benefit) expense
|
(83)
|
(87)
|
(257)
|
(340)
|
9,902
|
EBITDA
(non-GAAP)
|
(978)
|
(168)
|
1,003
|
(2,840)
|
3,621
|
Equity-based
compensation expense
|
522
|
751
|
354
|
2,725
|
2,673
|
Non-cash
and other items
|
423
|
276
|
608
|
2,425
|
3,027
|
Adjusted
EBITDA (non-GAAP)
|
$(33)
|
$859
|
$1,965
|
$2,310
|
$9,321
|
|
|
|
|
|
|
Loss
from operations, net of income taxes,
per diluted share (GAAP)
|
$(0.57)
|
$(0.13)
|
$(0.13)
|
$(1.25)
|
$(1.00)
|
|
|
|
|
|
|
Weighted
average shares outstanding used in computing
diluted per share amounts
|
19,601
|
19,542
|
19,305
|
19,493
|
19,117
|