Third Consecutive Quarter of Sequential
Gross Margin Improvement
AMERI Holdings, Inc. (NASDAQ: AMRH) (“Ameri100” or the “Company”),
a specialized SAP® cloud, digital and enterprise services company,
today reported its unaudited financial results for the three months
and nine months ended September 30, 2018.
Third Quarter 2018 vs. Third Quarter 2017
- Revenue of $10.6 million compared to $12.5 million;
- Gross profit of $2.3 million compared to $2.6 million;
- Gross margin of 22.2% compared to 20.5%;
- GAAP net income (loss) of $3.9 million compared to $(4.6)
million. GAAP net income includes a one-time non-cash gain of $7.3
million as a result of the Company’s change in estimate of its
consideration payable related to a prior acquisition;
- Diluted earnings (loss) per share of $0.16 compared to $(0.31).
Earnings per share for the third quarter of 2018 includes the
issuance of 2.6 million shares of common stock related to the
Company’s previously disclosed private placement; and
- Adjusted EBITDA of $5,403 compared to Adjusted EBITDA loss of
$(426,092).
First Nine Months of 2018 vs. First Nine Months of
2017
- Revenue of $32.7 million compared to $37.1 million;
- Gross profit of $7.1 million compared to $8.2 million;
- Gross margin of 21.6% compared to 22.1%;
- GAAP net income (loss) of $0.4 million compared to $(9.6)
million. GAAP net income includes a one-time non-cash gain of $7.3
million in the third quarter of 2018;
- Diluted earnings (loss) per share of $0.02 compared to $(0.66).
Earnings per share for the first nine months of 2018 includes the
issuance of additional shares of common stock related to the
Company’s previously disclosed private placement; and
- Adjusted EBITDA was $35,626 compared to Adjusted EBITDA loss of
$(194,699).
“Our 2018 third quarter results attest to a purposeful focus on
both quality of revenue and Adjusted EBITDA profitability.
Continued execution of our high margin solutions sales strategy
yielded a 172-basis point improvement in gross margin and a second
consecutive quarter of year-over-year positive Adjusted EBITDA. We
are winning digital transformation projects because of our deep SAP
domain expertise, broadened solutions offerings and an elevated
profile within the SAP ecosystem following recent marquee wins and
deployments. During the quarter we added to our client base,
including our first healthcare market project and a leading golf
lifestyle apparel brand. We also closed on a private placement that
gives us the financial flexibility to pursue our organic growth
strategy,” stated Brent Kelton, Chief Executive Officer at
Ameri100.
“Ameri100 is differentiated in the market as the only SAP
solutions-focused, publicly-traded IT services company. We are
building a deep partner network around our unique market position
that is generating new solutions sales opportunities to supplement
our sales efforts and is driving an expanding deal pipeline,”
continued Mr. Kelton. “With cloud computing central to SAP’s
strategy, we are in the advanced stages of formalizing a
partnership with a Top-3 cloud vendor that contributed a new client
win for us with a Fortune 500 insurance company subsequent to the
close of the quarter. Our machine learning partnership is driving
both existing and prospective clients to inquire about this
capability. SAP is also playing an increasing role in our business
development efforts. Since the start of 2018 we have seen a
substantial increase in our deal pipeline.”
Concluded, Mr. Kelton, “Looking ahead, favorable market trends
support our revenue trajectory, and as we leverage our
cost-efficient infrastructure and continue to shift revenue mix
towards high-margin solutions sales, we expect to increase
profitability. Our improving operating results, clean balance
sheet, highly motivated salesforce and engaged partner base put us
on a path to sustained growth.”
Updated Fiscal 2018 Financial
OutlookBased on its third quarter and nine months 2018
financial results and assuming a continued mix shift in favor of
higher-margin solution sales, as well as an expected fewer number
of billable days in its fourth quarter, the Company now expects
revenue to be in the range of $40.0 million to $42.0 million for
fiscal 2018. The Company also reaffirmed its prior guidance for
adjusted EBITDA profitability for the current fiscal year.
Private PlacementDuring the third quarter of
2018, Ameri100 entered into securities purchase agreements with
certain institutional and accredited investors for the sale of its
common stock and warrants for total consideration of approximately
$6,600,000. Pursuant to the private placement, the Company issued
an aggregate of 3,250,000 shares of common stock to these investors
at the closing of the private placement, along with pre-funded
Series B warrants for the purchase of 19,508,621 shares of
common stock and Series A warrants for the purchase
of 22,544,139 shares of common stock. The Series A
warrants have an exercise price of $0.3123 per share. As of
November 14, 2018, the private placement investors have exercised
the Series B warrants for the issuance of 16,661,552 shares of
common stock.
Conference Call Management will host a
conference call on Thursday, November 15, 2018, at 8:30 a.m. ET
(New York time) to discuss the Company’s results as well as recent
corporate developments. After opening remarks, there will be a
question and answer period. Interested parties may participate in
the call by dialing 1-833-366-1126 or 1-412-902-6772. Please call
in 10 minutes before the conference call is scheduled to begin. The
conference call will also be broadcast live over the Internet. To
listen to the live webcast of the call, please go to the Events
section of the Ameri100 corporate website. If you are unable to
listen live, the call will be archived and can be accessed for a
period of one year through the ‘Events’ link provided above.
About Ameri100Ameri100 is a
specialized SAP® cloud, digital and enterprise services company
which provides SAP® services to customers worldwide. Headquartered
in Atlanta, Georgia, Ameri100 has offices in the U.S. and Canada.
The Company also has global delivery centers in India. With its
bespoke engagement model, the Company delivers transformational
value to its clients across industry verticals. For further
information, visit www.ameri100.com.
Forward-Looking StatementsThis
press release includes forward-looking statements that relate to
the business and expected future events or future performance of
Ameri100 and involve known and unknown risks, uncertainties and
other factors that may cause its actual results, levels of
activity, performance or achievements to differ materially from any
future results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements. Words
such as, but not limited to, "believe," "expect," "anticipate,"
"estimate," "intend," "plan," "targets," "likely," "will," "would,"
"could," and similar expressions or phrases identify
forward-looking statements. Forward-looking statements include, but
are not limited to, statements about Ameri100's financial and
growth projections as well as statements concerning our plans,
predictions, estimates, strategies, intentions, beliefs and other
information concerning our business and the markets in which we
operate. The future performance of Ameri100 may be adversely
affected by the following risks and uncertainties: the level of
market demand for our services, the highly-competitive market for
the types of services that we offer, market conditions that could
cause our customers to reduce their spending for our services, our
ability to create, acquire and build new businesses and to grow our
existing businesses, our ability to attract and retain qualified
personnel, currency fluctuations and market conditions around the
world, and other risks not specifically mentioned herein but those
that are common to industry. For a more detailed discussion of
these factors and risks, investors should review Ameri100's reports
on Form 10-K and other reports filed with the Securities and
Exchange Commission (the “SEC”), which can be accessed through the
SEC's website. Forward-looking statements in this press release are
based on management's beliefs and opinions at the time the
statements are made. All forward-looking statements are qualified
in their entirety by this cautionary statement, and Ameri100
undertakes no duty to update this information to reflect future
events, information or circumstances.
Use of Non-GAAP Financial
MeasuresIn addition to financial results calculated in
accordance with U.S. generally accepted accounting principles
("GAAP"), information containing non-GAAP financial measures for
the Company are disclosed in this press release. The non-GAAP
financial measures disclosed by the Company should not be
considered a substitute for, or superior to, financial measures
calculated in accordance with GAAP, and the financial results
calculated in accordance with GAAP and reconciliations to those
financial statements should be carefully evaluated. The non-GAAP
financial measures used by the Company may be calculated
differently from, and therefore may not be comparable to, similarly
titled measures used by other companies. The Company has provided
reconciliations of the non-GAAP financial measures to the most
directly comparable GAAP financial measures. Management encourages
readers to rely upon the GAAP numbers, but includes the non-GAAP
financial measures as supplemental metrics to assist readers.
In this press release, the Company presents the
non-GAAP financial measure "adjusted EBITDA." Company management
uses this non-GAAP financial measures to evaluate the Company's
performance. As the Company's core business is providing
information technology services and products, Company management
finds it useful to use "adjusted EBITDA", which does not include
interest, taxes, depreciation, amortization, preferred stock
dividends, stock-based compensation expenses, acquisition related
expenses, restructuring expenses and changes in estimates related
to acquisitions. While we may have these types of items and charges
in the future, Company management believes that they are not
reflective of the day- to-day offering of its products and services
and relate more to strategic, multi-year corporate actions, without
predictable trends, and that may obscure the trends and financial
performance of the Company's core business. Company management
believes the exclusion of the items described above from "adjusted
EBITDA" is a very common measure utilized in the investment
community and it helps Company management benchmark its operations
and results with the industry.
The limitation associated with using these
non-GAAP financial measures is that these measures exclude items
that impact the Company's current period operating results. This
limitation is best addressed by using these non-GAAP financial
measures in combination with "net income (loss)", and "net income
(loss) per diluted share" (the most comparable GAAP measures)
because these non-GAAP financial measures do not reflect items that
impact current period operating results and may be higher or lower
than the most comparable GAAP measure.
Corporate Contact:Barry Kostiner, Chief
Financial OfficerIR@ameri100.com
Investor Relations Contact:Sanjay M. HurryLHA
Investor Relations(212) 838-3777IR@ameri100.com
– Financial Tables Follow –
|
AMERI HOLDINGS, INC. |
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
|
|
|
Assets |
|
Sep 30, 2018 |
|
Dec 31, 2017 |
Current assets: |
|
|
|
|
Cash and
cash equivalents |
$ |
2,063,690 |
$ |
4,882,084 |
Accounts
receivable |
|
7,828,791 |
|
8,838,453 |
Other
current assets |
|
701,059 |
|
924,266 |
Total current assets |
|
10,593,540 |
|
14,644,803 |
Other assets: |
|
|
|
|
Intangible assets, net |
|
7,249,490 |
|
9,469,703 |
Goodwill |
|
21,898,323 |
|
21,898,323 |
Other
assets |
|
6,158,086 |
|
6,183,799 |
Total other assets |
|
35,305,899 |
|
37,551,825 |
Total assets |
$ |
45,899,439 |
$ |
52,196,628 |
|
|
|
|
|
Current liabilities: |
|
|
|
|
Line of
credit |
$ |
3,601,134 |
$ |
4,053,318 |
Accounts
payable & accrued expenses |
|
5,976,672 |
|
7,907,533 |
Bank term
loan |
|
5,994 |
|
749,551 |
Dividend
Payable |
|
104,657 |
|
- |
Consideration payable – cash |
|
2,571,000 |
|
5,509,427 |
Consideration payable – equity |
|
605,223 |
|
12,148,053 |
Total current liabilities |
|
12,864,680 |
|
30,367,882 |
Long- term Liabilities: |
|
|
|
|
Convertible notes |
|
1,250,000 |
|
1,250,000 |
Bank term
loan |
|
1,698 |
|
1,130,563 |
Warrant
liability |
|
1,689,899 |
|
- |
Total long-term liabilities |
|
2,941,597 |
|
2,380,563 |
Total liabilities |
$ |
15,806,277 |
$ |
32,748,445 |
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
Stockholders’ equity |
|
30,093,162 |
|
19,448,183 |
Total liabilities and stockholders' equity |
$ |
45,899,439 |
$ |
52,196,628 |
|
|
|
|
|
|
AMERI HOLDINGS, INC. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
Three MonthsSep 30,2018 |
|
Three MonthsSep 30,2017 |
|
Nine MonthsSep 30,2018 |
|
Nine MonthsSep 30,2017 |
|
|
|
|
|
|
|
|
|
Revenue |
$ |
10,576,254 |
|
$ |
12,529,928 |
|
$ |
32,715,104 |
|
$ |
37,139,114 |
|
Cost of revenue |
|
8,230,456 |
|
|
9,966,490 |
|
|
25,637,422 |
|
|
28,941,535 |
|
Gross
profit |
|
2,345,798 |
|
|
2,563,438 |
|
|
7,077,682 |
|
|
8,197,579 |
|
Operating
expenses |
|
|
|
|
|
|
|
|
Selling, General and
administration |
|
2,655,902 |
|
|
5,685,905 |
|
|
8,059,432 |
|
|
13,559,632 |
|
Depreciation and
amortization |
|
636,495 |
|
|
817,284 |
|
|
2,266,513 |
|
|
2,332,041 |
|
Acquisition related
expenses |
|
227,952 |
|
|
5,694 |
|
|
237,952 |
|
|
390,174 |
|
Changes in estimate for
consideration payable |
|
(7,274,929 |
) |
|
- |
|
|
(7,140,310 |
) |
|
(400,000 |
) |
Operating
expenses |
|
(3,754,580 |
) |
|
6,508,883 |
|
|
3,423,587 |
|
|
15,881,847 |
|
Operating
Income (loss) |
|
6,100,378 |
|
|
(3,945,445 |
) |
|
3,654,095 |
|
|
(7,684,268 |
) |
Interest expenses |
|
(190,394 |
) |
|
(132,973 |
) |
|
(584,074 |
) |
|
(388,122 |
) |
Changes in fair value
of warrant liability |
|
(261,330 |
) |
|
- |
|
|
(261,330 |
) |
|
- |
|
Others, net |
|
75,747 |
|
|
17,446 |
|
|
83,736 |
|
|
21,921 |
|
Income (loss)
before income taxes |
|
5,724,401 |
|
|
(4,060,972 |
) |
|
2,892,427 |
|
|
(8,050,469 |
) |
Income tax benefit |
|
(24,934 |
) |
|
- |
|
|
(24,934 |
) |
|
- |
|
Income (loss)
after income taxes |
|
5,699,467 |
|
|
(4,060,972 |
) |
|
2,867,493 |
|
|
(8,050,469 |
) |
Net income attributable
to non-controlling interest |
|
- |
|
|
(6,632 |
) |
|
- |
|
|
(18,504 |
) |
Net Income
(loss) attributable to the Company |
|
5,699,467 |
|
|
(4,067,604 |
) |
|
2,867,493 |
|
|
(8,068,973 |
) |
Dividend on preferred
stock |
|
(1,816,452 |
) |
|
(541,864 |
) |
|
(2,478,005 |
) |
|
(1,546,655 |
) |
Net Income
(loss) attributable to common stock holders |
$ |
3,883,015 |
|
$ |
(4,609,468 |
) |
$ |
389,488 |
|
$ |
(9,615,628 |
) |
|
|
|
|
|
|
|
|
|
Basic (loss) per
share |
$ |
0.18 |
|
$ |
(0.31 |
) |
$ |
0.02 |
|
$ |
(0.66 |
) |
Diluted (loss) per
share |
$ |
0.16 |
|
$ |
(0.31 |
) |
$ |
0.02 |
|
$ |
(0.66 |
) |
|
|
|
|
|
|
|
|
|
Basic weighted average
number of common shares outstanding |
|
21,657,181 |
|
|
14,715,947 |
|
|
19,683,610 |
|
|
14,472,322 |
|
Diluted weighted
average number of common shares outstanding |
|
24,184,264 |
|
|
14,715,947 |
|
|
20,630,142 |
|
|
14,472,322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERI HOLDINGS, INC. |
UNAUDITED RECONCILIATION OF NET (LOSS)
ATTRIBUTABLE TO COMMON STOCKHOLDERS TO EBITDA & ADJUSTED
EBITDA |
|
|
|
|
|
EBITDA and
Adjusted EBITDA Calculation |
|
|
|
|
|
|
Three Months Sep2018 |
|
Three Months Sep2017 |
|
Nine months Sep 2018 |
|
Nine months Sep 2017 |
Net Income
(loss) attributable to the Common Stockholders : |
$ |
3,883,015 |
|
$ |
(4,609,468 |
) |
$ |
389,488 |
|
$ |
(9,615,628 |
) |
Dividend on Preference
shares |
|
1,816,452 |
|
|
541,864 |
|
|
2,478,005 |
|
|
1,546,655 |
|
Interest expense and
other, net |
|
114,647 |
|
|
115,527 |
|
|
500,338 |
|
|
366,201 |
|
Changes in fair value
of warrants |
|
261,330 |
|
|
- |
|
|
261,330 |
|
|
- |
|
Taxes |
|
24,934 |
|
|
- |
|
|
24,934 |
|
|
- |
|
Depreciation and
amortization |
|
636,495 |
|
|
817,284 |
|
|
2,266,513 |
|
|
2,332,041 |
|
Earnings before
interest, tax, depreciation and amortization (EBITDA) |
$ |
6,736,873 |
|
$ |
(3,134,793 |
) |
$ |
5,920,608 |
|
$ |
(5,370,731 |
) |
Stock based
compensation expense |
|
315,507 |
|
|
2,696,375 |
|
|
890,276 |
|
|
5,167,354 |
|
Acquisition related
expenses |
|
227,952 |
|
|
5,694 |
|
|
237,952 |
|
|
390,174 |
|
Changes in estimates
for consideration payable |
|
(7,274,929 |
) |
|
- |
|
|
(7,140,310 |
) |
|
(400,000 |
) |
Restructuring
Expenses |
|
- |
|
|
- |
|
|
127,100 |
|
|
- |
|
Non-Controlling
Interest |
|
- |
|
|
6,632 |
|
|
- |
|
|
18,504 |
|
Adjusted
(EBITDA) |
$ |
5,403 |
|
$ |
(426,092 |
) |
$ |
35,626 |
|
$ |
(194,699 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
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