Creative Realities, Inc. (“Creative Realities,” “CRI,” or the
“Company”) (NASDAQ: CREX, CREXW), a leading provider of digital
signage solutions, announced that it intends to remain listed on
the Nasdaq Capital Market by maintaining a minimum closing bid
price of at least $1.00 for a minimum of 10 consecutive trading
days in compliance with NASDAQ Listing Rule 5550(a)(2), otherwise
known as the “Minimum Bid Requirement,” prior to the current
compliance deadline of April 10, 2023.
The Company believes that investors will
ultimately recognize and acknowledge the value creation taking
place as general economic conditions improve and CRI continues to
report impressive financial results. The Company has reported
record revenue for the first, second and third quarters of 2022.
CRI has re-affirmed guidance for $43 million in revenue for FY2022,
which is a record full year revenue and represents a 40% organic
growth rate. The Company recently conveyed additional revenue
guidance of $54 million for FY2023, which would constitute 25%
incremental organic growth rate, nearly twice the industry average.
Management projects these increased levels of revenue will drive
2023 results to record Adjusted EBITDA at an improved Adjusted
EBITDA margin percentage. A reconciliation of the Company’s
historical GAAP-basis net income/(loss) to Adjusted EBITDA is
provided in our earnings releases and SEC filings on Form 10-Q and
Form 10-K, and will continue to be provided for future periods in
which Adjusted EBITDA is reported.
In addition to posting improvements in
profitability throughout FY2022, and anticipating a continuation of
this trend in FY2023, CRI has projected an annual recurring revenue
(“ARR”) of $15M on a run rate basis entering 2023. A core valuation
precept, we believe ARR is a key bellwether for the Company’s
SaaS-based business, providing a solid foundation for profit and
growth.
Despite such financial results, CRI currently
anticipates effectuating a reverse stock split if necessary to
ensure comply with the Minimum Bid Requirement before expiration of
the compliance period. As a Minnesota corporation, CRI may
effectuate a reverse stock split without obtaining shareholder
approval, subject to certain conditions.
“CRI’s management team is executing our growth
strategy and fulfilling upon the value creation plan that we have
communicated to shareholders and prospective investors,” said Rick
Mills, CEO of Creative Realities. “The Company is uniquely
positioned to meet the growing and diverse needs of the digital
signage, digital media and digital-out-of-home markets that it
serves, as evidenced by a blue-chip client base, recent customer
acquisitions and record results.” Mr. Mills continued “CRI
anticipates unfettered access to the capital markets to support
this value creation for years to come and intends to do what is
necessary to remain listed on the Nasdaq Capital Market.”
About Creative Realities,
Inc.Creative Realities helps clients use the latest
omnichannel technologies to inspire better customer experiences.
CRI designs, develops and deploys consumer experiences for high-end
enterprise-level networks, and is actively providing recurring SaaS
and support services across diverse vertical markets, including but
not limited to automotive, advertising networks, apparel &
accessories, convenience stores, food service/QSR, gaming, theater,
and stadium venues. The company has operations across North America
with active installations in more than 10 countries.
Use of Non-GAAP Measures and Operating
MeasuresCreative Realities, Inc. prepares its consolidated
financial statements in accordance with United States generally
accepted accounting principles (“GAAP”). In addition to disclosing
financial results prepared in accordance with GAAP, the Company
discloses information regarding “EBITDA” and “Adjusted EBITDA.” CRI
defines “EBITDA” as earnings before interest, income taxes,
depreciation and amortization of intangibles. CRI defines “Adjusted
EBITDA” as EBITDA excluding stock-based compensation, fair value
adjustments and both cash and non-cash non-recurring gains and
charges. EBITDA and Adjusted EBITDA are not measures of performance
defined in accordance with GAAP. However, EBITDA and Adjusted
EBITDA are used internally in planning and evaluating the Company’s
operating performance. Accordingly, management believes that
disclosure of these metrics offers investors, bankers and other
stakeholders an additional view of the Company’s operations that,
when coupled with the GAAP results, provides a more complete
understanding of the Company’s financial results.
EBITDA and Adjusted EBITDA should not be
considered as an alternative to net income/(loss) or to net cash
used in operating activities as measures of operating results or
liquidity. Our calculation of EBITDA and Adjusted EBITDA may not be
comparable to similarly titled measures used by other companies,
and the measures exclude financial information that some may
consider important in evaluating the Company’s performance. A
reconciliation of GAAP net income/(loss) to EBITDA and Adjusted
EBITDA is included in the accompanying financial schedules.
“Annual recurring revenue,” or “ARR,” represents
the annualized revenue run rate of our subscription (1)
software-as-a-service (“SaaS”) contracts, (2) maintenance and
support of perpetual license contracts, and (3) content management
service contracts at the end of the final calendar month included
in a reporting period, assuming these contracts are renewed on
their existing terms for customers that are under subscription
contracts with us. We believe that ARR is a key operating metric to
measure our business because it is driven by our ability to acquire
new subscription customers and to maintain and expand our
relationship with existing subscription customers. ARR should be
viewed independently of revenue and deferred revenue as ARR is a
performance metric and is not intended to be combined with any of
these items.
For further information, please refer to
Creative Realities, Inc.’s filings available online at www.sec.gov,
including its Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 22, 2022.
Cautionary Note on Forward-Looking
Statements This press release contains “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, Section 21E of the Securities Exchange Act of
1934, as amended, and the Private Securities Litigation Reform Act
of 1995, and includes, among other things, discussions of our
business strategies, product releases, future operations and
capital resources. Words such as “estimates,” “projected,”
“expects,” “anticipates,” “forecasts,” “plans,” “intends,”
“believes,” “seeks,” “may,” “will,” “should,” “future,” “propose”
and variations of these words or similar expressions (or the
negative versions of such words or expressions) are intended to
identify forward-looking statements. Forward-looking statements are
not guarantees of future performance, conditions or results. They
are based on the opinions, estimates and beliefs of management as
of the date such statements are made, and they are subject to known
and unknown risks, uncertainties, assumptions and other factors,
many of which are outside of our control, that may cause the actual
results, level of activity, performance or achievements to be
materially different from those expressed or implied by such
forward-looking statements. Some of these risks are discussed in
the “Risk Factors” section contained in Item 1A of our Annual
Report on Form 10-K for the year ended December 31, 2021 and the
Company’s subsequent filings with the U.S. Securities and Exchange
Commission. Important factors, among others, that may affect actual
results or outcomes include: our ability to effectively integrate
Reflect’s business operations, our strategy for customer retention,
growth, product development, market position, financial results and
reserves, our ability to execute on our business plan, our ability
to retain key personnel, potential litigation, supply chain
shortages, and general economic and market conditions impacting
demand for our products and services, including those as a result
of the COVID-19 pandemic. Readers should not place undue reliance
upon any forward-looking statements. We assume no obligation to
update or revise the forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Contacts
Media Inquiries
Christina Davieslrudd@ideagrove.com
Investor
Relations:ir@cri.comhttps://investors.cri.com/
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