WaveDancer Releases First Quarter 2022 Results
05/16/2022 - 08:13 PM
Investments In Transformation Continue-Expected to Begin Driving Revenue Growth in 2Q 2022
FAIRFAX, Va., May 16, 2022 (GLOBE NEWSWIRE) -- WaveDancer (NASDAQ: WAVD), today reported its results for the first quarter ended March 31, 2022, which was characterized by continued investment in the WaveDancer’s software development and sales team. This included new hires, board appointments, partnerships, and a definitive acquisition agreement as WaveDancer strives to become a leader in the zero trust, blockchain, and secure supply chain market.
WaveDancer CEO Jamie Benoit commented, “Our first quarter 2022 saw the company continue to prioritize investments in key operational areas. In addition to the recent additions, we have made at the board and senior leadership levels, we have also added three new blockchain sales professionals as well as six engineers and developers.”
Mr. Benoit continued, “Our lower revenue over first quarter 2021 is a result of our continued effort in the Tellenger business to move away from low margin distribution and reselling and towards higher margin professional services opportunities.”
First Quarter 2022 Financial Highlights (all comparisons to prior year period unless otherwise noted)
Total revenues decreased 12.4% to $3.0 million , compared with $3.4 million . Professional fees decreased 15.3% to $2.1 million down from $2.4 million . Gross profit decreased to $0.4 million , compared with $1.0 million . Gross margin expanded to 12.6% ; higher-margin professional fees accounted for 69.0% of revenues. Net loss of $(2.1) million , compared with net income of $0.3 million . Adjusted EBITDA1 of ($1.7) million , compared with $0.4 million . About WaveDancer
WaveDancer (www.wavedancer.com), headquartered in Fairfax, Virginia, is a provider of zero trust software solutions, specializing in secure blockchain supply chain management (SCM), asset tracking and security. Our technologies are deployed and being used to help organizations manage very complex supply chain challenges. Initially developed to secure a complex international supply chain for a global U.S. Government (USG) national security organization, the technology has matured to address multiple operational capabilities. Customers are using the WaveDancer platform to gain unprecedented levels of accountability, auditability, and predictability from their data, while giving insights to their partners and suppliers through a controlled, distributed ledger that is immutable and can be trusted by all parties. The sophisticated blockchain technology is now available to the entirety of the USG through GovCloud.
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1 Please see non-GAAP reconciliation on page 6
Additional information for investors This release may contain forward-looking statements regarding the Company's business, customer prospects, or other factors that may affect future earnings or financial results. Such statements involve risks and uncertainties which could cause actual results to vary materially from those expressed in the forward-looking statements. Investors should read and understand the risk factors detailed in the Company's 10-K for the fiscal year ended December 31, 2021 and in other filings with the Securities and Exchange Commission.
For additional information contact: Jeremy Hellman, CFA Vice President The Equity Group (212) 836-9626 jhellman@equityny.com
WAVEDANCER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
Three Months Ended March 31, 2022 2021 Revenues Professional fees $ 2,066,690 $ 2,439,259 Software sales 928,822 980,321 Total revenues 2,995,512 3,419,580 Cost of revenues Cost of professional fees 1,712,015 1,467,699 Cost of software sales 907,432 932,231 Total cost of revenues 2,619,447 2,399,930 Gross profit 376,065 1,019,650 Selling, general and administrative expenses 2,714,342 680,250 Acquisition costs 434,702 70,530 (Loss) income from operations (2,772,979 ) 268,870 Other income (expense): Interest expense (19,319 ) (1,459 ) Other income (expense), net (12,015 ) 3,404 (Loss) income before provision for income taxes (2,804,313 ) 270,815 Income tax benefit (726,006 ) - Net (loss) income $ (2,078,307 ) $ 270,815 Comprehensive (loss) income $ (2,078,307 ) $ 270,815 Basic (loss)/earnings per share $ (0.12 ) $ 0.02 Diluted (loss)/earnings per share $ (0.12 ) $ 0.02 Weighted average common shares outstanding Basic 17,294,808 11,282,671 Diluted 17,294,808 12,286,216
WAVEDANCER, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
March 31, 2022 December 31, 2021 ASSETS Current assets Cash and cash equivalents $ 2,999,201 $ 4,931,302 Accounts receivable 1,672,072 1,664,862 Prepaid expenses and other current assets 458,719 276,990 Total current assets 5,129,992 6,873,154 Intangible assets, net of accumulated amortization of $201,032 and $0 7,699,075 8,048,968 Goodwill 7,585,269 7,585,269 Right-of-use operating lease asset 627,977 672,896 Property and equipment, net of accumulated depreciation and amortization of $347,886 and $312,320 103,577 105,256 Other assets 77,100 77,100 Total assets $ 21,222,990 $ 23,362,643 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 302,323 $ 650,499 Accrued payroll and related liabilities 611,497 524,055 Commissions payable 250,043 224,250 Other accrued liabilities 816,536 204,080 Contract liabilities 149,692 186,835 Operating lease liability- current 192,128 192,128 Total current liabilities 2,322,219 1,981,847 Operating lease liability - non-current 460,505 507,120 Deferred income taxes 441,498 1,167,504 Other liabilities 2,296,928 2,265,000 Total liabilities 5,521,150 5,921,471 Stockholders' equity Common stock at $0.00 1 and $0.01 par value; 100,000,000 and 30,000,000 shares authorized, 18,882,313 and 12,904,376 shares issued, 17,239,697 and 11,261,760 shares outstanding, as of December 31, 2021 and 2020, respectively 18,987 18,882 Additional paid-in capital 32,128,334 31,789,464 Accumulated deficit (15,515,270 ) (13,436,963 ) Treasury stock, 1,642,616 shares at cost (930,211 ) (930,211 ) Total stockholders' equity 15,701,840 17,441,172 Total liabilities and stockholders' equity $ 21,222,990 $ 23,362,643
Non-GAAP Financial Measures In assessing the performance of our business, management utilizes a variety of financial and performance measures. The key measure is Adjusted EBITDA, a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss) plus depreciation and amortization expense, net interest expense (income), and taxes, as further adjusted to eliminate the impact of, when applicable, expenses that are unusual or non-recurring that we believe do not reflect our core operating results. and non-cash stock-based compensation. We believe that Adjusted EBITDA is meaningful to our investors to enhance their understanding of our financial performance for the current period and our ability to generate cash flows from operations that are available for taxes, capital expenditures and debt service. We understand that Adjusted EBITDA is frequently used by securities analysts, investors and other interested parties as a measure of financial performance and to compare our performance with the performance of other companies that report Adjusted EBITDA. Our calculation of Adjusted EBITDA, however, may not be comparable to similarly titled measures reported by other companies. When assessing our operating performance, investors and others should not consider this data in isolation or as a substitute for net income (loss) calculated in accordance with GAAP. Further, the results presented by Adjusted EBITDA cannot be achieved without incurring the costs that the measure excludes. A reconciliation of net income (loss) to Adjusted EBITDA, the most comparable GAAP measure, is provided below.
Reconciliation of Net (loss) income to Adjusted EBITDA (in thousands) Three Months Ended March 31, 2022 2021 Net (loss) income $ (2,078 ) $ 271 Adjustments: Interest expense (income), net 19 (2 ) Tax (benefit) expense (726 ) - Depreciation 13 5 Amortization 350 - EBITDA (2,422 ) 274 Non-cash stock-based compensation 312 28 Acquisition Costs 435 71 Post-employment agreement - 36 Adjusted EBITDA $ (1,675 ) $ 408