WaveDancer Releases Second Quarter 2022 Results
08/15/2022 - 08:30 AM
$500,000 of Revenue Recognized from Blockchain Platform Development as Company Nears Full Production; Revenue up 44% from First Quarter
FAIRFAX, Va., Aug. 15, 2022 (GLOBE NEWSWIRE) -- WaveDancer (NASDAQ: WAVD), reported its results for the second quarter ended June 30, 2022, which was characterized by continued investment in its software development team and strategic efforts focused on maintaining and growing profitability in the Company’s professional services work. The Company recognized significant revenues after achieving substantial project milestones on their key United States government contract to bring a blockchain-enabled supply chain and logistics platform into full production.
WaveDancer CEO Jamie Benoit commented, “The various investments we have made in WaveDancer are helping establish a strong foundation for growth. Our revenue has increased 44% from first quarter levels, while our gross profit has increased by 147% , in part due to the significant revenue recognized by our United States Government contracts. As we drive aggressively toward Authority to Operate our supply chain platform with our government customer, we are simultaneously readying our Maverix product for the broader commercial markets.”
Mr. Benoit continued, “Our focus on higher margin professional service opportunities, which resulted in our second quarter gross margin expanding to 30.9% , will continue in following quarters and establish a strong foundation upon which we can continue with our long-term strategic transformation into a leading technology company. I am optimistic, based on the strong interest we are hearing from customers, that our blockchain offering meets a large demand in the marketplace and am likewise optimistic about acquisition opportunities that will be immediately accretive.”
WaveDancer CFO Tim Hannon added, “The increase in expenses this quarter, in comparison to last year, was driven in part by one-time professional fees and other costs to conduct due diligence related to our intended acquisition of Knowmadics. The dramatic change in market sentiment during the first half of 2022 that made closing the transaction impossible was unfortunate, but ultimately in the best interests of our shareholders. Our strategic focus on profitability and investment in product development will ultimately allow us to emerge stronger and better positioned for the massive growth we expect in the blockchain and zero trust sector.”
Second Quarter 2022 Key Financial Items (all comparisons to prior year period unless otherwise noted)
Total revenues decreased 8.8% to $4.3 million , compared with $4.7 million . Professional fees decreased 14.5% to $2.8 million down from $3.3 million . Gross profit decreased slightly to $0.93 million , compared with $0.96 million . Gross margin expanded to 30.9% ; higher-margin professional fees accounted for 65.9% of revenues. Net loss of $(1.5) million , compared with net income of $0.04 million . Adjusted EBITDA1 of ($1.4) million , compared with $0.6 million Six Months 2022 Key Financial Items (all comparisons to prior year period unless otherwise noted)
Total revenues decreased to $7.3 million , compared with $8.2 million . Professional fees decreased to $4.9 million down from $5.8 million Gross margin improved significantly, increasing to 25.1% , compared with 24.2% ; higher-margin professional fees accounted for 67.2% of revenues. Net loss of ($3.6) million , compared with a net income of $0.3 million Adjusted EBITDA of ($3.0) million , compared with $0.05 million . About 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.
Additional information for investors
For additional information contact:jhellman@equityny.com
1 Please see non-GAAP reconciliation on page 6
WAVEDANCER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME Unaudited
Three Months Ended 2021 Revenues Professional fees $ 2,844,694 $ 3,328,274 Software sales 1,472,688 1,403,687 Total revenues 4,317,382 4,731,961 Cost of revenues Cost of professional fees 1,965,611 2,397,895 Cost of software sales 1,421,990 1,378,138 Total cost of revenues 3,387,601 3,776,033 Gross profit 929,781 955,928 Selling, general and administrative expenses 3,240,388 819,193 Acquisition costs 356,159 82,756 Change in fair value of contingent consideration (942,609 ) - (Loss) income from operations (1,724,157 ) 53,979 Other income (expense): Interest expense (19,818 ) (15,226 ) Other income (expense), net 195 4,404 (Loss) income before provision for income taxes (1,743,780 ) 43,157 Income tax benefit 218,338 - Net (loss) income $ (1,525,442 ) $ 43,157 Comprehensive (loss) income $ (1,525,442 ) $ 43,157 Basic (loss)/earnings per share $ (0.09 ) $ - Diluted (loss)/earnings per share $ (0.09 ) $ - Weighted average common shares outstanding Basic 17,376,697 11,980,397 Diluted 17,376,697 12,665,267
WAVEDANCER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME Unaudited
Six Months Ended 2021 Revenues Professional fees $ 4,911,384 $ 5,767,533 Software sales 2,401,510 2,384,008 Total revenues 7,312,894 8,151,541 Cost of revenues Cost of professional fees 3,677,626 3,865,594 Cost of software sales 2,329,422 2,310,369 Total cost of revenues 6,007,048 6,175,963 Gross profit 1,305,846 1,975,578 Selling, general and administrative expenses 5,954,730 1,499,443 Acquisition costs 790,861 153,286 Change in fair value of contingent consideration (930,000 ) - (Loss) income from operations (4,509,745 ) 322,849 Other income (expense): Interest expense (39,137 ) (16,684 ) ) Other income (expense), net 789 7,807 (Loss) income before provision for income taxes (4,548,093 ) 313,972 Income tax benefit 944,344 - Net (loss) income $ (3,603,749 ) $ 313,972 Comprehensive (loss) income $ (3,603,749 ) $ 313,972 Basic (loss)/earnings per share $ (0.21 ) $ 0.03 Diluted (loss)/earnings per share $ (0.21 ) $ 0.03 Weighted average common shares outstanding Basic 17,335,979 11,633,464 Diluted 17,335,979 12,305,182
WAVEDANCER, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
Unaudited December 31, ASSETS Current assets Cash and cash equivalents $ 578,982 $ 4,931,302 Accounts receivable 3,583,136 1,664,862 Prepaid expenses and other current assets 298,179 276,990 Total current assets 4,460,297 6,873,154 Intangible assets, net of accumulated amortization of $900,818 and $201,032 7,349,182 8,048,968 Goodwill 7,585,269 7,585,269 Right-of-use operating lease asset 582,500 672,896 Property and equipment, net of accumulated depreciation and amortization$374,185 and $347,886 109,990 Other assets 77,100 77,100 Total assets $ 20,164,338 $ 23,362,643 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 1,546,945 $ 650,499 Accrued payroll and related liabilities 721,927 524,055 Commissions payable 250,227 224,250 Other accrued liabilities 562,428 204,080 Contract liabilities 165,843 186,835 Operating lease liability- current 199,553 192,128 Total current liabilities 3,446,923 1,981,847 Operating lease liability - non-current 405,763 507,120 Deferred income taxes 223,160 1,167,504 Other liabilities 1,374,137 2,265,000 Total liabilities 5,449,983 5,921,471 Stockholders' equity Common stock at $0.00 1 and $0.01 par value; 100,000,000 shares authorized, 19,039,313 and 18,882,313 shares issued, Additional paid-in capital 32,666,239 31,789,464 Accumulated deficit (17,040,712 ) (13,436,963 ) Treasury stock, 1,642,616 shares at cost (930,211 ) (930,211 ) Total stockholders' equity 14,714,355 17,441,172 Total liabilities and stockholders' equity $ 20,164,338 $ 23,362,643
Non-GAAP Financial Measures
Reconciliation of Net (loss) income to Adjusted EBITDA (Unaudited) Three months ended Six months ended (in thousands) June 30, June 30, 2022 2021 2022 2021 Net (loss) income $ (1,525 ) $ 314 $ (3,604 ) $ 43 Adjustments: Interest expense (income), net 20 11 38 9 Income taxes (218 ) - (944 ) - Depreciation 13 7 26 12 Amortization 350 - 700 44 EBITDA (1,360 ) 332 (3,784 ) 108 Non-cash stock-based compensation 530 112 842 140 Acquisition Costs 356 71 791 153 Change in FV of earnout (943 ) - (930 ) - Post-employment agreement - 36 - 71 Moving expense - 8 - 8 Adjusted EBITDA $ (1,417 ) $ 559 $ (3,081 ) $ 480
