Q1 2016 @RMGNetworks Results
Gail Chiasson, North American Editor
RMG Networks Holding Corporation or RMG Networks, Dallas-based provider of technology-driven visual communications solutions, has announced its financial results for the first quarter ended March 31, 2016.
Highlights of the report include:
- Total revenues of $8.7 million, decreased 7% year-over-year from $9.3 million;
- Product sales revenues increased 25% year-over-year, to $3.9 million from $3.1 million;
- EBITDA loss of $0.4 million, narrowed by $1.2 million year-over-year;
- Professional services revenue of $1.4 million decreased 51% from $2.9 million in the first quarter of 2015, resulting primarily from installation services performed during the first quarter of 2015, associated with the sale of a large customer solution made during the fourth quarter of 2014;
- Operating expenses decreased 22% year-over-year.
“The fundamentals of our business continue to improve each quarter as we execute against our strategic plan to deliver innovative and value-added solutions in new market verticals and further diversify sales beyond our core contact center business,” said Robert Michelson, CEO. “We are particularly encouraged by the improvement in the efficiency and productivity of our sales organization during the first quarter, which drove a 25% increase in product revenue on a year-over-year basis. Simultaneously, our cost rationalization efforts over the past year resulted in a 22% year-over-year decline in operating expenses, ultimately driving a $1.2 million improvement in EBITDA.
“We made progress on our key growth initiatives, including closing sales orders for three supply chain pilots, a million dollar retail banking deal and a $425,000 deal with a large telecommunications customer. We also advanced discussions with specific, targeted, third-party sales channel partners, who have the potential to augment our growth, and look forward to announcing new partnerships in the coming months. Overall, we are pleased with the strategic and financial progress made during the first quarter. We continue to broaden our customer base, expand our pipeline with larger and more meaningful sales opportunities and are optimistic in our outlook for 2016.”
Prior year financial results from RMG Networks’ Airline Media Networks business have been excluded from continuing operations and are reported as discontinued operations in the Consolidated Statement of Comprehensive Loss, due to the completion of the sale of this business on July 1, 2015.
“As expected, we experienced the historical seasonality that generally impacts our revenues in the first quarter,” said Michelson. “Despite top-line seasonality, we narrowed our first quarter EBITDA loss to just over $400,000, a significant improvement over the EBITDA loss reported in each of the first three quarters of 2015 and every quarter of 2014. Looking forward, we are encouraged by the progress we continue to make in our key growth initiatives, and believe the investments we are making in our sales organization will lead to continued sequential revenue growth in 2016.”
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