WaveDancer Releases First Quarter 2022 Results
17 May 2022 - 10:13AM
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.
_______________________________
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, CFAVice PresidentThe Equity Group(212)
836-9626jhellman@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
SUBSIDIARIESCONSOLIDATED 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 $0.001 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 MeasuresIn
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 EndedMarch 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 |
|
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