MIL-OSI: WaveDancer Releases First Quarter 2022 Results

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Source: GlobeNewswire (MIL-OSI)

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.

_______________________________

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 $0.001 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 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  

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