Qumu Corp - FORM 8-K - EX-99.1 - PRESS RELEASE ISSUED AUGUST 6, 2015 - August 7, 2015

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EX-99.2 - STATEMENTS OF SHERMAN L. BLACK AND PETER J. GOEPFRICH - Qumu Corpq22015ex992.htm
8-K - FORM 8-K DATED AUGUST 6, 2015 - Qumu Corpa8-kq22015er.htm


EXHIBIT 99.1

Qumu Reports Record Quarterly Revenue of $8.8 Million

Revenue up 47% from 1Q 2015

Gross Margin Increased to 49% from 37% in 1Q 2015

Conference Call Today at 4:30 p.m. ET

Minneapolis, MN – August 6, 2015 – Qumu Corporation (NASDAQ: QUMU) today reported financial results for the second quarter ended June 30, 2015. Revenue totaled $8.8 million during the period and was up 47% from the revenue in the first quarter of 2015, establishing a new quarterly record for Qumu. Revenue was four percent higher than the $8.4 million generated during last year’s second quarter, which was previously the Company’s highest. Excluding significant revenue in the second quarter of 2014 from a large customer, revenue is up 46% over last year. Contracted commitments totaled $8.3 million in the second quarter of 2015 compared with $7.4 million in the second quarter of 2014, an increase of 12%.
 
“The second quarter results reflected significant sequential growth in revenue and improved gross margins,” said Sherman Black, CEO of Qumu. “We also saw improved execution in EMEA as we addressed issues noted in our first quarter report. In North America we continued to generate strong results from the Global 2000 market as we added new customers and expanded within our existing base. Lastly, in APAC we entered into a valuable sales partnership with Fujitsu, one of the world’s foremost IT service providers and the number one IT service provider in Japan.”

“During the quarter we were once again recognized by an industry analyst for our product and technology leadership,” Mr. Black continued. “Aragon Research, a technology-focused research and advisory firm, named Qumu a leader in the Aragon Research Globe for Video Content Management, 2015 report. In addition, our R&D investments resulted in several product highlights for the quarter.” These include:
•
Video Optimization Pack for Citrix Virtual Desktop Infrastructure
•
Enhanced mobility offerings
◦
Qumu Enterprise Mobile App v 2.5
◦
Qumu Enterprise integration with Citrix XenMobile Enterprise Mobility Management
◦
Qumu Cloud iOS and Android mobile apps
•
Qumu Cloud deployment on IBM Cloud’s SoftLayer
•
Cross publishing ability from Qumu Enterprise to Qumu Cloud
•
Qumu Cloud Japanese localization
•
Unified Communications Gateway to enable videoconferencing endpoints as sources for a live webcast
•
Live Transform, added functionality to Qumu’s already expansive streaming capabilities
•
Receipt of a U.S. Patent for Secured Delivery technology
•
Integrations with Webex and Microsoft Office 365


1


Other Second Quarter Information
•
Contracted commitments of $8.3 million for the second quarter of 2015 were received from several new customers representing a variety of industries, including financial services, insurance, heavy industry, creative services and non-profit service organizations.
•
Backlog was $33.4 million at June 30, 2015 compared with $33.9 million at the end of March 2015.
•
Cash, marketable securities and restricted cash at the end of June totaled $21.8 million compared with $29.7 million at the end of March, reflecting the second quarter operating loss and an unfavorable impact on cash from changes in working capital. Restricted cash consists of $2.3 million in proceeds from the sale of the disc publishing business in July 2014 that are in escrow which is scheduled to be released to the Company in October 2015.

Guidance for 2015
During the second half of 2015, the Company expects increased revenue growth compared with the first half of the year. Factors expected to drive this growth include stronger European leadership and execution, the continued strength of Qumu Enterprise in the Americas, the completion of a reseller agreement with a leading APAC channel partner, and a strong second half pipeline. Qumu maintains its guidance that annual revenue growth in 2015 will exceed 40% compared with prior year results. In addition, the Company maintains expectations of gross margins to exceed 50% for 2015.

“In support of our goal to be cash flow break even by the end of 2016, we are in the midst of a comprehensive operational review and have begun implementing cost reduction measures to consolidate and better focus our resources. As a result of this effort, we expect cash used by operations in the second half of 2015 to be reduced by at least 50% compared to the first half of 2015, and we expect cash and marketable securities to be approximately $15 million at the end of 2015,” Mr. Black concluded.

Conference Call
The Company has scheduled a conference call and webcast to review its second quarter results today, August 6, 2015 at 4:30 p.m. Eastern Time. The dial-in number for the conference call is 877-419-6594 for domestic participants and 719-325-4760 for international participants. Investors can also access a webcast of the live conference call by linking through the investor relations section of the Qumu website, www.qumu.com. Webcasts will be archived on Qumu’s website.

Forward-Looking Statements
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” or “estimate” or comparable terminology are intended to identify forward-looking statements. Such forward-looking statements include, for example, statements about: the Company’s future revenue and operating performance, cash balances, future product mix or the timing of recognition of revenue; the demand for the Company’s products or software; the anticipated benefits of sales partnerships and the success of cost reduction measures. The statements made by the Company are based upon management’s current expectations and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and other factors set forth in the Company’s filings with the Securities and Exchange Commission.

About Qumu
Video is today’s document. Qumu Corporation (NASDAQ: QUMU) provides the tools businesses need to create, manage, secure, deliver and measure the success of their videos. Qumu's innovative solutions release the power in video to engage and empower employees, partners and clients. Organizations around the world realize the greatest possible value from video they create and publish using Qumu. Whatever the audience size, viewer device or network configuration, Qumu solutions are how business does video. Additional information can be found at www.qumu.com.


2


Investor Contacts:                
Peter Goepfrich, CFO                
Qumu Corporation                
952-683-7864        
Or

EVC Group
Doug Sherk, 415-652-9100

3


QUMU CORPORATION
Condensed Consolidated Statements of Operations
(unaudited - in thousands, except per share data)
 
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,
 
2015
 
2014
 
2015
 
2014
Revenues:
 

 
 

 
 

 
 

Software licenses and appliances
$
2,719

 
$
4,714

 
$
3,703

 
$
5,910

Service
6,045

 
3,690

 
11,030

 
6,423

Total revenues
8,764

 
8,404

 
14,733

 
12,333

Cost of revenues:
 

 
 

 
 

 
 

Software licenses and appliances
706

 
1,464

 
939

 
2,236

Service
3,786

 
2,778

 
7,328

 
4,545

 Total cost of revenues
4,492

 
4,242

 
8,267

 
6,781

Gross profit
4,272

 
4,162

 
6,466

 
5,552

Operating expenses:
 

 
 

 
 

 
 

Research and development
2,858

 
2,264

 
5,660

 
4,288

Selling, general and administrative
8,298

 
7,421

 
17,490

 
13,938

Amortization of purchased intangibles
200

 
156

 
399

 
313

Total operating expenses
11,356

 
9,841

 
23,549

 
18,539

Operating loss
(7,084
)
 
(5,679
)
 
(17,083
)
 
(12,987
)
Other income (expense):
 

 
 

 
 

 
 

Interest, net
15

 
10

 
31

 
22

Loss on currency exchange
(4
)
 
(6
)
 
(68
)
 
(23
)
Other, net
—

 
—

 
—

 
(10
)
Total other income (expense), net
11

 
4

 
(37
)
 
(11
)
Loss before income taxes
(7,073
)
 
(5,675
)
 
(17,120
)
 
(12,998
)
Income tax benefit
(146
)
 
(296
)
 
(319
)
 
(1,446
)
Net loss from continuing operations
(6,927
)
 
(5,379
)
 
(16,801
)
 
(11,552
)
Net income (loss) from discontinued operations, net of tax
(22
)
 
562

 
(89
)
 
2,806

Net loss
$
(6,949
)
 
$
(4,817
)
 
$
(16,890
)
 
$
(8,746
)
Net income (loss) per basic and diluted share:
 
 
 
 
 
 
 
Net loss from continuing operations per share
$
(0.75
)
 
$
(0.61
)
 
$
(1.83
)
 
$
(1.32
)
Net income (loss) from discontinued operations per share
$
—

 
$
0.06

 
$
—

 
$
0.32

Net loss per share
$
(0.75
)
 
$
(0.55
)
 
$
(1.83
)
 
$
(1.00
)
Basic and diluted weighted average shares outstanding
9,243

 
8,748

 
9,206

 
8,724



4


QUMU CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
Assets
June 30,
2015
 
December 31,
2014
Current assets:
(unaudited)
 
 
Cash and cash equivalents
$
5,985

 
$
11,684

Marketable securities
13,503

 
23,486

Restricted cash
2,301

 
2,300

Receivables, net of allowance for doubtful accounts
6,722

 
10,090

Finished goods inventories
384

 
168

Prepaid income taxes
512

 
301

Prepaid expenses and other current assets
5,565

 
3,633

Deferred income taxes - current
62

 
64

Current assets from discontinued operations
945

 
1,026

Total current assets
35,979

 
52,752

Property and equipment, net of accumulated depreciation
2,209

 
1,899

Intangible assets, net of amortization
12,401

 
13,384

Goodwill
8,609

 
8,525

Other assets - non-current
3,985

 
3,617

Total assets
$
63,183

 
$
80,177

Liabilities and Stockholders’ Equity
 

 
 

Current liabilities:
 

 
 

Trade accounts payable and other accrued liabilities
$
2,962

 
$
3,529

Accrued compensation
4,463

 
6,222

Deferred revenue
10,036

 
9,015

Deferred income taxes - current
32

 
110

Income taxes payable
24

 
53

Financing obligations - current
163

 
—

Current liabilities from discontinued operations
50

 
448

Total current liabilities
17,730

 
19,377

Non-current liabilities:
 

 
 

Deferred revenue - non-current
1,143

 
1,047

Income taxes payable - non-current
9

 
8

Deferred tax liability - non-current
991

 
1,071

Financing obligations - non-current
315

 
—

Other non-current liabilities
331

 
401

Total non-current liabilities
2,789

 
2,527

Total liabilities
20,519

 
21,904

Stockholders’ equity:
 

 
 

Common stock
93

 
91

Additional paid-in capital
64,729

 
63,566

Accumulated deficit
(21,489
)
 
(4,599
)
Accumulated other comprehensive loss
(669
)
 
(785
)
Total stockholders’ equity
42,664

 
58,273

Total liabilities and stockholders’ equity
$
63,183

 
$
80,177



5


QUMU CORPORATION
Condensed Consolidated Statements of Cash Flows
(unaudited - in thousands)
 
Six Months Ended 
 June 30,
 
2015
 
2014
Cash flows used in operating activities:
 

 
 

Net loss
$
(16,890
)
 
$
(8,746
)
Net income (loss) from discontinued operations, net of tax
(89
)
 
2,806

Net loss from continuing operations
(16,801
)
 
(11,552
)
Adjustments to reconcile net loss to net cash used in continuing operating activities:
 
 
 
Depreciation and amortization
1,503

 
924

Current income tax benefit resulting from income generated from discontinued operations
—

 
(1,463
)
Deferred income tax benefit
(170
)
 
(25
)
Loss on disposal of property and equipment
4

 
10

Stock-based compensation
1,068

 
784

Changes in operating assets and liabilities:
 
 
 
Receivables
3,393

 
(5,456
)
Finished goods inventories
(216
)
 
(39
)
Prepaid income taxes / income taxes payable
(209
)
 
396

Prepaid expenses and other assets
(2,077
)
 
(1,555
)
Trade accounts payable and other accrued liabilities
(559
)
 
762

Accrued compensation
(1,763
)
 
(1,153
)
Deferred revenue
1,073

 
1,741

Other non-current liabilities
(69
)
 
(63
)
Net cash used in continuing operating activities
(14,823
)
 
(16,689
)
Net cash provided by (used in) discontinued operating activities
(397
)
 
5,980

Net cash used in operating activities
(15,220
)
 
(10,709
)
Cash flows provided by (used in) investing activities:
 

 
 

Purchases of marketable securities
(8,000
)
 
(20,251
)
Sales and maturities of marketable securities
17,965

 
9,000

Purchases of property and equipment
(425
)
 
(367
)
Proceeds from sale of property and equipment
43

 
—

Net cash provided by (used in) continuing investing activities
9,583

 
(11,618
)
Net cash provided by discontinued investing activities
—

 
22

Net cash provided by (used in) investing activities
9,583

 
(11,596
)
Cash flows provided by (used in) financing activities:
 

 
 

Checks written in excess of bank balance
—

 
74

Common stock repurchases to settle employee withholding liability
(45
)
 
(52
)
Principal payments on capital lease obligations
(168
)
 
—

Proceeds from employee stock plans
142

 
108

Net cash provided by (used in) continuing financing activities
(71
)
 
130

Net cash used in discontinued financing activities
—

 
(5
)
Net cash provided by (used in) financing activities
(71
)
 
125

Effect of exchange rate changes on cash
9

 
11

Net decrease in cash and cash equivalents
(5,699
)
 
(22,169
)
Cash and cash equivalents, beginning of period
11,684

 
37,725

Cash and cash equivalents, end of period
$
5,985

 
$
15,556


6


QUMU CORPORATION
Non-Cash Charges Included in Continuing Operations
(unaudited - in thousands)
 
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,
 
2015
 
2014
 
2015
 
2014
Continuing Operations:
 

 
 

 
 

 
 

Depreciation
$
238

 
$
173

 
$
471

 
$
331

Amortization of intangibles
 
 
 
 
 
 
 
Cost of revenues
$
317

 
$
140

 
$
633

 
$
280

Amortization of purchased intangibles
200

 
156

 
399

 
313

Total amortization of intangibles
$
517

 
$
296

 
$
1,032

 
$
593

Equity compensation:
 
 
 
 
 
 
 
Cost of revenues
$
39

 
$
11

 
$
75

 
$
18

Research and development
81

 
59

 
162

 
117

Selling, general and administrative
380

 
365

 
831

 
649

Total equity compensation
$
500

 
$
435


$
1,068

 
$
784


7

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