Qumu Corp - FORM 8-K - EX-99.1 - PRESS RELEASE ISSUED NOVEMBER 5, 2015 - November 6, 2015

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EX-99.2 - STATEMENTS OF VERN HANZLIK AND PETER J. GOEPFRICH - Qumu Corpq32015ex992.htm
8-K - FORM 8-K DATED NOVEMBER 5, 2015 - Qumu Corpa8-kq32015er.htm


EXHIBIT 99.1

Qumu Reports Record Quarterly Revenue of $9.6 Million

Quarterly Revenue up 64% Year-Over-Year
$9 Million Annualized Expense Reduction Program Implemented
Reiterate Cash Flow Breakeven During 2016

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

Minneapolis, MN – November 5, 2015 – Qumu Corporation (NASDAQ: QUMU) today reported financial results for the third quarter ended September 30, 2015.

Third quarter revenue was $9.6 million, an increase of 64%, compared to the third quarter 2014. Year-to-date revenue was $24.3 million, an increase of 34%, compared to the same period last year.

Third quarter net loss per share was $(0.79) compared to $(0.33) in the third quarter 2014. Third quarter 2015 results included severance expense of $784,000 or $(0.08) per share, an equipment operating lease loss of $1 million or $(0.11) per share, and a tax benefit of $163,000 or $0.02 per share; and the third quarter 2014 results included a tax benefit of $4.5 million or $0.51 per share. During the third quarter 2015, the Company implemented an expense reduction program that is expected to result in more than $9 million in annualized expense reductions compared to the first nine months of 2015 annualized.

“The third quarter results continue to reflect strong sequential and year-over-year revenue growth,” said Vern Hanzlik, Qumu’s new President and Chief Executive Officer. “I am excited for the opportunity to lead Qumu at this pivotal time in the evolution of the fast growing enterprise video market. I have had the privilege over the past three years to help create the foundation of our winning culture. I am proud of what our employees have accomplished to date and I look forward to increasing Qumu’s leadership advantage in the market. During the quarter we continued to execute our enterprise strategy by providing world class video solutions for the largest companies in the world. We believe we offer the only solution flexible and robust enough to be deployed just as our enterprise customers require, whether on premise, in the cloud or through a hybrid solution. Based on our strong pipeline, we believe video communication and management continues to grow rapidly in all of our target markets.”

“Additionally,” Mr. Hanzlik continued, “we implemented a significant expense reduction program in the third quarter that will allow us to move into next year well positioned to attain our goal of being cash flow breakeven during 2016 without sacrificing our growth objectives.”

Other Quarterly Information
•
Total headcount was 194 as of September 30, 2015 compared to 232 as of June 30, 2015 and 222 as of December 31, 2014.
•
Contracted commitments of $7.5 million for the third quarter of 2015 compared to $6.6 million for the third quarter 2014 and $8.3 million for the second quarter 2015. The decline from the second quarter 2015 was primarily due to the timing of maintenance and support renewals.
•
Backlog was $31.3 million as of September 30, 2015 compared with $33.4 million as of June 30, 2015.
•
Cash, marketable securities and restricted cash were $15.1 million as of September 30, 2015, compared to $21.8 million as of June 30, 2015, reflecting the third quarter operating loss and the impact on cash from changes in working capital primarily related to a $1.5 million customer payment that was anticipated in the third quarter but was received in the fourth quarter. Restricted cash as of September 30, 2015 consisted of $2.3 million in proceeds from the sale of the disc publishing business in July 2014. These funds were released from escrow in October 2015.

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Guidance
During the balance of 2015, the Company continues to expect significant bookings and revenue growth based on a strong fourth quarter pipeline. As a result, the Company expects:
•
Annual revenue growth in 2015 of approximately 30%,
•
Gross margin in 2015 of approximately 48%, and
•
Cash and marketable securities at the end of 2015 to be approximately $14 million.

Additionally, based on revenue growth and the expense reduction program, the Company continues to anticipate that it will be cash flow breakeven during 2016.

Conference Call
The Company has scheduled a conference call and webcast to review its third quarter results today, November 5, 2015 at 4:30 p.m. Eastern Time. The dial-in number for the conference call is 877-407-8293 for domestic participants and 201-689-8349 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; 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.

Investor Contact:                
Peter Goepfrich, CFO                
Qumu Corporation                
612-638-9096

2


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

 
 

 
 

 
 

Software licenses and appliances
$
3,267

 
$
2,193

 
$
6,970

 
$
8,103

Service
6,335

 
3,660

 
17,365

 
10,083

Total revenues
9,602

 
5,853

 
24,335

 
18,186

Cost of revenues:
 

 
 

 
 

 
 

Software licenses and appliances
1,057

 
615

 
1,996

 
2,850

Service
3,813

 
2,608

 
11,141

 
7,154

 Total cost of revenues
4,870

 
3,223

 
13,137

 
10,004

Gross profit
4,732

 
2,630

 
11,198

 
8,182

Operating expenses:
 

 
 

 
 

 
 

Research and development
2,848

 
2,321

 
8,508

 
6,609

Selling, general and administrative
9,059

 
7,473

 
26,549

 
21,411

Amortization of purchased intangibles
200

 
157

 
599

 
470

Total operating expenses
12,107

 
9,951

 
35,656

 
28,490

Operating loss
(7,375
)
 
(7,321
)
 
(24,458
)
 
(20,308
)
Other income (expense):
 

 
 

 
 

 
 

Interest, net
(10
)
 
11

 
21

 
33

Loss on currency exchange
(89
)
 
(33
)
 
(157
)
 
(56
)
Other, net
—

 
(28
)
 
—

 
(38
)
Total other income (expense), net
(99
)
 
(50
)
 
(136
)
 
(61
)
Loss before income taxes
(7,474
)
 
(7,371
)
 
(24,594
)
 
(20,369
)
Income tax benefit
(163
)
 
(4,492
)
 
(482
)
 
(5,938
)
Net loss from continuing operations
(7,311
)
 
(2,879
)
 
(24,112
)
 
(14,431
)
Net income (loss) from discontinued operations, net of tax
79

 
11,559

 
(10
)
 
14,365

Net income (loss)
$
(7,232
)
 
$
8,680

 
$
(24,122
)
 
$
(66
)
Net income (loss) per basic and diluted share:
 
 
 
 
 
 
 
Net loss from continuing operations per share
$
(0.79
)
 
$
(0.33
)
 
$
(2.61
)
 
$
(1.65
)
Net income (loss) from discontinued operations per share
$
0.01

 
$
1.32

 
$
—

 
$
1.64

Net income (loss) per share
$
(0.78
)
 
$
0.99

 
$
(2.61
)
 
$
(0.01
)
Basic and diluted weighted average shares outstanding
9,288

 
8,780

 
9,233

 
8,743



3


QUMU CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
Assets
September 30,
2015
 
December 31,
2014
Current assets:
(unaudited)
 
 
Cash and cash equivalents
$
4,029

 
$
11,684

Marketable securities
8,754

 
23,486

Restricted cash
2,301

 
2,300

Receivables, net of allowance for doubtful accounts
8,401

 
10,090

Finished goods inventories
329

 
168

Prepaid income taxes
700

 
301

Prepaid expenses and other current assets
3,863

 
3,633

Deferred income taxes - current
64

 
64

Current assets from discontinued operations
—

 
1,026

Total current assets
28,441

 
52,752

Property and equipment, net of accumulated depreciation
3,147

 
1,899

Intangible assets, net of amortization
11,669

 
13,384

Goodwill
8,295

 
8,525

Other assets - non-current
3,861

 
3,617

Total assets
$
55,413

 
$
80,177

Liabilities and Stockholders’ Equity
 

 
 

Current liabilities:
 

 
 

Trade accounts payable and other accrued liabilities
$
3,008

 
$
3,529

Accrued compensation
2,947

 
6,222

Deferred revenue
9,953

 
9,015

Deferred income taxes - current
13

 
110

Income taxes payable
—

 
53

Financing obligations - current
279

 
—

Current liabilities from discontinued operations
50

 
448

Total current liabilities
16,250

 
19,377

Non-current liabilities:
 

 
 

Deferred revenue - non-current
1,339

 
1,047

Income taxes payable - non-current
9

 
8

Deferred tax liability - non-current
904

 
1,071

Financing obligations - non-current
519

 
—

Other non-current liabilities
1,114

 
401

Total non-current liabilities
3,885

 
2,527

Total liabilities
20,135

 
21,904

Stockholders’ equity:
 

 
 

Common stock
92

 
91

Additional paid-in capital
65,091

 
63,566

Accumulated deficit
(28,721
)
 
(4,599
)
Accumulated other comprehensive loss
(1,184
)
 
(785
)
Total stockholders’ equity
35,278

 
58,273

Total liabilities and stockholders’ equity
$
55,413

 
$
80,177



4


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

 
 

Net loss
$
(24,122
)
 
$
(66
)
Net (income) loss from discontinued operations, net of tax
10

 
(14,365
)
Net loss from continuing operations
(24,112
)
 
(14,431
)
Adjustments to reconcile net loss to net cash used in continuing operating activities:
 
 
 
Depreciation and amortization
2,292

 
1,411

Stock-based compensation
1,430

 
1,281

Loss on disposal of property and equipment
23

 
31

Deferred income taxes
(235
)
 
85

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

 
(5,888
)
Changes in operating assets and liabilities:
 
 
 
Receivables
1,647

 
(4,364
)
Finished goods inventories
(162
)
 
(76
)
Prepaid income taxes / income taxes payable
(407
)
 
310

Prepaid expenses and other assets
(300
)
 
(2,231
)
Trade accounts payable and other accrued liabilities
(524
)
 
175

Accrued compensation
(3,264
)
 
498

Deferred revenue
1,296

 
2,624

Other non-current liabilities
(11
)
 
(91
)
Net cash used in continuing operating activities
(22,327
)
 
(20,666
)
Net cash provided by discontinued operating activities
665

 
1,483

Net cash used in operating activities
(21,662
)
 
(19,183
)
Cash flows provided by (used in) investing activities:
 

 
 

Purchases of marketable securities
(9,500
)
 
(31,250
)
Sales and maturities of marketable securities
24,215

 
14,250

Purchases of property and equipment
(530
)
 
(760
)
Proceeds from sale of property and equipment
43

 
—

Net cash provided by (used in) continuing investing activities
14,228

 
(17,760
)
Net cash provided by (used in) discontinued investing activities
(1
)
 
19,676

Net cash provided by investing activities
14,227

 
1,916

Cash flows provided by (used in) financing activities:
 

 
 

Common stock repurchases to settle employee withholding liability
(46
)
 
(84
)
Principal payments on financing obligations
(241
)
 
—

Proceeds from employee stock plans
142

 
123

Net cash provided by (used in) continuing financing activities
(145
)
 
39

Net cash used in discontinued financing activities
—

 
(59
)
Net cash used in financing activities
(145
)
 
(20
)
Effect of exchange rate changes on cash
(75
)
 
(90
)
Net decrease in cash and cash equivalents
(7,655
)
 
(17,377
)
Cash and cash equivalents, beginning of period
11,684

 
37,725

Cash and cash equivalents, end of period
$
4,029

 
$
20,348


5


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

 
 

 
 

 
 

Depreciation
$
269

 
$
190

 
$
740

 
$
521

Amortization of intangibles
 
 
 
 
 
 
 
Cost of revenues
$
320

 
$
140

 
$
953

 
$
420

Amortization of purchased intangibles
200

 
157

 
599

 
470

Total amortization of intangibles
$
520

 
$
297

 
$
1,552

 
$
890

Equity compensation:
 
 
 
 
 
 
 
Cost of revenues
$
40

 
$
4

 
$
115

 
$
23

Research and development
39

 
52

 
201

 
169

Selling, general and administrative
283

 
441

 
1,114

 
1,089

Total equity compensation
$
362

 
$
497


$
1,430

 
$
1,281


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