News Feed Item

Evolving Systems Reports Fourth Quarter and Full Year 2013 Financial Results

ENGLEWOOD, CO -- (Marketwired) -- 03/11/14 -- Evolving Systems, Inc. (NASDAQ: EVOL)

Q4 license and services bookings up 43% to $5.2M from $3.6M in Q4 last year as order velocity increases

DSA license and services bookings up 152% in Q4 to $2.3M from $0.9M in Q4 last year

Company adds a record four new Dynamic SIM Allocation™ (DSA) customers in 2013

Cash generated from operations in 2013 increased to $8.6M from $0.2M in cash used in operations last year

First quarter dividend of $0.10 per share, payable March 31, 2014, to stockholders of record on March 24, 2014

Evolving Systems, Inc. (NASDAQ: EVOL), a leader in activation, enablement and management of services for connected mobile devices, today reported financial results for its fourth quarter and full year ended December 31, 2013.

"Evolving Systems continued to build momentum in the fourth quarter with license and services bookings growing by 43% which followed our strong third quarter bookings results," said Thad Dupper, Chairman and CEO. "Fourth quarter DSA license and services bookings were up 152% year over year and Tertio® license and service orders increased by 6% year over year. We also completed our October acquisition of Telespree Communications -- a transaction that we expect to accelerate our introduction of a cloud-based DSA solution and enhance our connected device product offerings.

"For the full year we made progress in several key areas. We added a record four new DSA customers in 2013 and were pleased to see DSA's impact on the global wireless industry grow to more than 600 million licensed connections worldwide," Dupper added. "For the full year DSA bookings increased 40% to $11.3 million, up from the year ago figure of $8.1 million. In addition, we continued to generate strong cash flows and profitability in 2013, while maintaining a strong balance sheet and returning value to stockholders in the form of quarterly dividends totaling $0.36 per share for the year. As a result, we remain confident that our product portfolio of both SaaS and premise-based connected device activation solutions will position us for continued growth."

Fourth Quarter Results Recap

  • Revenue of $6.6 million versus $6.9 million in the fourth quarter last year. License and services revenue of $4.1 million compared with $4.6 million last year. Customer support revenue increased to $2.4 million from $2.3 million in the fourth quarter last year.

  • Operating income of $0.5 million (inclusive of $0.2 million in transaction and integration expenses and $0.6 million in restructuring costs related to the fourth quarter acquisition of Telespree Communications) versus operating income of $1.8 million in the fourth quarter last year.

  • Net income of $0.8 million versus $1.4 million in the fourth quarter last year. Diluted net income per share of $0.07 versus $0.12.

  • Adjusted EBITDA of $1.2 million versus $2.0 million in the fourth quarter last year.

  • Cash Flow: The Company generated $1.4 million in cash from operations in the fourth quarter compared with cash used in operations of $1.8 million in the same quarter last year.

  • Balance Sheet: Cash and cash equivalents at December 31, 2013, were $13.8 million, up from $8.8 million at 2012 year-end.

  • Dividend Update: The Company declared a first quarter dividend of $0.10 per share, payable on March 31, 2014, to stockholders of record on March 24, 2014.

Full Year Results Recap

  • Revenue of $25.1 million in 2013, down from $26.2 million in 2012. License and services revenue of $16.0 million versus $17.6 million last year. Customer support revenue of $9.1 million, up from $8.6 million.

  • Operating income of $5.0 million versus $5.6 million last year. The lower operating income was attributable to approximately $1.0 million in Telespree acquisition and integration expenses and restructuring costs.

  • Net income of $3.8 million compared with $5.6 million a year ago when the Company recorded $1.4 million in gain on sale and related interest associated with investments in marketable debt securities. Diluted net income per share was $0.32 versus $0.48.

  • Adjusted EBITDA of $6.3 million versus $6.5 million a year ago.

  • Cash Flow: Cash generated from operations increased to $8.6 million in 2013, up from $0.2 million in cash used in operations in 2012.

Bookings and Backlog Highlights

  • Fourth quarter bookings totaled $7.4 million, up 5% from the third quarter of this year and up 18% over the fourth quarter last year. License and services bookings were $5.2 million, up 10% from $4.7 million in the third quarter and up 43% over $3.6 million in the fourth quarter last year. DSA license and services bookings in the fourth quarter were $2.3 million, up slightly from $2.2 million in the third quarter but up 152% from $0.9 million in the fourth quarter last year. TSA license and services bookings were $2.8 million, up from $2.5 million in the third quarter and up from $2.7 million in the fourth quarter last year. Customer support bookings in the fourth quarter were $2.2 million, down from $2.3 million in the third quarter and $2.6 million in the fourth quarter a year ago. Bookings are defined as new, non-cancelable orders expected to be recognized as revenue during the following 12 months.

  • Full year bookings totaled $26.2 million, up from $24.6 million in 2012. License and services bookings were $16.4 million and included of $7.9 million in DSA orders and $8.4 million in TSA. Customer support bookings were $9.9 million, up 22% over $8.1 million last year. Customer support bookings included $3.4 million in DSA, up from $1.2 million last year, and $6.4 million in TSA, down from $6.9 million a year ago.

  • Total backlog at December 31, 2013, was $12.2 million, up from $11.4 million in the third quarter and up from $11.1 million at the same time last year. License and services backlog totaled $7.1 million and included $4.0 million in DSA and $3.0 million in TSA. Customer support backlog was $5.1 million.

Conference Call
The Company will conduct a conference call and webcast today at 2:30 p.m. Mountain Time. The call-in numbers for the conference call are 1-877-303-6316 for domestic toll free and 650-521-5176 for international callers. The conference ID is 1419941. A telephone replay will be available through March 25, 2014, and can be accessed by calling 1-855-859-2056 or 1-404-537-3406. Conference ID 1419941. To access a live webcast of the call, please visit Evolving Systems' website at www.evolving.com. A replay of the Webcast will be accessible at that website through March 25, 2014.

Non-GAAP Financial Measures
Evolving Systems reports its financial results in accordance with accounting principles generally accepted in the U.S. (GAAP). In addition, the Company is providing in this news release non-GAAP financial information in the form of net income, diluted net income per share and adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, impairment, stock compensation and gain/loss on foreign exchange transactions.) Management believes these non-GAAP financial measures are useful to investors and lenders in evaluating the overall financial health of the Company in that they allow for greater transparency of additional financial data routinely used by management to evaluate performance. Investors and financial analysts who follow the Company use non-GAAP net income and non-GAAP diluted income per share to compare the Company against other companies. Adjusted EBITDA can be useful for lenders as an indicator of earnings available to service debt. Non-GAAP financial measures should not be considered in isolation from or as an alternative to the financial information prepared in accordance with GAAP.

About Evolving Systems®
Evolving Systems, Inc. (NASDAQ: EVOL) is a provider of software and services to 60 network operators in over 40 countries worldwide. The Company's product portfolio includes market-leading activation products that address subscriber service activation, SIM card activation, mobile broadband activation as well as the activation of connected devices. Founded in 1985, the Company has headquarters in Englewood, CO, with offices in San Francisco, CA; the United Kingdom; India; and Malaysia. For more information please visit www.evolving.com or follow us on Twitter: http://twitter.com/EvolvingSystems

This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, based on current expectations, estimates and projections that are subject to risk. Specifically, statements about the market for the Company's DSA, TSA and SaaS products, market leadership, EBITDA, cash flow and bookings growth, and the Company's continued ability to pay dividends or post quarterly or full year results that are similar to those described in this press release are forward-looking statements. These statements are based on our expectations and are naturally subject to uncertainty and changes in circumstances. Readers should not place undue reliance on these forward-looking statements, and the Company may not undertake to update these statements. Actual results could vary materially from these expectations. For a more extensive discussion of Evolving Systems' business, and important factors that could cause actual results to differ materially from those contained in the forward-looking statements, please refer to the Company's Form 10-K filed with the SEC on March 11, 2014, as well as other SEC filings, including Forms 10-Q, 10-Q/A, 8-K and press releases.

Consolidated Statements of Operations
(In thousands except per share data)

                                  Three months ended    Twelve months ended
                                     December 31,          December 31,
                                    2013       2012       2013       2012
                                 ---------  ---------  ---------  ---------
  License fees and services      $   4,145  $   4,590  $  15,998  $  17,622
  Customer support                   2,425      2,261      9,095      8,625
                                 ---------  ---------  ---------  ---------
Total revenue                        6,570      6,851     25,093     26,247
                                 ---------  ---------  ---------  ---------
Costs of revenue and operating
  Costs of license fees and
   services, excluding
   depreciation and amortization     1,511      1,685      5,565      6,734
  Costs of customer support
   excluding depreciation and
   amortization                        512        364      1,599      1,502
  Sales and marketing                1,588      1,236      5,364      5,070
  General and administrative           964        769      3,644      3,613
  Product development                  840        887      2,956      3,069
  Depreciation                          38         44        155        268
  Amortization                          16        101        211        400
  Restructuring                        558          -        558          -
                                 ---------  ---------  ---------  ---------
Total costs of revenue and
 operating expenses                  6,027      5,086     20,052     20,656
                                 ---------  ---------  ---------  ---------
  Income from operations               543      1,765      5,041      5,591
                                 ---------  ---------  ---------  ---------
Other income (expense):
  Interest income                        3          4         11         60
  Interest income, related party         -          -          -        532
  Interest expense                      (5)        (3)       (20)        (3)
  Other income                          87          -         87          -
  Gain on sale of investments            -          -          -        891
  Foreign currency exchange gain
   (loss)                              (77)        60        (39)      (106)
                                 ---------  ---------  ---------  ---------
Other income (expense), net              8         61         39      1,374
                                 ---------  ---------  ---------  ---------
Income from operations before
 income taxes                          551      1,826      5,080      6,965
    Income tax expense (benefit)      (253)       389      1,274      1,401
                                 ---------  ---------  ---------  ---------
Net income                       $     804  $   1,437  $   3,806  $   5,564
                                 =========  =========  =========  =========
Basic income per common share    $    0.07  $    0.13  $    0.33  $    0.49
                                 =========  =========  =========  =========
Diluted income per common share  $    0.07  $    0.12  $    0.32  $    0.48
                                 =========  =========  =========  =========
Weighted average basic shares
 outstanding                        11,542     11,368     11,459     11,278
Weighted average diluted shares
 outstanding                        11,871     11,645     11,756     11,529

Consolidated Balance Sheets
(In thousands)                                   December 31,  December 31,
ASSETS                                               2013          2012
                                                 ------------  ------------
Current Assets:
  Cash and cash equivalents                      $     13,785  $      8,844
  Short-term restricted cash                                -            53
  Contract receivables, net                             6,420         4,803
  Unbilled work-in-progress, net                        2,423         4,802
  Deferred income taxes                                   131             -
  Prepaid and other current assets                      1,173         1,133
                                                 ------------  ------------
    Total current assets                               23,932        19,635
Property and equipment, net                               342           211
Amortizable intangible assets, net                        702           204
Goodwill                                               17,936        16,510
Long-term restricted cash                                  24             -
Long-term deferred income taxes                           248            27
Other long-term assets                                      -             6
                                                 ------------  ------------
    Total assets                                 $     43,184  $     36,593
                                                 ============  ============
Current liabilities:
  Current portion of capital lease obligations   $          8  $          4
  Accounts payable and accrued liabilities              4,479         3,833
  Income taxes payable                                    459           308
  Unearned revenue                                      5,314         1,596
                                                 ------------  ------------
    Total current liabilities                          10,260         5,741
Long-term liabilities:
  Capital lease obligations, net                           11            16
  Other long-term obligations                             178             -
                                                 ------------  ------------
    Total liabilities                                  10,449         5,757
Stockholders' equity:
  Common stock                                             12            11
  Additional paid-in capital                           93,895        91,957
  Treasury stock                                       (1,253)       (1,253)
  Accumulated other comprehensive loss                 (3,016)       (3,297)
  Accumulated deficit                                 (56,903)      (56,582)
                                                 ------------  ------------
    Total stockholders' equity                         32,735        30,836
                                                 ------------  ------------
  Total liabilities and stockholders' equity     $     43,184  $     36,593
                                                 ============  ============

Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands except per share data)
                               Three months ended      Twelve months ended
                                  December 31,            December 31,
                                2013        2012        2013        2012
                             ----------  ----------  ----------  ----------
Non-GAAP net income and
 income per share:
GAAP net income              $      804  $    1,437  $    3,806  $    5,564
Amortization of intangible
 assets                              16         101         211         400
Stock-based compensation
 expense                             61          59         288         264
Restructuring                       558           -         558           -
Income tax adjustment for
 non-GAAP*                         (179)        (31)       (302)       (127)
                             ----------  ----------  ----------  ----------
Non-GAAP net income          $    1,260  $    1,566  $    4,561  $    6,101
                             ==========  ==========  ==========  ==========

Diluted net income per share
  GAAP                       $     0.07  $     0.12  $     0.32  $     0.48
  Non-GAAP                   $     0.11  $     0.13  $     0.39  $     0.53
  Shares used to compute
   diluted EPS                   11,871      11,645      11,756      11,529

                               Three months ended      Twelve months ended
                                  December 31,            December 31,
                                2013        2012        2013        2012
                             ----------  ----------  ----------  ----------
Adjusted EBITDA:

Net income                   $      804  $    1,437  $    3,806  $    5,564
  Depreciation                       38          44         155         268
  Amortization of intangible
   assets                            16         101         211         400
  Stock-based compensation
   expense                           61          59         288         264
  Restructuring                     558           -         558           -
  Interest expense and other
   (benefit), net                    (8)        (61)        (39)     (1,374)
  Income tax expense
   (benefit)                       (253)        389       1,274       1,401
                             ----------  ----------  ----------  ----------
Adjusted EBITDA              $    1,216  $    1,969  $    6,253  $    6,523
                             ==========  ==========  ==========  ==========

*The estimated income tax for non-GAAP net income is adjusted by the amount of additional expense that the Company would accrue if it used non-GAAP results instead of GAAP results in the calculation of its tax liability, taking into account in which tax jurisdiction each of the above adjustments would be made and the tax rate in that jurisdiction.

Investor Relations

Jay Pfeiffer
Pfeiffer High Investor Relations, Inc.
Email Contact

Press Relations

Lissa Franklin
Evolving Systems
Email Contact

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Blockchain. A day doesn’t seem to go by without seeing articles and discussions about the technology. According to PwC executive Seamus Cushley, approximately $1.4B has been invested in blockchain just last year. In Gartner’s recent hype cycle for emerging technologies, blockchain is approaching the peak. It is considered by Gartner as one of the ‘Key platform-enabling technologies to track.’ While there is a lot of ‘hype vs reality’ discussions going on, there is no arguing that blockchain is b...
No hype cycles or predictions of a gazillion things here. IoT is here. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, an Associate Partner of Analytics, IoT & Cybersecurity at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He also discussed the evaluation of communication standards and IoT messaging protocols, data...
ChatOps is an emerging topic that has led to the wide availability of integrations between group chat and various other tools/platforms. Currently, HipChat is an extremely powerful collaboration platform due to the various ChatOps integrations that are available. However, DevOps automation can involve orchestration and complex workflows. In his session at @DevOpsSummit at 20th Cloud Expo, Himanshu Chhetri, CTO at Addteq, will cover practical examples and use cases such as self-provisioning infra...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
"IBM is really all in on blockchain. We take a look at sort of the history of blockchain ledger technologies. It started out with bitcoin, Ethereum, and IBM evaluated these particular blockchain technologies and found they were anonymous and permissionless and that many companies were looking for permissioned blockchain," stated René Bostic, Technical VP of the IBM Cloud Unit in North America, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventi...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
The need for greater agility and scalability necessitated the digital transformation in the form of following equation: monolithic to microservices to serverless architecture (FaaS). To keep up with the cut-throat competition, the organisations need to update their technology stack to make software development their differentiating factor. Thus microservices architecture emerged as a potential method to provide development teams with greater flexibility and other advantages, such as the abili...
Product connectivity goes hand and hand these days with increased use of personal data. New IoT devices are becoming more personalized than ever before. In his session at 22nd Cloud Expo | DXWorld Expo, Nicolas Fierro, CEO of MIMIR Blockchain Solutions, will discuss how in order to protect your data and privacy, IoT applications need to embrace Blockchain technology for a new level of product security never before seen - or needed.
Leading companies, from the Global Fortune 500 to the smallest companies, are adopting hybrid cloud as the path to business advantage. Hybrid cloud depends on cloud services and on-premises infrastructure working in unison. Successful implementations require new levels of data mobility, enabled by an automated and seamless flow across on-premises and cloud resources. In his general session at 21st Cloud Expo, Greg Tevis, an IBM Storage Software Technical Strategist and Customer Solution Architec...
The use of containers by developers -- and now increasingly IT operators -- has grown from infatuation to deep and abiding love. But as with any long-term affair, the honeymoon soon leads to needing to live well together ... and maybe even getting some relationship help along the way. And so it goes with container orchestration and automation solutions, which are rapidly emerging as the means to maintain the bliss between rapid container adoption and broad container use among multiple cloud host...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across business networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost as well as advance trade. Are you curious about how Blockchain is built for business? In her session at 21st Cloud Expo, René Bostic, Technical VP of the IBM Cloud Unit in North America, discussed the b...