Evolving Systems Reports First Quarter 2021 Financial Results
ENGLEWOOD, Colo., May 13, 2021 (GLOBE NEWSWIRE) -- Evolving Systems, Inc. (NASDAQ: EVOL), a leader in real-time digital engagement, today reported financial results for its first quarter ended March 31, 2021.
2021 First Quarter Highlights:
“We are pleased that, through these challenging times, we were able to maintain our stretch of quarters with positive adjusted EBITDA and that our revenue rose from the corresponding period a year ago when the pandemic had just started. We continue to successfully manage our work through telework and to provide the same level of performance our clients have grown to expect from us. The Company continues to generate positive cash flow from operations increasing our cash and cash equivalent balances from the end of 2020. Also, we made our final payment on the East West Bank term loan in the first quarter. Although there has been continued impact on our ability to interact with our clients in the traditional modes of sales and business development, and the pandemic has slowed our expected growth, we are excited to continue to make the gains that we have,” said Matthew Stecker, Chief Executive Officer and Executive Chairman of Evolving Systems.
First Quarter 2021 Results
Total operating expenses of $4.4 million in the quarter ended March 31, 2021 increased by approximately $0.1 million, as compared to $4.3 million in the corresponding year-ago period. The increase was related to resource costs toward our product development as staff size increased and internal staff have been reassigned to product development from client project work. This was partially offset by a reduction in sales and marketing costs as travel and entertainment costs were reduced due to the travel restrictions imposed and a reduction in staff.
The Company reported operating loss of $0.2 million in the quarter ended March 31, 2021 and March 31, 2020. The net loss was $0.9 million for the quarter ended March 31, 2021 as compared to a net loss of less than $0.1 million in the comparable year-ago period. The increase in net loss was primarily related to foreign currency exchange loss and the recording of a contingent liability. While we have previously disclosed the existence of a litigation matter regarding our former CEO in our filings, a settlement seemed unlikely and a value could not be estimated. While no settlement has been finalized, ongoing discussions are progressing. As such, we have recorded a contingent liability in the amount of $0.3 million as of March 31, 2021. The Company reported adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) of $0.3 million in the first quarter of 2021 as compared to $0.2 million adjusted EBITDA in the first quarter of 2020.
Cash and cash equivalents as of March 31, 2021 was $4.3 million, an increase of 55.3% compared to $2.8 million as of December 31, 2020. Contract receivables, net of allowance for doubtful accounts, were $4.7 million, a decrease of $1.0 million compared to December 31, 2020. Unbilled work-in-progress was $3.6 million for the period ended March 31, 2021, an increase of $0.2 million compared to December 31, 2020. Unearned revenue increased $1.3 million to $5.0 million as of March 31, 2021 as compared to $3.7 million as of December 31, 2020. Working capital as of March 31, 2021 decreased to $5.1 million as compared to $5.5 million as of December 31, 2020. This change is primarily related to changes in accounts noted above.
Matthew Stecker concluded: “We will continue our focus on increasing innovation and finding new growth opportunities. We are actively engaging with existing clients, helping them to explore new ways of using our products and services to enhance their businesses during these difficult times, while we also find opportunities to work with new customers. We plan to develop exciting new products and to facilitate penetration into new markets benefiting our clients while continuing to generate sustainable long-term shareholder value.”
Non-GAAP Financial Measures
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