Creative Realities Reports First Quarter 2021 Results
LOUISVILLE, Ky., May 17, 2021 /PRNewswire/ -- Creative Realities, Inc. ("Creative Realities," "CRI," or the "Company") (NASDAQ: CREX, CREXW), a leading provider of digital marketing solutions, announced its financial results for the first quarter ended March 31, 2021.
Rick Mills, Chief Executive Officer, commented "During the first quarter of 2021, CRI generated approximately $5.0 million of revenue and effectively achieved breakeven operating results, which are in-line with the expectations we communicated in our most recent earnings call. We generated net income during the period of $1.3 million and, consistent with the third and fourth quarter of 2020, we generated both positive EBITDA and Adjusted EBITDA, highlighting our continued focus on cost control and revenue-generating activities."
"During the quarter, CRI undertook and achieved significant capital activities, including achieving forgiveness of our PPP Loan, completion of a registered direct offering, and a refinancing of all outstanding debt facilities. These activities provide the foundation and runway for the Company's continued investment in customer acquisition and an expected return to growth in the second half of 2021. We continue to expect that the second half of 2021 will present opportunities for CRI as a result of strengthening the Company's market perception and competitive position during the COVID-19 pandemic, and through improvement of our balance sheet through activities executed in the first quarter of 2021."
First Quarter Financial Update
Revenue, gross profit, and gross margin:
Operating loss, net loss, and EBITDA:
Other material transactions during the three months ended March 31, 2021:
The Company expensed approximately $0.1 million in expenses related to the refinancing activity and recorded additional debt discount of approximately $0.1 million which will be amortized through interest expense over the remaining life of the loan.
Mr. Mills concluded, "We continue to build the foundation to prepare the Company for long-term success and are excited by recent customer developments. While we remain bullish on the long-term prospects for both the industry and the Company, there remain short-term challenges including the timing of reopening of our customers throughout the United States, and the current chip shortages and production delays, which will potentially impact our ability to procure and timely deliver customer solutions. We believe any impact as a result of these developments will result in a shift in timing of revenue, as opposed to a loss of revenue, however we continue to monitor the situation closely with our manufacturing partners. Despite potential short-term supply challenges, we continue to believe that our end-to-end offering has positioned us well within the industry to compete for new and growing opportunities with partners, particularly potential enterprise customers in a variety of key verticals."
Conference Call Details
Prior to the call, participants should register at https://bit.ly/criearnings2021Q1. Once registered, participants can use the weblink provided in the registration email to listen to and view prepared materials via live webcast. An archived edition of the conference call will also be posted on our website at www.cri.com later that same day and will remain available to interested parties via the same link for one year.
About Creative Realities, Inc.
Use of Non-GAAP Measures
EBITDA and Adjusted EBITDA should not be considered as an alternative to net income/(loss) or to net cash used in operating activities as measures of operating results or liquidity. Our calculation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies, and the measures exclude financial information that some may consider important in evaluating the Company's performance. A reconciliation of GAAP net income/(loss) to EBITDA and Adjusted EBITDA is included in the accompanying financial schedules.
For further information, please refer to Creative Realities, Inc.'s filings available online at www.sec.gov, including its Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 10, 2021.
Cautionary Note on Forward-Looking Statements
Except where required by law, the Company assumes no obligation to update forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA
Creative Realities, Inc. prepares its consolidated financial statements in accordance with United States generally accepted accounting principles ("GAAP"). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses information regarding "EBITDA" and "Adjusted EBITDA." CRI defines "EBITDA" as earnings before interest, income taxes, depreciation and amortization of intangibles. CRI defines "Adjusted EBITDA" as EBITDA excluding stock-based compensation, fair value adjustments and both cash and non-cash non-recurring gains and charges.
EBITDA and Adjusted EBITDA are non-GAAP financial measures and should not be considered as a substitute for net income (loss), operating income (loss) or any other performance measure derived in accordance with United States generally accepted accounting principles ("GAAP") or as an alternative to net cash provided by operating activities as a measure of CRI's profitability or liquidity. CRI's management believes EBITDA and Adjusted EBITDA are useful financial metrics because they allow external users of CRI's financial statements, such as industry analysts, investors, lenders and rating agencies, to more effectively evaluate CRI's operating performance, compare the results of its operations from period to period and against CRI's peers without regard to CRI's financing methods, hedging positions or capital structure and because it highlights trends in CRI's business that may not otherwise be apparent when relying solely on GAAP measures. CRI also presents EBITDA and Adjusted EBITDA because it believes EBITDA and Adjusted EBITDA are important supplemental measures of its performance that are frequently used by others in evaluating companies in its industry. Because EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income (loss) and may vary among companies, the EBITDA and Adjusted EBITDA CRI presents may not be comparable to similarly titled measures of other companies.
The following table presents a reconciliation of EBITDA and Adjusted EBITDA from net loss, CRI's most directly comparable financial measure calculated and presented in accordance with GAAP.
View original content to download multimedia:http://www.prnewswire.com/news-releases/creative-realities-reports-first-quarter-2021-results-301292808.html
SOURCE Creative Realities, Inc.
Creating Next-Gen Collaborative Post-Pandemic Work Environments
Great Customer Outcomes: A Balance Between Automation & Empathy