Exhibit 99.1

 

Sysorex Global Holdings Corp. Reports Record Revenues for the Second Quarter Ended June 30, 2015

 

Conference Call to be Held Today at 4:30 pm Eastern Time

 

Palo Alto, CA – (August 5, 2015),– Big data analytics and solutions provider Sysorex (NASDAQ: SYRX) today reported financial results for the Second Quarter ended June 30, 2015.

 

Second Quarter Financial Highlights:

 

· Q2 2015 Revenue of $17.7 Million
· Q2 2015 Gross Margin of 32%
· Q2 2015 GAAP net loss of $0.09 per share
· Proforma Non-GAAP net loss1 of $0.01 per share
· Q2 2015 Non-GAAP Adjusted EBITDA1 of $34,000

 

Revenue: Total revenues for the three months ended June 30, 2015 were $17.7 million compared to $17.1 million for the comparable period in the prior year. The $600,000 increase in revenues, or approximately 3.5%, was attributable to an increase in Professional Services and Storage and Computing revenues offset by lower Mobile, IoT & Big Data Products revenue. Total second quarter 2015 revenue included $13.4 million of Storage and Computing revenue, $987,000 of SaaS revenue, $233,000 of Mobile, IoT and Big Data Products revenue and $3.1 million of Professional Services revenue.

 

Gross Profit: Total gross profit for the three months ended June 30, 2015 was $5.7 million compared to $5.7 million for the comparable period in the prior year. The gross profit margin for the three months ended June 30, 2015 was approximately 32% compared to approximately 33% for the three months ended June 30, 2014.

 

Net Loss: GAAP net loss attributable to common stockholders for the three months ended June 30, 2015 was $1.7 million compared to $2.4 million for the prior year period. This decrease in net loss of $700,000 was attributable to the acquisition costs of AirPatrol in the three months ended June 30, 2014 that were not in the three months ended June 30, 2015.

  

Non-GAAP net loss1: Pro-forma non-GAAP net loss1 for the three months ended June 30, 2015 was $225,000 compared to non-GAAP net income of $265,000 for the comparable period in the prior year. Proforma non-GAAP net loss or income per basic and diluted common share for the three months ended June 30, 2015 was ($0.01) compared to $0.01 for the prior year period. Non-GAAP net loss or income per share is defined as net loss or income per basic and diluted share adjusted for non-cash items including stock based compensation, amortization of intangibles and one time charges including acquisition costs, severance costs, change in the fair value of shares to be issued and the costs associated with the public offering.

 

 

 

Non-GAAP adjusted EBITDA1: Total Non-GAAP adjusted EBITDA for the three months ended June 30, 2015 was income of $34,000 compared income of $455,000 for the prior year period. Non-GAAP adjusted EBITDA is defined as net income (loss) before interest, provision for (benefit from) income taxes, and depreciation and amortization plus adjustments for other income or expense items, adjustments for one time charges including acquisition costs, severance costs, change in the fair value of shares to be issued and the costs associated with the public offering, and non-cash stock-based compensation.

 

1 A reconciliation of GAAP to non-GAAP financial measures is provided in the financial statement tables included in this press release. An explanation of these measures is also included under the heading “Non-GAAP Financial Measures.”

 

Q2 2015 Business Highlights

 

· Lilien Systems, a Sysorex Company, named to CRN Solution Provider 500.
· Citrix Partners with AirPatrol to deliver strong mobile security.
· AirPatrol named in TechTarget’s SearchVirtualDesktop.com “Best of Citrix Synergy” 2015 Award Winners.
· Leading health care provider chooses Sysorex for $1.9 million critical data infrastructure project.
· Sysorex to develop gaming analytics for CrowdStar.
· Bridge Bank increases Sysorex credit line and extends an additional term loan for up to $12 million in financing.
· Sysorex acquires assets of LightMiner Systems.
· Sysorex hires Sean Thompson as VP Sales, Professional Services – Eastern U.S.
· Sysorex awarded CIO-CS Contract.
· Lilien Systems, a Sysorex Company, named to 2015 List of CRN Tech Elite.
· Sysorex Awarded NASA SEWP V Contract

 

All results summarized in this press release (including the financial statement tables) should be considered preliminary, are qualified in their entirety by the financial statement tables included in this press release and are subject to change. Please refer to Sysorex’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, which will be filed with the Securities and Exchange Commission on or about August 7, 2015.

 

Conference Call Information

 

Management will host a conference call on Wednesday, August 5, 2015, at 4:30pm Eastern Time to review financial results and corporate highlights. Following management’s formal remarks, there will be a question and answer session.

 

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To listen to the conference call, interested parties within the U.S. should call 1-866-652-5200. International callers should call +1-412-317-6060. All callers should ask for the Sysorex Global Holdings Corp. conference call. The conference call will also be available through a live webcast at www.sysorex.com.

 

A replay of the call will be available approximately one hour after the end of the call through September 5, 2015. The replay can be accessed via Sysorex’s website or by dialing 1-877-344-7529 (U.S.) or +1-412-317-0088 (international). The replay conference playback code is 10070391.

 

Forward-Looking Statements

 

All statements in this release that are not based on historical fact are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of the control of the registrant and its subsidiaries, which could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not limited to, the fluctuation of global economic conditions, the performance of management and employees, our ability to obtain financing, competition, general economic conditions and other factors that are detailed in our periodic and current reports available for review at www.sec.gov. Furthermore, we operate in a highly competitive and rapidly changing environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. We disclaim any intention to, and undertake no obligation to, update or revise forward-looking statements.

 

Non-GAAP Financial Measures

 

Management believes that certain financial measures not in accordance with generally accepted accounting principles ("GAAP") are useful measures of operations. EBIDTA, Adjusted EBITDA and pro forma net loss per share are non-GAAP measures. Sysorex defines “EBITDA” as net income (loss) before interest, provision for (benefit from) income taxes, and depreciation and amortization. Management uses Adjusted EBITDA as the matrix in which it manages the business and Sysorex defines “Adjusted EBITDA” as EBITDA plus adjustments for other income or expense items, adjustments for one time charges including acquisition costs, severance costs, change in the fair value of shares to be issued and the costs associated with the public offering, and non-cash stock-based compensation. Sysorex defines “pro forma net loss per share” as GAAP net loss per share adjusted for stock-based compensation, amortization of intangibles and one time non-recurring charges such as severance costs, change in the fair value of shares to be issued, acquisition and offering costs.

 

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Management provides Adjusted EBITDA and pro forma net loss per share measures so that investors will have the same financial information that management uses, which may assist investors in assessing Sysorex’s performance on a period-over-period basis. Adjusted EBITDA or pro forma net loss per share is not a measure of financial performance under GAAP, and should not be considered an alternative to net income (loss) or any other measure of performance under GAAP, or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity. Adjusted EBITDA and pro forma net loss per share have limitations as analytical tools and should not be considered either in isolation or as a substitute for analysis of Sysorex’s results as reported under GAAP.

 

About Sysorex

 

Sysorex (NASDAQ: SYRX) develops the systems and solutions that power the data-driven enterprise. With an innovative approach to big data, analytics and the Internet of Things (IoT), we blend virtual data from software and networks with the huge volume of physical data generated by mobile devices and Internet-connected things to open new worlds of insight. Our unique solutions are helping organizations worldwide improve decision-making, increase productivity, and fuel the discoveries of tomorrow. Headquartered in Palo Alto, California, we have regional offices in North America, South America, Europe and the Middle East. Visit www.sysorex.com, follow us @SysorexGlobal and Link up on LinkedIn.

 

 

Sysorex:

A. Sage Osterfeld, 760-707-0459

sage.osterfeld@sysorex.com

 

or

 

Sysorex Investor Relations:

CorProminence LLC

Scott Arnold, 516-222-2560

scotta@corprominence.com

www.corprominence.com

 

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SYSOREX

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

 

         
    June 30,   December 31,
    2015   2014
  (Unaudited)   (Audited)
ASSETS                
Current assets:                
Cash and cash equivalents   $ 2,242     $ 3,228  
Accounts receivable, net     9,315       8,225  
Note receivable, related party     0       90  
Notes and other receivables     1,856       1,294  
Inventory     892       610  
Prepaid licenses and maintenance contracts     7,300       7,151  
Other current assets     1,753       1,463  
Total current assets     23,358       22,061  
Prepaid licenses and maintenance contracts     6,296       6,200  
Property and equipment, net     1,478       1,308  
Software development costs, net     615       278  
Intangible assets, net     19,274       17,676  
Goodwill     13,166       13,166  
Other assets     1,350       1,371  
Total assets   $ 65,537     $ 62,060  
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable   $ 7,660     $ 7,468  
Accrued liabilities     3,025       3,299  
Deferred revenue     8,969       8,689  
Short-term debt     7,570       5,418  
Acquisition liability - LightMiner     3,596       —    
Total current liabilities     30,820       24,874  
Deferred revenue     7,274       7,181  
Long-term debt     1,729       100  
Other liabilities     615       684  
Total liabilities     40,438       32,839  
Commitments and contingencies                
Stockholders’ equity:                
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding     —         —    
                 
Common stock, $0.001 par value; 50,000,000 shares authorized; 19,807,875 and 19,707,262  issued and outstanding     20       20  
                 
Additional paid-in capital     52,603       52,122  
Due from Sysorex Consulting Inc.     (666 )     (666 )
Accumulated other comprehensive income (loss)     (22 )     (18 )
Accumulated deficit     (25,237 )     (20,641 )
Stockholders’ equity     26,698       30,817  
Non-controlling interest     (1,599 )     (1,596 )
Total stockholders’ equity attributable to common stockholders     25,099       29,221  
Total liabilities and stockholders’ equity   $ 65,537     $ 62,060  

  

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SYSOREX

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share data)

 

    Three Months Ended   Six Months Ended
    June 30,   June 30,
    2015   2014   2015   2014
    (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
Revenues                                
Products   $ 13,542     $ 14,025     $ 23,930     $ 27,251  
Services     4,155       3,119       7,889       6,214  
Total Revenues     17,697       17,144       31,819       33,465  
Cost of Revenues                                
Products     10,349       10,047       18,999       20,755  
Services     1,652       1,418       3,077       2,680  
Total Cost of Revenues     12,001       11,465       22,076       23,435  
Gross Profit     5,696       5,679       9,743       10,030  
Operating expenses:                                
Research and development     251       163       414       163  
Sales and marketing     3,075       2,523       5,538       4,820  
General and administrative     2,953       3,024       6,227       5,340  
Acquisition related costs     112       1,091       188       1,195  
Amortization of intangibles     1,000       1,249       1,881       1,577  
Total operating expenses     7,391       8,050       14,248       13,095  
Loss from operations     (1,695 )     (2,371 )     (4,505 )     (3,065 )
Other income (expense):                                
Interest expense     (121 )     (104 )     (220 )     (212 )
Other     32       12       37       26  
Change in fair value of shares to be issued     89       —         89       —    
Total other income (expense)     —         (92 )     (94 )     (186 )
Loss before income taxes     (1,695 )     (2,463 )     (4,599 )     (3,251 )
Provision for income taxes     —         —         —         (35 )
Net loss     (1,695 )     (2,463 )     (4,599 )     (3,286 )
Net loss attributable to non-controlling interest     2       (56 )     (3 )     (98 )
Net loss attributable to common stockholders   $ (1,697 )   $ (2,407 )   $ (4,596 )   $ (3,188 )
Comprehensive loss:                                
Net Loss     (1,695 )     (2,463 )     (4,599 )     (3,286 )
Unrealized holding loss in marketable securities including reclassification adjustment of realized gains included in net income     —         —         (4 )     (6 )
Unrealized foreign exchange loss from cumulative translation adjustments     3       (6 )     —         (3 )
Comprehensive loss   $ (1,692 )   $ (2,469 )   $ (4,603 )   $ (3,295 )
                                 
Net loss per basic and diluted common share   $ (0.09 )   $ (0.13 )   $ (0.23 )   $ (0.19 )
Weighted average common shares outstanding:                                
Basic and Diluted     19,806,779       18,641,546       19,786,296       16,455,268  
                                 

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SYSOREX

CONSOLIDATED STATEMENTS OF CASH FLOWS

  

    Six Months Ended
    June 30,
    2015   2014
    (Unaudited)   (Unaudited)
Cash flows from operating activities:                
Net loss   $ (4,599 )   $ (3,286 )
Adjustment to reconcile net loss to net cash used in operating activities:                
Depreciation and amortization     260       125  
Amortization of intangible assets     1,881       1,577  
Stock based compensation     494       844  
Investment income     —         (3 )
Amortization of deferred financing costs     23       —    
Change in fair value of shares to be issued     (89 )     —    
Compensation expense, note receivable related party     90       —    
Provision for doubtful accounts     (9 )     —    
Other     (13 )     —    
Changes in operating assets and liabilities:                
Accounts receivable and other receivables     (1,643 )     (2,010 )
Inventory     (282 )     (87 )
Other current assets     (290 )     (661 )
Prepaid licenses and maintenance contracts     (245 )     (2,058 )
Other assets     (2 )     188  
Accounts payable     192       (1,134 )
Accrued liabilities     (274 )     (1,472 )
Deferred revenue     373       2,448  
Other liabilities     (69 )     (5 )
Total Adjustments     397       (2,248 )
Net Cash Used in Operating Activities     (4,202 )     (5,534 )
Cash Flows From (Used in) Investing Activities:                
    Purchase of property and equipment     (168 )     (194 )
    Proceeds from the sale of marketable securities     —         125  
Investment in capitalized software     (374 )     (140 )
Cash paid for LightMiner     (19 )     —    
Cash paid for AirPatrol     —         (8,466 )
Cash acquired in AirPatrol acquisition     —         71  
Net Cash Used in Investing Activities     (561 )     (8,604 )
Cash Flows from Financing Activities                
Advances (repayment) of line of credit     2,213       (1,116 )
Repayment of term loan     (431 )     (125 )
Advances from term loan     2,000       —    
Net proceeds from issuance of common stock     —         2,080  
Net proceeds from capital raise     —         16,615  
Net proceeds from conversion of employee options     —         13  
Repayment of notes payable     (1 )     (245 )
Advance to related party     —         (90 )
Repayment of advance from Duroob Technology     —         (160 )
Net Cash Provided by Financing Activities     3,781       16,972  
Effect of Foreign Exchange Rate on Changes on Cash     (4 )     (6 )
Net (Decrease) Increase in Cash and Cash Equivalents     (986 )     2,829  
Cash and Cash Equivalents - Beginning of period     3,228       2,104  
Cash and Cash Equivalents - End of period   $ 2,242     $ 4,933  
                 

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Reconciliation of Non-GAAP Financial Measures:

(In thousands)   Three Months Ended   Six Months Ended
    June 30,   June 30,
    2015   2014   2015   2014
Net loss attributable to common stockholders   $ (1,697 )   $ (2,407 )   $ (4,596 )   $ (3,188 )
Adjustments:                                
Non-recurring one-time charges:                                
     Acquisition transaction/financing costs     112       771       188       855  
     Stock-based compensation – acquisition costs     —         320       —         340  
     Costs associated with public offering     34       —         34       45  
     Other - severance costs     307       —         307       —    
     Change in the fair value of shares to be issued     (89 )     —         (89 )     —    
Stock-based compensation – compensation and related benefits     108       332       494       504  
Interest expense     121       104       220       212  
Taxes     —         —         —         35  
Depreciation and amortization     1,138       1,335       2,141       1,703  
Adjusted EBITDA   $ 34     $ 455     $ (1,301 )   $ 506  
                                 

 

(In thousands, except share data)   Three Months Ended   Six Months Ended
    June 30,   June 30,
    2015   2014   2015   2014
Net loss attributable to common stockholders   $ (1,697 )   $ (2,407 )   $ (4,596 )   $ (3,188 )
Adjustments:                                
Non-recurring one-time charges:                                
     Acquisition transaction/financing costs     112       771       188       855  
     Stock-based compensation – acquisition costs     —         320       —         340  
     Costs associated with public offering     34       —         34       45  
     Other - severance costs     307       —         307       —    
     Change in the fair value of shares to be issued     (89 )     —         (89 )     —    
     Stock-based compensation – compensation and related benefits     108       332       494       504  
Amortization of intangibles     1,000       1,249       1,881       1,577  
Proforma non-GAAP net loss   $ (225 )   $ 265     $ (1,781 )   $ 133  
Proforma non-GAAP net loss per basic and diluted common share   $ (0.01 )   $ 0.01     $ (0.09 )   $ 0.01  
Weighted average basic and diluted common shares outstanding     19,806,779       18,641,546       19,786,296       16,455,268  

 

 

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