Exhibit 99.1

 

News Release

 

For Immediate Release

March 10, 2016

 Contact
A. Sage Osterfeld
sage.osterfeld@sysorex.com
Tel: (760) 707-0459

 

Sysorex Global Reports Record Fourth Quarter and 2015 Financial Results

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

 

PALO ALTO, Calif. – (BUSINESS WIRE) –Sysorex Global (NASDAQ: SYRX), a developer of high performance analytics software and solutions reported financial results today for the fourth quarter and year ended December 31, 2015.

 

Fourth Quarter Financial Highlights:

 

● 2015 Q4 revenue of $20.3 million
     
● 2015 Q4 gross margin of 26%
     
● 2015 Q4 GAAP net loss of $0.16 per share
     
● 2015 Q4 Proforma Non-GAAP net loss1 of $0.04 per share
     
● 2015 Q4 Non-GAAP Adjusted EBITDA1 loss of $0.8 million

 

Full Year 2015 Financial Highlights:

 

● 2015 revenue of $67.0 million
     
● 2015 gross margin of 29%
     
● 2015 GAAP net loss of $0.55 per share
     
● Proforma Non-GAAP net loss1 of $0.22 per share
     
● 2015 Non-GAAP Adjusted EBITDA1 loss of $3.6 million

 

Nadir Ali, CEO of Sysorex stated: "2015 was a pivotal year for Sysorex in completing the integration of the acquisitions we made and for positioning Sysorex Global as an innovative technology company that empowers our customers to derive real time value by combining data from both the physical and digital worlds using our proprietary AirPatrol and LightMiner technologies coupled with our professional services and our strategic storage and computing partners.”

 

 
 

 

2015 Financial Results

 

Revenue: Total revenues for the year ended December 31, 2015 were $67.0 million compared to $62.9 million for the prior year. The increase of $4.1 million, or approximately 6.5%, is primarily associated with growth in the Storage and Computing and Professional Services segments. Total 2015 revenue included Storage and Computing revenue of $50.0 million, Professional Services Revenue of $11.6 million, SaaS Revenue of $3.7 million and Mobile, IoT & Big Data Products revenue of $1.7 Million.

 

Gross Profit: Total gross profit for the year ended December 31, 2015 was $19.3 million, compared to $18.7 million in 2014. Gross margin for 2015 was approximately 29% compared to approximately 30% for 2014. This slight difference in margin is based on sales mix.

 

Net Loss: GAAP net loss attributable to the stockholders for 2015 was $11.7 million, compared to a net loss of $7.5 million for 2014. GAAP net loss per share for 2015 was $0.55, compared to a net loss per share of $0.42 for 2014. The increase in net loss was primarily attributable to an increase in amortization of intangibles, depreciation, acquisition costs, provision for doubtful accounts and the costs of expanding our engineering, sales and marketing operations.

 

Non-GAAP net loss1: 2015 pro-forma non-GAAP net loss was $4.7 million, compared to a non-GAAP net loss of $2.6 million for 2014. 2015 pro-forma non-GAAP net loss per share was $0.22, compared to a non-GAAP net loss per share of $0.14 for 2014. Non-GAAP net loss per share is defined as net loss per basic and diluted share adjusted for non-cash items including stock based compensation, amortization of intangibles and one time charges including gain/loss on the settlement of obligations, severance costs, change in the fair value of shares to be issued, acquisition costs, provision for doubtful accounts and the costs associated with the public offering.

 

Non-GAAP adjusted EBITDA1: Total adjusted EBITDA for the year ended December 31, 2015 was a loss of $3.6 million compared to loss of $1.9 million for the year ended December 31, 2014. Non-GAAP adjusted EBITDA is defined as net loss before interest, provision for income taxes, and depreciation and amortization plus adjustments for other income or expense items, non-recurring items 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.”

 

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2015 Business Highlights

 

● City of Seattle Selects Sysorex to Optimize its IT Infrastructure - $3.9 million purchase order
     
● Sysorex announces series of IT engagements with Fortune 500 biopharmaceutical firm
     
● Sysorex Lands Series of IT Systems Engagements With Leading Health Care Provider
     
● Agriculture Giant Chooses Sysorex for IT Infrastructure Upgrade
     
● Sysorex Secures $1 Million AirPatrol Cyber-Security Engagement with US Government Agency
     
● Sysorex Announces Signing of Additional $91 Million Contract With Daruna
     
● Sysorex Adds Bluetooth Support to Its AirPatrol Mobile Device Security and Locationing Systems
     
● Sysorex Signs Hearst Corporation to New 3-Year Deal
     
● Sysorex to Provide Retail Analytics for Saudi Shopping Center
     
● Citrix Partners with AirPatrol to Deliver Strong Mobile Security
     
● Sysorex to Develop Gaming Analytics for CrowdStar
     
● Sysorex Acquires Assets of LightMiner Systems
     
● Sysorex Awarded CIO-CS Contract
     
● Sysorex Awarded NASA SEWP V Contract
     
● Sysorex Awarded Sub-Contract on $249 Million Army Enterprise IT Services 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 Annual Report on Form 10-K for the year ended December 31, 2015, which will be filed with the Securities and Exchange Commission on or about March 30, 2016.

 

Management will host a conference call on Thursday, March 10, 2016, 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.

 

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 conference call. The conference call will also be available through a live webcast at http://services.choruscall.com/links/syrx160310.

 

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A replay of the call will be available approximately one hour after the end of the call through April 11, 2016. 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 10082016.

 

About Sysorex

 

Sysorex (NASDAQ: SYRX) helps you derive real time value by combining data from both the digital and physical worlds. 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 http://sysorex.com, follow us @SysorexGlobal and Link up on LinkedIn.

 

Safe Harbor Statement

 

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 Sysorex 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, the company’s ability to obtain financing, competition, general economic conditions and other factors that are detailed in the company’s 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.

 

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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, non-recurring items 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 gain/loss on the settlement of obligations, severance costs, change in the fair value of shares to be issued, acquisition costs, provision for doubtful accounts and the costs associated with the public offering.

 

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.

 

###

 

Contacts

Media Inquiries:

A. Sage Osterfeld +1 (760) 707-0459

sage.osterfeld@sysorex.com

 

Investor Relations:

CorProminence LLC

Scott Arnold, +1 (516) 222-2560

Managing Director

www.corprominence.com

 

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SYSOREX GLOBAL HOLDINGS CORP.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

 

    December 31,     December 31,  
    2015     2014  
  (Unaudited)     (Audited)  
ASSETS            
Current assets:            
Cash and cash equivalents   $ 4,060     $ 3,228  
Accounts receivable, net     12,209       8,223  
Notes receivable, related party     --       90  
Notes and other receivables     1,340       1,293  
Inventory     755       610  
Prepaid licenses and maintenance contracts     7,509       7,151  
Assets held for dissolution     772       15  
Other current assets     1,967       1,451  
Total current assets     28,612       22,061  
Prepaid licenses and maintenance contracts     6,586       6,200  
Property and equipment, net     1,392       1,308  
Software development costs, net     1,281       278  
Intangible assets, net     17,161       17,676  
Goodwill     13,166       13,166  
Assets held for dissolution, non-current     --       763  
Other assets     517       608  
Total assets   $ 68,715     $ 62,060  
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable   $ 9,320     $ 7,290  
Accrued liabilities     2,992       2,406  
Deferred revenue     9,095       8,453  
Short-term debt     9,417       4,696  
Liabilities held for dissolution     2,026       2,029  
Acquisition liability - LightMiner     3,475       --  
Total current liabilities     36,325       24,874  
Deferred revenue     7,666       7,181  
Long-term debt     1,226       100  
Other liabilities     542       684  
Total liabilities     45,759       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; 25,309,863 and 19,707,262 issued and 25,071,035 and 19,707,262 outstanding     25       20  
Additional paid-in capital     58,226       52,122  
Treasury stock, at cost, 238,838 shares     (695 )     --  
Due from Sysorex Consulting Inc.     (666 )     (666 )
Accumulated other comprehensive income (loss)     31       (18 )
Accumulated deficit     (32,359 )     (20,641 )
Stockholders’ equity     24,562       30,817  
Non-controlling interest     (1,606 )     (1,596 )
Total stockholders’ equity attributable to common stockholders     22,956       29,221  
Total liabilities and stockholders’ equity   $ 68,715     $ 62,060  

 

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SYSOREX GLOBAL HOLDINGS CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share data)

 

    Three Months Ended     For the Twelve Months Ended  
    December 31,     December 31,  
    2015     2014     2015     2014  
  (Unaudited)     (Audited)     (Unaudited)     (Audited)  
Revenues                        
Products   $ 16,744     $ 11,835     $ 51,381     $ 50,044  
Services     3,518       3,366       15,576       12,905  
Total Revenues     20,262       15,201       66,957       62,949  
Cost of Revenues                                
Products     13,162       9,532       40,763       38,906  
Services     1,903       1,235       6,865       5,303  
Total Cost of Revenues     15,065       10,767       47,628       44,209  
Gross Profit     5,197       4,434       19,329       18,740  
Operating expenses:                                
Research and development     14       247       635       616  
Sales and marketing     3,300       2,578       11,531       9,966  
General and administrative     4,485       3,077       14,255       11,935  
Acquisition related costs     155       (179 )     355       1,016  
Amortization of intangibles     1,056       893       3,994       2,913  
Total operating expenses     9,010       6,616       30,770       26,446  
Loss from operations     (3,813 )     (2,182 )     (11,441 )     (7,706 )
Other income (expense):                                
Interest expense     (109 )     (80 )     (448 )     (387 )
Other     (4 )     15       35       47  
Gain on the settlement of obligation     (85 )     394       (85 )     394  
Change in fair value of shares to be issued     53       --       211       --  
Total other income (expense)     (145 )     329       (287 )     54  
Loss before income taxes     (3,958 )     (1,853 )     (11,728 )     (7,652 )
Provision for income taxes     --       35       --       --  
Net loss     (3,958 )     (1,818 )     (11,728 )     (7,652 )
Net loss attributable to non-controlling interest     (3 )     (12 )     (10 )     (116 )
Net loss attributable to common stockholders   $ (3,955 )   $ (1,806 )   $ (11,718 )   $ (7,536 )
Comprehensive loss:                                
Net Loss     (3,958 )     (1,818 )     (11,728 )     (7,652 )
Unrealized holding loss in marketable securities including reclassification adjustment of realized gains included in net income     --       --       --       (3 )
Unrealized foreign exchange gain/(loss) from cumulative translation adjustments     70       (7 )     49       (18 )
Comprehensive loss   $ (3,888 )   $ (1,825 )   $ (11,679 )   $ (7,673 )
Net loss per basic and diluted common share   $ (0.16 )   $ (0.09 )   $ (0.55 )   $ (0.42 )
Weighted average common shares outstanding:                                
Basic and Diluted     25,274,544       19,649,288       21,181,407       18,111,210  

  

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SYSOREX GLOBAL HOLDINGS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

    Twelve Months Ended  
    December 31,  
    2015     2014  
    (Unaudited)     (Audited)  
Cash flows from operating activities:            
Net loss   $ (11,728 )   $ (7,652 )
Adjustment to reconcile net loss to net cash used in operating activities:                
Depreciation and amortization     653       293  
Amortization of intangible assets     3,994       2,913  
Stock based compensation     1,424       1,723  
Acquisition shares adjustment     --       (12 )
(Gain)/Loss on settlement of obligations     85       (394 )
Amortization of deferred financing costs     23       91  
Change in fair value of shares to be issued     (211 )     --  
Compensation expense, note receivable related party     90       --  
Provision for doubtful accounts     1,032       (14 )
Treasury shares received upon settlement of escrow     (695 )     --  
Other     18       (4 )
Changes in operating assets and liabilities:                
Accounts receivable and other receivables     (5,066 )     997  
Inventory     (145 )     (269 )
Other current assets     (510 )     (922 )
Prepaid licenses and maintenance contracts     (744 )     (2,963 )
Other assets     69       245  
Accounts payable     1,944       (1,204 )
Accrued liabilities     586       (1,498 )
Deferred revenue     1,127       3,623  
Other liabilities     (147 )     510  
Total Adjustments     3,527       3,115  
Net Cash Used in Operating Activities     (8,201 )     (4,537 )
Cash Flows Used in Investing Activities:                
Purchase of property and equipment     (355 )     (1,053 )
Proceeds from the sale of marketable securities     --       125  
Investment in capitalized software     (1,176 )     (235 )
Investment in LightMiner     (19 )     --  
Advance to employee     --       (90 )
Advances to third parties     --       (950 )
Repayment of notes receivable from third parties     --       180  
Cash paid for AirPatrol     --       (9,514 )
Cash acquired in AirPatrol acquisition     --       71  
Repayment of loans to other parties     --       1,000  
Change in restricted cash     --       70  
Net Cash Used in Investing Activities     (1,550 )     (10,396 )
Cash Flows Provided by Financing Activities                
Advances (repayment) of line of credit     4,682       (1,799 )
Repayment of advance from Duroob Technology     --       (160 )
Repayment of term loan     (764 )     (375 )
Advances from term loan     2,000       --  
Advances from related party     2       --  
Net proceeds from issuance of common stock     --       2,080  
Net proceeds from capital raise     4,685       16,615  
Net proceeds from conversion of employee options     --       13  
Repayment of notes payable     (71 )     (300 )
Net Cash Provided by Financing Activities     10,534       16,074  
Effect of Foreign Exchange Rate on Changes on Cash     49       (18 )
Net increase in Cash and Cash Equivalents     832       1,124  
Cash and Cash Equivalents - Beginning of period     3,228       2,104  
Cash and Cash Equivalents - End of period   $ 4,060     $ 3,228  

 

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Reconciliation of Non-GAAP Financial Measures:

 

  Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
 (In thousands)   2015     2014     2015     2014  
Net loss attributable to common stockholders   $ (3,955 )   $ (1,806 )   $ (11,718 )   $ (7,536 )
Adjustments:                                
Non-recurring one-time charges:                                
Provision for doubtful accounts   1,032       --       1,032       --  
Acquisition transaction/financing costs     155       (179 )     355       676  
Stock based compensation - acquisition costs     --       --       --       340  
Costs associated with public offering     6       --       45       45  
Other - severance costs     --       --       307       --  
Change in the fair value of shares to be issued     (53 )     --       (211 )     --  
Gain on the settlement of obligations     85       (394 )     85       (394 )
Stock-based compensation – compensation and related benefits     540       444       1,425       1,382  
Interest expense     109       80       448       387  
Taxes     --       (35 )     --       --  
Depreciation and amortization     1,262       989       4,647       3,205  
Adjusted EBITDA   $ (819 )   $ (901 )   $ (3,585 )   $ (1,895 )

 

  Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
(In thousands, except share data)   2015     2014     2015     2014  
Net loss attributable to common stockholders   $ (3,955 )   $ (1,806 )   $ (11,718 )   $ (7,536 )
Adjustments:                                
Non-recurring one-time charges:                                
Provision for doubtful accounts     1,032       --       1,032       --  
Acquisition transaction/financing costs     155       (179 )     355       676  
Stock based compensation - acquisition costs     --       --       --       340  
Costs associated with public offering     6       --       45       45  
Other - severance costs     --       --       307       --  
Change in the fair value of shares to be issued     (53 )     --       (211 )     --  
Gain on the settlement of obligations     85       (394 )     85       (394 )
Stock-based compensation – compensation and related benefits     540       444       1,425       1,382  
Amortization of intangibles     1,056       893       3,994       2,913  
Proforma non-GAAP net loss   $ (1,134 )   $ (1,042 )   $ (4,686 )   $ (2,574 )
Proforma non-GAAP net loss per basic and diluted common share   $ (0.04 )   $ (0.05 )   $ (0.22 )   $ (0.14 )
Weighted average basic and diluted common shares outstanding     25,274,544       19,649,288       21,181,407       18,111,210  

 

 

 

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