PARETEUM CORP NEW YORK, March 28, 2017 /PRNewswire/ -- Pareteum Corporation (NYSE MKT: TEUM) ("Pareteum" or the "Company"),a leading communications technology provider to global Mobile, MVNO, Enterprise and IoT markets, today announced financial results for the year ended December 31, 2016.
Highlights and achievements in 2016 and to-date:
-- Improved to positive adjusted EBITDA of $110K in Q416 from negative
adjusted EBITDA of $3.1 million in Q415 (adjustments to EBITDA include
elements of nonrecurring expenditures, restructuring charges, stock
based compensation, software development and non-cash adjustments);
-- Added new top talent additions at executive management, board of
directors, and other key operational levels, supporting Pareteum's
vision and growth mission.
-- Improved revenue metric annualized revenue per employee in Q416 to
$202,872 from $51,738 in Q415;
-- Strengthened gross margin with Q416 margin of 79% and sequential
quarterly gains from Q415 margin of 62%;
-- Reported Q416 revenue of $3.1 million, nearly 5% ahead of expectations;
-- Focused execution of growth strategy to leverage software and services
platform to address back office and mobile virtual network enabler needs
of
-- carriers;
-- enterprises; and
-- services providers, developers and solutions integrators; an
-- Completed substantial restructuring, with turnaround advanced as
demonstrated by improvements in reported results, capital infusion,
amended debt agreement, and growing roster of clients, prospective
clients, and partners.
Hal Turner, Executive Chairman of Pareteum commented, "We are very pleased to note that in 2017, we have turned the page. With 2016 dedicated to executing our restructuring plan and turning around the business, we believe we have entered 2017 with a stable and robust platform that is well positioned to capitalize on the major trends now impacting global communications."
Mr. Turner continued, "Our business is going where it needs to be going. Specifically, we have:
1. new clients and brands are positioned to come on board;
2. opened up new service segments that represent additional revenue streams;
3. continued development progress on announced transactions; and
4. announced four new sales agreements, including:
a. a key carrier customer global roaming enablement deal;
b. an important addition of content and streaming media capability to a
major carrier mobile MVNE customer
c. an important IoT technology enablement transaction, and
d. a focused subscriber multi-country network enablement agreement."
"In the age of the connected consumer, with our growth strategy addressing a combined $270 billion total market opportunity, the management team and Board of Directors of Pareteum are continuing to operate with a sense of urgency to execute and deliver. We remain committed to creating value through continued efficient execution of our plans to achieve sustainable, accretive operating and financial results," Mr. Turner concluded.
Financial Highlights for the Year Ended 2016:
Revenue for the year ended December 31, 2016 was $12,855,811 compared to $31,015,453 for the year ended December 31, 2015.
Cost of service for the twelve-month period ended December 31, 2016 was $3,658,667, a decrease of $2,267,624 or 38%, compared to $5,926,291 for the twelve-month period ended December 31, 2015. The decrease was related to a decrease in cost of mobile bundled service business and network, decrease in cost of service related management and personnel expenses and reduction of non-cash related expenses.
Total operating expenses, which includes product development, sales and marketing, and general and administrative costs, for the twelve-month period ended December 31, 2016 was $16,592,700, a decrease of $2,234,664 or 12%, compared to $18,827,364 for the twelve-month period ended December 31, 2015. The decrease was related to reductions in staffing in the areas of product development, overhead, sales and marketing activities.
Cumulative annualized restructuring savings generated during 2015 and 2016, thus far, have totaled approximately $7.4 million and relate primarily to workforce reduction.
Conference Call Information:
Date: Wednesday, March 29, 2017
Time: 11:00 a.m. EDT
Domestic Dial-in Number: 1-800-279-9534
International Dial-in Number: 1-719-457-2506
U.K. Toll Free: 0 800 404 7656
Live webcast: http://public.viavid.com/index.php?id=123530
All interested participants should dial in approximately 5 to 10 minutes prior to the 11:00 a.m. EDT conference call and an operator will register your name and organization.
A replay of the call will be available approximately one hour after the end of the call through March 29, 2018, and can be accessed via Pareteum's website (www.paretuem.com) or http://public.viavid.com/index.php?id=123530.
About Pareteum Corporation:
Pareteum Corporation, and its subsidiaries (also referred to as "Pareteum", and "the Company") provide a complete mobility cloud platform, utilizing messaging and security capabilities for the global Mobile, MVNO, Enterprise and IoT markets. For more information please visit: www.pareteum.com.
Forward-Looking Statements:
Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements with respect to Pareteum's plans and objectives, projections, expectations and intentions. These forward-looking statements are based on current expectations, estimates and projections about Pareteum's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of Pareteum may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, Pareteum also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from those projected or suggested in Pareteum's filings with the Securities and Exchange Commission, copies of which are available from the SEC or may be obtained upon request from Pareteum.
Investor Relations:
Vivian Cervantes
PCG Advisory
212-554-5482
vivian@pcgadvisory.com
Pareteum Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2016 AND 2015
December 31, December 31,
2016 2015
---- ----
ASSETS
CURRENT ASSETS
--------------
Cash and cash equivalents $931,189 $369,250
Financing receivable - 272,425
Restricted cash 564,018 246,151
Accounts receivable, net of an allowance for doubtful
accounts of $88,528 at December 31, 2016 and $269,608 at
December 31, 2015 614,670 1,112,032
Prepaid expenses and other current assets 1,084,994 2,016,236
--------- ---------
Total current assets 3,194,871 4,016,094
NON-CURRENT ASSETS
------------------
OTHER ASSETS 129,037 473,893
NOTE RECEIVABLE 1,012,603 -
PROPERTY AND EQUIPMENT, NET 8,708,778 13,051,375
INTANGIBLE ASSETS, NET - 258,630
ASSETS HELD FOR SALE - 4,564,972
GOODWILL - 3,027,422
--- ---------
TOTAL ASSETS $13,045,289 $25,392,386
=========== ===========
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES
-------------------
Accounts payable and customer deposits 2,316,768 2,639,863
Obligations under capital leases (current portion) 10,813 310,403
Net billings in excess of revenues 951,791 1,259,545
Accrued expenses and other payables 6,013,620 5,031,712
Senior Secured Loan -Short Term (Principal repayments
coming 12 months) 4,000,000 5,580,277
--------- ---------
Total current liabilities 13,292,992 14,821,800
LONG TERM LIABILITIES
---------------------
Derivative liabilities 4,265,829 945,618
Non-current portion of obligation under capital leases - 5,621
Other long term liabilities 192,980 260,290
Unsecured Convertible Promissory Note (net of Debt Discount
and Debt Issuance) 821,048 238,829
Senior Secured Loan -Long Term (net of Debt Discount, Debt
Issuance and Principal repayments coming 12 months) 3,715,662 -
Non-current portion of net billings in excess of revenues 121,309 1,066,687
------- ---------
Total long term liabilities 9,116,828 2,517,045
--------- ---------
Total liabilities 22,409,820 17,338,845
---------- ----------
Commitments and Contingencies (See Notes)
STOCKHOLDERS' (DEFICIT) EQUITY
Preferred Stock $0.00001 par value, 50,000,000 shares
authorized, 249 issued and outstanding as of December 31,
2016 2,143,196 -
Common Stock $0.00001 par value, 500,000,000 shares
authorized, 8,376,267 issued and outstanding as of
December 31, 2016 and 6,455,055 shares issued and
outstanding as of December 31, 2015 280,653,362 269,470,165
Accumulated other comprehensive loss (5,086,902) (5,789,975)
Accumulated deficit (287,080,234) (255,635,531)
------------ ------------
Pareteum Corporation stockholders' (deficit) equity (9,370,578) 8,044,659
NON-CONTROLLING INTEREST 6,047 8,882
----- -----
Total stockholders' (deficit) equity (9,364,531) 8,053,541
---------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY $13,045,289 $25,392,386
=========== ===========
Pareteum Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
2016 2015
---- ----
REVENUES $12,855,811 $31,015,453
COST AND OPERATING
EXPENSES
Cost of service
(excluding
depreciation and
amortization) 3,658,667 5,926,291
Product development 3,543,590 4,543,492
Sales and marketing 1,340,959 2,633,958
General and
administrative 11,708,151 11,649,914
Restructuring
charges 1,638,049 1,254,598
Depreciation and
amortization of
intangibles assets 4,246,787 6,623,985
Impairment for
assets held and
used 850,985 2,681,407
Impairment of
goodwill 3,228,930 -
Loss on sale of
assets 1,542,374 -
--------- ---
Total cost and
operating expenses 31,758,492 35,313,645
---------- ----------
LOSS FROM
OPERATIONS (18,902,681) (4,298,192)
OTHER INCOME
(EXPENSE)
Interest income 112,169 106,028
Interest expense (1,228,201) (1,488,203)
Interest expense
related to debt
discount and
conversion feature (6,041,607) (682,389)
Changes in
derivative
liabilities (3,316,199) 299,948
(Loss) Gain on
Extinguishment of
Debt (541,899) 2,475,799
Other (expense),
net (220,927) (922,894)
Amortization of
deferred financing
costs (1,267,073) (513,557)
---------- --------
Total other
(expense) (12,503,737) (725,268)
LOSS BEFORE
PROVISION FOR
INCOME TAXES (31,406,418) (5,023,460)
Provision (Benefit)
for income taxes 38,286 (17,225)
------ -------
NET LOSS (31,444,704) (5,006,235)
OTHER COMPREHENSIVE
LOSS
Foreign currency
translation gain
(loss) 703,073 (2,662,843)
------- ----------
COMPREHENSIVE LOSS $(30,741,631) $(7,669,078)
============ ===========
Net loss per common
share and
equivalents -
basic $(4.67) $(0.79)
====== ======
Net loss per common
share and
equivalents -
diluted $(4.67) $(0.79)
====== ======
Weighted average
shares outstanding
during the period
-basic 6,738,971 6,328,082
========= =========
Weighted average
shares outstanding
during the period
-diluted 6,738,971 6,328,082
========= =========
Pareteum Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
2016 2015
---- ----
CASH FLOWS FROM
OPERATING
ACTIVITIES:
Net loss $(31,444,704) $(5,006,235)
Adjustments to
reconcile net loss
to net cash (used
in) provided by
operating
activities:
Depreciation and
amortization 4,246,787 6,623,985
Provision for
doubtful accounts (88,528) 269,608
Stock based
compensation 3,897,437 3,481,908
Change in fair
value of warrant
liability 3,316,199 (299,948)
Amortization of
deferred financing
costs 1,267,073 513,557
Interest expense
relating to debt
discount and
conversion feature 6,041,607 682,389
Other (income) and
expense, net 220,927 922,894
Loss/(Gain) on
Extinguishment of
Debt 541,899 (2,475,799)
Impairment for
assets held and
used 850,985 2,681,407
Impairment of
goodwill 3,228,930 -
Loss on sale of
assets 1,542,374 -
Changes in
operating assets
and liabilities:
Decrease in
accounts
receivable 621,532 6,566,499
Decrease in prepaid
expenses, deposits
and other assets 1,637,006 759,275
Increase in
accounts payable
and customer
deposits 80,520 2,627,745
Decrease in net
billings in excess
of revenues (1,169,136) (9,753,225)
Increase in accrued
expenses and other
payables 1,551,261 1,385,775
Net cash (used in)
provided by
operating
activities (3,657,831) 8,979,835
CASH FLOWS FROM
INVESTING
ACTIVITIES:
Purchases of
property and
equipment (1,413,160) (7,709,972)
Advance Purchase
Payment on "Assets
held for Sale" 450,000 -
Proceeds from sale
of assets 2,000,000 -
Net cash provided
by (used in)
investing
activities 1,036,840 (7,709,972)
CASH FLOWS FROM
FINANCING
ACTIVITIES:
Financing
receivable 355,000 1,645,000
Exercise of
warrants & options - 5,861
Equity and Debt
issuance costs
paid (1,338,821) (532,558)
Principal payment
on 2014 10% +
libor 3rd Part
Loan (966,809) (5,500,000)
Proceeds from
convertible
promissory note 2,273,000 1,275,000
Unsecured
promissory note 350,000 -
Gross proceed from
Preferred A and A-
1 shares issuance 2,490,000 -
Net cash provided
by (used in)
financing
activities 3,162,370 (3,106,697)
EFFECT OF EXCHANGE
RATES ON CASH AND
CASH EQUIVALENTS 20,560 301,924
NET INCREASE
(DECREASE) IN CASH
AND CASH
EQUIVALENTS 561,939 (1,534,910)
CASH AND CASH
EQUIVALENTS,
BEGINNING OF THE
PERIOD 369,250 1,904,160
CASH AND CASH
EQUIVALENTS, END
OF THE PERIOD $931,189 $369,250
SUPPLEMENTAL
DISCLOSURES OF
CASH FLOW
INFORMATION:
Cash paid during
the period for
interest $909,637 $1,136,021
Cash paid during
the period for
income taxes 15,581 14,771
NON-CASH INVESTING
ACTIVITIES:
Note receivable
from sale of
assets $1,000,000 $ -
NON-CASH FINANCING
ACTIVITIES:
Conversion of 9%
unsecured
convertible note $5,238,329 $ -
Shares issued for
payables $700,425 $ -
PARETEUM CORPORATION
RECONCILIATION OF COMPREHENSIVE LOSS TO EBITDA AND ADJUSTED EBITDA
THREE MONTHS ENDED MARCH THREE MONTHS ENDED JUNE 30, THREE MONTHS ENDED SEPTEMBER THREE MONTHS
31, 2016 2016 30, 2016 ENDED
DECEMBER
31, 2016 YEAR ENDED
DECEMBER 31,
2016
----
COMPREHENSIVE LOSS $(3,972,576) $(3,168,709) $(12,612,947) $(10,987,399) $(30,741,631)
----------- ----------- ------------ ------------ ------------
Foreign currency translation loss 341,214 (345,478) 425,354 281,983 703,073
NET LOSS (4,313,790) (2,823,231) (13,038,301) (11,269,382) (31,444,704)
---------- ---------- ----------- ----------- -----------
Provision (Benefit) for income taxes 9,929 9,178 8,450 10,729 38,286
Total other income (expense) (28,465) (646,703) (4,194,734) (7,633,835) (12,503,737)
------- -------- ---------- ---------- -----------
Interest income 25,936 24,611 24,700 36,922 112,169
Interest expense (306,299) (296,473) (253,509) (371,920) (1,228,201)
Interest expense related to debt
discount and conversion feature (351,799) (261,345) (2,319,679) (3,108,784) (6.041,607)
Changes in derivative liabilities 518,986 140,950 (735,902) (3,240,233) (3,316,199)
(Loss) Gain on Extinguishment of
Debt - - (443,426) (98,473) (541,899)
Other income & (expense), net 221,640 (109,080) 101,328 (434,815) (220,927)
Amortization of deferred financing
costs (136,929) (145,366) (568,246) (416,532) (1,267,073)
-------- -------- -------- -------- ----------
LOSS FROM OPERATIONS (4,275,396) (2,167,350) (8,835,117) (3,624,818) (18,902,681)
Depreciation & Amortization 1,097,604 1,113,947 1,108,553 926,683 4,246,787
Impairment for assets held and used - - 850,985 - 850,985
Impairment of goodwill - - 3,228,930 - 3,228,930
Loss on sale of assets - - 1,746,905 (204,531) 1,542,374
EBITDA (3,177,792) (1,053,403) (1,899,744) (2,902,666) (9,033,605)
---------- ---------- ---------- ---------- ----------
Nonrecurring Expenditures - - - 650,000 650,000
Restructuring Costs 637,777 198,026 545,130 62,308 1,443,241
Restructuring Costs (Non Cash) - - 15,051 179,757 194,808
Stock based Compensation 944,024 362,107 781,258 1,615,240 3,702,629
Software and non-cash adjustments (492,997) (724,303) (42,539) 504,915 (754,924)
Adjusted EBITDA $(2,088,988) $(1,217,573) $(600,844) $109,554 $(3,797,851)
----------- ----------- --------- -------- -----------
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SOURCE Pareteum Corporation
