2017 Q2 Form 10-Q Financial Statement

#000162828017008218 Filed on August 07, 2017

View on sec.gov

Income Statement

Concept 2017 Q2 2017 Q1 2016 Q2
Revenue $15.15M $11.60M $6.960M
YoY Change 117.72% -49.64% -62.75%
Cost Of Revenue $10.00M -$30.75M $21.10M
YoY Change -52.61% -258.67% 28.59%
Gross Profit $5.152M $3.210M $1.961M
YoY Change 162.72% -12.1% -13.76%
Gross Profit Margin 34.0% 27.67% 28.18%
Selling, General & Admin $4.495M $390.0K $6.549M
YoY Change -31.36% -93.43% -1.83%
% of Gross Profit 87.25% 12.15% 333.96%
Research & Development $2.174M $220.0K $2.835M
YoY Change -23.32% -92.88% 2.94%
% of Gross Profit 42.2% 6.85% 144.57%
Depreciation & Amortization $252.0K -$3.720M $2.090M
YoY Change -87.94% -257.63% -6.7%
% of Gross Profit 4.89% -115.89% 106.58%
Operating Expenses $6.669M $5.977M $7.716M
YoY Change -13.57% -33.79% -18.13%
Operating Profit -$1.517M -$2.767M -$5.755M
YoY Change -73.64% -48.53% -19.52%
Interest Expense -$2.620M -$3.210M -$690.0K
YoY Change 279.71% 597.83% 40.82%
% of Operating Profit
Other Income/Expense, Net -$2.539M -$92.00K -$667.0K
YoY Change 280.66% 360.0% 34.48%
Pretax Income -$4.056M -$6.083M -$6.419M
YoY Change -36.81% 3.81% -16.06%
Income Tax $31.00K -$300.0K $296.0K
% Of Pretax Income
Net Earnings -$4.175M -$6.930M -$7.412M
YoY Change -43.67% 18.87% -8.71%
Net Earnings / Revenue -27.55% -59.75% -106.49%
Basic Earnings Per Share
Diluted Earnings Per Share -$62.76K -$101.7K -$111.8K
COMMON SHARES
Basic Shares Outstanding 66.60M shares 66.63M shares 66.28M shares
Diluted Shares Outstanding 66.60M shares

Balance Sheet

Concept 2017 Q2 2017 Q1 2016 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $6.300M $6.100M $9.400M
YoY Change -32.98% -45.54% 51.61%
Cash & Equivalents $6.302M $6.149M $9.412M
Short-Term Investments
Other Short-Term Assets $1.100M $1.000M $600.0K
YoY Change 83.33% 25.0% -33.33%
Inventory
Prepaid Expenses
Receivables $20.14M $10.66M $15.65M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $27.47M $23.67M $25.70M
YoY Change 6.89% -19.9% 30.31%
LONG-TERM ASSETS
Property, Plant & Equipment $2.453M $2.006M $2.043M
YoY Change 20.07% 36.46% 132.69%
Goodwill $76.62M $42.27M $76.62M
YoY Change 0.0% 0.0% -0.23%
Intangibles $3.975M $2.647M $10.61M
YoY Change -62.54% -78.81% -53.41%
Long-Term Investments $0.00 $1.000M
YoY Change -100.0%
Other Assets $400.0K $400.0K $500.0K
YoY Change -20.0% -20.0% 400.0%
Total Long-Term Assets $83.40M $83.92M $90.77M
YoY Change -8.12% -9.18% -9.71%
TOTAL ASSETS
Total Short-Term Assets $27.47M $23.67M $25.70M
Total Long-Term Assets $83.40M $83.92M $90.77M
Total Assets $110.9M $107.6M $116.5M
YoY Change -4.81% -11.78% -3.14%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $20.26M $11.79M $15.13M
YoY Change 33.92% -22.96% 41.5%
Accrued Expenses $9.952M $3.011M $10.04M
YoY Change -0.89% -68.71% 28.8%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $1.943M $0.00 $10.48M
YoY Change -81.45% -100.0% 203.65%
Total Short-Term Liabilities $35.20M $30.77M $39.45M
YoY Change -10.77% -20.8% 40.6%
LONG-TERM LIABILITIES
Long-Term Debt $10.03M $9.685M $0.00
YoY Change -100.0%
Other Long-Term Liabilities $849.0K $697.0K $835.0K
YoY Change 1.68% -14.48%
Total Long-Term Liabilities $10.87M $10.38M $835.0K
YoY Change 1202.28% 1173.87% -88.41%
TOTAL LIABILITIES
Total Short-Term Liabilities $35.20M $30.77M $39.45M
Total Long-Term Liabilities $10.87M $10.38M $835.0K
Total Liabilities $52.14M $45.54M $40.28M
YoY Change 29.43% 14.79% 14.23%
SHAREHOLDERS EQUITY
Retained Earnings -$241.4M -$237.3M -$220.4M
YoY Change 9.54% 11.39% 14.15%
Common Stock $8.000K $8.000K $8.000K
YoY Change 0.0% 0.0% 14.29%
Preferred Stock
YoY Change
Treasury Stock (at cost) $71.00K $71.00K $71.00K
YoY Change 0.0% 0.0% 0.0%
Treasury Stock Shares 754.6K shares 754.6K shares 754.6K shares
Shareholders Equity $58.74M $62.05M $76.19M
YoY Change
Total Liabilities & Shareholders Equity $110.9M $107.6M $116.5M
YoY Change -4.81% -11.78% -3.14%

Cashflow Statement

Concept 2017 Q2 2017 Q1 2016 Q2
OPERATING ACTIVITIES
Net Income -$4.175M -$6.930M -$7.412M
YoY Change -43.67% 18.87% -8.71%
Depreciation, Depletion And Amortization $252.0K -$3.720M $2.090M
YoY Change -87.94% -257.63% -6.7%
Cash From Operating Activities -$1.404M $790.0K -$1.096M
YoY Change 28.1% -149.07% 226.19%
INVESTING ACTIVITIES
Capital Expenditures -$370.0K -$40.00K -$470.0K
YoY Change -21.28% -92.59% 38.24%
Acquisitions
YoY Change
Other Investing Activities -$180.0K
YoY Change
Cash From Investing Activities -$374.0K -$220.0K -$472.0K
YoY Change -20.76% -59.26% 38.42%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net $0.00
YoY Change
Cash From Financing Activities $1.939M -60.00K -$278.0K
YoY Change -797.48% -60.0% 98.57%
NET CHANGE
Cash From Operating Activities -$1.404M 790.0K -$1.096M
Cash From Investing Activities -$374.0K -220.0K -$472.0K
Cash From Financing Activities $1.939M -60.00K -$278.0K
Net Change In Cash $161.0K 510.0K -$1.846M
YoY Change -108.72% -122.17% 125.95%
FREE CASH FLOW
Cash From Operating Activities -$1.404M $790.0K -$1.096M
Capital Expenditures -$370.0K -$40.00K -$470.0K
Free Cash Flow -$1.034M $830.0K -$626.0K
YoY Change 65.18% -177.57% -15750.0%

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CY2017Q2 us-gaap Concentration Risk Credit Risk
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Concentrations of Credit Risk</font></div><div style="line-height:120%;padding-bottom:6px;padding-top:16px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. A significant portion of the Company&#8217;s cash is held at one&#160;major financial institution that the Company's management has assessed to be of high credit quality. The Company has not experienced any losses in such accounts.</font></div><div style="line-height:120%;padding-bottom:6px;padding-top:16px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company mitigates its credit risk with respect to accounts receivable by performing credit evaluations and monitoring advertisers' and carriers' accounts receivable balances. The Company counts all advertisers and carriers within a single corporate structure as one customer, even in cases where multiple brands, branches, or divisions of an organization enter into separate contracts with the Company. As of </font><font style="font-family:inherit;font-size:10pt;">June&#160;30, 2017</font><font style="font-family:inherit;font-size:10pt;">, two major Advertising customers represented approximately </font><font style="font-family:inherit;font-size:10pt;">15.5%</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">10.1%</font><font style="font-family:inherit;font-size:10pt;"> , respectively, of the Company&#8217;s net accounts receivable balance. As of&#160;</font><font style="font-family:inherit;font-size:10pt;">March&#160;31, 2017</font><font style="font-family:inherit;font-size:10pt;">, two major customers represented </font><font style="font-family:inherit;font-size:10pt;">11.2%</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">10.7%</font><font style="font-family:inherit;font-size:10pt;"> of the Company's net accounts receivable balance, both within the Advertising business. </font></div><div style="line-height:120%;padding-bottom:6px;padding-top:16px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">With respect to revenue concentration, the Company defines a customer as an advertiser or a carrier that is a distinct source of revenue and is legally bound to pay for the services that the Company delivers on the advertiser&#8217;s or carrier's behalf. During the </font><font style="font-family:inherit;font-size:10pt;">three months ended June 30, 2017</font><font style="font-family:inherit;font-size:10pt;">, Singapore Telecommunications Limited, a Content customer represented </font><font style="font-family:inherit;font-size:10pt;">17.1%</font><font style="font-family:inherit;font-size:10pt;"> of net revenues; AOL Inc., an Advertising customer represented </font><font style="font-family:inherit;font-size:10pt;">12.0%</font><font style="font-family:inherit;font-size:10pt;"> of net revenues; Telstra Corporation Limited, a Content customer represented </font><font style="font-family:inherit;font-size:10pt;">11.4%</font><font style="font-family:inherit;font-size:10pt;"> of net revenues; and Machine Zone, Inc., an Advertising customer represented </font><font style="font-family:inherit;font-size:10pt;">10.2%</font><font style="font-family:inherit;font-size:10pt;"> of net revenues. During the </font><font style="font-family:inherit;font-size:10pt;">three months ended June 30, 2016</font><font style="font-family:inherit;font-size:10pt;">, Telstra Corporation Limited, a Content customer represented </font><font style="font-family:inherit;font-size:10pt;">32.9%</font><font style="font-family:inherit;font-size:10pt;"> of net revenues, and Jam City Inc., an Advertising customer represented </font><font style="font-family:inherit;font-size:10pt;">11.0%</font><font style="font-family:inherit;font-size:10pt;"> of net revenues.</font></div><div style="line-height:120%;padding-bottom:6px;padding-top:16px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company partners with mobile carriers and OEMS to deliver applications on our Ignite platform through the carrier network. 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During the </font><font style="font-family:inherit;font-size:10pt;">three months ended June 30, 2016</font><font style="font-family:inherit;font-size:10pt;">, Verizon Wireless, generated </font><font style="font-family:inherit;font-size:10pt;">18.9%</font><font style="font-family:inherit;font-size:10pt;"> of our net revenues.</font></div><div style="line-height:120%;padding-bottom:6px;padding-top:16px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company may not continue to receive significant revenues from any of these or from other large customers. A reduction or delay in operating activity from any of the Company&#8217;s significant customers, or a delay or default in payment by any significant customer could materially harm the Company&#8217;s business and prospects. Because of the Company&#8217;s significant customer concentration, its net sales and operating income could fluctuate significantly due to changes in political or economic conditions, or the loss, reduction of business, or less favorable terms for any of the Company's significant customers.</font></div></div>
CY2017Q2 us-gaap Nature Of Operations
NatureOfOperations
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Description of Business</font></div><div style="line-height:120%;padding-top:16px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Digital Turbine, through its subsidiaries, innovates at the convergence of media and mobile communications, delivering end-to-end products and solutions for mobile operators, application advertisers, device original equipment manufacturers ("OEMs") and other third parties to enable them to effectively monetize mobile content and generate higher value user acquisition. The Company operates its business in </font><font style="font-family:inherit;font-size:10pt;">two</font><font style="font-family:inherit;font-size:10pt;"> reportable segments &#8211; Advertising and Content.</font></div><div style="line-height:120%;padding-top:16px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company's Advertising business is comprised of </font><font style="font-family:inherit;font-size:10pt;">two</font><font style="font-family:inherit;font-size:10pt;"> businesses:</font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:112px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:88px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Operator and OEM ("O&amp;O"), an advertiser solution for unique and exclusive carrier and original equipment manufacturer ("OEM") inventory which is comprised of services including:</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:160px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:136px;"><font style="font-family:inherit;font-size:10pt;">&#9702;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Ignite&#8482; ("Ignite"), a mobile device management platform with targeted application distribution capabilities, and</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:160px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:136px;"><font style="font-family:inherit;font-size:10pt;">&#9702;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Other professional services directly related to the Ignite platform.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:112px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:88px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Advertiser and Publisher ("A&amp;P"), a worldwide mobile user acquisition network which is comprised of the Syndicated network service.</font></div></td></tr></table><div style="line-height:120%;padding-top:16px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company's Content business is comprised of services including:</font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:112px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:88px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Marketplace&#8482; ("Marketplace"), an application and content store, and</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:112px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:88px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Pay&#8482; ("Pay"), a content management and mobile payment solution.</font></div></td></tr></table><div style="line-height:120%;padding-top:16px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">With global headquarters in Austin, Texas and offices in Durham, North Carolina, San Francisco, California, Singapore, Sydney, and Tel Aviv, Digital Turbine&#8217;s solutions are available worldwide.</font></div><div style="line-height:120%;padding-top:16px;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Unless the context otherwise indicates, the use of the terms &#8220;we,&#8221; &#8220;our,&#8221; &#8220;us,&#8221; &#8220;Digital Turbine,&#8221; &#8220;DT,&#8221; or the &#8220;Company&#8221; refer to the collective business and operations of Digital Turbine, Inc. through its operating and wholly-owned subsidiaries, Digital Turbine USA, Inc. (&#8220;DT USA&#8221;), Digital Turbine (EMEA) Ltd. (&#8220;DT EMEA&#8221;), Digital Turbine Australia Pty Ltd (&#8220;DT APAC&#8221;), Digital Turbine Singapore Pte. Ltd. (&#8220;DT Singapore&#8221;), Digital Turbine Luxembourg S.a.r.l. (&#8220;DT Luxembourg&#8221;), Digital Turbine Germany, GmbH (&#8220;DT Germany&#8221;), and Digital Turbine Media, Inc. (&#8220;DT Media&#8221; or "DTM"). We refer to all the Company's subsidiaries collectively as "wholly-owned subsidiaries." We refer to Appia, Inc., a company we acquired on March 6, 2015, as &#8220;DT Media&#8221; or "DTM."</font></div></div>
CY2017Q2 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;padding-bottom:6px;padding-top:16px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of financial statements in conformity with GAAP requires management to make certain estimates that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.</font></div></div>

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