Creative Realities, Inc. (OTCQX: CREX), a leading provider of digital marketing solutions, announced its financial results for the quarter ended March 31, 2018.
Rick Mills, Chief Executive Officer, remarked, “CRI achieved revenue of approximately $4.1 million in the first quarter of 2018, in line with our first quarter budget despite a customer delay in acceptance of approximately $1.8 million in orders, which are now anticipated to be delivered in the third quarter. Our continued progress in 2018 is attributable to two things: investing in our sales team, which has resulted in a record customer backlog and project pipeline, and solid execution of our strategic plan for profitable growth. Our ability to achieve our budgeted first quarter revenues despite customer delays is evidence of the maturation of our business over the past twelve months. Our product offerings and sales team continue to gain traction in a rapidly changing marketplace, and we expect to further build upon this momentum throughout 2018.”
2018 First Quarter Financial Overview
- Revenues were approximately $4.1 million for the three-month period ended March 31, 2018, $2.3 million lower than first quarter 2017. Excluding a single significant non-recurring project from the same customer in each period, revenues were approximately $2.9 million for the three-month period ended March 31, 2018 as compared to $2.2 million for the same period in 2017, or growth of approximately 24%.
- Gross profit was $1.5 million in the first quarter of 2018. Gross margin declined to 37% in the first quarter of 2018 compared to 44% in the same period in 2017 due to sales mix and higher than normal gross margins on a $4.2 million non-recurring project in 2017. Hardware sales grew approximately $0.7 million, or 120% in the first quarter of 2018 as compared to the same period in the prior year.
- Operating Loss was approximately $1.3 million excluding the effect of a $0.5 million one-time non-cash charge related to exit of a long-term lease.
2018 Financial Guidance
The Company is reaffirming its 2018 financial guidance previously provided in connection with our FY2017 earnings release as follows:
- Organic revenue growth for FY18 of approximately 83%, to $33 million.
- 2018 positive EBITDA of approximately $3.5 million, excluding one-time, non-cash charges related to restructuring.
Rick Mills said “Our business is experiencing tremendous momentum in the marketplace with respect to both organic and inorganic growth throughout the remainder of 2018. We are participating in an increasing number of opportunities and are converting those opportunities into future revenues”.
Recent developments include:
- Competed and won an RFP for a French company with 850 retail locations in airports throughout the country;
- Partnership with one of the largest convenience chains in the country to provide menu board solutions is growing rapidly as nationwide rollout continues;
- Selected to install the pilot stores for the launch of an upscale chain of fuel & convenience stores by the largest oil company in the world;
- Working closely with the University of Louisville on providing digital signage solutions for their football complex and stadium expansion;
- Selected by a North American based LED manufacturer as their provider of installation, maintenance and support services; and
- Eentered into the sports and entertainment sales vertical, hiring Scott Werlein to drive the development of that business. Scott was the founding member of the Cisco Sports and Entertainment Solutions Group and was formerly employed as the Global Director of Strategy and Digital at Cisco Systems.
Rick Mills continued, “We have stated before that our primary goal for 2018 is to achieve scale and operating leverage which will result in ongoing sustainable profitability. We are actively working on various consolidation opportunities and have made significant progress in discussions with a number of parties. Our senior management team is now in place with the recent hiring and promotion of Will Logan to Chief Financial Officer, who has done an outstanding job in building a sustainable financial reporting infrastructure. John Walpuck will continue as Chief Operating Officer and focus on the operational issues and opportunities that our larger platform provides. We are focused on the execution of this strategy throughout the remainder of 2018.”
The Company will host a conference call to review the results and provide additional commentary about the Company’s recent performance, which is scheduled for Wednesday, May 16, 2018 at 9:00 am Eastern Time.
Prior to the call, participants should register at bit.ly/criearnings2018Q1. Once registered, participants can use the weblink provided in the registration email to dial-in by phone or use your computer to listen to the live webcast.
Following the live webcast, a replay will be available approximately two hours after the webcast on our website at www.cri.com for at least 30 days.