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8-K - FORM 8-K - Digital Turbine, Inc.tv496335_8k.htm

 

Exhibit 99.1

 

 

  

Digital Turbine Reports Fourth Quarter and Fiscal Full Year 2018 Results

Fiscal 2018 Revenue from Continuing Operations of $74.8 Million Represented 86% Annual Growth

 

Austin, TX – June 12, 2018 – Digital Turbine, Inc. (Nasdaq: APPS) announced financial results for the fiscal full year and quarter ended March 31, 2018. On May 1, 2018, the Company announced that it has entered into agreements to divest its Content and Advertisers & Publishers (“A&P”) businesses in two separate transactions. As a result, the results of these businesses are now reflected as discontinued operations for all periods presented. All results discussed below, except as otherwise specifically noted, refer only to the continuing operations of the Company, and all comparisons to prior periods are made on a pro forma basis.

 

Recent Highlights:

 

·Fiscal fourth quarter revenue was $21.0 million, representing 81% growth when compared to the fiscal fourth quarter of 2017. Fiscal year 2018 revenue totaled $74.8 million, up 86% as compared to fiscal year 2017 revenue. Fiscal year 2018 revenue, inclusive of discontinued operations, totaled $123.6 million.

 

·GAAP net loss for the fiscal fourth quarter was $4.2 million, or ($0.06) per share. Non-GAAP adjusted net loss1 from continuing operations was $0.6 million, or ($0.01) per share.

 

·Non-GAAP Adjusted EBITDA2 for fiscal 2018, inclusive of discontinued operations, was $2.6 million, as compared to a loss of $8.9 million in fiscal 2017.

 

·GAAP net cash provided by operating activities was $7.7 million during the fourth quarter of fiscal 2018, as compared to net cash used in operating activities of $1.1 million during the fourth quarter of fiscal 2017. Non-GAAP free cash flow3 in the fourth quarter of fiscal 2018 increased to $6.9 million, as compared to a loss of $1.3 million in the fourth quarter of fiscal 2017. Non-GAAP free cash flow for the full fiscal year 2018 totaled $5.3 million, as compared to a loss of $13.0 million for the full fiscal year 2017.

 

·The Company’s cash balance was $12.7 million as of March 31, 2018, up $5.8 million from the December 31, 2017 balance of $6.9 million.

 

·The Company has surpassed 155 million total devices with Ignite installed to date.

 

·‘Single-Tap’ and ‘Smart Folders’ are now live with multiple operator partners and social media platforms. These new products, along with other post-install initiatives, are designed to connect end-users to desired applications with minimal friction, while providing added sources of monetization for carrier and OEM partners over the lifespan of a mobile device.

 

 

Digital Turbine Reports Fourth Quarter and Fiscal 2018 Results

June 12, 2018

Page 2 of 13
  

 

·The Company announced upcoming launches with several new international OEMs, including Intex, VOTO, MyPhone, Karbonn, Cherry and SKK.

 

 

“Fiscal 2018 was a pivotal year for Digital Turbine,” said Bill Stone, CEO. “We entered the year with several clearly stated objectives. Foremost among our objectives was to establish a sustainably profitable business model capable of generating meaningful positive free cash flow. The Company successfully generated more than $5 million in Non-GAAP free cash flow during fiscal year 2018 and ended the year with more than $12 million in cash on the balance sheet. From an operational standpoint, we aspired to focus our attention and resources on our promising Mobile Delivery Platform business. In May, we announced the sales of our Content and A&P businesses, thereby enabling us to focus 100% of our energy going forward on the further development and market penetration of our Ignite-driven mobile platform. In terms of product development, our chief objective entering fiscal 2018 was to develop innovative new solutions capable of generating additional recurring revenue streams for our partners and us, while providing clear benefits to advertisers and end-users. We are currently live with Single-Tap, Smart Folders and Post-Install Notifications with multiple operators, publishers and advertisers. The initial market acceptance of these new products has been uniformly positive, and we expect them to contribute more meaningfully to our financial results over the course of fiscal 2019.”

 

Mr. Stone concluded, “I am extremely excited about the prospects for Digital Turbine heading into fiscal 2019, and the year is off to a promising start. Demand for our ever-evolving Mobile Delivery Platform among operators, OEMs, publishers and advertisers has never been greater, and we are currently installing our Ignite software platform at a rate of nearly 100 million new mobile devices per year. We remain committed to leveraging this platform’s unique and diverse set of capabilities in order to capitalize on the enormous market opportunity still in front of us.”

 

Fourth Quarter Fiscal 2018 Financial Results

 

Total revenue for the fiscal fourth quarter of 2018 was $21.0 million, representing an increase of 81% year-over-year. Revenue growth was attributable to year-over-year growth with large pre-existing carrier partners as well as incremental contributions from new carrier and OEM partners more recently added to the Ignite platform.

 

GAAP gross margin increased to 33% for the fourth quarter of fiscal 2018, as compared to 28% GAAP gross margin in the fiscal fourth quarter of 2017. Non-GAAP adjusted gross margin4 was 36% for the fiscal fourth quarter of 2018, as compared to 38% for the fiscal fourth quarter of 2017. The reconciliation between GAAP and Non-GAAP financial results for all referenced periods is provided in a table immediately following the Unaudited Consolidated Statements of Operations and Comprehensive Loss below.

 

Net loss for the fourth quarter of fiscal 2018 was $4.2 million, or ($0.06) per share, as compared to the net loss for the fiscal fourth quarter of 2017 of $5.8 million, or ($0.09) per share. Non-GAAP adjusted net loss1 for the fourth quarter of fiscal 2018 was $0.6 million, or ($0.01) per share, as compared to a Non-GAAP adjusted net loss of of $1.5 million, or ($0.02) per share, during the fiscal fourth quarter of 2017.

 

 

Digital Turbine Reports Fourth Quarter and Fiscal 2018 Results

June 12, 2018

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Non-GAAP adjusted EBITDA2 was approximately zero for the fourth quarter of fiscal 2018, as compared to a Non-GAAP adjusted EBITDA loss of $0.8 million for the fourth quarter of fiscal 2017. Please see ‘Use of Non-GAAP Measures’ at the end of this press release for the definition of adjusted EBITDA and a reconciliation to GAAP net loss.

 

 

Full Year Fiscal 2018 Financial Results

 

Revenue for fiscal 2018 totaled $74.8 million, representing annual growth of 86% when compared to fiscal 2017 revenue of $40.2 million. Revenue growth during fiscal 2018 was attributable to increased revenue with preexisting carrier partners as well as revenue derived from new carrier and OEM partners added to the Mobile Delivery Platform over the course of the fiscal year.

 

GAAP gross margin increased to 34% for fiscal 2018, as compared to 28% GAAP gross margin in fiscal 2017. Non-GAAP adjusted gross margin4 was 36% for fiscal 2018, as compared to 34% for fiscal 2017. The reconciliation between GAAP and non-GAAP financial results for all referenced periods is provided in a table immediately following the Unaudited Consolidated Statements of Operations and Comprehensive Loss below.

 

Net loss for fiscal 2018 was $19.7 million, or ($0.28) per share, as compared to a net loss for fiscal 2017 of $19.1 million, or ($0.29) per share. Non-GAAP adjusted net loss1 for fiscal 2018 was $3.6 million, or ($0.05) per share, as compared to a net loss of $14.1 million, or ($0.21) per share, during fiscal 2017.

 

Non-GAAP adjusted EBITDA2 was a loss of $0.2 million for fiscal 2018, as compared to a Non-GAAP adjusted EBITDA loss of $9.8 million for the fiscal 2017. Please see ‘Use of Non-GAAP Measures’ at the end of this press release for the definition of adjusted EBITDA and a reconciliation to GAAP net loss.

 

 

Business Outlook

 

Based on information available as of June 12, 2018, the Company expects first quarter of fiscal 2019 revenue of approximately $23 million and positive non-GAAP adjusted EBITDA2.

 

 

 

Digital Turbine Reports Fourth Quarter and Fiscal 2018 Results

June 12, 2018

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About Digital Turbine, Inc.

 

Digital Turbine works at the convergence of media and mobile communications, connecting top mobile operators, OEMs and publishers with app developers and advertisers worldwide. Its comprehensive Mobile Delivery Platform powers frictionless user acquisition and engagement, operational efficiency and monetization opportunities. Digital Turbine’s technology platform has been adopted by more than 30 mobile operators and OEMs worldwide, and has delivered more than one billion app preloads for tens of thousands advertising campaigns. The company is headquartered in Austin, Texas, with global offices in Durham, Mumbai, San Francisco, Singapore, Sydney and Tel Aviv. For additional information visit www.digitalturbine.com.

 

 

       

 

  

 

Conference Call

Management will host a conference call today at 4:30 p.m. ET to discuss its fourth quarter and fiscal 2018 financial results and provide operational updates on existing business. To participate, interested parties should dial 855-238-2713 in the United States or 412-542-4111 from international locations. A webcast of the conference call will be available at ir.digitalturbine.com/events.

 

For those who are not able to join the live call, a playback will be available through June 19, 2018. The replay can be accessed by dialing 877-344-7529 in the United States or 412-317-0088 from international locations, passcode 10120985.

 

The conference call will discuss guidance and other material information.

 

Use of Non-GAAP Financial Measures

To supplement the Company’s condensed consolidated financial statements presented in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), Digital Turbine uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP adjusted gross profit, non-GAAP gross margin and non-GAAP adjusted EBITDA. Reconciliations to the nearest GAAP measures of all non-GAAP measures included in this press release can be found in the tables below.

 

Non-GAAP measures are provided to enhance investors’ overall understanding of the Company's current financial performance, prospects for the future and as a means to evaluate period-to-period comparisons. The Company believes that these Non-GAAP measures provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of recurring core business operating results. The Company believes the non-GAAP measures that exclude such items when viewed in conjunction with GAAP results and the accompanying reconciliations enhance the comparability of results against prior periods and allow for greater transparency of financial results. The Company believes Non-GAAP measures facilitate management's internal comparison of its financial performance to that of prior periods as well as trend analysis for budgeting and planning purposes. The presentation of Non-GAAP measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

 

 

Digital Turbine Reports Fourth Quarter and Fiscal 2018 Results

June 12, 2018

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1Non-GAAP adjusted net income/(loss) and EPS are defined as GAAP net income/(loss) and EPS adjusted to exclude the effect of stock-based compensation, amortization of intangibles, impairment of intangible assets, changes in the fair value of derivatives and warrants related to the September 2016 convertible notes offering, loss on extinguishment of debt, and tax adjustments due to updates resulting from finalization of a transfer pricing study. Readers are cautioned that Non-GAAP adjusted net income/(loss) and EPS should not be construed as an alternative to comparable GAAP net income figures determined in accordance with U.S. GAAP as an indicator of profitability or performance, which is the most comparable measure under GAAP.

 

2Non-GAAP adjusted EBITDA is calculated as GAAP net loss excluding the following cash and non-cash expenses: interest expense, foreign transaction loss/(gain), income taxes provision/(benefit), depreciation and amortization, stock-based compensation expense, the change in fair value of derivatives and warrants that are recorded related to the September 2016 convertible notes offering, other income / (expense), impairment of intangible assets, loss on disposal of fixed assets, and loss on extinguishment of debt. Readers are cautioned that Non-GAAP adjusted EBITDA should not be construed as an alternative to net income (loss) determined in accordance with U.S. GAAP as an indicator of performance, which is the most comparable measure under GAAP.

 

3Non-GAAP free cash flow is defined as net cash provided by operating activities (as stated in our Unaudited Consolidated Statement of Cash Flows) reduced by capital expenditures. Readers are cautioned that free cash flow should not be construed as an alternative to net cash provided by operating activities determined in accordance with U.S. GAAP as an indicator of profitability, performance or liquidity, which is the most comparable measure under GAAP.

 

4Non-GAAP adjusted gross profit and gross margin are defined as GAAP gross profit and gross margin adjusted to exclude the effect of intangible amortization expense, impairment of intangible assets, and depreciation of software. Readers are cautioned that Non-GAAP adjusted gross profit and gross margin should not be construed as an alternative to gross margin determined in accordance with U.S. GAAP as an indicator of profitability or performance, which is the most comparable measure under GAAP.

 

Non-GAAP adjusted gross profit and gross margin, Non-GAAP adjusted EBITDA, Non-GAAP adjusted net income and EPS, and Non-GAAP free cash flow are used by management as internal measures of profitability, performance and liquidity. They have been included because the Company believes that the measures are used by certain investors to assess the Company’s financial performance before non-cash charges and certain costs that the Company does not believe are reflective of its underlying business.

 

 

Digital Turbine Reports Fourth Quarter and Fiscal 2018 Results

June 12, 2018

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Forward-Looking Statements

This news release includes "forward-looking statements" within the meaning of the U.S. federal securities laws. Statements in this news release that are not statements of historical fact and that concern future results from operations, financial position, economic conditions, product releases and any other statement that may be construed as a prediction of future performance or events, including financial projections and growth in various products are forward-looking statements that speak only as of the date made and which involve known and unknown risks, uncertainties and other factors which may, should one or more of these risks uncertainties or other factors materialize, cause actual results to differ materially from those expressed or implied by such statements.

 

These factors and risks include:

·risks associated with Ignite adoption among existing customers (including the impact of possible delays with major carrier and OEM partners in the roll out for mobile phones deploying Ignite)
·actual mobile device sales and sell-through where Ignite is deployed is out of our control
·risks associated with the timing of Ignite software pushes to the embedded bases of carrier and OEM partners
·risks associated with end user take rates of carrier and OEM software pushes which include Ignite
·new customer adoption and time to revenue with new carrier and OEM partners is subject to delays and factors out of our control
·risks associated with fluctuations in the number of Ignite slots across US carrier partners
·required customization and technical integration which may slow down time to revenue notwithstanding the existence of a distribution agreement
·risk that strong Apple iPhone sales could result in a disproportionately low amount of Android sales
·risks associated with delays in major mobile phone launches, or the failure of such launches to achieve the scale
·customer adoption that either we or the market may expect
·risks associated with the level of our secured and unsecured indebtedness
·ability to comply with financial covenants in outstanding indebtedness
·the difficulty of extrapolating monthly demand to quarterly demand
·the challenges, given the Company’s comparatively small size, to expand the combined Company's global reach, accelerate growth and create a scalable, low-capex business model that drives EBITDA (as well as Adjusted EBITDA)
·ability as a smaller Company to manage international operations
·varying and often unpredictable levels of orders; the challenges inherent in technology development necessary to maintain the Company's competitive advantage such as adherence to release schedules and the costs and time required for finalization and gaining market acceptance of new products
·changes in economic conditions and market demand
·rapid and complex changes occurring in the mobile marketplace
·pricing and other activities by competitors

 

 

Digital Turbine Reports Fourth Quarter and Fiscal 2018 Results

June 12, 2018

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·derivative and warrant liabilities on our balance sheet will fluctuate as our stock price moves and will also produce changes in our income statement; these fluctuations and changes might materially impact our reported GAAP financials in an adverse manner, particularly if our stock price were to rise
·technology management risk as the Company needs to adapt to complex specifications of different carriers and the management of a complex technology platform given the Company's relatively limited resources, and
·other risks including those described from time to time in Digital Turbine's filings on Forms 10-K and 10-Q with the Securities and Exchange Commission (SEC), press releases and other communications. You should not place undue reliance on these forward-looking statements.  The Company does not undertake to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

 

Investor Relations Contacts:

 

Brian BartholomewDigital Turbine
brian.bartholomew@digitalturbine.com

 

 

SOURCE Digital Turbine, Inc.

 

 

Digital Turbine Reports Fourth Quarter and Fiscal 2018 Results

June 12, 2018

Page 8 of 13
  

 

Digital Turbine, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Loss

 

(in thousands, except per share amounts)

 

 

   3 Months Ended   3 Months Ended   12 Months Ended   12 Months Ended 
   March 31, 2018   March 31, 2017   March 31, 2018   March 31, 2017 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
Net revenues  $20,961   $11,599   $74,751   $40,207 
Cost of revenues                    
License fees and revenue share   13,623    7,172    47,967    26,374 
Other direct cost of revenues   453    1,217    1,729    2,575 
Total cost of revenues   14,076    8,389    49,696    28,949 
Gross profit   6,885    3,210    25,055    11,258 
Operating expenses                    
Product development   2,118    2,359    9,653    9,283 
Sales and marketing   2,043    1,259    6,087    4,180 
General and administrative   4,063    2,359    15,124    14,766 
Total operating expenses   8,224    5,977    30,864    28,229 
Loss from operations   (1,339)   (2,767)   (5,809)   (16,971)
Interest and other expense, net                    
Interest expense, net   (252)   (599)   (2,067)   (2,625)
Foreign exchange transaction gain / (loss)   (87)   (27)   (148)   (26)
Change in fair value of convertible note
embedded derivative liability
   (1,249)   (1,948)   (7,559)   475 
Change in fair value of warrant liability   (682)   (650)   (3,208)   147 
Loss on extinguishment of debt   (619)   -    (1,785)   (293)
Other income / (expense)   2    (92)   (72)   11 
Total interest and other expense, net   (2,887)   (3,316)   (14,839)   (2,311)
Loss from operations before income taxes   (4,226)   (6,083)   (20,648)   (19,282)
Income tax benefit / (provision)   (14)   (303)   (951)   (144)
Net loss from operations, net of taxes  $(4,212)  $(5,780)  $(19,697)  $(19,138)
Discontinued operations, net of taxes                    
Net loss from operations of discontinued components  $(34,213)  $(1,145)  $(33,160)  $(5,126)
Net loss from discontinued operations, net of taxes  $(34,213)  $(1,145)  $(33,160)  $(5,126)
Net loss  $(38,425)  $(6,925)  $(52,857)  $(24,264)
Other comprehensive income / (loss):                    
Foreign currency translation adjustment   1    (71)   (4)   (119)
Comprehensive loss:  $(38,424)  $(6,996)  $(52,861)  $(24,383)
Basic and diluted net loss per common share  $(0.51)  $(0.10)  $(0.75)  $(0.35)
Continuing operations  $(0.06)  $(0.09)  $(0.28)  $(0.29)
Discontinued operations  $(0.46)  $(0.02)  $(0.47)  $(0.07)
Net loss  $(0.51)  $(0.10)  $(0.75)  $(0.35)
Weighted average common shares outstanding, basic and diluted   75,160    66,595    70,263    66,511 

 

 

Digital Turbine Reports Fourth Quarter and Fiscal 2018 Results

June 12, 2018

Page 9 of 13
  

 

Digital Turbine, Inc. and Subsidiaries

Consolidated Balance Sheets

 

(in thousands, except par value and share amounts)

 

 

   March 31, 2018   March 31, 2017 
   (Unaudited)   (Unaudited) 
ASSETS          
Current assets          
Cash and cash equivalents  $12,720   $6,149 
Restricted cash   331    331 
Accounts receivable, net of allowances of $512 and $228, respectively   17,050    10,663 
Deposits   151    121 
Prepaid expenses and other current assets   750    448 
Current assets held for disposal   8,753    5,953 
Total current assets   39,755    23,665 
Property and equipment, net   2,757    2,006 
Deferred tax assets   596    352 
Intangible assets, net   1,231    2,647 
Goodwill   42,268    42,268 
Long-lived assets held for disposal   -    36,642 
TOTAL ASSETS  $86,607   $107,580 
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current liabilities          
Accounts payable  $19,895   $11,787 
Accrued license fees and revenue share   8,232    3,011 
Accrued compensation   2,966    520 
Short-term debt, net of debt issuance costs and discounts of $205 and $0, respectively   1,445    - 
Other current liabilities   1,142    1,041 
Current liabilities held for disposal   12,726    14,415 
Total current liabilities   46,406    30,774 
Convertible notes, net of debt issuance costs and discounts of $1,827 and $6,315, respectively   3,873    9,685 
Convertible note embedded derivative liability   4,676    3,218 
Warrant liability   3,980    1,076 
Other non-current liabilities   -    697 
Long-term liabilities held for disposal   -    85 
Total liabilities   58,935    45,535 
Stockholders' equity          
Preferred stock          
Series A convertible preferred stock at $0.0001 par value;
2,000,000 shares authorized, 100,000 issued and outstanding
(liquidation preference of $1,000)
   100    100 
Common stock          
$0.0001 par value: 200,000,000 shares authorized;
76,843,278 issued and 76,108,822 outstanding at March 31, 2018;
67,329,262 issued and 66,594,807 outstanding at March 31, 2017
   10    8 
Additional paid-in capital   318,066    299,580 
Treasury stock (754,599 shares at March 31, 2018 and March 31, 2017)   (71)   (71)
Accumulated other comprehensive loss   (325)   (321)
Accumulated deficit   (290,108)   (237,251)
Total stockholders' equity   27,672    62,045 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $86,607   $107,580 

  

 

Digital Turbine Reports Fourth Quarter and Fiscal 2018 Results

June 12, 2018

Page 10 of 13
  

 

Digital Turbine, Inc. and Subsidiaries

Consolidated Statement of Cash Flows

(in thousands)

               

 

   12 Months Ended   12 Months Ended   3 Months Ended   3 Months Ended 
   March 31, 2018   March 31, 2017   March 31, 2018   March 31, 2017 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
Cash flows from operating activities                    
Net loss  $(19,697)  $(19,138)  $(4,212)  $(5,780)
Adjustments to reconcile net loss to net cash used in operating activities:                    
Depreciation and amortization   2,660    2,606    702    697 
Change in allowance for doubtful accounts   299    48    68    (4)
Amortization of debt discount and debt issuance costs   1,018    1,256    143    287 
Accrued interest   (26)   36    (191)   (261)
Stock-based compensation   2,655    3,362    519    364 
Stock-based compensation for services rendered   323    398    100    122 
Change in fair value of convertible note embedded derivative liability   7,559    (475)   1,249    1,948 
Change in fair value of warrant liability   3,208    (147)   682    650 
Loss on extinguishment of debt   1,787    293    618    - 
Impairment of intangible assets   -    757    -    757 
(Increase)/decrease in assets:                    
Restricted cash transferred from operating cash   -    (331)   -    (8)
Accounts receivable   (7,071)   (3,882)   5,636    711 
Deposits   (30)   23    4    (66)
Deferred tax assets   (244)   148    -    9 
Prepaid expenses and other current assets   (306)   81    (253)   58 
Increase/(decrease) in liabilities:                    
Accounts payable   8,108    4,434    1,075    1,204 
Accrued license fees and revenue share   5,221    (4)   1,547    (793)
Accrued compensation   2,445    385    90    (27)
Accrued interest   (26)   36    (191)   (261)
Other current liabilities   76    (1,323)   (55)   (863)
Other non-current liabilities   (695)   (116)   (67)   (140)
Net cash provided by / (used in) operating activities - continuing operations   7,290    (11,589)   7,655    (1,135)
Net cash provided by / (used in) operating activities - discontinued operations   (324)   4,594    (1,175)   1,928 
Net cash used / (from) in operating activities   6,966    (6,995)   6,480    793 
                     
Cash flows from investing activities                    
Capital expenditures   (1,992)   (1,418)   (772)   (160)
Proceeds from the sale of cost method investment in Sift, net   -    999    -    - 
Net cash provided by / (used in) investing activities - continuing operations   (1,992)   (419)   (772)   (160)
Net cash provided by / (used in) investing activities - discontinued operations   (142)   (177)   (50)   (54)
Net cash used in investing activities   (2,134)   (596)   (822)   (214)
                     
Cash flows from financing activities                    
Cash received from issuance of convertible notes   -    16,000    -    - 
Proceeds from short-term borrowings   2,500    -    -    - 
Repayment of debt obligations   (1,098)   (11,000)   (250)   - 
Payment for debt issuance costs   (346)   (2,383)   -    (64)
Options exercised   337    11    78    - 
Warrant exercised   350    -    350    - 
Net cash provided in financing activities   1,743    2,628    178    (64)
                     
Effect of exchange rate changes on cash and cash equivalents   (4)   (119)   1    (71)
                     
Net change in cash and cash equivalents   6,571    (5,082)   5,837    444 
                     
Cash and cash equivalents, beginning of period   6,149    11,231    6,883    5,705 
                     
Cash and cash equivalents, end of period  $12,720   $6,149   $12,720   $6,149 
Supplemental disclosure of cash flow information                    
Interest paid  $1,071   $1,406           
Supplemental disclosure of non-cash financing activities:                    
Cashless exercise of warrants to purchase common stock of the Company  $10   $-           
Common stock of the Company issued for extinguishment of debt  $11,942   $-           

  

 

Digital Turbine Reports Fourth Quarter and Fiscal 2018 Results

June 12, 2018

Page 11 of 13
  

 

GAAP GROSS MARGIN TO NON-GAAP GROSS MARGIN

 

(in thousands)

                 

 

   3 Months Ended   3 Months Ended   12 Months Ended   12 Months Ended 
   March 31, 2018   March 31, 2017   March 31, 2018   March 31, 2017 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
Continuing Operations:                    
        Revenue  $20,960   $11,599   $74,751   $40,207 
         Gross profit  $6,885   $3,210   $25,055   $11,258 
                  Add back items:                    
         Amortization of intangibles  $453   $447   $1,416   $1,731 
         Depreciation of software   202    13    314    13 
         Impairment of intangible assets   -    757    -    757 
         Non-GAAP gross profit from Continuing Operations   7,540    4,427    26,785    13,759 
                     
Discontinued Operations:                    
Revenue   10,626    10,798    48,877    51,346 
Gross profit   457    697    5,927    2,105 
Add back items:                    
Amortization of intangibles   214    1,081    855    5,363 
Impairment of intangible assets   1,064    -    1,064    - 
Non-GAAP gross profit from Discontinued Operations   1,735    1,778    7,846    7,468 
                     
Total Non-GAAP gross profit*  $9,275   $6,205   $34,631   $21,227 
                     
Non-GAAP gross margin percentage from Continuing Operations   36%   38%   36%   34%
Non-GAAP gross margin percentage from Discontinued Operations   16%   16%   16%   15%
Total Non-GAAP gross margin percentage*   29%   28%   28%   23%

 

*Reconciliation represents Total Non-GAAP gross profit and margin percentage inclusive of the impact from Discontinued Operations.

 

 

Digital Turbine Reports Fourth Quarter and Fiscal 2018 Results

June 12, 2018

Page 12 of 13
  

 

GAAP NET LOSS TO NON-GAAP ADJUSTED NET INCOME / (LOSS)

 

(in thousands)

               

 

   3 Months Ended   3 Months Ended   12 Months Ended   12 Months Ended 
   March 31, 2018   March 31, 2017   March 31, 2018   March 31, 2017 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
Continuing Operations:                    
Net Loss from continuing operations  $(4,212)  $(5,780)  $(19,697)  $(19,138)
Add back items:                    
Stock and stock option compensation  $619   $486   $2,978   $3,760 
Amortization of intangibles  $453   $1,314   $1,416   $1,731 
Impairment of intanbles assets  $-   $757   $-   $757 
                     
Change in fair value of convertible note
embedded derivative and warrant liability
  $1,931   $2,598   $10,767   $(622)
Loss on extinguishment of debt  $619   $-   $1,785   $293 
Tax adjustment ***  $-   $(912)  $(848)  $(912)
Non-GAAP Adjusted Net Loss from Continuing Operations  $(590)  $(1,537)  $(3,599)  $(14,131)
                     
Discontinued Operations:                    
Net Loss from discontinued operations  $(34,213)  $(1,145)  $(33,160)  $(5,126)
Add back items:                    
Stock and stock option compensation  $28   $49   $189   $386 
Amortization of intangibles  $214   $214   $855   $5,363 
Impairment of intangible assets  $1,064   $-   $1,064   $- 
Impairment of goodwill  $34,045   $-   $34,045   $- 
Non-GAAP Adjusted Net Income from Discontinued Operations  $1,138   $(882)  $2,993   $623 
                     
Total Non-GAAP Adjusted Net Income *  $548   $(2,419)  $(606)  $(13,508)
                     
Non-GAAP Adjusted Net Loss per share from Continuing Operations   (0.01)   (0.02)   (0.05)   (0.21)
Non-GAAP Adjusted Net Income from Discontinued Operations**   0.02    (0.01)   0.04    0.01 
Total Non-GAAP Adjusted Net Income per share *   0.01    (0.04)   (0.01)   (0.20)
Weighted average common shares outstanding, basic and diluted   75,160    66,595    70,263    66,511 

 

*Reconciliation represents Total Non-GAAP Adjusted Net Income / (Loss) and per share amounts inclusive of the impact from Discontinued Operations.
**In accordance with GAAP, no corporate overhead allocated to Discontinued Operations.
***These non cash changes to the tax provision / (benefit) reported are largely due to updates resulting from finalization of a transfer pricing study.

  

 

Digital Turbine Reports Fourth Quarter and Fiscal 2018 Results

June 12, 2018

Page 13 of 13
  

 

GAAP NET INCOME / (LOSS) TO NON-GAAP ADJUSTED EBITDA

 

(in thousands)              

 

   3 Months Ended   3 Months Ended   12 Months Ended   12 Months Ended 
   March 31, 2018   March 31, 2017   March 31, 2018   March 31, 2017 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
Continuing Operations:                    
Net Loss from continuing operations  $(4,212)  $(5,780)  $(19,697)  $(19,138)
Add back items:                  0 
Stock and stock option compensation  $619   $486   $2,978   $3,760 
Amortization of intangibles  $453   $447   $1,416   $1,731 
Impairment of intangible assets  $-   $757   $-   $757 
Depreciation expense  $248   $277   $1,244   $875 
Interest expense, net  $252   $599   $2,067   $2,625 
Other expense / (income)  $-   $92   $72   $4 
Change in fair value of convertible note
embedded derivative
  $1,249   $1,948   $7,559   $(475)
Change in fair value of warrant liability  $682   $650   $3,208   $(147)
Loss on extinguishment of debt  $619   $-   $1,785   $293 
Foreign exchange transaction loss / (gain)  $87   $27   $148   $26 
Income tax provision / (benefit)  $(16)  $(303)  $(951)  $(144)
Non-GAAP Adjusted EBITDA from Continuing Operations  $(19)  $(800)  $(171)  $(9,833)
                     
Discontinued Operations:                    
Net Loss from discontinued operations  $(34,213)  $(1,145)  $(33,160)  $(5,126)
Add back items:                    
Stock and stock option compensation  $28   $49   $189   $386 
Amortization of intangibles  $214   $1,081   $855   $5,363 
Impairment of intangible assets  $1,064   $-   $1,064   $- 
Impairment of goodwill  $34,045   $-   $34,045   $- 
Depreciation expense  $62   $40   $182   $201 
Interest expense, net  $-   $-   $-   $3 
Other expense / (income)  $(409)  $10   $(481)  $(3)
Foreign exchange transaction loss / (gain)  $(71)  $48   $50)  $62
Non-GAAP Adjusted EBITDA from Discontinued Operations**  $720   $83   $2,744   $886 
                     
Total Non-GAAP Adjusted EBITDA *  $701   $(717)  $2,573   $(8,947)

 

*Reconciliation represents Total Non-GAAP Adjusted Net Income and per share amounts inclusive of the impact from Discontinued Operations.
**In accordance with GAAP, no corporate overhead allocated to Discontinued Operations.

 

 

GAAP CASH FLOW FROM OPERATIONS TO NON-GAAP FREE CASH FLOW

 

(in thousands)              

 

   3 Months Ended   3 Months Ended   12 Months Ended   12 Months Ended 
   March 31, 2018   March 31, 2017   March 31, 2018   March 31, 2017 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
Net cash provided by/(used in) operating activities - continuing operations  $7,655   $(1,135)  $7,290   $(11,589)
Capital expenditures   772    160    1,992    1,418 
                     
Non-GAAP free cash flow  $6,883   $(1,295)  $5,298   $(13,007)