LOUISVILLE, Ky., May 15, 2018 /PRNewswire/ -- Creative
Realities, Inc. ("Creative Realities," "CRI," or the "Company") (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.
Mr. Mills added, "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:
- We competed and won an RFP for a French company with 850 retail locations in airports throughout the country;
- Our partnership with one of the largest convenience chains in the country to provide menu board solutions is growing
rapidly as nationwide rollout continues;
- We were 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;
- We are working closely with the University of Louisville on providing digital signage solutions
for their football complex and stadium expansion;
- We were selected by a North American based LED manufacturer as their provider of installation, maintenance and support
services; and
- We have entered 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."
Mr. 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."
Conference Call Details
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.
About Creative Realities, Inc.
Creative Realities helps retailers and brands use the latest technologies to inspire shopper engagement in and around the
Store. Founded over 15 years ago, the firm's evolving client base has led to recognized leadership in deploying technology
aligned with strategic and consumer behavior goals at Retail. The firm has created and delivered consumer/shopper experiences,
designs and installs high-end audio-visual networks, and is actively providing recurring SaaS and support services across diverse
categories: Automotive, Apparel & Accessories, Banking, Baby/Children, Beauty, CPG, Department Stores, Digital Out-of-Home
(DOOH), Electronics, Fashion, Fitness, Foodservice/QSR, Financial Services, Gaming, Luxury, Mass Merchants, Mobile Operators, and
Pharmacy Retail.
Cautionary Note on Forward-Looking Statements
This press release contains certain statements that would be deemed "forward-looking statements" under Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and includes, among other things, discussions of
our business strategies, future operations and capital resources. Words such as "may," "likely," "anticipate," "expect" and
"believe" indicate forward-looking statements.
These forward-looking statements may reflect management's present expectations and estimates regarding future expenses,
revenue and profitability, trends affecting our financial condition and results of operations, operating efficiencies, revenue
opportunities, potential new markets, and the ability of the Company to effectively compete in a highly competitive market.
Nevertheless, and despite the fact that management's expectations and estimates are based on assumptions management believes to
be reasonable and data management believes to be reliable, the Company's actual results, performance, or achievements are subject
to future risks and uncertainties, any of which could materially affect the Company's actual performance. Risks and
uncertainties that could affect such performance include, but are not limited to: the adequacy of funds for future
operations; future expenses, revenue and profitability; trends affecting financial condition and results of operations; ability
to convert proposals into customer orders; the ability of customers to pay for products and services; the impact of changing
customer requirements upon revenue recognition; customer cancellations; the availability and terms of additional capital; ability
to develop new products; dependence on key suppliers, manufacturers and strategic partners; industry trends and the competitive
environment; the impact of the Company's financial condition upon customer and prospective customer relationships; and the impact
of losing one or more senior executives or failing to attract additional key personnel. These and other risk factors are
discussed in Company reports filed with the Securities and Exchange Commission.
Given these uncertainties, and the fact that forward-looking statements represent management's estimates and assumption as of
the date of this press release, you should not attribute undue certainty to these forward-looking statements. We assume no
obligation to update any forward-looking statements publicly, or to update the reasons why actual results could differ materially
from those anticipated in any forward-looking statements contained in this press release, even if new information becomes
available in the future.
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SOURCE Creative Realities, Inc.