Press Release

Majesco Announces Fiscal 2017 First Quarter Financial Results

First Quarter Revenue up 40.5% Year on Year
Adjusted EBITDA Margin Improved to 3.1% over the Previous Quarter

Morristown, NJ – August 2, 2016 – Majesco, a global provider of core insurance software, consulting and services for insurance business transformation, today announced its financial results for the fiscal 2017 first quarter ended June 30, 2016.

“I am pleased with our continued growth momentum demonstrated by the 40.5% increase in revenue over the same quarter last year, which represents the fourth consecutive quarter of revenue growth.  As expected, profitability improved sequentially as we scale our business and we delivered positive adjusted EBITDA margins during the quarter,” commented Ketan Mehta, CEO and Co-Founder.

“I am particularly excited by the June 2016 launch of our CloudInsurer platform, which provides an out-of-the-box repeatable, scalable cloud platform for all insurers.  Recent industry research has indicated that Cloud is at an inflection point, where more carriers are selecting cloud based or hosted solutions as compared to on-premise solutions.  I expect our cloud platform will become an important driver for new deals in the future.”

Financial Highlights

For the first quarter ended June 30, 2016

  • Revenue for the first quarter ended June 30, 2016 increased 40.5% to $32.6 million as compared to $23.2 million in the corresponding quarter of last year. The growth was primarily driven by the addition of the Cover-All business and expanding relationships with our current P&C and L&A customer base.
  • Gross profit was $14.8 million (45.3% of revenue) for the first quarter ended June 30, 2016, compared to $11.1 million (47.7% of revenue) for the quarter ended June 30, 2015. The decrease in gross margin was primarily due to a change in revenue mix.
  • Research and development (R&D) expenses were $4.5 million (13.9% of revenue) during the first quarter ended June 30, 2016 as compared to $3.2 million (13.6% of revenue) during the quarter ended June 30, 2015. The increased R&D expense was mainly due to the addition of the Cover-All business and increased investments in our P&C and L&A business.
  • SG&A expenses were $10.7 million (32.7% of revenue) during the first quarter ended June 30, 2016 as compared to $7.6 million (32.8% of revenue) for the quarter ended June 30, 2015. The increased SG&A expense for the fiscal 2017 first quarter was mainly due to planned investment in our sales & marketing efforts and the addition of Cover-All business.
  • Adjusted EBITDA for the first quarter ended June 30, 2016 was $1.0 million (3.1% of revenue) as compared to $1.2 million (5.2% of revenue) for the quarter ended June 30, 2015.
  • Net loss for the first quarter ended June 30, 2016 was $0.6 million, or ($0.02) per share as compared to net income of $82,000, or $0.00 per share for the quarter ended June 30, 2015.

 

  • EBITDA and Adjusted EBITDA are non-GAAP measures. Reconciliation tables of EBITDA and Adjusted EBITDA as used in this press release to GAAP are included in the financial section of this press release.

Balance Sheet

  • Majesco had cash and cash equivalents of $14.9 million at June 30, 2016, compared to $9.3 million at June 30, 2015, and $6.2 million at March 31, 2016.
  • Total debt at June 30, 2016 was $17.7 million, compared to $11.5 million at June 30, 2015, and $13.8 million at March 31, 2016.
  • DSO’s were down to 67 days at June 30, 2016 as compared to 84 days in the previous quarter ended March 31, 2016.

 

Operating Highlights

  • Majesco expanded its relationship with a number of existing client accounts, including a tier 1 and mid-market insurer highlighting progress with our client centric and cross sale strategy. This included the expanding relationship with Homesite, a tier 1 insurer, to support their broadening product portfolio and geographical presence in the U.S. on Majesco’s Cloud platform with ready to use content, including ISO ERC integrated content, for the commercial line of business, and Colorado Farm Bureau Mutual Insurance Co., a mid-market insurer who will upgrade to Majesco Policy for P&C as its strategic enterprise platform
  • Majesco announced the release of Majesco CloudInsurer, an out-of-the-box repeatable, scalable cloud platform that leverages Majesco’s experience with cloud customers designed to provide a business platform with broad appeal for all insurers from greenfields, new start-ups and incubators to mid-market and tier 1 insurers. In addition, Majesco announced its expanding partnership ecosystem with the additions of iSIGN and eGain, strengthening the portfolio of offerings to clients and the Majesco CloudInsurer business model.
  • The 12-month backlog as on June 30, 2016 was $63.4 million as compared to $71.9 million as on March 31, 2016. The order book for the trailing twelve month period was $152.8 million as compared to $ 156.4 million as at March 31, 2016.

Conference Call and Webcast Information

Management of Majesco will conduct a live teleconference to discuss Majesco’s fiscal 2017 first quarter financial results on Tuesday, August 2, 2016 at 4:30 pm ET.  Anyone interested in participating should call 877-340-7912 if calling from the U.S., or 719-325-4842 if calling internationally. A replay will be available until August 16, 2016, which can be accessed by calling 877-870-5176 within the U.S. and 858-384-5517 if calling internationally. Please use passcode 9452085 to access the replay.

In addition, the call will be webcast and will be available on the Company’s website at www.majesco.com or by visiting http://public.viavid.com/index.php?id=120500

Use of Non-GAAP Financial Measures

In evaluating our business, we consider and use EBITDA as a supplemental measure of operating performance. We define EBITDA as earnings before interest, taxes, depreciation and amortization. We present EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance. We define Adjusted EBITDA as EBITDA before one-time non-recurring one-time costs related to the merger with Cover-All Technologies and the listing of the Majesco common stock on the NYSE-MKT in connection with the merger and stock-based compensation.

The terms EBITDA and Adjusted EBITDA are not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and are not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA have limitations as an analytical tool, and when assessing Majesco’s operating performance, investors should not consider EBITDA or Adjusted EBITDA in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Among other things, EBITDA and Adjusted EBITDA do not reflect our actual cash expenditures. Other companies may calculate similar measures differently than Majesco, limiting their usefulness as comparative tools. We compensate for these limitations by relying on U.S. GAAP results and using EBITDA and Adjusted EBITDA only supplementally.

About Majesco

Majesco enables insurance business transformation for approximately 150 global customers by providing technology solutions which include software products, consulting and IT services. Our customers are carriers from the Property and Casualty, Life, Annuity and Group insurance segments worldwide.   Majesco delivers proven software solutions and IT services in the core insurance areas such as policy administration, billing, claims, distribution and analytics.

For more information, please visit us on the web at www.majesco.com, or call 1-973-461-5200.

Cautionary Language Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of management, are not guarantees of performance and are subject to significant risks and uncertainty. These forward-looking statements should, therefore, be considered in light of various important factors, including those set forth in Majesco’s reports that it files from time to time with the Securities and Exchange Commission and which you should review, including those statements under “Item 1A – Risk Factors” in Majesco’s Annual Report on Form 10-K for the year ended March 31, 2016.

Important factors that could cause actual results to differ materially from those described in forward-looking statements contained in this press release include, but are not limited to:  integration risks;  changes in economic conditions, political conditions, trade protection measures, licensing requirements and tax matters; technology development risks; intellectual property rights risks; competition risks; additional scrutiny and increased expenses as a result of being a public company; the financial condition, financing requirements, prospects and cash flow of Majesco; loss of strategic relationships; changes in laws or regulations affecting the insurance industry in particular; restrictions on immigration; the ability and cost of retaining and recruiting key personnel; the ability to attract new clients and retain them and the risk of loss of large customers; continued compliance with evolving laws; customer data and cybersecurity risk; and Majesco’s ability to raise capital to fund future growth.

These forward-looking statements should not be relied upon as predictions of future events and Majesco cannot assure you that the events or circumstances discussed or reflected in these statements will be achieved or will occur. If such forward-looking statements prove to be inaccurate, the inaccuracy may be material. You should not regard these statements as a representation or warranty by Majesco or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Majesco disclaims any obligation to publicly update or release any revisions to these forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law.

 

Majesco Contacts:

Corporate Contact                                                                               Investor & Media Contact

Ann Massey                                                                                          SM Berger & Co

SVP-Finance                                                                                          Andrew Berger

(973) 461-5190                                                                                    (216) 464-6400

ann.massey@majesco.com                                                                andrew@smberger.com

 

Majesco and Subsidiaries

Consolidated Statements of Operations (Unaudited)

(All amounts are in thousands of U.S. Dollars except per share data and as stated otherwise)

 

  Three Months Ended

June  30,

   
  2016   2015        
Revenue…………………………………………………………………………………. $     32,554   $     23,163        
Cost of revenue……………………………………………………………………….        17,802          12,107        
Gross profit…………………………………………………………………………… $     14,752   $     11,056        
               
Operating expenses              
        Research and development expenses…………………………………… $       4,528   $       3,151        
        Selling, general and administrative expenses…………………………. 10,659            7,586        
        Restructuring expenses………………………………………………………                 –               228        
Total operating expenses…………………………………………………………. $     15,187   $     10,965        
Income/(Loss) from operations…………………………………………………. $      (435)   $            91        
        Interest income………………………………………………………………… 8                 10        
        Interest expense……………………………………………………………….. (208)              (55)        
        Other income (expenses),net………………………………………………              (2)               136        
Income/(Loss) before provision for income taxes………………………… $       (637)   $          182        
    (Benefit)/Provision for income taxes……………………………………….            (87)               100        
Net Income/(Loss)…………………………………………………………………… $       (550)   $            82        
               
               
Earnings (Loss) per share:              
        Basic………………………………………………………………………………. $      (0.02)   $         0.00        
        Diluted……………………………………………………………………………. $      (0.02)   $         0.00        
               
Weighted average number of common shares outstanding              
        Basic………………………………………………………………………………. 36,451,606   30,836,171        
        Diluted……………………………………………………………………………. 36,451,606   30,951,441        

 

 

 

 

 

Majesco and Subsidiaries

Consolidated Balance Sheets (Unaudited)

(All amounts are in thousands of U.S. Dollars except per share data and as stated otherwise)

 

  June 30,

2016

  March 31,

2016

ASSETS      
    CURRENT ASSETS      
        Cash and cash equivalents…………………………………………………………….. $              14,183   $               5,520
        Short term investments………………………………………………………………….                      673                       634
        Restricted cash…………………………………………………………………………….. 256                       257
        Accounts receivables, net……………………………………………………………… 16,333                  22,503
        Unbilled accounts receivable………………………………………………………….                   7,528                    7,379
        Deferred income tax assets……………………………………………………………. 2,138                    1,847
        Prepaid expenses and other current assets ……………………………………….                   5,751                    6,195
    Total current assets…………………………………………………………………………                 46,862                  44,335
        Property and equipment, net…………………………………………………………..                   3,774                    3,462
        Intangible assets, net……………………………………………………………………..                   9,975                  10,483
        Deferred income tax assets…………………………………………………………….                   3,633                    3,586
        Other assets………………………………………………………………………………… 536   480
        Goodwill……………………………………………………………………………………..                 32,279                  32,275
    Total Assets……………………………………………………………………………………. $              97,059   $             94,621
       
LIABILITIES AND STOCKHOLDERS’ EQUITY      
    CURRENT LIABILITIES      
        Capital lease obligation…………………………………………………………………. $                  212   $                  159
        Loan from bank…………………………………………………………………………… 7,700   6,951
        Accounts payable………………………………………………………………………… 4,484                    3,659
        Accrued expenses and other liabilities      
            Related Parties………………………………………………………………………….                          —
            Others…………………………………………………………………………………….. 14,490                  16,701
        Deferred revenue………………………………………………………………………….                 11,474                  11,200
    Total current liabilities…………………………………………………………………….                 38,360                  38,670
        Capital lease obligation, net of current portion………………………………….. 36                       120
        Term loan – bank…………………………………………………………………………. 10,000                    6,800
        Other………………………………………………………………………………………….                   3,629                    3,474
    Total Liabilities………………………………………………………………………………. $              52,025   $             49,064
       
Commitments and contingencies      
       
STOCKHOLDERS’ EQUITY      
Preferred stock, par value $0.002 per share – 50,000,000 shares authorized as of June 30, 2016 and 50,000,000 as of March 31, 2016, NIL shares issued and outstanding as of June 30, 2016 and March 31, 2016…………………………………………………………………………………………..  
Common stock, par value $0.002 per share – 450,000,000 shares authorized as of June 30, 2016 and 450,000,000 as of March 31, 2016, 36,474,004 shares issued and outstanding as of June 30, 2016 and 36,451,357 as of March 31, 2016………………………………………………….. $                     73   $                    73
    Additional paid-in capital 69,827                  69,505
    Accumulated deficit…………………………………………………………………………. (24,911)               (24,360)
    Accumulated other comprehensive income ………………………………………….                        45                       339
Total equity of common stockholder……………………………………………………..                 45,034                  45,557
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY……………………… $              97,059   $             94,621
       

 

 

 

Majesco and Subsidiaries

Reconciliation of U.S. GAAP Net Income to EBITDA and Adjusted EBITDA

(Unaudited)

 

  Three Months Ended

June 30,

     
(U.S. dollars; in thousands): 2016   2015        
Net Income (Loss) ………………………………….. $          (550)   $              82        
               
Add:              
Provision (benefit) for income taxes ………….. (87)   100        
Depreciation and amortization …………………… 1,112   883        
Interest expense ……………………………………… 208   55        
               
Less:              
Interest income ……………………………………….. 8   10        
Other income (expenses), net ……………………. (2)   136        
EBITDA ………………………………………………… $            677   $            974        
               
Add:              
Restructuring costs   228        
Stock based compensation………………………… 322          
Adjusted EBITDA……………………………………. $            999   $         1,202        
               
Revenue ………………………………………………… 32,554   23,163        
Adjusted EBITDA as % of Revenue……………. 3.1%   5.2%        

 

Majesco and Subsidiaries

Reconciliation of Selected U.S. GAAP Measures to Non-U.S. GAAP Measures

(Unaudited)

 

  Three Months Ended

March 31,

   
(U.S. dollars; in thousands): 2016   2015        
Net Income (Loss) ………………………………….. $          (550)   $               82        
               
Restructuring Costs(1) ……………………………….   228        
Stock based compensation………………………… $             322   $                 –        
Adjusted Net Income (Loss)……………………… $          (228)   $             310        
               
Adjusted Earnings (Loss) per Common Share:              
   Basic…………………………………………………… $         (0.01)   $0.01        
   Diluted………………………………………………… $         (0.01)   $            0.01        

 

(1)Costs related to the merger with Cover-All Technologies and the listing of the Majesco common stock on the NYSE-MKT in connection with the merger.

 

 

Media Contact

Majesco
Tara Dilzer Alexander
Director, Marketing Communications and Creative Services
Phone: +1-718-916-6873
Email: tara.dilzeralexander@majesco.com

Subscribe to our Research and Communications