Business Wire India
Rimini Street, Inc. (Nasdaq: RMNI), a global provider of support services for enterprise software products, and the leading third-party support provider for Oracle and SAP software products, announced results for its fiscal third quarter ended September 30, 2017.
“The third quarter was another record quarter for revenue and the 47th consecutive quarter of revenue growth for Rimini Street,” stated Seth A. Ravin, Rimini Street CEO. “We continued to see growing demand for our enterprise software support products and services and had strong deal flow, including many significant global wins with name-brand clients, across diverse industries. We also closed more than six thousand support cases across 48 countries for our clients, and achieved our aggressive client satisfaction goals. In summary, we believe the third quarter was a solid, all-around execution.”
“Rimini Street achieved significant growth, financial and operating milestones in the third quarter,” stated Tom Sabol, Rimini Street CFO. “In addition to solid business execution, the combination of the $50 million equity raise from the recently completed merger with GPIAC, amendment of the Company’s financing agreement and transition to a public company structure provides Rimini Street with additional growth capital and financial flexibility to expand service offerings and capabilities in new markets and regions, strengthens our balance sheet, and provides the potential to accelerate our growth by facilitating additional sales opportunities.”
Third Quarter 2017 Financial Highlights
Reconciliations of the non-GAAP financial measures provided in this press release to their most directly comparable GAAP financial measures are provided in the financial tables included at the end of this press release. An explanation of these measures and how they are calculated is also included under the heading “About Non-GAAP Financial Measures and Certain Key Metrics.”
Third Quarter 2017 Company Highlights
GP Investments Acquisition Corp. Transaction
On October 10, 2017, Rimini Street, Inc. completed its merger with GPIAC. The combined company, which retained the Rimini Street, Inc. name, raised gross transaction proceeds of approximately $50 million and began trading on Nasdaq under the symbol “RMNI” on October 11, 2017.
2017 Revenue Guidance
The Company is providing full year 2017 revenue guidance whereby we currently expect net revenue to be in the range of $204 million to $210 million.
Webcast and Conference Call Information
Rimini Street will host a conference call and webcast to discuss the third quarter 2017 results at 5:00 p.m. Eastern / 2:00 p.m. Pacific time on November 9, 2017. A live webcast of the event will be available on Rimini Street’s Investor Relations site https://investors.riministreet.com or https://edge.media-server.com/m6/p/pnz9u3jn. Dial in participants can access the conference call by dialing (855) 213-3942 in the U.S. and Canada and enter the code 7698688. A recording of the webcast will be available on the Investor Relations section of the Company’s website two hours after the live call ends and will remain available on the site for two months.
Company’s Use of Non-GAAP Financial Measures
This press release contains certain “non-GAAP financial measures.” Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with disclosures required by generally accepted accounting principles, or GAAP. Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. A reconciliation of GAAP to non-GAAP results is included in the financial tables included in this press release. Presented under the heading “About Non-GAAP Financial Measures and Certain Key Metrics” is a description and explanation of our non-GAAP financial measures.
About Rimini Street, Inc.
Rimini Street is a global provider of enterprise software products and services, and the leading third-party support provider for Oracle and SAP software products, based on both the number of active clients supported and recognition by industry analyst firms. The company has redefined enterprise software support services since 2005 with an innovative, award-winning program that enables licensees of IBM, Microsoft, Oracle, SAP and other enterprise software vendors to save up to 90 percent on total support costs. Clients can remain on their current software release without any required upgrades for a minimum of 15 years. Over 1,450 global Fortune 500, midmarket, public sector and other organizations from a broad range of industries currently rely on Rimini Street as their trusted, third-party support provider. To learn more, please visit https://www.riministreet.com follow @riministreet on Twitter and find Rimini Street on Facebook and LinkedIn. (IR-RMNI)
Forward-Looking Statements
Certain statements included in this communication are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “may,” “should,” “would,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “seem,” “seek,” “continue,” “future,” “will,” “expect,” “outlook” or other similar words, phrases or expressions. These forward-looking statements include, but are not limited to, statements regarding our 2017 revenue guidance, industry, future events, future opportunities and growth initiatives, estimates of Rimini Street’s total addressable market, and projections of customer savings. These statements are based on various assumptions and on the current expectations of management and are not predictions of actual performance, nor are these statements of historical facts. These statements are subject to a number of risks and uncertainties regarding Rimini Street’s business, and actual results may differ materially. These risks and uncertainties include, but are not limited to, changes in the business environment in which Rimini Street operates, including inflation and interest rates, and general financial, economic, regulatory and political conditions affecting the industry in which Rimini Street operates; adverse litigation developments; inability to refinance existing debt on favorable terms; changes in taxes, governmental laws, and regulations; competitive product and pricing activity; difficulties of managing growth profitably; the loss of one or more members of Rimini Street’s management team; failure to realize the anticipated benefits of the merger transaction with GPIAC, including difficulty in integrating the businesses of GPIAC and Rimini Street; uncertainty as to the long-term value of RMNI common stock; the inability to realize the expected amount and timing of cost savings and operating synergies; those discussed in Rimini Street’s Current Report on Form 8-K/A filed on November 9, 2017 and other documents Rimini Street on file with the Securities and Exchange Commission. There may be additional risks that Rimini Street presently knows or that Rimini Street currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements provide Rimini Street’s expectations, plans or forecasts of future events and views as of the date of this communication. Rimini Street anticipates that subsequent events and developments will cause Rimini Street’s assessments to change. However, while Rimini Street may elect to update these forward-looking statements at some point in the future, Rimini Street specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Rimini Street's assessments as of any date subsequent to the date of this communication.
© 2017 Rimini Street, Inc. All rights reserved. “Rimini Street” is a registered trademark of Rimini Street, Inc. in the United States and other countries, and Rimini Street, the Rimini Street logo, and combinations thereof, and other marks marked by TM are trademarks of Rimini Street, Inc. All other trademarks remain the property of their respective owners, and unless otherwise specified, Rimini Street claims no affiliation, endorsement, or association with any such trademark holder or other companies referenced herein.
| Rimini Street, Inc. and Subsidiaries | |||||||||
| Unaudited Condensed Consolidated Balance Sheets | |||||||||
| September 30, 2017 and December 31, 2016 | |||||||||
| (In thousands, except per share amounts) | |||||||||
| ASSETS |
2017 |
2016 |
|||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 6,862 | $ | 9,385 | |||||
| Restricted cash | 8,727 | 18,852 | |||||||
| Accounts receivable, net of allowance of $55 and $36, respectively | 33,711 | 55,324 | |||||||
| Prepaid expenses and other | 7,650 | 5,748 | |||||||
| Total current assets | 56,950 | 89,309 | |||||||
| Long-term assets: | |||||||||
| Property and equipment, net | 4,244 | 4,559 | |||||||
| Deferred debt issuance costs, net | 3,313 | 3,950 | |||||||
| Deferred offering costs | 3,957 | - | |||||||
| Deposits and other | 972 | 965 | |||||||
| Deferred income taxes, net | 640 | 595 | |||||||
|
Total assets |
$ | 70,076 | $ | 99,378 | |||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||||
| Current liabilities: | |||||||||
| Current maturities of long-term debt | $ | 11,750 | $ | 24,750 | |||||
| Accounts payable | 9,256 | 8,839 | |||||||
| Accrued expenses | 39,253 | 36,650 | |||||||
| Deferred insurance settlement | 13,230 | - | |||||||
| Liability for embedded derivatives | 9,800 | 5,400 | |||||||
| Deferred revenue | 125,882 | 137,293 | |||||||
|
Total current liabilities |
209,171 | 212,932 | |||||||
| Long-term liabilities: | |||||||||
| Long-term debt, net of current maturities | 68,406 | 63,314 | |||||||
| Deferred revenue | 27,082 | 27,538 | |||||||
| Liability for redeemable warrants | 21,336 | 7,269 | |||||||
| Other long-term liabilities | 4,129 | 1,835 | |||||||
|
Total liabilities |
330,124 | 312,888 | |||||||
| Stockholders’ deficit: | |||||||||
|
Convertible preferred stock, $0.001 par value per share. Authorized, issued and outstanding 100,486 shares; aggregate liquidation preference of $20,551 |
19,542 | 19,542 | |||||||
|
Convertible Class A common stock, $0.001 par value. Authorized 500,000 shares; 529 and 340 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively |
1 | - | |||||||
|
Convertible Class B common stock, $0.001 par value. Authorized 192,000 shares; 102,926 and 101,083 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively |
103 | 101 | |||||||
|
Common stock; $0.001 par value. Authorized 500,000 shares; no shares issued and outstanding |
- | - | |||||||
| Additional paid-in capital | 21,676 | 19,003 | |||||||
| Accumulated other comprehensive loss | (886 | ) | (1,046 | ) | |||||
| Accumulated deficit | (300,484 | ) | (251,110 | ) | |||||
|
Total stockholders’ deficit |
(260,048 | ) | (213,510 | ) | |||||
|
Total liabilities and stockholders’ deficit |
$ | 70,076 | $ | 99,378 | |||||
|
Rimini Street, Inc. and Subsidiaries |
|||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30: | September 30: | ||||||||||||||||
|
2017 |
2016 |
2017 |
2016 |
||||||||||||||
| Net revenue | $ | 53,611 | $ | 40,723 | $ | 154,729 | $ | 113,438 | |||||||||
| Cost of revenue | 20,109 | 17,231 | 58,002 | 48,074 | |||||||||||||
| Gross profit | 33,502 | 23,492 | 96,727 |
65,364 |
|||||||||||||
| Operating expenses: | |||||||||||||||||
| Sales and marketing | 17,188 | 18,725 | 47,685 | 53,573 | |||||||||||||
| General and administrative | 8,580 | 8,192 | 26,784 | 22,082 | |||||||||||||
| Write-off of deferred financing costs | - | - | - | 2,000 | |||||||||||||
| Litigation costs and related insurance recoveries: | |||||||||||||||||
| Professional fees and other defense costs of litigation | 3,327 | 5,152 | 11,724 | 15,865 | |||||||||||||
| Insurance recoveries and reduction in deferred settlement liability | (2,962 | ) | (4,988 | ) | (7,113 | ) | (6,868 | ) | |||||||||
| Pre-judgment interest | - | 917 | - | 2,706 | |||||||||||||
| Total operating expenses | 26,133 | 27,998 | 79,080 | 89,358 | |||||||||||||
| Operating income (loss) | 7,369 | (4,506 | ) | 17,647 | (23,994 | ) | |||||||||||
| Non-operating expenses: | |||||||||||||||||
|
Interest expense |
(9,152 | ) | (4,317 | ) | (33,629 | ) | (5,020 | ) | |||||||||
| Other debt financing expenses | (2,563 | ) | (3,973 | ) | (14,704 | ) | (4,278 | ) | |||||||||
| Loss on embedded derivatives and redeemable warrants, net | (4,417 | ) | (2,145 | ) | (18,467 | ) | (2,145 | ) | |||||||||
| Other, net | 108 | (144 | ) | 422 | (665 | ) | |||||||||||
| Loss before income taxes | (8,655 | ) | (15,085 | ) | (48,731 | ) | (36,102 | ) | |||||||||
| Income tax expense | (385 | ) | (306 | ) | (643 | ) | (895 | ) | |||||||||
| Net loss | $ | (9,040 | ) | $ | (15,391 | ) | $ | (49,374 | ) | $ | (36,997 | ) | |||||
| Net loss per common share: | |||||||||||||||||
| Basic and diluted | $ | (0.09 | ) | $ | (0.15 | ) | $ | (0.48 | ) | $ | (0.37 | ) | |||||
| Weighted average number of common shares outstanding: | |||||||||||||||||
| Basic and diluted | 103,280 | 101,339 | 102,535 | 101,326 | |||||||||||||
