AMERI Holdings, Inc. (NASDAQ: AMRH), a specialized SAP® cloud, digital and enterprise services company, today reported its unaudited financial results for the three months and nine months ended September 30, 2018.
Third Quarter 2018 vs. Third Quarter 2017
- Revenue of $10.6 million compared to $12.5 million;
- Gross profit of $2.3 million compared to $2.6 million;
- Gross margin of 22.2% compared to 20.5%;
- GAAP net income (loss) of $3.9 million compared to $(4.6) million. GAAP net income includes a one-time non-cash gain of $7.3 million as a result of the Company’s change in estimate of its consideration payable related to a prior acquisition;
- Diluted earnings (loss) per share of $0.16 compared to $(0.31). Earnings per share for the third quarter of 2018 includes the issuance of 2.6 million shares of common stock related to the Company’s previously disclosed private placement; and
- Adjusted EBITDA of $5,403 compared to Adjusted EBITDA loss of $(426,092).
First Nine Months of 2018 vs. First Nine Months of 2017
- Revenue of $32.7 million compared to $37.1 million;
- Gross profit of $7.1 million compared to $8.2 million;
- Gross margin of 21.6% compared to 22.1%;
- GAAP net income (loss) of $0.4 million compared to $(9.6) million. GAAP net income includes a one-time non-cash gain of $7.3 million in the third quarter of 2018;
- Diluted earnings (loss) per share of $0.02 compared to $(0.66). Earnings per share for the first nine months of 2018 includes the issuance of additional shares of common stock related to the Company’s previously disclosed private placement; and
- Adjusted EBITDA was $35,626 compared to Adjusted EBITDA loss of $(194,699).
“Our 2018 third quarter results attest to a purposeful focus on both quality of revenue and Adjusted EBITDA profitability. Continued execution of our high margin solutions sales strategy yielded a 172-basis point sequential improvement in gross margin and a second consecutive quarter of year-over-year positive Adjusted EBITDA. We are winning digital transformation projects because of our deep SAP domain expertise, broadened solutions offerings and an elevated profile within the SAP ecosystem following recent marquee wins and deployments. During the quarter we added to our client base, including our first healthcare market project and a leading golf lifestyle apparel brand. We also closed on a private placement that gives us the financial flexibility to pursue our organic growth strategy,” stated Brent Kelton, Chief Executive Officer at Ameri100.
“Ameri100 is differentiated in the market as the only SAP solutions-focused, publicly-traded IT services company. We are building a deep partner network around our unique market position that is generating new solutions sales opportunities to supplement our sales efforts and is driving an expanding deal pipeline,” continued Mr. Kelton. “With cloud computing central to SAP’s strategy, we are in the advanced stages of formalizing a partnership with a Top-3 cloud vendor that contributed a new client win for us with a Fortune 500 insurance company subsequent to the close of the quarter. Our machine learning partnership is driving both existing and prospective clients to inquire about this capability. SAP is also playing an increasing role in our business development efforts. Since the start of 2018 we have seen a substantial increase in our deal pipeline.”
Concluded, Mr. Kelton, “Looking ahead, favorable market trends support our revenue trajectory, and as we leverage our cost-efficient infrastructure and continue to shift revenue mix towards high-margin solutions sales, we expect to increase profitability. Our improving operating results, clean balance sheet, highly motivated salesforce and engaged partner base put us on a path to sustained growth.”
Updated Fiscal 2018 Financial Outlook
Based on its third quarter and nine months 2018 financial results and assuming a continued mix shift in favor of higher-margin solution sales, as well as an expected fewer number of billable days in its fourth quarter, the Company now expects revenue to be in the range of $40.0 million to $42.0 million for fiscal 2018. The Company also reaffirmed its prior guidance for adjusted EBITDA profitability for the current fiscal year.
Private Placement
During the third quarter of 2018, Ameri100 entered into securities purchase agreements with certain institutional and accredited investors for the sale of its common stock and warrants for total consideration of approximately $6,600,000. Pursuant to the private placement, the Company issued an aggregate of 3,250,000 shares of common stock to these investors at the closing of the private placement, along with pre-funded Series B warrants for the purchase of 22,758,621 shares of common stock and Series A warrants for the purchase of 22,544,139 shares of common stock. The Series A warrants have an exercise price of $0.3123 per share. As of November 14, 2018, the private placement investors have exercised the Series B warrants for the issuance of 16,661,552 shares of common stock.
About Ameri100
Ameri100 is a specialized SAP® cloud, digital and enterprise services company which provides SAP® services to customers worldwide. Headquartered in Atlanta, Georgia, Ameri100 has offices in the U.S. and Canada. The Company also has global delivery centers in India. With its bespoke engagement model, the Company delivers transformational value to its clients across industry verticals. For further information, visit www.ameri100.com.
