RMG Networks Releases First Financials

August 14, 2013 by Dave Haynes

RMG Networks move on to the stock market means the company now has to regularly let everyone else know how it is doing.

The company released its first set of quarterly financials today, and it looks like Q2 was good-ish. Ad sales and software sales (the Symon stuff) were both up, with pro forma combined total and core revenues up 14% and 22%, respectively, from Q2 2012.

However, the company had an operating loss it attributes to a bunch of one-time variables associated with taking the company public, ie legal, etc etc.

I am not all that good at reading this stuff at the best of times, and it is a little convoluted right now because there are numbers both for pre and post listing. Here’s the highlighted section:

Reported Results 
Total revenue for the successor company from April 20, 2013 through June 30, 2013 was $15.0 million; for RMG Networks from April 1, 2013 through April 19, 2013 was $1.8 million; and for the Predecessor Company from April 1, 2013 through April 19, 2013 was $1.4 million. This compares to Predecessor Company’s total revenue from May 1, 2013 through July 31, 2012 of $9.5 million.

Operating loss for the successor company from April 20, 2013 through June 30, 2013, was $2.9 million; for RMG Networks from April 1, 2013 through April 19, 2013 was $2.5 million; and for the Predecessor Company from April 1, 2013 through April 19, 2013 was $3.1 million. This compares to Predecessor Company’s operating income from May 1, 2013 through July 31, 2012 of $1.0 million.

2013 and 2014 Outlook

RMG Networks anticipates 2013 revenue to be in the range of $76 million to $78 million compared to $68.2 million in 2012, and Adjusted EBITDA in the range of $5 million to $6 million compared to $7.5 million in 2012; the decrease in 2013 Adjusted EBITDA reflects, as the company has previously disclosed, integration costs and the company’s investment in growth initiatives. For 2014, RMG Networks is anticipating revenue in the range of $105 million to $110 million and Adjusted EBITDA in the range of $16 million to $18 million.

Garry McGuire, CEO of RMG Networks, says in the financials news release:

“During the quarter, RMG acquired and integrated a significant acquisition, creating a market leader that is taking advantage of the explosive growth in digital video and the shift from traditional media to digital media. We also completed a $40M follow-on offering. Amid this transformation, RMG recorded, on a pro forma combined basis, strong second quarter revenue growth, demonstrating the operating performance inherent in our business units even before most of our growth initiatives have begun to hit full effectiveness.”

“RMG’s second half year priorities focus on capturing cross-selling opportunities between our two divisions, adding new ad inventory and inventory partners, and expanding our geographic and vertical market presences,” added McGuire. “With our existing global footprint, our exceptional reputation with large-enterprise customers, our comprehensive and customizable solutions offerings, and our strong track record of success, our mission is to be the leader in the marketplace through organic growth, to be the consolidator of a fragmented industry, and to deliver increasing profitability.”