ShotSpotter, Inc. (NASDAQ: SSTI), a leader in
precision policing technology solutions that enable law enforcement
to more effectively respond to, investigate and deter crime, today
reported financial results for the first quarter ended March 31,
2021.
First Quarter 2021 Financial and Operational
Highlights
- Revenues
increased 44% to $15.0 million from $10.5 million for the first
quarter of 2020.
- Gross profit
increased 42% to $8.7 million (58% of revenues) from $6.1 million
(58% of revenues) for the first quarter of 2020.
- Net income
increased to $79,000 from $13,000 for the first quarter of
2020.
- Adjusted net
income1 increased to $244,000 from $13,000 for the first quarter of
2020.
- Adjusted EBITDA1
increased to $3.3 million from $2.2 million for the first quarter
of 2020.
- Went "live" with
ShotSpotter Respond in six new cities and with five expansions in
current customer cities.
- Maintained a
strong balance sheet with $10.9 million in cash and cash
equivalents and had $20.0 million available on the Company’s line
of credit at the end of the quarter.
- Repurchased over
56,000 shares for a total of approximately $2.2 million.
- Full year 2021
revenue guidance increased to $60 million to $61 million
(previously $58 million to $60 million), representing growth of
over 30% compared to full year 2020.
1See the section below titled “Non-GAAP
Financial Measures” for more information about Adjusted net income
and Adjusted EBITDA, and their reconciliation to GAAP net
income.
Management Commentary
“We grew revenues by 44% to a record $15 million
while maintaining strong margins and generating profitable results,
including a 22% Adjusted EBITDA margin (Adjusted EBITDA divided by
revenues) for the period,” said ShotSpotter CEO Ralph Clark.
“During the quarter we went live with ShotSpotter Respond in six
new cities, expanded with five existing customers and had a robust
number of new city and expansion projects staffed and to be
deployed in Q2 and early Q3 of this year. Additionally, a number of
ShotSpotter Connect deals have already been booked and are expected
to be taken live in Q2 and early Q3.
“We have made solid progress in expanding and
enhancing our product suite to offer an end-to-end precision
policing platform that provides more efficient and effective ways
to respond to, investigate, and prevent crime beyond gunshot
detection. Today, we announced the availability of the fully
functional and demonstrable version of ShotSpotter Investigate, our
purpose-built case management solution. This is ahead of our
original schedule and will enable us to immediately build a backlog
of early adopter prospects 60+ days sooner than we had anticipated.
ShotSpotter Investigate, ShotSpotter Connect and our leading
acoustic gunshot detection solution ShotSpotter Respond represent a
triumvirate of precision policing tools that enable more efficient,
effective, and equitable application of public safety being
demanded by police departments and the communities they serve.
“We are encouraged with the injection of federal
stimulus dollars into municipal governments and the return of
earmarks. The positive funding environment combined with the
measurable increase in violent crime and calls for policing reform
are creating what we believe are strong tailwinds for the growth of
our business and the ability to effect positive social change
through adoption of 21st century policing strategies that leverage
data, technology, and digital precision.”
First Quarter 2021 Financial Results
Revenues for the first quarter of 2021 increased
44% to $15.0 million from $10.5 million for the same period in
2020. The increase in revenues reflects a significant
year-over-year increase in ShotSpotter Respond coverage areas and
renewals in the first quarter of 2021 that were delayed from the
prior quarter, as well as contribution from LEEDS, which was
acquired in the fourth quarter of 2020.
Gross profit for the first quarter of 2021
increased 42% to $8.7 million (58% of revenues) from $6.1 million
(58% of revenues) for the same period in 2020.
Total operating expenses for the first quarter
of 2021 increased 39% to $8.5 million from $6.1 million for the
same period in 2020. The increase in operating expenses was
primarily due to increased insurance costs, legal fees,
personnel-related costs as well as acquisition-related expenses
associated with our acquisition of LEEDS.
Net income totaled $79,000, or $0.01 per basic
and diluted share based on 11.6 million basic and 11.9 million
diluted weighted average shares outstanding, a 508% increase
compared to $13,000, or $0.00 per basic and diluted share based on
11.3 million basic and 11.7 million diluted weighted average shares
outstanding for the same period in 2020.
Adjusted net income for the first quarter of
2021 increased to $244,000 from $13,000 in the same period last
year.
Adjusted EBITDA for the first quarter of 2021
increased 53% to $3.3 million from $2.2 million in the same period
last year.
Financial Outlook
The company increased its full year 2021 revenue
guidance to $60 million to $61 million (previously $58 million to
$60 million). The company expects to remain GAAP profitable for the
full year of 2021.
The company’s financial outlook statements are
based on current expectations. The preceding statements are
forward-looking, and actual results could differ materially
depending on market conditions and the factors set forth under
“Safe Harbor Statement” below.
Conference Call
ShotSpotter will hold a conference call today
(May 11, 2021) at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time)
to discuss these results and provide an update on business
conditions.
ShotSpotter management will host the presentation, followed by a
question and answer period.
U.S. dial-in: 1-855-327-6838International dial-in:
1-604-235-2082Conference ID: 10014323
The conference call will be broadcast
simultaneously and available for replay via the investor section of
the company’s website at www.shotspotter.com.
Please call the conference telephone number 5-10
minutes prior to the start time. An operator will register your
name and organization. If you have any difficulty connecting with
the conference call, please contact ShotSpotter’s investor
relations team at 1-949-574-3860.
A replay of the call will be available after
7:30 p.m. Eastern Time on the same day through June 11, 2021, 11:59
p.m. Eastern Time.
U.S. replay dial-in: 1-844-512-2921International replay dial-in:
1-412-317-6671Replay ID: 10014323
Non-GAAP Financial Measures
Adjusted net income:
Adjusted net income, a non-GAAP financial measure, represents the
company’s net income or loss before acquisition related
expenses.
Adjusted EBITDA: Adjusted
EBITDA, a non-GAAP financial measure, represents the company’s net
income or loss before interest (income) expense, income taxes,
depreciation, amortization and impairment, stock-based compensation
expense and acquisition related expenses. Adjusted EBITDA is a
measure used by management internally to understand and evaluate
the company’s core operating performance and trends across
accounting periods and in connection with developing future
operating plans, making strategic decisions regarding the
allocation of capital and considering initiatives focused on
cultivating new markets for our solutions. In particular, the
exclusion of these expenses in calculating adjusted EBITDA
facilitates comparisons of the company’s operating performance on a
period-to-period basis.
ShotSpotter believes adjusted net income
and adjusted EBITDA also provide useful information to investors
and others in understanding and evaluating our operating results in
the same manner as our management and board of directors. For
example, ShotSpotter adjusts EBITDA for stock-based compensation
expense and acquisition related expenses because such expenses
often vary for reasons that are generally unrelated to financial
and operational performance in any particular period. Stock-based
compensation is utilized by ShotSpotter to attract and retain
employees with a goal of long-term retention and the alignment of
employee interests with those of the company and its stockholders,
rather than to address operational performance for any particular
period based financial performance measures, in particular net
income or loss, and our other GAAP financial results.
The following table presents a reconciliation of
adjusted net income to GAAP net income, the most directly
comparable GAAP measure, for each of the periods indicated (in
thousands):
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
(unaudited) |
|
GAAP net income |
|
$ |
79 |
|
|
$ |
13 |
|
Less: |
|
|
|
|
|
|
Acquisition related expenses |
|
|
165 |
|
|
|
— |
|
Adjusted net income |
|
$ |
244 |
|
|
$ |
13 |
|
Adjusted net income per share,
basic |
|
$ |
0.02 |
|
|
$ |
0.00 |
|
Adjusted net income per share,
diluted |
|
$ |
0.02 |
|
|
$ |
0.00 |
|
Weighted average shares used in
computing adjusted net income per share, basic |
|
|
11,584,605 |
|
|
|
11,337,491 |
|
Weighted average shares used in
computing adjusted net income per share, diluted |
|
|
11,898,362 |
|
|
|
11,715,426 |
|
The following table presents a reconciliation of
adjusted EBITDA to net income, the most directly comparable GAAP
measure, for each of the periods indicated (in thousands):
|
|
Three Months Ended March 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
(unaudited) |
|
GAAP net income |
|
$ |
79 |
|
|
$ |
13 |
|
Less: |
|
|
|
|
|
|
Interest income |
|
|
(11 |
) |
|
|
(93 |
) |
Income taxes |
|
|
49 |
|
|
|
(1 |
) |
Depreciation, amortization and impairment |
|
|
1,677 |
|
|
|
1,367 |
|
Stock-based compensation expense |
|
|
1,375 |
|
|
|
887 |
|
Acquisition related expenses |
|
|
165 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
3,334 |
|
|
$ |
2,173 |
|
|
|
|
|
|
|
|
|
|
Safe Harbor Statement
This press release contains "forward-looking
statements" within the meaning of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995, including but
not limited to statements regarding revenue and GAAP profitability
guidance for full year 2021, future deployments of ShotSpotter
Respond and ShotSpotter Connect, the Company’s expectations for
demand for ShotSpotter Investigate and the funding environment for
the company’s products. Words such as "expect," "anticipate,"
"should," "believe," "target," "project," "goals," "estimate,"
"potential," "predict," "may," "will," "could," "intend,"
variations of these terms or the negative of these terms and
similar expressions are intended to identify these forward-looking
statements. Forward-looking statements are subject to a number of
risks and uncertainties, many of which involve factors or
circumstances that are beyond the company’s control. The company’s
actual results could differ materially from those stated or implied
in forward-looking statements due to a number of factors, including
but not limited to: the company’s ability to successfully negotiate
and execute contracts with new and existing customers in a timely
manner, if at all; the company’s ability to address the business
and other impacts and uncertainties associated with the COVID-19
pandemic; the company’s ability to maintain and increase sales,
including sales of the company’s newer product lines; the
availability of funding for the company’s customers to purchase the
company’s solutions; the complexity, expense and time associated
with contracting with government entities; the company’s ability to
maintain and expand coverage of existing public safety customer
accounts and further penetrate the public safety market; the
company’s ability to sell its solutions into international and
other new markets; the lengthy sales cycle for the company’s
solutions; changes in federal funding available to support local
law enforcement; the company’s ability to deploy and deliver its
solutions; and the company’s ability to maintain and enhance its
brand, as well as other risk factors included in the company’s most
recent annual report on Form 10-K and quarterly report on Form 10-Q
and other SEC filings. These forward-looking statements are made as
of the date of this press release and are based on current
expectations, estimates, forecasts and projections as well as the
beliefs and assumptions of management. Except as required by law,
the company undertakes no duty or obligation to update any
forward-looking statements contained in this release as a result of
new information, future events or changes in its expectations.
About ShotSpotter, Inc.
ShotSpotter (NASDAQ: SSTI) is a leader in
precision policing technology solutions that enable law enforcement
to more effectively respond to, investigate and deter crime. The
company’s products are trusted by more than 100 U.S. cities to help
make their communities safer. The platform includes its flagship
product, ShotSpotter Respond™, the leading gunshot detection,
location, and forensic system, ShotSpotter Connect™, patrol
management software to dynamically direct patrol resources to areas
of greatest risk and more effectively deter crime, and ShotSpotter
Investigate™, an investigative case management solution that help
detectives connect the dots and share information more effectively
to improve case clearance rates. ShotSpotter also serves the
corporate and college security markets and has been designated a
Great Place to Work® Company.
Company Contact:
Alan Stewart, CFOShotSpotter, Inc. +1 (510) 794-3100
astewart@shotspotter.com
Investor Relations Contacts:
Matt GloverGateway Investor Relations+1 (949)
574-3860SSTI@gatewayir.com
JoAnn HorneMarket Street Partners+1 (415)
445-3240jhorne@marketstreetpartners.com
ShotSpotter,
Inc.Condensed Consolidated Statements of
Operations(In thousands, except share and per
share data)(Unaudited)
|
|
|
|
|
|
Three Months EndedMarch 31, |
|
|
|
2021 |
|
|
2020 |
|
Revenues |
|
$ |
15,013 |
|
|
$ |
10,458 |
|
Costs |
|
|
|
|
|
|
Cost of revenues |
|
|
6,300 |
|
|
|
4,342 |
|
Impairment of property and equipment |
|
|
25 |
|
|
|
— |
|
Total costs |
|
|
6,325 |
|
|
|
4,342 |
|
Gross profit |
|
|
8,688 |
|
|
|
6,116 |
|
Operating expenses |
|
|
|
|
|
|
Sales and marketing |
|
|
3,935 |
|
|
|
2,516 |
|
Research and development |
|
|
1,713 |
|
|
|
1,352 |
|
General and administrative |
|
|
2,871 |
|
|
|
2,271 |
|
Total operating expenses |
|
|
8,519 |
|
|
|
6,139 |
|
Operating income (loss) |
|
|
169 |
|
|
|
(23 |
) |
Other income (expense), net |
|
|
|
|
|
|
Interest income, net |
|
|
11 |
|
|
|
93 |
|
Other expense, net |
|
|
(52 |
) |
|
|
(58 |
) |
Total other income (expense), net |
|
|
(41 |
) |
|
|
35 |
|
Income before income taxes |
|
|
128 |
|
|
|
12 |
|
Provision (benefit) for income taxes |
|
|
49 |
|
|
|
(1 |
) |
Net income |
|
$ |
79 |
|
|
$ |
13 |
|
Net income per share, basic |
|
$ |
0.01 |
|
|
$ |
0.00 |
|
Net income per share,
diluted |
|
$ |
0.01 |
|
|
$ |
0.00 |
|
Weighted average shares used in
computing net income per share, basic |
|
|
11,584,605 |
|
|
|
11,337,491 |
|
Weighted average shares used in
computing net income per share, diluted |
|
|
11,898,362 |
|
|
|
11,715,426 |
|
ShotSpotter,
Inc.Condensed Consolidated Balance
Sheets(In thousands)
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
|
(Unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
10,940 |
|
|
$ |
16,043 |
|
Accounts receivable and contract asset |
|
|
16,806 |
|
|
|
12,921 |
|
Prepaid expenses and other current assets |
|
|
1,954 |
|
|
|
2,172 |
|
Total current assets |
|
|
29,700 |
|
|
|
31,136 |
|
Property and equipment, net |
|
|
15,221 |
|
|
|
15,346 |
|
Operating lease right-of-use
assets |
|
|
753 |
|
|
|
882 |
|
Goodwill |
|
|
2,816 |
|
|
|
2,811 |
|
Intangible assets, net |
|
|
14,294 |
|
|
|
14,540 |
|
Other assets |
|
|
1,659 |
|
|
|
1,605 |
|
Total assets |
|
$ |
64,443 |
|
|
$ |
66,320 |
|
Liabilities and Stockholders'
Equity |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
1,404 |
|
|
$ |
1,192 |
|
Deferred revenue, short-term |
|
|
24,672 |
|
|
|
24,174 |
|
Accrued expenses and other current liabilities |
|
|
3,686 |
|
|
|
5,613 |
|
Total current liabilities |
|
|
29,762 |
|
|
|
30,979 |
|
Deferred revenue, long-term |
|
|
336 |
|
|
|
405 |
|
Other liabilities |
|
|
574 |
|
|
|
631 |
|
Total liabilities |
|
|
30,672 |
|
|
|
32,015 |
|
Stockholders' equity |
|
|
|
|
|
|
Common stock |
|
|
58 |
|
|
|
58 |
|
Additional paid-in capital |
|
|
128,175 |
|
|
|
128,771 |
|
Accumulated deficit |
|
|
(94,275 |
) |
|
|
(94,354 |
) |
Accumulated other comprehensive loss |
|
|
(187 |
) |
|
|
(170 |
) |
Total stockholders' equity |
|
|
33,771 |
|
|
|
34,305 |
|
Total liabilities and stockholders' equity |
|
$ |
64,443 |
|
|
$ |
66,320 |
|
|
|
|
|
|
|
|
|
|
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