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TMNG Global Reports Second Quarter 2013 Financial Results



TMNG Global Reports Second Quarter 2013 Financial Results

OVERLAND PARK, Kan., Aug. 8, 2013 (GLOBE NEWSWIRE) -- TMNG Global
(Nasdaq:TMNG), a premier provider of professional services and technical
solutions to the global leaders in the communications, digital media, and
technology industries, reported financial results for its 2013 second quarter
ended June 29, 2013.

"We made continued progress executing on our strategic plan in the second
quarter, delivering year-over-year revenue growth and expanding margins, and
on a year-to-date basis our bottom line results have improved substantially
from the prior year," said Donald Klumb, CEO of TMNG Global. "Importantly, we
are further enhancing the depth of our relationships with key customers and
are continuing to innovate our technical solution offerings, which are
centered on our flagship Ascertain software platform. The early momentum in
this area is driving a larger proportion of our total revenue mix. We remain
focused on fostering innovation and evolving our business model, while driving
further operational efficiencies. In addition, our balance sheet is healthy,
with a solid cash position of $11.5 million and working capital of $17.7
million."

Financial Results for the Thirteen Weeks Ended June 29, 2013

Revenues in the second quarter of 2013 were $14.0 million, up 4.0% from $13.5
million in the second quarter of 2012 and flat with $14.0 million in the first
quarter of 2013. During the quarter, TMNG's gross margin was 38.6%, compared
with 37.4% in the second quarter of 2012 and 36.0% in the first quarter of
2013. 

Selling, general and administrative expenses were $5.9 million in the second
quarter of 2013, compared to $5.4 million in the second quarter of 2012 and
$5.2 million in the first quarter of 2013. The year-over-year increase
reflects $0.3 million of legal expenses, subject to expected insurance
reimbursement related to the arbitration with our prior CEO, and non-cash
charges related to the issuance of new restricted stock shares, partially
offset by further cost reductions.

TMNG Global reported a net loss of ($0.5) million on a GAAP basis, or ($0.06)
per diluted share for the second quarter of 2013, compared to a net loss of
($0.4) million or ($0.06) per diluted share in the second quarter of 2012, and
net loss of ($0.2) million or ($0.02) per diluted share for the first quarter
of 2013. After adjusting for the after tax impact of depreciation and
amortization expense and share-based compensation expense, non-GAAP adjusted
net loss was breakeven for the second quarter of 2013. The comparable non-GAAP
adjusted net loss was ($0.2) million, or ($0.02) per diluted share, for the
second quarter of fiscal 2012.

Financial Results for the Twenty-Six Weeks Ended June 29, 2013

For the twenty-six weeks ended June 29, 2013, revenues were $28.0 million,
compared with $27.3 million in the comparable period of fiscal year 2012. TMNG
Global's gross margin was 37.3% during the twenty-six weeks ended June 29,
2013, compared with 37.1% in the comparable period of fiscal year 2012.

Selling, general and administrative expenses were $11.0 million during the
twenty-six weeks ended June 29, 2013, compared to $11.7 million in the
comparable period of fiscal year 2012.

Net loss for the twenty-six weeks ended June 29, 2013 was ($0.6) million or
($0.09) per diluted share, compared with a net loss of ($1.6) million or
($0.22) per diluted share in the comparable period of fiscal year 2012. After
adjusting for the after tax impact of depreciation and amortization expense
and share-based compensation expense, non-GAAP adjusted net income was
approximately $0.1 million, or $0.01 per diluted share, for the twenty-six
weeks ended June 29, 2013. The comparable non-GAAP adjusted net loss for the
twenty-six weeks ended June 30, 2012 was ($1.1) million or ($0.16) per diluted
share.

In addition to reporting net loss and net loss per share on a GAAP basis, this
press release contains certain non-GAAP adjustments which are described in the
schedule entitled "Reconciliation of GAAP Net Loss to Non-GAAP Adjusted Net
Income (Loss)" that accompanies this press release. In making these non-GAAP
adjustments, the Company took into account certain non-cash expenses and
benefits, including tax effects as applicable, and the impact of certain items
that are generally not expected to be on-going in nature or that are unrelated
to the Company's core operations. Management believes non-GAAP financial
information provides a useful basis for evaluating underlying business
performance, but should not be considered in isolation and is not a substitute
for GAAP financial information. The Company believes that providing such
adjusted results allows investors and other users of the Company's financial
statements to better understand TMNG Global's comparative operating
performance for the periods presented.

TMNG Global's management uses the non-GAAP financial measure in its own
evaluation of the Company's performance, particularly when comparing
performance to the prior year's period and on a sequential basis. TMNG
Global's non-GAAP measure may differ from similar measures used by other
companies, even if similar terms are used to identify such measures. Although
TMNG Global's management believes the non-GAAP financial measure is useful in
evaluating the performance of its business, TMNG Global acknowledges that
items excluded from such measure have a material impact on the Company's net
loss and net loss per share calculated in accordance with GAAP. Therefore,
management uses non-GAAP measures in conjunction with GAAP results. Investors
and other users of our financial information should also consider the above
factors when evaluating TMNG Global's results.

Conference Call

The Company will host a conference call at 5:00 p.m. ET today to discuss 2013
second quarter results. The call may also include discussion of company
developments, forward-looking information and other material information about
business and financial matters. Investors can access the conference call via a
live webcast on the Company's website, www.tmng.com, or by dialing
877-317-6789 in the United States or 412-317-6789 from international locations
and referencing the TMNG Global call. A replay of the conference call will be
archived on the Company's website for 90 days. Additionally, a replay of the
call will be available by dialing 877-344-7529, pass code 10031684, through
August 15, 2013.

About TMNG Global

TMNG Global (Nasdaq:TMNG) is a premier provider of professional services and
technical solutions to the global leaders in the communications, digital
media, and technology industries. TMNG Global and its divisions, CSMG and
Cartesian, and a team of approximately 500 experts, provide strategy,
operations and technology consulting services and technical solutions to more
than 1,200 communications clients worldwide. The company is headquartered in
Overland Park, Kansas, with offices in Boston, London, New Jersey, and
Washington, D.C. For more information about the Company and its services,
visit www.tmng.com.

The TMNG Global logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=6089

Cautionary Statement Regarding Forward Looking Information

This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. In particular, any
statements that do not relate to historical or current facts constitute
forward-looking statements, including any statements contained herein
regarding expectations with respect to the Company's future business,
financial condition and results of operations. Forward-looking statements are
subject to known and unknown risks, uncertainties, and contingencies, many of
which are beyond the Company's control, which may cause actual results,
performance, or achievements to differ materially from those projected or
implied in such forward-looking statements. Factors that might affect actual
results, performance, or achievements include, among other things, conditions
in the telecommunications industry, overall economic and business conditions
(including the current economic slowdown), the demand for the Company's
services (including the slowing of client decisions on proposals and project
opportunities along with scope reduction of existing projects), the level of
cash and non-cash expenditures incurred by the Company, technological advances
and competitive factors in the markets in which the Company competes, and the
factors described in this press release and in The Management Network Group's
filings with the Securities and Exchange Commission, including the risks
described in its periodic reports filed with the SEC, including, but not
limited to, "Cautionary Statement Regarding Forward Looking Information" under
Part I of its Annual Report on Form 10-K for the fiscal year ended December
29, 2012 and subsequent periodic reports containing updated disclosures of
such risks. These filings are available at the SEC's web site at www.sec.gov.
Any forward-looking statements made in this release speak only as of the date
of this release. TMNG Global does not intend to update these forward-looking
statements and undertakes no duty to any person to provide any such update
under any circumstances.

                    (Please see attached financial tables)

THE MANAGEMENT NETWORK GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
                                                                    
                                                                    
                                   Thirteen Weeks Ended Twenty-six Weeks Ended
                                   June 29,   June 30,  June 29,   June 30,
                                   2013       2012      2013       2012
                                                                    
Revenues                            $ 14,037   $ 13,498  $ 28,047   $ 27,344
                                                                    
Cost of services                   8,621      8,449     17,590     17,204
                                                                    
Gross profit                       5,416      5,049     10,457     10,140
                                                                    
Selling, general and
administrative expenses (includes
non-cash share-based compensation
expense of $234 and $3 for the
thirteen weeks ended June 29, 2013 5,850      5,432     11,029     11,681
and June 30, 2012, respectively
and $297 and $6 for the twenty-six
weeks ended June 29, 2013 and June
30, 2012, respectively)
Loss from operations               (434)      (383)     (572)      (1,541)
Other income                       1          5         2          7
Loss before income taxes           (433)      (378)     (570)      (1,534)
Income tax provision               (23)       (30)      (39)       (60)
Net loss                            $ (456)    $ (408)   $ (609)    $ (1,594)
                                                                    
Net loss per common share:                                          
Basic and diluted                   $ (0.06)   $ (0.06)  $ (0.09)   $ (0.22)
                                                                    
Weighted average shares used in
calculation of net loss per basic  7,126      7,101     7,122      7,097
and diluted common share

 
THE MANAGEMENT NETWORK GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
                                                         
                                                         
                                              June 29,  December 29,
                                              2013      2012
ASSETS                                                   
CURRENT ASSETS:                                          
Cash and cash equivalents                      $ 11,525  $ 12,177
Accounts receivable, net                      12,101    12,762
Prepaid and other current assets              695       658
Total current assets                          24,321    25,597
                                                         
NONCURRENT ASSETS:                                       
Property and equipment, net                   1,369     1,355
Goodwill                                      7,936     8,160
Other noncurrent assets                       194       204
Total Assets                                   $ 33,820  $ 35,316
                                                         
LIABILITIES AND STOCKHOLDERS' EQUITY                     
CURRENT LIABILITIES:                                     
Trade accounts payable                         $ 1,370   $ 975
Accrued payroll, bonuses and related expenses 2,955     4,003
Deferred revenue                              537       605
Other accrued liabilities                     1,756     1,809
Total current liabilities                     6,618     7,392
                                                         
NONCURRENT LIABILITIES:                                  
Deferred income tax liabilities               511       472
Other noncurrent liabilities                  417       441
Total noncurrent liabilities                  928       913
                                                         
Total stockholders' equity                    26,274    27,011
Total Liabilities and Stockholders' Equity     $ 33,820  $ 35,316

 
THE MANAGEMENT NETWORK GROUP, INC.
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP ADJUSTED NET INCOME (LOSS)
(unaudited)
(in thousands, except per share data)
                                                                   
                                                                   
                             Thirteen Weeks Ended     Twenty-six Weeks Ended
                             June 29,     June 30,    June 29,    June 30,
                             2013         2012        2013        2012
                                                                   
Reconciliation of GAAP net
loss to non-GAAP adjusted                                          
net income (loss):
GAAP net loss                 $ (456)      $ (408)     $ (609)     $ (1,594)
                                                                   
Depreciation and              170          208         335         408
amortization
Non-cash share based          234          4           298         7
compensation expense
Tax effect of applicable      23           30          39          60
non-GAAP adjustments ^ 1
Adjustments to GAAP net loss  427          242         672         475
                                                                   
Non-GAAP adjusted net income  $ (29)       $ (166)     $ 63        $ (1,119)
(loss)
                                                                   
                                                                   
Reconciliation of GAAP net
loss per diluted common
share to non-GAAP adjusted                                         
net income (loss) per
diluted common share:
GAAP net loss per diluted     $ (0.06)     $ (0.06)    $ (0.08)    $ (0.22)
common share
                                                                   
Depreciation and              0.03         0.03        0.05        0.05
amortization
Non-cash share based          0.03         0.00        0.04        0.00
compensation expense
Tax effect of applicable      0.00         0.01        0.00        0.01
non-GAAP adjustments ^ 1
Adjustments to GAAP net loss  0.06         0.04        0.09        0.06
per diluted common share
                                                                   
Non-GAAP adjusted net income
(loss) per diluted common     $ (0.00)     $ (0.02)    $ 0.01      $ (0.16)
share
                                                                   
Weighted average shares used
in calculation of Non-GAAP   7,126        7,101       7,177       7,097
adjusted net income (loss)
per diluted common share
                                                                   
                                                                   
Footnote 1: The Company calculated the tax effect of non-GAAP adjustments by
applying an applicable estimated jurisdictional tax rate to each specific
non-GAAP item after consideration of the Company's valuation allowance.

CONTACT: Brainerd Communicators
         Ray Yeung (Media)
         yeung@braincomm.com
         Corey Kinger (Investors)
         kinger@braincomm.com
         212.986.6667

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