omniQ Reports First Quarter Fiscal 2018 Results

  • Revenue grew 5.1% to $15.2 million versus first quarter 2017
  • Revenue grew 18% sequentially compared to fourth quarter 2017
  • Shareholders’ Equity improved by $14.9 million to a deficit of $0.3 million; $15.2 million at March 31, 2017
  • Adjusted EBITDA for first quarter 2018 increased 18% to $0.66 million
  • Company remains focused on driving turnaround of the business

EUGENE, Ore., May 22, 2018 (GLOBE NEWSWIRE) — omniQ, Inc. (OTCQB:QUES), a specialty systems integrator focused on field and supply chain mobility announced its financial results for the quarter ended March 31, 2018.

Financial Results:

For the quarter ended March 31, 2018, omniQ reported revenues of $15.2 million, compared to $14.3 million in the comparable 2017 period.  The Company achieved sequential revenue growth of 18% compared to the fourth quarter of 2017. Gross margin of 21% was consistent with the first quarter of 2017.   Total operating expenses for first quarter of 2018 increased to $3.8 million, primarily related to the Company’s adoption of an equity incentive plan, increases in sales commissions related to revenue growth, increased professional fees attributable to the turnaround process and the Debt elimination.  Net loss attributable to the common stockholders was $1 million, or a loss of $0.03 per share in the first quarter of 2018, compared to a net loss of $0.4 million, or a loss of $0.01 per share in the first quarter of 2017.  Adjusted EBITDA (EBITDA plus Stock Based Compensation and one-time fees mainly related to the turnaround process) for the first quarter of 2018 improved by 18% to $656,000 compared to $555,000 in the first quarter of 2017. Shareholders’ equity improved to a deficit of $0.3 million at March 31, 2018 as compared to a deficit of $1.2 million at December 31, 2017 and a deficit of $14.9 million at March 31, 2017.

Shai Lustgarten, CEO, commented, “omniQ is now better positioned to execute our strategy, further improve our financial results and drive differentiation in the market place by adding state of the art technologies to our product offering. During the first quarter, we continued to make progress with our turnaround initiatives.  Revenue grew due to organic growth in our customer base.  Our sales team is focused on strengthening our existing customer relationships to generate new business as needs evolve and capturing new customers to drive incremental revenue growth in our multi Billion USD market place.

“Much of the increase in operating expenses that we saw in the quarter was related to non-cash equity compensation expense, increased sales commissions due to our reinvigorated sales and marketing effort, as well as some increased professional fees related to the turnaround and debt reduction agreements.  Importantly, we drove a 13% reduction in salary expense during the quarter, and we expect operating expenses to moderate as a percentage of sales as we continue to execute the turnaround.”

Mr. Lustgarten continued, “We previously announced a $15 million reduction of our notes liability, which significantly enhanced our financial structure and provides a solid platform for the Company’s growth.  omniQ serves blue chip customers operating in attractive, growth industries and we remain focused on exceeding the needs of our existing customers and cultivating new opportunities to increase our market share as we move through 2018.”

Please refer to the financial tables included below for a reconciliation of generally accepted accounting principles in the United States (“GAAP”) to non-GAAP financial results. Please refer to the financial tables included below for a reconciliation of GAAP to non-GAAP results.

About omniQ
omniQ is a Specialty Systems Integrator focused on Field and Supply Chain Mobility. We are also a manufacturer and distributor of consumables (labels, tags, and ribbons), RFID solutions, and barcoding printers. Founded in 1994, omniQ is headquartered in Eugene, Oregon, with offices in the United States.

Rated in the Top 1% of global solution providers, omniQ specializes in the design, deployment and management of enterprise mobility solutions including Automatic Identification and Data Capture (AIDC), Mobile Cloud Analytics, RFID (Radio Frequency Identification), and proprietary Mobility software. Our mobility products and services offering is designed to identify, track, trace, share and connect data to enterprise systems such as CRM or ERP solutions. Our customers are leading Fortune 500 companies from several sectors including manufacturing, retail, distribution, food / beverage, transportation and logistics, health care and chemicals / gas / oil.

Information about Forward-Looking Statements
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Statements in this press release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. This release contains “forward-looking statements” that include information relating to future events and future financial and operating performance. The words “may,” “would,” “will,” “expect,” “estimate,” “can,” “believe,” “potential” and similar expressions and variations thereof are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for omniQ, Inc.’s products, the introduction of new products, the Company’s ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of the Company’s liquidity and financial strength to support its growth, the Company’s ability to manage credit and debt structures from vendors, debt holders and secured lenders, the Company’s ability to successfully integrate its acquisitions, risks related to the sale of omniQ Inc. to Viascan Group Inc. and other information that may be detailed from time-to-time in omniQ Inc.’s filings with the United States Securities and Exchange Commission. Examples of such forward looking statements in this release include, among others, statements regarding revenue growth, driving sales, operational and financial initiatives, cost reduction and profitability, and simplification of operations. For a more detailed description of the risk factors and uncertainties affecting omniQ, Inc. please refer to the Company’s recent Securities and Exchange Commission filings, which are available at omniQ, Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by law.

omniQ, INC.
For the three months
ended March 31
2018 2017
Total Revenues $ 15,180,547 $ 14,437,556
Cost of goods sold
Cost of goods sold 12,014,454 11,445,609
Total costs of goods sold 12,014,454 11,445,609
Gross profit 3,166,093 2,991,947
Operating expenses
General and administrative 476,855 412,945
Salary and employee benefits 2,602,565 1,945,883
Depreciation and amortization 437,398 442,400
Professional fees 292,862 103,277
Total operating expenses 3,809,680 2,904,505
Income (loss) from operations (643,587) 87,442
Other income (expenses):
Interest expense (294,765) (355,658)
Other (expenses) income 2,544 (6,042)
Total other expenses (292,221) (361,700)
Net loss before Income Taxes (935,808) (274,258)
Provision for Income Taxes
Current (13,197) (56,900)
Total Provision for Income Taxes (13,197) (56,900)
Net loss attributable to omniQ Inc. $ (949,005) $ (331,158)
Less: Preferred stock – Series C dividend (48,124) (46,507)
Net loss attributable to the common stockholders $ (997,129) $ (377,665)
Net loss per share – basic $ (0.03) $ (0.01)
Net loss per share from continuing operations – basic $ (0.03) $ (0.01)
Weighted average number of common shares outstanding – basic 37,125,286 35,141,560
omniQ, INC.
As of
March 31, 2018 December 31, 2017
Current assets
Cash $ 244,596 $ 24,634
Restricted Cash 381,494 684,610
Accounts receivable, net 9,418,463 6,387,734
Inventory, net 2,141,855 439,720
Prepaid expenses 2,411,851 476,840
Other current assets 30,251 126,187
Total current assets 14,628,510 8,139,725
Fixed assets, net 85,951 92,803
Goodwill 10,114,164 10,114,164
Trade name, net 2,215,231 2,359,481
Customer Relationships, net 5,029,759 5,310,938
Other assets 37,063 39,512
Total assets $ 32,110,678 $ 26,056,623
Current liabilities
Accounts payable and accrued liabilities $ 18,226,932 $ 13,239,810
Accrued interest on note payable 43,323 38,430
Line of credit 4,832,353 3,667,417
Accrued payroll and sales tax 2,790,539 1,531,233
Deferred revenue, net 761,194
Current portion of note payable 2,275,404 3,429,025
Notes payable, related parties 106,500 106,500
Other current liabilities 156,957 121,117
Total current liabilities 28,432,008 22,894,726
Long term liabilities
Note payable, related party 3,222,900 3,222,900
Accrued interest, related party 185,862 165,014
Long term portion of note payable 130,294 130,294
Deferred revenue, net 452,024
Other long term liabilities 486,538 439,833
Total liabilities 32,457,602 27,304,791
Stockholders’ (deficit)
Series A Preferred stock; $0.001 par value; 1,000,000 shares designated and 0 shares outstanding as of March 31, 2018 and December 31, 2017, respectively.
Series B Preferred stock; $0.001 par value; 1 share designated and 0 shares outstanding as of March 31, 2018 and December 31, 2017, respectively.
Series C Preferred stock; $0.001 par value; 15,000,000 shares designated, 3,143,530 shares outstanding as of March 31, 2018 and December 31, 2017, respectively, liquidation preference of $1.00 per share and a cumulative dividend of $0.06 per share. 4,829 4,829
Common stock; $0.001 par value; 100,000,000 shares designated, 39,673,631 and 36,828,371 shares outstanding of March 31, 2018 and December 31, 2017, respectively. 39,673 36,828
Common stock to be repurchased by the Company (230,490) (230,490)
Additional paid-in capital 35,177,970 34,495,659
Accumulated (deficit) (35,338,906) (35,554,994)
Total stockholders’ (deficit) (346,924) (1,248,168)
Total liabilities and stockholders’ (deficit) $ 32,110,678 $ 26,056,623
Three months ended
March 31, 2018 March 31, 2017
Operating income $   (644) $   87
Depreciation & amortization 437 442
EBITDA (204) 529
Stock based compensation 681 26
One-time turnaround expenses 179
Adjusted EBITDA $   656 $   555

Investor Contact:

John Nesbett/Jen Belodeau
Institutional Marketing Services (IMS)

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