Research Solutions Reports Fiscal Fourth Quarter and Full Year 2021 Results

HENDERSON, Nev., Sept. 23, 2021 /PRNewswire/ -- Research Solutions, Inc. (NASDAQ: RSSS), a pioneer in providing cloud-based workflow solutions for R&D driven organizations, reported financial results for its fiscal fourth quarter and full year 2020 ended June 30, 2021.

Fiscal Fourth Quarter 2021 Highlights

• Total revenue increased 4.2% to $8.2 million
• Platform revenue up 34% to $1.4 million, Annual recurring revenue up 32% to $5.9 million.
• Total gross margin improved 160 basis points to 33.4%.
• Earnings of nil per share, unchanged from the prior-year quarter
• Adjusted EBITDA of $134,000, compared to $146,000

Full-Year Fiscal 2021 Highlights

• Total revenue increased 2.2% to $31.8 million
• Platform revenue of $5.1 million, a 32% increase, with a 38% increase in total Platform deployments to 553
• Total gross margin increased 140 basis points to 32.4%
• Loss of ($0.01) per share, compared to ($0.03) per share Adjusted EBITDA of $700,000, an improvement of $557,000
• Cash and cash equivalents increased to $11.0 million, up $1.7 million compared to prior year end

"Our fourth quarter and fiscal 2021 results reflect the continued momentum across our organization.  The third and fourth quarter represented the two best quarters for net platform deployments in company history, contributing to 152 net new deployments for the year," said Roy W. Olivier, Interim President and CEO of Research Solutions. "Through new partnerships and product initiatives - including the recent launch of our Article Galaxy 3.0 platform – our users are capable of accessing information in a faster, more simplified manner. These items, combined with our ongoing sales and marketing improvements and strong balance sheet, leave us well-positioned for continued progress in fiscal 2022."

Fiscal Fourth Quarter 2021 Results

Total revenue increased 4.2% to $8.2 million, compared to $7.9 million in the same year-ago quarter.

Platform subscription revenue increased 34% to $1.4 million compared to approximately $1.1 million in the year-ago quarter. The increase was primarily due to an increase in the total number of paid Platform deployments, including 41 net new added in the quarter, and upselling current platform customers. The quarter ended with annual recurring revenue of $5.9 million, up 6% sequentially and 32% year-over-year (see the company's definition of annual recurring revenue below).

Transaction revenue was $6.8 million, relatively unchanged from the fourth quarter of fiscal 2020. Transaction customers count for the quarter was 1,132, compared to 1,087 customers in the prior year quarter (see the company's definition of active customer accounts and transactions below).

Total gross margin improved 160 basis points from the prior-year quarter to 33.4%. The increase was primarily driven by a continued revenue mix shift to the higher-margin Platform business.

Total operating expenses were $2.8 million, compared to $2.5 million in the fourth quarter of 2020. The increase was primarily due to higher technology and product development,  and administrative personnel costs.

Net loss in the fourth quarter was ($89,000), or nil per share, compared to a net loss of ($1,000), or nil per share, in the prior-year quarter. Adjusted EBITDA was $134,000, compared to $146,000 in the year-ago quarter (see definition and further discussion about the presentation of Adjusted EBITDA, a non-GAAP term, below).

Full-Year Fiscal 2021 Results

Total revenue increased 2.2% to $31.8 million, compared to $31.1 million in fiscal 2020.

Platform subscription revenue was $5.1 million, a 32% increase over the prior year. The increase was primarily due an increase in the total number of paid Platform deployments and upselling current platform customers.

Transaction revenue was $26.6 million, a 2% decrease compared to the previous year. The decrease is primarily due to a decrease in order volume.

Total gross margin improved 140 basis points over the prior year to 32.4%. The increase was primarily driven by a continued revenue mix shift to the higher-margin Platform business.

Total operating expenses were $10.6 million compared to $10.5 million in the prior year. The increase was primarily due to higher technology and product development personnel costs.

Net loss from continuing operations improved by $495,000 over the prior year to ($285,000). Net loss per share improved by $0.02 from fiscal 2020, to $(0.01) per share. Adjusted EBITDA was $700,000, compared to $143,000 in the prior year (see definition and further discussion about the presentation of Adjusted EBITDA, a non-GAAP term, below).

Cash and cash equivalents on June 30, 2021, amounted to $11.0 million compared to $9.3 million as of June 30, 2020. There were no outstanding borrowings under the company's $2.5 million revolving line of credit and the company had no long-term liabilities or other debt.

Conference Call

Research Solutions Interim President and CEO Roy W. Olivier and CFO Alan Urban will host the conference call, followed by a question and answer period.

Date: Thursday, September 23, 2021
Time: 5:00 p.m. ET (2:00 p.m. PT)
Toll-free dial-in number: 1-855-327-6837
International dial-in number: 1-631-891-4304
Conference ID: 10016429

The conference call will be broadcast live and available for replay until October 14, 2021, by dialing 1-844-512-2921 and using the replay ID 10016429, and via the investor relations section of the company's website at https://researchsolutions.investorroom.com/.

Active Customer Accounts, Transactions and Annual Recurring Revenue

The company defines active customer accounts as the sum of the total quantity of customers per month for each month in the period divided by the respective number of months in the period. The quantity of customers per month is defined as customers with at least one transaction during the month.

A transaction is an order for a unit of copyrighted content fulfilled or managed in the Platform.

The company defines annual recurring revenue as the value of contracted Platform subscription recurring revenue normalized to a one-year period.

Use of Non-GAAP Measure – Adjusted EBITDA

Research Solutions' management evaluates and makes operating decisions using various financial metrics. In addition to the company's GAAP results, management also considers the non-GAAP measure of Adjusted EBITDA. Management believes that this non-GAAP measure provides useful information about the company's operating results.

The tables below provide a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure. Adjusted EBITDA is defined as net income (loss), plus interest expense, other income (expense), foreign currency transaction loss, provision for income taxes, depreciation and amortization, stock-based compensation, gain on sale of discontinued operations, and other potential adjustments that may arise. Set forth below is a reconciliation of Adjusted EBITDA to net income (loss):

About Research Solutions

Research Solutions, Inc. (NASDAQ: RSSS) provides cloud-based technologies to streamline the process of obtaining, managing, and creating intellectual property. Founded in 2006 as Reprints Desk, the company was a pioneer in developing solutions to serve researchers. Today, more than 70 percent of the top pharmaceutical companies, prestigious universities, and emerging businesses rely on Article Galaxy, the company's SaaS research platform, to streamline access to the latest scientific research and data with 24/7 customer support. For more information and details, please visit www.researchsolutions.com.

Important Cautions Regarding Forward-Looking Statements

Certain statements in this press release may contain "forward-looking statements" regarding future events and our future results. All statements other than statements of historical facts are statements that could be deemed to be forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the markets in which we operate and the beliefs and assumptions of our management. Words such as "expects," "anticipates," "targets," "goals," "projects", "intends," "plans," "believes," "seeks," "estimates," "endeavors," "strives," "may," or variations of such words, and similar expressions are intended to identify such forward-looking statements. Readers are cautioned that these forward-looking statements are subject to a number of risks, uncertainties and assumptions that are difficult to predict, estimate or verify. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Such risks and uncertainties include those factors described in the Company's most recent annual report on Form 10-K, as such may be amended or supplemented by subsequent quarterly reports on Form 10-Q, or other reports filed with the Securities and Exchange Commission. Examples of forward-looking statements in this release include statements regarding improved liquidity, an expanded investor base and driving long-term shareholder value as a result of listing on Nasdaq, continued momentum in the Company's business and financial performance, and the Company's strong outlook. Readers are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements. For more information, please refer to the Company's filings with the Securities and Exchange Commission. 

View original content to download multimedia:https://www.prnewswire.com/news-releases/research-solutions-reports-fiscal-fourth-quarter-and-full-year-2021-results-301384363.html

SOURCE Research Solutions, Inc.