Rimini Street Announces Fiscal Third Quarter 2017 Financial Results

Quarterly net revenue of $53.6 million, up 32% year over year
Third quarter gross profit of 62.5%, up from 57.7% vs the same period last year
Completed merger with GP Investments Acquisition Corp.
Began trading on Nasdaq under ticker « RMNI »

LAS VEGAS, November 9, 2017 – Rimini Street, Inc. (Nasdaq: RMNI), a global provider of support services for enterprise software products, and the leading third-party support provider for Oracle and SAP software products, today announced results for its fiscal third quarter ended September 30, 2017.

“The third quarter was another record quarter for revenue and the 47th consecutive quarter of revenue growth for Rimini Street,” stated Seth A. Ravin, Rimini Street CEO. “We continued to see growing demand for our enterprise software support products and services and had strong deal flow, including many significant global wins with name-brand clients, across diverse industries. We also closed more than six thousand support cases across 48 countries for our clients, and achieved our aggressive client satisfaction goals. In summary, we believe the third quarter was a solid, all-around execution.”

“Rimini Street achieved significant growth, financial and operating milestones in the third quarter,” stated Tom Sabol, Rimini Street CFO. “In addition to solid business execution, the combination of the $50 million equity raise from the recently completed merger with GPIAC, amendment of the Company’s financing agreement and transition to a public company structure provides Rimini Street with additional growth capital and financial flexibility to expand service offerings and capabilities in new markets and regions, strengthens our balance sheet, and provides the potential to accelerate our growth by facilitating additional sales opportunities.”

Third Quarter 2017 Financial Highlights

Net Revenue was $53.6 million for the quarter, an increase of 32% compared to $40.7 million for the same period last year.
Annualized Subscription Revenue was $214.4 million for the quarter, an increase of 32% compared to $162.9 million for the same period last year.
Active Clients as of September 30, 2017 were 1,459, an increase of 34% compared to 1,085 Active Clients on September 30, 2016.
Revenue Retention Rate was 94.5% for the trailing 12-months ended September 30, 2017.
Gross Profit Percentage increased to 62.5% for the quarter compared to 57.7% for the same period last year.
Operating Income was $7.4 million for the quarter compared to a loss of $4.5 million for the same period last year; Non-GAAP Operating Income was $8.9 million for the quarter compared to a loss of $2.8 million for the same period last year.
Net Loss for the quarter was $9.0 million compared to a net loss of $15.4 million for the same period last year; Non-GAAP Net Loss for the quarter was $3.1 million compared to a net loss of $11.6 million for the same period last year.
Adjusted EBITDA for the quarter was a positive $9.5 million compared to a negative $2.5 million for the same period last year.
As of October 10, 2017, upon the closing of the merger with GP Investments Acquisition Corp. (“GPIAC”), Rimini Street had 58.6 million Common shares outstanding.

Reconciliations of the non-GAAP financial measures provided in this press release to their most directly comparable GAAP financial measures are provided in the financial tables included at the end of this press release. An explanation of these measures and how they are calculated is also included under the heading “About Non-GAAP Financial Measures and Certain Key Metrics.”

Third Quarter 2017 Company Highlights

Announced the opening of the Company’s new, expanded Latin America headquarters in Sao Paulo, Brazil.
Launched the Company’s French subsidiary, Rimini Street SAS, opened a new office in Paris and hired the first employees in France to meet growing demand for Rimini Street’s support and services in the region.
Closed more than 6,000 support cases across 48 countries, and delivered a strong continued, consistent client satisfaction rating on the Company’s support delivery of 4.8 out of 5.0 (where 5.0 is rated as “excellent”).
Recognized by the Customer Sales and Service World Awards with three awards for delivering excellence in client service and support.
Achieved a zero non-conformities audit of the Company’s ISO 9001 quality system for the sixth consecutive year.
Presented at 10 CIO and IT and procurement leader events worldwide, including Gartner’s IT Financial, Procurement & Asset Management Summits in the U.S. and UK.

GP Investments Acquisition Corp. Transaction

On October 10, 2017, Rimini Street, Inc. completed its merger with GPIAC. The combined company, which retained the Rimini Street, Inc. name, raised gross transaction proceeds of approximately $50 million and began trading on Nasdaq under the symbol “RMNI” on October 11, 2017.

2017 Revenue Guidance

The Company is providing full year 2017 revenue guidance whereby we currently expect net revenue to be in the range of $204 million to $210 million.

Webcast and Conference Call Information

Rimini Street will host a conference call and webcast to discuss the third quarter 2017 results at 5:00 p.m. Eastern / 2:00 p.m. Pacific time on November 9, 2017. A live webcast of the event will be available on Rimini Street’s Investor Relations site http://investors.riministreet.com or https://edge.media-server.com/m6/p/pnz9u3jn. Dial in participants can access the conference call by dialing (855) 213-3942 in the U.S. and Canada and enter the code 7698688. A recording of the webcast will be available on the Investor Relations section of the Company’s website two hours after the live call ends and will remain available on the site for two months.

Company’s Use of Non-GAAP Financial Measures

This press release contains certain “non-GAAP financial measures.” Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with disclosures required by generally accepted accounting principles, or GAAP. Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. A reconciliation of GAAP to non-GAAP results is included in the financial tables included in this press release. Presented under the heading “About Non-GAAP Financial Measures and Certain Key Metrics” is a description and explanation of our non-GAAP financial measures.

About Non-GAAP Financial Measures and Certain Key Metrics

To provide investors and others with additional information regarding Rimini Street’s results, we have disclosed the following non-GAAP financial measures and certain key metrics. We have described below Active Clients, Annualized Subscription Revenue and Revenue Retention Rate, each of which is a key operational metric for our business. In addition, we have disclosed the following non-GAAP financial measures: non-GAAP operating income (loss), non-GAAP net loss, EBITDA, and adjusted EBITDA. Rimini Street has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. Due to a valuation allowance for our deferred tax assets, there were no tax effects associated with any of our non-GAAP adjustments. These non-GAAP financial measures are also described below.

The primary purpose of using non-GAAP measures is to provide supplemental information that may prove useful to investors and to enable investors to evaluate our results in the same way management does. We also present the non-GAAP financial measures because we believe they assist investors in comparing our performance across reporting periods on a consistent basis, as well as comparing our results against the results of other companies, by excluding items that we do not believe are indicative of our core operating performance. Specifically, management uses these non-GAAP measures as measures of operating performance; to prepare our annual operating budget; to allocate resources to enhance the financial performance of our business; to evaluate the effectiveness of our business strategies; to provide consistency and comparability with past financial performance; to facilitate a comparison of our results with those of other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and in communication with our board of directors concerning our financial performance. Investors should be aware however, that not all companies define these non-GAAP measures consistently.

An Active Client is a distinct entity that purchases our services to support a specific product, including a company, an educational or government institution, or a business unit of a company. For example, we count as two separate active clients when support for two different products is being provided to the same entity. We believe that our ability to expand our active clients is an indicator of the growth of our business, the success of our sales and marketing activities, and the value that our services bring to our clients.

Annualized Subscription Revenue is the amount of subscription revenue recognized during a quarter and multiplied by four. This gives us an indication of the revenue that can be earned in the following 12-month period from our existing client base assuming no cancellations or price changes occur during that period. Subscription revenue excludes any non-recurring revenue, which has been insignificant to date.

Revenue Retention Rate is the actual subscription revenue (dollar-based) recognized over a 12-month period from customers that were clients on the day prior to the start of such 12-month period, divided by our Annualized Subscription Revenue as of the day prior to the start of the 12-month period.

Non-GAAP Operating Income (Loss) is operating income (loss) less stock-based compensation expense, litigation costs, net of related insurance recoveries and adjustments, and write-off of deferred financing costs.

Non-GAAP Net Loss is net loss less stock-based compensation expense, litigation costs, net of related insurance recoveries and adjustments, write-off of deferred financing costs, and loss on embedded derivatives and redeemable warrants.

Specifically, management is excluding the following items from its non-GAAP financial measures, as applicable, for the periods presented:

Stock-Based Compensation Expense: The company’s compensation strategy includes the use of stock-based compensation to attract and retain employees. This strategy is principally aimed at aligning the employee interests with those of our stockholders and to achieve long-term employee retention, rather than to motivate or reward operational performance for any particular period. As a result, stock-based compensation expense varies for reasons that are generally unrelated to operational decisions and performance in any particular period. Litigation Costs, Net of Related Insurance Adjustments: Litigation costs and the associated insurance recoveries and adjustments to the deferred settlement liability relate to outside costs on the litigation activities, for which we are currently appealing the 2016 judgment and for which we have asserted certain counterclaims. These costs reflect the ongoing litigation we are involved with, and do not relate to the day-to-day operation or our core business of serving our clients. Write-off of Deferred Financing Costs: The write-off of deferred financing costs relates to certain costs that were expensed in 2016 because we determined that the arrangements related to these costs would not result in future financings when we completed our credit facility in June 2016. As such, these write-offs are not related to how we manage our business and operational decisions on an ongoing basis. Loss on Embedded Derivatives and Redeemable Warrants, Net: Our credit facility includes features that were determined to be embedded derivatives requiring bifurcation and accounting as separate financial instruments. We have determined to exclude the gains and losses on embedded derivatives and redeemable warrants related to the change in fair value of these instruments given the financial nature of this fair value requirement. We are not able to manage these amounts as part of our business operations nor are the costs core to servicing our clients and have excluded them.

EBITDA is net loss, adjusted to exclude: interest expense, income tax expense, and depreciation and amortization.

Adjusted EBITDA is EBITDA adjusted to exclude: other debt financing expenses, stock-based compensation expense, write-off of deferred financing costs, gains and losses on embedded derivatives and redeemable warrants, and litigation costs, net of insurance recoveries.

À propos de Rimini Street, Inc.

Rimini Street, Inc. (Nasdaq : RMNI) est un fournisseur mondial de services et produits logiciels d’entreprise, le premier prestataire de services de support tiers pour les produits logiciels Oracle et SAP, et un partenaire Salesforce. La société propose d’excellents services ultraréactifs et intégrés de gestion d’applications et d’assistance, qui permettent aux détenteurs de licences de logiciels d’entreprise de réaliser des économies substantielles, de libérer des ressources pour l’innovation et d’obtenir de meilleurs résultats. Près de 2 100 organisations internationales du classement Fortune 500, du marché intermédiaire et du secteur public, ainsi que d’autres organisations représentant un large éventail de secteurs ont choisi Rimini Street comme fournisseur de confiance de services et de produits logiciels d’application d’entreprise. Pour en savoir plus, consultez le site https://www.riministreet.com, suivez @riministreet sur Twitter, et rejoignez Rimini Street sur Facebook et LinkedIn. (C-RMNI)

Déclarations prévisionnelles

Certaines déclarations contenues dans le présent communiqué ne constituent pas des faits historiques, mais sont des déclarations prévisionnelles aux fins des dispositions de la règle refuge sous la loi Private Securities Litigation Reform Act de 1995. Les déclarations prévisionnelles sont généralement accompagnées de mots, tels que « pourrait », « devrait », « serait », « aurait », « projette », « envisage de », « prévoit de », « croit », « estime », « prédit », « potentiel », « semble », « cherche à », « continue de », « futur », « s’attend à », « perspectives », l’emploi du futur ou du conditionnel ou d’autres mots, phrases ou expressions similaires. Ces déclarations prévisionnelles incluent, sans toutefois s’y limiter, des déclarations concernant nos attentes relatives aux événements futurs, opportunités futures, expansions mondiales et autres initiatives de croissance, ainsi qu’à nos investissements dans de telles initiatives. Ces déclarations sont fondées sur diverses hypothèses et sur les attentes actuelles de la direction, et ne constituent ni des prédictions de la performance réelle ni des faits historiques. Ces déclarations sont assujetties à un certain nombre de risques et d’incertitudes concernant les activités de Rimini Street, et les résultats réels pourront être sensiblement différents. Ces risques et incertitudes comprennent, sans toutefois s’y limiter, la durée et les impacts économiques, opérationnels et financiers sur nos activités de la pandémie de COVID-19, ainsi que les mesures prises par les autorités gouvernementales, les clients ou autres en réponse à la pandémie de COVID-19 ; tous événements catastrophiques qui perturberaient nos activités ou l’activité de nos clients actuels ou potentiels, les changements de l’environnement commercial dans lequel évolue Rimini Street, notamment l’inflation et les taux d’intérêt, ainsi que les conditions financières, économiques, réglementaires et politiques générales affectant le secteur dans lequel Rimini Street exerce ses activités ; les évolutions défavorables des litiges en cours ou dans les enquêtes gouvernementales ou tout nouveau litige ; notre nécessité de et notre capacité à obtenir un financement supplémentaire des actions ou de la dette dans des conditions avantageuses, et notre capacité à générer des flux de trésorerie des opérations afin d’aider à financer l’investissement accru dans nos initiatives de croissance ; la suffisance de notre trésorerie et équivalents de trésorerie afin de satisfaire nos besoins en liquidités ; les conditions et l’impact de nos 13,00 % d’actions privilégiées de série A en circulation ; les changements au niveau des taxes, lois et réglementations ; l’activité en matière de tarification et de produits concurrentiels ; les difficultés de gestion de la rentabilité de la croissance ; l’adoption par les clients des produits et services que nous avons lancés récemment, notamment nos Application Management Services (AMS), Rimini Street Advanced Database Security, et les services associés aux produits Salesforce Sales Cloud et Service Cloud, parallèlement aux autres produits et services que nous prévoyons de lancer dans un avenir proche ; le départ d’un ou de plusieurs membres de l’équipe de direction de Rimini Street ; l’incertitude quant à la valeur à long terme des titres de participation de Rimini Street ; ainsi que les risques et incertitudes abordés dans la rubrique « Facteurs de risque » du rapport trimestriel de Rimini Street sur formulaire 10-Q, déposé le 7 mai 2020 et, tels qu’actualisés de temps à autre, les rapports annuels futurs de Rimini Street sur formulaire 10-K, les rapports trimestriels sur formulaire 10-Q, les rapports de situation ponctuelle sur formulaire 8-K, ainsi que les autres documents déposés par Rimini Street auprès de la Commission des valeurs et des changes. En outre, ces déclarations prévisionnelles expriment les attentes, projets ou prévisions d’événements et de points de vue futurs de Rimini Street, à la date de ce communiqué. Rimini Street s’attend à ce que ses évaluations changent en réponse à des événements et à des développements ultérieurs. Cependant, même si Rimini Street décidait d’actualiser les présentes déclarations prévisionnelles à l’avenir, Rimini Street décline expressément toute obligation de le faire, sauf sous obligation légale. Le lecteur est prié de ne pas considérer ces déclarations prévisionnelles comme représentant les évaluations de Rimini Street à une quelconque date postérieure à la date du présent communiqué.

© 2020 Rimini Street, Inc. Tous droits réservés. « Rimini Street » est une marque de commerce déposée de Rimini Street, Inc. aux États-Unis et dans d’autres pays, et Rimini Street, le logo Rimini Street et les combinaisons de ces derniers, ainsi que les autres marques identifiées par le symbole TM sont des marques de commerce de Rimini Street, Inc. Toutes les autres marques de commerce demeurent la propriété de leurs propriétaires respectifs et, sauf indication contraire, Rimini Street ne revendique aucune affiliation, aucun cautionnement, ni aucune association avec tout titulaire de marque ou avec toutes autres sociétés mentionnés dans les présentes.