Symbolic Logic, Inc.
Q1 2021 Earnings Call Transcript

Published: 13 May 2021

[Keith Brody:]

Now I would like to turn the call over to Matthew Stecker. Matthew?

[Matthew Stecker:]

Thank you, Keith. And thanks, everyone for joining. We have a quite a crowd today. So I'll begin by underlining what's now become happily a regular theme in these calls a consistent stretch of quarters with positive adjusted EBITDA which began a year ago, and reflects the turnaround of our business continuing in this the first quarter of 2021. Additionally, despite the continued global pandemic defined commercial environment, our revenue rose from the corresponding quarter last year when the impact of COVID had just started to be felt. I want to digress a moment on that note and thank evolving employees, those in our team who have together driven our turnaround and often extremely challenging environments. Many of you know that roughly half our staff are located near our two development centers in India. You'll also likely be aware that presently India is facing truly harrowing conditions as Coronavirus is spiraling there.

[Mark Szynkowski:]

Thank you, Matthew. Good afternoon, everyone. And thank you for joining. Let us start with the total revenue. As Matthew touched on earlier for the first quarter of March that ended March 31, 2021 it was $6.5 million a $0.2 million increase from the three months ended March 31, 2020. The increase was primarily related to revenues from existing client work on new projects and upgrades, as well as a few new client projects. These were partially offset by less work as some projects near completion and some other things ongoing services decreased. Service revenues. They're mostly reoccurring in nature increased year-over-year by $0.2 million to $6.3 million over the comparable year ago period. The company reported gross profit margins excluding depreciation and amortization, mostly consistent with the prior periods at approximately 65.3% for the quarter ended March 31, 2021. Turning to expenses. The first quarter of 2021 total operating expenses were $4.4 million, a slight increase of approximately $0.1 million as compared to $4.3 million the corresponding year ago period. The increase was related to resource costs and our product development group as we increase staff and reassign delivery staff to product development off of the client project work. This cost was partially offset by a reduction in sales and marketing cost as travel and entertainment costs remain lower due to the travel restrictions imposed and there was also a reduction in staff in that area. This resulted in the company reporting a loss of $0.2 million in the quarter ended March 31, 2021, consistent with last year's quarter that ended March 31, 2020 when the global pandemic just started towards the tail end. The company reported a net loss of $0.9 million for the quarter ended March 31, 2021, as compared to a net loss of less than $0.1 million in the comparable year ago period. The other expenses recorded were primarily related to foreign currency exchange loss, and a recording of a contingent liability regarding an ongoing litigation matter. While we have previously disclosed the existence of this matter regarding our former CEO in our filings, a settlement seemed unlikely and value cannot be estimated.

[Matthew Stecker:]

Thanks Mark. Earlier I spoke at some length and I thank you for indulging the length about how today's commercial conditions are in fact extremely favorable to evolving due to our specific areas of expertise in digital marketing and customer value management. For those of you who don't really know what these are, essentially, this part of our business runs programs for wireless operators around the world designed to help them get the most from their existing customer bases by driving specific behavior through promotions and other incentives. The trends we're seeing in this segment of our work give me a great deal of confidence about both our short and long term future. Carriers today must renew their approaches and their mechanisms for customer communications. Industry leaders around the world already seen as mandate and acting. And some of those are our customers already working with us to do this. Our customers are asking us every day to help them find ways to incentivize their consumers to build enhanced relationships. And in the process to differentiate themselves from their competition. They have to find relevant themed partners and promotions they can add to their portfolios.

[Operator:]

So we presently don't have any questions. But if anybody has anything they'd like to ask, would you please use the question box now. We'll hold for about 30 seconds and then move on.

[Matthew Stecker:]

In the absence of specific questions case, I'll take it that we've we've addressed every possible contingency.

[Operator:]

There appear to be no questions. So ladies and gentlemen, thank you for your, actually we do have a question.

[Matthew Stecker:]

I will take them. The first one is have you addressed the shelf filing. So as you may have seen we filed the shelf registration with the SEC, that would allow us to raise money by offering new shares to the public markets. That filing has now gone effective. For us, the purpose is essentially good housekeeping. At a certain level, it is simply prudent for us to raise capital in the balance sheet. We do not have specific purposes for that other than we keep our options open to raise more working capital if it makes sense. So there is not a specific target or strategic mandate for those funds. We are currently in the process of reviewing and deliberating between various brokerage proposals of people who have different ideas for how we can drive that. And that's how we look at it. Second question, any plans to start accepting Dogecoin or another currency? I would love to accept Dogecoin from our clients. We will let them drive that. But if they want to offer it, we'd love to take it. Next question. How do you explain the drop in the stock value by approximately $1 per share in the first quarter? Our stock is highly volatile over any reasonable period. It's still up substantially over the last 24 months. And I think that value that it's increased has largely reflected the fact that we are now debt free and the market had been betting that we might not get to that outcome. In terms of the volatility over the last 60 days the stock reached a peak on around March 19, just after the first quarter after the annual call. Honestly, we reported reported results then are very similar to the results we're reporting now. Slight positive EBITDA and slight growth sequentially. So I cannot explain why the market has reacted a certain way. From our perspective as management, we focus on creating fundamental value and driving the business forward. And we think for the reasons we've mentioned, we've done a good job doing that. And that long term the market will appreciate that. In terms of short term motions, it's very hard to predict what the market will do. What's interesting, by the way, is that the drop from that high on March 19 to now we have had essentially no news. Right. So there has been literally no news driving the behavior. So again it's hard to say why something happens against the background of news but it is, we're cognizant that investors have a financial stake and we're looking to drive long term value.

[Keith Brody:]

Okay. Ladies and gentlemen, I want to thank you for your continued support. Management will be available to talk with investors throughout the week. And if you have any questions, by all means, please feel free to contact us and we look forward to communicating further progress and developments with you. Operator, we're ready to end the call.

[Operator:]

Thanks, everyone.