Support biz Rimini Street’s net losses have skyrocketed to $48.4m in the latest quarter as a result of debt payoffs.
The firm yesterday announced results for the three months to 30 September – in which it pulled in revenues of $62.6m – saying that it had now completed refinancing its credit facility after the long-running legal battle with Oracle.
According to chief bean-counter Tom Sabol, the firm’s total debt has now been reduced to about $3m, which “improves the balance sheet and lowers our cost of capital going forward”.
Rimini Street announced last quarter it had secured a $140m equity financing agreement in order to pay off its outstanding obligations under its credit facility – which totalled $132.8m.
However, the final payment in this quarter has made quite an impact on the firm’s net losses, which were $48.4m, up from $9m in the year-ago quarter and $6m in the second quarter of 2018.
At the same time, escaping from the facility means that Rimini is free from the covenants that constrained sales and marketing spend by the facility – and this shows in its operating income, which came to $2.5m this quarter compared with $7.4m a year ago.
As well as splashing out on $22.3m sales and marketing this quarter (up from $17.2m in the previous quarter), the firm said the extra outlay was a result of “increased litigation costs”, which came to $6.9m, up from $3.3m in the previous year period.
The company has recently won its bid to have an appeal in its long-running case with Oracle heard by the Supreme Court. This will decide whether the Copyright Act’s allowance of “full costs” to be awarded to the winning sides includes non-taxable costs.
If the Supreme Court rules that it doesn’t, it would effectively shave $12m off Rimini’s bill for infringing Oracle’s copyright in their years-long stand-off.
Meanwhile, the support biz is looking to move on from being just an Oracle botherer. It added support for Salesforce Sales Cloud and Service Cloud to its portfolio earlier this year, along with existing maintenance provided for Microsoft SQL Server, SAP and IBM DB2.
Rimini Street is now aiming to expand its customer base, looking to markets outside the US, as this currently represents some 36 per cent of its total revenue.
It also announced three new additions to its senior team: a group veep for SAP products, one for North America and the hire of former Gartner analyst Pat Phelan as VP of market research. ®
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