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CREDITRISKMONITOR COM INC (CRMZ)·Q4 2021 Earnings Summary

Executive Summary

  • Q4 2021 capped a return to profitability: FY operating revenues rose 8.5% to $17.07M and operating income reached $2.30M; Q4 included a $1.56M non‑taxable gain from PPP loan forgiveness, driving FY net income to $3.36M .
  • Quarterly trajectory remained solid: revenue increased from $4.25M in Q2 to $4.32M in Q3, and an implied ~$4.36M in Q4 (derived from FY less 9M), with operating income stepping up from $0.42M (Q2) to $0.70M (Q3) to ~$0.94M (Q4) .
  • Board authorized a $1.0M share repurchase program on Jan 28, 2022, signaling confidence in cash generation and balance sheet strength; management emphasized “strong balance sheet and cash flow performance for 2021” as rationale .
  • No formal numerical guidance was provided for Q4/FY22; management highlighted product investments and the planned launch of SupplyChainMonitor in Q2 2022 as medium‑term growth catalysts .

What Went Well and What Went Wrong

  • What Went Well

    • Operating leverage improved: SG&A fell 16% YoY in FY21, supporting operating margin expansion to 13% despite modestly higher data/product costs .
    • PPP forgiveness materially boosted GAAP results: $1.56M non‑taxable gain recorded in Q4 lifted FY net income to $3.36M versus a loss in 2020 .
    • Strategic capital allocation: $1.0M repurchase authorization, underpinned by “strong balance sheet and cash flow performance” (Mike Flum) .

  • What Went Wrong

    • Data/product cost inflation persisted (+5% YoY), reflecting higher supplier content costs and staff pay raises, partially offsetting revenue gains .
    • No specific revenue/EPS guidance ranges offered; management highlighted uncertainty from COVID variants and macro swings, implying limited visibility into quarterly cadence .
    • Cybersecurity incident (Sep 8, 2021) required third‑party review and control enhancements; while no sensitive file exfiltration was found, it underscores operational risk exposure .

Financial Results

MetricQ2 2021Q3 2021Q4 2021
Revenue ($USD)$4,248,179 $4,323,676 $4,360,376 (Derived: FY $17,065,132 − 9M $12,704,756)
Operating Income ($USD)$417,608 $704,187 $940,442 (Derived: FY $2,302,048 − 9M $1,361,606)
Operating Margin (%)9.83% 16% ~21.6% (Derived from revenue/operating income above)
Net Income ($USD)$322,708 $495,352 $2,357,930 (Derived: FY $3,363,704 − 9M $1,005,774)
Diluted EPS ($USD)$0.03 $0.05 N/A (not separately disclosed)

Notes: Q4 figures are derived from FY 2021 results minus 9M through Q3 2021 reported in the company’s filings . Q4 other income included PPP forgiveness of $1,561,500 .

Segment breakdown: Single operating/reportable segment (no segment revenue table applicable) .

Selected KPIs and Balance Items (quarter-end)

KPIQ2 2021Q3 2021Q4 2021
Cash & Cash Equivalents ($USD)$10,903,794 $11,694,046 $12,381,521
Unexpired Subscription Revenue (Current) ($USD)$9,972,001 $9,302,926 $9,520,226

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue/EPS/MarginsFY22None providedNone providedMaintained (no formal guidance)
Share Repurchase AuthorizationOpen-endedN/AUp to $1.0M common stockNew authorization

Earnings Call Themes & Trends

(Transcript not available; themes compiled from MD&A and press releases)

TopicPrevious Mentions (Q2, Q3 2021)Current Period (Q4 2021)Trend
Product development (SupplyChainMonitor)Focus on expanding products and infrastructure; investment plans noted Launch targeted for Q2 2022; expansion of European Private Company Data Enhancement Increasing execution emphasis
Cost structure (SG&A, data costs)Commission accrual methodology revised; SG&A down; data costs up modestly FY SG&A −16% YoY; data/product +5% YoY Mixed: SG&A efficiency vs supplier inflation
COVID/macro uncertaintyRemote operations; renewal rates monitored; PPP forgiveness process pending PPP forgiven; macro uncertainty and quarterly variability flagged Uncertainty persists, liquidity strong
CybersecurityNot highlightedSep 8 incident; no evidence of sensitive file exfiltration; controls strengthened Risk management heightened

Management Commentary

  • “With a strong balance sheet and cash flow performance for 2021, we are well positioned to invest in CreditRiskMonitor’s common stock, consistent with our commitment to creating value for our shareholders” — Mike Flum, President & COO .
  • “Operating revenues… increased to approximately $17 million… pre‑tax operating income of approximately $2.3 million… approximately $1.6 million in non‑taxable income recognized due to the forgiveness of the Company’s PPP loan… Our top priority remains the final testing and launch of our new supply chain risk platform, SupplyChainMonitor™, scheduled for the second quarter of 2022.” — Mike Flum .

Q&A Highlights

  • No Q4 2021 earnings call transcript or Q&A available in the document catalog; therefore, no analyst Q&A highlights or guidance clarifications could be sourced for this period (search returned no transcripts) [ListDocuments result: 0 earnings-call-transcript].

Estimates Context

  • Wall Street consensus for Q4 2021 (EPS/revenue) via S&P Global was unavailable for CRMZ; SPGI query returned an error, and CRMZ appears to have limited or no analyst coverage (Simply Wall St notes “0 analysts” coverage) .
  • Implication: No benchmark to declare beat/miss versus consensus; any adjustments to estimates are not applicable due to lack of formal coverage.

Key Takeaways for Investors

  • Q4’s outsized GAAP net income was driven by PPP forgiveness; normalize that one‑off to assess core operating trends (Q4 implied revenue ~$4.36M; operating income ~$0.94M) .
  • Operating leverage is improving (SG&A down YoY) while supplier/data cost inflation remains a watch item; monitor gross/operating margin durability into FY22 .
  • The $1.0M repurchase authorization is a positive capital allocation signal supported by rising cash; assess actual buyback execution and pace over coming quarters .
  • Pipeline and product expansion (SupplyChainMonitor launch, European data enhancement) are near‑term growth catalysts; track adoption/upsell into the existing Fortune 1000 base .
  • No formal guidance reduces visibility; expect quarterly variability tied to macro (bankruptcy rates, client procurement budgets) per management’s cautionary commentary .
  • Cybersecurity hardening post‑incident is prudent; continue to evaluate operational resilience and potential incremental costs .
  • With limited sell‑side coverage, price discovery may be idiosyncratic; fundamentals and execution milestones (product launch, renewals) likely to drive narrative.