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Creative Realities Creative Realities Reports First Quarter 2021 Results May 17 , 2021 LOUISVILLE , KY . , May 17 , 2021 / PRNewswire / -- Creative Realities , Inc. ( " Creative Realities , " " CRI , " or the " Company " ) ( NASDAQ : CREX , CREXW ) , a leading provider of digital marketing solutions , announced its financial results for the first quarter ended March 31 , 2021 . Rick Mills , Chief Executive Officer , commented " During the first quarter of 2021 , CRI generated approximately $ 5.0 million of revenue and effectively achieved breakeven operating results , which are in - line with the expectations we communicated in our most recent earnings call . We generated net income during the period of $ 1.3 million and , consistent with the third and fourth quarter of 2020 , we generated both positive EBITDA and Adjusted EBITDA , highlighting our continued focus on cost control and revenue - generating activities . " " During the quarter , CRI undertook and achieved significant capital activities , including achieving forgiveness of our PPP Loan , completion of a registered direct offering , and a refinancing of all outstanding debt facilities . These activities provide the foundation and runway for the Company's continued investment in customer acquisition and an expected return to growth in the second half of 2021. We continue to expect that the second half of 2021 will present opportunities for CRI as a result of strengthening the Company's market perception and competitive position during the COVID - 19 pandemic , and through improvement of our balance sheet through activities executed in the first quarter of 2021. " First Quarter Financial Update Revenue , gross profit , and gross margin : • Revenues were $ 5.0 million for the three months ended March 31 , 2021 , an increase of $ 1.3 million , or 35 % , as compared to the same period in 2020 . • Hardware revenues were $ 2.8 million for the three months ended March 31 , 2021 , an increase of $ 1.4 million , or 106 % , as compared to the prior year , driven by ( i ) Thermal Mirror and other Safe Space Solutions products , which generated approximately $ 0.8 million in hardware sales during the three months ended March 31 , 2021 and ( ii ) increasing sales to a previously announced expanding customer partnership , which is undergoing conversion of its network during the first and second quarter of 2021. Gross margin on hardware revenue was 32.0 % during 2021 as compared to 28.1 % during the same period in 2020 due to the shift in mix of hardware revenues from displays to the Thermal Mirror and other Safe Space Solutions products , which typically generate higher gross profit on a per unit basis compared to our digital solutions products . • Services and other revenues were $ 2.2 million for the three months ended March 31 , 2021 , a decrease of $ 0.1 million , or 6.8 % , as compared to the same period in 2020. Current year installation services decreased by $ 0.3 million as a result of suspended , delayed , and cancelled customer projects , initiatives , and customer capital expenditures following announcement of the COVID - 19 pandemic , partially offset by an increase of $ 0.1 million in software development services in the current year . • Managed services revenue , which includes both software - as - a - service ( " SaaS " ) and help desk technical subscription services for our traditional digital signage and recent Thermal Mirror and Safe Space Solutions product offerings , were $ 1.3 million for the three months ended March 31 , 2021 and 2020 as reductions in digital signage subscription revenue related to contracts with customers which were partially or permanently closed during the year as a result of the COVID - 19 pandemic were replaced with subscription revenues added through our Safe Space Solutions products and services . • Gross profit was $ 2.2 million for the three months ended March 31 , 2021 , an increase of $ 0.6 million , or 39 % , compared to the same period in 2020 , approximately half of which relates to an increase in revenue period - over - period with half driven by higher gross profit generated on sales of the Thermal Mirror and Safe Space products . Operating expenses : • For the three months ended March 31 , 2021 as compared to the same period in the prior year : • Sales and marketing expenses decreased by $ 0.1 million , or 22 % while research and development expenses decreased by $ 0.1 million , or 45 % , each driven by a reduction in employee - related expenses as a result of a combination of headcount reductions , salary reductions implemented for retained personnel , and a reduction in travel - related expenses in the current year including the elimination of participation in industry trade shows . • General and administrative expenses decreased by $ 0.4 million during the three months ended March 31 , 2021 , or 16 % compared to the same period in 2020 , driven by reduced headcount , salary reductions , and the exit and / or restructuring of several of the Company's operating leases for real estate following the start of the COVID - 19 pandemic . During the three months ended March 31 , 2021 , general and administrative includes an increase of $ 0.3 million in compensation expenses related to the probable vesting of performance restricted awards . Exclusive of this incremental non - cash compensation expense , general and administrative expenses decreased by $ 0.7 million , or 26 % , as compared to the three months ended March 31 , 2020 .