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Creative Realities Creative Realities Reports Third Quarter 2021 Results November 15 , 2021 LOUISVILLE , KY . , Nov. 15 , 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 three- and nine - months ended September 30 , 2021 . Rick Mills , Chief Executive Officer , commented , " During the third quarter of 2021 , we saw demand for our core digital signage offerings begin to approach pre - pandemic levels . Revenues from our core digital signage products and services increased $ 1.5 million , or approximately 50 % , versus the same period in 2020. Throughout 2021 we have been engaged in customer conversations which were challenged by a lack of customer budget allocation for the 2021 calendar year as a reaction to the COVID - 19 pandemic . As many of our current and prospective customers enter into the 2022 budget cycle , we are witnessing a significant expansion in both customer marketing and IT budgets with respect to the allocation of funds for digital transformation and signage projects . We are engaging in meaningful conversations that we believe will translate into a return to strong top - line growth beginning in the fourth quarter and continuing throughout 2022. " " Despite facing continued disruptions in delivering and executing sold engagements due to limited supply chain availability of semiconductor chips , which has delayed the delivery of digital displays to the Company , we have received high praise from customers and vendor partners for our consistent and transparent communications which have further built trust and engagement . While we have seen a significant increase in market activity and remain bullish on a number of opportunities as we move into 2022 , we expect to experience continued disruptions and delays related to fulfilment of inventory purchases from vendors and the associated services into the first half of 2022. Despite these industry challenges , specifically the lack of availability of displays , I am proud of our ability to generate positive EBITDA for the fifth consecutive quarter . " " Beyond the current financial results , I could not be more excited about the opportunity to join forces with Reflect Systems , Inc. , which we announced last week . Reflect has an incredible track record for growing annual recurring revenues via software subscriptions to its content management system . In addition , it brings CRI a tremendous ADTECH platform ( AdLogic ) which we will leverage to support the strong growth continuing in the digital- out - of - home advertising industry . The combined company becomes a key player for enterprise customers in the digital signage industry . By fully integrating our solutions and business operations , we can bring to bear the most competitive product and service offerings available for the digital signage market , including the potential for integrated programmatic advertising solutions . We expect the merger to close in the first quarter of 2022. " Third Quarter Financial Update Revenue , gross profit , and gross margin : For the three months ended September 30 , 2021 as compared to the same period in the prior year : • Revenues were $ 4.8 million , representing a decrease of $ 0.4 million , or 7 % , as compared to the same period in 2020 despite a reduction in revenues generated from the sale of our Safe Space Solutions products and services of $ 1.9 million . Revenues generated from our core digital signage products and services increased $ 1.5 million , or 50 % , for the three months ended September 30 , 2021 as compared to the same period in 2020 . • Hardware revenues were $ 2.2 million in 2021 , a decrease of $ 0.6 million , or 21 % , as compared to the prior year , driven by ( 1 ) continued supply chain disruptions related to semiconductor chips delaying the delivery of digital displays and media players to the Company , and ( 2 ) reduced revenues from the sale of our Safe Space Solutions hardware of $ 1.9 million The supply disruption for digital displays prevented the Company from delivery of hardware and execution of installation activities during the quarter . As of September 30 , 2021 , the Company had customer purchase orders for equipment and installation activities in excess of $ 1.2 million which were delayed as a result of product unavailability . The Company expects to experience continued disruptions and delays related to fulfilment of inventory purchases from vendors throughout the remainder of 2021 ; however , the Company currently anticipates those disruptions will be resolved in the first half of 2022 . • Services and other revenues were $ 2.5 million in 2021 , an increase of $ 0.3 million , or 13 % , as compared to 2020 driven by increases in both installation ( $ 0.3 million ) and managed services ( $ 0.1 million ) revenue . Managed services revenue , which includes both software - as - a - service ( " SaaS " ) and help desk technical subscription services for our traditional digital signage and Safe Space Solutions product offerings , were $ 1.4 million in 2021 as compared to $ 1.3 million in 2020 as digital signage subscription revenue began to rebuild following ( 1 ) customer reopening activities , and ( 2 ) the continued expansion in the number of devices managed by the Company generating such revenues . • Gross profit decreased by $ 0.1 million , or 4 % , during the three months ended September 30 , 2021 as compared to the same period in 2020 driven by a reduction in revenue but offset by an increase in gross profit margin . Gross profit margin increased to 49.4 % in 2021 from 47.9 % during the same period in 2020 as a result of improved mix and from increasing managed services revenue . Operating expenses : For the three months ended September 30 , 2021 as compared to the same period in the prior year : • Sales and marketing expenses decreased by $ 0.1 million , or 20 % , having benefited by approximately $ 0.1 million in the