|By Marketwired .||
|November 29, 2012 09:14 PM EST||
CALGARY, ALBERTA -- (Marketwire) -- 11/30/12 -- GINSMS Inc. ("GINSMS" or the "Company") (TSX VENTURE:GOK) has announced its financial results for the second quarter ended September 30, 2012.
PERFORMANCE HIGHLIGHTS FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2012
-- The acquisition of Inphosoft Group Pte Ltd ("Inphosoft") was completed on September 28, 2012. GINSMS consolidated balance sheet as at September 30, 2012 includes the accounts of Inphosoft Group Pte Ltd and its subsidiaries for the first time. -- A decline in revenue, an increase in general expenses, notably professional fees due the acquisition of Inphosoft, resulted in a net loss of $425,148 for the three-month period ended September 30, 2012. This represents a drop of 890% compared to a net loss of $42,951 for the corresponding quarter the previous year. EBITDA was also affected dropping from a deficit of $12,273 to a deficit of $399,109. For the six months ended September 30, 2012, GINSMS showed a decline in revenue of 15.7% to $306,997. EBITDA recorded a negative $421,653, compared to $36,099 in the comparable period the previous year. -- The decline in revenue combined with a slight increase in the cost of sales resulted in a drop in gross margin to 55.2% in the three-month period ended September 30, 2012, compared to 64.7% in the same quarter the previous year. Gross margin for the six-month period dropped to 55.1%, from 64.5% in the same quarter the previous year. -- Volume of inter-SMS traffic for the three-month period ended September 30, 2012 was down by 29.1% to 23,784,375 million from the same period the previous year. When compared to the previous quarter ended June 30, 2012, traffic is up 2.5%. As explained before GINSMS believes that this downward trend in SMS traffic is partly caused by cellphone users migrating to mobile instant messaging ("MIM") applications such as Research in Motion's BlackBerry Messenger ("BBM"), Apple's Imessage or other cross-platform mobile messaging applications such as WhatsApp. This migration enables smart phone users to send MIM using device data channel or WI-FI. -- Excluding Inphosoft's opening balance sheet, liquidity was materially affected by the unusual amount of professional fees incurred for the acquisition of Inphosoft resulting in drop in working capital of $418,274 to $196,633. With the acquisition of Inphosoft, working capital improved by 15.4% to $709,492 with cash on of $714,599. The working capital ratio stood at 1.6 times to one as at September 30, 2012, compared to 5.1 times to one as at March 31, 2012. SECTION 1.4: RESULTS OF OPERATIONS ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Three-month period ended Six-month period ended Financial Highlights September 30, September 30, (Unaudited) (Unaudited) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- 2012 2011 2012 2011 Revenues $ 149,908 182,444 306,997 364,254 Cost of sales $ (67,216) (64,461) (137,940) (129,150) ---------------------------------------------------------------------------- Gross profit $ 82,692 117,983 169.057 235,104 Gross margin 55.2% 64.7% 55.1% 64.5% ---------------------------------------------------------------------------- EBITDA (1) $ (399,109) (12,273) (421,653) 36,099 EBITDA margin (266.2)% (6.7)% (137.3)% 9.9% ---------------------------------------------------------------------------- Net earnings $ (425,148) (42,951) (473,183) (26,442) Net earnings margin (283.6)% (23.5)% (154.1)% (7.3)% 1. EBITDA is a non-GAAP measure related to cash earnings and is defined for these purposes as earnings before income taxes, depreciation and amortization (share-based compensation included).
Financial Review for the Three- and Six-Month Period ended September 30, 2012
Revenue for the second quarter ending September 30, 2012 was $149,908, representing a reduction of 17.8% over revenue of $182,444 reported during the same three-month period the previous year. The reduction in revenue is due essentially to a 29.1% drop in SMS traffic during the quarter, compared to the corresponding quarter the previous year. Note that in comparison with the immediately preceding quarter ending June 30, 2012, revenue dropped by only 4.5%, reflecting a slight increase in traffic of 2.5%, compensated by the dampening effect the bundle program may have on net revenue depending on the level of traffic generated by each customer.
For the six-month period ended September 30, 2012, revenue dropped by 15.7% to $306,997, compared to the corresponding period the previous year. The drop manifested as SMS traffic during the six-month period of the current fiscal year dropped by an average of about 10 million SMS. This is a significant drop given that the latest available statistics from the office of the Telecommunication Authority (OFTA) in Hong Kong covering the periods up to and including August 2012 continue to show a considerable increase in all categories of customers in the 2G to 4G space. In spite of this, however, overall traffic of both sent and received short messages are trending downward. During August of 2012 the average traffic sent and received per mobile customers averaged 32 and 42 messages respectively. This is down from an average of 46 and 55 messages respectively for all of 2011.
As mentioned before, GINSMS believes that the lower trend in SMS traffic is partly caused by cellphone users migrating to MIM applications such as Research in Motion's BBM, Apple's Imessage or other cross- platform mobile messaging applications such as WhatsApp, IM+, Skype or Google Talk. This migration enables smart phone users to send MIM using device data channel or WI-FI at a fraction of the cost required to send an SMS. Given the conditions in the market and the potential for new competitors to enters the space for the delivery of SMS in Hong Kong,, management does not anticipate traffic going through GINSMS proprietary platform to improve in the foreseeable future or even beyond.
As mentioned in the previous MD&A, management anticipated this downward trend in SMS traffic and initiated discussions with Inphosoft Group Pte Ltd ("Inphosoft"), a Singapore IT mobile middleware solutions developer for MNOs, financial institutions, media companies and enterprises which provides innovative mobile data services and solutions. These discussions ended with the acquisition on September 28, 2012 of Inphosoft for a total consideration of $11.3 million, $10.5 million of which paid via the issuance of $10.5 million in convertible debentures.
With the acquisition, management intends to focus its attention mainly on the enterprise market to tap the potential growth of mobile advertising and machine-to machine applications. The timing of the acquisition is critical to allow GINSMS to extract the benefit of a platform that has been losing ground to both the competition and market trends in the delivery of SMS not only in the Company's market but worldwide. Steps have already been taken to minimize operating costs in operating the platform and a strategy is being developed to advance the cause of Company's new focus on mobile advertising and the machine-to- machine space. This new focus is now more relevant today given that there are new competitors showing an interest in the IOSMS market in Hong Kong and this could intensify the competition for SMS traffic even more.
The net loss for the quarter ended September 30, 2012 amounted to $425,148 representing an increase of 890% compared to the loss of $42,951 recorded during the same quarter the previous year. This is due mainly to a 6.4 fold increase in professional fees which amounted to $376,706 for the period. An increase of 37.9% in salaries and wages to $39,003 and of 107% in general and administrative expenses to $38,884 also contributed to the loss. The length and complexity of the negotiations leading to the acquisition of Inphosoft and the requirements and conditions imposed by the TSXV on GINSMS to complete the acquisition of Inphosoft have resulted in a substantial increase in the professional fees. In addition to the legal, accountancy and audit fees, professional fees include fees for the retention of the services of an agent, namely Raymond James Ltd to act as sponsor for the Company, and the fees of a business valuation firm, namely BDO Canada LLP to provide a valuation of Inphosoft, as required by the TSX Venture Exchange. The increase in general and administrative expenses is related to the stamp duty levied by the Inland Revenue Authority of Singapore in connection with the transfer of the shares of Inphosoft upon the closing of the transaction.
The net loss of the six-month period ended September 30, 2012 was $473,183, compared to a net loss of $26,442 for the corresponding period the previous year. The reasons for the increase are the same as those explained for the second quarter as described above with professional increasing by 508% to$402,464, salaries and wages increasing by 39.1% and general and administrative expenses increasing by 77.8% to $55,300.
EBITDA (earnings before interest, taxes, depreciation and amortization) is a useful indicator in measuring the Company's ability to sustain long term viable operations while resources are used to grow the Company in a difficult environment. EBITDA for the three-month period ended September 30, 2012 amounted to a negative $399,109 compared to a negative EBITDA of $12,273 for the corresponding period the previous year. For the six-month period also ended on September 30, 2012, EBITDA was a negative $421,653, compared to a positive $36,099 for the same period the previous year. The incidence on net earnings resulting from the drop in revenue, the increase principally in professional but also in salaries and wages and general and administrative are the main reasons for the drop in EBITDA for both period.
GINSMS owns 100% of Global Edge Technology, a technology company focused on providing inter- operator short messaging services to mobile telecom operators in Hong Kong. Since September 28, 2012 with the acquisition of Inphosoft Group Pte Ltd, a company whose activities consists in providing mobile data service and solutions, GINSMS will be focusing more on enterprise messaging needs comprising mainly of mobile marketing and machine-to-machine applications.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
"Once customers get a year into their IoT deployments, they start to realize that they may have been shortsighted in the ways they built out their deployment and the key thing I see a lot of people looking at is - how can I take equipment data, pull it back in an IoT solution and show it in a dashboard," stated Dave McCarthy, Director of Products at Bsquare Corporation, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 8, 2016 09:45 PM EST Reads: 1,233
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...
Dec. 8, 2016 09:15 PM EST Reads: 947
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
Dec. 8, 2016 07:45 PM EST Reads: 311
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
Dec. 8, 2016 07:15 PM EST Reads: 370
Everyone knows that truly innovative companies learn as they go along, pushing boundaries in response to market changes and demands. What's more of a mystery is how to balance innovation on a fresh platform built from scratch with the legacy tech stack, product suite and customers that continue to serve as the business' foundation. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, discussed why and how ReadyTalk diverted from healthy revenue and mor...
Dec. 8, 2016 05:45 PM EST Reads: 1,719
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
Dec. 8, 2016 05:00 PM EST Reads: 1,817
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
Dec. 8, 2016 04:45 PM EST Reads: 1,846
Financial Technology has become a topic of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 20th Cloud Expo at the Javits Center in New York, June 6-8, 2017, will find fresh new content in a new track called FinTech.
Dec. 8, 2016 04:45 PM EST Reads: 2,250
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
Dec. 8, 2016 04:15 PM EST Reads: 2,315
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
Dec. 8, 2016 03:30 PM EST Reads: 1,241
Unsecured IoT devices were used to launch crippling DDOS attacks in October 2016, targeting services such as Twitter, Spotify, and GitHub. Subsequent testimony to Congress about potential attacks on office buildings, schools, and hospitals raised the possibility for the IoT to harm and even kill people. What should be done? Does the government need to intervene? This panel at @ThingExpo New York brings together leading IoT and security experts to discuss this very serious topic.
Dec. 8, 2016 03:00 PM EST Reads: 530
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
Dec. 8, 2016 02:30 PM EST Reads: 934
"Dice has been around for the last 20 years. We have been helping tech professionals find new jobs and career opportunities," explained Manish Dixit, VP of Product and Engineering at Dice, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 8, 2016 02:15 PM EST Reads: 1,193
"ReadyTalk is an audio and web video conferencing provider. We've really come to embrace WebRTC as the platform for our future of technology," explained Dan Cunningham, CTO of ReadyTalk, in this SYS-CON.tv interview at WebRTC Summit at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 8, 2016 01:45 PM EST Reads: 796
"At ROHA we develop an app called Catcha. It was developed after we spent a year meeting with, talking to, interacting with senior citizens watching them use their smartphones and talking to them about how they use their smartphones so we could get to know their smartphone behavior," explained Dave Woods, Chief Innovation Officer at ROHA, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 8, 2016 01:45 PM EST Reads: 777
WebRTC is the future of browser-to-browser communications, and continues to make inroads into the traditional, difficult, plug-in web communications world. The 6th WebRTC Summit continues our tradition of delivering the latest and greatest presentations within the world of WebRTC. Topics include voice calling, video chat, P2P file sharing, and use cases that have already leveraged the power and convenience of WebRTC.
Dec. 8, 2016 12:45 PM EST Reads: 1,753
The many IoT deployments around the world are busy integrating smart devices and sensors into their enterprise IT infrastructures. Yet all of this technology – and there are an amazing number of choices – is of no use without the software to gather, communicate, and analyze the new data flows. Without software, there is no IT. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Dave McCarthy, Director of Products at Bsquare Corporation; Alan Williamson, Principal...
Dec. 8, 2016 12:00 PM EST Reads: 537
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
Dec. 8, 2016 11:30 AM EST Reads: 2,349
An IoT product’s log files speak volumes about what’s happening with your products in the field, pinpointing current and potential issues, and enabling you to predict failures and save millions of dollars in inventory. But until recently, no one knew how to listen. In his session at @ThingsExpo, Dan Gettens, Chief Research Officer at OnProcess, discussed recent research by Massachusetts Institute of Technology and OnProcess Technology, where MIT created a new, breakthrough analytics model for ...
Dec. 8, 2016 10:30 AM EST Reads: 576
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Dec. 8, 2016 10:30 AM EST Reads: 7,330