Welcome!

.NET Authors: David Fletcher, Srinivasan Sundara Rajan, Pat Romanski, Tad Anderson, Adine Deford

News Feed Item

GINSMS Inc. Announces Financial Results For The Second quarter ended September 30, 2012

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.

About GINSMS

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.

Contacts:
GINSMS Inc.
Raymond Richard
Corporate Secretary
450-466-2921

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential.
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com), moderated by Ashar Baig, Research Director, Cloud, at Gigaom Research, Nate Gordon, Director of T...
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover how hardware commoditization, the ubiquitous nature of connectivity, and the emergence of Big Data a...
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's platform-as-a-service. The new platform enables developers to build ap...

SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada. Our partner network encompasses some 300 of the world's leading systems integrators and security s...
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Nigeria has the largest economy in Africa, at more than US$500 billion, and ranks 23rd in the world. A recent re-evaluation of Nigeria's true economic size doubled the previous estimate, and brought it well ahead of South Africa, which is a member (unlike Nigeria) of the G20 club for political as well as economic reasons. Nigeria's economy can be said to be quite diverse from one point of view, but heavily dependent on oil and gas at the same time. Oil and natural gas account for about 15% of Nigera's overall economy, but traditionally represent more than 90% of the country's exports and as...
The Internet of Things is a misnomer. That implies that everything is on the Internet, and that simply should not be - especially for things that are blurring the line between medical devices that stimulate like a pacemaker and quantified self-sensors like a pedometer or pulse tracker. The mesh of things that we manage must be segmented into zones of trust for sensing data, transmitting data, receiving command and control administrative changes, and peer-to-peer mesh messaging. In his session at @ThingsExpo, Ryan Bagnulo, Solution Architect / Software Engineer at SOA Software, focused on desi...
"At our booth we are showing how to provide trust in the Internet of Things. Trust is where everything starts to become secure and trustworthy. Now with the scaling of the Internet of Things it becomes an interesting question – I've heard numbers from 200 billion devices next year up to a trillion in the next 10 to 15 years," explained Johannes Lintzen, Vice President of Sales at Utimaco, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"For over 25 years we have been working with a lot of enterprise customers and we have seen how companies create applications. And now that we have moved to cloud computing, mobile, social and the Internet of Things, we see that the market needs a new way of creating applications," stated Jesse Shiah, CEO, President and Co-Founder of AgilePoint Inc., in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the industry’s first all flash version of HyperConverged Appliances that include both compute and storag...
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile devices as well as laptops and desktops using a visual drag-and-drop application – and eForms-buildi...
We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core of our infrastructures. At the same time, we have old approaches made new again like micro-services...
Code Halos - aka "digital fingerprints" - are the key organizing principle to understand a) how dumb things become smart and b) how to monetize this dynamic. In his session at @ThingsExpo, Robert Brown, AVP, Center for the Future of Work at Cognizant Technology Solutions, outlined research, analysis and recommendations from his recently published book on this phenomena on the way leading edge organizations like GE and Disney are unlocking the Internet of Things opportunity and what steps your organization should be taking to position itself for the next platform of digital competition.
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at @ThingsExpo, Andrew Bolwell, Director of Innovation for HP's Printing and Personal Systems Group, discussed how key attributes of mobile technology – touch input, sensors, social, and ...
In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect at GE, and Ibrahim Gokcen, who leads GE's advanced IoT analytics, focused on the Internet of Things / Industrial Internet and how to make it operational for business end-users. Learn about the challenges posed by machine and sensor data and how to marry it with enterprise data. They also discussed the tips and tricks to provide the Industrial Internet as an end-user consumable service using Big Data Analytics and Industrial Cloud.