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Transcat Reports 3.0% Increase in Revenue for Fiscal 2013 Third Quarter

Transcat, Inc. (NASDAQ: TRNS) (“Transcat” or the “Company”), an accredited provider of calibration, repair, inspection and other compliance services and a leading distributor of professional grade handheld test, measurement and control instruments, today reported financial results for its third quarter ended December 29, 2012. Included in the reported results are those of Anacor Compliance Services, Inc., which the Company acquired on July 16, 2012.

Fiscal 2013 third quarter total revenue increased 3.0% to $29.3 million from $28.5 million in the third quarter of the prior fiscal year driven by Service segment revenue growth of 8.9%. Product segment sales were consistent with the prior fiscal year period at $19.4 million.

Net income was $0.8 million, or $0.10 per diluted share, in the third quarter of fiscal 2013, compared with $1.0 million, or $0.13 per diluted share, in the prior-year period.

Charles P. Hadeed, CEO of Transcat, commented, “Our acquisition strategy to expand our Service segment drove our growth in the quarter and helped to support overall margins in a challenging market environment for our Product segment. The Anacor acquisition led to 8.9% growth for the Service segment and also contributed to expanded operating and contribution margins for the segment. We have completed six acquisitions in the last three years, including Anacor, and we recently announced the acquisition of Cal-Matrix. In combination with our organic growth initiatives, we expect to continue to acquire high quality calibration labs that further expand our geographic footprint and capabilities.”

On January 25, 2013, the Company announced the acquisition of Cal-Matrix Metrology Inc., a leading Canadian provider of commercial and accredited calibrations and coordinate measurement inspection services. The acquisition greatly expands the Company’s presence in Canada by adding a second laboratory in Southern Ontario and a lab in Montreal, Quebec. Transcat now has 18 strategically located centers of excellence in the United States, Canada and Puerto Rico.

Service Segment Expansion Muted by Product Segment Declines

Operating income for the third quarter of fiscal 2013 was $1.2 million, a $0.4 million decrease from the prior fiscal year period. Operating margin declined 160 basis points to 4.2% in the third quarter of fiscal 2013 compared with 5.8% for the prior-year period. Total operating expenses in the third quarter of fiscal 2013 increased $0.3 million, or 5.3%, including upfront costs related to the Company’s deployment of Salesforce.com, a customer relationship management (“CRM”) software program which is expected to increase the efficiency of our sales teams.

During the third quarter of fiscal 2013, Transcat generated $1.9 million of EBITDA (earnings before interest, taxes, depreciation and amortization), a decrease of $0.5 million when compared with the same quarter of the prior fiscal year. Service segment EBITDA increased 15.5%, to $0.4 million, which was more than offset by a decrease in EBITDA attributable to the Product segment. See Note 1 on page 4 for a description of this non-GAAP financial measure and page 9 for the EBITDA Reconciliation table.

Service Segment Strengthened by Acquisition

Service Segment: Represents the Company’s accredited calibration, repair, inspection and other compliance services business (34% of total revenue for the third quarter of fiscal 2013)

“The third quarter Service segment revenue growth can largely be attributed to furthering our reach into the targeted life sciences industry with our recent acquisition of Anacor,” stated Lee D. Rudow, President and COO of Transcat. “While we have made strides growing with acquisitions, we intend to further increase our focus on organic growth as well, which we expect will lead to enhanced operating leverage and stronger cash flow generation.”

  • Service segment revenue increased 8.9%, or $0.8 million, to $9.9 million in the third quarter of fiscal 2013 compared with the third quarter of the prior fiscal year.
  • Third quarter fiscal 2013 Service segment gross profit improved $0.3 million, or 16.5%, to $2.1 million compared with the prior fiscal year period, while gross margin expanded 140 basis points over the same comparable period to 21.5%.
  • Service segment contribution margin increased $0.3 million, or 65.4%, to $0.8 million compared with the third quarter of fiscal 2012. See Note 1 on page 4 for a description of this non-GAAP financial measure and page 10 for the Contribution Margin Reconciliation in the Business Segment Data.
  • Operating expenses associated with the Service segment increased 5.9% to $2.1 million in the third quarter of fiscal 2013 compared with the third quarter of the prior fiscal year.
  • Service segment operating income was basically break-even for the third quarter of fiscal 2013, an improvement from an operating loss of $0.2 million in the third quarter of fiscal 2012. Operating margin over the same comparable period improved 200 basis points.
  • Service segment EBITDA increased 15.5% to $0.4 million in the fiscal 2013 third quarter compared with the third quarter of fiscal 2012. As a percentage of Service segment revenue, EBITDA for the Service segment was 4.1% and 3.8% in the third quarters of fiscal 2013 and 2012, respectively. See Note 1 on page 4 for a description of this non-GAAP financial measure and page 9 for the EBITDA Reconciliation table.

Product Segment Revenue Steady in a Challenging Market

Product Segment: Represents the Company’s distribution of professional grade handheld test and measurement instruments business (66% of total revenue for the third quarter of fiscal 2013)

  • Product segment sales were $19.4 million in the third quarter of fiscal 2013, consistent with the prior-year period despite two fewer business days. Average Product segment sales per day increased 3.6% to $319 thousand in the third quarter of fiscal 2013, compared with $308 thousand in the same period of fiscal 2012.
  • Online product sales increased 24.5% to $2.3 million in the third quarter of fiscal 2013 from $1.8 million in the prior-year period. Online sales accounted for 11.7% and 9.4% of Product segment sales in the third quarters of 2013 and 2012, respectively.
  • Third quarter Product segment gross profit decreased $0.5 million to $4.5 million, or 23.2% of Product segment sales, primarily due to competitive pricing pressures and a $0.2 million reduction in volume-based rebate income.
  • Product segment operating income decreased $0.6 million to $1.2 million in the third quarter of fiscal 2013 primarily as a result of the contraction in gross profit. Operating margin was 6.4% and 9.6% of Product segment sales in the third quarter of fiscal 2013 and 2012, respectively.
  • Product segment EBITDA was $1.5 million, or 7.8% of segment sales, in the third quarter of fiscal 2013, compared with $2.1 million, or 11.0% of segment sales, in the prior-year period. See Note 1 on page 4 for a description of this non-GAAP financial measure and page 9 for the EBITDA Reconciliation table.

Nine-Month Review

Total revenue increased to $81.2 million in the first nine months of fiscal 2013, up 2.5% from total revenue of $79.2 million in the first nine months of fiscal 2012. Revenue increases in the Service segment were partially offset by lower sales in the Product segment.

  • Service segment revenue increased 10.7% to $28.5 million in the first nine months of fiscal 2013, compared with $25.7 million in the first nine months of fiscal 2012. Incremental revenue from recent acquisitions complemented by organic growth was partially offset by the strategic decision not to renew $0.8 million in low margin revenue from the Company outsourcing primarily non-calibration services for a specific customer.
  • Product segment sales were $52.8 million in the first nine months of fiscal 2013, a decrease of 1.5% from $53.5 million in the same period of the prior fiscal year. Sales to both direct and reseller customers declined slightly, reflecting general economic conditions.

Gross margin was 23.3% in the first nine months of fiscal 2013 compared with 24.3% in the same period of the prior fiscal year.

  • Service segment gross margin improved 60 basis points to 22.8% in the first nine months of fiscal 2013 compared with 22.2% in the same period of the prior fiscal year. Revenue growth in the Service segment included incremental revenue from recent acquisitions, which provided limited short-term gross margin expansion opportunity.
  • Product segment gross margin was 23.6% and 25.3% for the first nine months of fiscal 2013 and 2012, respectively. The decline was primarily a result of $0.7 million less in manufacturer rebates as well as increased price discounts extended to customers, partially offset by a
    $0.3 million increase in cooperative advertising income.

Operating expenses increased modestly to $15.9 million in the first nine months of fiscal 2013, compared with the first nine months of the prior fiscal year. As a percentage of total revenue, operating expenses in the fiscal 2013 year-to-date period improved to 19.6% from 19.9% in the prior-year period reflecting lower performance-based compensation and acquisition-related expenses, partially offset by one-time sales organization restructuring charges and increased investments in our CRM software Salesforce.com.

Fiscal 2013 year-to-date operating income declined $0.5 million, or 13.5%, to $3.0 million compared with the same period of fiscal 2012. The decline reflects lower Product segment operating income partially offset by improved operating income within the Service segment. Operating margin for the same comparable period declined 70 basis points to 3.7%. Net income was $1.9 million, or $0.25 per diluted share, in the first nine months of fiscal 2013, compared with $2.1 million, or $0.27 per diluted share, in the prior-year period.

EBITDA was $4.9 million in the first nine months of fiscal 2013, compared with $5.7 million for the same period in fiscal 2012. See Note 1 on page 4 for a description of this non-GAAP financial measure and page 9 for the EBITDA Reconciliation table.

Strong and Flexible Balance Sheet

Net cash provided by operations was $2.4 million for the year-to-date period of fiscal 2013, compared with $2.5 million in the comparable period of fiscal 2012. The year-over-year change was the result of working capital requirements and timing.

Capital expenditures in the first nine months of fiscal 2013 were $2.2 million compared with $1.2 million in the first nine months of fiscal 2012, and were primarily for additional service capabilities, including implementing Salesforce.com, a larger laboratory in Nashville, TN and an additional calibration system to expand the Company’s pressure calibration capabilities. Business acquisitions were $3.1 million during the first nine months of fiscal 2013 and 2012.

As of December 29, 2012, the Company had $13.4 million in remaining availability under its $20 million secured revolving credit facility.

Outlook

Mr. Hadeed stated, “For the long term, we continue to drive our strategy to grow the Service segment at a higher rate than our product business, both through acquisitions and organically, while continuing to expand the Product segment through increased market penetration. Given the operating leverage inherent in the Service segment, we expect over time this growth will strengthen our earnings power.

“For the fourth quarter of fiscal 2013, we will have one less sales week compared with the prior-year period as a result of our 52/53 week fiscal cycle. In addition, the delay in production tax credits for manufacturers in the wind industry may affect product sales for the remainder of the fiscal year. We expect our Service segment operating income to significantly increase while we face continued margin pressure within our Product segment.”

NOTE 1

In addition to reporting net income, a U.S. generally accepted accounting principle (“GAAP”) measure, we present EBITDA (earnings before interest, income taxes, depreciation and amortization), which is a non-GAAP measure. The Company believes EBITDA allows investors to view its performance in a manner similar to the methods used by management and provides additional insight into its operating results. EBITDA is not calculated through the application of GAAP and is not the required form of disclosure by the Securities and Exchange Commission. As such, it should not be considered as a substitute for the GAAP measure of net income and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure. The use of any non-GAAP measure may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies. See the attached EBITDA Reconciliation table on page 9.

Contribution margin, a non-GAAP financial measure, consists of gross profit less sales, marketing and warehouse expenses. We believe contribution margin provides management and users of the financial statements information about our ability to cover our operating costs, such as technology and general and administrative expenses. Contribution margin is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. The material limitation associated with the use of contribution margin is that it is an incomplete measure of profitability as it does not include all operating expenses or non-operating income and expenses. Management compensates for these limitations when using this measure by looking at other GAAP measures, such as operating income (loss) and net income (loss). For further details on contribution margin, see the calculation of this non-GAAP financial measure and the reconciliation of contribution margin to gross profit on pages 10 and 11.

ABOUT TRANSCAT

Transcat, Inc. is a leading provider of accredited calibration, repair, inspection and compliance services including analytical instrument qualifications, equipment and process validation. Targeted industries include life science, biotechnology, medical device, pharmaceutical and other FDA-regulated industries, industrial manufacturing, energy and utilities, chemical manufacturing and other industries. Throughout its 18 strategically located centers of excellence in the United States, Canada and Puerto Rico, Transcat delivers precise services with reliable turn-around times. The breadth and depth of measurement parameters addressed by Transcat’s ISO/IEC 17025 scopes of accreditation are believed to be among the best in the industry.

In addition, Transcat operates as a leading distributor of professional grade handheld test, measurement and control instrumentation. Through its distribution products segment, Transcat markets and distributes premier and propriety brand instruments to nearly 15,000 customers. The Company offers access to more than 25,000 test, measurement and control products.

Transcat’s growth strategy is to expand its product and service platform comprised of a balanced suite of test products and analytical, calibration, compliance, and validation services. The goal is to deliver specialized technical services with a quality assurance approach, which maximizes document accuracy and on-time job delivery. Transcat answers the call with cGMP, GLP, and GXP compliant services. Transcat can provide life science companies with a reliable alternative service and product solution to the OEMs and to the “generalist” service providers who cannot meet the client’s specialized needs.

More information about Transcat can be found on its website at: transcat.com

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as “expects,” “estimates,” “projects,” “anticipates,” “believes,” “could,” and other similar words. All statements addressing operating performance, events, or developments that Transcat, Inc. expects or anticipates will occur in the future, including but not limited to statements relating to anticipated revenue, profit margins, sales operations, its strategy to build its sales representative channel, customer preferences and changes in market conditions in the industries in which Transcat operates are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Transcat’s Annual and Quarterly Reports filed with the Securities and Exchange Commission, including under the heading entitled “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of the Company’s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on the Company’s forward-looking statements. Except as required by law, the Company disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this press release.

                       
TRANSCAT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
 
 
(Unaudited) (Unaudited)
Third Quarter Ended Nine Months Ended
December 29, December 24, December 29, December 24,
2012 2011 2012 2011
 
Product Sales $ 19,440 $ 19,382 $ 52,753 $ 53,533
Service Revenue   9,884   9,078   28,456   25,715

Total Revenue

  29,324   28,460   81,209   79,248
 
Cost of Products Sold 14,937 14,420 40,317 39,992
Cost of Services Sold   7,757   7,252   21,977   20,017

Total Cost of Products and Services Sold

  22,694   21,672   62,294   60,009
 
Gross Profit   6,630   6,788   18,915   19,239
 
Selling, Marketing and Warehouse Expenses 3,386 3,403 9,786 10,071
Administrative Expenses   2,023   1,732   6,134   5,704

Total Operating Expenses

  5,409   5,135   15,920   15,775
 
Operating Income   1,221   1,653   2,995   3,464
 
Interest and Other Expense, net   37   44   135   127
 
Income Before Income Taxes 1,184 1,609 2,860 3,337
Provision for Income Taxes   402   585   972   1,242
 
Net Income   782   1,024   1,888   2,095
 
 
Basic Earnings Per Share $ 0.11 $ 0.14 $ 0.26 $ 0.29
Average Shares Outstanding 7,417 7,325 7,399 7,301
 
Diluted Earnings Per Share $ 0.10 $ 0.13 $ 0.25 $ 0.27
Average Shares Outstanding 7,562 7,680 7,575 7,647
 
           
TRANSCAT, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts)
 
(Unaudited)
December 29, March 31,
2012

2012

ASSETS
Current Assets:

Cash

$ 459 $ 32

Accounts Receivable, less allowance for doubtful accounts of $100

and $99 as of December 29, 2012 and March 31, 2012, respectively

13,868 13,800

Other Receivables

1,350 845

Inventory, net

6,753 6,396

Prepaid Expenses and Other Current Assets

1,307 1,064

Deferred Tax Asset

  901   1,041  

Total Current Assets

24,638 23,178
Property and Equipment, net 6,609 5,306
Goodwill 15,294 13,390
Intangible Assets, net 2,458 2,449
Deferred Tax Asset 332 -
Other Assets   1,010   654  

Total Assets

$ 50,341 $ 44,977  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:

Accounts Payable

$ 8,839 $ 7,516

Accrued Compensation and Other Liabilities

3,750 5,171

Income Taxes Payable

  -   366  

Total Current Liabilities

12,589 13,053
Long-Term Debt 6,642 3,365
Deferred Tax Liability - 139
Other Liabilities   1,538   1,042  

Total Liabilities

  20,769   17,599  
 
Shareholders' Equity:

Common Stock, par value $0.50 per share, 30,000,000 shares authorized;

7,417,294 and 7,840,994 shares issued as of December 29, 2012 and

March 31, 2012, respectively; 7,417,294 and 7,341,007 shares

outstanding as of December 29, 2012 and March 31, 2012, respectively

3,709 3,920

Capital in Excess of Par Value

10,680 10,810

Accumulated Other Comprehensive Income

402 448

Retained Earnings

14,781 14,394

Less: Treasury Stock, at cost, 498,782 shares as of March 31, 2012

  -   (2,194 )

Total Shareholders' Equity

  29,572   27,378  

Total Liabilities and Shareholders' Equity

$ 50,341 $ 44,977  
 
           

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

 

(Unaudited)

Nine Months Ended

December 29,

December 24,

2012

2011

Cash Flows from Operating Activities:
Net Income

$

1,888

$

2,095

Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Deferred Income Taxes (250 ) (105 )
Depreciation and Amortization 1,945 2,241
Provision for Accounts Receivable and Inventory Reserves 167 157
Stock-Based Compensation Expense 220 407
Changes in Assets and Liabilities:
Accounts Receivable and Other Receivables (252 ) (2,387 )
Inventory (349 ) (1,347 )
Prepaid Expenses and Other Assets (909 ) (627 )
Accounts Payable 1,337 1,270
Accrued Compensation and Other Liabilities (1,038 ) 873
Income Taxes Payable   (409 )   (42 )
Net Cash Provided by Operating Activities   2,350     2,535  
 
Cash Flows from Investing Activities:
Purchase of Property and Equipment (2,189 ) (1,233 )
Business Acquisitions   (3,129 )   (3,122 )
Net Cash Used in Investing Activities   (5,318 )   (4,355 )
 
Cash Flows from Financing Activities:
Revolving Line of Credit, net 3,277 1,606
Payments on Other Debt Obligations

-

(11 )
Payments of Contingent Consideration (14 ) (88 )
Issuance of Common Stock 199 350
Repurchase of Common Stock (110 ) (61 )
Excess Tax Benefits Related to Stock-Based Compensation   43     39  
Net Cash Provided by Financing Activities   3,395     1,835  
 
Effect of Exchange Rate Changes on Cash  

-

    10  
 
Net Increase in Cash 427 25
Cash at Beginning of Period   32     32  
Cash at End of Period

$

459

 

$

57

 
 
           

TRANSCAT, INC.

Fiscal Year 2013 and Fiscal Year 2012
Additional Information
 
EBITDA Reconciliation

(Dollars in thousands)

(Unaudited)

 

FY2013

Q1       Q2       Q3       YTD
Net Income $ 361       $ 745       $ 782       $ 1,888
+ Interest Expense 21 38 20 79
+ Other Expense / (Income) 26 13 17 56
+ Tax Provision   186           384           402           972  
Operating Income $ 594 $ 1,180 $ 1,221 $ 2,995
+ Depreciation & Amortization 600 621 724 1,945
+ Other (Expense) / Income   (26 )         (13 )         (17 )         (56 )
EBITDA $ 1,168 $ 1,788 $ 1,928 $ 4,884
 

Segment Breakdown

 
Service Operating Income (Loss) $ (258 ) $ 333 $ (19 ) $ 56
+ Depreciation & Amortization 359 422 439 1,220
+ Other (Expense) / Income   (18 )         (14 )         (18 )         (50 )
Service EBITDA $ 83 $ 741 $ 402 $ 1,226
 
Product Operating Income $ 852 $ 847 $ 1,240 $ 2,939
+ Depreciation & Amortization 241 199 285 725
+ Other (Expense) / Income   (8 )         1           1           (6 )
Product EBITDA $ 1,085 $ 1,047 $ 1,526 $ 3,658
                                       
 

FY2012

Q1       Q2       Q3       YTD
Net Income $ 325 $ 746 $ 1,024 $ 2,095
+ Interest Expense 28 28 35 91
+ Other Expense / (Income) 17 10 9 36
+ Tax Provision   200           457           585           1,242  
Operating Income $ 570 $ 1,241 $ 1,653 $ 3,464
+ Depreciation & Amortization 670 738 833 2,241
+ Other (Expense) / Income   (17 )         (10 )         (9 )         (36 )
EBITDA $ 1,223 $ 1,969 $ 2,477 $ 5,669
 

Segment Breakdown

 
Service Operating Income $ (251 ) $ (216 ) $ (201 ) $ (668 )
+ Depreciation & Amortization 474 511 557 1,542
+ Other (Expense) / Income   (11 )         (9 )         (8 )         (28 )
Service EBITDA $ 212 $ 286 $ 348 $ 846
 
Product Operating Income $ 821 $ 1,457 $ 1,854 $ 4,132
+ Depreciation & Amortization 196 227 276 699
+ Other (Expense) / Income   (6 )         (1 )         (1 )         (8 )
Product EBITDA $ 1,011 $ 1,683 $ 2,129 $ 4,823
 
                 
TRANSCAT, INC.
Additional Information - Business Segment Data

(Dollars in thousands)

(Unaudited)

Change
SERVICE FY 2013 Q3 FY 2012 Q3 $'s       %
 
Service Revenue $ 9,884 $ 9,078 $ 806 8.9 %
Cost of Services Sold $ 7,757   $ 7,252   $ 505   7.0 %
Gross Profit $ 2,127 $ 1,826 $ 301 16.5 %
Gross Margin 21.5 % 20.1 %
 
Selling, Marketing & Warehouse Expenses $ 1,313   $ 1,334   $ (21 ) (1.6 %)
Contribution Margin $ 814 $ 492 $ 322 65.4 %
% of Revenue 8.2 % 5.4 %
 
Administrative Expenses $ 833   $ 693   $ 140   20.2 %
Operating Loss $ (19 ) $ (201 ) $ 182 90.5 %
% of Revenue (0.2 %) (2.2 %)
 
 
Change
PRODUCT FY 2013 Q3 FY 2012 Q3 $'s %
Product Sales $ 19,440 $ 19,382 $ 58 0.3 %
Cost of Products Sold $ 14,937   $ 14,420   $ 517   3.6 %
Gross Profit $ 4,503 $ 4,962 $ (459 ) (9.3 %)
Gross Margin 23.2 % 25.6 %
 
Selling, Marketing & Warehouse Expenses $ 2,073   $ 2,069   $ 4   0.2 %
Contribution Margin $ 2,430 $ 2,893 $ (463 ) (16.0 %)
% of Sales 12.5 % 14.9 %
 
Administrative Expenses $ 1,190   $ 1,039   $ 151   14.5 %
Operating Income $ 1,240 $ 1,854 $ (614 ) (33.1 %)
% of Sales 6.4 % 9.6 %
                                 
 
Change
TOTAL FY 2013 Q3 FY 2012 Q3 $'s %
 
Total Revenue $ 29,324 $ 28,460 $ 864 3.0 %
Total Cost of Products and Services Sold $ 22,694   $ 21,672   $ 1,022   4.7 %
Gross Profit $ 6,630 $ 6,788 $ (158 ) (2.3 %)
Gross Margin 22.6 % 23.9 %
 
Selling, Marketing & Warehouse Expenses $ 3,386   $ 3,403   $ (17 ) (0.5 %)
Contribution Margin $ 3,244 $ 3,385 $ (141 ) (4.2 %)
% of Revenue 11.1 % 11.9 %
 
Administrative Expenses $ 2,023   $ 1,732   $ 291   16.8 %
Operating Income $ 1,221 $ 1,653 $ (432 ) (26.1 %)
% of Revenue 4.2 % 5.8 %
 
                 
TRANSCAT, INC.
Additional Information - Business Segment Data

(Dollars in thousands)

(Unaudited)

Change
SERVICE FY 2013 YTD FY 2012 YTD $'s       %
 
Service Revenue $ 28,456 $ 25,715 $ 2,741 10.7%
Cost of Services Sold $ 21,977 $ 20,017 $ 1,960 9.8%
Gross Profit $ 6,479 $ 5,698 $ 781 13.7%
Gross Margin 22.8% 22.2%
 
Selling, Marketing & Warehouse Expenses $ 3,748 $ 3,966 $ (218) (5.5%)
Contribution Margin $ 2,731 $ 1,732 $ 999 57.7%
% of Revenue 9.6% 6.7%
 
Administrative Expenses $ 2,675 $ 2,400 $ 275 11.5%
Operating Income (Loss) $ 56 $ (668) $ 724 108.4%
% of Revenue 0.2% (2.6%)
 
Change
PRODUCT FY 2013 YTD FY 2012 YTD $'s     %
Product Sales $ 52,753 $ 53,533 $ (780) (1.5%)
Cost of Products Sold $ 40,317 $ 39,992 $ 325 0.8%
Gross Profit $ 12,436 $ 13,541 $ (1,105) (8.2%)
Gross Margin 23.6% 25.3%
 
Selling, Marketing & Warehouse Expenses $ 6,038 $ 6,105 $ (67) (1.1%)
Contribution Margin $ 6,398 $ 7,436 $ (1,038) (14.0%)
% of Sales 12.1% 13.9%
 
Administrative Expenses $ 3,459 $ 3,304 $ 155 4.7%
Operating Income $ 2,939 $ 4,132 $ (1,193) (28.9%)
% of Sales 5.6% 7.7%
                                 
Change
TOTAL FY 2013 YTD FY 2012 YTD $'s %
 
Total Revenue $ 81,209 $ 79,248 $ 1,961 2.5%
Total Cost of Products and Services Sold $ 62,294 $ 60,009 $ 2,285 3.8%
Gross Profit $ 18,915 $ 19,239 $ (324) (1.7%)
Gross Margin 23.3% 24.3%
 
Selling, Marketing & Warehouse Expenses $ 9,786 $ 10,071 $ (285) (2.8%)
Contribution Margin $ 9,129 $ 9,168 $ (39) (0.4%)
% of Revenue 11.2% 11.6%
 
Administrative Expenses $ 6,134 $ 5,704 $ 430 7.5%
Operating Income $ 2,995 $ 3,464 $ (469) (13.5%)
% of Revenue 3.7% 4.4%
 
                         

PRODUCT SALES PER BUSINESS DAY

(Dollars in thousands)

(Unaudited)

 
Change
FY 2013 Q3               FY 2012 Q3       $'s       %
Product Sales $ 19,440 $ 19,382 $ 58       0.3%
Business Days 61 63 (2)
Sales Per Business Day $ 319               $ 308       $ 11       3.6%
 
                 
Change
FY 2013 YTD       FY 2012 YTD       $'s       %
Product Sales $ 52,753 $ 53,533 $ (780)       (1.5%)
Business Days 187 190 (3)
Sales Per Business Day $ 282       $ 282       $ 0       0.1%
 

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@ThingsExpo Stories
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it's a mix of architectural styles ...
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...
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and assessments, including a decade of leading incident response and digital forensics. He is co-author of t...
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.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
The 3rd International @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 it is now accepting Keynote Proposals. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades.
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
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.
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
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.
"There is a natural synchronization between the business models, the IoT is there to support ,” explained Brendan O'Brien, Co-founder and Chief Architect of Aria Systems, in this SYS-CON.tv interview at the 15th International Cloud Expo®, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, demonstrated how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
There's Big Data, then there's really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at Big Data Expo®, Hannah Smalltree, Director at Treasure Data, discussed how IoT, Big Data and deployments are processing massive data volumes from wearables, utilities and other machines...