|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.
The Internet of Things is in the early stages of mainstream deployment but it promises to unlock value and rapidly transform how organizations manage, operationalize, and monetize their assets. IoT is a complex structure of hardware, sensors, applications, analytics and devices that need to be able to communicate geographically and across all functions. Once the data is collected from numerous endpoints, the challenge then becomes converting it into actionable insight.
Sep. 4, 2015 12:30 PM EDT Reads: 113
SYS-CON Events announced today that Micron Technology, Inc., a global leader in advanced semiconductor systems, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Micron’s broad portfolio of high-performance memory technologies – including DRAM, NAND and NOR Flash – is the basis for solid state drives, modules, multichip packages and other system solutions. Backed by more than 35 years of technology leadership, Micron's memory solutions enable the world's most innovative computing, consumer,...
Sep. 4, 2015 12:00 PM EDT Reads: 292
With the Apple Watch making its way onto wrists all over the world, it’s only a matter of time before it becomes a staple in the workplace. In fact, Forrester reported that 68 percent of technology and business decision-makers characterize wearables as a top priority for 2015. Recognizing their business value early on, FinancialForce.com was the first to bring ERP to wearables, helping streamline communication across front and back office functions. In his session at @ThingsExpo, Kevin Roberts, GM of Platform at FinancialForce.com, will discuss the value of business applications on wearable ...
Sep. 4, 2015 12:00 PM EDT Reads: 103
SYS-CON Events announced today that IceWarp will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. IceWarp, the leader of cloud and on-premise messaging, delivers secured email, chat, documents, conferencing and collaboration to today's mobile workforce, all in one unified interface
Sep. 4, 2015 12:00 PM EDT Reads: 496
As more and more data is generated from a variety of connected devices, the need to get insights from this data and predict future behavior and trends is increasingly essential for businesses. Real-time stream processing is needed in a variety of different industries such as Manufacturing, Oil and Gas, Automobile, Finance, Online Retail, Smart Grids, and Healthcare. Azure Stream Analytics is a fully managed distributed stream computation service that provides low latency, scalable processing of streaming data in the cloud with an enterprise grade SLA. It features built-in integration with Azur...
Sep. 4, 2015 11:45 AM EDT Reads: 398
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, 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. Meanwhile, 94% of enterprises are using some form of XaaS – software, platform, and infrastructure as a service.
Sep. 4, 2015 11:00 AM EDT Reads: 1,615
SYS-CON Events announced today the Containers & Microservices Bootcamp, being held November 3-4, 2015, in conjunction with 17th Cloud Expo, @ThingsExpo, and @DevOpsSummit at the Santa Clara Convention Center in Santa Clara, CA. This is your chance to get started with the latest technology in the industry. Combined with real-world scenarios and use cases, the Containers and Microservices Bootcamp, led by Janakiram MSV, a Microsoft Regional Director, will include presentations as well as hands-on demos and comprehensive walkthroughs.
Sep. 4, 2015 11:00 AM EDT Reads: 427
SYS-CON Events announced today that the "Second Containers & Microservices Expo" will take place November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities.
Sep. 4, 2015 10:45 AM EDT Reads: 662
WebRTC services have already permeated corporate communications in the form of videoconferencing solutions. However, WebRTC has the potential of going beyond and catalyzing a new class of services providing more than calls with capabilities such as mass-scale real-time media broadcasting, enriched and augmented video, person-to-machine and machine-to-machine communications. In his session at @ThingsExpo, Luis Lopez, CEO of Kurento, will introduce the technologies required for implementing these ideas and some early experiments performed in the Kurento open source software community in areas ...
Sep. 4, 2015 10:00 AM EDT Reads: 135
Akana has announced the availability of the new Akana Healthcare Solution. The API-driven solution helps healthcare organizations accelerate their transition to being secure, digitally interoperable businesses. It leverages the Health Level Seven International Fast Healthcare Interoperability Resources (HL7 FHIR) standard to enable broader business use of medical data. Akana developed the Healthcare Solution in response to healthcare businesses that want to increase electronic, multi-device access to health records while reducing operating costs and complying with government regulations.
Sep. 4, 2015 09:30 AM EDT Reads: 334
Containers are not new, but renewed commitments to performance, flexibility, and agility have propelled them to the top of the agenda today. By working without the need for virtualization and its overhead, containers are seen as the perfect way to deploy apps and services across multiple clouds. Containers can handle anything from file types to operating systems and services, including microservices. What are microservices? Unlike what the name implies, microservices are not necessarily small, but are focused on specific tasks. The ability for developers to deploy multiple containers – thous...
Sep. 4, 2015 09:00 AM EDT Reads: 209
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal an...
Sep. 4, 2015 08:15 AM EDT Reads: 2,044
Consumer IoT applications provide data about the user that just doesn’t exist in traditional PC or mobile web applications. This rich data, or “context,” enables the highly personalized consumer experiences that characterize many consumer IoT apps. This same data is also providing brands with unprecedented insight into how their connected products are being used, while, at the same time, powering highly targeted engagement and marketing opportunities. In his session at @ThingsExpo, Nathan Treloar, President and COO of Bebaio, will explore examples of brands transforming their businesses by t...
Sep. 4, 2015 07:00 AM EDT Reads: 301
Through WebRTC, audio and video communications are being embedded more easily than ever into applications, helping carriers, enterprises and independent software vendors deliver greater functionality to their end users. With today’s business world increasingly focused on outcomes, users’ growing calls for ease of use, and businesses craving smarter, tighter integration, what’s the next step in delivering a richer, more immersive experience? That richer, more fully integrated experience comes about through a Communications Platform as a Service which allows for messaging, screen sharing, video...
Sep. 4, 2015 06:00 AM EDT Reads: 756
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
Sep. 4, 2015 06:00 AM EDT Reads: 506
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps 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 today!
Sep. 4, 2015 04:30 AM EDT Reads: 1,707
In his session at @ThingsExpo, Lee Williams, a producer of the first smartphones and tablets, will talk about how he is now applying his experience in mobile technology to the design and development of the next generation of Environmental and Sustainability Services at ETwater. He will explain how M2M controllers work through wirelessly connected remote controls; and specifically delve into a retrofit option that reverse-engineers control codes of existing conventional controller systems so they don't have to be replaced and are instantly converted to become smart, connected devices.
Sep. 4, 2015 02:00 AM EDT Reads: 275
The 3rd International WebRTC Summit, to be held Nov. 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, announces that its Call for Papers is now open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 15th International Cloud Expo, 6th International Big Data Expo, 3rd International DevOps Summit and 2nd Internet of @ThingsExpo. WebRTC (Web-based Real-Time Communication) is an open source project supported by Google, Mozilla and Opera that aims to enable bro...
Sep. 4, 2015 01:15 AM EDT Reads: 1,634
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies leverage disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevOps to advance innovation and increase agility. Specializing in designing, imple...
Sep. 4, 2015 12:00 AM EDT Reads: 392
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. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo, November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be.
Sep. 3, 2015 08:30 PM EDT Reads: 211