|By Business Wire||
|December 14, 2012 04:01 PM EST||
Emtec, Inc. (OTCBB: ETEC) (“Emtec” or the “Company”) announced today that for the year ended August 31, 2012, the Company reported positive Adjusted EBITDA (as defined below) of $5.8 million, which reflects growth of over 51% versus Adjusted EBITDA of $3.8 million for the year ended August 31, 2011. Consulting and outsourcing revenue increased by 39% when compared to the year ended August 31, 2011.
Revenue increased to $224.6 million for fiscal year 2012 from $212.1 million in the fiscal year 2011, an increase of 5.9%. Gross Profit increased by $4.9 million to $38.0 million for the year ended August 31, 2012 from $33.1 million for the year ended August 31, 2011 Adjusted EBITDA, which is defined by management as net income before interest, taxes, depreciation, amortization, impairment charges, retention bonuses, non-essential overhead, stock-based compensation, executive recruiting fees, severance, ERP capitalized costs, earn out liability adjustment and stock warrant expense (“Adjusted EBITDA”), was $5.8 million for the year ended August 31, 2012 versus $3.8 million for the year ended August 31, 2011. A reconciliation of net loss to EBITDA and Adjusted EBITDA is attached to this press release.
EBITDA and Adjusted EBITDA are key financial metrics used by the Company’s Board of Directors and management to evaluate and measure the Company’s operating performance. These metrics are not in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Management’s calculation of EBITDA eliminates the effect of charges primarily associated with financing decisions, tax regulations and capital investments. Adjusted EBITDA also eliminates certain unusual costs and reflects certain changes in the business made by management and includes adjustments which in the opinion of management are necessary to reflect the underlying ongoing operations of the business. Net loss is the most comparable GAAP measure of the Company’s operating results presented in the Company’s consolidated financial statements. The Company has made a reconciliation of net income (loss), the most closely comparable GAAP measure, to these non-GAAP measures for the years ended August 31, 2012 and 2011 and discussed these adjustments in this release. EBITDA and Adjusted EBITDA should not be considered as an alternative to net loss or any other GAAP measure of performance or liquidity, and may not be comparable to other similarly titled measures of other companies. Management believes that the presentation of EBITDA and Adjusted EBITDA is important to investors because Adjusted EBITDA is used by management to evaluate financial performance and continuing operations and to determine resource allocation for each of our business segments.
“We have had several successes this year that led to top line growth. We started a multi-year outsourcing deal with a new commercial client, our Federal business posted solid growth on the top and bottom lines, and our Education business returned to growth and profitability after three quarters of difficult project delays. We integrated our new acquisitions and spread their talent and expertise across our Company. Several new hires in our practices have taken our Company to a new level including a new head of our offshore operations and a new application services lead. We hired new key sales talent from other large systems integrators who bring with them years of sales experience. Our shared services leadership was upgraded especially in our human resources, recruiting, and MIS functions. In addition we welcomed two new Financial partners to the table with PNC Business Credit and Peachtree Equity Partners joining the Emtec team in our second quarter. I would like to thank all our partners and our associates who helped bring us back to growth in our bottom line,” said Dinesh Desai, Chairman, CEO, and President of Emtec.
Mr. Gregory Chandler, CFO added, “In analyzing our financial results, we focus on Adjusted EBITDA as we frequently have significant non-cash charges running through our income statement that have little impact on the Company’s cash flows or our operations. The impending fiscal cliff led us to lower future projections across all our business. Even these slight changes resulted in large goodwill and intangible impairments. However we do believe the fundamentals of the business we are focused on growing are extremely strong and we are generating more than enough cash flows to meet all of our obligations. We have many exciting opportunities in the pipeline and our backlog is growing. Our base business, combined with profitable acquisitions, drove our gross profit to increase by $5 million from the prior year in spite of a nearly $3 million slowdown in projects in our Education Business. Since this business now has a strong backlog, we are in a sound position going into 2013. In addition, the restructuring from last year and a continued focus on cost controls has enabled us to lower our SG&A costs by nearly $7.6 million from the prior year. This was partially offset however by the SG&A from acquired businesses by about $6.7 million. We are continuing to focus on cost control including a recently commenced $2 million reduction of costs in our Springfield facility which we intend to shut down by February of 2013.”
Emtec, established in 1964, provides technology-empowered business solutions for world-class organizations in the enterprise, federal, state and local government, and education markets. With offices in 14 cities in the U.S., Canada and India, Emtec is big enough to address our client needs but small enough to care. Our local offices, highly-skilled associates, and global delivery capabilities ensure the accessibility and scale to align client’s technology solutions with their business needs. Emtec’s singular mission is to create “Clients for Life” - long-term relationships that deliver rapid, meaningful, and lasting business value. Our offerings span the entire IT lifecycle: from Consulting through Packaged, Custom, and Cloud Applications as well as a variety of Infrastructure Services.
The PNC Financial Services Group, Inc. (www.pnc.com) is one of the nation’s largest diversified financial services organizations providing retail and business banking; residential mortgage banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. Follow @PNCNews on Twitter for breaking news, updates and announcements from PNC.
About Peachtree Equity Partners:
Based in Atlanta, Peachtree Equity Partners provides subordinated debt and equity securities to middle market companies. Peachtree’s capital is utilized for organic growth and expansion, acquisitions, recapitalizations, and shareholder buyouts. Peachtree targets investments of $2-7 million in companies with $2-10 million of EBITDA. The principals of Peachtree founded and managed the private equity investment business of legacy Wachovia. For more information on Peachtree, please visit www.peachtreeequity.com or contact us at 404.870.8900.
Certain statements in this document constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The Company’s future operating results are dependent upon many factors, including but not limited to: (i) the Company’s ability to obtain sufficient capital or a strategic business arrangement to fund its plan of operations when needed; (ii) the Company’s ability to build the management and human resources and infrastructure necessary to support the growth of its business; (iii) competitive factors and developments beyond the Company’s control; and (iv) other risk factors discussed in the Company’s periodic filings with the Securities and Exchange Commission which are available for review at www.sec.gov under “Search for Company Filings.” We undertake no obligation to publicly update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, or changes to future results over time.
|CONSOLIDATED STATEMENTS OF OPERATIONS|
|Years Ended August 31,|
|Consulting and outsourcing||103,438||74,538||28,900||38.8||%|
Cost of Revenues
|Cost of consulting and outsourcing||80,132||55,695||24,437||43.9||%|
|Cost of procurement services||106,420||123,385||(16,965||)||(13.7||)%|
Total Cost of Revenues
|Consulting and outsourcing||23,306||18,843||4,463||23.7||%|
|Consulting and outsourcing %||22.5||%||25.3||%|
|Procurement services %||12.1||%||10.3||%|
Total Gross Profit
Total Gross Profit %
|Selling, general, and administrative expenses||32,467||33,346||(879||)||(2.6||)%|
|Retention bonuses to former owners of acquired entities||884||1,040||(156||)||(15.0||)%|
|Non cash operating expenses|
|Warrant liability adjustment||890||57||833||1461.4||%|
|Earnout liability adjustment||557||-||557||NA|
|Impairment of identifiable intangible assets||4,132||-||4,132||NA|
|Impairment of goodwill||5,295||200||5,095||2547.5||%|
|Depreciation and amortization||5,304||
|Total operating expenses||49,949||
|Percent of revenues||22||%||18||%|
|Percent of revenues||(5.3||)%||(2.6||)%|
|Other expense (income):|
|Interest income – other||(102||)||(23||)||(79||)||343.5||%|
|Loss before income tax benefit||(15,007||)||(6,621||)||(8,386||)||126.7||%|
|Income tax benefit||(2,584||)||(2,371||)||(213||)||9.0||%|
|Percent of revenues||(5.5||)%||(2.0||)%|
|RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA|
|Year Ended August 31,|
|Net income (loss)||$||(12,423||)||$||(4,250||)||$||(8,173||)|
|Depreciation and amortization||5,304||3,387||1,917|
|Retention bonuses (1)||884||1,040|
|Elimination of non-essential overhead||-||3,796|
|Stock based compensation (2)||420||612|
|Executive recruiting (3)||-||156|
|ERP capitalized costs (4)||-||(735||)|
|Earnout liability adjustment (5)||557||-|
|Warrant expense (6)||890||57|
|Impairment of identifiable intangible assets (7)||4,132||-|
|Impairment of goodwill (7)||5,295||200|
|Total Adjustments (8)||12,190||5,957|
1) Expenses associated with retention bonuses which were agreed to in connection with the closing of the Company’s acquisition of Emerging Solutions (Gnuco), Dinero, Luceo, EBAS/Aveeva, SDI and EMS, a company of which certain assets were acquired through Koan-IT US.
2) Stock based compensation for the years ended August 31, 2012 and 2011, was $420,000 and $612,000, of which $98,000 is reflected in selling, general and administrative expenses for the year ended August 31, 2011.
3) Reflects executive recruiting fees incurred in connection with a management launched search for a senior executive in 2009. Management made a one-time decision to invest in the business by hiring new senior executives to grow the business in 2010 and thereafter.
4) Capitalization of internal resource costs associated with the implementation of a new ERP system in FY 2011.
5) Non Cash adjustment of future contingent earnout liabilities in connection with the acquisitions of SDI, Dinero, Covelix, and Emerging. The earnout liabilities were recorded at fair value based on valuation models which utilize relevant factors such as expected life and estimated probabilities of the acquisitions achieving the performance targets throughout the earnout periods. These earnout liabilities are reassessed each reporting period and can result in recording additional income or expense.
6) Expense or income related to the stock warrants issued to our majority stockholder in August 2010, as well as the stock warrant issued in connection with the subordinated debt financing in August 2011 and December 2011. These warrants are “marked-to-market” each reporting period, which can result in fluctuations in non cash income or expense in future periods.
7) Impairment of goodwill and identifiable intangibles is a non-cash charge that was recorded in connection with our annual goodwill impairment testing in the 4th quarter in fiscal 2012. In 4th quarter of fiscal 2011 we recorded an impairment charge associated with the acquisition that ceased operation.
8) In addition to the adjustments described above, the Company has not made adjustments for merger and acquisition related costs. The Company may incur similar costs in future periods. The company recorded merger and acquisition related costs of $257,000 and $542,000 for the years ended August 31, 2012 and 2011, respectively. Effective September 1, 2009, the Company adopted the new standard for accounting for business combinations in accordance with ASC 805 "Business Combinations."
SYS-CON Events announced today that Auditwerx will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Auditwerx specializes in SOC 1, SOC 2, and SOC 3 attestation services throughout the U.S. and Canada. As a division of Carr, Riggs & Ingram (CRI), one of the top 20 largest CPA firms nationally, you can expect the resources, skills, and experience of a much larger firm combined with the accessibility and attent...
Mar. 29, 2017 09:00 AM EDT Reads: 520
In his session at @ThingsExpo, Eric Lachapelle, CEO of the Professional Evaluation and Certification Board (PECB), will provide an overview of various initiatives to certifiy the security of connected devices and future trends in ensuring public trust of IoT. Eric Lachapelle is the Chief Executive Officer of the Professional Evaluation and Certification Board (PECB), an international certification body. His role is to help companies and individuals to achieve professional, accredited and worldw...
Mar. 29, 2017 08:45 AM EDT Reads: 880
In his General Session at 16th Cloud Expo, David Shacochis, host of The Hybrid IT Files podcast and Vice President at CenturyLink, investigated three key trends of the “gigabit economy" though the story of a Fortune 500 communications company in transformation. Narrating how multi-modal hybrid IT, service automation, and agile delivery all intersect, he will cover the role of storytelling and empathy in achieving strategic alignment between the enterprise and its information technology.
Mar. 29, 2017 08:00 AM EDT Reads: 7,416
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem" ...
Mar. 29, 2017 06:00 AM EDT Reads: 9,044
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound e...
Mar. 29, 2017 04:00 AM EDT Reads: 15,086
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
Mar. 29, 2017 03:45 AM EDT Reads: 2,143
My team embarked on building a data lake for our sales and marketing data to better understand customer journeys. This required building a hybrid data pipeline to connect our cloud CRM with the new Hadoop Data Lake. One challenge is that IT was not in a position to provide support until we proved value and marketing did not have the experience, so we embarked on the journey ourselves within the product marketing team for our line of business within Progress. In his session at @BigDataExpo, Sum...
Mar. 29, 2017 03:30 AM EDT Reads: 3,226
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.
Mar. 29, 2017 03:00 AM EDT Reads: 6,077
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
Mar. 29, 2017 01:15 AM EDT Reads: 2,504
What sort of WebRTC based applications can we expect to see over the next year and beyond? One way to predict development trends is to see what sorts of applications startups are building. In his session at @ThingsExpo, Arin Sime, founder of WebRTC.ventures, will discuss the current and likely future trends in WebRTC application development based on real requests for custom applications from real customers, as well as other public sources of information,
Mar. 29, 2017 01:00 AM EDT Reads: 1,110
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
Mar. 28, 2017 11:15 PM EDT Reads: 3,492
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Mar. 28, 2017 09:30 PM EDT Reads: 3,871
With the introduction of IoT and Smart Living in every aspect of our lives, one question has become relevant: What are the security implications? To answer this, first we have to look and explore the security models of the technologies that IoT is founded upon. In his session at @ThingsExpo, Nevi Kaja, a Research Engineer at Ford Motor Company, will discuss some of the security challenges of the IoT infrastructure and relate how these aspects impact Smart Living. The material will be delivered i...
Mar. 28, 2017 09:30 PM EDT Reads: 2,244
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
Mar. 28, 2017 08:15 PM EDT Reads: 2,367
Your homes and cars can be automated and self-serviced. Why can't your storage? From simply asking questions to analyze and troubleshoot your infrastructure, to provisioning storage with snapshots, recovery and replication, your wildest sci-fi dream has come true. In his session at @DevOpsSummit at 20th Cloud Expo, Dan Florea, Director of Product Management at Tintri, will provide a ChatOps demo where you can talk to your storage and manage it from anywhere, through Slack and similar services ...
Mar. 28, 2017 07:00 PM EDT Reads: 4,531
SYS-CON Events announced today that Linux Academy, the foremost online Linux and cloud training platform and community, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Linux Academy was founded on the belief that providing high-quality, in-depth training should be available at an affordable price. Industry leaders in quality training, provided services, and student certification passes, its goal is to c...
Mar. 28, 2017 03:45 PM EDT Reads: 4,215
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Mar. 28, 2017 03:00 PM EDT Reads: 2,168
"delaPlex is a software development company. We do team-based outsourcing development," explained Mark Rivers, COO and Co-founder of delaPlex Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Mar. 28, 2017 03:00 PM EDT Reads: 9,722
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
Mar. 28, 2017 02:15 PM EDT Reads: 2,240
SYS-CON Events announced today that Technologic Systems Inc., an embedded systems solutions company, will exhibit at SYS-CON's @ThingsExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Technologic Systems is an embedded systems company with headquarters in Fountain Hills, Arizona. They have been in business for 32 years, helping more than 8,000 OEM customers and building over a hundred COTS products that have never been discontinued. Technologic Systems’ pr...
Mar. 28, 2017 02:15 PM EDT Reads: 3,750