|By Business Wire||
|January 14, 2013 04:15 PM EST||
Emtec, Inc. (OTCQB: ETEC) (“Emtec” or the “Company”) announced today that for the quarter ended November 30, 2012, its gross profit from Consulting and Outsourcing grew by 6.0% versus the first fiscal quarter of last year to $6.5 million, and total gross margin increased from 16.5% for the quarter ended November 30, 2011 to 18.0% for the quarter ended November 30, 2012. The Company also reported Adjusted EBITDA, which is defined by management as net income (loss) before interest, taxes, depreciation, amortization, retention bonuses, stock-based compensation, severance, earn out liability adjustment, stock warrant expense, restructuring charge, impairment of identifiable intangible assets and impairment of goodwill (“Adjusted EBITDA”) of $2.6 million for the quarter ended November 30, 2012 compared with Adjusted EBITDA of $2.7 million for the quarter ended November 30, 2011. A reconciliation of net income (loss) to Adjusted EBITDA is attached to this press release.
Total revenue for the quarter ended November 30, 2012 decreased by $13.8 million or 19.2% compared to the quarter ended November 30, 2011. Procurement services revenue for the quarter ended November 30, 2012 decreased by $12.8 million while consulting and outsourcing decreased by $1.0 million from the same quarter in the prior year. However, gross profit from consulting and outsourcing increased by $362,000 for the quarter ended November 30, 2012 from the same quarter in the prior year.
“We had a difficult quarter in our federal segment. However, this was not inconsistent with our overall strategy of moving towards higher gross margin recurring business. We were able to generate over $2.6 million in Adjusted EBITDA despite the drop in our Federal business. We are focusing on using our cost savings over the last year to invest in high level sales talent and have had many seasoned sales and delivery experts join us recently from much larger systems integrators. We look forward to increasing our average total contract value as we identify new large outsourcing opportunities,” commented Dinesh Desai, the Company’s Chief Executive Officer.
Greg Chandler, Chief Financial Officer added, “We continue to find ways to make the Company more efficient. We announced the closing of our Springfield facility in November 2012 that will save the Company over $2 million on an annualized basis when we complete the closure. We recorded a restructuring charge in the quarter related to the closure. In addition, we have consolidated a good deal of the back office and reduced the size of our general and administrative expenses. We are now poised for growth as we continue to build more opportunities in our pipeline. However, due to the performance of our Federal business and concerns regarding the fiscal cliff, the first quarter results are disappointing, and we are continuing to examine ways to improve value within the Federal segment.”
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 accounting principles generally accepted 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 income (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 quarters ended November 30, 2012 and 2011 and discussed these adjustments in this release. EBITDA and Adjusted EBITDA should not be considered as an alternative to net income (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.
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.
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 INCOME|
|For the Three Months Ended November 30,|
|Consulting and outsourcing||$||24,579||$||25,614||$||(1,035||)||(4.0||)%|
Cost of Revenues
|Cost of consulting and outsourcing||18,082||19,479||(1,397||)||(7.2||)%|
|Cost of procurement services||29,628||40,655||(11,027||)||(27.1||)%|
Total Cost of Revenues
|Consulting and outsourcing||6,497||6,135||362||5.9||%|
|Consulting and outsourcing %||26.4||%||24.0||%|
|Procurement services %||11.9||%||12.4||%|
Total Gross Profit
Total Gross Profit %
|Selling, general, and administrative expenses||7,871||9,259||(1,388||)||(15.0||)%|
|Retention bonuses to former owners of acquired entities||-||146|
|Non-cash operating expenses|
|Warrant liability adjustment||12||(608||)||620||(102.0||)%|
|Earnout liability adjustment||902||168||734||436.9||%|
|Depreciation and amortization||1,027||1,360||(333||)||(24.5||)%|
|Total operating expenses||10,489||10,485||150||1.4||%|
|Percent of revenues||18.0||%||14.6||%|
|Percent of revenues||0.0||%||2.0||%|
|Other expense (income):|
|Interest income – other||(5||)||(62||)||57||(91.9||)%|
|Income (loss) before income tax expense (benefit)||(752||)||640||(1,392||)||(217.5||)%|
|Income tax expense (benefit)||(6||)||185||(191||)||(103.2||)%|
|Net income (loss)||$||(746||)||$||455||$||(1,201||)||(264.0||)%|
|Percent of revenues||(1.3||)%||0.6||%|
|RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA|
|For the Three Months Ended November 30,|
|Net income (loss)||$||(746||)||$||455||$||(1,201||)|
|Income tax expense (benefit)||(6||)||185||(191||)|
|Depreciation and amortization||1,027||1,360||(333||)|
|Retention bonuses (1)||-||146|
|Stock based compensation||95||160|
|Earnout liability adjustment (2)||902||168|
|Warrant expense (3)||12||(608||)|
|Restructuring charge (4)||582||-|
|Impairment of identifiable intangible assets||-||-|
|Impairment of goodwill||-||-|
|Total Adjustments (5)||1,591||(123||)|
1) Expenses associated with retention bonuses which were agreed to in connection with the closing of the Company’s acquisition of Emerging Solutions (Gnuco).
2) Non Cash adjustment of future contingent earn out liabilities in connection with the acquisitions of SDI, Dinero, Covelix, and Emerging. The earn out 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 earn out periods. These earn out liabilities are reassessed each reporting period and can result in recording additional income or expense.
3) Expense or income related to the stock warrants issued to our majority stockholder in August 2010 including legal fees associated with the issuance, as well as the stock warrant issued in connection with the subordinated debt financing in August 2011. These warrants are “marked-to-market” each reporting period, which can result in fluctuations in non-cash income or expense in future periods.
4) Expense related to the Company approved restructuring plan designed to reduce costs and improve efficiencies. Implementation of the Restructuring Plan started in November 2012 and is expected to be completed in the second quarter of fiscal 2013 with certain cash payments expected through the third quarter of fiscal 2014.
5) 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 $10,000 and $83,000 for the quarters ended November 30, 2012 and 2011, respectively.
As more intelligent IoT applications shift into gear, they’re merging into the ever-increasing traffic flow of the Internet. It won’t be long before we experience bottlenecks, as IoT traffic peaks during rush hours. Organizations that are unprepared will find themselves by the side of the road unable to cross back into the fast lane. As billions of new devices begin to communicate and exchange data – will your infrastructure be scalable enough to handle this new interconnected world?
Oct. 13, 2015 05:00 PM EDT Reads: 121
This week, the team assembled in NYC for @Cloud Expo 2015 and @ThingsExpo 2015. For the past four years, this has been a must-attend event for MetraTech. We were happy to once again join industry visionaries, colleagues, customers and even competitors to share and explore the ways in which the Internet of Things (IoT) will impact our industry. Over the course of the show, we discussed the types of challenges we will collectively need to solve to capitalize on the opportunity IoT presents.
Oct. 13, 2015 04:30 PM EDT Reads: 115
SYS-CON Events announced today that Dyn, the worldwide leader in Internet Performance, will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Dyn is a cloud-based Internet Performance company. Dyn helps companies monitor, control, and optimize online infrastructure for an exceptional end-user experience. Through a world-class network and unrivaled, objective intelligence into Internet conditions, Dyn ensures traffic gets delivered faster, safer, and more reliably than ever.
Oct. 13, 2015 04:00 PM EDT Reads: 728
SYS-CON Events announced today that Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, will keynote 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.
Oct. 13, 2015 03:15 PM EDT Reads: 257
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in high-performance, high-efficiency server, storage technology and green computing, 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. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and Embedded Systems worldwide. Supermi...
Oct. 13, 2015 01:45 PM EDT Reads: 229
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data shows "less than 10 percent of IoT developers are making enough to support a reasonably sized team....
Oct. 13, 2015 01:00 PM EDT Reads: 342
The IoT market is on track to hit $7.1 trillion in 2020. The reality is that only a handful of companies are ready for this massive demand. There are a lot of barriers, paint points, traps, and hidden roadblocks. How can we deal with these issues and challenges? The paradigm has changed. Old-style ad-hoc trial-and-error ways will certainly lead you to the dead end. What is mandatory is an overarching and adaptive approach to effectively handle the rapid changes and exponential growth.
Oct. 13, 2015 01:00 PM EDT Reads: 338
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...
Oct. 13, 2015 01:00 PM EDT Reads: 225
Developing software for the Internet of Things (IoT) comes with its own set of challenges. Security, privacy, and unified standards are a few key issues. In addition, each IoT product is comprised of at least three separate application components: the software embedded in the device, the backend big-data service, and the mobile application for the end user's controls. Each component is developed by a different team, using different technologies and practices, and deployed to a different stack/target - this makes the integration of these separate pipelines and the coordination of software upd...
Oct. 13, 2015 12:00 PM EDT Reads: 412
As a company adopts a DevOps approach to software development, what are key things that both the Dev and Ops side of the business must keep in mind to ensure effective continuous delivery? In his session at DevOps Summit, Mark Hydar, Head of DevOps, Ericsson TV Platforms, will share best practices and provide helpful tips for Ops teams to adopt an open line of communication with the development side of the house to ensure success between the two sides.
Oct. 13, 2015 12:00 PM EDT Reads: 693
The IoT is upon us, but today’s databases, built on 30-year-old math, require multiple platforms to create a single solution. Data demands of the IoT require Big Data systems that can handle ingest, transactions and analytics concurrently adapting to varied situations as they occur, with speed at scale. In his session at @ThingsExpo, Chad Jones, chief strategy officer at Deep Information Sciences, will look differently at IoT data so enterprises can fully leverage their IoT potential. He’ll share tips on how to speed up business initiatives, harness Big Data and remain one step ahead by apply...
Oct. 13, 2015 12:00 PM EDT Reads: 747
There will be 20 billion IoT devices connected to the Internet soon. What if we could control these devices with our voice, mind, or gestures? What if we could teach these devices how to talk to each other? What if these devices could learn how to interact with us (and each other) to make our lives better? What if Jarvis was real? How can I gain these super powers? In his session at 17th Cloud Expo, Chris Matthieu, co-founder and CTO of Octoblu, will show you!
Oct. 13, 2015 12:00 PM EDT Reads: 303
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi's VP Business Development and Engineering, will explore the IoT cloud-based platform technologies driving this change including privacy controls, data transparency and integration of real time context w...
Oct. 13, 2015 11:00 AM EDT Reads: 305
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, will explore the current state of IoT connectivity and review key trends and technology requirements that will drive the Internet of Things from hype to reality.
Oct. 13, 2015 11:00 AM EDT Reads: 320
"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.
Oct. 13, 2015 07:00 AM EDT Reads: 6,012
Nowadays, a large number of sensors and devices are connected to the network. Leading-edge IoT technologies integrate various types of sensor data to create a new value for several business decision scenarios. The transparent cloud is a model of a new IoT emergence service platform. Many service providers store and access various types of sensor data in order to create and find out new business values by integrating such data.
Oct. 13, 2015 04:00 AM EDT Reads: 683
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, will show how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants will get the download information, scripts, and complete end-to-end walkthrough of the analysis from start to finish. Participants will also be given the pract...
Oct. 13, 2015 03:00 AM EDT Reads: 410
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome,” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
Oct. 13, 2015 03:00 AM EDT Reads: 262
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 ...
Oct. 13, 2015 12:45 AM EDT Reads: 854
Electric power utilities face relentless pressure on their financial performance, and reducing distribution grid losses is one of the last untapped opportunities to meet their business goals. Combining IoT-enabled sensors and cloud-based data analytics, utilities now are able to find, quantify and reduce losses faster – and with a smaller IT footprint. Solutions exist using Internet-enabled sensors deployed temporarily at strategic locations within the distribution grid to measure actual line loads.
Oct. 13, 2015 12:00 AM EDT Reads: 277