|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.
In high-production environments where release cycles are measured in hours or minutes — not days or weeks — there's little room for mistakes and no room for confusion. Everyone has to understand what's happening, in real time, and have the means to do whatever is necessary to keep applications up and running optimally. DevOps is a high-stakes world, but done well, it delivers the agility and performance to significantly impact business competitiveness.
Dec. 21, 2014 07:00 PM EST Reads: 903
"Our premise is Docker is not enough. That's not a bad thing - we actually love Docker. At ActiveState all our products are based on open source technology and Docker is an up-and-coming piece of open source technology," explained Bart Copeland, President & CEO of ActiveState Software, in this SYS-CON.tv interview at DevOps Summit at Cloud Expo®, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 21, 2014 06:00 PM EST Reads: 2,037
ScriptRock makes GuardRail, a DevOps-ready platform for configuration monitoring. Realizing we were spending way too much time digging up, cataloguing, and tracking machine configurations, we began writing our own scripts and tools to handle what is normally an enormous chore. Then we took the concept a step further, giving it a beautiful interface and making it simple enough for our bosses to understand. We named it GuardRail after its function - to allow businesses to move fast and stay sa...
Dec. 21, 2014 02:30 PM EST Reads: 902
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover ...
Dec. 21, 2014 02:00 PM EST Reads: 2,381
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 21, 2014 01:00 PM EST Reads: 2,008
SYS-CON Media announced today that Sematext launched a popular blog feed on DevOps Journal with over 6,000 story reads over the weekend. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Sematext is a globally distributed organization that builds innovative Cloud and On Premises solutions for performance monitoring, alerting an...
Dec. 21, 2014 01:00 PM EST Reads: 861
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com...
Dec. 21, 2014 11:30 AM EST Reads: 2,424
Leysin American School is an exclusive, private boarding school located in Leysin, Switzerland. Leysin selected an OpenStack-powered, private cloud as a service to manage multiple applications and provide development environments for students across the institution. Seeking to meet rigid data sovereignty and data integrity requirements while offering flexible, on-demand cloud resources to users, Leysin identified OpenStack as the clear choice to round out the school's cloud strategy. Additional...
Dec. 21, 2014 11:00 AM EST Reads: 1,988
Verizon Enterprise Solutions is simplifying the cloud-purchasing experience for its clients, with the launch of Verizon Cloud Marketplace, a key foundational component of the company's robust ecosystem of enterprise-class technologies. The online storefront will initially feature pre-built cloud-based services from AppDynamics, Hitachi Data Systems, Juniper Networks, PfSense and Tervela. Available globally to enterprises using Verizon Cloud, Verizon Cloud Marketplace provides a one-stop shop fo...
Dec. 21, 2014 11:00 AM EST Reads: 2,013
The move in recent years to cloud computing services and architectures has added significant pace to the application development and deployment environment. When enterprise IT can spin up large computing instances in just minutes, developers can also design and deploy in small time frames that were unimaginable a few years ago. The consequent move toward lean, agile, and fast development leads to the need for the development and operations sides to work very closely together. Thus, DevOps become...
Dec. 21, 2014 10:00 AM EST Reads: 2,062
SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada...
Dec. 21, 2014 10:00 AM EST Reads: 2,162
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, p...
Dec. 21, 2014 08:30 AM EST Reads: 2,294
SYS-CON Events announced today that AIC, a leading provider of OEM/ODM server and storage solutions, 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. AIC is a leading provider of both standard OTS, off-the-shelf, and OEM/ODM server and storage solutions. With expert in-house design capabilities, validation, manufacturing and production, AIC's broad selection of products are highly flexible and are conf...
Dec. 21, 2014 06:30 AM EST Reads: 2,001
The BPM world is going through some evolution or changes where traditional business process management solutions really have nowhere to go in terms of development of the road map. In this demo at 15th Cloud Expo, Kyle Hansen, Director of Professional Services at AgilePoint, shows AgilePoint’s unique approach to dealing with this market circumstance by developing a rapid application composition or development framework.
Dec. 20, 2014 11:00 PM EST Reads: 1,381
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...
Dec. 20, 2014 11:00 PM EST Reads: 1,307
AppZero has announced that its award-winning application migration software is now fully qualified within the Microsoft Azure Certified program. AppZero has undergone extensive technical evaluation with Microsoft Corp., earning its designation as Microsoft Azure Certified. As a result of AppZero's work with Microsoft, customers are able to easily find, purchase and deploy AppZero from the Azure Marketplace. With just a few clicks, users have an Azure-based solution for moving applications to the...
Dec. 20, 2014 09:00 AM EST Reads: 1,045
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 20, 2014 08:00 AM EST Reads: 1,391
The cloud is becoming the de-facto way for enterprises to leverage common infrastructure while innovating and one of the biggest obstacles facing public cloud computing is security. In his session at 15th Cloud Expo, Jeff Aliber, a global marketing executive at Verizon, discussed how the best place for web security is in the cloud. Benefits include: Functions as the first layer of defense Easy operation –CNAME change Implement an integrated solution Best architecture for addressing network-l...
Dec. 20, 2014 05:00 AM EST Reads: 1,363
“We help people build clusters, in the classical sense of the cluster. We help people put a full stack on top of every single one of those machines. We do the full bare metal install," explained Greg Bruno, Vice President of Engineering and co-founder of StackIQ, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 19, 2014 11:45 PM EST Reads: 1,379