Welcome!

API Journal Authors: Jeev Trika, PagerDuty Blog, Liz McMillan, Igor Drobiazko, Elizabeth White

News Feed Item

GINSMS Inc. Announces Financial Results For The Second quarter ended September 30, 2012

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.

About GINSMS

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.

Contacts:
GINSMS Inc.
Raymond Richard
Corporate Secretary
450-466-2921

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
When it comes to IoT in the enterprise, namely the commercial building and hospitality markets, a benefit not getting the attention it deserves is energy efficiency, and IoT's direct impact on a cleaner, greener environment when installed in smart buildings. Until now clean technology was offered piecemeal and led with point solutions that require significant systems integration to orchestrate and deploy. There didn't exist a 'top down' approach that can manage and monitor the way a Smart Buildi...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, will provide tips on how to be successful in large scale machine lear...
Digital payments using wearable devices such as smart watches, fitness trackers, and payment wristbands are an increasing area of focus for industry participants, and consumer acceptance from early trials and deployments has encouraged some of the biggest names in technology and banking to continue their push to drive growth in this nascent market. Wearable payment systems may utilize near field communication (NFC), radio frequency identification (RFID), or quick response (QR) codes and barcodes...
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus inter...
SYS-CON Events announced today that Ericsson has been named “Gold Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. Ericsson is a world leader in the rapidly changing environment of communications technology – providing equipment, software and services to enable transformation through mobility. Some 40 percent of global mobile traffic runs through networks we have supplied. More than 1 billion subscribers around the world re...
We're entering the post-smartphone era, where wearable gadgets from watches and fitness bands to glasses and health aids will power the next technological revolution. With mass adoption of wearable devices comes a new data ecosystem that must be protected. Wearables open new pathways that facilitate the tracking, sharing and storing of consumers’ personal health, location and daily activity data. Consumers have some idea of the data these devices capture, but most don’t realize how revealing and...
The demand for organizations to expand their infrastructure to multiple IT environments like the cloud, on-premise, mobile, bring your own device (BYOD) and the Internet of Things (IoT) continues to grow. As this hybrid infrastructure increases, the challenge to monitor the security of these systems increases in volume and complexity. In his session at 18th Cloud Expo, Stephen Coty, Chief Security Evangelist at Alert Logic, will show how properly configured and managed security architecture can...
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
Artificial Intelligence has the potential to massively disrupt IoT. In his session at 18th Cloud Expo, AJ Abdallat, CEO of Beyond AI, will discuss what the five main drivers are in Artificial Intelligence that could shape the future of the Internet of Things. AJ Abdallat is CEO of Beyond AI. He has over 20 years of management experience in the fields of artificial intelligence, sensors, instruments, devices and software for telecommunications, life sciences, environmental monitoring, process...
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, will discuss how leveraging the Industrial Interne...
The increasing popularity of the Internet of Things necessitates that our physical and cognitive relationship with wearable technology will change rapidly in the near future. This advent means logging has become a thing of the past. Before, it was on us to track our own data, but now that data is automatically available. What does this mean for mHealth and the "connected" body? In her session at @ThingsExpo, Lisa Calkins, CEO and co-founder of Amadeus Consulting, will discuss the impact of wea...
Increasing IoT connectivity is forcing enterprises to find elegant solutions to organize and visualize all incoming data from these connected devices with re-configurable dashboard widgets to effectively allow rapid decision-making for everything from immediate actions in tactical situations to strategic analysis and reporting. In his session at 18th Cloud Expo, Shikhir Singh, Senior Developer Relations Manager at Sencha, will discuss how to create HTML5 dashboards that interact with IoT devic...
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
A critical component of any IoT project is the back-end systems that capture data from remote IoT devices and structure it in a way to answer useful questions. Traditional data warehouse and analytical systems are mature technologies that can be used to handle large data sets, but they are not well suited to many IoT-scale products and the need for real-time insights. At Fuze, we have developed a backend platform as part of our mobility-oriented cloud service that uses Big Data-based approache...
trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vice president of product management, IoT solutions at GlobalSign, will teach IoT developers how t...
There is an ever-growing explosion of new devices that are connected to the Internet using “cloud” solutions. This rapid growth is creating a massive new demand for efficient access to data. And it’s not just about connecting to that data anymore. This new demand is bringing new issues and challenges and it is important for companies to scale for the coming growth. And with that scaling comes the need for greater security, gathering and data analysis, storage, connectivity and, of course, the...
The IETF draft standard for M2M certificates is a security solution specifically designed for the demanding needs of IoT/M2M applications. In his session at @ThingsExpo, Brian Romansky, VP of Strategic Technology at TrustPoint Innovation, will explain how M2M certificates can efficiently enable confidentiality, integrity, and authenticity on highly constrained devices.