GINSMS Inc. (TSX VENTURE:GOK) has announced its financial results for the first
quarter ended June 30, 2013.
PERFORMANCE HIGHLIGHTS FOR THE THREE MONTHS ENDED JUNE 30, 2013:
-- The acquisition of Inphosoft Group Pte Ltd ("Inphosoft") was completed
on September 28, 2012. GINSMS's income statement for the quarter ended
June 30, 2013 includes the operating results of Inphosoft Group Pte Ltd
and its subsidiaries resulting in total revenue of $445,584, compared to
$157,089 for the corresponding quarter the previous year.
-- Activities for the three-month period ended June 30, 2013 resulted in a
net loss of $481,991, including a non-realized exchange gain of $19,762
and a non-cash charge to earnings of $290,549 representing accretion on
obligations related to the convertible debentures and promissory notes
issued in connection with the acquisition of Inphosoft. For the quarter
ended June 30, 2012, the Company recorded a net loss of $48,035.
-- EBITDA of negative $79,852 for the quarter ended June 30, 2013. This is
a deterioration of $57,308 compared to EBITDA of negative $22,544 during
the corresponding quarter the previous year. The lower EBITDA
principally reflect much higher losses due to lower revenue generated by
the IOSMS platform and, principally but not exclusively, substantially
higher professional fees incurred by the Group.
-- Volume of inter-SMS traffic for the three-month period ended June 30,
2013 was down by 76.7% to 5,543,603 from the same period the previous
year. When compared to the previous quarter ended March 31, 2013,
traffic is down 58.7%. This downward trend in SMS traffic is largely
caused by cellphone users migrating to mobile instant messaging ("MIM")
applications and the removal of bundle fees in the new agreements signed
with the mobile network operators that came into effect on the 1st March
2013.
-- Liquidity improved considerably with cash on hand of $670,500, down
30.6% from March 31, 2013. Net current assets as at June 30, 2013 were
$687,209, compared to $797,995 as at March 31, 2013.
RESULTS OF OPERATIONS
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Three-month period Year ended
ended March 31,
Financial Highlights June 30, (Audited)
(Unaudited)
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2013 2012 2013 2012
Revenues $ 445,584 157,089 1,302,915 686,934
Cost of sales $ (144,279) (70,724) (400,908) (268,454)
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Gross profit $ 301,305 86,365 902,007 418,480
Gross margin % 67.6% 55.0% 69.2% 60.9%
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Selling, General & Admin 381,157 108,909 1,526,863 763,828
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Amortization 107,425 26,381 327,092 103,077
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EBITDA (1) $ (79,852) (22,544) (561,057) (345,348)
EBITDA margin (17.9%) (14.4)% (43.1)% (50.3)%
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Net earnings $ (481,991) (48,035) (1,534,662) (493,704)
Net earnings margin (108.2)% (30.6)% (117.8)% (71.9)%
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Net earnings (loss) per share
$
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Basic (0.01) (0.00) (0.04) (0.01)
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Diluted (0.01) (0.00) (0.04) (0.01)
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(1) EBITDA is a non-GAAP measure related to cash earnings and is defined
for these purposes as earnings before income taxes, depreciation,
amortization and the accretion on obligations.
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Consolidated as at Consolidated as at
June 30, 2013 March 31, 2013
(unaudited)(1) (Audited)(1)
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Total assets $ 6,061,208 6,686,027
Total liabilities $ 6,745,628 7,056,584
Shareholders' equity $ (684,420) (370,557)
(1) The figures reported above are based on the consolidated financial
statements of the Company which have been prepared in accordance with
International Financial Reporting Standard.
Revenue for the first quarter ending June 30, 2013 was $445,584, representing an
increase of 183.7%, compared to $157,089 during the corresponding quarter the
previous year. 260.3% of the increase is due to the inclusion for the first time
of the revenue from Inphosoft in the consolidated statement of income as revenue
from the Company's IOSMS activities, taken separately, declined by 76.6%. The
decline in the revenue generated from the IOSMS platform is due to the less
favourable terms of the contracts signed with mobile network operators that came
into effect on 1st March 2013 as well as a 76.7% drop in SMS traffic during the
quarter ended June 30, 2013, compared to the corresponding quarter the previous
year.
Revenue from Inphosoft during that period aggregated $408,846 and is broken down
as follow: Professional Services - $287,531 (70.3%), License fees - $6,681
(1.6%), and Support and Maintenance (S&M) -$114,634 (28.1%). Professional
Services essentially represent contract work provided customers for an array of
software services and solutions including software installation services,
software customization services, or the design and development of bespoke
software solutions for customers.
The net loss for the quarter ended June 30, 2013 amounted to $481,991, compared
to a loss of $48,035 during the same quarter the previous year. The loss for the
first quarter this fiscal year includes a non-cash charge to earnings of
$290,549 representing accretion on obligations related to the convertible
debentures and promissory notes issued in connection with the acquisition of
Inphosoft.
EBITDA for the first quarter ended June 30, 2013 amounted to negative $79,852
while EBITDA for the corresponding period the previous year which showed a
deficit of $22,544. These results underline a much improved gross profit picture
with gross income increasing by 183.7% to $445,584, the result of substantially
higher gross profit margins at Inphosoft which, on a fully consolidated basis,
translate into a gross margin of 67.6%, compared to 55.0% during the
corresponding quarter the previous year.
Other than lower revenue generated by the IOSMS platform, the loss of $481,991
reported during the period reflects higher operating expenses albeit more than
offset, as mentioned above, by a much higher gross income. With Inphosoft,
salaries and wages jumped by 376.7% to $187,450, professional fees are increased
by 104.3% to $52,614, and general and administrative expenses are up 688.6% to
$129,460. Consultancy fees incurred a slight increase of 14.5% to $31,395. The
consolidation of Inphosoft also resulted in higher amortization charges which
amounted to $107,425, compared to $26,381 for the corresponding quarter the
previous year.
About GINSMS
GINSMS is a mobile technology and services company focusing on 4 areas namely
Telecom Platforms and Products, Mobile Advertising, Mobile Messaging and Mobile
Applications. GINSMS conducts research and development and also establishes
partnerships to develop and distribute innovative products and services
globally. Through its wholly owned subsidiaries in Singapore, Hong Kong,
Malaysia and Indonesia, GINSMS has successfully deployed more than 100 solutions
globally. GINSMS also operates a short message service ("SMS") hub that provides
inter-operator messaging services to mobile telecom operators in Hong Kong and
messaging services to enterprises in Asia. Through its Right Here Media brand,
GINSMS provides a one-stop mobile advertising service to advertisers. These
services include the development of creative mobile advertising campaigns for
advertisers, the provision of technology to execute these campaigns and the
placement of advertisements on mobile advertising networks.
Forward Looking Statements
This news release includes certain forward-looking statements that are based
upon current expectations, which involve risks and uncertainties associated with
GINSMS' business and the environment in which the business operates. Any
statements contained herein that are not statements of historical facts may be
deemed to be forward-looking, including those identified by the expressions
"anticipate", "believe", "plan", "estimate", "expect", "intend", and similar
expressions to the extent they relate to GINSMS or its management. The
forward-looking statements are not historical facts, but reflect GINSMS' current
expectations regarding future results or events. These forward-looking
statements are subject to a number of risks and uncertainties that could cause
actual results or events to differ materially from current expectations,
including the matters discussed under "Risks Factors" in GINSMS' Filing
Statement filed on August 29, 2012 with the regulatory authorities. GINSMS
assumes no obligation to update the forward-looking statements, or to update the
reasons why actual results could differ from those reflected in the
forward-looking statements unless required by law.
NEITHER THE 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
GINSMS Inc.
Joel Chin
CEO
+65-6441-1029
investor.relations@ginsms.com
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