Welcome!

Web 2.0 Authors: Elizabeth White, Roger Strukhoff, Kevin Benedict, Carmen Gonzalez, Yeshim Deniz

News Feed Item

Emtec, Inc. Announces Fiscal 2012 Results

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.”

About Emtec:

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.

About PNC:

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.

EMTEC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
       
Years Ended August 31,
2012   2011   Change   %

Revenues

Consulting and outsourcing 103,438 74,538 28,900 38.8 %
Procurement services   121,135       137,609       (16,474 )   (12.0 )%

Total Revenues

224,573 212,147 12,426 5.9 %
 

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

186,552 179,080 7,472 4.2 %
 

Gross Profit

Consulting and outsourcing 23,306 18,843 4,463 23.7 %
Consulting and outsourcing % 22.5 % 25.3 %
 
Procurement services 14,715 14,224 491 3.5 %
Procurement services % 12.1 % 10.3 %
 

Total Gross Profit

38,021 33,067 4,954 15.0 %

Total Gross Profit %

16.9 % 15.6 %
 
Operating expenses:
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
Stock-based compensation 420 514 (94 ) (18.3 )%
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  

 

  3,387     1,917   56.6 %
Total operating expenses   49,949  

 

  38,544     11,405   29.6 %
Percent of revenues 22 % 18 %
Operating loss (11,928 ) (5,477 ) (6,451 ) 117.8 %
Percent of revenues (5.3 )% (2.6 )%
 
Other expense (income):
Interest income – other (102 ) (23 ) (79 ) 343.5 %
Interest expense 3,298 1,110 2,188 197.1 %
Other   (117 )   57     (174 ) (305.3 )%
 
Loss before income tax benefit (15,007 ) (6,621 ) (8,386 ) 126.7 %
Income tax benefit   (2,584 )   (2,371 )   (213 ) 9.0 %
Net loss $ (12,423 ) $ (4,250 ) $ (8,173 ) 192.3 %
Percent of revenues (5.5 )% (2.0 )%
 
EMTEC, INC.
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA
(In thousands)
Year Ended August 31,
  2012   2011   Change
Net income (loss) $ (12,423 )   $ (4,250 )   $ (8,173 )
Interest expense 3,298 1,110 2,188
Income taxes (2,584 ) (2,371 ) (213 )
Depreciation and amortization   5,304     3,387     1,917  
EBITDA (6,405 ) (2,124 ) (4,281 )
 
Retention bonuses (1) 884 1,040
Elimination of non-essential overhead - 3,796
Stock based compensation (2) 420 612
Executive recruiting (3) - 156
Severance 13 831
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    
Adjusted EBITDA $ 5,785   $ 3,833   $ 1,953  
 

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."

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
Software AG helps organizations transform into Digital Enterprises, so they can differentiate from competitors and better engage customers, partners and employees. Using the Software AG Suite, companies can close the gap between business and IT to create digital systems of differentiation that drive front-line agility. We offer four on-ramps to the Digital Enterprise: alignment through collaborative process analysis; transformation through portfolio management; agility through process automation and integration; and visibility through intelligent business operations and big data.
There will be 50 billion Internet connected devices by 2020. Today, every manufacturer has a propriety protocol and an app. How do we securely integrate these "things" into our lives and businesses in a way that we can easily control and manage? Even better, how do we integrate these "things" so that they control and manage each other so our lives become more convenient or our businesses become more profitable and/or safe? We have heard that the best interface is no interface. In his session at Internet of @ThingsExpo, Chris Matthieu, Co-Founder & CTO at Octoblu, Inc., will discuss how these devices generate enough data to learn our behaviors and simplify/improve our lives. What if we could connect everything to everything? I'm not only talking about connecting things to things but also systems, cloud services, and people. Add in a little machine learning and artificial intelligence and now we have something interesting...
Last week, while in San Francisco, I used the Uber app and service four times. All four experiences were great, although one of the drivers stopped for 30 seconds and then left as I was walking up to the car. He must have realized I was a blogger. None the less, the next car was just a minute away and I suffered no pain. In this article, my colleague, Ved Sen, Global Head, Advisory Services Social, Mobile and Sensors at Cognizant shares his experiences and insights.
We are reaching the end of the beginning with WebRTC and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) irreversibly encoded. In his session at Internet of @ThingsExpo, Peter Dunkley, Technical Director at Acision, will look at how this identity problem can be solved and discuss ways to use existing web identities for real-time communication.
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. It also ensured scalability and better service for customers, including MUY! Companies, one of the country's largest franchise restaurant companies with 232 Pizza Hut locations. This is one example of WebRTC adoption today, but the potential is limitless when powered by IoT. Attendees will learn real-world benefits of WebRTC and explore future possibilities, as WebRTC and IoT intersect to improve customer service.
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at Internet of @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, will share some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, deploy, and manage applications integrating voice, video and data. He is the co-founder of TeleStax, an Open Source Cloud Communications company that helps the shift from legacy IN/SS7 telco networks to IP-based cloud comms. An early investor in multiple start-ups, he still finds time to code for his companies and contribute to open source projects.
The Internet of Things (IoT) promises to create new business models as significant as those that were inspired by the Internet and the smartphone 20 and 10 years ago. What business, social and practical implications will this phenomenon bring? That's the subject of "Monetizing the Internet of Things: Perspectives from the Front Lines," an e-book released today and available free of charge from Aria Systems, the leading innovator in recurring revenue management.
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges.
There’s Big Data, then there’s really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at 6th Big Data Expo®, Hannah Smalltree, Director at Treasure Data, to discuss how IoT, Big Data and deployments are processing massive data volumes from wearables, utilities and other machines.
All major researchers estimate there will be tens of billions devices – computers, smartphones, tablets, and sensors – connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. 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!
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at Internet of @ThingsExpo, Erik Lagerway, Co-founder of Hookflash, will walk through the shifting landscape of traditional telephone and voice services to the modern P2P RTC era of OTT cloud assisted services.
While great strides have been made relative to the video aspects of remote collaboration, audio technology has basically stagnated. Typically all audio is mixed to a single monaural stream and emanates from a single point, such as a speakerphone or a speaker associated with a video monitor. This leads to confusion and lack of understanding among participants especially regarding who is actually speaking. Spatial teleconferencing introduces the concept of acoustic spatial separation between conference participants in three dimensional space. This has been shown to significantly improve comprehension and conference efficiency.
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, will discuss single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example to explain some of these concepts including when to use different storage models.
SYS-CON Events announced today that Gridstore™, the leader in software-defined storage (SDS) purpose-built for Windows Servers and Hyper-V, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Gridstore™ is the leader in software-defined storage purpose built for virtualization that is designed to accelerate applications in virtualized environments. Using its patented Server-Side Virtual Controller™ Technology (SVCT) to eliminate the I/O blender effect and accelerate applications Gridstore delivers vmOptimized™ Storage that self-optimizes to each application or VM across both virtual and physical environments. Leveraging a grid architecture, Gridstore delivers the first end-to-end storage QoS to ensure the most important App or VM performance is never compromised. The storage grid, that uses Gridstore’s performance optimized nodes or capacity optimized nodes, starts with as few a...
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace. These technological reforms have not only changed computers and smartphones, but are also changing the data processing model for all information devices. In particular, in the area known as M2M (Machine-To-Machine), there are great expectations that information with a new type of value can be produced using a variety of devices and sensors saving/sharing data via the network and through large-scale cloud-type data processing. This consortium believes that attaching a huge number of devic...
Innodisk is a service-driven provider of industrial embedded flash and DRAM storage products and technologies, with a focus on the enterprise, industrial, aerospace, and defense industries. Innodisk is dedicated to serving their customers and business partners. Quality is vitally important when it comes to industrial embedded flash and DRAM storage products. That’s why Innodisk manufactures all of their products in their own purpose-built memory production facility. In fact, they designed and built their production center to maximize manufacturing efficiency and guarantee the highest quality of our products.
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. Download Slide Deck: ▸ Here
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. Over the summer Gartner released its much anticipated annual Hype Cycle report and the big news is that Internet of Things has now replaced Big Data as the most hyped technology. Indeed, we're hearing more and more about this fascinating new technological paradigm. Every other IT news item seems to be about IoT and its implications on the future of digital business.
BSQUARE is a global leader of embedded software solutions. We enable smart connected systems at the device level and beyond that millions use every day and provide actionable data solutions for the growing Internet of Things (IoT) market. We empower our world-class customers with our products, services and solutions to achieve innovation and success. For more information, visit www.bsquare.com.
With the iCloud scandal seemingly in its past, Apple announced new iPhones, updates to iPad and MacBook as well as news on OSX Yosemite. Although consumers will have to wait to get their hands on some of that new stuff, what they can get is the latest release of iOS 8 that Apple made available for most in-market iPhones and iPads. Originally announced at WWDC (Apple’s annual developers conference) in June, iOS 8 seems to spearhead Apple’s newfound focus upon greater integration of their products into everyday tasks, cross-platform mobility and self-monitoring. Before you update your device, here is a look at some of the new features and things you may want to consider from a mobile security perspective.