Systems America Announces Strong Earnings and Revenue Growth for the Third Quarter and Nine Months Financial Performance of 2012
SAN RAMON, California, October 22, 2012 /GLOBE NEWSWIRE/ -- Systems America, Inc. (OTC: SYAI) ("Systems America" or the “Company”), a premier provider of cloud computing and information technology solutions, today reported its financial results for the third quarter and nine months of 2012.
For the Nine Months period ended September 30, 2012, Systems America reported net income of US$743,169 compared to net loss of US$9.08 million for the same period the year prior. Adjusting for the impact of acquisitions, net earnings in the nine months amounted to US$743,169, or US$0.0018 per share (basic and fully diluted), compared to net earnings of US$82,716, or US$0.0011 per share (basic and fully diluted) for the nine months of 2011. Adjusted net earnings per share grew 798.45 percent year-over-year.
The Company reported revenue of US$2,536,111 for nine months of 2012 compared to US$1,129,242 for the nine months of 2011, representing an increase of 124.58 percent. Cloud Computing Application Services such as Salesforce.com Support Services sales were up 210.7 percent in 2012, while sales of enterprise solutions grew by 51 percent.
“Consistent with our long-term strategy to increase the value of our Cloud applications and mobility solutions portfolio, the addition of pre-sales and professional services resources coupled with solid demand across the major segments of our business have translated into strong earnings growth and steady improvements in our margin performance,” said Adesh Tyagi, Chairman and CEO of Systems America. “As we look to the balance of year, we are well positioned to benefit from the ongoing technology refresh cycle and from new incentives Salesforce.com has created for partners who provide value-added support around the deployment of leading Salesforce.com sales cloud and social media marketing solutions.”
Gross profit was US$1,211,487 for nine months of 2012, representing an increase of 94.63 percent compared to gross profit of US$622,444 reported for the nine months of 2011. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 798.45 percent to US$743,169 delivering a 295 basis point year-over-year increase in EBITDA margin to 950 percent.
“The strong growth in EBITDA in 2012 reflects the success of our strategy to shift a greater proportion of our gross profit mix to higher margin engagements such as cloud applications, storage virtualization and private cloud solutions,” added Mr. Tyagi. “While still in the early stages, we are very pleased with these results and with the impact our mobility services investments have had on driving substantial improvements in the productivity of our mobility services business.”
At the close of the second quarter, the Company had US$843,641 in cash on hand.
Systems America’s interim consolidated financial statements and quarterly report are available at http://www.otcmarkets.com/stock/SYAI/filings
Additional Acquisition Update
Systems America has signed Letter of Intent to acquire a business intelligence and data warehousing solutions company with 2012 revenues of $26 million and adjusted EBITDA of $3.8 million. Upon completion of the proposed acquisition and based on negotiated credit facility terms, the Company is expected to have consolidated pro forma revenues of $30 million and earnings of over $4.4 million for the fiscal year ending December 31, 2012.
Systems America had also received favorable terms from Wells Fargo that provides Systems America a secured $7.5 million asset-based credit facility that would be used to acquire this specific targeted business intelligence and data warehousing solutions company. The Closing of the transaction is subject to certain conditions, including execution of a definitive acquisition agreement. The Transaction is expected to close in next few weeks. There can be no assurance that the financing or acquisition will be consummated.
Systems America has also identified, evaluated and discussed acquisition prospects and signed terms with three other acquisition targets, Mobile application and Social Media Services Company, with revenues in excess of $40 million and earnings in excess of $5.4 million for the year ended December 31, 2011. In addition, the Company is currently further negotiating terms with two acquisition targets, Cloud Application Services Company, with revenues in excess of $24 million and earnings in excess of $2.8 million for the year ended December 31, 2011, and another acquisition target with Mobile Application services and Social Analytics Company with revenues in excess of $25 million and earnings in excess of $4.1 million for the year ended December 31, 2011. The Company expects to close several acquisitions mostly in all cash transactions.
About Systems America
Systems America is a premier provider of diversified cloud computing and information technology solutions to commercial and government clients worldwide. We are ranked one of the fastest growing companies with multiple locations around the world. Systems America delivers superior cloud computing, information technology consulting services, and systems and integration services to hundreds of clients worldwide. Building on a core competency of efficient technology infrastructure outsourcing, the company is headquartered in San Ramon, California, United States. For additional information about Systems America, please visit http://www.systemsamerica.com.
Forward-Looking Statements and Safe Harbor Statement:
The information provided herein may include forward-looking statements. These forward-looking statements may be identified by the use of terms and phrases such as "anticipates," "believes," "can," "could," "estimates," "expects," "forecasts," "intends," "anticipates", "may," "plans," "projects," "targets," "will," and similar expressions or variations of these terms and similar phrases. These forward-looking statements are largely based on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Such forward-looking statements include, without limitation, projections about our possible future results, statements about our plans, strategies, business prospects, changes and trends in our business and the markets in which we operate. Additionally, statements concerning future matters such as new business models, new products, product enhancements, new technologies, sales levels, expense levels and other statements regarding matters that are not historical are forward-looking statements. Management cautions that these forward-looking statements relate to future events or our future financial performance and are subject to business, economic, regulatory and other risks and uncertainties, both known and unknown, that may cause actual results, levels of activity, performance or achievements of our business or our industry to be materially different from those expressed or implied by any forward-looking statements. Risks that may cause these forward-looking statements to be inaccurate include, among others, termination or suspension of the repurchase program, which may occur at any time, changes in the manner in which we implement the program, we may use substantially less than the full 80 million shares allocated under this repurchase program, fluctuations in the market price of our common stock. There is no certainty or assurance that any prospective events referenced as forward-looking statements will be achieved. The Company undertakes no duty to provide updates with respect to matters disclosed in this press release.
Systems America, Inc.