|By Marketwired .||
|May 8, 2014 08:41 PM EDT||
CALGARY, ALBERTA -- (Marketwired) -- 05/08/14 -- CriticalControl Solutions Corp. (TSX: CCZ) today reported its financial results for the three months ended March 31, 2014.
"Significant progress in bringing our key strategic longer term investments to market is the highlight of our quarter," said Alykhan Mamdani, President and CEO of CriticalControl. "The two material sales of ProMonitor announced in the quarter combined with preparations for going to market in the US with our core software solutions positions us for growth in 2014."
Quarter ended March 31, 2014 highlights
-- Total revenue was $11.6 million in Q1 2014 compared to $10.7 million in Q1 2013, representing an increase of $0.9 or 9.0%. -- Revenue from the Canadian Energy Services was $3.2 million in Q1 2014 compared to $3.1 in Q1 2013, representing an increase of $0.1 million or 3.7%. -- Revenue from the US Energy Services business increased by $0.5 million or 14.7%, from $3.8 million in Q1 2013 to $4.3 million in Q1 2014. -- Revenue from the Corporation's Service Bureau Operations increased by $0.3 million or 8.2%, from $3.8 million in Q1 2013 to $4.1 million in Q1 2014.
Gross margin percentage
-- Gross margin percentage for the Corporation was 31.5% in Q1 2014 compared to 36.5% in Q1 2013. -- Canadian Energy Services gross margin percentage decreased from 56.2% in Q1 2013 to 43.1% in Q1 2014. The decrease is attributable to negative margins on the implementation of a large strategic ProMonitor project. -- US Energy Services gross margin percentage decreased from 28.7% in Q1 2013 to 26.2% in Q1 2014. The decrease is driven by the costs associated with ProChart implementation. -- Service Bureau Operations gross margin percentage decreased from 28.5% in Q1 2013 to 27.9% in Q1 2014.
Selling and administrative expenses
-- Selling and administrative expenses for the Corporation increased by $0.1 million from $3.7 million in Q1 2013 to $3.8 million in Q1 2014. Of the increase, $76 thousand can be attributed to the impact of the weaker Canadian dollar in relation to the US dollar. Other changes in selling and administrative expenses were primarily offsetting.
-- Research and development expense decreased by $65 thousand in Q1 2014 compared to Q1 2013, but when the impact of amounts capitalized is considered, expenditures increased by $44 thousand. -- Finance costs in Q1 2014 decreased by $0.1 million compared to Q1 2013. The decrease was primarily attributable to a favorable swing in foreign exchange rates, and decreased debt levels in relation to Q1 2013. -- Other operating expenses in Q1 2014 decreased by $0.1 million compared to Q1 2013, due to a favorable adjustment to the onerous lease provision for Edmonton.
Earnings and net earnings
-- Loss before income tax for Q1 2014 remained consistent at $0.2 million compared to Q1 2013. -- Net loss for Q1 2014 remained consistent at $0.2 million compared to Q1 2013.
Cash flow, working capital and debt
-- Working capital decreased by $0.8 million from $2.3 million at December 31, 2013 to $1.5 million at March 31, 2014. The main drivers of this were increased borrowings on the Corporation's secured bank facility and the accrual of a loss on a large strategic ProMonitor project. -- Net cash from operating activities decreased by $0.4 million from $0.5 million in Q1 2013 to $0.1 million in Q1 2014. The impact of income tax refunds in Q1 2013 and income tax payments in Q1 2014 accounted for the decrease.
Outlook and forward looking statements
The Corporation has invested significant resources in the past two years on initiatives within its Canadian and US Energy business which are anticipated to bear fruit in the next six calendar quarters. Revenue growth prior to the benefits of these initiatives being realized provides management optimism for the remainder of the year.
Specifically, the Corporation continued development of two material software initiatives related to its Canadian Energy Services business, ProMonitor and ProFDC. ProMonitor currently has two separate modules consisting of a schematics management application and a pipeline corrosion risk application offered through a common map-based interface. CriticalControl launched the schematics module commercially in 2013, with certain small to medium sized producers adopting the platform. One of Canada's largest producers adopted the schematics module, as announced by the Corporation during Q1 2014. In order to implement the module, data driven schematics need to be produced from public and proprietary databases to form the first draft schematic, which is then refined and stored as data in the system. Given the size of the producer, the number of assets in the field and the complexity of their gathering systems that integrate assets from the well to the plant, the scope of the implementation is material and significantly more complex than the Corporation's other clients.
The scope of the implementation required CriticalControl to triple the size of its team and accelerate training. The complexity of the project, combined with the fact that the schematics module is new and currently lacks the automated processes required for the scope of the producer's field assets, has resulted in an inefficient implementation. Development of the ProMonitor tool will continue and is expected to improve productivity later in 2014. However, time constraints have necessitated the use of manual efforts to complete the initial phases of the implementation, resulting in a negative margin for ProMonitor. The negative margin is attributable to the loss on the large producer implementation project of $0.4 million in Q1 2014, including a provision for $0.2 million. Management expects further losses on the contract in 2014 until the software can be adapted to materially offset current manual processes, and accordingly has taken the additional $0.2 million provision this quarter. Inability to complete necessary software changes in a timely manner would result in an investment greater than the provision taken.
The pipeline corrosion risk module was adopted by a prominent Canadian producer in Q1 2014, prior to its commercial launch in Q2 2014. Both modules of ProMonitor require significant development in the next six months, and business processes need to be built to handle the scope of growth. Notwithstanding the forgoing, the market acceptance of ProMonitor as indicated by these material engagements, reduce a critical risk factor in the commercialization of the product.
The Corporation's other large development initiative, ProFDC, a field data capture system, continues to be in development, with initial modules expected to become commercial later in 2014. The ability to successfully complete development, the ability to attract and retain implementation staff, the ability to build viable business processes and broader market acceptance of the products are risk factors that could materially, adversely affect the Corporation's profitability in 2014 and 2015.
The Corporation is in the process of finalizing its core Canadian applications, ProChart, ProTrend and NetFlow, for the US market. Management views leveraging its strong presence in the Appalachians to penetrate the US market with its core products as a strong vehicle for growth in the next year. This process is near completion, and the Corporation has been focused on building its US management and sales teams to leverage its software in the US market. These costs will increase in 2014 as the Corporation intends to add a senior gas measurement resource to its US management team. In order to benefit from these expenditures, the Corporation needs to be successful in implementing its core applications in the US. Although management is optimistic of the viability of its plan, market acceptance of these applications cannot be certain and could negatively affect profitability in 2014.
The Corporation was expecting increased revenue in Q1 2014 from its Service Bureau Operations related to a contract from a large Canadian bank. The expansion of the project has been delayed by the customer due to internal issues, and expansion into Quebec has been delayed to Q4 2014 from the original Q2 2014 expectation. Growth in the scope of this project is at the discretion of the customer, and further delays are outside of management's control.
In a world of escalating globalization, with an increasingly transient workforce, enterprises have difficulty maintaining their knowledge and are forced to focus on their key market advantages to remain competitive. CriticalControl provides these enterprises with secure and cost-effective solutions for the completion of document and information intensive business processes through an integrated offering of software, outsourced services and optimized business processes.
CriticalControl Solutions Corp.
President & CEO
“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: 1,226
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. 19, 2014 08:00 PM EST Reads: 792
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. 19, 2014 07:00 PM EST Reads: 1,206
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. 19, 2014 07:00 PM EST Reads: 807
“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. 19, 2014 06:00 PM EST Reads: 1,185
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. 19, 2014 04:45 PM EST Reads: 841
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. 19, 2014 11:30 AM EST Reads: 2,308
"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. 19, 2014 11:00 AM EST Reads: 1,865
SYS-CON Media announced today that Aruna Ravichandran, VP of Marketing, Application Performance Management and DevOps at CA Technologies, has joined DevOps Journal’s authors. 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. Aruna's inaugural article "Four Essential Cultural Hacks for DevOps Newbies" discusses how to demonstrate the...
Dec. 19, 2014 10:00 AM EST Reads: 1,694
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. 19, 2014 10:00 AM EST Reads: 1,974
"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. 19, 2014 09:00 AM EST Reads: 1,893
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. 19, 2014 08:00 AM EST Reads: 1,883
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. 19, 2014 07:00 AM EST Reads: 2,179
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. 19, 2014 06:30 AM EST Reads: 2,170
ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ -- IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's