|By Marketwired .||
|May 8, 2014 08:40 PM EDT||
CALGARY, ALBERTA -- (Marketwired) -- 05/09/14 -- 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
One of biggest questions about Big Data is “How do we harness all that information for business use quickly and effectively?” Geographic Information Systems (GIS) or spatial technology is about more than making maps, but adding critical context and meaning to data of all types, coming from all different channels – even sensors. In his session at @ThingsExpo, William (Bill) Meehan, director of utility solutions for Esri, will take a closer look at the current state of spatial technology and ar...
Sep. 29, 2016 09:30 AM EDT Reads: 388
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Sep. 29, 2016 09:30 AM EDT Reads: 3,203
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Sep. 29, 2016 09:30 AM EDT Reads: 4,437
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
Sep. 29, 2016 09:30 AM EDT Reads: 624
SYS-CON Events announced today that Interface Masters Technologies, a leader in Network Visibility and Uptime Solutions, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Interface Masters Technologies is a leading vendor in the network monitoring and high speed networking markets. Based in the heart of Silicon Valley, Interface Masters' expertise lies in Gigabit, 10 Gigabit and 40 Gigabit Eth...
Sep. 29, 2016 09:15 AM EDT Reads: 2,692
Much of the value of DevOps comes from a (renewed) focus on measurement, sharing, and continuous feedback loops. In increasingly complex DevOps workflows and environments, and especially in larger, regulated, or more crystallized organizations, these core concepts become even more critical. In his session at @DevOpsSummit at 18th Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, showed how, by focusing on 'metrics that matter,' you can provide objective, transparent, and meaningful f...
Sep. 29, 2016 09:00 AM EDT Reads: 2,791
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
Sep. 29, 2016 09:00 AM EDT Reads: 4,161
Creating replica copies to tolerate a certain number of failures is easy, but very expensive at cloud-scale. Conventional RAID has lower overhead, but it is limited in the number of failures it can tolerate. And the management is like herding cats (overseeing capacity, rebuilds, migrations, and degraded performance). Download Slide Deck: ▸ Here In his general session at 18th Cloud Expo, Scott Cleland, Senior Director of Product Marketing for the HGST Cloud Infrastructure Business Unit, discusse...
Sep. 29, 2016 08:30 AM EDT Reads: 2,457
To leverage Continuous Delivery, enterprises must consider impacts that span functional silos, as well as applications that touch older, slower moving components. Managing the many dependencies can cause slowdowns. See how to achieve continuous delivery in the enterprise.
Sep. 29, 2016 08:15 AM EDT Reads: 2,139
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. Big Data at Cloud Expo - to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is...
Sep. 29, 2016 08:00 AM EDT Reads: 2,710
Internet of @ThingsExpo has announced today that Chris Matthieu has been named tech chair of Internet of @ThingsExpo 2016 Silicon Valley. The 6thInternet of @ThingsExpo will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Sep. 29, 2016 08:00 AM EDT Reads: 2,688
An IoT product’s log files speak volumes about what’s happening with your products in the field, pinpointing current and potential issues, and enabling you to predict failures and save millions of dollars in inventory. But until recently, no one knew how to listen. In his session at @ThingsExpo, Dan Gettens, Chief Research Officer at OnProcess, will discuss recent research by Massachusetts Institute of Technology and OnProcess Technology, where MIT created a new, breakthrough analytics model f...
Sep. 29, 2016 08:00 AM EDT Reads: 2,089
Most of us already know that adopting new cloud applications can boost a business’s productivity by enabling organizations to be more agile and ready to change course in our fast-moving and connected digital world. But the rapid adoption of cloud apps and services also brings with it profound security threats, including visibility and control challenges that aren’t present in traditional on-premises environments. At the same time, the cloud – because of its interconnected, flexible and adaptable...
Sep. 29, 2016 07:15 AM EDT Reads: 1,733
As organizations shift towards IT-as-a-service models, the need for managing and protecting data residing across physical, virtual, and now cloud environments grows with it. Commvault can ensure protection, access and E-Discovery of your data – whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise. In his general session at 18th Cloud Expo, Randy De Meno, Chief Technologist - Windows Products and Microsoft Part...
Sep. 29, 2016 07:00 AM EDT Reads: 2,944
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Sep. 29, 2016 07:00 AM EDT Reads: 3,489