GINSMS Announces Financial Results for Second Quarter Ended September 30, 2013

CALGARY, ALBERTA--(Marketwired - Nov. 27, 2013) - GINSMS Inc. (TSX VENTURE:GOK) has announced its financial results for the second quarter ended September 30, 2013.

PERFORMANCE HIGHLIGHTS FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2013:

• The acquisition of Inphosoft Group Pte Ltd ("Inphosoft") was completed on September 28, 2012. GINSMS's income statement for the three and six months ended September 30, 2013 includes the operating results of Inphosoft Group Pte Ltd and its subsidiaries resulting in total revenue of $211,741 and $657,325 respectively, compared to $149,908 and $306,997 for the corresponding three and six months in the previous year.
• Activities for the three-month and six-month period ended September 30, 2013 resulted in a net loss of $832,129 and $1,314,120 respectively, including a non-realized exchange loss of $16,631 and exchange gain of $3,131 respectively and a non-cash charge to earnings of $308,902 and $599,451 respectively representing accretion on obligations related to the convertible debentures and promissory notes issued in connection with the acquisition of Inphosoft. For the three and six months ended September 30, 2012, the Company recorded a net loss of $425,148 and $473,183 respectively.
• EBITDA of negative $316,190 and $396,044 respectively for the three and six months ended September 30, 2013. This is an improvement of $82,919 and $25,609, compared to EBITDA of negative $399,109 and $421,653 respectively during the corresponding three and six months in the previous year. The lower negative EBITDA principally reflect much lower losses due to revenue contributed by the Inphosoft Group Pte Ltd and its subsidiaries.
• Volume of inter-SMS traffic for the three-month period ended September 30, 2013 was down by 73.3% to 6,506,168 from the same period the previous year. When compared to the previous quarter ended June 30, 2013, traffic improved by 17.4%. 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 1^st March 2013. The slight improvement compared to previous quarter ended June 30, 2013 was due to return of traffic by one major customer.
• Liquidity deteriorated considerably with cash on hand of $445,513, down 53.8% from March 31, 2013. Net current assets as at September 30, 2013 were $286,274, compared to $797,995 as at March 31, 2013.

RESULTS OF OPERATIONS

Financial Highlights		Three-month period ended September 30, (Unaudited)		Six-month period ended September 30, (Unaudited)
		2013	2012	2013	2012
Revenues $		211,741	149,908	657,325	306,997
Cost of sales $		(100,690)	(67,216)	(244,969)	(137,940)
Gross profit $ Gross margin %		111,051 52.4%	82,692 55.2%	412,356 62.7%	169,057 55.1%
EBITDA (1) $ EBITDA margin		(316,192) (149.3)%)	(399,109) (266.2)%	(396,044) (60.3)%	(421,653) (137.3)%
Net earnings $ Net earnings margin		(832,127) (393.0)%	(425,148) (283.6)%	(1,314,120) (199.9)%	(473,183) (154.1)%
Net earnings (loss) per share $
	Basic	(0.02)	(0.01)	(0.03)	(0.01)
	Diluted	(0.02)	(0.01)	(0.03)	(0.01)
(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.

	Consolidated as at September 30, 2013 (unaudited)(1)	Consolidated as at March 31, 2013 (Audited)(1)
Total assets $	5,403,717	6,686,027
Total liabilities $	6,953,002	7,056,584
Shareholders' equity $	(1,549,285)	(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 3 months and 6 months ended September 30, 2013 was $211,741 and $657,325 respectively, representing an increase of 41.2% and 114.2% respectively, compared to $149,908 and $306,997 during the corresponding periods the previous year. The increase is due to the inclusion for the revenue from Inphosoft in the consolidated statement of income as revenue from the Company's IOSMS activities, taken separately, declined by 74.4% and 79.6% for the 3 months and 6 months the previous year. 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 1^st March 2013 as well as a 73.3% drop in SMS traffic during the quarter ended September 30, 2013, compared to the corresponding quarter the previous year.

Revenue from Inphosoft for the six months aggregated $594,624 is broken down as follow: Professional Services - $349,651 (58.8%), License fees - $11,125 (1.9%), and Support and Maintenance (S&M) -$233,848 (39.3%).

The net loss for the quarter ended September 30, 2013 amounted to $832,129, compared to a loss of $425,148 during the same quarter the previous year. The loss for the second quarter this fiscal year includes a net foreign exchange loss of $16,631 and a non-cash charge to earnings of $308,902 representing accretion on obligations related to the convertible debentures and promissory notes issued in connection with the acquisition of Inphosoft.

EBITDA for the second quarter ended September 30, 2013 amounted to negative $316,190 while EBITDA for the corresponding period the previous year which showed a deficit of $399,109. These results underline an improved gross profit picture with gross income increasing by 34.3% to $111,051, but with a lower gross profit margins hence translate into a gross margin of 52.4%, compared to 55.2% during the corresponding quarter the previous year.

Other than lower revenue generated by the IOSMS platform and the impact the foreign exchange gain have had on the results of the Company for the 6 months ended September 30, 2013, the loss of $1,314,120 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 556.7% to $514,360, and general and administrative expenses are up 177.6% to $153,530.. However, consultancy fees decreased by 38.5% to $33,582 and professional fees decreased by 72.7% to $110,059. The decline in professional fees reflected the lower legal fees in particular following the completion of the acquisition at the end of the second quarter of the previous year. The consolidation of Inphosoft also resulted in higher amortization charges which amounted to $314,165, compared to $52,414 for the corresponding 6 months 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.

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