Add
ASVP.OB to Portfolio
Set Alert
Email to a
Friend
| |||
|
|
Quotes & Info
|
| ASVP.OB > SEC Filings for ASVP.OB > Form 10-Q on 16-Nov-2009 | All Recent SEC Filings |
16-Nov-2009
Quarterly Report
This Report contains statements that may contain forward-looking statements, concerning the Registrant's future operations and planned future acquisitions and other matters and the Registrant intends that such forward-looking statements be subject to the safe harbors for such statements. Any statements that involve discussions with respect to predictions, expectations, belief, plans, projections, objectives, assumptions or future events or performance (often, but not always, using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimates" or "intends", or stating that certain actions, events or results "may", could", "might", or "will" be taken to occur or be achieved) are not statements of historical fact and may be "forward looking statements". These forward-looking statements include statements relating to, among other things, the ability of the Registrant to continue as a going concern.
The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Such forward-looking statements are based on the beliefs and estimates of the Company's management as well as on assumptions made by and information currently available to the Company at the time such statements were made. Forward looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward looking statements, including, without limitation, the failure to obtain adequate financing on a timely basis. Actual results could differ materially from those projected in the forward- looking statements, either as a result of the matters set forth or incorporated in this Report generally and certain economic and business factors, some of which may be beyond the control of the Registrant. Additional risks and uncertainties that may affect forward-looking statements about the Company's business and prospects include adverse economic conditions, inadequate capital, unexpected costs, and other factors which could have an immediate and material adverse effect. The Company disclaims any obligation subsequently to revise any forward -looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
The following discussion and analysis of the results of operations and financial condition of the Company should be read in conjunction with the audited financial statements for the period ended December 31, 2008 and the related notes, contained in the Company's Annual Report on Form 10-K and in conjunction with the unaudited financial statements and notes thereto appearing elsewhere in this Form 10-Q.
Three Months Ended September 30, 2009 and 2008
Revenue. Revenue for the three months ended September 30, 2009 ("Q3 2009") was $7,760,601 as compared to $2,653,858 for the three month period ended September 30, 2008 ("Q3 2008"). The increase in revenue in Q3 2009 was primarily due to the acquisition of iPrint Technologies, LLC, ("iPrint") which occurred on October 31, 2008. Revenues from the sale of toner cartridges increased by $4,541,759 for three months ended September 30, 2009 compared to the same period in 2008 due to the revenue associated with the acquisition of iPrint. Revenues from service increased by $ 564,984 for the three months ended September 30, 2009 compared to the same period in 2008 primarily due to additional service contracts that were won in 2009.
Three Months Ended September 30, 2009 and 2008 (continued)
Gross Profit. Gross profit for Q3 2009 increased to $2,000,083 from $1,078,174 in Q3 2008. The gross profit margin in Q3 2009 was 25.8% compared to a gross profit margin for Q3 2008 of 40.6% . The Company's gross margins decreased compared to Q3 2008 due to the lower margins associated with sales to customers acquired from iPrint which have a high concentration of OEM cartridge sales which have lower margins than remanufactured cartridges.
Salaries and Wages. Salaries and wages expenses were $ 808,314 for Q3 2009 compared to $717,517 in Q3 2008. The Q3 2009 increase was due to the increase in employees due to the iPrint acquisition offset by a reduction in headcount at corporate headquarters.
Professional Fees and Services. Professional fees and services expenses were $222,734 in Q3 2009 compared to $217,143 in Q3 2008. These fees remained relatively the same during each of the quarters.
Sales and Marketing. Sales and marketing expenses were $611,972 for Q3 2009 compared to $ 237,333 in Q3 2008. The increase in Q3 2009 was primarily due to the additional sales personnel hired through the acquisition of iPrint, increased commissions paid out due to higher revenues and an increase in Independent Sales Partners (ISP's) in 2009 from 2008. The iPrint acquisition brought on seventeen ISP's and since then, the Company has increased that amount to forty ISP's through an aggressive recruiting strategy.
General and Administrative. General and administrative expenses were $490,420 in Q3 2009 as compared to $ 460,065 in Q3 2008. General and Administrative expenses increased due to the overhead associated with the operations of iPrint.
Amortization Expense. Amortization expense was $181,616 in Q3 2009 as compared to $155,224 in Q3 2008. The increase was due to the acquisition of assets from iPrint in October 2008 of $58,101 offset by a reduction in amortization from the Tonertype customer list of $37,564 as a result of a purchase price adjustment in December 2008.
Other (Expense) Income. During the three month period ended September 30, 2009, there was an increase of $145,965 in interest expense as compared to three month period ended September 30, 2008 as a result of the issuance of notes in connection with the iPrint acquisition in 2008 and the issuance of notes in a private offering. There was an increase in income related to the change in fair value of warrant liabilities of $41,739 for Q3 2009 versus Q3 2008. The Company did not recognize a gain or loss in Q3 2009 on the fair value of convertible debt which compared to an expense of $31,250 during Q3 2008.
Net Loss from operations. The net loss from operations for the three months ended September 30, 2009 was $314,973 compared to a net loss of $ 709,108 for the three months ended September 30, 2008. The decrease in the net loss of $394,135 for Q3 2009 was primarily related to the effect of the iPrint acquisition.
Net Loss. The net loss for the three months ended September 30, 2009 was $1,028,777 compared to a net loss of $956,080 for the three months ended September 30, 2009. The increase in the net loss over the prior year
Three Months Ended September 30, 2009 and 2008 (continued)
was primarily related to an increase in the change in fair value of warrant liabilities of approximately $291,000 and interest expense of $146,000 offset by the decrease in net loss from operations discussed above.
Net Loss per Share. The net loss per share in Q3 2009 was $0.014 compared to a net loss of $ 0.015 in Q3 2008. The decrease in the net loss per share was primarily due to the acquisition of iPrint and an increased number of shares of common stock outstanding which occurred during the last six months of 2008 and in 2009.
EBITDA. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for Q3 2009 was a negative $473,271 compared to a negative EBITDA of $584,006 for Q3 2008. The $110,735 improvement in EBITDA was primarily the result of the iPrint acquisition.
Adjusted EBITDA. Adjusted EBITDA, which represents net income before interest, taxes, depreciation, amortization and other non-cash related expenditures, for Q3 2009 was $61,200 compared to a negative Adjusted EBITDA of $401,400 for Q3 2008. This improvement of $462,600 was primarily the result of the iPrint acquisition
Nine Months Ended September 30, 2009 and 2008
Revenue. Revenue for the nine months ended September 30, 2009 ("YTD 2009") was $21,493,092 as compared to $8,106,084 for the nine month period ended September 30, 2008 ("YTD 2008"). The increase in revenue in YTD 2009 was primarily due to the acquisition of iPrint Technologies, LLC, ("iPrint") which occurred on October 31, 2008. Revenues from the sale of toner cartridges increased by $11,720,414 for the nine months ended September 30, 2009 compared to the same period in 2008 due to the revenue associated with the acquisition of iPrint. Revenues from service increased by $1,666,594 for the nine months ended September 30, 2009 compared to the same period in 2008 primarily due to additional service contracts that were won in 2009.
Gross Profit. Gross profit for YTD 2009 increased to $6,215,305 from $3,036,228 in YTD 2008. The gross profit margin in YTD 2009 was 28.9% compared to a gross profit margin for YTD 2008 of 37.5%. The Company's gross margins decreased due to the lower margins associated with sales to customers acquired from iPrint which have a high concentration of OEM cartridge sales.
Salaries and Wages. Salaries and wages expenses were $ 2,557,927 for YTD 2009 compared to $ 2,074,177 in YTD 2008. The increase was due to the additional wages resulting from the iPrint acquisition of $424,959 and $113,884 in bonuses paid out to certain operations managers.
Professional Fees and Services. Professional fees and services expenses were $1,006,043 in YTD 2009 compared to $948,270 in YTD 2008. This increase was primarily due to compensation of $365,576 for the issuance of warrants in exchange for personal guarantees by certain directors of the Company in 2009 offset by a reduction in stock related compensation of $265,311 paid to the Company's former investment banker in 2008.
Nine Months Ended September 30, 2009 and 2008 (continued)
Sales and Marketing. Sales and marketing expenses were $1,712,472 for YTD 2009 compared to $ 717,540 in YTD 2008. The increase was primarily due to the additional sales personnel hired through the acquisition of iPrint, increased commissions paid out due to higher revenues and an increase in Independent Sales Partners (ISP's) to forty in 2009 from three in 2008.
General and Administrative. General and administrative expenses were $1,477,950 in YTD 2009 as compared to $1,202,576 in YTD 2008. General and Administrative expenses increased due to the overhead associated with the operations of iPrint.
Amortization Expense. Amortization expense was $535,107 in YTD 2009 as compared to $461,430 in YTD 2008. The increase was due to the acquisition of intangible assets from iPrint in October 2008 of $172,053 which was partially offset by a reduction in amortization from the Tonertype customer list purchase price adjustment of $111,354 in December 2008.
Other (Expense) Income. During the nine month period ended September 30, 2009, there was an increase of $506,675 in interest expense as compared to nine month period ended September 30, 2008, as a result of the restructuring of the Brody Enterprises note, the issuance of notes in connection with the iPrint acquisition in 2008 and the issuance of notes in a private offering. There was an increase in income related to the change in fair value of warrant liabilities of $409,056 for YTD 2009 versus YTD 2008 due to the decrease in the Company's stock price that is used to value the warrants.
Net Loss from operations. The net loss from operations for the nine months ended September 30, 2009, was $1,074,194 compared to a net loss of $2,367,765 for the nine months ended September 30, 2008. The decrease in the net loss of $1,293,571 for YTD 2009 was primarily related to the effect of the iPrint acquisition.
Net Loss. The net loss for the nine months ended September 30, 2009, was $1,874,843 compared to a net loss of $3,408,006 for the nine months ended September 30, 2008. The decrease in the net loss over the prior year was primarily related to the increased gross profit from the acquisition of iPrint along with the implementation of cost cutting measures and improved operational efficiencies. The reduction in the net loss has reduced the amount of outside capital that the Company needs to raise to support its operations and existing debt service.
Net Loss per Share. The net loss per share for YTD 2009 was less than $0.02 compared to a net loss of $0.05 for YTD 2008. The decrease in the net loss per share was primarily due to the acquisition of iPrint and an increased number of shares of common stock outstanding which occurred during the last six months of 2008.
EBITDA. EBITDA for YTD 2009 was negative $81,350 compared to a negative EBITDA of $2,232,399 for YTD 2008. The $2,313,749 improvement in EBITDA was primarily the result of the iPrint acquisition, the implementation of cost cutting measures and improved operational efficiencies. An increase in other income related to the change in fair value of warrant liabilities of $159,806 and a $581,250 positive change in the fair value of convertible debt for YTD 2009 versus YTD 2008 also impacted this number positively.
Nine Months Ended September 30, 2009 and 2008 (continued)
Adjusted EBITDA. Adjusted EBITDA for YTD 2009 was $345,616 compared to a negative Adjusted EBITDA of $1,158,902 for YTD 2008. This increase of $1,504,518 was primarily the result of the iPrint acquisition, the implementation of cost cutting measures and improved operational efficiencies.
Non-GAAP Measures:
EBITDA and Adjusted EBITDA presented in this report are a supplemental measure of our performance that is not required by or presented in accordance with GAAP. These measures are not a measurement of our financial performance under GAAP and should not be considered as alternatives to net income, income from operations, or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating, investing or financing activities as a measure of our liquidity.
EBITDA represents net income before interest, taxes, depreciation and amortization. Adjusted EBITDA represents net income before interest, taxes, depreciation, amortization and other non-cash related expenditures. We present EBITDA and Adjusted EBITDA because we consider them important supplemental measures of our performance and liquidity. We believe investors may also find these measures meaningful, given how our management makes use of them. The following is a discussion of our use of these measures.
We use EBITDA and Adjusted EBITDA to measure and compare the performance of our Company. We also use EBITDA and Adjusted EBITDA to measure performance for determining division-level compensation. We also use EBITDA and Adjusted EBITDA as a measurement to manage cash flow from our divisions to the corporate level and to determine the financial health of each division. We also use EBITDA and Adjusted EBITDA to evaluate potential acquisitions and to evaluate whether to incur capital expenditures.
EBITDA and Adjusted EBITDA have limitations as an analytical tool, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:
* They do not reflect our cash expenditures, or future requirements for capital expenditures and contractual commitments;
* They do not reflect changes in, or cash requirements for, our working capital needs;
* They do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
* Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; and
* Other companies, including companies in our industry, may calculate these measures differently than we do, limiting their usefulness as comparative measures.
Non-GAAP Measures (continued):
Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in business growth or to reduce our indebtedness. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA only as supplements.
We have presented EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2009 and 2008 to reflect the exclusion of all stock related compensation and gain or loss recognized on the fair value of convertible debt and other one-time expenditures. This presentation facilitates a meaningful comparison of our operating results for the three and nine months ended September 30, 2009 and 2008.
The following is a reconciliation of cash flows provided by operating activities to EBIT, EBITDA, and net loss:
|
|