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Fair assessment smallotcinvestor. I think they're making the right strategic decisions. Nothing is ever as easy as we often hope.
Yesterday's communication was a step in the right direction in my eyes. Clearly they need to execute which I believe they can.
I believe the warrants expire three years from the IPO date so approximately Dec 19, 2017.
Considering taking a personal position here.
Been doing a lot of due diligence on this company and specifically its management. Management is everything in my eyes and I believe Steve Alfers the real deal, impressive to say the least.
Clearly an equity play for him which makes his goals and ours perfectly aligned.
Based on my findings, I see considerable possible upside with minimal downside risk at current price levels.
Really like this communications. Well written and compelling.
One of the better shareholder communications I've seen in some time.
Yes, however remember the shares were trading as a unit "MDVXU" which consisted of a share and a warrant.
Now they are trading separately as expected and previously announced.
See "MDVX" and "MDVXW". Combined they are approximately valued at the price you indicated.
First, it has not traded at 75 cents post r/s. It typically takes at least a few days for an equitable market to reestablish post r/s.
Second, please provide a link to any publicly filed document that indicates the company has any debt or convertible notes currently issued or outstanding. I don't find any reference to any in the current public filings made with the SEC.
Third, the company is profitable and generates earnings. Now with the more favorable cap structure, it will produces meaningful EPS and have a PE ratio which is exactly what value investors want to see. Furthermore, value investors generally speaking don't buy penny stocks that aren't listed on a larger exchange. Recent developments remedy that issue as you know.
Fourth, split or not, the company is trading 1X sales. The space trades at almost 3X sales and many aren't profitable. A profitable company with 12 consecutive quarters of double digit growth and trading at just 1X sales is literally the definition of value in my book.
Thanks for the exchange as always.
I believe the financing is to give them the capital they need to list on Nasdaq, as well as also potentially use for some larger acquisitions.
With the new capital structure, they will now have nice earnings leverage whereby it should finally get the recognition it deserves and trade more on par with comps and others in the space.
A company that has demonstrated both growth and profitability like this one will never receive the proper attention or draw the interest of more sophisticated investors while listed on the otcbb.
In my opinion, management has done precisely the most prudent thing on behalf of shareholders, ironically management being the largest themselves.
"We are pleased with the USPTO's decision denying EMC Corporation, EMC International U.S. Holdings, Inc., and VMware's IPR petition on claims 1, 2, 15, and 17 of the '839 patent. Of the three claims asserted against the defendants (1, 6, and 17), two of the three (1 and 17) survived challenge," said Doug Croxall, Founder and CEO of Marathon Patent Group. "We will continue to seek reasonable royalty payments from those who infringe the '839 patent. Hopefully the IPR denial of the aforementioned claims will encourage the parties in suit to reach reasonable licensing arrangements with Clouding Corp."
I am more than happy to own them. With the now clean capital structure, a possible Nasdaq listing forthcoming, some potential institutions now looking at the name now that they can buy the shares, and eps that should merit much higher prices, I'm ok with owning them.
Whether it's this company or any other, 1X sales is completely undervalued, especially when they are profitable with 12 consecutive q's of strong growth under their belt. The r/s doesn't change the value proposition, just allows those investors who are more likely to acknowledge and invest in a company like this actually do so.
Best to you regardless of our differing view here.
What's the old saying..."No good deed goes unpunished?" ;)
While I believe longer term the market applauds the news, it was clearly met with a fairly neutral response today.
I believe the market likely awaiting a clearer indication of what they intend to do with the capital. Absent that part of the equation, it's obviously difficult for most to properly assess the situation, or even place it in proper context in terms of ultimate opportunity.
Like everything management has done over the past 2 plus years since inception, ultimately I expect we as shareholders will come to see it as having been very strategic, well advised and a probable catalyst to value creation.
I think I bought your shares. Lol
As Flyers rightfully stated, the terms of the deal are distinctly different and far more advantageous for shareholders than any other deal I've seen Fortress do.
It can only speak to the investors perceived quality of Marathon as a company, as well as their underlying confidence in managements ability to execute and drive value and return on investment.
I said yesterday what my opinion was on it based on my read. Today my opinion was affirmed. While certainly a matter of interpretation, it was responsible to clarify it.
Totally agree with your assessment and conclusion flyers.
Said it yesterday, but what this does for the company's stature in the eyes of those it's in litigation with, can not be understated. The cost of capital will come back 10 fold in the company's now ability to extract larger settlements.
Furthermore, the key will be what asset they acquire and where it stands in the process of monetization. Hypothetically if they pay $15M for it, they must believe the upside at least 4X the investment.
Using someone else's capital to make $30-$45M is pretty strategic, even if you have to pay them a few million to do it.
They are doing it to list on the Nasdaq exchange which if successful, will be a very big positive.
This company is doing one for the right reason versus the wrong.
1X sales is a joke for any valuation of a company in this space, let alone a profitable one.
Appears as though perhaps even RPX is questioning just how thoroughly Spherix and its board really vetted any potential offer.
I wonder if the CEO of Spherix inevitably comes to regret some of his recent decisions.
http://m.iam-magazine.com/Blog/Detail.aspx?g=e76e9b21-90c0-46f3-a395-a2f12e5aeae0
The board of Spherix better prey to God they are successful at creating some shareholder value on the heals of turning down any offer. They've now put themselves in a somewhat precarious and liable position should they fail.
Well said. Furthermore, I wonder how truly formal these discussions really even were. I believe the pr has but one purpose and it's not a noble one.
To me, it's highly ironic that they announced this, when most would not have, on the same day that the RPX deal is closing with Rockstar. My hunch is that it is far from a coincidence as RPX may be starting to sell their multi-million share position in SPEX.
While a deal did not happen this time, I would expect it only a matter of time before SPEX is again desperate and out of money and trying to explain to shareholders why they are again being diluted.
Imo, inevitably all the good assets will find their way into the hands of Marathon, or someone very similar to a Marathon.
Appreciate your opinion of what constitutes value and what does not. Find me another profitable company trading at a mere 1X revenues and that is executing as described in the release below, and I will start buying it as well.
Hard to argue the facts.
SilverSun Technologies Reports Best Quarterly Results in Its 12-Year History
Net Profitability for First Nine Months of 2014 Climbs Over 349%
November 13, 2014 8:42 AM
LIVINGSTON, NJ--(Marketwired - Nov 13, 2014) - SilverSun Technologies, Inc. (OTCQB: SSNT), a national provider of transformational business technology solutions and services, today announced its 12th consecutive quarter of double-digit percentage revenue growth, reporting results for the three and nine months ended September 30, 2014.
Financial Highlights for the Three Months Ended September 30, 2014 Compared to the Three Months Ended September 30, 2013:
•Total revenues increased 39%, rising to a record $6,086,465 from $4,374,951. •Revenues from services climbed 40% to $4,741,227 from $3,379,806.
•Software sales totaled $1,345,238, representing a 35% increase over $995,145.
•Even after factoring in non-cash expenses of $151,190 related to share-base compensation, depreciation and amortization; income from operations rose 853% to $467,506 over a loss from operations of $62,084, which factored in $97,807 in similar non-cash expenses.
•Net income before taxes increased to $446,012 compared to a net loss of $82,219.
•After factoring $197,847 for taxes for the current three month reporting period, net income was $248,165, or $0.00 per diluted share, which compared to a net loss of $82,219, or $0.00 per diluted share.
Financial Highlights for the Nine Months Ended September 30, 2014 Compared to the Nine Months Ended September 30, 2013:
•Total revenues increased to a new historic high of $16,266,032, up 32% from $12,290,088. •Services revenue totaled $13,364,021, up 33% from $10,050,315.
•Software sales rose 30% to $2,902,011 from $2,239,773.
•Income from operations was $801,877, rising 446% from $146,895. Notwithstanding non-cash expenses related to share-base compensation, depreciation and amortization totaling $381,216 in the first nine months of 2014, income from operations would have totaled $1,183,093..
•Net income before taxes totaled $756,160, representing a 692% increase over net income before taxes of $95,496.
•After factoring an income tax provision of $327,364, net income was $428,796, or $0.00 per diluted share, a 349% increase when compared to $95,496, or $0.00 per diluted share.
As of September 30, 2014, the Company had $1,449,773 in cash and cash equivalents; $1,924,428 in accounts receivable; $260,059 in long term debt; and total stockholders' equity of $238,410. Net cash provided by the Company's operations for the first nine months of this year totaled $910,824, as compared to $862,003 for the same nine month period in the prior year.
"Our third quarter results set several new Company records, a trend that we have been effectively perpetuating for the last three consecutive years," stated Mark Meller, Chairman and CEO of SilverSun. "Our operating performance continues to be fueled by the dynamic growth of our high margin Managed Services business, successful execution of our growth-through-acquisition strategy, increasing market penetration for our proprietary cloud-based business management solutions custom-created for the U.S. craft brewery and distribution industry, and our continued success at winning major new customers to the Sage ERP X3 platform."
"Our strong balance sheet, reflecting a solid working capital position, provides SilverSun with notably enhanced operating flexibility and allows us to continue investing in the growth of our businesses without resorting to unnecessary dilution to our shareholders. As we approach the end of 2014 and commit to our growth strategies for the year beyond, we remain confident that SilverSun will continue to set new records for performance, and set entirely new standards of excellence for enabling clients to positively transform their operations through our proven technological solutions."
For more details on SilverSun's third quarter results, please refer to the Company's 10-Q filed with the U.S. Securities Exchange Commission and accessible at www.sec.gov.
I know. Somewhere along the line, Yahoo or someone had an issue.
Wasn't Marketwire since they posted it at 8:30am. Lot's of sites pull from other sites to populate their news. All it takes is for one site to break the chain sometimes.
That was from last week, not sure why SA sent it out today.
May be because Yahoo Finance was having issues this am with news releases posting. Looks like they just fixed it in recent hour or two. Now today's news is showing where earlier it was absent.
SA must have seen they had news, but inadvertently posted the wrong settlement.
Today's is here:
http://finance.yahoo.com/news/marathon-patent-groups-subsidiary-selene-133000490.html
It's a value here in my opinion.
Medovex Corp. Announces Jeffery Wright as Chief Financial Officer, Changes Auditors
ATLANTA, GA--(Marketwired - Jan 30, 2015) - Medovex Corp. (NASDAQ: MDVXU), a developer of medical technology products including the DenerveX device, announced today that the Board of Directors approved the appointment of Jeffery Wright as the Company's Chief Financial Officer, and Frazier & Deeter LLP, an Atlanta based independent registered public accounting firm, as the Company's new auditor at its January 27th Board meeting.
The desire for an Atlanta based auditing firm was cited as the primary reason for the change in auditors (the former auditors were based in New York City). There were no disagreements with former auditors.
As a newly appointed member of the management team, Mr. Wright will be responsible for leading and managing all of the Company's corporate and managerial finance functions including planning, budgeting and analysis. Wright replaces Charles Farrahar, who will remain with the Company on a part-time basis as its Secretary.
"We believe Jeff is ideally suited for this position and expect that he will play a key role in supporting Medovex's growth and business development initiatives," said Jarrett Gorlin, CEO of Medovex.
Prior to joining Medovex, Mr. Wright was an audit senior at Ernst & Young within the Assurance Services division, where he had an opportunity to help manage audits of large ($2 billion to $10 billion annual revenue) publicly-traded companies. He also has experience auditing medium size ($2 million - $200 million annual revenue) privately-held companies in multiple industries with other accounting firms.
Prior to his career in public accounting, Mr. Wright worked as a trading analyst in the retirement trust services department at Reliance Trust Company, managing the institutional trading desk to settle mutual fund transactions with the National Securities Clearing Corporation. Mr. Wright holds Master of Professional Accountancy and Bachelor of Business Administration degrees from the Georgia State University Robinson College of Business and is a member of the Georgia Society of Certified Public Accountants.
About Medovex:
Medovex was formed to acquire and develop a diversified portfolio of potentially ground breaking medical technology products. Criteria for selection include those products with potential for significant improvement in the quality of patient care combined with cost effectiveness. The Company's first pipeline product, the DenerveX device, is intended to provide long lasting relief from pain associated with facet joint syndrome at significantly less cost than currently available options. To learn more about Medovex Corp., visit www.medovex.com
Safe Harbor Statement
Certain statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including without limitation those set forth in the Company's filings with the Securities and Exchange Commission (the "SEC"), not limited to Risk Factors relating to its patent business contained therein. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law.
Hands down the best assessment of Marathon to date. Great work Flyers!
Management Insight: An Interview With Mark Meller, CEO of SilverSun Technologies:
Tom: Hello Mr. Meller, thank you for providing investors and readers with your valuable insight into SilverSun Technologies.
Mr. Meller: Thanks for having me, Tom. It was a pleasure meeting with you recently at our offices. I appreciate the opportunity to speak with your subscribers.
Tom: I see that SilverSun, through its fully owned subsidiary SWK Technologies, has three key business segments. Can you offer a quick overview of each segment, and how much each segment accounts for your revenue?
Mr. Meller: We have three different primary business units. They are:
1. Proprietary Software - We publish 20 different solutions which are sold into the SMB marketplace, both directly and via a network of 100+ business partners. These partners are primarily, but not exclusively, other software VARs. Our largest and most important solution is MAPADOCtm, which is an integrated electronic data interchange ("EDI") solution that enables manufacturers and distributors to trade business documents (sales orders, shipping notices, etc.) digitally with their big-box customers (Walmart, Target, Walgreens, etc.) With approximately 400 active end-user customers, the number of implementations of MAPADOC has doubled over the last 4 years. We also have products for time & billing, warehouse management and a number of verticals where we have a client concentration.
We also publish a SaaS ("Software as a Service") solution for the craft beer brewing industry called BeerRun. In just two short years since the product's introduction, BeerRun is the most widely used industry management software for small and craft breweries. With BeerRun, brewers can plan their batches, view schedules and ingredient forecasts, purchase ingredients, enter bills, sales orders and email invoices, produce and pack, and file their TTB Excise Returns and Brewer's Report of Operations easily and efficiently.
This division provided roughly $4.4 million in revenue in 2013, out of total revenue of $17.4 million.
2. ERP Software - We are a value-added reseller and master developer of ERP software published by Sage, a publicly-traded company listed on the London Stock Exchange. We sell, implement and customize Sage 100 ERP, Sage 500 ERP and SAGE ERP X3. We believe we are the largest reseller of Sage ERP X3 in the U.S. There are in excess of 1,000 total Sage resellers in the U.S., and we believe that we are among the 10 largest.
We also resell ERP solutions published by NetSuite and Acumatica. In addition, we are resellers of business intelligence software published by Qlikview and Tangerine, and we resell warehouse management solutions published by Accellos. We have also integrated the various Sage ERPs with Accellos WMS.
We customize all of the Sage ERPs that we sell and support, creating both a differentiator for the company compared to our competition, AND a way to keep our clients "stickier."
This division provided roughly $11 million in revenue in 2013, out of total revenue of $17.4 million.
3. Managed Service Provider - Our network services group provides 24/7 remote monitoring of our customer's networks, and provides business continuity and disaster recovery services. In addition, we provide data backup, both via an onsite appliance or in the cloud. We also do network configurations, and some break-fix work.
This division was responsible for roughly $2 million in revenue in 2013.
Tom: Within your EDI segment, namely Mapadoc, how are you going about bolstering growth for this segment? Are you approaching and communicating the benefits of your EDI solutions to large retailers and businesses?
Mr. Meller: We have a national footprint where MAPADOC is concerned. We sell directly nationally, and we have a reseller network of over 100 organizations who sell MAPADOC to their clients.
Most importantly, though, we have a partnership with a large NASDAQ company, SPS Commerce, which is rapidly growing. SPS developed a platform that enables highly cost-effective and reliable trading partner collaboration. This platform has enabled SPS to grow to over $100 million in revenue. SPS resells MAPADOC to their customers who are presently running either Sage 100, Sage 500, or ERP X3. As a result, our sales continue to grow as SPS Commerce sales continue to grow.
Tom: I see in your investor presentation and through SilverSun's history that acquisitions play a big role in growing your business. Are these acquisitions related solely to bolstering growth for the second area of your business - as a Sage reseller?
Mr. Meller: Not at all. While most of our acquisitions have been in the Sage reseller space, this is more a function of there being more attractive acquisition candidates in that space than elsewhere. We want to be acquisitive in every area of our business, but we seek reasonably priced deals that are accretive to earnings day one. We look at many deals on a monthly basis to find the deals that are right for our formula.
Tom: How many Sage resellers exist or are potential buyout candidates by SilverSun? Do you have a revenue target for your Sage segment, or a total number of buyouts in mind - is there a ceiling on the revenue you can earn from Sage linked to acquisitions?
Mr. Meller: There are literally hundreds of potential buyout candidates in the Sage channel, most of whom are relatively small. Our acquisition model points to companies doing greater than $1 million in sales, and are profitable and sustainable, with management and technical resources in place, and with geography that expands our reach (We currently have offices in Livingston, NJ, Syracuse and Buffalo, NY, Skokie, IL, Costa Mesa, CA, Minneapolis, Dallas, and Phoenix.) There is no limit to the number of buy-outs we would theoretically do, nor is there a ceiling on what we can earn. In addition to intellectual property and skilled technicians, the key asset for us are the customers; if the target acquisition has done their job well, the customers will be extremely "sticky," which will provides us with upsell and cross-sell opportunities for diverse products and services.
Tom: Do you have a greater product discount from Sage over these smaller resellers? Is this why it is accretive to acquire these smaller resellers?
Mr. Meller: Resellers receive a discount from the software publishers based on their sales volume. We are at the highest level of discount from Sage, while most resellers are at significantly lower margins. This alone does not make the acquisitions accretive. Rather, it is our ability to negotiate well and buy right that enables us to do accretive transactions.
Tom: Are you only looking for smaller resellers, or are there any larger targets that SilverSun can go after as potential buy out candidates that will be accretive to your business?
Mr. Meller: We will talk with any acquisition candidate that wants to meet, regardless of size. Our existing infrastructure can handle revenues in excess of $40 million, so we have the existing capacity to do larger transactions.
The acquisition we closed in May 2014 was for a company that did $1.7 million in top-line revenue for 2013. We previously had entered into a letter of intent in November 2012 for a company that did $7 million in top-line revenue. That deal did not close due to the owner deciding to take the company off the market. I raise the issue simply to illustrate the point that we are not just looking at small operations.
Tom: What else do you gain from these acquisitions? Such as human capital and acquiring employees that do not need to be trained or a customer base you can up-sell and cross-sell other products to?
Mr. Meller: The most important thing we gain is customers. We do a very good job of servicing clients, which yields us a very high customer retention rate. We generally know that once they are part of our family, they very rarely leave. As a result, there are numerous and profitable products and services we can cross-sell and upsell to them.
The next important thing we gain is talented resources. Our company has grown at a compound annual growth rate of 32% the last 4 years, and the only limiting factor in our growth is having the right people with the right skill sets on staff. We have grown from less than 50 employees 2 years ago to over 90 today. Recruiting talented and qualified people is difficult. Acquiring them as part of an acquisition is easier. Therefore, the human element is a very important variable in our acquisition.
Tom: What is SilverSun doing to market BeerRun? How big is the market potential for this SAAS solution?
Mr. Meller: We are attending more events and recently hired a new development director for BeerRun. The following shows the growth in the number of customers over the past few years:
As of 12/31/11: we had 2 live BeerRun clients
As of 12/31/12: we had 20 live BeerRun clients
As of 12/31/13: we had 58 live BeerRun clients
As of 08/31/14: we have 87 live BeerRun clients
Tom: Can you share your gross margins for each business segment?
Mr. Meller: While we have never publicly disclosed gross margins by segment, margins across all of our business lines exceed 42%, as reported in our public filings. We continue to work on maximizing operational efficiencies, always seeking to further increase earnings leverage.
Tom: SilverSun is now the largest reseller of Sage software in the U.S. Does this fact help you compete with larger players such as SAP and Oracle? Why will Sage software remain competitive in the face of the much larger players' ERP software solutions?
Mr. Meller: We are among the largest Sage resellers in both the SMB market and the Mid-market. Generally speaking, SAP and Oracle typically don't play much in these spaces, which is our bread and butter.
We do, however, compete with SAP and Oracle on Tier I opportunities, which are significantly larger and more complex. In those situations, we are typically presenting the potential client with Sage ERP X3 as an alternative to SAP and Oracle. We compete on price and functionality, and also on our company's background and experience as a trusted business advisor, and we have won more than our fair share of these opportunities over the last 3 years. In fact, in just the last few weeks, we publicly announced one of those larger wins.
Tom: How lucrative is the consulting and installation side of your business? Does this add a high level of stickiness to your business as business owners do not want to take part in another set up which can take them away from running their businesses?
Mr. Meller: Consulting is an indispensable part of our business, and it is quite lucrative. We do not sell "plug and play" software. Rather, once a software license is sold, our consultants will implement, customize and do programming such that the software operates in accordance with the business processes of the client. As a rough rule of thumb, we expect consulting revenues of $1.50-$2.50 for every $1 of software license cost. Therefore, a $100,000 license will generate anywhere from $150,000 - $250,000 in consulting revenue. This will result in a total transaction value between $250,000-$300,000.
Tom: How high is the insider ownership percentage at SilverSun Technologies, or SWK Technologies?
Mr. Meller: My management team and I own approximately 90% of SilverSun. I personally own 51% of the Company. SilverSun is really a total equity play for myself and my management team. Our goals could simply not be more, or better, aligned with those of our shareholders. Our clear vested interest means we are extremely focused on doing those things that lead to the creation of increased and sustainable shareholder value.
Tom: I see that SilverSun has every Nasdaq requirement to up-list except two, share price and net tangible assets. Can you give us a projection on when SilverSun is looking to uplist, or what you are doing to satisfy the remaining two requirements?
Mr. Meller: I am always reluctant to project, but I can say in no uncertain terms that listing on an alternative exchange, such as Nasdaq, is one of management's primary identified goals. While we can make no assurance of if and when, we are keenly aware of the fundamental importance of earning such an opportunity. We fully understand what must occur in order to facilitate such an opportunity and the associated benefits should it be accomplished.
As large shareholders in the company, you may rest assured management has laid out a strategic plan, already in motion, which we believe if successful could help us realize this opportunity, potentially within the next couple of quarters.
Tom: Shares of SilverSun are hard to buy due to the company being illiquid. Should investors pay less attention to the PPS due it being less transparent? Will a future raise to satisfy one of the two remaining Nasdaq requirements increase liquidity?
Mr. Meller: Management's focus over the last year or so has remained on fundamentals. Having successfully delivered consistent revenue growth and profitability, we believe SilverSun now offers investors real long term value appreciation potential. For example, peer public companies generally trade at around 2.4x revenue, while we currently trade at .87x revenue. As a result, some investors may consider SilverSun a good growth investment opportunity at a very reasonable price.
Because of management's considerable vested interest in the company, it was important to us that when we began to be more pro-active in terms of our corporate communications, something we have just recently begun, that our financial results spoke for themselves. We felt the best way to establish credibility with investors was to deliver tangible results that confirm we're doing exactly what we stated we would. I'm proud to say I believe we've done just that.
You'll notice that in recent months, we have turned our attention to trying to better communicate with the marketplace and shareholders. We issued a shareholder letter, launched a new shareholder friendly website, attended an investor conference and issued numerous releases on real and relevant corporate accomplishments. We fully understand that successful corporate communications is a process and not an event, it takes time and consistency. We understand that investor goodwill is something that must be both earned and maintained through proper corporate communications and transparency.
While our shares still could be considered somewhat illiquid by some standards, we have seen a nice increase in interest since we commenced the initiative. Yahoo Finance reports our volume of the last 3 months being approximately 38,000 shares per day. We clearly hope that with continued communications and a possible future up-listing, more investors will become aware of the SilverSun story.
Tom: Can you share your employee turnover rate with us?
Mr. Meller: It is very small. We currently have 90 employees, and I would guesstimate that we turn over 5 employees per year.
Tom: I see that Sage ended support for Sage Pro ERP on March 31, 2014. Is Sage ending this product all together, or simply ending support for an outdated version? I ask since this software is a key portion of your business.
Mr. Meller: We were never resellers for Sage Pro ERP, so the end of life announcement had little impact on our business. We did, however, acquire a former Sage partner's book of business not too long ago and there were approximately 150 Sage Pro ERP customers, all of whom have been targeted to migrate to one of our other solutions. Typically, Sage and other publishers will, from time to time, terminate support for an older product while simultaneously providing a roadmap for the customers to migrate to another, more current solution.
Tom: In modeling, how can we account for "Gain from bargain purchase interest expense, net" and your outstanding share count? The latter applies since I am assuming shares will be generally used in your acquisition of Sage resellers.
Mr. Meller: "Gain from bargain purchase interest expense" refers to our buying assets for less than their fair market value. We were able to do this once back in 2012 when we acquired Hightower, but it is difficult to presume that we will be able to do so again with any regularity. I would suggest that these "gains" not be factored into any model.
We are generally reluctant to issue any shares for acquisitions, since we regard our stock price as grossly undervalued. As a result, we have not issued shares in any of the acquisitions we have done in the last 3 years, although we have issued some options with strike prices in excess of $0.15 per share.
Tom: I see your top line growth has been impressive, with a CAGR of 32% over the past four fiscal years, although your net income only increased around $5K this most recent quarter on a Q/Q basis. What are you doing to bolster bottom line growth?
Mr. Meller: We are currently in the midst of rationalizing our expense structure and headcount so that it more closely aligns with our current level of revenue. I would expect that we will see increased profitability from these efforts over the balance of 2014 and beyond.
Tom: How can investors model your growth moving forward since these acquisitions vary on size and in ability to cross-sell and up-sell other products to their customer base - coupled with the other segments of your business?
Mr. Meller: I would hold us to the 30+% growth figure going forward. We internally target a payback on our acquisitions of 30 months or less, assuming no growth from the time of acquisition. Therefore, we are effectively paying 2.5x EBITDA, or less, on the acquisitions we have already completed.
Tom: Will SilverSun's growth accelerate on an exponential basis rather than an arbitrary rate due to the increase in your ability to up-sell and cross-sell to your acquired companies' customer bases, growth in your recurring revenue?
Mr. Meller: We are growing rapidly, and I see no reason for that to change. I have publicly stated that our goal is for revenue of $50 million by the end of 2015.
Tom: How much of your revenue is from recurring revenue? Do you view SilverSun's recurring revenue as a solid income stream coupled with a lucrative consulting and installation services section linked to your software sales?
Mr. Meller: Recurring revenue exceeded $6 million in 2013, greater than 1/3 of our total revenue, and it is up again in 2014. Every business decision we make is with the notion of increasing our recurring revenue base. Our ultimate goal is to have our recurring revenue equal or exceed our selling, general, and administrative expenses, such that every dollar of gross profit associated with software sales will drop immediately down to net income. While we have a ways to go to accomplish this task, it is clearly front and center in our minds.
Tom: How important are the other areas of your business, such as Cloud/Managed Services or your Professional Services Group? Are these both secondary to EDI and ERP?
Mr. Meller: Cloud and managed services are an integral part of our business, having grown by over 40% in 2013. As more and more SMB companies migrate to the cloud, they will need the expertise we offer in order to maximize their cloud initiatives.
Professional services are a fundamental part of what we do, with almost every sale involving some consulting time. Consulting is inextricably linked with all our products and services, and I don't foresee that changing anytime soon.
Tom: What do you see as the biggest risk to your business and what are you doing to combat it?
Mr. Meller: The greatest potential risk to our business is managing our rapid growth and successfully integrating our acquisitions. However, because of our past experience in doing both, we do believe we have dramatically mitigated such considerations.
Tom: How many acquisitions are you seeking for the rest of 2014? And also in 2015?
Mr. Meller: We have already successfully completed one acquisition in 2014. I think we can comfortably predict that there will be at least two more in 2014. As for 2015, it's difficult to say, but rest assured that acquisitions are an important part of our growth strategy and you can reasonably expect that we will continue to aggressively pursue highly accretive transactions throughout 2015 and beyond. The beauty of being in our position is that the space remains fragmented with no shortage of opportunities, this allows us to be highly selective.
Tom: Can you share your quarterly burn rate with us? Will you have to raise money for operations moving forward or is your robust cash position and profitable business enough to cover your expenses?
Mr. Meller: We are a profitable company, with positive cash flow, and as such, we do not have a "cash-burn." The only reason we would have to raise money would be to facilitate an acquisition or to increase our net worth so that we would be eligible for an uplisting on either NASDAQ or the NYSE MKT. We would view any associated raise under either circumstance as opportunistic and capable of resulting in increased shareholder value.
Tom: What is your personal long term objective for the company and is there anything else you would like to say in conclusion?
Mr. Meller: First, I would simply again like to thank you for this opportunity. Because of our proximity and your ability to always come see us, please know our door is always open to you.
Second, my primary goal remains on the continued execution of our business plan and hitting our stated objectives. I do believe if we continue to do this, it's highly probable that we too may become a very attractive potential acquisition target for a larger player. If and when that happens, we will review and consider any opportunity that was to the benefit of all of our shareholders
What's happened is that the company has reported 12 Q's of consecutive double digit growth and is profitable. Company is performing and undervalued, stock remains unknown to most however it did recently trade at new multi -year and yearly highs.
Good question msl2008, hard to know. What we do know is that it appears as though in total, Apple made almost ten unsuccessful attempts to challenge the 798 patent. Last I checked, they had no further pending papers before the PTAB. I also believe Apple may not appeal the non-institution of an IPR to the Federal Circuit.
Maestro,
I appreciate your response and thoughts. That said, I don't agree with some of your continued comments, most not supported by actual public filings.
First and foremost, they are paying for the acquisitions, they are not getting any of them for free. They are buying them at very low multiples which makes them almost immediately accretive.
Surely you know that this is a highly fragmented space with many smaller players. The space is ripe for consolidation. You're essentially unlocking value in greater scale since SilverSun get's much better pricing than the smaller players due to higher sales volumes. I believe they are the largest reseller of Sage or very close to it.
As you also know, public companies generally receive a much higher valuation multiple than private companies. That is the entire premise of a roll up strategy and one that has been successfully executed by many other companies in equally fragmented spaces.
As for your comment something HUGE is coming. I never said that and don't believe that to be the case. Simple continued execution is all that is required, the financials speak for themselves. They just need to continue to execute.
As noted before, the avg. company in the space trades at almost 3X revenues which makes SilverSun undervalued in relation. I believe some of the comps aren't even profitable.
Thanks again for the exchange.
PM,
Caliber of management and the board reminds me a lot of the other investment we've both done well with over the last couple years.
As you know, management is really everything with these type of companies and investment opportunities.
Check out that video I posted here of Dr. James Andrews. Medovex is the only public board he has ever been a member of.
Also look into Mr. Steve Gorlin and some of his last projects. It all speaks for itself.
Glad you came over.
I believe your assessment and commentary insightful and likely highly accurate based on what I too know and have learned since making my original investment years ago, as well as being the second post in this forum.
I think it self evident that everything Croxall does is based on return on investment. He treats every shareholder dollar as if it were his very own.
I would presume the CMO will continue to assist and that the relationship is merely taking on a different form. Perhaps more performance based, or an "eat what you kill" model, something which may ultimately prove to be far better for shareholders and possibly even more opportunistic for the CMO in the long run.
Fact is, we all know that Croxall is all about tangible and measurable results. Everything he and his team have done to date has been strictly with shareholders best interest in mind. I don't expect that to ever change.
It's simply who he is. His past words, actions and accomplishments over the last two years have earned my trust and confidence. If he makes a decision, I know for certain that there is a specific reason behind it and it's to our collective benefit.
I'm confused, correct me if I'm wrong, but as a shareholder, don't we want the company to make accretive acquisitions at the lowest multiple possible? Are you suggesting you'd be more impressed if management were to be over paying for acquisitions?
Seems to defy reason. Talk about trying to turn a positive into a negative.
Another tidbit, as future acquisitions are made, assuming they are, they will likely represent a smaller and less material amount of the company's overall revenues which lessons reporting requirements.
Maestro,
Actually I do! The reason is because the transaction has not closed necessitating the filing of a form 8k with the SEC.
As a reference, please find the last 8k filed on the last acquisition. Note it was filed upon the successful closing.
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=9987069-1111-8017&type=sect&TabIndex=2&dcn=0001185185-14-001232&nav=1&src=Yahoo
Postyle,
Well stated and articulated as always.
I'm trying to pick up some shares in the $6.60 range give or take.
As indicated earlier here, I hope some take advantage of Flyers effort and purchase his report.
It is highly insightful and gives a level of depth that nobody to date has been able to capture for readers.
It makes quite clear the sheer abundance of opportunities that many investors probably aren't even aware of. Most who have read it would likely be inclined to be taking advantage of recent weakness.
I don't believe management "sold" the dividend to shareholders as anything than exactly what it was.
Management has considerable insider holdings in the company, it is an equity play for all involved, not limited to Croxall and Spangenberg. Everything they have done to date has created value and I expect the split will eventually as well.
I also see no evidence that shorts have piled on as you suggest. Recent short interest is reported at just 162,800 shares or 81,400 pre split. Really not much of a material increase post split.
I think some are failing to consider the broader market conditions that have been present in recent months. I would suggest Marathon merely pulling back from all time highs in the midst of a pretty poor broader market. Tough for even the best of companies to swim against the tide.
While the stock may not currently reflect it, it's hard to argue that the company itself has never been in better shape, or in a better strategic position. Just look at their own presentation and note the handfuls of potential catalysts on the calendar. Remember, they had just two Markman hearings last year if I recall correctly.
Some may also recall Acacia in it's infancy. It wasn't until year three, just where Marathon is now, until they saw their pipeline of suits start to really bear fruit, where the stock really took off. I think the same could ultimately be true for Marathon.
SilverSun Technologies Signs Letter of Intent to Acquire Accounting Technology Resources
California Firm's 2014 Revenue Exceeded $1.5 Million
LIVINGSTON, NJ -- (Marketwired) -- 01/21/15 -- SilverSun Technologies, Inc. (OTCBB: SSNT) (OTCQB: SSNT) announced today that its wholly owned subsidiary, SWK Technologies, Inc. ("SWK Technologies" and together with SilverSun Technologies, Inc., the "Company"), a national provider of transformational business technology solutions and services, has signed a non-binding letter of intent to acquire 2000 Soft, Inc. d/b/a Accounting Technology Resources ("ATR"), a leading California-based reseller of Sage and Acumatica applications. ATR has implemented technology solutions at prominent companies throughout California.
We anticipate that this transaction would add more than $1,500,000 in annual revenue to the Company and will be immediately accretive to our earnings. It is anticipated that the transaction, which is subject to the signing of definitive agreements and customary closing conditions, will close on or before February 16, 2015.
Mark Meller, the Company's Chief Executive Officer, stated, "Accounting Technology Resources (ATR) has a solid revenue stream and a strong, established customer base. This transaction further solidifies our position as one of the largest resellers of Sage, Acumatica, and Accellos software in the United States. We continue to execute on our business plan to increase value for our shareholders by increasing profitable sales and acquiring companies and technologies."
"This acquisition makes SWK Technologies a dynamic force with significant market presence in the West," added Jeffrey D. Roth, Chief Executive Officer of SWK Technologies. "Further, the fact that both SWK and ATR have added Acumatica to their portfolios is an indicator that our business strategies are very much aligned. With our management talent, in-house expertise, and financial resources, we are confident that the combined companies will be able to accelerate sales and earnings growth. Our shared commitment to putting clients' needs first ensures ATR's client base will continue to receive superior service. We are very excited about our future prospects."
About SilverSun Technologies, Inc.
SilverSun Technologies is involved in the acquisition and build-out of technology and software companies. The Company's growth strategy is to acquire firms in the extensive and expanding, but highly fragmented, business solutions marketplace, as it seeks to create substantial value for shareholders. Since June 2004, SilverSun has acquired SWK Technologies, Inc., Business Tech Solutions Group, Inc., Wolen Katz Associates, AMP-BEST Consulting, Inc., Hightower, Inc., and ESC Software, Inc. Through its subsidiaries, the Company offers an array of ERP, EDI, WMS, BI and business management products, including its own proprietary software, as well as a wide range of value-added services.
For additional information, visit SilverSun's corporate website: www.silversuntech.com
Forward Looking Statements
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, regarding among other things our plans, strategies and prospects -- both business and financial. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Many of the forward-looking statements contained in this news release may be identified by the use of forward-looking words such as "believe," "expect," "anticipate," "should," "planned," "will," "may," "intend," "estimated," and "potential," among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this news release include market conditions and those set forth in reports or documents that we file from time to time with the United States Securities and Exchange Commission. All forward-looking statements attributable to SilverSun Technologies, Inc. or a person acting on its behalf are expressly qualified in their entirety by this cautionary language.
Absolutely. Undoubtedly further courtroom proceedings. No way they will get through much today commencing at 3pm.
As mentioned earlier, actual hearing doesn't even begin until 3pm today.
Good find. I believe the hearing begins at 3pm today, not 2pm. Regardless, it will clearly go past today. I would presume the judge has also scheduled time in actual court for its continuance and completion.