Expert System Announces 2014 results with €17.2 million production value and EBITDA of €2.3 million (EBITDA margin 13.6%)
Modena, May 29, 2015 –
Consolidated financial results for 12/31/2014
- €17.2 million production value
- EBITDA of €2.3 million with EBITDA margin of 13.6%
- EBIT of €0.6 million
- Net profit €0.1 million
- Positive Net Financial Position of €5.5 million
Expert System S.P.A. 12/31/2014 financial results
- €16.1 million production value (+23.1% over 12/31/2013)
- EBITDA of €3.2 million with EBITDA margin of 20% (+60.5% over 12/31/2013)
- EBIT of €1.5 million (€0.9 million on 12/31/2013)
- Net income of €1.0 million (€0.2 million on 12/31/2013)
- Positive Net Financial Position of €5.0 million (over negative NFP of €5.2 million on 12/31/2013)
The Board of Directors of Expert System, the leader in semantic technology for the effective management of unstructured information, on May 28, 2015 approved the consolidated financial statements for December 31, 2014, and the draft financial statements to be submitted for approval at the Shareholders’ Meeting scheduled for June 27, 2015 (first call), and, if necessary, June 29, 2015 (second call).
Stefano Spaggiari, CEO, Expert System, commented: “2014 was an important year for our group, starting with our listing on the AIM Italia February geared toward our international development and expansion. The funds raised through the capital increase were used in support of this primary objective, as well as for the continued development of the Cogito® platform and products. These results reflect the significant increase in business in terms of both value and margin, with a €17.2 million production value and an EBITDA margin up 13.6%. In 2014 and 2015, the Group has concentrated its efforts on continued development and management of the domestic market, as well as on building an international network of partners, systems integrators and vendors for sales of the Cogito product line on the American and European markets, which are characterized by large government and private companies interested in the use of advanced tools for managing big data, and for search and semantic text analytics. Expert System’s international presence was strengthened with the launch of Expert System Cogito Ltd in the UK, a new US division and office in Palo Alto, California, through the acquisition of the ICM and iLab divisions of ISOCO in Spain, which will offer direct entry into the Spanish market, and a platform for access to South American countries. Finally, with the establishment of CY4Gate targeted for the foreign market, as well as the agreement signed yesterday for the acquisition of TEMIS, we have created a world leader for semantic technology for cognitive computing.”
Results of the consolidated financial statements for December 31, 2014
The company prepared its first consolidated financial statement for the period ending December 31, 2014; therefore, the consolidated results for 2014 are not comparable to the results represented in the 2013 financial statements.
The production value totaled €17.2 million, and revenues from sales and services amounted to €11.9 million. Domestic revenues were €9.3 million, and foreign revenues were €2.6 million. EBITDA totaled €2.3 million, with an EBITDA margin of 13.6%. EBIT was €0.6 million.
The company achieved net profit of €0.1 million, and the positive net financial position totaled €5.5 million.
Please note that the scope of consolidation at December 31, 2014 includes, in addition to Expert System SpA, both Expert System USA, Inc. (100%) and Expert System Cogito Ltd (100%).
Note also that the consolidated results were lower than those for Expert System SpA, in terms of margin produced, due to increased costs and spending related to the two foreign subsidiaries, the benefits of which, in financial terms, is expected to be reflected in future accounting periods.
Expert System financial performance as of December 31, 2014
The company achieved a production value of €16.1 million, a 23.2% increase over 2013 (€13.1 million).
Sales and services revenues totaled €10.9 million, a 3.2% increase over (the results of) December 31, 2013.
EBITDA increased by 60.5%, with €3.2 million in 2014 compared to €2.0 million in 2013. The EBITDA margin of 20.0% improved significantly over December, 31, 2013 (results?) (15.3%).
EBIT (gross operating profit) amounted to €1.5 million (compared to €0.9 million of December 31, 2013) after amortization and depreciation of €1.7 million (compared to €1.1 million of December 31, 2013).
Profit before taxes more than doubled over the previous year, amounting to €1.6 million in 2014, compared to €0.6 million in 2013.
The net result value of €1 million represents a more than four-fold increase compared to 2013 (€0.2 million).
Appropriation of profits: At the Shareholders’ Meeting, the Board of Directors proposed to allocate all 2014 profits in reserve.
The positive Net Financial Position amounts to €5.0 (compared to negative NFP of €5.2 million at December 31,2013); the variation is primarily the result of proceeds from the company’s listing on the AIM Italia in February 2014.
Significant events in 2014
- February: trading on the AIM Italia
- July: opening of the new subsidiary, Expert System Cogito Ltd in Great Britain; inclusion in the Gartner Magic Quadrant for Enterprise Search
- December: joint venture with Elettronica, a market leader in defense electronics, and CY4Gate, the new global player in “Cyber Defense Electronics”; the acquisition by the newly formed Expert System Iberia S.L.U. of the ICM and iLab divisions of ISOCO, a Spanish company based in Barcelona that operates in the field of semantic technology
Key events after the close of the fiscal year
May 27, 2015: The company signed a binding agreement to acquire 100% of TEMIS, a company based in France, with a strong presence in Germany, the United Kingdom and the United States; the company employs the proprietary Luxid® technology for text analytics and has an established presence in the Media and Publishing, Healthcare and Intelligence sectors. Through the acquisition of TEMIS, which combines cutting-edge technology and strengthens the company’s focus on developing intelligent solutions that support business, Expert System aims at global leadership in the cognitive computing market.
Business Outlook for 2015
In line with its business plan the Group will continue its focus on strengthening its presence in foreign markets and for creating new strategic synergies with major companies. In Europe, the establishment of its newest subsidiaries will enable continued expansion in northern Europe through Expert System Cogito Ltd., and in southern Europe and South America through its Spanish company Expert System Iberia S.L.U.
On the domestic market, the Group will focus on establishing its presence and on continued investment for developing the Cogito technology. It will continue its expansion also in the North American market by strengthening its sales force and by scouting for new partnership opportunities.
About Expert System
Headquartered in Chicago, Expert System is a leading provider of information access solutions based on the proprietary, patented, multilingual semantic technology of Cogito. Using Expert System’s products, enterprise companies and government agencies can go beyond traditional keyword approaches for the rapid sense-making of their structured and unstructured data. Expert System technology has been deployed to deliver solutions for a vast range of business requirements such as semantic searches, open source intelligence, multilingual and big text analytics, natural language processing and the development and management of taxonomies and ontologies. Expert System serves some of the world’s largest industries including Banking and Insurance, Life Sciences and Pharmaceuticals, Oil and Gas, Media and Publishing, and Government including companies such as Shell, Chevron, Eli Lilly, Wolters Kluwer, Networked Insights, Nalco Champion, US Department of Justice and the DTRA. For more information visit expertsystem.com or follow us on Twitter at @Expert_System.