Intrinsyc Technology drops software but increases sales

      On November 8 Intrinsyc Technology reported it's third quarter results.It showed that as the CEO says "the company is also garnering strong interest from recently introduced new products and has additional products in the pipeline".However Intrinsyc Technology showed only slight increases in all financial indicators.It also adds that it has earned decreased revenues from services and software.Revenues for the third quarter and for 9 months was up but only by 6% to $14 million.ITC tells shareholders that it's new products have produced new orders and new markets.But of course not all these orders will become firm revenues.
             Nine Month Tally
         Revenues were up 5% to $14 million from $13.2 million for 9 months of 2016.But net income was only $197,000 in comparison to $1,905,000 for 2016.Also the all important adjusted EBITDA fell from $2 million in 2016 to $1,500,000 in 2017.The key here is that Intrinsyc tells us that revenues from software and services fell from 2016.This blog believes (as do most investors) that the margin on both software and services is lower than on hardware.Rumour has it that ITC has met with several software companies and other equipment producers but has not made an acquisition.An astute acquisition might increase adjusted EBITDA as well as revenues.It is clear that ITC would have little trouble issuing equity for an  acquisition as it

 has only 21 million shares outstanding.
               The Fourth Quarter
            It is true that revenues have increased consistently for four quarters and adjusted EBITDA has remained quite buoyant.For these details see earlier Workathon blogs.But ITC will have to sharpen it's pencil and make some important changes- if not in the fourth quarter then soon.The share price has already dropped from the $2.00 -$2.25 area as investors saw the drop in sales and earnings coming. And this blog sees the share price staying in the same price range without either (a) a new product line (b) an acquisition or a joint venture to bring out new apps on it's open -Q computing modules.As this blog feels that a 6% increase in sales is not enough to get Intrinsyc Software back to
 the $2.25 area.             

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