GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

Management Network Group Inc. Reports Operating Results (10-Q)

May 15, 2012 | About:
insider

10qk

18 followers
Management Network Group Inc. (TMNG) filed Quarterly Report for the period ended 2012-03-31.

Management Ntwk has a market cap of $17.6 million; its shares were traded at around $2.5 with and P/S ratio of 0.3.

Highlight of Business Operations:

Revenues are driven by the ability of our team to secure new project contracts and deliver those projects in a way that adds value to our client in terms of return on investment or assisting clients to address a need or implement change. For the thirteen weeks ended March 31, 2012, revenues decreased 18.2% to $13.8 million from $16.9 million for the thirteen weeks ended April 2, 2011 driven primarily by the completion of a significant Tier 1 carrier engagement in fiscal year 2011. Our international revenues were approximately 28.0% of total revenues for the thirteen weeks ended March 31, 2012 as compared to 25.6% for the thirteen weeks ended April 2, 2011. Our revenues are denominated in multiple currencies and may be impacted by currency rate fluctuations.

Revenue Recognition — We recognize revenues from time and materials consulting contracts in the period in which our services are performed. We recognized $5.1 and $8.0 million in revenues from time and materials contracts during the thirteen weeks ended March 31, 2012 and April 2, 2011, respectively. In addition to time and materials contracts, our other types of contracts include fixed fee contracts. We recognize revenues on milestone or deliverables-based fixed fee contracts and time and materials contracts not to exceed contract price using the percentage of completion-like method described by FASB ASC 605-35, "Revenue Recognition — Construction-Type and Production-Type Contracts." For fixed fee contracts where services are not based on providing deliverables or achieving milestones, we recognize revenues on a straight-line basis over the period during which such services are expected to be performed. During the thirteen weeks ended March 31, 2012 and April 2, 2011, we recognized $8.7 million and $8.9 million in revenues on fixed fee contracts, respectively. In connection with some fixed fee contracts, we receive payments from customers that exceed recognized revenues. We record the excess of receipts from customers over recognized revenue as deferred revenue. Deferred revenue is classified as a current liability to the extent it is expected to be earned within twelve months from the date of the balance sheet.

North America Segment — North America segment revenues decreased 20.1% to $10.4 million for the thirteen weeks ended March 31, 2012 from $13.1 million for the thirteen weeks ended April 2, 2011. During the thirteen weeks ended March 31, 2012, the North America segment provided services on 81 customer projects, compared to 88 projects performed in the thirteen weeks ended April 2, 2011. Average revenue per project was $129,000 in the thirteen weeks ended March 31, 2012, compared to $148,000 in the thirteen weeks ended April 2, 2011. Revenues recognized in connection with fixed price engagements totaled $6.9 million and $6.8 million for the thirteen weeks ended March 31, 2012 and April 2, 2011, representing 65.8% and 52.3% of the total revenues of the segment, respectively. There were no revenues from software licensing during the thirteen weeks ended March 31, 2012. Revenues from software licensing and related implementation fees during the thirteen weeks ended April 2, 2011 were $208,000.

EMEA Segment— EMEA segment revenues decreased 11.6% to $3.4 million for the thirteen weeks ended March 31, 2012 from $3.9 million for the thirteen weeks ended April 2, 2011. During the thirteen weeks ended March 31, 2012 and April 2, 2011, this segment provided services on 72 and 70 customer projects, respectively. Average revenue per project was approximately $37,000 and $45,000, respectively, for the thirteen weeks ended March 31, 2012 and April 2, 2011. Revenues from post-contract software related support services were approximately $727,000 and $708,000 for the thirteen weeks ended March 31, 2012 and April 2, 2011, respectively. There were no revenues from software licensing during the thirteen weeks ended March 31, 2012 and April 2, 2011.

Costs of services decreased 17.5% to $8.8 million for the thirteen weeks ended March 31, 2012 from $10.6 million for the thirteen weeks ended April 2, 2011. Our gross margin was 36.8% for the thirteen weeks ended March 31, 2012 compared to 37.3% for the thirteen weeks ended April 2, 2011. Our North America segment gross margin was 38.2% for the thirteen weeks ended March 31, 2012 compared to 37.6% for the thirteen weeks ended April 2, 2011. The increase in gross margin in the first quarter of 2012 as compared to the same period of 2011 in our North America segment is primarily due to improved utilization and reduced volume discounts with clients partially offset by the completion of a significant Tier 1 carrier engagement in fiscal year 2011. Our EMEA segment gross margin was 32.4% for the thirteen weeks ended March 31, 2012, compared to 36.2% for the thirteen weeks ended April 2, 2011. Margin decreases in the EMEA segment are primarily related to declines in revenues and lower staff utilization.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 2.0/5 (2 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK