IRVINE, Calif., Nov. 20 /PRNewswire-FirstCall/ -- DynTek, Inc. (OTC Bulletin Board: DYNK), a leading provider of professional technology services, today announced results for its first fiscal quarter ended September 30, 2007.
IRVINE, Calif., Nov. 20 /PRNewswire-FirstCall/ — DynTek, Inc. (OTC Bulletin Board: DYNK), a leading provider of professional technology services, today announced results for its first fiscal quarter ended September 30, 2007.
DynTek reported revenue of approximately $30.1 million for the first quarter, up from $21.8 million in the same period of the prior fiscal year, an increase of 38%. The company reported an EBITDA loss of $504,000 for the first fiscal quarter ended September 30, 2007, as compared to a loss of $320,000 for the same period in the prior fiscal year. Excluding one-time and non-cash stock compensation expense charges, the adjusted EBITDA loss was approximately $127,000 for the first quarter, as compared to positive adjusted EBITDA of $208,000 for the same period in the prior fiscal year.
Gross profit increased to approximately $4.9 million for the first quarter, as compared to $3.6 million for the same period of the prior fiscal year. General and administrative expenses increased to approximately $1.7 million during the first fiscal quarter, as compared to $1.3 million during the same period in the prior fiscal year. The expense increase was attributable to higher than expected one-time costs associated with the reorganization of the company's finance and accounting operations.
Net loss for the first quarter was $3.2 million, as compared to a net loss of $2.6 million for the same period of the prior fiscal year. The increase in net loss was primarily attributable to higher interest expense in the three months ended September 30, 2007 as compared to the three months ended September 30, 2006. Loss from continuing operations during the three months ended September 30, 2007 includes depreciation and amortization expense of $669,000, non-cash stock based compensation expense of $66,000, and interest expense of $2.0 million (including non-cash interest of $1.4 million).
"Our revenue and gross profit growth from operations continues to perform well, aided by a focus on higher margin products and improved services utilization," said Casper Zublin, Jr., DynTek's chief executive officer. "We incurred higher than expected one-time costs as a result of the reorganization of our finance and accounting back-office functions; however, we expect those costs to decrease for the remainder of the fiscal year. Our intent is to accelerate over the next several quarters in order to meet our key performance indicators for fiscal year 2008 of positive cash flow and revenue growth of greater than 20%."
The Company defines EBITDA as net income (loss) before interest, taxes, depreciation and amortization, and goodwill impairment charges. Other companies may calculate EBITDA differently. Although EBITDA is a widely used financial indicator of a company's ability to service debt, it is not a recognized measure for financial statement presentation under generally accepted accounting procedures (GAAP). EBITDA should not be considered in isolation or as superior or as an alternative to net income (loss) or to cash flows from operating activities as determined in accordance with GAAP. Nonetheless, the Company believes that EBITDA provides useful supplemental information for investors and others to measure operating performance, especially in situations where a company has significant non-cash operating expenses that are not indicative of core business operating results. EBITDA is widely used in the IT services industry to analyze comparable company performance, and management of the Company also uses EBITDA, in addition to GAAP information, as a measure of operating performance for assessing its business units as well as completed and potential acquisitions.
DYNTEK, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS EBITDA Presentation (in thousands) Three Months Ended September Total revenues 2007 2006 Total cost of revenues $30,082 $21,777 GROSS PROFIT 25,154 18,161 Total operating expenses 4,928 3,616 EBITDA 5,432 3,936 Depreciation and amortization (504) (320) LOSS FROM OPERATIONS 669 693 OTHER INCOME (EXPENSE): (1,173) (1,013) Interest expense (2,014) (1,554) Other income (expense) 1 2 Interest income 6 19 Total other income (expense) (2,007) (1,533) LOSS FROM CONTINUING OPERATIONS (3,180) (2,546) INCOME TAX (16) (38) LOSS FROM CONTINUING OPERATIONS (3,196) (2,584)
DynTek is a leading provider of professional technology services to mid- market companies, such as state and local governments, educational institutions and commercial entities in the largest IT markets nationwide. The company provides a broad range of IT security, unified communication, virtualization, Microsoft Information Worker, and application infrastructure and delivery solutions. DynTek's multidisciplinary approach allows our clients to turn to a single source for their most critical technology requirements. For more information, visit http://www.dyntek.com.
Forward Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that certain statements in this release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors. Such uncertainties and risks include, among others, success in reaching target markets for services and products in a highly competitive market and the ability to maintain existing and attract future customers; our ability to finance and sustain operations, including our ability to comply with the terms of working capital facilities and/or other term indebtedness of the Company, and to extend such obligations when they become due, or to replace them with alternative financing; our ability to raise equity capital in the future; our ability to achieve profitability despite historical losses from operations; our ability to maintain business relationships with IT product vendors and our ability to procure products as necessary; the size and timing of additional significant orders and their fulfillment; the continuing desire of and available budgets for state and local governments to outsource to private contractors; our ability to successfully identify and integrate acquisitions; the retention of skilled professional staff and certain key executives; the performance of the Company's government and commercial technology services; the continuation of general economic and business conditions that are conducive to outsourcing of IT services; our ability to maintain trading on the NASD OTC Bulletin Board or other markets in the future; and such other risks and uncertainties included in our Annual Report on Form 10-K filed on October 11, 2007 and our Quarterly Report on Form 10-Q filed on November 19, 2007 and other SEC filings. The Company has no obligation to publicly revise any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.
SOURCE DynTek, Inc.