DynTek Announces Results for the Third Quarter and Year-to-Date Period Ended March 31, 2014

NEWPORT BEACH, CA--(Marketwired - Apr 28, 2014) -  DynTek, Inc. (PINKSHEETS: DYNE), a leading provider of professional technology services, today announced results for its fiscal year 2014 third quarter and nine months ended March 31, 2014. 

Year-to-Date Period Ended March 31, 2014

DynTek reported revenues of $107,114,000 and gross profit of $18,490,000 for the nine months ended March 31, 2014 compared to revenues of $95,648,000 and gross profit of $16,117,000 in the prior year nine months ended March 31, 2013. The $11,466,000 or 12% revenue growth, and the $2,373,000 or 15% gross profit growth, are primarily attributable to several multi-million dollar deals with government customers in the New York district and government and commercial customers in the Newport Beach district in the second quarter of fiscal 2014.

Total operating expenses were $14,805,000 for the nine months ended March 31, 2014 compared to $12,892,000 in the prior year nine months ended March 31, 2013. The $1,913,000 or 15% increase year over year is primarily due to sales commissions on higher revenue levels and investments in additional sales representatives.

DynTek reported EBITDA of $4,092,000 for the nine months ended March 31, 2014, compared to $3,472,000 in the prior year nine months ended March 31, 2013, an increase of $620,000 or 18% year over year. Net income was $2,768,000 for the nine months ended March 31, 2014, or $1.26 per diluted share, an increase of $178,000 or $0.03 per diluted share, over net income of $2,590,000 or $1.23 per diluted share, in the nine months ended March 31, 2013.

Third Fiscal Year 2014 Quarter Ended March 31, 2014

DynTek reported revenues of $26,834,00 and gross profit of $4,901,000 for the third fiscal quarter ended March 31, 2014 compared to revenues of $27,429,000 and gross profit of $5,047,000 in the prior year third fiscal quarter ended March 31, 2013. Total operating expenses were $4,424,000 in the third fiscal quarter ended March 31, 2014 compared to $4,208,000 in the prior year third quarter ended March 31, 2013. 

DynTek reported EBITDA of $725,000 for the third fiscal quarter ended March 31, 2014, compared to $919,000 in the prior year third quarter, a decrease of $194,000 or 21%. Net income was $206,000 for the third fiscal quarter of 2014, or $0.09 per diluted share, a decrease of $656,000 or $0.32 per diluted share, over net income of $862,000 or $0.41 per diluted share, in the third quarter of 2013. 

"We have had strong year-to-date growth across our regions and technology practices," said Ron Ben-Yishay, DynTek's chief executive officer. "We continue to focus on the growth and expansion of our cloud offerings and managed services, which present new and innovative ways for our customers to leverage technology as a service. In addition, as new security attacks continue to burden the market, we expect continued growth in our security services, which provide our customers with new, sophisticated lines of defense from next generation security threats."

EBITDA
The Company defines EBITDA as net income from operations before interest, taxes, depreciation and amortization, and stock-based compensation. 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 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.

About DynTek
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. From virtualization and cloud computing to unified communications and collaboration, DynTek provides professional technology solutions across the three core areas of our customers' technical environment: Infrastructure/Data Center, Microsoft Platforms, End Point Computing. 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.

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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. Investors are cautioned that forward-looking statements made in this press release, such as statements relating to the effect that the adoption of the revolving line of credit will have on our business and our intended use of funds borrowed under the revolving line of credit, involve known and unknown risks and uncertainties that could cause actual results to materially differ from the forward-looking statements. Such risks and uncertainties include, among others, our success in reaching target markets for services and products in a highly competitive market; our ability to maintain existing customers and attract future customers; our ability to finance and sustain operations, including our ability to comply with the terms of the revolving line of credit and the Company's other existing and future indebtedness; our ability to achieve profitability and positive cash flow from operations; our ability to maintain business relationships with IT product vendors; the size and timing of additional significant orders for our products and services and our ability to fulfill such orders; the continuing desire of state and local governments to outsource to private contractors and the availability of budgets to place orders for our products and services; our ability to retain skilled professional staff and certain key executives; the performance of our government and commercial technology services; and the continuation of general economic and business conditions that are conducive to outsourcing of IT services. We have no obligation to publicly revise any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.

DYNTEK, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(EBITDA presentation)
(Unaudited, in thousands, except share and per share data)
			Quarter Ended March 31,				Nine Months Ended March 31,				Quarter Ended March 31,				Nine Months Ended March 31,
			2014				2014				2013				2013
REVENUES
	Product revenues		$	18,642			$	83,315			$	19,337			$	70,908
	Service revenues			8,192				23,799				8,093				24,740
	TOTAL REVENUES			26,834				107,114				27,429				95,648
COST OF REVENUES
	Cost of products			15,675				69,662				15,877				59,816
	Cost of services			6,258				18,962				6,505				19,715
	TOTAL COST OF REVENUES			21,933				88,624				22,382				79,530
GROSS PROFIT				4,901				18,490				5,047				16,117
OPERATING EXPENSES:
	Selling			3,461				11,646				3,199				9,669
	General and administrative			936				3,094				986				3,149
	Depreciation and amortization			27				65				23				74
	TOTAL OPERATING EXPENSES			4,424				14,805				4,208				12,892
INCOME FROM OPERATIONS				477				3,685				839				3,225
EBITDA				725				4,092				919				3,472
OTHER INCOME (EXPENSE):
Interest expense				(254	)			(681	)			(225	)			(693	)
Other income (expense), net				-				-				9				9
	TOTAL OTHER EXPENSE			(254	)			(681	)			(216	)			(684	)
INCOME BEFORE INCOME TAXES				223				3,004				623				2,541
Income tax (provision) benefit				(17	)			(236	)			239				48
NET INCOME			$	206			$	2,768			$	862			$	2,590
NET INCOME PER SHARE:
	Basic		$	0.10			$	1.30			$	0.41			$	1.24
	Diluted		$	0.09			$	1.26			$	0.41			$	1.23
WEIGHTED AVERAGE NUMBER OF SHARES:
	Basic			2,127,601				2,126,490				2,094,202				2,091,836
	Diluted			2,216,261				2,188,860				2,121,708				2,112,829