NEWPORT BEACH, CA--(Marketwired - Oct 28, 2015) - DynTek, Inc. (
DynTek reported revenues of $43,519,000 for the first fiscal quarter ended September 30, 2015, a decrease of $41,000 or 0.1%, from $43,560,000 in the prior year first quarter ended September 30, 2014. Gross profit decreased to $7,050,000 for the first fiscal quarter ended September 30, 2015, a decrease of $255,000 or 3.5%, from $7,305,000 in the prior year first quarter ended September 30, 2014. The decline in product gross profit was $108,000 due to the mix of orders, and the decline in services gross profit was $147,000 due to increased third party costs for short term implementations.
Total operating expenses were $5,381,000 in the first fiscal quarter ended September 30, 2015, an increase of $20,000 or 0.4%, as compared to $5,361,000 in the prior year first quarter ended September 30, 2014.
DynTek reported EBITDA of $1,769,000 for the first fiscal quarter ended September 30, 2015, a decrease of $263,000 or 12.9%, as compared to $2,032,000 in the prior year first quarter. Net income was $784,000 for the first fiscal quarter of 2016, or $0.35 per diluted share, a decrease of $186,000, 19.2% and a decrease of $0.07 per diluted share, over the net income of $970,000 and $0.42 per diluted share in the first fiscal quarter of 2015. The decreases in EBITDA and net income as compared to prior year first quarter are primarily attributable to the decreased gross profit.
On September 30, 2015, DynTek completed an amendment to its revolving line of credit agreement with Opus Bank, a major commercial bank based in California. The line of credit increased from $20,000,000 to $30,000,000. The proceeds were used for working capital and to pay off in full the previously subordinated Senior Secured Notes held by the Company's majority shareholder in the amount of $7,641,000.
"We increased our investments in technical talent, sales leadership and field sales in the recent quarter to drive and support growth throughout this fiscal year," said Ron Ben-Yishay, DynTek's chief executive officer. "The growing complexity of our customers' technical and business environments is necessitating relevant industry knowledge and expertise. DynTek has extensive experience in the government, health, education, financial, gaming and manufacturing markets and we are focused on the development of vertical solutions in high growth, high customer demand areas such as cloud computing, managed services and IT security."
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.
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.
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, 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|
|(Unaudited, in thousands, except share and per share data)|
|Quarter Ended September 30,||Quarter Ended September 30,|
|COST OF REVENUES|
|Cost of products||29,634||29,680|
|Cost of services||6,835||6,575|
|TOTAL COST OF REVENUES||36,469||36,255|
|General and administrative||1,102||1,144|
|Depreciation and amortization||44||32|
|TOTAL OPERATING EXPENSES||5,381||5,361|
|INCOME FROM OPERATIONS||1,669||1,944|
|OTHER INCOME (EXPENSE)|
|TOTAL OTHER EXPENSE||(364||)||(328||)|
|INCOME BEFORE INCOME TAXES||1,305||1,616|
|Income tax provision||(521||)||(646||)|
|NET INCOME PER SHARE:|
|WEIGHTED AVERAGE NUMBER OF SHARES:|
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