Company Reports Over 30% Increase in Revenue and Gross Profit and 104% Increase in EBITDA
NEWPORT BEACH, CA--(Marketwired - Apr 27, 2016) - DynTek, Inc. (
Third Fiscal Quarter 2016 Ended March 31, 2016
DynTek reported revenues of $39,009,000 for the third fiscal quarter ended March 31, 2016, an increase of $9,384,000 or 31.7%, from $29,625,000 in the prior year third quarter ended March 31, 2015. Incremental product revenues generated $9,265,000 or 43.6% increase over prior year quarter while services revenue grew by $119,000 or 11.3%. Gross profit increased to $5,827,000 for the third fiscal quarter ended March 31, 2016, an increase of $1,357,000 or 30.4%, from $4,470,000 in the prior year third quarter ended March 31, 2015. Product gross profit generated $1,160,000 or 38.4% increase in gross profit. Services revenues of $119,000 generated $196,000 or 13.6% increase in gross profit as the services utilization went up and margins improved.
Total operating expenses were $4,900,000, 12.6% of revenues, in the third fiscal quarter ended March 31, 2016, an increase of $840,000 or 20.7%, as compared to $4,060,000, 13.7% of revenues, in the prior year third quarter ended March 31, 2015. This quarter over prior year quarter increase is due to increased selling expenses as they relate to increased revenues.
DynTek reported EBITDA of $1,026,000 for the third fiscal quarter ended March 31, 2016, an increase of $525,000 or 104.8%, as compared to $501,000 in the prior year third quarter. Net income was $392,000 for the third fiscal quarter of 2016, or $0.17 per diluted share, an increase of $310,000 and $0.13 per diluted share, over the net income of $82,000 and $0.04 per diluted share in the third fiscal quarter of 2015. The increases in EBITDA and net income as compared to prior year third quarter are primarily attributable to increased gross profit, higher services margins, and leveraging related selling expenses.
Year-to-Date Period Ended March 31, 2016
DynTek reported revenues of $126,421,000 for the nine months ended March 31, 2016, an increase of $13,042,000 or 11.5%, from $113,379,000 in the prior nine months ended March 31, 2015. Product revenues generated $13,448,000 or 15.3% growth while services revenues declined by $406,000 or 1.6%. Gross profit increased to $19,441,000 for the nine months ended March 31, 2016, an increase of $1,440,000 or 8.0%, from $18,001,000 in the prior year nine months ended March 31, 2015. Product gross profit generated $1,577,000 or 11.7% while services gross profit was down slightly $136,000, 3.0%.
Total operating expenses were $15,884,000, 12.6% of revenues, in the nine months ended March 31, 2016, an increase of $1,344,000 or 9.2%, as compared to $14,540,000, 12.8% of revenues, in the prior year nine months ended March 31, 2015.
DynTek reported EBITDA of $3,856,000 for the nine months ended March 31, 2016, an increase of $136,000 or 3.7%, as compared to $3,720,000 in the prior year nine month period. Net income was $1,573,000 for the nine months ended March 31, 2016, or $0.69 per diluted share, an increase of $48,000, 3.2% and $0.02 per diluted share, over the net income of $1,525,000 and $0.67 per diluted share in the nine months ended March 31, 2015.
"Our team delivered an exceptional third quarter in both sales and service delivery," said Ron Ben-Yishay, DynTek's chief executive officer. "We increased the billable utilization of our technical team for client engagements, expanded our footprint into new areas in established accounts and created opportunities with net new customers."
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 March 31,||Nine Months Ended
|Quarter Ended March 31,||Nine Months Ended
|COST OF REVENUES|
|Cost of products||26,340||86,524||18,236||74,653|
|Cost of services||6,842||20,455||6,919||20,725|
|TOTAL COST OF REVENUES||33,182||106,980||25,154||95,378|
|General and administrative||954||3,087||821||2,870|
|Depreciation and amortization||46||134||36||101|
|TOTAL OPERATING EXPENSES||4,900||15,884||4,060||14,540|
|INCOME FROM OPERATIONS||927||3,557||411||3,461|
|OTHER INCOME (EXPENSE)|
|TOTAL OTHER EXPENSE||(274||)||(935||)||(275||)||(923||)|
|INCOME BEFORE INCOME TAXES||653||2,622||135||2,539|
|Income tax provision||(261||)||(1,049||)||(53||)||(1,014||)|
|NET INCOME PER SHARE:|
|WEIGHTED AVERAGE NUMBER OF SHARES:|
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