Emtec Reports a 21% Increase in Third Quarter 2002 Revenues Over 10 Million Dollars in New Purchase Orders From State of New Jersey



    MT. Laurel, N.J., Feb. 18 /PRNewswire-FirstCall/ -- Emtec, Inc.
 (OTC-BB: ETEC) announced today its results for the third quarter ended
 December 31, 2002.  Total revenues for the IT business, which includes
 procurement services, and service consulting, increased by 21.3% or $4.37
 million, to $24.9 million for the third quarter ended December 31, 2002.  This
 is compared to revenues of $20.5 million for the third quarter results ended
 December 31, 2001. Total revenues for the IT business for the nine months
 ended December 31, 2002, increased by 30% or $17.1 million, to $74.6 million
 as compared to $57.5 million for the nine months ended December 31, 2001. The
 company believes that this increase is primarily due to winning new business
 with a school district in Jacksonville, Florida and the business generated
 from its recent acquisitions of Devise Associates, Inc., Acentra Technologies,
 Inc. and Turnkey Computer systems, Inc.
     Gross profit for the company decreased by 16.8%, or $462,000, to $2.3
 million for the third quarter ended December 31, 2002, as compared to $2.8
 million for the third quarter ended December 31, 2001.  Sales, general and
 administrative expenses increased by 17.6%, or $452,000 to $3.02 million for
 the third quarter ended December 31, 2002 as compared to $2.56 million for the
 third quarter ended December 31,2001. This increase is primarily due to
 expenses associated with the new businesses of the company mentioned above.
 Measured as a percentage of the company's total revenues for the third quarter
 the S,G&A decreased to 12.11% of total revenues for the completed third
 quarter and 12.5% for the third quarter results ended December 31, 2001. The
 decrease was mainly due to the company's strong effort to "streamline" many of
 their sales and operational functions.
     Gross profit for the company increased by 8.5%, or $669,000 to $8.6
 million for the nine months ended December 31, 2002.  This increase is mainly
 attributable to a 30% increase in the company's revenues in the IT business.
 Gross profit for product sales increased by 28.2% or $1.4 million to $6.2
 million for the nine months ended December 31, 2002 as compared to $4.8
 million for the nine months ended December 31, 2001.  This increase was
 attributable to a 28.5% increase in produce revenue and as measured as a
 percentage of procurement revenues is consistent with the comparative nine
 months ended December 31, 2001. However, gross profits for services and
 consulting decreased by 22.5% or $688,000 or $2.37 million for the nine months
 ended December 31, 2002 as compared with $3.1 million for the nine months
 ended December 31, 2001. This decrease is the result of lower effective
 billing rates and lower utilization rates of the company's engineers during
 the period.  Net income for the third quarter ended December 31, 2002 was a
 loss of eleven cents $(0.11) per share versus $(0.00) per share for the
 comparative third quarter in 2001.  Net income for the nine- month period
 ended December 31, 2002 resulted in a loss of $530,200 or $(0.07) per share
 versus a profit of $457,721 or $0.06 for the comparable nine months ended
 December 31, 2001. Sales, general, and administrative expenses increased by
 33% or $2.2 million to $9 million for the nine months ended December 31, 2002
 as compared with $6.8 million for the nine months ended December 31, 2001.
 This increase is primarily a result of the following:
     -- $2.2 million increase due to the addition of a school district in
        Jacksonville, Florida and the acquisitions of Devise Associates, Inc.,
        Acentra Technologies, Inc. and Turnkey Computer Systems, Inc.
     -- $87,000 payment to the State of New York as a result of a sales and use
        tax audit.
 
     In commenting about the quarter, Mr. John Howlett CEO stated: "Since
 December of 2002 we have taken over one (1) million dollars of expenditures
 out of our costs.  We have reduced the number of our employees and eliminated
 the duplication of non-essential services.  With the State of New Jersey
 awarding the company 10 million dollars of new purchase orders, our company is
 poised for growth.  We will work with the State to make its services more
 efficient by upgrading and installing over 6,000 new computers Statewide.
 This includes upgrading 1,500 of systems of the New Jersey police and close to
 2,000 of its computers as well as servers and information systems components
 of the State Department of Labor.  We at Emtec feel strongly that other
 opportunities will be forthcoming and look forward to sharing that news with
 our loyal shareholders and customers."
 
     About Emtec
     Emtec, Inc. established in 1981, provides high-end computer systems and
 services to Fortune 1000 clients ranging in size from $50 million to $500
 million in revenues.  The Company specializes in evaluating and providing
 solutions for data management including Enterprise Management, Managed
 Services (monitoring/maintenance/helpdesk), and Data Management (storage and
 protection of data). With the recent acquisitions of Intellispan (Help Desk),
 Accentra (systems and services) and Turnkey Computer Systems (managed building
 services), Emtec has broadened its engineering and services capabilities.
     For additional information please contact Consulting For Strategic Growth
 1, Ltd, at 800-625-2236.
 
     Statements contained in this press release about anticipated revenue
 growth, and all other statements that are not purely historical, are forward-
 looking statement for purposes of the safe harbor provisions under The Private
 Securities Litigation Reform act of 1995. In some cases, we use words such as
 "believes," "expects," "anticipates," "plans," "estimates," and similar
 expressions that convey uncertainty of future events or outcomes to identify
 these forward-looking statements. Actual results may differ materially from
 those indicated by these forward-looking statements. In addition, any forward-
 looking statements represent our estimates only as of today and should not be
 relied upon as representing our estimates as of any subsequent date.  While we
 may elect to update forward-looking statements at some point in the future, we
 specifically disclaim any obligation to do so, even if our estimates change.
 
                        -Financial information follows-
 
                                  EMTEC, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (unaudited)
 
                                Three Months Ended        Nine Months Ended
                                    December 31,             December 31,
                                 2002         2001        2002        2001
 
     Revenues:
       Procurement services   $18,522,103 $14,255,967  $55,237,353 $42,959,628
       Service and consulting   6,332,241   6,228,978   19,292,465  14,414,918
       Geothermal                  45,353      45,256      127,705     134,654
 
         Total Revenues        24,899,697  20,530,201   74,657,523  57,509,200
 
     Cost of Revenues:
       Procurement services    16,681,947  12,783,001   49,070,806  38,150,746
       Service and consulting   5,891,255   4,958,895   16,925,532  11,359,382
       Geothermal                  18,154      13,262       53,783      46,769
 
         Total Cost of
          Revenues             22,591,356  17,755,158   66,050,121  49,556,897
 
     Gross Profit:
 
       Procurement services     1,840,156   1,472,966    6,166,547   4,808,882
       Service and consulting     440,986   1,270,083    2,366,933   3,055,536
       Geothermal                  27,199      31,994       73,922      87,885
 
         Total Gross Profit     2,308,341   2,775,043    8,607,402   7,952,303
 
     Operating Expenses:
       Selling, general, and
        administrative          3,016,008   2,564,068    9,020,806   6,781,684
       Internet                    59,359      36,347      106,926     204,093
       E-Business costs                --     145,248           --     502,605
 
         Total Operating
          Expenses              3,075,367   2,745,663    9,127,732   7,488,382
 
     Income (Loss) From
      Continuing Operations
      Before Income Tax
      Expense                    (767,026)     29,380     (520,330)    463,921
 
     Income Tax expense                --          --        9,870       6,200
 
     Net (Loss) Income           (767,026)     29,380     (530,200)    457,721
 
     (Loss) Income Per Share
      From Continuing Operations
      (Basic and Diluted)          $(0.11)       $.00       $(0.07)      $0.06
 
     Net (Loss) Income Per Share
      (Basic and Diluted)          $(0.11)       $.00       $(0.07)      $0.06
 
     Weighted Average Number of
      Shares Outstanding (Basic
      and Diluted)              7,080,498   7,080,498    7,080,498   7,080,498
 
 
      Contacts:
 
      Stanley Wunderlich                      John Howlett
      Consulting For Strategic Growth, Ltd.   Chief Executive Officer
      Public Relations                        Emtec, Inc.
      Corporate Development Consultants       Tel: 856-235-8787
      Tel: 800-625-2236                       Fax: 856-235-2932
      Fax: 212-697-0910                       Email:john_howlett@emtecinc.com
      Email: cfsg@consultant.com              Website: www.emtecinc.com
 
 

SOURCE Emtec, Inc.

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