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:firstname.lastname@example.org Email: email@example.com Website: www.emtecinc.com
SOURCE Emtec, Inc.
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