FORT MYERS, Fla., Oct. 16 (PRIMEZONE) -- Hy-Tech Technology Group, Inc. (the "Company") (OTCBB:HYTT), today announced its results for its fiscal second quarter and first half ended August 31, 2003.
During the three months ended August 31, 2003, the Company reported revenue of $3,354,614 compared to revenue of $7,397,311 during the three months ended August 31, 2003. This represents a decrease of approximately 54.7%. This decrease is principally attributed to limitations of working capital to fund inventory purchases to fulfill customer orders. The Company's loss from operations for the three months ended August 31, 2003 increased to $497,327 from $142,240 during the three months ended August 31, 2002. This increase is principally due to costs associated to fundraising and the Company's reverse acquisition into SRM Networks and its obligations as a reporting company under the securities laws during the three and six months ended August 31, 2003 with no expenses during the comparable 2002 Periods.
Net loss for the three months ended August 31, 2003 was $623,072, or $.02 per share compared to $252,142, or $.02 per share for the three months ended August 31, 2002.
Fiscal Half-Year Review
During the six months ended August 31, 2003, the Company reported revenue of $7,350,944 compared to revenue of $13,432,041 during the six months ended August 31, 2003. The Company posted net income for the six months ended August 31, 2003 of $41,186, principally attributed to the gain on settlement of debt compared to a net loss of $639,237 for the six months ended August 31, 2002.
In May 2003, Martin Nielson assumed full time responsibilities as CEO, brought new investors to the Company, and is attempting to transform Hy-Tech Technology Group, Inc. from a custom systems builder and an authorized distributor of the world's leading computer system and components to a solutions provider offering an expanding range of services and software to it client base. During the fiscal first quarter, the Company took steps necessary to design this new business strategy. This new business strategy is now being implemented and seeks growth by acquisition as well as organic growth.
Mr. Nielson stated, "During this period, a number of significant steps were taken to prepare the Company for the launch of this new plan. Among the steps taken were construction of the details of the new plan; restructuring of the organization along with a re-alignment of personnel, including identifying new additions to management; reduction of costs and writing off unproductive assets; engagement of key professionals, including investment banking teams; negotiating with sources of new investment; and identifying and negotiating with acquisition targets. This plan is now being implemented and I would like to commend the hard work and dedication of the company's personnel, customers, and partners in working with us to make this plan achievable."
During the first half of the fiscal year, the Company reduced its current liabilities by approximately $4.8M. This was principally attributed to the settlement of debt reached with its primary lender and accomplished via the sale of a convertible debenture to a private investor following an acquisition. Despite the additional issuance of shares, the Company believes it has shored up its balance sheet.
Financing / Business Outlook
The next phase of the Company's transformation plan requires new financing to increase working capital, to further reduce liabilities, and to help complete acquisitions. "I remain confident of our ability to obtain new financing and our efforts are very focused in this area. These recent improvements in our balance sheet, plus the streamlining of our operations make me optimistic that the new wave of financing can help us attain profitability and provide a platform for growth", said Nielson.
Nielson also added, "We are already in advanced negotiations regarding acquisitions that, if closed, can produce substantial acceleration of our transformation plans. While there can be no assurance that we will close these, the acquisitions presently under negotiation could more than double the size of the Company. And each of them are profitable."
About Hy-Tech Technology Group, Inc
Hy-Tech is transforming itself from a custom systems builder and an authorized distributor of the world's leading computer system and components to a solutions provider offering an expanding range of services and software to it client base. Founded in 1992; it has operations in Florida, Alabama, Tennessee, Kentucky, Wisconsin and Colorado. Hy-Tech presently supplies a full line of computer components and peripherals and has technicians capable of building and servicing systems that range in scope from basic desktop systems to very sophisticated server applications. The Company has adopted an aggressive growth strategy designed to leverage these existing operations through strategic acquisitions, by expanding into new commercial growth areas in software and services, by adding e-commerce channels of distribution, and by differentiating itself with proprietary technologies. Throughout its history, the Company has demonstrated its technical capability as an award-winning reseller of the industry's leading technology products and by earning a variety of accreditations such as Intel Premier Provider, Microsoft System Builder Gold Member, Symantec Authorized Education Reseller, and Iomega Premier Partner. For more information, please visit our website at www.e-hytech.com
Safe Harbor Statement
Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 and may contain forward-looking statements, with words such as "anticipate," "believe," "expect," "future," "may," "will," "should," "plan," "projected," "intend," and similar expressions to identify forward-looking statements. These statements are based on the Company's beliefs and the assumptions it made using information currently available to it. Because these statements reflect the Company's current views concerning future events, these statements involve risks, uncertainties and assumptions. The actual results could differ materially from the results discussed in the forward-looking statements. In any event, undue reliance should not be placed on any forward-looking statements, which apply only as of the date of this press release. Accordingly, reference should be made to the Company's periodic filings with the Securities and Exchange Commission.
HY-TECH TECHNOLOGY GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
August 31, August 31,
------------------------- ------------------------
2003 2002 2003 2002
----------- ------------ ----------- -----------
Net revenues $ 3,354,614 $ 7,397,311 $ 7,350,944 $13,432,041
Cost of revenues 2,838,396 6,378,739 6,440,749 11,443,723
----------- ------------ ----------- -----------
Gross margin 516,218 1,018,572 910,195 1,988,318
General,
administrative
and selling 1,013,545 1,160,812 2,385,515 2,478,022
----------- ------------ ----------- -----------
Loss from
operations (497,327) (142,240) (1,475,320) (489,704)
----------- ------------ ----------- -----------
Other income
(expense)
Other income
(expense) 0 3,727 (6,288) 6,948
Gain on
settlement
of debt 0 0 1,655,601 0
Interest (125,745) (113,629) (132,807) (156,481)
----------- ------------ ----------- -----------
(125,745) (109,902) 1,516,506 (149,533)
----------- ------------ ----------- -----------
Net income
(loss) $ (623,072) $ (252,142) $ 41,186 $ (639,237)
=========== ============ =========== ===========
Net income (loss)
per share:
Net income
(loss) -
basic and
diluted $ (0.02) $ (0.02) $ 0.00 $ (0.04)
=========== ============ =========== ===========
Weighted average
shares
outstanding:
Basic and
diluted 31,946,290 16,000,000 30,092,182 16,000,000
============ ============ =========== ===========