TRENTON, N.J., June 29, 2005 (PRIMEZONE) -- Emtec, Inc. (OTCBB:ETEC), a systems integrator providing technology solutions to enable customers to effectively use and manage data to grow their business, today announced its results for the year ended March 31, 2005.
Net income for the year ended March 31, 2005 rose to $2.87 million, or $0.37 per share compared to a net income of $642,988, or $0.09 per share, for the year ended March 31, 2004, an increase of 346.3 percent.
Total revenues, which include services and consulting revenues and procurement revenues, increased by 12.5 percent or $12.53 million, to $112.70 million for the year ended March 31, 2005, compared to $100.17 million for the year ended March 31, 2004. Income from continuing operation before income taxes for the year ended March 31, 2005, rose to $3.60 million, from $741,433 for the year ended March 31, 2004. These increased revenues and net income are mainly attributable to computer roll-out projects for various school districts in Georgia and Florida, and revenue growth in the company's commercial customer base as well as to continuous cost containment efforts undertaken by the company.
The reported income from continuing operations before income taxes for the year ended March 31, 2005 includes a one-time charge of $470,000 associated with the sub-lease of the New York office. Without this one-time charge, income from continuing operations before income taxes for the year ended March 31, 2005 would have been approximately $4.07 million, compared to an income from continuing operations before taxes of $741,433 for the year ended March 31, 2004, an increase of 449.3 percent.
John Howlett, CEO, noted, "We are pleased to deliver another year of strong operating results and proud to report the sixth consecutive quarter of profitability for our company. I would caution, however, that our performance for the fiscal year ended March 31, 2005, and particularly its fourth fiscal quarter, may not be indicative of our future operating results."
EMTEC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended March 31,
2005 2004 Change %
Revenues
Procurement services $97,605,588 $82,184,744 $15,420,844 18.8%
Service and consulting 15,094,410 17,986,564 $(2,892,154) -16.1%
----------- -----------
Total Revenues 112,699,998 100,171,308 $12,528,690 12.5%
-------------- ----------- -----------
Cost of Revenues
Procurement services 85,879,341 74,282,388 $11,596,953 15.6%
Service and consulting 10,467,370 11,497,465 $(1,030,095) -9.0%
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Total Cost of Revenues 96,346,711 85,779,853 $10,566,858 12.3%
---------------------- ----------- -----------
Percent of revenues 85.5% 85.6%
Gross Profit
Procurement services 11,726,247 7,902,356 $ 3,823,891 48.4%
Service and consulting 4,627,040 6,489,099 $(1,862,059) -28.7%
----------- -----------
Total Gross Profit 16,353,287 14,391,455 $ 1,961,832 13.6%
------------------ ----------- -----------
Percent of revenue 14.5% 14.4%
Operating Expenses
Sales, General &
Administrative
Expenses 12,532,580 13,321,726 $ (789,146) -5.9%
Interest Expense 217,860 328,296 $ (110,436) -33.6%
Loss on impairment,
Goodwill -- -- $ -- N/M
----------- -----------
Total Operating
Expenses 12,750,440 13,650,022 $ (899,582) -6.6%
--------------- ----------- -----------
Percent of revenue 11.3% 13.6%
Income(Loss) From
Continuing Operations 3,602,847 741,433 $ 2,861,414 385.9%
----------- -----------
Income From
Discontinued
Geothermal Operations,
net tax 48,052 22,883 $ 25,169 110.0%
Gain on the Sale of
the Geothermal
Investment, net tax 208,278 -- $ 208,278 N/M
----------- -----------
Income (Loss) Before
Income Tax 3,859,177 764,316 $ 3,094,861 404.9%
Income Tax Expense
(Benefit) 989,317 121,328 $ 867,989 715.4%
----------- -----------
Net Income (Loss) $ 2,869,860 $ 642,988 $ 2,226,872 346.3%
=========== =========== =========== ======
Income (Loss) Per
Share - Basic $ 0.39 $ 0.09
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Income (Loss) Per
Share - Diluted $ 0.37 $ 0.09
---------------- =========== ===========
N/M = not meaningful
About Emtec, Inc.
Established in 1981, Emtec, Inc. is a systems integrator focused on providing technology solutions that enable its customers to effectively use and manage their data to grow their businesses. Areas of specialization in information technology ("IT") include communications (IP telephony, wireless connectivity, cabling, network infrastructure), data availability (remote access, messaging, management), enterprise computing (enterprise architecture, high availability, server consolidation, data management), and managed services (network monitoring, help desk). Emtec's solutions are crafted to enable customers to become more efficient and effective, thereby giving them a competitive advantage.
Certain statements in this document constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Emtec, Inc. ("the Company"), or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The Company's future operating results are dependent upon many factors, including but not limited to the Company's ability to: (i) obtain sufficient capital or a strategic business arrangement to fund its plan of operations when needed; (ii) build the management and human resources and infrastructure necessary to support the growth of its business; (iii) competitive factors and developments beyond the Company's control; and (iv) other risk factors discussed in the Company's periodic filings with the Securities and Exchange Commission which are available for review at www.sec.gov under "Search for Company Filings."
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