LOUISVILLE, Ky., CINCINNATI and COLUMBUS, Ohio, May 15, 2008 (PRIME NEWSWIRE) -- Beacon Enterprise Solutions Group, Inc. (OTCBB:BEAC) today announced its financial results for the three months ended March 31, 2008.
Revenue for the three months ended March 31, 2008, was $1,571,742 and Gross Profit was $732,817. The Company recorded significant non-cash charges during the period, which contributed to a Net Loss of ($1,279,765). Adjusted EBIDTA(1) for the period was ($656,521).
"The three months ended March 31, 2008, represent the first quarter of consolidated operations for our recently acquired businesses," commented Bruce Widener, CEO of Beacon Solutions. "Our primary objectives during the quarter were to 1) consolidate the various operational elements of our initial acquisitions into a single core infrastructure; 2) integrate our acquired sales forces into a cohesive organization capable of cross selling multiple services and product lines; 3) begin establishing a manageable sales funnel for 2008. We successfully accomplished each of theses objectives during the first quarter," concluded Widener.
"In addition, we hired additional sales executives in each of our primary markets, increasing the size of our sales organization by over 20%; launched a network circuit sales group; re-branded our customer facing sales and support material under the Beacon Solutions brand; and began to capitalize on cross-selling opportunities among our different product and service groups," added Rick Mills, President of Beacon Solutions. "As a result of these and other efforts, we anticipate revenue for the quarter ending June 30, 2008, will exceed $2.6 million (an increase of 63% over the current period)."
Please see footnote 1 below for our definition of Adjusted EBITDA, a description of why we use Adjusted EBITDA and important disclaimers regarding Adjusted EBITDA, which is a non-GAAP measure. A reconciliation of Adjusted EBITDA to the appropriate GAAP measure is also included in footnote 1.
About Beacon Enterprise Solutions Group:
Beacon was formed by the consolidation of four independently successful companies in the IT and Telecom service sectors. Today, Beacon is a unified, single-source provider of technology and telecommunications services, from software development and infrastructure design to interconnect voice/data, security and systems integration. Beacon's client roster includes over 4,000 companies, from small and medium-sized business enterprises (SME market) to Fortune 500 firms, along with state and local government agencies and educational institutions. The Company's business strategy currently centers on a three phase development plan (regional in Phase I, super-regional in Phase II and national in Phase III) driven by a combination of organic and acquisition growth. Headquartered in Louisville, Kentucky, Beacon maintains offices in Cincinnati, Ohio; Columbus, Ohio; Mangalore, India and services clients globally. For more information please visit www.askbeacon.com or contact the Company at 502-379-4788 or investors@askbeacon.com.
This press release may contain "forward-looking statements." Expressions of future goals and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "could", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential", "continue" or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan. Although we believe that the expectations reflected in any forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. Changes in the circumstances upon which we base our predictions and/or forward-looking statements could materially affect our actual results. Factors that could cause or contribute to such differences include, but are not limited to, market acceptance of products and technologies, competitive factors, the Company's ability to continue to secure sources of financing, the Company's ability to identify, acquire and integrate suitable target companies and other factors described in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this press release.
(1) Explanation of Adjusted EBITDA, a Non-GAAP Financial Measure
The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, as adjusted for stock based compensation expense and other income. The Company believes that Adjusted EBITDA, which is a financial measure that is not defined by Generally Accepted Accounting Principles in the U.S., or GAAP, is a useful performance metric because it eliminates significant non-cash and/or one-time charges to earnings. It is important to note that non-GAAP measures such as Adjusted EBITDA should be considered in addition to, not as a substitute for or superior to, net income, cash flows, or other measures of financial performance prepared in accordance with GAAP. The items excluded from adjusted EBITDA are significant components in understanding and evaluating financial performance and liquidity. A reconciliation of net income to Adjusted EBITDA is as follows for the quarters ended March 31, 2008.
Adjusted EBITDA
For the three
months ended
March 31,
2008
-------------
(Unaudited)
Net loss $ (1,279,765)
Depreciation expense 20,308
Amortization of intangible assets 160,101
Interest expense 115,158
Interest income (2,689)
Non-cash share-based payments 330,366
-------------
Adjusted EBITDA $ (656,521)
=============
Operating Results
For the three
months ended
March 31,
2008
-------------
(Unaudited)
Net sales $ 1,571,742
Cost of goods sold 838,925
-----------
Gross profit 732,817
Operating expense
Salaries and benefits 1,126,350
Selling, general and administrative 593,354
Depreciation expense 20,308
Amortization of intangible assets 160,101
-------------
Total operating expense 1,900,113
-------------
Loss from operations (1,167,296)
Other expenses
Interest expense (115,158)
Interest income 2,689
-------------
Total other expenses (112,469)
-------------
Net loss before income taxes (1,279,765)
Income taxes --
-------------
Net Loss $ (1,279,765)
=============
Beacon Enterprise Solutions Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
March 31,
2008
-------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 711,688
Accounts receivable 665,180
Inventory 707,526
Prepaid expenses and other current assets 127,110
-------------
Total current assets 2,211,504
Property and equipment, net 252,327
Goodwill 2,762,194
Other intangible assets, net 4,122,919
Inventory, less current portion 99,158
Security deposits 27,892
-------------
Total assets $ 9,475,994
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 649,890
Current portion of capital lease obligations 17,734
Accounts payable 709,763
Accrued acquisition costs 84,924
Accrued expenses 444,060
Customer deposits 227,118
-------------
Total current liabilities 2,133,489
Long-term debt, less current portion 1,732,565
Bridge notes (net of $176,698 of discounts) 523,302
Capital lease obligations, less current portion 2,807
Other acquisition liability 50,000
-------------
Total liabilities 4,442,163
-------------
Stockholders' equity
Series A convertible preferred stock, $1,000 stated
value, 4,500 shares authorized, 4,000 shares issued
and outstanding, (liquidation preference $5,118,630) 4,000,000
Series A-1 convertible preferred stock, $1,000 stated
value, 1,000 shares authorized, 800 shares issued and
outstanding, (liquidation preference $1,006,813) 800,000
Common stock, $0.001 par value 70,000,000 shares
authorized, 10,648,021 shares issued and outstanding 10,468
Additional paid in capital 6,390,393
Accumulated deficit (6,167,030)
-------------
Total stockholders' equity 5,033,831
-------------
Total liabilities and stockholders' equity $ 9,475,994
=============
Beacon Enterprise Solutions Group, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations
For the three
months ended
March 31,
2008
-------------
(Unaudited)
Net sales $ 1,571,742
Cost of goods sold 838,925
-------------
Gross profit 732,817
Operating expense
Salaries and benefits 1,126,350
Selling, general and administrative 593,354
Depreciation expense 20,308
Amortization of intangible assets 160,101
-------------
Total operating expense 1,900,113
-------------
Loss from operations (1,167,296)
Other expenses
Interest expense (115,158)
Interest income 2,689
-------------
Total other expenses (112,469)
-------------
Net loss before income taxes (1,279,765)
Income taxes --
-------------
Net loss (1,279,765)
Series A and A-1 Preferred Stock:
Contractual dividends --
Deemed dividends related to beneficial conversion
feature (2,991,719)
-------------
Net loss available to common stockholders $ (4,271,484)
=============
Net loss per share to common stockholders - basic and
diluted $ (0.41)
=============
Weighted average shares outstanding
basic and diluted 10,468,021
=============