DynTek Announces Results for the First Quarter Fiscal Year 2017

NEWPORT BEACH, CA--(Marketwired - Oct 26, 2016) -  DynTek, Inc. (OTCBB: DYNE), a leading provider of professional technology services, today announced results for its fiscal year 2017 first quarter ended September 30, 2016. 

DynTek reported revenues of $29,727,000 for the first fiscal quarter ended September 30, 2016, a decrease of $13,792,000 or 31.7%, from $43,519,000 in the prior year first quarter ended September 30, 2015. Several expected orders missed the first quarter cutoff and will be recorded in the second fiscal quarter. Gross profit decreased to $5,277,000 for the first fiscal quarter ended September 30, 2016, a decrease of $1,773,000 or 25.1%, from $7,050,000 in the prior year first quarter ended September 30, 2015. The decrease in gross profit is attributable to the decrease in revenues.

Total operating expenses were $4,832,000 in the first fiscal quarter ended September 30, 2016, a decrease of $549,000 or 10.2%, as compared to $5,381,000 in the prior year first quarter ended September 30, 2015. The decrease is primarily due to lower selling expenses associated with lower revenues.

DynTek reported EBITDA of $544,000 for the first fiscal quarter ended September 30, 2016, a decrease of $1,225,000 or 69.2%, as compared to $1,769,000 in the prior year first quarter. Net income was $86,000 for the first fiscal quarter of 2017, or $0.04 per diluted share, a decrease of $698,000, 89% and a decrease of $0.31 per diluted share, over the net income of $784,000 and $0.35 per diluted share in the first fiscal quarter of 2016. The decreases in EBITDA and net income as compared to prior year first quarter are primarily attributable to the decreased gross profit.

"Our team is focused on a strong fiscal year 2017, bolstered by our growing pipeline," said Ron Ben-Yishay, DynTek's chief executive officer. "We are realizing strong growth in our cyber security business, especially within the healthcare sector. Healthcare organizations continue to make additional investments in proactive and defensive countermeasures to combat threats such as Ransomware and data loss. This is also a growing factor in our other key verticals including government, education and financial services."

EBITDA
The Company defines EBITDA as net income from operations before interest, taxes, depreciation and amortization, and stock-based compensation. Other companies may calculate EBITDA differently. Although EBITDA is a widely used financial indicator of a company's ability to service debt, it is not a recognized measure for financial statement presentation under generally accepted accounting procedures (GAAP). EBITDA should not be considered in isolation or as superior or as an alternative to net income or to cash flows from operating activities as determined in accordance with GAAP. Nonetheless, the Company believes that EBITDA provides useful supplemental information for investors and others to measure operating performance, especially in situations where a company has significant non-cash operating expenses that are not indicative of core business operating results. EBITDA is widely used in the IT services industry to analyze comparable company performance, and management of the Company also uses EBITDA, in addition to GAAP information, as a measure of operating performance for assessing its business units.

About DynTek
DynTek is a leading provider of professional technology services to mid-market companies, such as state and local governments, educational institutions and commercial entities in the largest IT markets nationwide. From virtualization and cloud computing to unified communications and collaboration, DynTek provides professional technology solutions across the three core areas of our customers' technical environment: Infrastructure/Data Center, Microsoft Platforms, End Point Computing. DynTek's multidisciplinary approach allows our clients to turn to a single source for their most critical technology requirements. For more information, visit http://www.dyntek.com.

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Forward Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Investors are cautioned that forward-looking statements made in this press release, involve known and unknown risks and uncertainties that could cause actual results to materially differ from the forward-looking statements. Such risks and uncertainties include, among others, our success in reaching target markets for services and products in a highly competitive market; our ability to maintain existing customers and attract future customers; our ability to finance and sustain operations, including our ability to comply with the terms of the revolving line of credit and the Company's other existing and future indebtedness; our ability to achieve profitability and positive cash flow from operations; our ability to maintain business relationships with IT product vendors; the size and timing of additional significant orders for our products and services and our ability to fulfill such orders; the continuing desire of state and local governments to outsource to private contractors and the availability of budgets to place orders for our products and services; our ability to retain skilled professional staff and certain key executives; the performance of our government and commercial technology services; and the continuation of general economic and business conditions that are conducive to outsourcing of IT services. We have no obligation to publicly revise any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.