TRENTON, N.J., Feb. 15, 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, announced today its results for the third quarter ended December 31, 2004.
Net income for the three months ended December 31, 2004 was $81,590, or $0.01, per share compared to a net income of $320,326, or $0.04, per share for the comparable period in 2003, a decrease of 74.5%. This decrease in net income is mainly due to the non-renewal of an annual manufacturers' support service contract by one of our commercial customers and an increase in SG&A expenses due to a one-time charge of $470,000 associated with the sub-lease of our New York office. Without this one-time charge, net of income tax, our net income for the quarter ended December 31, 2004 would have been approximately $400,000, or $0.05, per share for the quarter ended December 31, 2004.
Net income for the nine months ended December 31, 2004, rose to $1.30 million, or $0.17, per share compared to a net income of $539,269, or $0.07, per share for the same period in 2003 -- for the comparable period in 2003, an increase of 141.3%. This increase in net income is mainly attributable to computer roll-out projects for various school districts in Georgia and Florida, and revenue growth in our commercial customer base as well as continuous cost containment efforts undertaken by the Company. The reported net income for the nine months ended December 31, 2004 includes a one-time charge of $470,000 associated with the sub-lease of our New York office. Without this one-time charge, net of income tax, our net income for the nine months ended December 31, 2004 would have been approximately $1.61 million, or $0.21, per share for the nine months ended December 31, 2004.
John Howlett, CEO of Emtec Inc., said, "I'm pleased about Emtec's prospects moving forward. With this consolidation and restructuring behind us, we can now focus on providing innovative customer solutions for the use and management of their data."
About Emtec Inc.
Emtec Inc. established in 1981, is a systems integrator focused on providing technology solutions that enable its customers to effectively use and manage their data to grow their businesses. The company's areas of specialization in information technology 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 its customers to become more efficient and effective, thereby giving them a competitive advantage.
EMTEC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended December 31,
2004 2003 Change %
---------------------------------------------------------------------
Revenues
Procurement
services $ 21,208,639 $ 19,648,683 $ 1,559,956 7.9%
Service and
consulting 3,751,018 4,969,881 $ (1,218,863) -24.5%
Geothermal 47,886 47,900 $ (14) 0.0%
---------- ----------
Total
Revenues 25,007,543 24,666,464 $ 341,079 1.4%
--------- ---------- ----------
Cost of
Revenues
Procurement
services 18,701,165 17,686,595 $ 1,014,570 5.7%
Service and
consulting 2,571,789 3,094,958 $ (523,169) -16.9%
Geothermal 20,741 61,167 $ (40,426) -66.1%
---------- -----------
Total Cost
of Revenues 21,293,695 20,842,720 $ 450,975 2.2%
------------ ---------- -----------
Percent of
revenues 85.1% 84.5%
Gross Profit
Procurement
services 2,507,474 1,962,088 $ 545,386 27.8%
Service and
consulting 1,179,229 1,874,923 $ (695,694) -37.1%
Geothermal 27,145 (13,267) $ 40,412 304.6%
---------- -----------
Total Gross
Profit 3,713,848 3,823,744 $ (109,896) -2.9%
------------ ---------- -----------
Percent of
revenue 14.9% 15.5%
Operating Expenses
Sales,
General &
Administra-
tive
Expenses 3,517,096 3,350,077 $ 167,019 5.0%
Interest
Expense 47,686 75,333 $ (27,647) -36.7%
---------- -----------
Total
Operating
Expenses 3,564,782 3,425,410 $ 139,372 4.1%
---------- -----------
Percent of
revenue 14.3% 13.9%
Income
Before
Income Tax 149,066 398,334 $ (249,268) -62.6%
Income Tax
Expense 67,476 78,008 $ (10,532) -13.5%
---------- -----------
Net Income $ 81,590 $ 320,326 $ (238,736) -74.5%
========== ========== ========== ======
Income
Per
Share
Basic $ 0.01 $ 0.04
------ ========== ==========
Income Per
Share
Diluted $ 0.01 $ 0.04
--------- ========== ==========
EMTEC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
2004 2003 Change %
---------------------------------------------------------------------
Revenues
Procurement
services $ 71,355,830 $ 65,286,512 $ 6,069,318 9.3%
Service and
consulting 11,251,763 13,533,973 $(2,282,210) -16.9%
Geothermal 139,921 140,873 $ (952) -0.7%
----------- ----------- -----------
Total
Revenues 82,747,514 78,961,358 $ 3,786,156 4.8%
--------- ----------- -----------
Cost of
Revenues
Procurement
services 63,402,197 59,127,426 $ 4,274,771 7.2%
Service and
consulting 7,706,300 8,917,374 $(1,211,074) -13.6%
Geothermal 54,817 91,249 $ (36,432) -39.9%
----------- -----------
Total Cost
of Revenues 71,163,314 68,136,049 $ 3,027,265 4.4%
------------ ----------- -----------
Percent of
revenues 86.0% 86.3%
Gross Profit
Procurement
services 7,953,633 6,159,086 $ 1,794,547 29.1%
Service and
consulting 3,545,463 4,616,599 $(1,071,136) -23.2%
Geothermal 85,104 49,624 $ 35,480 71.5%
----------- -----------
Total Gross
Profit 11,584,200 10,825,309 $ 758,891 7.0%
----------- ----------- -----------
Percent of
revenue 14.0% 13.7%
Operating
Expenses
Sales,
General &
Administra-
tive
Expenses 9,355,359 9,934,891 $ (579,532) -5.8%
Interest
Expense 145,243 247,885 $ (102,642) -41.4%
----------- -----------
Total
Operating
Expenses 9,500,602 10,182,776 $ (682,174) -6.7%
---------- ----------- -----------
Percent of
revenue 11.5% 12.9%
Income Before
Income Tax 2,083,598 642,533 $ 1,441,065 224.3%
Income Tax
Expense 782,476 103,264 $ 679,212 657.7%
----------- -----------
Net Income $ 1,301,122 $ 539,269 $ 761,853 141.3%
=========== =========== =========== ======
Income Per
Share Basic $ 0.18 $ 0.08
------------ =========== ===========
Income Per
Share
Diluted $ 0.17 $ 0.07
---------- =========== ===========
Safe Harbor Statement
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 obtain sufficient capital or a strategic business arrangement to fund its plan of operations when needed and build the management and human resources and infrastructure necessary to support the growth of its business as well as competitive factors and developments beyond the company's control, and 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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