BOSTON, May 23, 2006 (PRIMEZONE) -- Technest Holdings Inc. http://www.technestholdings.com (OTCBB:TCNH), a defense and homeland security company transforming advanced laboratory technology into real-world products, announced today its operating results for the Company's fiscal third quarter ended March 31, 2006. The complete filing is available at www.sec.gov.
The Company posted revenue of $55,141,077 for the nine months ended March 31, 2006, compared with $7,448,880 for the same period in 2005. Revenues for the three months ended March 31, 2006 were $17,855,160, compared to $7,448,800 for the same quarter in 2005. Revenues for the 2005 periods are not comparable, as the operations of EOIR and Genex were included only from February, 14, 2005. Gross profit for the nine months ended March 31, 2006 was $10,295,877, or 19% of revenue. The gross profit for the three months ended March 31, 2006 was $3,237,084, or 18% of revenue. The gross profit for the nine months and three months ended March 31, 2005 was $1,569,329, or 21% of revenue, reflecting the acquisitions of Genex Technologies and E-OIR Technologies from February 14, 2005. The net loss attributable to common shareholders for the nine months and three months ended March 31, 2006 was $3,320,261 and $1,523,608 or a loss per share of $0.22 and $0.10, respectively. The net loss attributable to common shareholders for the nine months and three months ended March 31, 2005 was $4,738,648 and $4,631,927, or a loss per share of $0.68 and $1.94 respectively, reflecting the acquisitions of Genex Technologies and E-OIR Technologies from February 14, 2005
Said Dr. Joe Mackin, Technest CEO and Chairman, "These very positive results reflect our acquisition of Genex Technologies, Inc. and E-OIR Technologies, Inc. in 2005. These acquisitions form the base of our ongoing business strategy of creating a world-class integrated portfolio of sensing technology products, services and solutions for the U.S. Departments of Homeland Security and Defense, Intelligence Agencies and the National Institute of Health.
Dr. Mackin continued, "Our business model has two basic components. The first component is to become an incubator for emerging security technologies, which are in the final stages of development and are market ready. The second component is to acquire revenue-generating assets in the security marketplace, which have historical positive cash flow but have not been optimized. The continuing strength of our business strategy is underscored by the achievements of our current fourth fiscal quarter. For example, in May 2006:
-- EOIR Technologies was ranked among the top 100 federal government
contractors by the Federal Times.
-- Genex Technologies provided 3-D camera technology to the SaferKidz
Program to create a database of 3-D images to provide law
enforcement agencies with real-time identification and
biographical information when a child is reported missing.
-- Technest received an additional $7.7 million in incremental funds
from the U.S. Army.
"In April 2006:
-- The U.S. Navy awarded Technest Holdings a Small Business
Innovative Research (SBIR) grant for the Hyperspectral Project.
-- Genex presented at the 2006 SPIE Defense and Security Symposium.
-- Technest received incremental funding from the U.S. Army.
"In March 2006:
-- We developed a high-tech sensing device for chemical plant
security to protect against terrorism.
-- Our subsidiary, EOIR Technologies, received incremental funding
totaling $4.7 million from the U.S. Army's Night Vision and
Electronic Sensors Directorate for remote sensor technology
products and engineering services.
-- We received $4.7 million in new incremental funding by the U.S.
Army, in addition to $1.35 million from the U.S. Army's Night
Vision and Electronic Sensors Directorate.
-- Genex successfully developed and demonstrated a working prototype
for a missile detection and tracing system called the OmniSeeker.
-- Technest developed a working prototype of an intelligent thermal
imaging sensor for missile detection applications.
"We believe our highly differentiated and integrated solutions have established Technest Holdings as an industry leader in the fields of defense force protection, remote sensing technologies, chemical detection, border security and a host of other emerging security technology applications," Dr. Macklin concluded.
About Technest Holdings, Inc.
Technest Holdings, Inc. is a provider of: advanced remote sensor systems, chemical detectors, intelligent surveillance and advanced 3D imaging technology solutions to the defense and homeland security marketplaces. Technest is committed to setting next-generation standards in defense and security through the provision of innovative emerging technologies and expert services. Technest's solutions support military, law enforcement and homeland security personnel. Through strategic development, Technest focuses on the creation of dual-use technology and products with applications in both the defense market and civilian homeland security and law enforcement fields. For more information, please visit the company's website at http://www.technestholdings.com/.
Investors are cautioned that certain statements contained in this press release are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, applicability, benefit and use of our product and possible future actions, which may be provided by management, are also forward-looking statements as defined by the Act. Some of the factors that could significantly impact the forward-looking statements in this press release include, but are not limited to: the functionality of our product; a rejection of the Company's products and technologies by the marketplace; and disputes as to the Company's intellectual property rights. Forward-looking statements are based upon current expectations and projections about future events and are subject to risks, uncertainties, and assumptions about Technest Holdings, its products, economic and market factors and the industries in which Technest Holdings does business, among other things. These statements are not guarantees of future performance and Technest Holdings has no specific intention to update these statements. More detailed information about those factors is contained in Technest Holdings' filings with the Securities and Exchange Commission. http://www.sec.gov/
Technest Holdings, Inc. is a featured Company on http://www.HomelandDefenseStocks.com, a service for which Technest Holdings compensates the provider.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE NINE MONTHS AND THREE MONTHS
ENDED MARCH 31, 2006 AND 2005
FOLLOW
TECHNEST HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF LOSS
Nine months ended March 31, 2006 and 2005 (unaudited)
2006 2005
---- ----
Revenues $ 55,141,077 $ 7,448,880
Cost of Revenues 44,845,200 5,879,471
------------ ------------
Gross Profit 10,295,877 1,569,329
------------ ------------
Operating Expenses
Selling, general and
administrative (including $ to
related parties) 9,897,578 1,673,405
Research and development 138,448 2,095,000
Amortization of intangible assets 1,339,634 163,264
------------ ------------
Total Operating Expenses 11,375,660 3,931,669
------------ ------------
Operating Loss (1,079,783) (2,362,340)
------------ ------------
Other Expenses (Income), Net
Interest expense 2,359,289 212,794
Other income (118,811) (11,344)
------------ ------------
Total other expenses, net 2,240,478 201,450
------------ ------------
Net Loss (3,320,261) (2,563,790)
Deemed dividend on Series A preferred
stock -- 124,858
Deemed dividend on Series C preferred
stock -- 2,050,000
------------ ------------
Net loss attributable to Common
Stockholders $ (3,320,261) $ (4,738,648)
============ ============
Basic and Diluted Loss Per Common
Share $ (0.22) $ (0.68)
============ ============
Weighted Average Number of Common
Shares Outstanding 15,034,540 6,961,227
============ ============
TECHNEST HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF LOSS
Three months ended March 31, 2006 and 2005 (unaudited)
2006 2005
---- ----
Revenues $ 17,855,160 $ 7,448,800
Cost of Revenues 14,618,076 5,879,471
------------ ------------
Gross Profit 3,237,084 1,569,329
------------ ------------
Operating Expenses
Selling, general and administrative
(including $ to related parties
in 2006) 3,586,344 1,574,374
Research and development -- 2,095,000
Amortization of intangible
assets 446,512 163,264
------------ ------------
Total Operating Expenses 4,032,856 3,832,638
------------ ------------
Operating Loss (795,772) (2,263,309)
------------ ------------
Other Expenses (Income), Net
Interest expense 763,469 205,104
Other income (35,633) (11,344)
------------ ------------
Total other expenses, net 727,836 193,760
------------ ------------
Net Loss (1,523,608) (2,457,069)
Deemed Dividend on Series A
Preferred Stock -- 124,858
Deemed Dividend on Series C
Preferred Stock -- 2,050,000
------------ ------------
Net Loss Applicable to Common
Stockholders $ (1,523,608) $ (4,631,927)
============ ============
Basic and Diluted Loss Per Common
Share $ (0.10) $ (1.94)
============ ============
Weighted Average Number of Common
Shares Outstanding 15,677,163 2,384,747
============ ============