LOUISVILLE, Ky., CINCINNATI and COLUMBUS, Ohio, Aug. 19, 2008 (GLOBE NEWSWIRE) -- Beacon Enterprise Solutions Group, Inc. (OTCBB:BEAC) today announced its financial results for the three months ended June 30, 2008.
Revenue for the three months ended June 30, 2008, was $2,364,000 (up 50.4% from $1,572,000 in the previous quarter), Gross Profit was $920,000 (up 25.5% from $733,000 in the previous quarter) and the Company's Net Loss was ($1,029,000), a 19.6% improvement from ($1,280,000) in the previous quarter. Adjusted EBIDTA(1) for the period was ($617,000) a 6% improvement from ($657,000) in the previous quarter.
"Due to minor construction delays and manufacturer backorders we were unable to record some of our anticipated revenue during the period and ended the quarter with a pending business backlog of $1,480,000, up 39% from our backlog of $1,068,000 at the end of the previous quarter," commented Rick Mills, President of Beacon Solutions. "As a result of the increased backlog and new business development efforts, we anticipate significant revenue growth during the current quarter."
"Our ongoing cross selling and integrated product selling strategies contributed to our 50% quarter over quarter revenue growth," commented Bruce Widener, CEO of Beacon Solutions. "We're seeing continued growth within multiple product and service lines, particularly in the areas of unified communications and infrastructure services. By bringing together and integrating specialists in the areas of telecommunications, IT services, data, physical security systems, network design and engineering, all within one organization, we believe Beacon holds a distinct competitive advantage in each of our primary markets," concluded Widener.
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 quarter ended June 30, 2008.
30-Jun-08
-------------
(Unaudited)
Net loss $ (1,028,987)
Depreciation expense 23,571
Amortization of intangible assets 160,101
Interest expense 120,068
Interest income (3,222)
Non-cash share-based payments 111,680
-------------
Adjusted EBITDA $ (616,789)
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Beacon Enterprise Solutions Group, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations
(Unaudited)
For the three
months ended
June 30,
2008
-------------
Net sales $ 2,364,605
Cost of goods sold 1,444,807
-------------
Gross profit 919,798
Operating expense
Salaries and benefits 1,116,705
Selling, general and administrative 531,562
Depreciation expense 23,571
Amortization of intangible assets 160,101
-------------
Total operating expense 1,831,940
-------------
Loss from operations (912,141)
Other expenses
Interest expense (120,068)
Interest income 3,222
-------------
Total other expenses (116,846)
-------------
Net loss before income taxes (1,028,987)
Income taxes --
-------------
Net loss (1,028,987)
Beacon Enterprise Solutions Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
June 30,
2008
-------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 126,827
Accounts receivable, net 1,398,260
Inventory, net 618,256
Prepaid expenses and other current assets 55,198
-------------
Total current assets 2,198,541
Property and equipment, net 251,238
Goodwill 2,750,696
Other intangible assets, net 3,962,818
Inventory, less current portion 99,158
Security deposits 27,892
-------------
Total assets $ 9,290,343
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $ 200,000
Bridge notes (net of $152,769 of discounts) 547,231
Current portion of long-term debt 669,495
Current portion of capital lease obligations 8,867
Accounts payable 1,439,407
Accrued expenses 741,304
Customer deposits 144,225
-------------
Total current liabilities 3,750,529
Long-term debt, less current portion 1,532,999
Capital lease obligations, less current portion 7,241
-------------
Total liabilities 5,290,769
-------------
Stockholders' equity
Preferred Stock: $0.01 par value, 5,000,000 shares
authorized, 4,800 shares outstanding in the
following classes:
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, 10,468,021 shares issued and outstanding 10,468
Additional paid in capital 6,538,354
Accumulated deficit (7,349,248)
-------------
Total stockholders' equity 3,999,574
-------------
Total liabilities and stockholders' equity $ 9,290,343
=============
Beacon Enterprise Solutions Group, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations
(Unaudited)
For the three
months ended
June 30,
2008
-------------
Net sales $ 2,364,605
Cost of goods sold 1,444,807
-------------
Gross profit 919,798
Operating expense
Salaries and benefits 1,116,705
Selling, general and administrative 531,562
Depreciation expense 23,571
Amortization of intangible assets 160,101
-------------
Total operating expense 1,831,940
-------------
Loss from operations (912,141)
Other expenses
Interest expense (120,068)
Interest income 3,222
-------------
Total other expenses (116,846)
Net loss before income taxes (1,028,987)
Income taxes --
-------------
Net loss (1,028,987)
Series A and A-1 Preferred Stock:
Contractual dividends (93,019)
Deemed dividends related to beneficial conversion
feature (60,212)
-------------
Net loss available to common stockholders $ (1,182,218)
=============
Net loss per share to common stockholders - basic and
diluted $ (0.11)
=============
Weighted average shares outstanding
basic and diluted 10,468,021
=============