DynTek Announces Results for the Third Fiscal Quarter and Year-to-Date Period Ended March 31, 2013

NEWPORT BEACH, CA--(Marketwired - Apr 24, 2013) -  DynTek, Inc. (PINKSHEETS: DYNE), a leading provider of professional technology services, today announced results for the quarter and nine months ended March 31, 2013. The unaudited interim condensed consolidated financial statements for the quarter and year-to-date period are available under DYNE.PK.

Third Fiscal Quarter Ended March 31, 2013

DynTek reported revenues of $27,429,000 for the third quarter ended March 31, 2013, an increase of $3,148,000, or 13%, from $24,281,000 in the prior year third quarter ended March 31, 2012. Gross profit increased to $5,047,000 for the third quarter ended March 31, 2013, an increase of $542,000, or 12%, from $4,505,000 for the prior third fiscal quarter. Total operating expenses increased to $4,208,000 in the third quarter ended March 31, 2013 compared to $3,911,000 in the prior third quarter ended March 31, 2012, primarily attributable to higher selling expense associated with higher revenues.

DynTek reported EBITDA of $919,000 for the third fiscal quarter ended March 31, 2013, an increase of $266,000, or 41%, from $653,000 for the prior third fiscal quarter ended March 31, 2012. Net income for the third fiscal quarter of 2013 was $862,000, or $0.41 per diluted share, a decrease of $27,000 or $0.02 per diluted share, over the net income for the third fiscal quarter of 2012 of $889,000, or $0.43 per diluted share.

Year-to-Date Period Ended March 31, 2013

DynTek reported revenues of $95,648,000 for the nine months ended March 31, 2013, an increase of $18,145,000, or 23%, from $77,503,000 in the nine months ended March 31, 2012. Gross profit also increased to $16,117,000 for the nine months ended March 31, 2013, an increase of $2,162,000, or 15%, from $13,955,000 for the prior nine months ended March 31, 2012. Total operating expenses increased to $12,892,000 in the nine months ended March 31, 2013 compared to $11,511,000 in the prior nine months ended March 31, 2012, primarily attributable to higher selling expense associated with higher revenues.

DynTek reported EBITDA of $3,472,000 for the nine months ended March 31, 2013, an increase of $877,000, or 34%, from $2,595,000 for the prior nine months ended March 31, 2012. Net income for the nine months ended March 31, 2013 was $2,590,000, or $1.23 per diluted share, an increase of $1,014,000 or $0.46 per diluted share, over the prior nine months ended March 31, 2012 net income of $1,576,000 or $0.77 per diluted share. 

In March 2013, DynTek made a permitted repayment of $1,383,000 on its subordinated debt, which will reduce debt service costs in future periods.

"Our investments in sales and technical talent, strategic partnerships and business-enabling technologies are fueling our healthy and steady growth," said Ron Ben-Yishay, DynTek's chief executive officer. "Cloud-based solutions, managed services, mobility and virtualization are no longer horizon technology projects -- they have quickly become core to our customer's business strategies. DynTek's strategic partner portfolio is comprised of the leaders in these key growth markets, including Microsoft, Cisco, Citrix, McAfee and more. In addition, we are increasing our footprint across vertical industries, from education and government to healthcare and finance, providing DynTek a well balanced portfolio." 

EBITDA
The Company defines EBITDA as 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 Platform, 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.

DYNTEK, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(EBITDA presentation)
(Unaudited, in thousands, except share and per share data)
			Quarter Ended March 31,				Nine Months Ended March 31,				Quarter Ended March 31,				Nine Months Ended March 31,
			2013				2013				2012				2012
REVENUES
Product revenues			$	19,337			$	70,908			$	16,798			$	54,731
Service revenues				8,093				24,740				7,483				22,772
	TOTAL REVENUES			27,429				95,648				24,281				77,503
COST OF REVENUES
	Cost of products			15,877				59,816				13,957				45,999
	Cost of services			6,505				19,715				5,819				17,549
	TOTAL COST OF REVENUES			22,382				79,530				19,776				63,548
GROSS PROFIT				5,047				16,117				4,505				13,955
OPERATING EXPENSES
	Selling			3,199				9,669				2,711				7,966
	General and administrative			986				3,149				1,168				3,451
	Depreciation and amortization			23				74				32				94
TOTAL OPERATING EXPENSES				4,208				12,892				3,911				11,511
INCOME FROM OPERATIONS				839				3,225				594				2,444
EBITDA				919				3,472				653				2,595
OTHER INCOME (EXPENSE)
	Interest expense			(225	)			(693	)			(197	)			(750	)
	Other income (expense)			9				9				-				-
TOTAL OTHER EXPENSE				(216	)			(684	)			(197	)			(750	)
INCOME BEFORE INCOME TAX				623				2,541				397				1,694
	Income tax benefit (provision)			239				48				492				(118	)
NET INCOME			$	862			$	2,590			$	889			$	1,576
NET INCOME PER SHARE:
	Basic		$	0.41			$	1.24			$	0.44			$	0.79
	Diluted		$	0.41			$	1.23			$	0.43			$	0.77
WEIGHTED AVERAGE NUMBER OF SHARES:
	Basic			2,094,202				2,091,836				2,033,325				1,992,375
	Diluted			2,121,708				2,112,829				2,045,842				2,042,545