Avatech Solutions Announces Fourth Quarter and Year-end Results.Company Reports Record Revenues and Earnings for FY 2006 BALTIMORE -- Avatech Solutions, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :AVSO AVSO Association of Voluntary Service Organisations .OB), the nationwide technology experts for design, engineering, and facilities management The management of a user's computer installation by an outside organization. All operations including systems, programming and the datacenter can be performed by the facilities management organization on the user's premises. solutions, today announced financial results for its fourth quarter and fiscal year ended June 30, 2006. Fiscal 2006 Highlights * Revenue for the fiscal year increased 16% to $39.6 million. Excluding the one-time sale of developed software to a major supplier in fiscal year 2005, revenue increased 23%. The company realized double-digit sales growth in all three of its revenue categories. * Net income for the fiscal year increased to $2.2 million, a 14% increase over the prior year's net income. Excluding the one-time software sale in fiscal year 2005, net income increased by $2.1 million. * The company closed its acquisition of Sterling Systems and Consulting, Inc., on May 30, 2006. This acquisition contributed $1.1 million of revenue in fiscal year 2006 and provided the company with four new locations in the upper Midwest The Upper Midwest is a region of the United States with no universally agreed-upon boundary, but it almost always lies within the US Census Bureau's definition of the Midwest and includes the states of Minnesota and Wisconsin, as well as at least the Upper Peninsula of Michigan. . * The company significantly expanded its professional staff, adding a total of 24 sales representatives, including 11 from the Sterling acquisition, and 20 technical engineers, including 12 from the Sterling acquisition. * The company was able to significantly strengthen its balance sheet through its profitable operations, two equity offerings, and the repayment of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , and increased its stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. to $4.7 million at June 30, 2006 from a deficit of $2.7 million at June 30, 2005. For the year ended June 30, 2006, revenue totaled $39.6 million compared to $34.1 million for fiscal year 2005. Excluding the one-time $1.9 million sale of developed software to a major supplier in 2005, revenue increased 23%. Net income for fiscal year 2006 totaled $2.2 million, or $0.18 per share, compared to net income of $1.9 million, or $0.18 per share, for fiscal year 2005. Excluding the one-time software sale, net income for fiscal year 2005 would have been $111,000, or $0.01 per share. Results for fiscal year 2006 reflect the effect of expensing stock options which totaled $315,000, or $0.03 per share. For the fourth quarter ended June 30, 2006, revenue totaled $9.9 million compared to $8.8 million for the fourth quarter of fiscal year 2005. The company reported a net loss of $84,000, or $0.01 per share, for the fourth quarter of 2006, compared to net income of $714,000, or $0.06 per share, for the same period last year. Chief Executive Officer Scotty Walsh commented, "Avatech performed well for the year overall, meeting our revenue goal and outperforming our internal expectations for the bottom line. These accomplishments were driven largely by the company's success in vertical markets where customers are increasingly converting to 3D design. As planned, another key accomplishment for fiscal year 2006 was the strengthening of our balance sheet. "The company's fourth quarter was somewhat less robust than we would have liked, particularly in comparison to our very strong third quarter, which benefited from increased sales activity related to the retirement of certain products by our main supplier, Autodesk. During the fourth quarter, we made significant investment in sales and technical staff in addition to adding personnel through the Sterling acquisition. We expect these new personnel, who were not yet fully productive in the fourth quarter, to begin contributing to revenue growth in fiscal year 2007. In addition to the higher selling expenses, our financial results for the quarter were also impacted by a non-recurring interest expense of $65,000 associated with the short-term loan we secured to finance the Sterling acquisition. "Overall, our growth strategy -- aimed at transitioning Avatech to a diversified diversified (di·verˑ·s services and solutions provider -- has been very successful, and in fiscal 2007 we plan to build on the progress we have achieved to date. Management expects that this strategy will include the exploration of acquisition opportunities as they arise and acting on those that management believes involve profitable, well-managed companies expected to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. our revenue stream, expand our customer base, and increase the profitability of the services we offer. Because the ability to close on any acquisition opportunity depends on our financial condition at the time and other unpredictable factors beyond our control, there can be no guarantee that we will pursue or realize on any opportunity that may arise. During the coming year, we also expect to reap the benefits of an expanded and fully productive sales and technical force. "Our goal for fiscal year 2007 is to generate revenue in the range of $55 million to $60 million, excluding the effects of any additional acquisitions, and to achieve measurable improvement in our operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . The realization of this goal, however, is highly dependent on the successful expansion and diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. of our range of products, the growth of our geographic footprint, and an increase in our sales and customer-facing experts, all of which are subject to several risks and uncertainties related to our business and other factors beyond our control. Accordingly, there can be no guarantee that we will achieve this goal." 8K Filing - Audited Financial Statements of Sterling Systems The company also noted that it had recently filed an amendment to its Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. filed with the Securities and Exchange Commission on June 1, 2006, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Sterling acquisition, which amendment contains the audited financial statements of Sterling and the pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma financial information required by Form 8-K. Conference Call Information The Company will hold a conference call to discuss its results on Thursday, September 28th at 11:00 Eastern Time. The phone number to join the call is 1-888-677-5721, the passcode is AVATEL and the leader of the call will be the Company's CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Scotty Walsh. A recording of the conference call will also be available in the investor relations Investor relations The process by which the corporation communicates with its investors. section of the website after approximately 2:00 PM Eastern Time on September 28th. About Avatech Solutions Avatech Solutions, Inc. (OTCBB:AVSO.OB) is the recognized leader in design and engineering technology with unparalleled expertise in design automation, data management and process optimization Process optimization is the practice of making changes or adjustments to a process, to get results. Optimization is the use of specific techniques to determine the most cost effective and efficient solution to a problem or design for a process. for the manufacturing, engineering, building design and facilities management markets. Headquartered in Owings Mills, Maryland Owings Mills is an unincorporated community and a census-designated place in Baltimore County, Maryland, United States. The population was 20,193 at the 2000 census. Owings Mills is home to the northern terminus for the Baltimore Metro Subway and to Owings Mills Mall. , the company specializes in consulting, software systems integration and implementation, standards development and deployment, education, and technical support. Avatech is one of the largest integrators of Autodesk software worldwide and a leading provider of PLM (Product Life cycle Management) A comprehensive information system that coordinates all aspects of a product from initial concept to its eventual retirement. Sometimes called the "digital backbone" of a product, it includes the requirements phase, analysis and design solutions. The company's clients include industry leaders from Fortune 500 and Engineering News Record's Top 100 companies. Visit http://www.avatech.com for more information. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains forward-looking statements about the expectations, beliefs, plans, intentions, and strategies of Avatech Solutions, Inc. There are a number of important factors that could cause actual results to differ materially from those anticipated by any forward-looking information. Statements that are not historical in nature, including those that include the words "goal", "expect", "anticipate", "estimate", "should", "believe", "intend", and similar expressions, are based on current expectations, estimates and projections about, among other things, the industry and the markets in which Avatech operates, and they are not guarantees of future performance. Whether actual results will conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" expectations and predictions is subject to known and unknown risks and uncertainties, including risks and uncertainties discussed in this report; general economic, market, or business conditions; changes in interest rates, and demand for our products and services; changes in our competitive position or competitive actions by other companies; the ability to manage growth; changes in laws or regulations or policies of federal and state regulators and agencies; and other circumstances beyond our control. Consequently, all of the forward-looking statements made in this document are qualified by these cautionary statements, and there can be no assurance that the actual results anticipated will be realized, or, if substantially realized, will have the expected consequences on our business or operations. All brand names, product names, or trademarks belong to their respective holders. [TABLE OMITTED] |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion