Avatech Solutions Announces Profitable Second Quarter Including a 38 Percent Increase in Revenue.Business Editors BALTIMORE--(BUSINESS WIRE)--Feb. 17, 2004 Avatech Solutions, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :AVSO AVSO Association of Voluntary Service Organisations .OB), the recognized leader in design and engineering technology solutions for the manufacturing, building design and engineering markets, today reported total revenues of $7.8 million for the second quarter of fiscal year 2004, ended December December: see month. 31, 2003, which represents a 38% increase over the same quarter last year. The Company reported positive earnings of $4,725 for the current quarter, compared to a net loss of $(799,729) in the second quarter of the prior fiscal year. For the six month period ended December 31, 2003, revenues totalled $13.7 million, which represents a 25% increase over the same six month period last year. The Company reported a net loss of $(498,751) for the six months ended December 31, 2003, compared to net income of $172,347 for the same period last fiscal year. The prior year's net income includes a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gain on debt extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of $1.96 million. "I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in pleased to announce to our shareholders that our goal of becoming a profitable, diversified diversified (di·verˑ·s , solution-based provider of design and engineering technology solutions is being realized," said Avatech 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 Scot·ty n. Variant of Scottie. Walsh Walsh has several meanings: Mathematics
(Computer-Aided Design) Using computers to design products. CAD systems are high-speed workstations or desktop computers with CAD software. and design automation business, our new lines of business - product lifecycle Product lifecycle or product life cycle is the course of a product's sales and profits over time. The five stages of each product lifecycle are product development, introduction, growth, maturity and decline. management ("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 ") 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. ("FM") - are generating revenue and contributing to our bottom line." "This quarter's revenues and profits are largely attributable to revenue growth in our CAD and design automation business. We will continue to aggressively pursue growing this business while diversifying our offerings in FM and PLM," continued Walsh. "We've we've Contraction of we have. we've have made significant strides this past quarter in hiring new employees, establishing a solid pipeline, and acquiring new customers." "To achieve profitability is outstanding - a milestone attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. . However, our ultimate objective is to increase shareholder value through sustainable growth and profitability - through more people, products and solutions. A key part of our growth strategy is merger and acquisition activity. We believe we have the diversified plan and strategy in place to obtain our goals," stated Walsh. About Avatech Solutions Avatech Solutions, Inc. (OTCBB: AVSO.OB) is the recognized leader in design and engineering technology solutions with unparalleled expertise in CAD software, 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 industries. 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 software integration, standards development and deployment, education and technical support. Avatech is one the largest integrators of Autodesk (Autodesk, Inc., San Rafael, CA, www.autodesk.com) A leading provider of computer-aided design (CAD) software, founded in 1982. It introduced AutoCAD in its first year, and three years later, became the first PC CAD company to go public. software worldwide and a leading provider of SMARTEAM PLM solutions. The company serves 18,000 clients worldwide including the industry leaders from Fortune 500 and Engineering News Record's Top 100 companies. Visit http://www.avatechsolutions.com for more information. All brand names, product names, or trademarks belong to their respective holders. This press release contains 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. 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. A description of risks and uncertainties attendant ATTENDANT. One who owes a duty or service to another, or in some sort depends upon him. Termes de la Ley, h.t. As to attendant terms, see Powell on Morts. Index, tit. Attendant term; Park on Dower, c. 1 7. to Avatech and its industry, and other factors that could affect Avatech's financial results, are included in Avatech's Securities and Exchange Commission filings, including, but not limited to, the annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended June 30, 2003, the Proxy Statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. filed on October 10, 2003 in connection with Avatech's 2003 annual shareholder meeting, the quarterly reports on Form 10-Q Form 10-Q See 10-Q. for the quarter ended September 30, 2003 and December 31, 2003, and the current reports on 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 November 17, 2003 and January 21, 2004. Investors and shareholders may obtain a free copy of the documents filed by Avatech Solutions, Inc. with the Commission at the Commission's web site at www.sec.gov. The documents also may be obtained for free by directing a request to Melody melody, succession of single tones of varying pitch. Melody is the linear aspect of music, in contrast to harmony, the chordal aspect, which results from the simultaneous sounding of tones. Craigmyle, Director of Corporate Communications Corporate communications is the process of facilitating information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise. at 410-581-8080 or email MCraigmyle@avatechsolutions.com.
Avatech Solutions, Inc. and Subsidiaries
Consolidated Statements of Operations
Three Months Ended
December 31,
2002 2003
----------- -----------
(unaudited (unaudited)
and
restated)
Revenues:
Product sales $2,948,353 $5,183,449
Service revenue 1,696,290 1,283,609
Commission revenue 1,040,803 1,400,015
----------- -----------
5,685,446 7,867,073
----------- -----------
Cost of revenue:
Cost of product sales 2,081,173 3,933,520
Cost of service revenue 970,441 493,557
----------- -----------
3,051,614 4,427,077
----------- -----------
Gross margin 2,633,832 3,439,996
Other expenses:
Selling, general and administrative 2,878,324 3,215,548
Depreciation and amortization 116,056 82,437
----------- -----------
2,994,380 3,297,985
----------- -----------
Operating income (loss) (360,548) 142,011
----------- -----------
Other income (expense):
Minority interest (17,891) (38,125)
Interest and other income 5,352 5,006
Interest expense (74,830) (95,172)
----------- -----------
(87,369) (128,291)
----------- -----------
Income (loss) from continuing operations
before income taxes (447,917) 13,720
Income tax expense 10,000 10,000
----------- -----------
Income (loss) from continuing operations (457,917) 3,720
Income (loss) from operations of discontinued
operating segments (341,812) 1,005
----------- -----------
Net income (loss) (799,729) 4,725
Preferred stock dividends - 10,122
----------- -----------
Loss attributable to common stockholders $(799,729) $(5,397)
=========== ===========
Loss from continuing operations per common
share, basic and diluted $(0.06) $(0.00)
=========== ===========
Loss per common share, basic and diluted $(0.11) $(0.00)
Shares used in computation 7,172,370 9,217,874
=========== ===========
Avatech Solutions, Inc. and Subsidiaries
Consolidated Statements of Operations
Six Months Ended
December 31,
2002 2003
----------- -----------
(unaudited (unaudited)
and
restated)
Revenues:
Product sales $6,055,329 $8,688,397
Service revenue 3,036,328 2,760,177
Commission revenue 1,927,428 2,284,811
----------- -----------
11,019,085 13,733,385
----------- -----------
Cost of revenue:
Cost of product sales 4,138,400 6,414,849
Cost of service revenue 1,809,839 1,553,255
----------- -----------
5,948,239 7,968,104
----------- -----------
Gross margin 5,070,846 5,765,281
Other expenses:
Selling, general and administrative 5,767,097 5,718,505
Depreciation and amortization 230,189 149,626
----------- -----------
5,997,286 5,868,131
----------- -----------
Operating loss (926,440) (102,850)
----------- -----------
Other income (expense):
Gain on the extinguishment of debt 1,960,646 -
Minority interest (17,891) (76,250)
Interest and other income 11,960 4,293
Interest expense (157,233) (161,697)
----------- -----------
1,797,482 (233,654)
----------- -----------
Income (loss) from continuing operations
before income taxes 871,042 (336,504)
Income tax expense 403,000 21,000
----------- -----------
Income (loss) from continuing operations 468,042 (357,504)
Loss from operations of discontinued operating
segments (295,695) (141,247)
----------- -----------
Net income (loss) 172,347 (498,751)
Preferred stock dividends - 17,379
----------- -----------
Net income (loss) attributable to common
stockholders $172,347 $(516,130)
=========== ===========
Earnings (loss) from continuing operations per
share, basic and diluted $0.06 $(0.04)
=========== ===========
Earnings (loss) per common share, basic and
diluted $0.02 $(0.06)
=========== ===========
Shares used in computation 7,172,370 9,177,399
=========== ===========
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