Charys Holding Company Reports Record First Quarter Revenue for Second Year in a Row; 2007 First Qtr. Revenue Increases 314% over Previous Year's First Qtr.ATLANTA -- Charys Holding Company, Inc. ("Charys") (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : CHYS.OB) today announced operating results for its fiscal 2007 first quarter ended July 31, 2006. Net revenue from operating platforms for the quarter increased 314% to over $25 million as compared to $6.1 million for the same period in fiscal 2006. Increased net revenue for the quarter is directly attributable to the inclusion of the acquisitions made in the third and fourth quarter of 2006 and the inclusion of the first quarter operating results of the recently acquired subsidiaries of Crochet and Borel Services, Inc. ("C&B"), LFC LFC Liverpool Football Club LFC Lake Forest College (Lake Forest, IL) LFC Level of Free Convection (meteorology) LFC Large Format Camera LFC Load Frequency Control Inc. and Digital Communications Transmitting text, voice and video in binary form. See communications. Services. These results do not include any revenues from the recently announced acquisitions of Complete Tower Sources, Inc. ("CTSI CTSI Census Tract Street Index (US Census Bureau) CTSI California Traffic Safety Institute CTSI Corbett Technology Solutions, Inc. (Chantilly, VA) CTSI Central Terminal Signaling Interface ") and Mitchell Site Acquisition, Inc. ("MSAI MSAI Malaysian Society of Allergy and Immunology "), which will be part of the quarter ended October 31, 2006. Gross margin increased to 30% for the first quarter of fiscal 2007 from 21% in the same period of 2006. Billy V. Ray, Jr., Chairman and 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. of Charys, commented that "The Charys management team has successfully implemented the initial phase of its business plan. Now we have moved into the second stage of building our operational platforms and capitalizing on the organic growth opportunities that are embedded Inserted into. See embedded system. in our customer base. In the second quarter of 2007 we expect, that the acquisitions of CTSI and MSAI and a full quarter of revenue from Ayin a·yin n. The 16th letter of the Hebrew alphabet. See Table at alphabet. [Hebrew 'ayin, eye, ayin; see Tower Management Services Inc. will add revenue of approximately $7 million. In addition, based on preliminary August results, we expect to see a further increase in our gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. as a result of the continued improvement in operational results at CCI CCI Chambre de Commerce et d'Industrie (France) CCI CAM (Complementary and Alternative Medicine) Citation Index CCI Chamber of Commerce and Industry (Western Australia) , Inc. ("CCI")." "Charys has achieved marked gains in key business performance categories, and even though the first fiscal quarter is traditionally the slowest for our disaster remediation platform, C&B provided 69% of the operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. , with their year-to-date revenue 50% ahead of the same period last year. The second and third fiscal 2007 quarters are normally the strongest revenue quarters for the disaster remediation market segment, dependent on the severity of the hurricane season Hurricane season refers to a period in a year when hurricanes usually form. For more information see: Tropical cyclone#Times of formation. For a lists of past seasons, see:
Selected results of operations, excluding Holding Company costs, for the three months ended July 31, 2006 and 2005 are as follows:
Operating Platform Results of Operations
Excluding Holding Company Cost
(In thousands, except per share data)
2007 2006
Net Revenue $25,045 $6,055
Gross Profit $7,409 $1,241
EBITDA $3,131 $152
Operating Profit $2,099 $23
Charys reported quarterly net earnings from operations of $2.1 million or $.09 per share ($.05 per share on a fully diluted basis), excluding Holding Company costs, as compared to $23,000 for the quarter ended July 31, 2005. Interpreting the results, Mr. Ray explained: "With the explosive growth of Charys, and the complexities of the acquisition and financing related accounting that has made this growth possible it is helpful to look into the results of the operating platforms minus the costs associated with financing and acquisitions activities and focus on the subsidiary operating results (in the table above). For instance, our results include one-time costs associated with the multiple acquisitions and financing fees, along with amortization of non-cash costs associated with warrants and options issued to support the acquisition and financing activities, which obscure the operating results of the platforms. Also, the balance sheet reflects short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. associated with Seller's notes and payments from the acquisitions, predominantly held by large Charys shareholders, which we intend to refinance with long term debt. When reclassifying these amounts due to Sellers, Charys demonstrates a very strong positive working capital position of $19.9 million." "With the continued growth in revenues and increasing operational efficiencies along with the recently completed $35 million Revolving Credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. Facility and $20 million Subordinated Convertible Debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay , Charys has positioned itself to successfully execute the next phase of its business strategy," Mr. Ray said. Mr. Ray's insights are illustrated in the following representation of the Charys Balance Sheet as of July 31, 2006, which are based on the above assumptions.
Operating Balance Sheet
Reclassifying Sellers Notes to Long Term Debt
As Reported at Pro Forma Pro Forma at
July 31, 2006 Adjustments July 31, 2006
Assets
Total Current Assets $ 88,484 $ - $ 88,484
Property Plant and
Equipment $ 15,898 $ - $ 15,898
Other Assets $ 181,984 $ - $ 181,984
Total Assets $ 286,366 $ - $ 286,366
Liabilities and Net Equity
Current Liabilities
Accounts Payable $ 30,873 $ - $ 30,873
Accrued Expenses $ 11,345 $ - $ 11,345
Billings in Excess of
Profit $ 1,091 $ - $ 1,091
Deferred Revenue $ 1,392 $ - $ 1,392
Short-Term Borrowings $ 22,723 $ - $ 22,723
Notes Payable- current
portion $ 68,817 $ (67,484) $ 1,333
Total Current Liabilities $ 136,241 $ (67,484) $ 68,757
Long Term Liabilities
Long Term Debt $ 2,457 $ 67,484 $ 69,941
Other Liabilities
Mandatory Redeemable
Preferred Stock $ 13,000 $ - $ 13,000
Total Liabilities $ 151,698 $ - $ 151,698
Total Shareholders Equity $ 134,668 $ - $ 134,668
Total Liabilities and
Shareholders Equity $ 286,366 $ - $ 286,366
Net working Capital $ (47,757) $ 67,484 $ 19,727
Reported Net Revenue for the first fiscal quarter 2007 increased 314% to $25.1 million as compared to $6.1 million for the same period in fiscal 2006. Charys reported operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $119 thousand for the quarter ended July 31, 2006, as compared to an operating loss of $297 thousand for the same period in fiscal year 2006. Selected results of operations for the three months ended July 31, 2006 and 2005 are as follows:
Consolidated Financial Results of Operations
(In thousands, except per share data)
2007 2006
Net Revenue $ 25,045 $ 6,055
Gross Profit $ 7,408 $ 1,241
EBITDA $ 1,631 $ (167)
Operating Profit $ (119) $ (297)
Consolidated Balance Sheet
Assets July 31, 2006 July 31, 2005
Cash $ 3,184 $ 116
Account Receivable $ 74,362 $ 3,325
Cost and Profits in Excess of Billings $ 5,070 $ 2,205
Other Current Assets $ 5,868 $ 1,082
Total Current Assets $ 88,484 $ 6,728
Property Plant and Equipment $ 15,898 $ 665
Other Assets $ 183,317 $ 7,048
Total Assets $ 287,699 $ 14,441
Liabilities and Net Equity
Current Liabilities
Accounts Payable $ 30,873 $ 3,402
Accrued Expenses $ 11,345 $ 2,356
Billings in Excess of Profit $ 1,091 $ 294
Deferred Revenue $ 1,392
Short-Term Borrowings $ 22,723 $ 2,782
Notes Payable - including Amounts due
Sellers $ 68,679 $ 30
Total Current Liabilities $ 136,103 $ 8,864
Long Term Liabilities
Long Term Debt $ 2,595 $ 781
Other Liabilities $ 2,679
Mandatory Redeemable Preferred Stock $ 13,000
Total Liabilities $ 151,698 $ 12,324
Total Shareholders Equity $ 136,001 $ 2,117
Total Liabilities and Shareholders
Equity $ 287,699 $ 14,441
Financing activity generated non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. and premium redemption charges Redemption charge The commission a mutual fund charges an investor who is redeeming shares. For example, a 2% redemption charge (also called a back end load) on the sale of shares valued at $1000 will result in payment of $980 (or 98% of the value) to the investor. of $2.694 million including a warrant amortization cost using the Black-Scholes method of calculation of $872,600, on the Series D Preferred, for the period July 31, 2006. Net earnings after interest and amortization expenses for the period were negative $3,350 million or a loss of $0.15 per share, excluding non-cash and premium redemption charges net earnings after interest and amortization charges was a negative $657 thousand or $.02 per share. An earnings report conference call is being scheduled, with the date, time and call-in number to be announced To be announced (TBA) A contract for the purchase or sale of an MBS to be delivered at an agreed-upon future date but does not include a specified pool number and number of pools or precise amount to be delivered. next week. About Charys Holding Company, Inc. Headquartered in Atlanta, Georgia, Charys Holding Company, Inc. (OTC Bulletin Board OTC Bulletin Board An electronic quotation listing of the bid and asked prices of OTC stocks that do not meet the requirements to be listed on the NASDAQ stock-listing system. : CHYS.OB) is a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. focusing on the Integrated Infrastructure Services Market. This market segment is fundamentally focused on environmental remediation Generally, remediation means providing a remedy, so environmental remediation deals with the removal of pollution or contaminants from environmental media such as soil, groundwater, sediment, or surface water for the general protection of human health and the environment or from a and on upgrading the underpinning, infrastructure, and back office operations of the telecommunication, cable, electric, and Internet industries serving consumers, businesses and government entities. Charys' principal strategy is to acquire, through mergers and acquisitions, companies that support this underserved segment. Charys subsidiaries include: Viasys Services, Inc., Personnel Resources of Georgia, Inc., Method IQ, Inc., CCI Telecom, Inc., Aeon Technologies, Inc., Digital Communication Services, Inc., Ayin Holding Company, Inc., Crochet & Borel Services, Inc., Complete Tower Sources, Inc., and Mitchell Site Acq. Inc. For more information about Charys visit http://www.charys.com. About Corporate Evolutions, Inc. Headquartered in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , Corporate Evolutions, Inc. is the ultimate concierge service in the financial industry. Corporate Evolutions, Inc. specialize in providing a multi-faceted suite of services custom designed to each of our client's needs in order to increase market awareness and facilitate corporate growth. Specializing in 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. , Corporate Evolutions, Inc. works in close partnership with our clients to achieve maximum presence in the Wall Street community by leveraging our existing relationships with our broad based network of broker-dealers, fund managers, and Investment funds Noun 1. investment funds - money that is invested with an expectation of profit investment assets - anything of material value or usefulness that is owned by a person or company . For more information visit: http://www.corporateevolutions.com/chys.php and http://www.corporateevolutions.com/ NOTE: The names of actual companies and products mentioned herein may be the trademarks of their respective owners. Some statements in this release, including statements regarding management's expectations for future financial results and access to capital markets, are 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. . Investors are cautioned that these forward-looking statements regarding Charys Holding Company, Inc. and its subsidiaries and its and their operations and financial results involve risks and uncertainties, including without limitation risks of accessing capital markets on terms acceptable to Charys, downturns in economic conditions generally and in the telecommunications and data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. markets; risks in product development and market acceptance of and demand for Charys products; risks of failing to attract and retain key managerial and technical personnel; risks associated with competition and competitive pricing pressures; risks associated with investing in new businesses; risks related to intellectual property rights and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; risks in technology development and commercialization. |
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