For Immediate ReleaseCONTACTS: |
| William Medve | John G. Nesbett | ||
| Chief Financial Officer | Lippert/Heilshorn & Associates | ||
| AlphaNet Solutions, Inc. | 212-838-3777 | ||
| 973-889-3826 | jnesbett@lhai.com | ||
| WMEDVE@ALPHANETSOLUTIONS.COM | |||
ALPHANET SOLUTIONS ANNOUNCES |
Erickson continued, “While revenues were down, we streamlined our business and improved our margins. For example, professional service gross margins increased year over year to 29.6% in the first quarter of 2003 from 25.7% in the first quarter of 2002.” Net sales decreased to $5.2 million for the first quarter of 2003 from $6.9 million for the first quarter of 2002. The decrease of $1.7 million was primarily due to a reduction in product sales of $1.3 million and a reduction in professional service revenues of $0.4 million. The decline in product sales is attributable to our exit from the product business due to the low margins associated with this business, as well as the January 2003 completion of the MTA contract subject to continuing warranty and change-order work. The downturn in technology spending has adversely impacted our professional service revenues. Gross profit increased by $0.6 million to $2.2 million for the first quarter of 2003 from $1.6 million for the first quarter of 2002. This increase was due to the favorable impact of the reduction in MTA contract-related liabilities of $0.7 million in the first quarter of 2003 offset by the decline in both product sales and professional service revenue during the first quarter of 2003. The gross profit percentage on product sales decreased by 9.6% to 1.0% in the first quarter of 2003, down from 10.6% in the first quarter of 2002. Professional service gross profits increased by 3.9% to 29.6% in the first quarter of 2003, up from 25.7 % in the first quarter of 2002. For our billable staff, we recorded $70,000 of severance compensation costs during the first quarter of 2003 and the first quarter of 2002, which has reduced professional service gross profit in these periods. Selling, general and administrative expenses increased by $0.3 million to $3.0 million in the first quarter of 2003, up from $2.7 million in the first quarter of 2002. This increase was primarily attributable to a non-employee stock option charge of $121,000 and various legal matters. Selling, general and administrative expenses in the first quarter of 2002 included $34,000 of severance costs. Due to declining interest rates, interest income, net, totaled $66,000 for the first quarter of 2003, down from $100,000 for the first quarter of 2002. In the first quarter of 2003, federal and state income tax benefits of $247,000 were offset by the establishment of a valuation allowance. In the first quarter of 2002, AlphaNet recorded $2.2 million of federal income tax benefits, reflecting expected federal income tax refunds related to the carryback of tax losses to prior years as a result of changes to the Internal Revenue Code enacted during the first quarter of 2002. No valuation allowance was recorded on federal income tax benefits of $366,000 generated in the first quarter of 2002. At March 31, 2003, AlphaNet had cash of $22.5 million, as compared to $22.9 million at December 31, 2002 and working capital of $25.0 million at March 31, 2003 as compared to $25.5 million at December 31, 2002. |
CIBER Acquisition Revised To All Cash DealOn May 6, 2003, AlphaNet’s agreement to be acquired by CIBER, Inc. was amended and restated as of April 21, 2003, to eliminate the stock element of the transaction and proceed with an all-cash deal at $4.05 per share. Consummation of the transaction is expected late in the second quarter to early in the third quarter, 2003. About AlphaNetAlphaNet Solutions, Inc. is a leading IT professional services firm. AlphaNet’s services include a range of outsourced solutions in three major IT practice areas: technology solutions, service desk solutions, and learning solutions. For information on AlphaNet’s complete range of services, please visit AlphaNet’s web site athttp://www.alphanetsolutions.com. Safe Harbor StatementCertain statements are included in this news release which are not historical and are “forward-looking,” and may be identified by such terms as “will,” “continuing,” “remaining,” and “expected,” or similar terms. Such forward-looking statements include risks and uncertainties, such as the uncertainties relating to shareholder approval of the proposed merger transaction with CIBER, Inc. and satisfaction of transaction closing conditions, as well as those related to AlphaNet’s contracts and other business risks, including, among other things, general and industry-specific economic conditions, the substantial variability of AlphaNet’s quarterly results, AlphaNet’s substantial reliance upon a concentrated number of key clients, AlphaNet’s ability to recruit and retain qualified technical and sales professionals, and other industry-wide market factors, all as detailed from time to time in AlphaNet’s filings with the Securities and Exchange Commission. These risks and uncertainties could cause actual results to differ materially from results expressed or implied by forward-looking statements contained in this document. These forward-looking statements speak only as of the date of this document. — Tables Follow — |
ALPHANET SOLUTIONS, INC. |
| For the Three Months ended March 31, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2003 | 2002 | |||||||
| Net sales: | ||||||||
| Product sales | $ | 96 | $ | 1,445 | ||||
| Professional services | 5,124 | 5,490 | ||||||
| 5,220 | 6,935 | |||||||
| Cost of sales: | ||||||||
| Product sales | 95 | 1,292 | ||||||
| Professional services | 3,606 | 4,077 | ||||||
| MTA contract liability adjustment | (700 | ) | - | |||||
| 3,001 | 5,369 | |||||||
| Gross Profit: | ||||||||
| Product sales | 1 | 153 | ||||||
| Professional services | 1,518 | 1,413 | ||||||
| MTA contract liability adjustment | 700 | - | ||||||
| 2,219 | 1,566 | |||||||
| Operating expenses: | ||||||||
| Selling, general & administrative | 3,036 | 2,747 | ||||||
| Operating loss | (817 | ) | (1,181 | ) | ||||
| Other income: | ||||||||
| Interest income | 66 | 100 | ||||||
| Other Income | - | 4 | ||||||
| 66 | 104 | |||||||
| Loss before income taxes | (751 | ) | (1,077 | ) | ||||
| (Benefit) expense for income taxes | 11 | (2,200 | ) | |||||
| Net income (loss) | $ | (762 | ) | $ | 1,123 | |||
| Basic and Diluted net income (loss) per share | $ | (0.12 | ) | $ | 0.17 | |||
| Weighted average number of common shares outstanding | 6,387 | 6,438 | ||||||
| Weighted average number of common and common equivalent | ||||||||
| shares outstanding | 6,387 | 6,438 | ||||||
ALPHANET SOLUTIONS, INC.CONSOLIDATED |
| March 31, 2003 | December 31, 2002 | |||||||
|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 22,472 | $ | 22,936 | ||||
| Accounts receivable, less allowance for doubtful accounts of | ||||||||
| $275 at March 31, 2003 and $415 at December 31, 2002 | 4,135 | 5,474 | ||||||
| Inventories | 65 | 123 | ||||||
| Income tax receivable | 2,600 | 2,600 | ||||||
| Prepaid expenses and other current assets | 669 | 421 | ||||||
| Total current assets | 29,941 | 31,554 | ||||||
| Property and equipment, net | 860 | 973 | ||||||
| Goodwill | 646 | 646 | ||||||
| Other assets | 10 | 10 | ||||||
| Total assets | $ | 31,457 | $ | 33,183 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | 542 | 1,057 | ||||||
| Accrued expenses | 1,645 | 1,727 | ||||||
| Deferred revenue | 1,490 | 1,168 | ||||||
| Accrued MTA contract liability | 1,279 | 2,091 | ||||||
| Total current liabilities | 4,956 | 6,043 | ||||||
| Total liabilities | 4,956 | 6,043 | ||||||
| Shareholders’ equity: | ||||||||
| Preferred stock -- $0.01 par value; authorized 3,000,000 | ||||||||
| shares, none issued | -- | -- | ||||||
| Common stock -- $0.01 par value; authorized 15,000,000 shares, | ||||||||
| 6,590,288 shares issued at March 31, 2003 and 6,588,413 shares | ||||||||
| issued at December 31, 2002 | 66 | 66 | ||||||
| Additional paid-in capital | 35,261 | 35,138 | ||||||
| Accumulated Deficit | (8,027 | ) | (7,265 | ) | ||||
| Treasury stock - at cost; 202,100 shares at March 31, 2003 | ||||||||
| and 202,100 shares at December 31, 2002 | (799 | ) | (799 | ) | ||||
| Total shareholders’ equity | 26,501 | 27,140 | ||||||
| Total liabilities and shareholders’ equity | $ | 31,457 | $ | 33,183 | ||||