Exhibit 99.1
enherent Corp. Reports First-Quarter Results
FOR IMMEDIATE RELEASE
May 12, 2003 (Windsor, CT) - - enherent Corp. (OTC BB: ENHT, www.enherent.com) (the “Company”) today reported first-quarter 2003 revenue of $3.7 million as compared to $4.4 million in the fourth quarter of 2002 and $5.9 million in first quarter 2002. The Company reported a net loss applicable to common stock of approximately $642,000, or $(0.04) per share in the first quarter as compared to approximately $189,000, or $(0.01) per share in the fourth quarter of 2002 and approximately $1.4 million, or $(0.08) per share, in the first quarter 2002.
In an effort to reduce costs and improve efficiency the Company plans to close its Dallas office in the third quarter of 2003. The Company recorded a charge of approximately $56,000 in the first quarter of 2003 for severance and stay bonuses related to the Dallas office closure. The Company estimates the total cost of the Dallas office closure at approximately $228,000.
In addition, the Company reported cash and cash equivalents of $2.5 million at the end of the first quarter 2003 as compared to $3.1 million at the end of the fourth quarter 2002. Days Sales Outstanding (DSO) was 48 days at the end of the first quarter 2003, as compared to 40 days at the end of the fourth quarter 2002. The Company had no long- or short-term debt on March 31, 2003, with the exception of a minimal amount under capital leases.
Bob Merkl, Chairman, President and Chief Executive Officer, commenting on the quarter said, “As in the previous several Quarters the Company continues to feel the effects of a generally depressed IT services market. Several of our key clients have had to initiate cost containment initiatives or postpone required work until later in the year. Our pipeline of fully qualified opportunities continues to grow and we remain well positioned for the inevitable break in pent up demand.”
about enherent
enherent Corp. (OTCBB:ENHT) is a leading provider of application development and integration solutions. Utilizing its Balanced Development Methodology(SM), enherent accelerates the design, development and delivery of discrete and seamless end-to-end solutions along the application development lifecycle. enherent addresses cross-industry business needs by focusing on the critical disciplines of project management, business requirements management and technology integration. enherent is headquartered in Windsor, Connecticut. The Company has a Solutions Center in Windsor, Connecticut and sales locations in Connecticut, Texas, Virginia, Massachusetts and the New York/New Jersey area. For more information visit www.enherent.com.
Forward-Looking and Cautionary Statements
Except for the historical information and discussions contained herein, statements contained in this release may constitute “forward- looking statements” within the meaning of the Private
-more-
Securities Litigation Reform Act of 1995. Such forward-looking statements are based on certain assumptions and analyses made by the Company derived from its experience and perceptions. Actual results and developments may vary materially from those described because they are subject to a number of known and unknown risks and uncertainties. Such risks and uncertainties include, but are not limited to, global political factors; future demand for the Company’s services; the impact of general economic and other conditions on the discretionary spend of our existing clients and our ability to obtain new business and reduce costs of providing services; the Company’s ability to recruit and retain IT professionals; competition in the industry and the impact of competition on pricing, revenues and margins; and various other factors discussed in the Company’s filings with the Securities and Exchange Commission including those set forth under Item 7 of enherent’s recent Form 10-K. The Company disclaims any intention or obligation to revise any forward-looking statements whether as a result of new information, future developments, or otherwise.
CONTACT INFORMATION:
Felicia A. Norvell
enherent Corp.
972-243-8345, ext. 229
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enherent Corp. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except number of shares)
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| March 31, |
| December 31, |
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| (unaudited) |
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Assets |
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Current assets: |
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Cash and equivalents |
| $ | 2,467 |
| $ | 3,067 |
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Accounts receivable, net of allowance of $48 at March 31, 2003 and $57 at December 31, 2002 |
| 1,940 |
| 1,926 |
| ||
Prepaid expenses and other current assets |
| 220 |
| 259 |
| ||
Total current assets |
| 4,627 |
| 5,252 |
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|
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Fixed assets, net |
| 358 |
| 477 |
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Other assets |
| 63 |
| 69 |
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Total assets |
| $ | 5,048 |
| $ | 5,798 |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accrued compensation |
| $ | 340 |
| $ | 283 |
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Accounts payable |
| 422 |
| 470 |
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Accrued expenses |
| 193 |
| 294 |
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Current portion of capital lease obligations |
| 9 |
| 14 |
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Deferred revenue |
| 32 |
| 171 |
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Total current liabilities |
| 996 |
| 1,232 |
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Capital lease obligations, net of current portion |
| 4 |
| 5 |
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Deferred rent |
| 51 |
| 58 |
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Total liabilities |
| 1,051 |
| 1,295 |
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Commitments and contingencies |
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Series A senior participating redeemable convertible preferred stock, $0.001 par value; authorized—10,000,000 shares; issued and outstanding—7,000,000 shares at March 31, 2003 and December 31, 2002 |
| 5,689 |
| 5,553 |
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Common stockholders’ equity (deficit): |
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Common stock, $0.001 par value; authorized—50,000,000 shares; issued—19,351,311 shares; outstanding—17,502,188 shares at March 31, 2003 and December 31, 2002 |
| 19 |
| 19 |
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Additional paid-in capital |
| 94,411 |
| 94,411 |
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Treasury stock, at cost—1,849,123 shares at March 31, 2003 and December 31, 2002 |
| (366 | ) | (366 | ) | ||
Accumulated deficit |
| (95,756 | ) | (95,114 | ) | ||
Total common stockholders’ equity (deficit) |
| (1,692 | ) | (1,050 | ) | ||
Total liabilities and stockholders’ equity |
| $ | 5,048 |
| $ | 5,798 |
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3
enherent Corp. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
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| Three Months Ended March 31, |
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| 2003 |
| 2002 |
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Revenues |
| $ | 3,653 |
| $ | 5,916 |
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Cost of revenues |
| 2,915 |
| 4,724 |
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Gross profit |
| 738 |
| 1,192 |
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Selling, general and administrative expenses |
| 1,248 |
| 2,988 |
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Loss from operations |
| (510 | ) | (1,796 | ) | ||
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Other income (expense): |
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Miscellaneous income (expense) |
| 3 |
| — |
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Interest expense |
| (2 | ) | (5 | ) | ||
Interest income |
| 3 |
| 16 |
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Net loss |
| (506 | ) | (1,785 | ) | ||
Preferred stock accretion net of benefit to common shareholders |
| (136 | ) | 400 |
| ||
Net loss available to common stockholders |
| $ | (642 | ) | $ | (1,385 | ) |
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Basic and diluted net loss per share applicable to common stockholders |
| $ | (.04 | ) | $ | (.08 | ) |
Number of shares used in computing basic and diluted net loss per share |
| 17,502 |
| 17,502 |
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