Filed by TekInsight.Com, Inc.
pursuant to Rule 425 under the
Securities Act of 1933, as amended
Subject Company: TekInsight.com, Inc.
Commission File No.: 1-11568
[GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE
FOR MORE INFORMATION, CONTACT:
Linda Wise
Investor Relations
TekInsight
949-955-0078, ext. 115
lwise@tekinsight.com
TEKINSIGHT ANNOUNCES FIRST FISCAL QUARTER RESULTS
AND PROVIDES MERGER UPDATE
Performance Improving as Close of Merger Approaches
IRVINE, CA - NOVEMBER 15, 2001 - TekInsight.com, Inc. (Nasdaq: TEKS, TEKSP,
TEKSW) today announced results for its first fiscal quarter ended September 30,
2001. The company also released selected unaudited financial data from the
results of DynCorp Management Resources (DMR) for the same period and updated
certain pro forma information described in its proxy statement, which was
delivered to shareholders on November 6, 2001.
The company's revenues for the first quarter of fiscal year 2002 were $11.6
million, up from $8.1 million in the same period last year. Gross profit from
sales increased to $2.4 million during the first quarter, up from $1.9 million
during the same quarter in fiscal 2001. Operating costs decreased to $3.8
million from $4.0 million during the prior year period. Net loss from continuing
operations was $1.6 million, compared to $2.2 million during the same period
last year. Net loss per share was $0.08 for the fiscal quarter and $0.13 during
the prior year period.
"Results for the quarter reflect the progress that we are achieving," stated
Steve Ross, TekInsight's chief executive officer. "The trends in our company's
sales, margins and operating costs are all favorable and are within
expectations. Our continuing growth and improvement in results are reflective of
the strong, consistent demand for our services in the state and local government
market. Information technology design and support services, along with the
business process outsourcing services of our merger partner DMR, represent a
rapidly expanding requirement for our customers."
Mr. Ross continued, "Our company is on schedule for the completion of the merger
with DMR which is presently planned for the week of November 26, 2001, assuming
approval by shareholders during their shareholders' meeting on November 20,
2001, and the meeting and satisfaction of various conditions precedent to
closing that are described in the merger agreement."
- MORE -
-2-
PRO FORMA INFORMATION
On a pro forma basis reflecting the combination of TekInsight and DMR as if it
had occurred for the entire quarter ended September 30, 2001, after taking into
consideration pro forma adjustments for nonrecurring merger expenses of $165,000
and overhead allocation charged to DMR from DynCorp of $91,000, the company
provided the following information:
o Combined revenues were $25.5 million for the quarter.
o EBITDA was approximately $0.2 million for the quarter.
o DMR backlog for business process outsourcing services of approximately
$164 million at September 30, 2001.
o Additionally, TekInsight's estimated total contracted value for
outsourced IT services, or the estimated future revenues to be
generated under existing master contracts and approved vendor
relationships, was approximately $45 million at September 30, 2001.
The company provided guidance for its forecast of future results, on a pro forma
basis reflecting the combination of TekInsight and DMR. For the fiscal quarter
ending December 31, 2001, assuming the merger occurred at the beginning of the
quarter, the company forecasts that total combined pro forma revenues would be
approximately $27 million, with EBITDA margin of approximately 1.5%. For the
fiscal year ending June 30, 2002, assuming the merger had occurred at the
beginning of the fiscal year, revenues are forecast to be approximately $115
million, with gross margins of approximately 17% and EBITDA margin of
approximately 3%. Fiscal 2003 revenues are forecast to be approximately $150
million, with gross margins of approximately 19.5% and EBITDA margin of
approximately 6.5%. On a combined basis, the company currently anticipates
reaching net income profitability beginning in late fiscal 2002.
On November 1, 2001, the company issued short-term convertible notes payable of
approximately $1.8 million. Interest costs during fiscal 2002 will include
non-cash finance costs from options issued in connection with the short-term
notes payable, of approximately $967,000, and loan fees of $176,000, both of
which will be recorded during the quarter ended December 31, 2001. The company's
cash position of $1.1 million at September 30, 2001 was increased by net
receipts from short-term notes payable after that date of $1.3 million.
(tables follow)
-MORE-
-3-
ABOUT TEKINSIGHT
TekInsight helps governments transform by using innovative technology and
management techniques to increase efficiency in government operations and
improve access to government functions. The company's comprehensive Government
Transformation Methodology includes consulting, systems integration,
e-government application development, legacy integration and support.
TekInsight's ePluribus(TM) Software Suite is comprised of custom and modular
e-government applications that enable governments to process tax and violation
payments, licenses, parks & recreation management, deeds and more online and in
real-time. TekInsight's ProductivIT(TM) suite of Internet-based applications is
a completely customizable IT support enhancement tool designed to aid in the
diagnosis and resolution of hardware and software application issues in any size
environment. For additional information on TekInsight, please visit
WWW.TEKINSIGHT.COM.
# # #
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors created thereby. Investors are cautioned that
certain statements in this release are "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and involve
known and unknown risks, uncertainties and other factors. Such uncertainties and
risks include, among others, certain risks associated with the operation of the
company described above, completion of the DMR merger and successful integration
of DMR with TekInsight, the continuation of existing contracts and vendor
relationships to full term without a material decrease in current levels of
activity thereunder, continuation in budgetary support for existing contracts
and vendor relationships, government regulation, and general economic and
business conditions. Actual events, circumstances, effects and results may be
materially different from the results, performance or achievements expressed or
implied by the forward-looking statements. Consequently, the forward-looking
statements contained herein should not be regarded as representations by
TekInsight, or any other person that the projected outcomes can or will be
achieved.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
TekInsight mailed a Proxy Statement to its shareholders with respect to the
proposed merger on November 6, 2001. Shareholders are urged to read the Proxy
Statement carefully. The Proxy Statement contains important information
regarding TekInsight, DMR, the proposed merger, the persons soliciting proxies
relating to the proposed merger, their interests in the proposed merger and
other related matters. Shareholders may obtain free copies of the Proxy
Statement and any other relevant documents through the website maintained by the
U.S. Securities and Exchange Commission (the "SEC") at http://www.sec.gov, or
through TekInsight's website at http://www.tekinsight.com. Free copies of the
Proxy Statement and any other relevant documents may also be obtained from
TekInsight by directing a request to TekInsight.com, Inc., 18881 Von Karman
Avenue, Suite 250, Irvine, California 92612, attention: Linda Wise, telephone:
(949) 955-0078, ext. 115.
In addition to the Proxy Statement, TekInsight files annual, quarterly and
special reports and other information with the SEC. You may read and copy any
reports, statements or other information filed by TekInsight at the SEC's public
reference room at 450 Fifth Street, N.W., Washington D.C. 20549 or at any of the
SEC's other public reference rooms in New York, New York and Chicago, Illinois.
Please call the SEC at 1-800-SEC-0330 for further information regarding the
public reference rooms. TekInsight's filings with the SEC are also available to
the public from commercial document-retrieval services and through the website
maintained by the SEC at http://www.sec.gov.
TekInsight and its directors, executive officers and certain other employees and
members of management may be deemed to be soliciting proxies from shareholders
of TekInsight in favor of the proposed merger. Information concerning the
participants in the solicitation, including a description of their direct and
indirect interest in TekInsight, is set forth in TekInsight's report on Form
10-K for the year ended June 30, 2001. Updated information concerning the
participants is set forth in the Proxy Statement.
-4-
FINANCIAL HIGHLIGHTS
(in thousands of dollars, except per share data)
- --------------------------------------------------------------------------------
Quarter Ended
TEKINSIGHT September 30,
2001 2000
---- ----
Selected Statement of Operations Data: (unaudited)
- --------------------------------------
Total revenues 11,585 8,147
Gross profit 2,436 1,852
EBITDA (786) (1,732)
Net loss (1,653) (2,195)
Loss per share (0.08) (0.13)
Weighted average shares outstanding,
basic and diluted 20,924 16,295
Selected Balance Sheet Data:
Total current assets 11,981 12,555
Total assets 32,724 33,997
Total current liabilities 17,716 17,540
Total stockholders' equity 14,738 16,235
- --------------------------------------------------------------------------------
DYNCORP MANAGEMENT RESOURCES Quarter Ended
September 30,
2001
----
(unaudited)
Total service revenues 13,925
Gross profit from services 1,690(a)
EBITDA 744
- --------------------------------------------------------------------------------
PRO FORMA COMBINED RESULTS Quarter Ended
September 30,
2001
----
(unaudited)
Total service revenues 25,510
Gross profit from services 4,126(a)
EBITDA 214
- --------------------------------------------------------------------------------
(a) Reflects a reclassification of $742,000 DMR Division G&A expenses from cost
of revenues to SG&A, to conform with future accounting treatment.