Exhibit 99.1
Contacts:
John Howlett Sam Bhatt
Chief Executive Officer Vice President - Finance
Emtec, Inc. Emtec, Inc.
Tel: 609-528-8500 Tel: 609-528-8500
Fax: 866-422-3640 Fax: 815-346-7605
Email:john_howlett@emtecinc.com Email:sam_bhatt@emtecinc.com
Website: www.emtecinc.com Website: www.emtecinc.com
EARNINGS RELEASE
EMTEC, INC. REPORTS RESULTS FOR THE YEAR
ENDED MARCH 31, 2004
Net Income Increased by 404.05 % for the year ended March
31, 2004, Compared to the year ended March 31, 2003
TRENTON, N.J., June 25, 2004 - Emtec, Inc. (OTCBB:ETEC), a systems
integrator providing technology solutions to enable customers to effectively use
and manage data to grow their business, announced today its results for the year
ended March 31, 2004.
Net income for the year ended March 31, 2004, rose to $642,988 or $0.09
per share compared to a net loss of $(211,471) or $(0.03) per share for the year
ended March 31, 2003. Management attributed this increase in net income to a
53.59% or $2.26 million increase in services and consulting gross profits. The
increase in services and consulting gross profits was mainly attributable to
installation services associated with computer roll-out projects for the various
state agencies in the State of New Jersey, and school districts in Georgia and
Florida as well as the company's ability to manage its utilization rates
(billable hours divided by paid hours) of engineers more effectively.
John Howlett, CEO, Emtec, Inc., said, "While we are pleased with this
improvement in performance, we have continued to focus on increasing sales while
simultaneously restructuring to reduce overhead costs. Since April 1st, we have
consolidated all New Jersey operations in one facility at 572 Whitehead Rd. in
Trenton, NJ, with a small sales office at 354 North Avenue in Cranford, NJ. The
closing of the former Cranford and Mt. Laurel, NJ offices and warehouses, will
result in an approximate cost savings of $170,000 annually in rent and
utilities."
Effective July 1, we will begin outsourcing our NOC (Network Operation
Center) and Help Desk operations to a third party. By outsourcing this part of
our business, we will be able to continue to offer these strategic services
while allowing us to eliminate an unprofitable part of our business. Through
this relationship we expect to be able to enhance our support offering and
continue to pursue our strategic plan for managed services.
Effective June 21st, we have reorganized management of our Northeast
Region to bring more focus to sales and customer service. With all of these
changes solidly in place by the end of the first quarter, we are excited about
our prospects for fiscal 2005.
About Emtec, Inc.
Emtec, Inc. established in 1981, provides IT solutions for government,
education and commercial clients throughout the eastern seaboard. The Company
specializes in evaluating and providing services for Managed Services
(monitoring/maintenance/helpdesk), Data Management (storage and protection of
data), Communications (wireless, VoIP, cabling), Data Access, Enterprise
Infrastructure (design and implementation), and IT Consulting.
# # #
Certain statements in this document constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors, which may cause the actual results, performance or achievements
of Emtec, Inc. ("the Company"), or industry results, to be materially different
from any future results, performance, or achievements expressed or implied by
such forward-looking statements. The Company's future operating results are
dependent upon many factors, including but not limited to the Company's ability
to: (i) obtain sufficient capital or a strategic business arrangement to fund
its plan of operations when needed; (ii) build the management and human
resources and infrastructure necessary to support the growth of its business;
(iii) competitive factors and developments beyond the Company's control; and
(iv) other risk factors discussed in the Company's periodic filings with the
Securities and Exchange Commission which are available for review at WWW.SEC.GOV
under "Search for Company Filings."
EMTEC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended March 31,
2004 2003 Change %
- --------------------------------------------------------------------------------------------------------------
Revenues
Procurement services $ 82,184,744 $75,943,230 $6,241,514 8.22%
Service and consulting 17,986,564 16,140,896 $1,845,668 11.43%
Geothermal 190,346 175,902 $14,444 8.21%
------------ -----------
Total Revenues 100,361,654 92,260,028 $8,101,626 8.78%
------------ -----------
Cost of Revenues
Procurement services 74,282,388 67,525,430 $6,756,958 10.01%
Service and consulting 11,497,465 11,915,844 $ (418,379) -3.51%
Geothermal 108,782 72,476 $36,306 50.09%
------------ -----------
Total Cost of Revenues 85,888,635 79,513,750 $6,374,885 8.02%
------------ -----------
Percent of revenues 85.58% 86.18%
Gross Profit
Procurement services 7,902,356 8,417,800 $ (515,444) -6.12%
Service and consulting 6,489,099 4,225,052 $2,264,047 53.59%
Geothermal 81,564 103,426 $ (21,862) -21.14%
------------ -----------
Total Gross Profit 14,473,019 12,746,278 $1,726,741 13.55%
------------ -----------
Percent of revenue 14.42% 13.82%
Operating Expenses
Sales, General & Administrative Expenses 13,376,048 12,574,667 $ 801,381 6.37%
Termination costs - - -
Interest Expense 328,296 160,803 $ 167,493 104.16%
Loss on impairment, Goodwill - 254,894 $ (254,894) N/M
E-Business costs - -
------------ -----------
Total Operating Expenses 13,704,344 12,990,364 $ 713,980 5.50%
------------ -----------
Percent of revenue 13.65% 14.08%
Income (Loss) Before Income Tax 768,675 (244,086) $1,012,761 414.92%
Income Tax Expense (Benefit) 125,687 (32,615) $ 158,302 485.37%
------------ -----------
Net Income (Loss) $ 642,988 $ (211,471) $ 854,459 404.05%
============ =========== ========== ======
Income (Loss) Per Share (Basic And Diluted) $ 0.09 $ (0.03)
============ ===========
EMTEC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended March 31,
2003 2002 Change %
- -------------------------------------------------------------------------------------------------------------
Revenues
Procurement services $75,943,230 $50,813,243 $25,129,987 49.46%
Service and consulting 16,140,896 11,654,978 $ 4,485,918 38.49%
Geothermal 175,902 187,978 $ (12,076) -6.42%
----------- -----------
Total Revenues 92,260,028 62,656,199 $29,603,829 47.25%
----------- -----------
Cost of Revenues
Procurement services 67,525,430 44,832,526 $22,692,904 50.62%
Service and consulting 11,915,844 7,693,460 $ 4,222,384 54.88%
Geothermal 72,476 63,083 $ 9,393 14.89%
----------- -----------
Total Cost of Revenues 79,513,750 52,589,069 $26,924,681 51.20%
----------- -----------
Percent of revenues 86.18% 83.93%
Gross Profit
Procurement services 8,417,800 5,980,717 $ 2,437,083 40.75%
Service and consulting 4,225,052 3,961,518 $ 263,534 6.65%
Geothermal 103,426 124,895 $ (21,469) -17.19%
----------- -----------
Total Gross Profit 12,746,278 10,067,130 $ 2,679,148 26.61%
----------- -----------
Percent of revenue 13.82% 16.07%
Operating Expenses
Sales, General & Administrative Expenses 12,574,667 8,995,255 $ 3,579,412 39.79%
Termination costs - 21,746 (21,746) N/M
Interest Expense 160,803 210,305 $ (49,502) -23.54%
Loss on impairment, Goodwill 254,894 - $ 254,894 N/M
E-Business costs - 617,220 $ (617,220) N/M
Total Operating Expenses 12,990,364 9,844,526 $ 3,145,838 31.96%
Percent of revenue 14.08% 15.71%
Income (Loss) Before Income Tax (244,086) 222,604 $ (466,690) -209.65%
Income Tax Expense (Benefit) (32,615) 5,632 $ (38,247) -679.10%
----------- -----------
Net Income (Loss) $ (211,471) $ 216,972 $ (428,443) -197.46%
=========== =========== =========== ========
Income (Loss) Per Share (Basic And Diluted) $ (0.03) $ 0.03
=========== ===========
N/M = not meaningful