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
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EMTEC, INC. REPORTS RESULTS FOR THE YEAR
ENDED MARCH 31, 2005
Net Income Increased by 346.3 % for the year ended March 31, 2005,
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Compared to the year ended March 31, 2004
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TRENTON, N.J., June 29, 2005 - 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, 2005.
Net income for the year ended March 31, 2005 rose to $2.87 million, or
$0.37 per share compared to a net income of $642,988, or $0.09 per share, for
the year ended March 31, 2004, an increase of 346.3%.
Total revenues, which include services and consulting revenues and
procurement revenues, increased by 12.5% or $12.53 million, to $112.70 million
for the year ended March 31, 2005, compared to $100.17 million for the year
ended March 31, 2004. Income from continuing operation before income taxes for
the year ended March 31, 2005, rose to $3.60 million, from $741,433 for the year
ended March 31, 2004. These increased revenues and net income are mainly
attributable to computer roll-out projects for various school districts in
Georgia and Florida, and revenue growth in our commercial customer base as well
as continuous cost containment efforts undertaken by the Company. The reported
income from continuing operations before income taxes for the year ended March
31, 2005 includes a one-time charge of $470,000 associated with the sub-lease of
our New York office. Without this one-time charge, our income from continuing
operations before income taxes for the year ended March 31, 2005 would have been
approximately $4.07 million, compared to a income from continuing operations
before taxes of $741,433 for the year ended March 31, 2004, an increase of
449.3%.
John Howlett, CEO, noted, "We are pleased to deliver another year of
strong operating results, and proud to report the 6th consecutive quarter of
profitability for our Company. I would
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caution, however, that our performance for the fiscal year ended March 31, 2005,
and particularly its fourth fiscal quarter, may not be indicative of our future
operating results."
About Emtec, Inc.
Emtec, Inc. established in 1981, is a systems integrator focused on providing
technology solutions that enable its customers to effectively use and manage
their data to grow their businesses. Our areas of specialization in information
technology ("IT") include Communications (IP Telephony, Wireless Connectivity,
Cabling, Network Infrastructure), Data Availability (Remote Access, Messaging,
Management), Enterprise Computing (Enterprise Architecture, High Availability,
Server Consolidation, Data Management), and Managed Services (Network
Monitoring, Help Desk). Emtec's solutions are crafted to enable our customers to
become more efficient and effective, thereby giving them a competitive
advantage.
# # #
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."
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EMTEC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended March 31,
2005 2004 Change %
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Revenues
Procurement services $ 97,605,588 $ 82,184,744 $ 15,420,844 18.8%
Service and consulting 15,094,410 17,986,564 $ (2,892,154) -16.1%
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Total Revenues 112,699,998 100,171,308 $ 12,528,690 12.5%
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Cost of Revenues
Procurement services 85,879,341 74,282,388 $ 11,596,953 15.6%
Service and consulting 10,467,370 11,497,465 $ (1,030,095) -9.0%
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Total Cost of Revenues 96,346,711 85,779,853 $ 10,566,858 12.3%
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Percent of revenues 85.5% 85.6%
Gross Profit
Procurement services 11,726,247 7,902,356 $ 3,823,891 48.4%
Service and consulting 4,627,040 6,489,099 $ (1,862,059) -28.7%
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Total Gross Profit 16,353,287 14,391,455 $ 1,961,832 13.6%
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Percent of revenue 14.5% 14.4%
Operating Expenses
Sales, General & Administrative Expenses 12,532,580 13,321,726 $ (789,146) -5.9%
Interest Expense 217,860 328,296 $ (110,436) -33.6%
Loss on impairment, Goodwill -- -- $ -- N/M
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Total Operating Expenses 12,750,440 13,650,022 $ (899,582) -6.6%
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Percent of revenue 11.3% 13.6%
Income(Loss) From Continuing Operations 3,602,847 741,433 $ 2,861,414 385.9%
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Income From Discontinued Geothermal Operations, net tax 48,052 22,883 $ 25,169 110.0%
Gain on the Sale of the Geothermal Investment, net tax 208,278 -- $ 208,278 N/M
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Income (Loss) Before Income Tax 3,859,177 764,316 $ 3,094,861 404.9%
Income Tax Expense (Benefit) 989,317 121,328 $ 867,989 715.4%
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Net Income (Loss) $ 2,869,860 $ 642,988 $ 2,226,872 346.3%
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Income (Loss) Per Share - Basic $ 0.39 $ 0.09
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Income (Loss) Per Share - Diluted $ 0.37 $ 0.09
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N/M = not meaningful
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