1
Filed by Data Systems Network Corporation
pursuant to Rule 425 under the Securities
Act of 1933, as amended.
Subject Company: Data Systems Network Corporation
Commission File No.: 1-13424
[DATA SYSTEMS NETWORK CORPORATION LOGO]
- --------------------------------------------------------------------------------
PRESS RELEASE
- --------------------------------------------------------------------------------
DATA SYSTEMS NETWORK CORPORATION ANNOUNCES 1999 PROFIT
WITH IMPROVED CONTINUED OPERATIONS AND YEAR-END RESULTS
FARMINGTON HILLS, MICHIGAN - March 10, 2000-Data Systems Network Corporation
(OTC BB:DSYS) announced today that its net income for 1999 is $191,190 or
$.04 basic per share, compared to the 1998 net loss of $4,678,893 or $.96
basic per share.
The Company's loss in 1999 from operations declined significantly (38.5%) to
$787,062 from $1,279,461 in 1998 while revenues were substantially reduced
to $52,825,535 in 1999 from $85,323,500 in 1998, as the Company continued to
reduce the equipment component of its business. The 1999 loss from
operations includes non-recurring professional fees related to the proposed
merger in the first quarter and, losses from unprofitable operations that
the Company was required to maintain under the restrictive terms of a merger
agreement. That agreement was subsequently terminated on September 15, 1999.
Offsetting the loss from operations was other income of $978,252. The
primary component of other income was $1.1 million, which resulted from the
settlement of the shareholder lawsuit for an amount less than what was
anticipated. The net result is the Company reporting income of $191,190 for
1999.
On February 29, 2000, Data Systems and TekInsight.Com, Inc. (Nasdaq: "TEKS")
of New York, New York announced the signing of a definitive Agreement and
Plan of Merger.
Mike Grieves, CEO, stated, "We worked hard in 1999 to position the Company
as a major supplier of Internet, e-commerce and network services. With the
announcement of the TekInsight Agreement, we have access to technical
capabilities, which will allow us to provide a total enterprise solution in
the e-commerce marketspace to our existing customer base. The combined
offering of TekInsight's superior development capabilities and products in
the Internet and e-commerce areas and Data Systems' enterprise management,
applications development and network services will allow us to offer
innovative new services to our existing client base."
Mike Jansen, CFO, stated, "During 1999, Data Systems showed marked
improvement in operations despite the non-recurring expenses incurred. We
eliminated non-profitable sales offices and reduced our overhead to improve
our margins. In 2000, the merger should allow us to offer customers a wider
range of technical services which carry higher profit margins."
Data Systems, the Computer Associates 1999 New Business Partner of the Year,
has more than 13 years of experience providing strategic technology
solutions to Fortune 1000 companies and over 16 state and local government
agencies. The company provides a wide range of services, including
Applications Development, Network Services, Enterprise Management, Help Desk
and Security Services. Data Systems provides computer network services and
products that enable the control of complex distributed computing
environments, allowing companies to capitalize on their investments in
technology and people. Data Systems also provides a wide range of network
integration services including installation, consultation,
2
technical support and training to governments and corporate accounts. For
more information visit www.datasystems.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 closing of the transaction described above, government
regulation, and general economic and business conditions. Actual events,
circumstances, effects and results maybe 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 Data Systems
or any other person that the projected outcomes can or will be achieved.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
TekInsight.com plans to file a Registration Statement on SEC Form S-4 in
connection with the merger with the Company, and TekInsight.com and the
Company expect to mail a Joint Proxy Statement/Prospectus to shareholders
of TekInsight.com and the Company containing information about the merger.
Investors and shareholders are urged to read the Registration Statement and
the Joint Proxy Statement/Prospectus carefully when they are available. The
Registration Statement and the Joint Proxy Statement/Prospectus will contain
important information about TekInsight.com, the Company, the merger, the
persons soliciting proxies relating to the merger, their interests in the
merger, and other related matters. Investors and shareholders will be able
to obtain free copies of these documents through the website maintained by
the U.S. Securities and Exchange Commission at http://www.sec.gov. Free
copies of the Joint Proxy Statement/Prospectus and these other documents may
also be obtained (when available) from TekInsight.com by directing a request
to TekInsight.com, Inc., 5 Hanover Square, 24th Floor, New York, New York
10004, attention: Investor Relations.
In addition to the Registration Statement and the Joint Proxy Statement/
Prospectus, TekInsight.com and the Company file annual, quarterly and
special reports, proxy statements and other information with the Securities
and Exchange Commission. You may read and copy any reports, statements or
other information filed by TekInsight.com or the Company at the SEC's public
reference room at 450 Fifth Street, N.W., Washington D.C. 20549 or at any of
the Commission's other public reference rooms in New York, New York and
Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for further
information on the public reference rooms. TekInsight.com's and the
Company's filings with the SEC are also available to the public from
commercial document-retrieval services and at the Web site maintained by the
SEC at http://www.sec.gov.
CONTACT:
MICHAEL JANSEN
DATA SYSTEMS NETWORK CORPORATION
(248) 489-8700
(248) 544-2086
MJANSEN@DATASYSTEMS.COM
3
DATA SYSTEMS NETWORK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
1999 1998 1997
REVENUES:
Product revenue $ 32,451,828 $ 63,530,818 $ 67,845,466
Service revenue 20,373,707 21,792,682 18,151,674
----------------- ----------------- -----------------
Total revenues 52,825,535 85,323,500 85,997,140
COST OF REVENUES:
Cost of products 26,608,898 52,213,508 59,227,854
Cost of services 16,216,325 19,024,585 14,287,978
----------------- ----------------- -----------------
Total cost of revenues 42,825,223 71,238,093 73,515,832
GROSS PROFIT 10,000,312 14,085,407 12,481,308
OPERATING EXPENSES:
Selling expenses 6,105,959 9,896,255 10,334,103
General and administrative expenses 4,681,415 5,468,614 5,814,607
----------------- ----------------- -----------------
Total operating expenses 10,787,374 15,364,869 16,148,710
LOSS FROM OPERATIONS (787,062) (1,279,461) (3,667,402)
OTHER INCOME (EXPENSE):
Shareholder settlement 1,137,500 (1,768,000) -
Loss on Sale of Equipment (385,419) - -
Interest income 109,957 109,592 375,856
Interest expense (564,859) (802,329) (1,616,723)
Other income 681,073 41,615 491,638
----------------- ----------------- -----------------
978,252 (2,419,121) (749,229)
Earnings (loss) before discontinued operations 191,190 (3,698,582) (4,416,631)
Loss before extraordinary items and
discontinued operations (3,698,582) (4,416,631)
DISCONTINUED OPERATIONS
Loss from operations of Unified Network Services - (1,686,054) (557,469)
Gain on Disposal of Unified Network Services - 705,742 -
----------------- ----------------- -----------------
- (980,311) (557,469)
----------------- ----------------- -----------------
NET EARNINGS (LOSS) $ 191,190 $ (4,678,893) $ (4,974,100)
================= ================= =================
Earnings (Loss) per common share - basic and diluted
Continuing operations $ 0.04 $ (0.76) $ (1.02)
Discontinued operations - (0.20) (0.13)
----------------- ----------------- -----------------
Net loss per common share $ 0.04 $ (0.96) $ (1.15)
================= ================= =================
Weighted average shares outstanding 5,204,703 4,859,224 4,324,229
================= ================= =================