EXHIBIT 99.1
[TACT LOGO] COMPANY CONTACT: INVESTOR CONTACT:
Richard D. Falcone, CFO Joseph M. Zappulla
TACT Wall Street Consultants Corp.
732-499-8228 212-681-4100
rfalcone@tact.com jzappulla@wallstreetir.com
THE A CONSULTING TEAM ANNOUNCES FIRST QUARTER FINANCIAL RESULTS
NEW YORK, NY, MAY 05, 2005 - THE A CONSULTING TEAM (`TACT') (NASDAQ SMALLCAP:
TACX), AN IT AND BUSINESS PROCESS OUTSOURCING (BPO) SERVICES PROVIDER TO FORTUNE
1000 COMPANIES, TODAY REPORTED FINANCIAL RESULTS FOR ITS FIRST QUARTER ENDED
MARCH 31, 2005. THE COMPANY REPORTED REVENUE OF $6.1 MILLION, AN INCREASE OF
$314,000 OR 5.4 PERCENT OVER THE FIRST QUARTER OF THE PREVIOUS YEAR. THE COMPANY
REPORTED A NET LOSS OF $259,000 OR $0.12 PER SHARE, WHICH INCLUDES PRETAX
CHARGES OF $545,000 OF COSTS RELATED TO THE PENDING BUSINESS COMBINATION WITH
VANGUARD INFO-SOLUTIONS CORPORATION ("VANGUARD"), WHICH IS EXPECTED TO CLOSE
SHORTLY. THIS COMPARES TO NET EARNINGS OF $220,000 OR $0.10 PER DILUTED SHARE IN
THE FIRST QUARTER OF 2004.
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$ IN 000'S THREE MONTHS ENDED
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3-31-05 3-31-04
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Revenue $ 6,115 $ 5,801
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Gross profit $ 1,875 $ 1,681
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Net earnings/(loss) $ (259) $ 220
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Earnings per diluted share $ (0.12) $ 0.10
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Transaction Costs included
in Net loss above $ 545 $ -
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Gross margin during the first quarter was 30.7 percent, an increase of
approximately 2 percent from the first quarter of 2004 and virtually flat with
the previous quarter.
On January 23, 2004, the Company announced that it had agreed to combine its
business with Vanguard, a private global business process outsourcing, call
center and IT services company with operations in the US and India. Pursuant to
the terms of the agreement, which includes the issuance of 7.3 million new
shares of TACT common stock to Vanguard shareholders, TACT intends to pay a cash
dividend of $0.75 per share upon the consummation of the transaction to its
shareholders of record as of March 21, 2005.
"Excluding the $545,000 in transaction costs incurred during the quarter, TACT
would have generated its seventh consecutive quarter of net profitability,"
commented Shmuel BenTov, TACT's chairman and CEO. "We expect the proposed merger
with Vanguard to be completed shortly, which will mark a new era for TACT's
shareholders. In addition to a well respected IT services business, our
shareholders will also benefit from the fast growing, India based, business
processing outsourcing business. Our combined businesses should provide a solid
base for strong revenue and earnings growth."
Richard Falcone, TACT's chief financial officer, added, "We ended the first
quarter with a strong balance sheet. The company's current ratio of 3.02 was
virtually flat with the previous quarter level. While accounts receivable
increased to $4.5 million from $3.8 million at the end of the previous quarter,
our DSO remains very manageable at 59 days. Book value at the end of the quarter
was $2.88 per share, and we had no long term debt."
TACT intends to conduct a conference call to discuss its first quarter results
and its pending business combination with Vanguard when the transaction is
completed.
ABOUT TACT
TACT (Nasdaq SmallCap:TACX) is an end-to-end IT and Business Process Outsourcing
(BPO) services provider to Fortune 1000 companies, and other large
organizations. TACT through its SMART Approach, a leading edge set of end-to-end
solutions and services that include Strategy, Methodology, Architecture,
Resources and Tools provides its clients with modernization and development
services, which include systems that should be replaced and rewritten, enhanced,
converted or Web Enabled. More information about TACT(R) can be found at its web
site at http://www.tact.com
ABOUT VANGUARD
Vanguard was formed in 2000 and is a leading provider of value-added offshore
customer care and customer acquisition services, and business process
outsourcing ("BPO") solutions in the telecom, medical billing, financial
services, debt collection, claims processing, data processing and utility
sectors. Vanguard is also a provider of IT consulting and solutions services in
the area of telecommunications, web software development, network management and
enterprise - wide security. Vanguard has leveraged its global delivery model and
process expertise to rapidly become one of the leading off-shore BPO providers
and is well-positioned to grow within the BPO services market. Vanguard has
facilities in New Jersey, USA and Delhi and Bangalore, India
"Safe Harbor" Statements under the Private Securities Litigation Reform Act of
1995: Statements made in this press release which are not historical facts,
including those that refer to TACT plans, beliefs and intentions, are
"forward-looking statements" that involve risks and uncertainties. These risks
and uncertainties could cause actual results to differ materially from the
forward-looking statements, and include, but are not limited to, TACT's ability
to scale its existing and any new businesses. For a more complete description of
the risks that apply to TACT's business, please refer to the Company's filings
with the Securities and Exchange Commission. The Company's actual results may
differ materially from the results anticipated in these forward-looking
statements as a result of certain factors set forth under Risk Factors and
elsewhere in the Company's Annual Report on Form 10-K with the Securities and
Exchange Commission on March 25, 2005
*** Financial Statements Follow ***
THE A CONSULTING TEAM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
MARCH 31,
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2005 2004
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(UNAUDITED) (UNAUDITED)
Revenues $ 6,115,110 $ 5,801,072
Cost of revenues 4,240,279 4,119,429
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Gross profit 1,874,831 1,681,643
Operating expenses:
Selling, general & administrative 1,525,999 1,286,803
Transaction expense 545,412 -
Depreciation & amortization 60,189 120,274
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2,131,601 1,407,077
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Income (loss) from operations (256,770) 274,566
Other income(expense):
Interest expense, net 3,447 (3,736)
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Income (loss) before income taxes (253,323) 270,830
Provision (Benefit) for income taxes 5,921 50,906
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Net income (loss) $ (259,244) $ 219,924
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Net income (loss) earning per share:
Basic & Diluted $ (0.12) $ 0.10
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THE A CONSULTING TEAM, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 2005 DECEMBER 31, 2004
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(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 1,456,593 $ 2,493,104
Accounts receivable 4,467,430 3,810,759
Other current assets 635,536 399,704
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Total Current Assets 6,559,559 6,703,567
Investment at cost 112,059 87,059
Property and equipment, net 518,379 556,896
Intangibles and Goodwill, net 1,158,297 1,175,631
Deposits and Other 123,363 126,363
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Total Assets $ 8,471,657 $ 8,649,516
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 2,174,728 $ 2,213,139
Other liabilities 9,876 13,479
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Total liabilities 2,184,604 2,226,618
Total shareholders' equity 6,287,053 6,422,898
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Total liabilities and shareholders' equity $ 8,471,657 $ 8,649,516
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