Exhibit 99.1
Edgewater Technology, Inc. Reports First Quarter 2003 Results;
Sequential Revenue Growth of 10.8%
WAKEFIELD, Mass.--(BUSINESS WIRE)--April 23, 2003--Custom
development and system integration consulting firm, Edgewater
Technology, Inc. (NASDAQ: EDGW, www.edgewater.com, "Edgewater
Technology" or the "Company") today reported financial results for the
first quarter 2003.
Actual financial results and utilization for the first quarter
2003 were as follows:
-- Revenue increased 10.8% to $5.2 million, compared to $4.7
million in the fourth quarter of 2002 and increased 13.2%
compared to $4.6 million reported for the first quarter 2002;
-- Gross profit increased to $2.3 million, compared to $1.9
million in the fourth quarter of 2002 and $1.2 million for the
first quarter 2002;
-- Gross profit margin increased to 45%, compared to 41% in the
fourth quarter of 2002 and 26% for the first quarter 2002;
-- Utilization improved to 77% for the first quarter, compared to
74% during the fourth quarter 2002 and 59% for the first
quarter 2002;
-- Net income from continuing operations was $0.07 million, or
$0.01 per share for the first quarter, compared to a net loss
from continuing operations of $7.5 million, or $0.65 per share
in the fourth quarter of 2002, which included a non-cash
charge for goodwill impairment of $7.4 million. Net loss from
continuing operations was $1.5 million, or $0.13 per share for
the first quarter of 2002;
-- Cash used in operating activities was $0.3 million for the
first quarter, as a result of large cash outflow for 2003
annual insurance renewals.
"As anticipated, Edgewater Technology achieved revenue growth
during the first quarter, while our key metrics of gross profit
margins and utilization have continued to improve for the past three
consecutive quarters," said Shirley Singleton, President and CEO of
Edgewater Technology. "Our revenue growth can be attributed to our
strategy of focusing on the middle market and key vertical industries.
During the first quarter, we won engagements with 5 new customers, of
which 3 were within our Insurance vertical, which aligns to the trend
we are experiencing of increased sales activity within our targeted
vertical markets."
Singleton continued, "New bid activity remains healthy, while
customers look to spend IT dollars on consolidating and integrating
systems that deliver hard economic benefits and a quick return on
investment. As we review our sales pipeline, we remain optimistic that
Edgewater Technology will continue to attain modest revenue growth and
profitability into the second quarter."
Conference Call
Edgewater Technology will host a conference call today, Wednesday,
April 23, at 10:00 a.m. (EST) to discuss the Company's first quarter
2003 results. To listen to the live call via the Internet, you can
participate by logging onto the Web cast at www.edgewater.com -
Investor Relations section or you can dial 800-915-4836 approximately
15 minutes prior to start of the call. A replay of the call can be
accessed via www.edgewater.com - Investor Relations section or by
dialing 1-800-428-6051 (passcode 288325) from 12:00 p.m. EST
Wednesday, April 23 through 11:59 p.m. EST Monday, April 28.
About Edgewater Technology, Inc.
Founded in 1992, Edgewater Technology, Inc. is an award-winning
consulting and systems integration firm that specializes in tailored
technology solutions for middle-market companies and divisions of
Global 2000 companies. Headquartered in Wakefield, Massachusetts, the
company has taken a partnership approach with its clients, targeting
strategic, mission-critical applications. Edgewater Technology
services its client base by leveraging a combination of leading-edge
technologies and proven reengineering techniques provided by its
network of national solutions centers strategically positioned across
the United States. For further information, visit www.edgewater.com or
call 781-246-3343.
Selected Financial Data:
EDGEWATER TECHNOLOGY, INC.
Statements of Operation
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
2003 2002
Service revenue $5,189 $4,582
Cost of services 2,868 3,405
Gross profit 2,321 1,177
Selling, general and administrative 2,135 2,218
Depreciation and amortization 204 290
Restructuring - 349
Operating (loss) income (18) (1,680)
Interest income and other, net 133 221
Income (loss) before income taxes 115 (1,459)
Income tax provision 46 -
Net income (loss) from continuing operations 69 (1,459)
Change in accounting principle - (12,451)
Net income (loss) $69 ($13,910)
BASIC AND DILUTED EARNINGS PER SHARE
From continuing operations $0.01 ($0.13)
Net income (loss) $0.01 ($1.20)
Weighted Average Shares Outstanding - Basic 11,473 11,607
Weighted Average Shares Outstanding - Diluted 11,557 11,607
EDGEWATER TECHNOLOGY, INC.
Summary Balance Sheet Information
(In thousands)
March 31, December 31,
2003 2002
(Unaudited)
Assets
Cash and marketable securities $44,840 $46,782
Accounts receivable, net 2,777 2,647
Fixed assets, net 1,565 1,606
Deferred tax asset, net 22,838 22,884
Intangible assets, net 11,531 11,614
Prepaid expenses and Other assets 851 960
Total Assets $84,402 $86,493
Liabilities and Equity
Accounts payable & Accrued liabilities $2,158 $4,332
Accrued payroll & related liabilities 1,198 882
Other liabilities 193 240
Stockholders' Equity 80,853 81,039
Total Liabilities & Stockholders' Equity $84,402 $86,493
Shares Outstanding 11,420 11,485
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, including statements made with respect to our sales pipeline,
utilization, revenue growth, sales activity, sales, profitability and
IT spending trends. The forward looking statements included in the
Press Release relate to future events or our future financial
conditions or performance, Words such as "will," "are," "provide,"
"continue," "remain," "optimistic" or the negative thereof or
variations thereon and similar expressions are intended to identify
forward-looking statements. These forward-looking statements
inherently involve certain risks and uncertainties, although they are
based on our current plans or assessments that are believed to be
reasonable as of the date of this Press Release. Factors that may
cause actual results, goals, targets or objectives to differ
materially from those contemplated, projected, forecast, estimated,
anticipated, planned or budgeted in such forward-looking statements
include, among others, the following possibilities: (1) changes in
industry trends, such as decline in the demand for custom development
and system integration services and/or spending delays with existing
information technology services projects; (2) failure to obtain new
customers or retain significant existing customers; (3) loss of key
executives; (4) general economic and business conditions (whether
foreign, national, state or local) which include but are not limited
to changes in interest or currently exchange rates and the overall
demand for information technology services and/or spending delays for
existing information technology services; (5) failure of the general
economy or IT services spending to rebound or otherwise improve; (6)
lack of available growth opportunities; (7) the inability to maintain,
sustain or grow revenues; (8)failure of middle-market companies to
spend amounts on IT projects, whether short-term or long-term; and (9)
any changes in ownership of the Company or otherwise that would result
in a limitation on the use of the net operating loss carry forward
under applicable tax laws. Actual events or results may differ
materially from those discussed, contemplated, forecasted, estimated,
anticipated, planned or implied in the forward-looking statements as a
result of the various factors described above and those further set
forth under the heading "Business- Factors Affecting Finances,
Business Prospects and Stock Volatility" in the Company's Form 10-K
filed with the Securities and Exchange Commission on March 28, 2003.
CONTACT: Edgewater Technology, Inc.
Kevin R. Rhodes, 781/246-3343
Barbara Warren-Sica, 781/246-3343