Exhibit 99.1
Edgewater Technology, Inc.
Reports Second Quarter 2003 Financial Results
WAKEFIELD, Mass.--(BUSINESS WIRE)--July 23, 2003--
Sequential Revenue Growth of 19% and Year-Over-Year Growth of 28%
Custom development and system integration consulting firm,
Edgewater Technology, Inc. (NASDAQ: EDGW, www.edgewater.com,
"Edgewater Technology" or the "Company") today announced financial
results for the second quarter ended June 30, 2003.
Second Quarter Results
Actual financial results and utilization for the June 30, 2003
quarter were as follows:
-- Revenue increased 19% to $6.2 million, compared to $5.2
million in the first quarter of 2003 and increased 28%,
compared to revenue of $4.8 million during the second quarter
of 2002;
-- Gross profit increased to $2.9 million, compared to $2.3
million in the first quarter of 2003 and $1.9 million for the
second quarter of 2002;
-- Gross profit margin increased to 48%, compared to 45% in the
first quarter of 2003 and 40% for the second quarter of 2002;
-- Utilization was the highest it has been in twelve quarters,
improving to 83% for the second quarter, compared to 77%
during the first quarter of 2003 and 70% for the second
quarter of 2002;
-- Net income from continuing operations was $0.2 million, or
$0.01 per share, compared to net income from continuing
operations of $0.07 million, or $0.01 per share for the first
quarter and a net loss from continuing operations during the
second quarter 2002 of ($0.6) million or ($0.05) per share;
-- Positive cash flow from operating activities.
First Six Months of 2003
Actual financial results and utilization for the first six months
of 2003 were as follows:
-- Revenue increased 21% to $11.3 million, compared to $9.4
million during the first six months of 2002;
-- Gross profit increased to $5.3 million, compared to $3.1
million during the first six months of 2002;
-- Gross profit margin increased to 46%, compared to 33% during
the first six months of 2002;
-- Utilization improved to 80%, compared to 64% during the first
six months of 2002;
-- Net income from continuing operations was $0.2 million, or
$0.02 per share, compared to a net loss from continuing
operations for the first six months of 2002 totaling ($2.0)
million, or ($0.18) per share.
"We are pleased that our key metrics of revenue, gross profit
margins, operating income and utilization continued to climb for the
third consecutive quarter," said Shirley Singleton, President and CEO
of Edgewater Technology. "Although the economic climate remains
challenging, Edgewater Technology's strategy of focusing on the middle
market and key vertical industries coupled with strong fiscal
management continue to contribute to our improving metrics. Due to
traditional seasonality, we are anticipating a flat to slight increase
in revenue during the third quarter of 2003 and are cautiously
optimistic for the remainder of the year."
Conference Call
Edgewater Technology will host a conference call today, Wednesday,
July 23, at 10:00 a.m. (EST) to discuss the Company's quarterly
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 800-428-6051 (passcode 299307) from 12:00 a.m. EST Wednesday,
July 23 through 11:59 p.m. EST Monday, July 28.
About Edgewater Technology
Founded in 1992, Edgewater Technology, Inc. is an award-winning
technical consulting firm that specializes in custom software
development and systems integration services primarily to
middle-market companies and divisions of large 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 Six Months Ended
Ended
June 30, June 30,
2003 2002 2003 2002
------- ------- -------- ---------
Service revenues $6,158 4,811 $11,347 $9,393
Cost of services 3,219 2,873 6,087 6,278
------- ------- -------- ---------
Gross profit 2,939 1,938 5,260 3,115
Selling, general and
administrative 2,539 2,481 4,674 4,699
Depreciation and amortization
expense 223 242 427 532
Restructuring - - - 349
------- ------- -------- ---------
Operating income (loss) 177 (785) 159 (2,465)
Interest income and other, net 96 208 229 428
------- ------- -------- ---------
Income (loss) before income
taxes 273 (577) 388 (2,037)
Income tax provision 109 - 155 -
------- ------- -------- ---------
Net income (loss) from
continuing operations 164 (577) 233 (2,037)
Change in accounting principle - - - (12,451)
------- ------- -------- ---------
Net income (loss) $164 ($577) $233 ($14,488)
======= ======= ======== =========
BASIC AND DILUTED EARNINGS PER SHARE
From continuing operations $0.01 ($0.05) $0.02 ($0.18)
Net income (loss) $0.01 ($0.05) $0.02 ($1.25)
Weighted Average Shares
Outstanding - Basic 11,365 11,616 11,416 11,612
Weighted Average Shares
Outstanding - Diluted 11,554 11,616 11,553 11,612
EDGEWATER TECHNOLOGY, INC.
Summary Balance Sheet Information
(In thousands)
June December
30, 31,
2003 2002
(Unaudited)
------------ --------
Assets
- -------------------------------------------------
Cash and marketable securities $42,288 $46,782
Accounts receivable, net 4,157 2,647
Fixed assets, net 1,567 1,606
Deferred tax asset, net 22,397 22,884
Intangible assets, net 13,373 11,614
Prepaid expenses and Other assets 732 960
------------ --------
Total Assets $84,514 $86,493
============ ========
Liabilities and Equity
- -------------------------------------------------
Accounts payable & Accrued liabilities $2,862 $4,334
Accrued payroll & related liabilities 1,145 882
Other liabilities 186 240
Stockholders' Equity 80,321 81,037
------------ --------
Total Liabilities & Stockholders' Equity $84,514 $86,493
============ ========
Shares Outstanding 11,382 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 revenue, gross
margins, operating income, utilization and improving metrics. The
forward looking statements included in the Press Release relate to
future events or our future financial conditions or performance. Words
such as "continue," "remain," "anticipating," "focusing," "are" 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 currency 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) inability to integrate entities acquired by acquisition
quickly and effectively into the Company or its subsidiaries; (7) lack
of available growth opportunities; (8) the inability to maintain,
sustain or grow revenues; (9)failure of middle-market companies to
spend amounts on IT projects, whether short-term or long-term; and
(10) 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
Kevin R. Rhodes
Barbara Warren-Sica
781-246-3343