Exhibit 99.1
Edgewater Technology, Inc. Reports Third Quarter 2003 Financial
Results; Sequential Revenue Growth of 13% and Year-Over-Year
Growth of 51%
WAKEFIELD, Mass.--(BUSINESS WIRE)--Oct. 22, 2003--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 third quarter ended September 30, 2003.
Third Quarter Results
Actual financial results and utilization for the September 30,
2003 quarter were as follows:
-- Revenue increased 13% to $6.9 million, compared to $6.2
million in the second quarter of 2003 and increased 51%,
compared to revenue of $4.6 million during the third quarter
of 2002;
-- Gross profit increased to $3.2 million, compared to $2.9
million in the second quarter of 2003 and $1.7 million for the
third quarter of 2002;
-- Gross profit margin was 46%, compared to 48% in the second
quarter of 2003 and 38% for the third quarter of 2002;
-- Utilization was 80% for the third quarter, compared to 83%
during the second quarter of 2003 and 66% for the third
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 $0.2 million, or $0.01 per share for the second
quarter and a net loss from continuing operations during the
third quarter 2002 of ($0.6) million or ($0.05) per share;
-- Positive cash flow from operating activities.
First Nine Months of 2003
Actual financial results and utilization for the first nine months
of 2003 were as follows:
-- Revenue increased 31% to $18.3 million, compared to $14.0
million during the first nine months of 2002;
-- Gross profit increased to $8.5 million, compared to $4.8
million during the first nine months of 2002;
-- Gross profit margin increased to 46%, compared to 35% during
the first nine months of 2002;
-- Utilization improved to 80%, compared to 65% during the first
nine months of 2002;
-- Net income from continuing operations was $0.4 million, or
$0.03 per share, compared to a net loss from continuing
operations for the first nine months of 2002 totaling ($2.6)
million, or ($0.22) per share.
"We are pleased to report that Edgewater Technology had another
solid quarter and continues to demonstrate its ability to attain
revenue growth and profitability in a challenging economic climate.
Our double-digit sequential and year-over-year revenue growth for the
third quarter is a result of organic growth coupled with a full
quarter of our most recent acquisition, northern Virginia-based
Intelix, Inc.," said Shirley Singleton, President and CEO of Edgewater
Technology.
Singleton concluded, "As we look ahead to the remainder of this
year, we continue to remain cautious when evaluating overall corporate
IT spending. Traditionally, the fourth quarter has been affected by
heavy holiday schedules and therefore, we are anticipating our revenue
to be flat for the fourth quarter. We are also guardedly optimistic
for modest revenue growth and continued profitability in 2004."
Conference Call
Edgewater Technology will host a conference call today, Wednesday,
October 22, at 10:00 a.m. (EST) to discuss the Company's third 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 307984) from 12:00 p.m. ET Wednesday,
October 22 through 11:59 p.m. ET Wednesday, October 29.
About Edgewater Technology
Founded in 1992, Edgewater Technology 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 Nine Months
Ended Ended
September 30, September 30,
2003 2002 2003 2002
------- ------- -------- ---------
Service revenues $6,934 4,590 $18,281 $13,982
Cost of services 3,729 2,864 9,816 9,142
------- ------- -------- ---------
Gross profit 3,205 1,726 8,465 4,840
Selling, general and
administrative 2,783 2,235 7,457 6,934
Depreciation and amortization
expense 262 232 689 763
Restructuring - - - 349
------- ------- -------- ---------
Operating income (loss) 160 (741) 319 (3,206)
Interest income and other, net 94 188 323 617
------- ------- -------- ---------
Income (loss) before income
taxes 254 (553) 642 (2,589)
Income tax provision 102 - 257 -
------- ------- -------- ---------
Net income (loss) from
continuing operations 152 (553) 385 (2,589)
Change in accounting
principle - - - (12,451)
------- ------- -------- ---------
Net income (loss) $152 ($553) $385 ($15,040)
======= ======= ======== =========
BASIC AND DILUTED EARNINGS PER SHARE
From continuing operations $0.01 ($0.05) $0.03 ($0.22)
Net income (loss) $0.01 ($0.05) $0.03 ($1.30)
Weighted Average Shares
Outstanding - Basic 11,393 11,527 11,409 11,599
Weighted Average Shares
Outstanding - Diluted 11,701 11,527 11,564 11,599
EDGEWATER TECHNOLOGY, INC.
Summary Balance Sheet Information
(In thousands)
September December
30, 31,
2003 2002
(Unaudited)
------------ --------
Assets
- -------------------------------------------------
Cash and marketable securities $42,668 $46,782
Accounts receivable, net 4,536 2,647
Fixed assets, net 1,426 1,606
Deferred tax asset, net 22,295 22,884
Intangible assets, net 13,262 11,614
Prepaid expenses and other assets 524 960
------------ --------
Total Assets $84,711 $86,493
============ ========
Liabilities and Equity
- -------------------------------------------------
Accounts payable & accrued liabilities $2,386 $4,334
Accrued payroll & related liabilities 1,698 882
Other liabilities 171 240
Stockholders' Equity 80,456 81,037
------------ --------
Total Liabilities & Stockholders' Equity $84,711 $86,493
============ ========
Shares Outstanding 11,407 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, Inc.
Kevin R. Rhodes, Chief Financial Officer
Barbara Warren-Sica, Investor Relations
781-246-3343