Exhibit 99.1
Edgewater Technology Announces Results for First Quarter 2004;
Year-over-Year Revenue Growth of 24%
WAKEFIELD, Mass.--(BUSINESS WIRE)--April 21, 2004--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
its first quarter 2004.
Actual financial results and utilization for the first quarter
2004 were as follows:
-- Revenue decreased 5% to $6.4 million, compared to $6.8 million
in the fourth quarter of 2003 and increased 24%, compared to
revenue of $5.2 million during the first quarter of 2003;
-- Gross profit was $2.6 million, compared to $3.0 million in the
fourth quarter of 2003 and $2.3 million during the first
quarter of 2003;
-- Gross profit margin was 40%, compared to 45% in the fourth
quarter of 2003 and 45% during the first quarter of 2003;
-- Utilization was 76% for the first quarter, compared to 74%
during the fourth quarter of 2003 and 77% for the first
quarter of 2003;
-- Income before taxes was $0.1 million, or $0.01 per share for
the first quarter, compared to $0.3 million, or $0.03 per
share during the fourth quarter of 2003 and $0.1 million, or
$0.01 per share during the first quarter of 2003.
-- Net income amounted to $0.07 million or $0.01 per share;
-- Cash flow used in continuing operations was $1.5 million
during the first quarter.
"As a natural evolution to Edgewater's vertical industry focus,
strategy and design opportunities have taken center stage in our sales
pipeline. These potential engagements represent the front-end of the
buying cycle and are substantially larger than the average first bids
experienced during 2003. Infrastructure optimization services,
although smaller in dollar value, are closing at a fast pace," stated
Shirley Singleton, President and CEO of Edgewater Technology. "Our
strong credentials, particularly in Insurance and Higher Education,
have caused several prospects to entertain the idea of utilizing
Edgewater's services over a longer period of time. While these
potential multi-year deals take longer to close, it should be noted
that Edgewater's average hit rate on winning is steadily increasing."
Singleton continued, "We are pleased with our strong
year-over-year revenue growth and look forward to unlocking our sales
pipeline. To date, we have secured 6 new customers. While the longer
decision cycles will affect us from a sequential growth perspective,
the possibility of more multi-year contracts could bring steady
utilization and long-term growth."
Conference Call
Edgewater Technology will host a conference call today, Wednesday,
April 21, at 10:00 a.m. (EST) to discuss the Company's first quarter
2004 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 or 973-709-2089 (passcode 348379) from 12:00 p.m.
EST Wednesday, April 21 through 11:59 p.m. EST Wednesday, April 28.
About Edgewater Technology, Inc.
Founded in 1992, Edgewater Technology is an award-winning
consulting firm that specializes in combining strategic consulting,
technical knowledge, and industry domain expertise to develop
technology solutions that assist primarily middle-market companies and
divisions of Global 2000 companies to align their processes with their
purposes. This approach not only promotes increased efficiency, but
also supports increased effectiveness. Targeting strategic,
mission-critical applications, the Company collaborates with customers
to translate business goals into technical strategies. Headquartered
in Wakefield, Massachusetts, the Company services its client base
throughout its network of strategically positioned solutions centers.
For further information, visit www.edgewater.com or call 781-246-3343.
Selected Financial Data:
EDGEWATER TECHNOLOGY, INC.
Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
2004 2003
Service revenue $6,422 $5,189
Cost of services 3,841 2,868
Gross profit 2,581 2,321
Selling, general and administrative 2,382 2,135
Depreciation and amortization 193 204
Operating income (loss) 6 (18)
Interest income and other, net 101 133
Income before taxes 107 115
Income tax provision 42 46
Net income $65 $69
BASIC AND DILUTED EARNINGS PER SHARE
Net income $0.01 $0.01
Weighted Average Shares Outstanding - Basic 11,392 11,473
Weighted Average Shares Outstanding - Diluted 12,367 11,557
EDGEWATER TECHNOLOGY, INC.
Summary Balance Sheet Information
(In thousands)
March 31, December 31,
2004 2003
(Unaudited) (Unaudited)
Assets
Cash and marketable securities $42,434 $44,259
Accounts receivable, net 4,142 3,532
Fixed assets, net 1,249 1,309
Deferred tax asset, net 22,095 22,175
Intangible assets, net 13,031 13,135
Prepaid expenses and other assets 2,288 2,121
Total Assets $85,239 $86,531
Liabilities and Equity
Accounts payable & Accrued liabilities $3,083 $3,554
Accrued payroll & related liabilities 927 2,009
Other liabilities 28 84
Stockholders' Equity 81,201 80,884
Total Liabilities & Stockholders' Equity $85,239 $86,531
Shares Outstanding 11,422 11,366
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 2004 outlook
concerning revenues, sales, operating profitability, growth
opportunities and plans; and IT spending and decision-making 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," "provide," "focused," "believe," "continue," "remain,"
"optimistic," and "emerge," 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) the strength or visibility of the
Company's backlog of business for 2004; (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;
and (10) the failure to obtain predecessor entity tax records that are
not in our control and successfully resolve outstanding tax disputes.
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 30, 2004.
CONTACT: Edgewater Technology, Inc.
Kevin Rhodes, Chief Financial Officer
Barbara Warren-Sica, Investor Relations
781-246-3343