Exhibit 99.1
Edgewater Technology, Inc. Reports Second Quarter 2004 Financial Results
WAKEFIELD, Mass.--(BUSINESS WIRE)--July 14, 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 the second quarter ended June 30, 2004.
Second Quarter Results
Actual financial results and utilization for the June 30, 2004 quarter were
as follows:
-- Revenue amounted to $6.1 million, compared to $6.4 million in the
first quarter of 2004 and compared to revenue of $6.2 million during
the second quarter of 2003;
-- Gross profit was $2.4 million, compared to $2.6 million in the first
quarter of 2004 and $2.9 million for the second quarter of 2003;
-- Gross profit margin was 39%, compared to 40% in the first quarter of
2004 and 48% for the second quarter of 2003;
-- Utilization was 71% for the second quarter, compared to 76% during the
first quarter of 2004 and 83% for the second quarter of 2003, and;
-- Net loss was ($0.04) million, or ($0.004) per share, compared to net
income of $0.1 million, or $0.01 per share for the first quarter of
2004 and to net income during the second quarter of 2003 of $0.2
million or $0.01 per share.
First Six Months of 2004
Actual financial results and utilization for the first six months of 2004
were as follows:
-- Revenue amounted to $12.6 million, compared to $11.3 million during
the first six months of 2003;
-- Gross profit amounted to $5.0 million, compared to $5.3 million during
the first six months of 2003;
-- Gross profit margin amounted to 40%, compared to 46% during the first
six months of 2003;
-- Utilization was 73%, compared to 80% during the first six months of
2003, and;
-- Net income was $0.02 million, or $0.002 per share, compared to net
income for the first six months of 2003 of $0.2 million, or $0.02 per
share.
"The challenges of longer decision cycles and general slow IT software
spending have affected us in the short run. However, potential engagements
continue to emerge in our pipeline and we remain optimistic that once these
opportunities unlock that they could bring steady utilization and long-term
growth for the Company," stated Shirley Singleton, President and CEO of
Edgewater Technology.
Singleton continued, "While we remain committed to improving our key
operating metrics for 2004, we do expect a decline in our third quarter revenue
due to traditional seasonality coupled with continued delays in spending."
Conference Call
Edgewater Technology will host a conference call today, Wednesday, July 14,
at 10:00 a.m. (EST) to discuss the Company's second 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 362039) from 12:00 p.m. EST
Wednesday, July 14 through 11:59 p.m. EST Wednesday, July 21.
About Edgewater Technology
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 Operation
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
--------- -------- -------- ---------
Service revenues $6,138 6,158 $12,560 $11,347
Cost of services 3,730 3,219 7,571 6,087
--------- -------- -------- ---------
Gross profit 2,408 2,939 4,989 5,260
Selling, general and
administrative 2,395 2,539 4,777 4,674
Depreciation and amortization
expense 197 223 390 427
--------- -------- -------- ---------
Operating (loss)
income (184) 177 (178) 159
Interest income and other, net 113 96 214 229
--------- -------- -------- ---------
(Loss) income before income
taxes (71) 273 36 388
Income tax (benefit) provision (28) 109 14 155
--------- -------- -------- ---------
Net (loss) income $(43) $164 $22 $233
========= ======== ======== =========
BASIC AND DILUTED EARNINGS PER SHARE
Net (loss) income $(0.004) $0.01 $0.002 $0.02
Weighted Average Shares
Outstanding - Basic 11,435 11,365 11,413 11,416
Weighted Average Shares
Outstanding - Diluted 12,200 11,554 12,288 11,553
EDGEWATER TECHNOLOGY, INC.
Summary Balance Sheet Information
(In thousands)
June 30, December 31,
2004 2003
(Unaudited) (Unaudited)
------------ -------------
Assets
- --------------------------------------------
Cash and marketable securities $42,302 $44,259
Accounts receivable, net 4,340 3,532
Fixed assets, net 1,229 1,309
Deferred tax asset, net 22,199 22,175
Intangible assets, net 12,928 13,135
Prepaid expenses and Other assets 2,173 2,121
------------ -------------
Total Assets $85,171 $86,531
============ =============
Liabilities and Equity
- --------------------------------------------
Accounts payable & Accrued liabilities $3,193 $3,554
Accrued payroll & related liabilities 612 2,009
Other liabilities 33 84
Stockholders' Equity 81,333 80,884
------------ -------------
Total Liabilities & Stockholders' Equity $85,171 $86,531
============ =============
Shares Outstanding 11,458 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 R. Rhodes, Chief Financial Officer
Barbara Warren-Sica, Investor Relations
781-246-3343