Exhibit 99.1
Edgewater Technology Reports Financial Results for First Quarter 2005;
Achieves 30% Year-Over-Year Net Revenue Growth
WAKEFIELD, Mass.--(BUSINESS WIRE)--April 20, 2005--A technology
management consulting firm specializing in providing premium IT
services, Edgewater Technology, Inc. (NASDAQ: EDGW, www.edgewater.com,
"Edgewater Technology" or the "Company"), today announced financial
results for first quarter ended March 31, 2005.
First Quarter Results
Actual financial results for the quarter ended March 31, 2005 were
as follows:
-- Net revenue increased 10.6% to $8.3 million, compared to $7.5
million in the fourth quarter of 2004 and increased 30.5%,
compared to revenue of $6.4 million during the first quarter
of 2004;
-- Gross profit increased 20.1% to $3.8 million, or 42.7% of
revenues, compared to $3.2 million, or 40.4% of revenues, in
the fourth quarter of 2004 and increased 48.1%, compared to
$2.6 million, or 40.2% of revenues, during the first quarter
of 2004;
-- Gross profit for services revenue was 45.8%, compared to 42.2%
in the fourth quarter of 2004 and 40.5% in the first quarter
of 2004;
-- Utilization was 81.5%, compared to 75.4% during the fourth
quarter of 2004 and 75.5% for the first quarter of 2004;
-- Income from continuing operations was $0.2 million, or $0.02
per diluted share, in both the first quarter of 2005 and the
fourth quarter of 2004, compared to income from continuing
operations during the first quarter of 2004 of $0.1 million,
or $0.01 per diluted share;
-- Net income amounted to $0.2 million, or $0.02 per diluted
share, compared to $0.4 million, or $0.04 per diluted share,
in the fourth quarter of 2004, which included a reversal of a
portion of the Company's fiscal 2003 accrual for discontinued
operations in the amount of $0.2 million, or $0.02 per diluted
share. Net income was $0.1 million, or $0.01 per share, in the
first quarter of 2004; and
-- Cash flow provided by operating activities was $1.4 million in
the first quarter of 2005, compared to cash flow provided by
operating activities of $1.5 million during the fourth quarter
of 2004 and cash flow used in operating activities of $(1.5)
million during the first quarter of 2004.
"Our first quarter results underscore the effectiveness of our
strategy in moving to premium IT service offerings. We were pleased to
see substantially improved operating metrics, sales activity and
revenue growth in the first quarter, along with the positive effects
of the Ranzal acquisition," stated Shirley Singleton, President and
CEO of Edgewater Technology.
"We are optimistic that our pipeline can support continued revenue
growth and profitability in the second quarter," said Singleton.
Conference Call
Edgewater Technology will host a conference call on Wednesday,
April 20, at 10:00 a.m. (ET) to discuss first-quarter 2005 financial
results. To listen to the call, you can participate by webcast at
www.edgewater.com - Investor Relations section or you can dial
866-761-0749 (passcode 66649398) approximately 10 minutes prior to the
call start. A replay of the call can be accessed via www.edgewater.com
- - Investor Relations section or by dialing 888-286-8010 (passcode
97757365) from 12:00 p.m. (ET) Wednesday, April 20 through 11:59 p.m.
(ET) Wednesday, April 27.
About Edgewater Technology, Inc.
Edgewater Technology, Inc. is an innovative technology management
consulting firm. We provide a unique blend of premium IT services by
leveraging our proven industry expertise in strategy, technology and
corporate performance management. Headquartered in Wakefield, MA, we
go to market by vertical industry and provide our clients with a wide
range of business and technology offerings. To learn more, visit
www.edgewater.com or call 800-410-4014.
Selected Financial Data:
EDGEWATER TECHNOLOGY, INC
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
----------------------
2005 2004
------------ ---------
Revenue:
Service revenues (net revenue) $8,309 $6,368
Software 274 -
Reimbursable expenses 376 54
------------ ---------
Total revenue 8,959 6,422
Cost of revenue:
Project and personnel costs 4,501 3,787
Software costs 261 -
Reimbursable expenses 376 54
------------ ---------
Total cost of revenue 5,138 3,841
------------ ---------
Gross profit 3,821 2,581
Selling, general and administrative 3,455 2,382
Depreciation and amortization expense 304 193
------------ ---------
Operating income 62 6
Interest income and other, net 252 101
------------ ---------
Income before income taxes 314 107
Provision for income taxes 126 42
------------ ---------
Net income $188 $65
============ =========
BASIC AND DILUTED EARNINGS PER SHARE:
Basic and diluted earnings per share $0.02 $0.01
============ =========
Weighted Average Shares Outstanding -
Basic 10,341 11,392
============ =========
Weighted Average Shares Outstanding -
Diluted 10,762 12,367
============ =========
EDGEWATER TECHNOLOGY, INC.
Summary Consolidated Balance Sheet Information
(In thousands)
December
March 31, 31,
2005 2004
(Unaudited) (Audited)
----------- ---------
Assets
- -------------------------------------------------
Cash and marketable securities $32,710 $33,908
Accounts receivable, net 6,037 5,272
Fixed assets, net 1,271 1,364
Deferred taxes, net 22,107 22,213
Intangible assets, net 17,453 16,628
Prepaid expenses and other assets 1,533 2,317
----------- ---------
Total Assets $81,111 $81,702
=========== =========
Liabilities and Stockholders' Equity
- -------------------------------------------------
Accounts payable and accrued liabilities $4,031 $3,650
Accrued payroll and related liabilities 1,184 1,091
Deferred revenue and other liabilities 611 365
Stockholders' Equity 75,285 76,596
----------- ---------
Total Liabilities and Stockholders' Equity $81,111 $81,702
----------- ---------
Shares Outstanding 10,254 10,549
=========== =========
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 fiscal 2005
outlook. The forward looking statements included in the Press Release
relate to future events or our future financial conditions or
performance. In some cases, you can identify forward-looking
statements by terminology such as "may," "should," "believe,"
"anticipate," "future," "forward," "potential," "estimate,"
"encourage," "opportunity," "goal," "objective," "quality," "growth,"
"leader," "could", "expect," "intend," "plan," "planned" "expand,"
"focus," "build," "through," "strategy," "expiration," "provide,"
"offer," "maximize," "allow," "allowed," "represent," "commitment,"
"create," "implement," "result," "seeking," "increase," "add,"
"establish," "pursue," "feel," "work," "perform," "make," "continue,"
"can," "will," "ongoing," "include" or the negative of such terms or
comparable terminology. These forward-looking statements inherently
involve certain risks and uncertainties, although they are based on
our current plans or assessments which 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, forecasted, estimated, anticipated, planned
or budgeted in such forward-looking statements include, among others,
the following possibilities: (1) inability to execute upon growth
objectives, including growth in entities acquired by our Company; (2)
failure to obtain new customers or retain significant existing
customers; (3) the loss of one or more key executives and/or
employees; (4) changes in industry trends, such as a decline in the
demand for Business Intelligence ("BI") and Corporate Performance
Management ("CPM") solutions, custom development and system
integration services and/or delays in industry-wide information
technology ("IT") spending, whether on a temporary or permanent basis
and/or delays by customers in initiating new projects or existing
project milestones; (5) adverse developments and volatility involving
geopolitical or technology market conditions; (6) unanticipated events
or the occurrence of fluctuations or variability in the matters
identified under "Critical Accounting Policies"; (7) failure of our
sales pipeline to be converted to billable work and recorded as
revenue; (8) failure of the middle market and the needs of
middle-market enterprises for business services to develop as
anticipated; (9) inability to recruit and retain professionals with
the high level of information technology skills and experience needed
to provide our services; (10) failure to expand outsourcing services
to generate additional revenue; (11) any changes in ownership of the
Company or otherwise that would result in a limitation of the net
operating loss carry forward under applicable tax laws; (12) the
failure of the marketplace to embrace CPM or BI services; and/or (13)
the failure to obtain remaining predecessor entity tax records that
are not in our control and/or successfully resolve remaining
outstanding IRS matters relating to our former staffing businesses. In
evaluating these statements, you should specifically consider various
factors described above as well as the risks outlined under Item I
"Business - Factors Affecting Finances, Business Prospects and Stock
Volatility" in our 2004 Annual Report on Form 10-K filed with the SEC
on March 29, 2005. These factors may cause our actual results to
differ materially from those contemplated, projected, anticipated,
planned or budgeted in any such forward-looking statements.
Although we believe that the expectations in the forward-looking
statements are reasonable, we cannot guarantee future results, levels
of activity, performance, growth, earnings per share or achievements.
However, neither we nor any other person assumes responsibility for
the accuracy and completeness of such statements. We are under no duty
to update any of the forward-looking statements after the date of this
Press Release to conform such statements to actual results.
CONTACT: Edgewater Technology
Kevin Rhodes, Chief Financial Officer
Barbara Warren-Sica, Investor Relations
(781) 246-3343
ir@edgewater.com