Exhibit 99.1
Edgewater Achieves 63% Year-over-Year Revenue Growth
WAKEFIELD, Mass.--(BUSINESS WIRE)--April 19, 2006--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 its first quarter ended March 31, 2006.
First Quarter Results
Actual financial results and utilization for the quarter ended
March 31, 2006:
-- Total revenue increased 59.7% to $14.3 million, compared to
$9.0 million in the first quarter of 2005.
-- Service revenue increased 62.5% to $13.5 million, compared to
$8.3 million in the first quarter of 2005;
-- Gross profit was $5.2 million, or 36.1% of total revenues,
compared to $3.8 million, or 42.7% of total revenues in the
first quarter of 2005;
-- Gross profit margin related to service revenue was 38.0%,
compared to 45.8% in the first quarter of 2005;
-- Net income from continuing operations amounted to $0.5
million, or $0.04 per diluted share, compared to $0.2 million,
or $0.02 per diluted share in the first quarter of 2005.
-- Net income was $0.5 million, or $0.04 per diluted share,
compared to net income of $0.2 million, or $0.02 per diluted
share in the first quarter of 2005; and
-- Utilization was 78.8%, compared to 81.5% during the first
quarter of 2005;
-- Cash flow provided by operating activities was $1.4 million in
the first quarter of 2006, compared to cash flow provided by
operating activities of $1.4 million during the first quarter
of 2005.
"We are pleased that Edgewater achieved solid growth in the first
quarter," said Shirley Singleton, President and CEO of Edgewater
Technology. "Our organic metrics were slightly impacted by some
customer delays in launching new projects at the beginning of the
quarter, which is reflected in our utilization and gross profits
numbers. However, we finished the quarter strong welcoming 14 new
customers and achieving organic growth."
Singleton continued, "Our sales activity has begun to increase,
producing more bid opportunities, of a larger size and scope. In
addition, the recent acquisition of National Decision Systems ("NDS")
contributed to the Company's revenue and profitability during the
first quarter."
Commenting on NDS, Singleton added, "The NDS acquisition expands
Edgewater's offerings; complements our core competencies by adding new
strategic service offerings; and strengthens Edgewater's vertical
expertise. In addition, it is providing Edgewater and Ranzal with the
opportunity to deliver more robust service offerings to existing and
prospective clients."
"With the pipeline to support continued organic growth combined
with the full effect of the NDS acquisition, we expect to post higher
revenue and improved profitability in the second quarter," Singleton
concluded.
During the first quarter, Edgewater Technology, Inc. also adopted
SFAS 123R "Share-Based Payments". In accordance with the adoption,
Edgewater recorded $243 thousand in total stock-based compensation
expense during the quarter, which represents $.02 per diluted share.
SFAS 123R requires recognition of stock-based expense on the same line
item where cash compensation is recognized for our employees, so we
recognized $93 thousand of such expense under "Cost of Revenue -
Project and Personnel Costs" and $150 thousand under "Selling, General
and Administrative Expense". Further details can be found in the
attached Consolidated Statement of Operations.
Conference Call
Edgewater Technology will host a conference call on Wednesday,
April 19, at 10:00 a.m. (ET) to discuss first-quarter 2006 financial
results. To listen to the call, you can participate by webcast at
www.edgewater.com - Investor Relations section or you can dial
800-884-5695 (passcode 74423305) 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
89524111) from 12:00 p.m. (ET) Wednesday, April 19 through 11:59 p.m.
(ET) Wednesday, April 26.
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:
- -0-
*T
EDGEWATER TECHNOLOGY, INC
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
----------------------
2006 2005
----------- ----------
Revenue:
Service revenues $13,502 $8,309
Software 293 274
Reimbursable expenses 513 376
----------- ----------
Total revenue 14,308 8,959
Cost of revenue:
Project and personnel costs(1) 8,368 4,501
Software costs 267 261
Reimbursable expenses 513 376
----------- ----------
Total cost of revenue 9,148 5,138
----------- ----------
Gross profit 5,160 3,821
Selling, general and administrative
expense(1) 4,352 3,455
Depreciation and amortization expense 345 304
----------- ----------
Operating income 463 62
Interest income and other, net 299 252
----------- ----------
Income before income taxes 762 314
Provision for income taxes 302 126
----------- ----------
Net income $460 $188
=========== ==========
BASIC AND DILUTED EARNINGS PER SHARE:
Basic and diluted earnings per share $0.04 $0.02
=========== ==========
Weighted Average Shares Outstanding - Basic 10,635 10,341
=========== ==========
Weighted Average Shares Outstanding -
Diluted 11,335 10,762
=========== ==========
(1) Includes the following amounts related to
stock-based compensation expense:
Cost of revenue - Project and personnel
costs $93 $-
Selling, general and administrative expense 150 33
----------- ----------
Total stock-based compensation expense $243 $33
=========== ==========
EDGEWATER TECHNOLOGY, INC.
Summary Consolidated Balance Sheet Information
(In thousands)
March 31, December 31,
2006 2005
(Unaudited) (Audited)
-------------- ------------
Assets
Cash and marketable securities $25,566 $33,381
Accounts receivable, net 11,727 9,858
Deferred taxes, current 1,323 1,323
Prepaid expenses and other assets, current 1,460 1,367
-------------- ------------
Total current assets 40,076 45,929
Fixed assets, net 1,401 1,364
Deferred taxes, net 19,911 20,168
Intangible assets, net 28,599 17,076
Other assets 45 52
-------------- ------------
Total Assets $90,032 $84,589
============== ============
Liabilities and Stockholders' Equity
- ------------------------------------------
Accounts payable and accrued liabilities $7,047 $3,159
Accrued payroll and related liabilities 1,939 3,085
Deferred revenue and other liabilities 215 260
-------------- ------------
Total current liabilities 9,201 6,504
Stockholders' Equity 80,831 78,085
-------------- ------------
Total Liabilities and Stockholders'
Equity $90,032 $84,589
-------------- ------------
Shares Outstanding 11,157 10,460
============== ============
*T
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 2006
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; and/or (12)
the failure of the marketplace to embrace CPM or BI services. 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 2005 Annual Report on Form 10-K filed with the SEC
on March 23, 2006. 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, Inc.
Kevin Rhodes, 781-246-3343
Chief Financial Officer
ir@edgewater.com
or
Barbara Warren-Sica, 781-246-3343
Investor Relations
ir@edgewater.com