Business Services Industry
Datatec Systems Reports First Quarter 2003 Results; Achieves Year-over-Year Growth of 32% and EPS of 7 Cents and Reaffirms Fiscal 2003 Sales Growth Targets and Earnings Guidance
Business Wire, Nov 5, 2002
Business Editors & Technology Writers
FAIRFIELD, N.J.--(BUSINESS WIRE)--Nov. 5, 2002
Datatec Systems, Inc. (Nasdaq: DATCE), a leading provider of technology deployment services and software tools, today reported results for the first quarter of fiscal 2003 ended July 31, 2002.
Highlights of the report are:
- Revenues were $21.0 million, representing year-over-year growth of 32.2%. - Net Income was $2.4 million or $0.07 per share, compared to a net loss of $2.1million or ($0.06) per share in the same period last year and a net income of $1.47 million or $0.04 per share in the prior quarter. - SG&A expense continued to decrease to $5.05 million, an 18.2% reduction compared with the same quarter last year - The 12-month backlog as at October 31, 2002 stood at $75.1 million, with a total pipeline of $194.3 million
With the agreement of its auditors, the Company changed its method of estimating progress toward completion of its contracts at the beginning of the 2003 fiscal year. Under the previous method, the percentage of direct labor incurred to date to total estimated direct labor to be incurred on a project was used to determine a contract's percentage of completion. Under the new method, the percentage of total costs incurred to date to total estimated costs to be incurred on a project is used to determine a contract's percentage of completion. "Cost to cost" is a commonly used methodology in the IT services industry as it more accurately records profits in the period in which costs are incurred.
The cumulative effect on prior years of the change in method of determining percentage of completion has been included in income in the Company's financial statements for the quarter ended July 31, 2002. The effect of the change for the quarter ended July 31, 2002 is an increase in net income of $1.7 million or $0.05 per share.
Commenting on the quarter, Isaac Gaon, Chairman and CEO said, "I am delighted with our continuing strong progress and outstanding business execution in what is still a very difficult economic environment. Our Q1 results are testimony to how a combination of dedicated people with great skills and a compelling business proposition can deliver a remarkable turnaround even under current tough conditions. We look forward to the future with increasing optimism and confidence of attaining our previously stated fiscal 2003 goals of a year-over-year sales growth of 25% coupled with an EPS of 14 cents per share."
Mr. Gaon continued, "Late yesterday, the Company was advised that the Nasdaq Listing Qualifications Panel has determined to transfer the listing of the Company's securities to The Nasdaq SmallCap Market effective with the open of business on Thursday, November 7, 2002. Although the Company may request that the Listing Council review this transfer decision, on advisement from many sources, we have decided not to pursue this avenue but rather consider a re-application for National Market listing once the Company qualifies through organic means rather than having to raise capital immediately."
Datatec will discuss its first quarter results in an investor conference call today, November 5, 2002 at 4:30 p.m. Eastern Time. Conference call details are:
US & Canada Toll Free 877-352-5214
International 212-287-1622
Password Q1-03
Conference Leader Bob Engelberg
About Datatec Systems, Inc.
Fairfield, NJ-based Datatec Systems specializes in the rapid, large-scale market absorption of networking technologies. Datatec's deployment services utilize a software-enabled implementation model to configure, integrate and roll out new technology solutions using a "best practices" structured process. Its customers include Fortune 1000 companies and world-class technology providers. Datatec stock is listed on the Nasdaq Stock Market (DATCE). For more information, visit http://www.datatec.com/.> This Press Release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties that may cause the actual results or objectives to be materially different from those expressed or implied by such forward-looking statements.
DATATEC SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE AMOUNTS)
(unaudited)
For the Three Months Ended
July 31,
--------------------------------
2001 2002
(As Restated)
-------------- ---------------
Revenue $ 15,902 $ 21,028
Cost of revenues 11,084 14,502
---------- -----------
Gross profit 4,818 6,526
Selling, general and
administrative expenses 6,180 5,054
---------- -----------
Operating income (loss) (1,362) 1,472
Interest expense (582) (740)
---------- -----------
Income (loss) before minority
interest, income taxes and
cumulative effect of
accounting change (1,944) 732
Minority interest (170) --
---------- -----------
Income (loss) before cumulative
effect of accounting change (2,114) 732
Cumulative effect of accounting
change -- 1,699
---------- -----------
Net income (loss) ($2,114) $2,431
========== ===========
Earnings per common share - basic:
Income (loss) before cumulative
effect of accounting change $(0.06) $0.02
Cumulative effect of accounting change -- 0.05
---------- -----------
Net income (loss) per share $(0.06) $ 0.07
========== ===========
Earnings per common share - diluted:
Income (loss) before cumulative
effect of accounting change $(0.06) $0.02
Cumulative effect of accounting change -- 0.05
---------- -----------
Net income (loss) per share $(0.06) $ 0.07
========== ===========
WEIGHTED AVERAGE COMMON SHARES - BASIC 33,844,000 35,672,000
========== ===========
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES - DILUTED 33,844,000 35,750,000
========== ===========
DATATEC SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
July 31, 2002
April 30, 2002 (unaudited)
--------------- --------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 49 $ 138
Receivables, net 17,204 25,377
Inventory 3,176 3,200
Prepaid expenses and
other current assets 4,096 727
----------- -----------
Total current assets 24,525 29,442
Property and equipment, net 3,259 3,167
Goodwill, net 2,665 2,665
Other assets 4,170 3,751
----------- -----------
TOTAL ASSETS $ 34,619 $ 39,025
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $ 17,464 $ 17,278
Accounts payable 7,789 10,222
Accrued and other liabilities 4,214 3,769
Subordinated secured convertible
debentures, net of unamortized
discount -- 1,573
----------- ------------
Total current liabilities 29,467 32,842
----------- ------------
LONG-TERM DEBT:
Due to related parties 1,414 1,414
Other long-term debt 2 --
Subordinated secured convertible
debentures, net of unamortized
discount 1,457 --
----------- ------------
Total long-term debt 2,873 1,414
----------- ------------
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value
(authorized 75,000,000 shares;
issued and outstanding 35,591,000
shares and 35,688,000 shares as of
April 30, 2002 and July 31, 2002,
respectively) 35 35
Additional paid-in capital 53,532 53,593
Accumulated deficit (50,938) (48,507)
Accumulated comprehensive loss (350) (352)
----------- ------------
Total stockholders' equity 2,279 4,769
----------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 34,619 $ 39,025
=========== ============
Most Recent Business Articles
- Multiple criteria evaluation and optimization of transportation systems
- Multi-criteria analysis procedure for sustainable mobility evaluation in urban areas
- A two-leveled multi-objective symbiotic evolutionary algorithm for the hub and spoke location problem
- Multi-criteria analysis for evaluating the impacts of intelligent speed adaptation
- The development of Taiwan arterial traffic-adaptive signal control system and its field test: a Taiwan experience
Most Recent Business Publications
Most Popular Business Articles
- 7 tips for effective listening: productive listening does not occur naturally. It requires hard work and practice - Back To Basics - effective listening is a crucial skill for internal auditors
- FAS 109: a primer for non-accountants - Financial Accounting Standards Board's "Statement 109: Accounting for Income Taxes"
- Design a commission plan that drives sales - Sales Commissions
- Too Young to Rent a Car? - 25-years-old the minimum age for car renting - Brief Article
- LIFO vs. FIFO: a return to the basics
Most Popular Business Publications
Content provided in partnership with
