Edgewater Announces Preliminary Third Quarter 2016 Revenue
October 18 2016 - 8:30AM
Edgewater Technology, Inc. (NASDAQ:EDGW), a leading consulting firm
that helps business leaders drive transformational change through
its unique selection of business and technology services and
specialized product-based solutions, announced today that the
company expects to report service revenue of approximately $27.0
million for the quarter ended September 30, 2016. Total
revenue for the quarter ended September 30, 2016 is expected to be
approximately $30.8 million, including approximately $2.1 million
in software-related revenue. All reported preliminary revenue
amounts are subject to the completion of our standard quarterly
review procedures.
“We expect third quarter 2016 service revenue to be essentially
flat on a year-over-year quarterly basis,” commented Shirley
Singleton, Edgewater’s chairman, president and CEO. “During the
second half of the third quarter, our ability to drive organic
service revenue growth was hindered by channel disruption
associated with a vendor push to accelerate the adoption of new
cloud-based applications, a curtailment of IT spending by customers
across all of our service offerings and underperformance in the
United Kingdom. These events combined to cause third quarter
2016 service revenue to fall short of our anticipated service
revenue guidance. While we have proactively taken steps to manage
billable consultant headcount and reduce operating expenses, the
lower than anticipated service revenue performance will also
negatively affect our billable consultant utilization and operating
performance during the third quarter of 2016.
“The strong push from our channel partners to drive the adoption
of new cloud-based applications may continue to cause near-term
disruption as customers contemplate their cloud adoption strategy.
Edgewater is actively marketing cloud-based services and we
are pleased to see traction coming from customers deciding to
embrace the cloud. We continue to close new business, we are
pleased with the performance of our acquisitions, and our backlog
remains stable. We continue to anticipate that we will still
see double-digit service revenue growth for the full year
2016.”
Edgewater will hold an analyst conference call on Wednesday,
November 2, 2016 at 10:00 a.m. Eastern Time to discuss its
financial results for the third quarter ended September 30, 2016.
The company will issue its financial results in a press release
prior to the call.
Date: Wednesday, November 2, 2016Time: 10:00 a.m. Eastern
TimeDial-in number: 1-877-713-9347 / Passcode: 86873551Webcast:
http://ir.edgewater.com/
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization.
Edgewater’s news release containing the third quarter 2016
financial results will be released prior to the market opening on
the day of the call. A replay of the conference call can be
accessed via Edgewater’s investor relations web site at
http://ir.edgewater.com/ or by dialing 1-404-537-3406 (Conference
ID#: 86873551) after 1:00 p.m. Eastern Time on the same day through
Wednesday, November 16, 2016.
About Edgewater
Edgewater Technology, Inc. (NASDAQ:EDGW) is a strategic
consulting firm delivering a blend of classic and product-based
consulting services. Edgewater addresses the market both vertically
by industry and horizontally by product and technology specialty,
providing its client base with a wide range of business and
technology solutions. As one of the largest IT consulting firms
based in New England, the company works with clients to reduce
costs, improve processes and increase revenue through the judicious
use of technology. Edgewater’s brand names include Edgewater
Technology, Edgewater Ranzal and Edgewater Fullscope. To learn
more, please visit www.edgewater.com.
Forward-Looking Statements
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 concerning our expected third quarter
2016 service revenue, our expected full year 2016 service revenue
growth, and the impact of the anticipated service revenue shortfall
on our third quarter 2016 billable consultant utilization and
operating performance, the performance of our 2015 acquisitions,
the stability of our backlog and our ability to convert our backlog
into service revenue. 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) failure to obtain new customers or retain significant
existing customers; (2) the loss of one or more key executives
and/or employees; (3) changes in industry trends, such as a
decline in the demand for Enterprise Resource Planning and
Enterprise Performance Management solutions, custom development and
system integration services and/or declines in industry-wide
information technology spending, whether on a temporary or
permanent basis and/or delays by customers in initiating new
projects or existing project milestones; (4) inability to
execute upon growth objectives; (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” in our 2015 Annual Report on Form 10-K; (7) delays
in, or the failure of, our sales pipeline being converted to
billable work and recorded as revenue; (8) termination by clients
of their contracts with the Company or inability or unwillingness
of clients to pay for the Company's services, which may impact the
Company's accounting assumptions; (9) inability to recruit and
retain professionals with the high level of information technology
skills and experience needed to provide the Company's 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 possibility that
activist stockholders may wage proxy contests or gain
representation on or control of the Board of Directors, causing
disruption and/or uncertainty to the Company's business, customer
relationships and employee retention; (13) the failure of the
marketplace to embrace advisory and product-based consulting
services; (14) difficulties and costs associated with transitioning
to the cloud; (15) the inability to achieve the expected synergies
from our 2015 acquisitions; and/or (16) changes in the Company's
utilization levels. In evaluating these statements, you
should specifically consider various factors described above as
well as the risks outlined under “Part I - Item IA. Risk Factors”
in our 2015 Annual Report on Form 10-K filed with the SEC on March
11, 2016. 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 the Company believes that the expectations in the
forward-looking statements are reasonable, it cannot guarantee
future results, levels of activity, performance, growth, earnings
per share or achievements. However, neither the Company nor any
other person assumes responsibility for the accuracy and
completeness of such statements. Except as required by law, the
Company undertakes no obligation to update any of the
forward-looking statements after the date of this Press Release to
conform such statements to actual results.
Company Contact:
Timothy R. Oakes, Chief Financial Officer
1-781-246-3343
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