Emtec, Inc. Reports Results for Third Quarter Ended December 31,
2003 Net Income Increased by 141.76 % for the Quarter and by
201.71% for the Nine Months, Compared to the Same Periods in 2002
MT. LAUREL, N.J., Feb. 17 /PRNewswire-FirstCall/ -- Emtec, Inc.
(BULLETIN BOARD: ETEC) , a systems integrator providing technology
solutions to enable customers to effectively use and manage data to
grow their business, announced today its results for the third
quarter ended December 31, 2003. Net income for the three months
ended December 31, 2003 rose by 141.76 percent to $320,326,
compared to a net loss of $(767,026) for the comparable period in
2002. Net income for the nine months ended December 31, 2003, rose
to $539,269 compared to a net loss of $(530,200) for the same
period in 2002 - an increase of 201.71 percent. Management
attributed both of these increases in net income to the overall
increase in installation services associated with computer roll-out
projects for the various state agenciesin the State of New Jersey
and a school district in Georgia, as well as an increase in our
manufacturers' support services contract revenues to one customer.
John Howlett, CEO, Emtec, Inc., said, "Our rapidly growing net
income in 2003 was a result ofour acquisitions in August 2002 of
certain assets of Acentra Technologies, Inc. and Turnkey Computer
Systems, Inc., which brought us substantial new groups of customers
for our IT solutions, including a contract with the State of New
Jersey. Today, Emtec is building on that foundation. In November
2003, we received Sun Microsystems' highest level of accreditation
- iForce Strategic Technology Integrator. In February 2004, Emtec
was awarded a backdrop contract (#CMS553A) from the New York State
Office of General Services to provide IT consulting and systems
integration services to a variety of state government entities. As
a longtime provider of IT services to Fortune 1000 companies, we
are becoming a solution of choice in the government and education
markets, and this is adding strongly to our bottom line." Revenue
Increases For the three months ended December 31, 2003, total
revenues for the IT business, which includes services and
consulting revenue and procurement revenues, increased by 9.44
percent or $2.12 million, to $24.62 million, compared to revenues
of $22.49 million for the same period in 2002. Services and
consulting revenue increased by 25.11 percent, or $1.0 million, to
$4.97 million. This increase was attributed to the overall increase
in installation services associated with computer roll-out projects
for the various state agencies in the State of New Jersey and a
school district in Georgia, as well as an increase in our
manufacturers' support services contract revenues. The increase in
manufacturers support services contracts revenue is mainly
attributable to a third-year renewal of an annual maintenance
contract to one customer. Net revenue associated with this sale
increased by approximately $410,000 for the quarter ended December
31, 2003. For the nine months ended December 31, 2003, total
revenues for the IT business increased by 18.61 percent or $12.36
million, to $78.82 million compared to $66.46 million for the same
nine months in 2002. The company attributed this increase primarily
to the acquisitions of Acentra Technologies, Inc. and Turnkey
Computer systems, Inc. in August 2002. Also attributed to these
acquisitions is the increase in services and consulting revenue,
which rose by 20.64 percent, or $2.31 million, to $13.53 million
for the nine-month period. An 18.19 percent rise in procurement
revenues, to $65.29 million for the nine months, is also attributed
to these acquisitions. Gross Profits For the three months ended
December 31, 2003, aggregate gross profit for the IT business
increased by 68.21 percent (or $1.56 million) to $3.84 million.
This increase was attributed to a 25.11 percent increase in
services and consulting revenues. As a percentage of total IT
revenues, overall gross profit margin also increased to 15.59
percent of total IT revenues for the quarter, compared to 10.14
percent for the same quarter a year ago. Gross profit for product
sales during the three months increased by 6.63 percent. Gross
profit for service and consulting increased by 325.17 percent, or
$1.43 million, to $1.87 million, compared with $440,986 for the
same quarter in 2002. For the nine months ended December 31, 2003,
aggregate gross profit for IT business increased by 26.28 percent,
or $2.24 million, to $10.77 million. As a percentage of total IT
revenues, overall gross profit margin for the nine- month period
increased to 13.67 percent, up from 12.84 percent for the same
period in 2002. Gross profit for product sales decreased slightly
by 0.12 percent from results for the same period a year ago. Gross
profit for service and consulting increased by 95.05 percent, or
$2.25 million, to $4.62 million for the nine months ended December
31, 2003. This increase was attributed to the 20.64 percent
increase in services and consulting revenues. SG&A Expenses For
the three-month period, sales, general, and administrative expenses
increased by 11.08 percent, or $334,068, to $3.35 million for the
three months ended December 31, 2003. For the nine-month period,
SG&A expenses increased by 10.13 percent, or $914,085, to $9.93
million. These increases are primarily a result of the new
businesses of the company, mentioned above. Without the
acquisitions of Acentra Technologies, Inc. and Turnkey computer
Systems, Inc., the SG&A expenses would have decreased by
approximately 11.41 percent of $1.03 million, to $7.99 million for
the nine months ended December 31, 2003 compared with $9.02 million
for the nine months ended December 31, 2002. This decrease is
attributable to the elimination of non-productive sales staff,
reduction in sales commission compensation plans, and eliminated
duplication of non- essential administrative support services.
About Emtec Emtec, Inc. established in 1981, provides high-end
computer systems and services to Fortune 1000 clients ranging in
size from $50 million to $500 million in revenues. The Company
specializes in evaluating and providing solutions for data
management including Enterprise Management, Managed Services
(monitoring/maintenance/helpdesk), and Data Management (storage and
protection of data). With the recent acquisitions of Intellispan
(Help Desk), Acentra (systems and services) and Turnkey Computer
Systems (managed building services), Emtec has broadened its
engineering and services capabilities. For additional information
please contact Consulting For Strategic Growth 1, Ltd, at
800-625-2236. Certain statements in this document constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors, which may cause the actual results, performance or
achievements of Emtec, Inc. ("the Company"), or industry results,
to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking
statements. The Company's future operating results are dependent
upon many factors, including but not limited to the Company's
ability to: (i) obtain sufficient capital or a strategic business
arrangement to fund its plan of operations when needed; (ii) build
the management and human resources and infrastructure necessary to
support the growth of its business; (iii) competitive factors and
developments beyond the Company's control; and (iv) other risk
factors discussed in the Company's periodic filings with the
Securities and Exchange Commission which are available for review
at http://www.sec.gov/ under "Search for Company Filings."
Consulting For Strategic Growth I, Ltd. ("CFSG") has a
month-to-month relationship with Emtec, Inc. to provide consulting,
business advisory, investor relations, public relations and
corporate development services to the Company for fees to be
determined. In connection with these services, CFSG prepares press
releases, corporate profiles, and other publications on behalf of
and regarding the Company. Independent of CFSG's receipt of cash
compensation from Emtec, CFSG may choose to purchase the common
stock of Emtec and thereafter liquidate those securities at any
time it deems appropriate to do so. EMTEC, INC. CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited) Three Months Ended Nine Months
Ended December 31, December 31, 2003 2002 2003 2002 Revenues:
Procurement services $ 19,648,683 $ 18,522,103 $ 65,286,512 $
55,237,353 Service and consulting 4,969,881 3,972,432 13,533,973
11,218,523 Geothermal 47,900 45,353 140,873 127,705 Total Revenues
24,666,464 22,539,888 78,961,358 66,583,581 Cost of Revenues:
Procurement services 17,686,595 16,681,947 59,127,426 49,070,806
Service and consulting 3,094,958 3,531,4468,917,374 8,851,590
Geothermal 61,167 18,154 91,249 53,783 Total Cost of Revenues
20,842,720 20,231,547 68,136,049 57,976,179 Gross Profit:
Procurement services 1,962,088 1,840,156 6,159,086 6,166,547
Service and consulting 1,874,923 440,986 4,616,599 2,366,933
Geothermal (13,267) 27,199 49,624 73,922 Total Gross
Profit3,823,744 2,308,341 10,825,309 8,607,402 Operating Expenses:
Selling, general and administrative 3,350,077 3,016,008 9,934,891
9,020,806 Interest 75,333 59,359 247,885 106,926 Total Operating
Expenses 3,425,410 3,075,367 10,182,776 9,127,732 Income (Loss)
Before Income Tax Expense 398,334 (767,026) 642,533 (520,330)
Income tax expense 78,008 - 103,264 9,870 Net Income (Loss) $
320,326 $ (767,026) $ 539,269 $ (530,200) Net Income (Loss) Per
Share Basic $ .04 $ (.11) $ .08 $ (.07) Net Income (Loss) Per Share
Diluted $ .04 $ (.11) $ .07 $ (.07) Weighted Average Number Of
Shares Outstanding {Basic} 7,197,628 7,080,498 7,118,680 7,080,498
Weighted Average Number Of Shares Outstanding {Diluted} 7,504,498
7,080,498 7,470,137 7,080,498 Contacts: Stanley Wunderlich
Consulting For Strategic Growth 1, Ltd. Public Relations Corporate
Development Consultants Tel: 800-625-2236 Fax: 212-697-0910 E-mail:
John Howlett Chief Executive Officer Emtec, Inc. Tel: 856-235-8787
Fax: 856-235-2932 E-mail: Web site: http://www.emtecinc.com/
DATASOURCE: Emtec, Inc. CONTACT: Stanley Wunderlich of Consulting
For Strategic Growth 1, Ltd., 1-800-625-2236, fax, +1-212-697-0910,
, for Emtec; or John Howlett, Chief Executive Officer of Emtec,
Inc., +1-856-235-8787, fax, +1-856-235-2932, Web site:
http://www.emtecinc.com/
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