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DynTek Announces Results for the Second Quarter Fiscal Year 2019

1212 Days ago

Company reporting 26% increase in Revenue, 67% increase in EBITDA and 109% increase in Net Earnings

IRVINE, Calif., Jan. 23, 2019 (GLOBE NEWSWIRE) -- DynTek, Inc. (DYNE.OTC), a leading provider of professional technology services, today announced results for its second fiscal quarter ended December 31, 2018. 

Financial & Business Highlights

Second Quarter, 2019 Ended December 31, 2018

  • Revenues increased 25.7% to $47.6 million
  • Gross profit increased 12.4% to $7.3 million
  • Total operating expenses increased 6.4% to $5.9 million
  • Net earnings increased >100% to $984 thousand
  • Diluted earnings per share increased to $0.41
  • EBITDA increased 67.3% to $1.7 million

Six Months Ended December 31, 2018

  • Revenues increased 19% to $102.2 million
  • Gross profit increased 14.8% to $17.4 million
  • Total operating expenses decreased 7.3% to $12.9 million
  • Net earnings increased >100% to $3.1 million
  • Diluted earnings per share increased to $1.29
  • EBITDA increased 61.1% to $4.9 million

Management Comment

Second quarter results reflect higher revenue and gross profit performance across our product mix, with the most favorable increases in the continued demand for data center upgrades and security solutions. Gross Profit rose 12.4% to $7.3 million. EBITDA rose 67.3% from $1.0 million to $1.7 million, driven primarily by the increase in gross profit, while controlling expenses.

In our six months year to date, we achieved significant year-on-year growth in revenue and gross profit, due in part to delivering higher volume solutions. Our year to date EBITDA growth of 61.1% reflects control over selling expenses as revenues continue to rise. The reduction in operating expenses was partly due to the prior year stock option buyback charge of $1.4 million which was reclassed to Equity at prior year end. After adjusting for this Q1 FY18 stock option buyback charge, net operating expenses decreased by 3.1% in FY19 and net earnings on a comparative basis were 58% higher than prior year earnings.

“Our team delivered strong top line and bottom line growth driven by both sales and operational improvements and efficiencies,” said Ron Ben-Yishay, DynTek’s chief executive officer.  “We continue to expand our offerings with a focus on helping enterprise and government customers digitally transform their organizations through enhanced security, infrastructure, modern workplace and data center solutions.”

The Company defines EBITDA as net income from operations before interest, taxes, depreciation and amortization, and stock-based compensation. Other companies may calculate EBITDA differently. Although EBITDA is a widely used financial indicator of a company's ability to service debt, it is not a recognized measure for financial statement presentation under generally accepted accounting procedures (GAAP). EBITDA should not be considered in isolation or as superior or as an alternative to net income or to cash flows from operating activities as determined in accordance with GAAP. Nonetheless, the Company believes that EBITDA provides useful supplemental information for investors and others to measure operating performance, especially in situations where a company has significant non-cash operating expenses that are not indicative of core business operating results. EBITDA is widely used in the IT services industry to analyze comparable company performance, and management of the Company also uses EBITDA, in addition to GAAP information, as a measure of operating performance for assessing its business units.

About DynTek
DynTek is a leading provider of professional technology services to mid-market companies, such as state and local governments, educational institutions and commercial entities in the largest IT markets nationwide. From virtualization and cloud computing to unified communications and collaboration, DynTek provides professional technology solutions across the three core areas of our customers’ technical environment: Infrastructure/Data Center, Microsoft Platforms, End Point Computing. DynTek's multidisciplinary approach allows our clients to turn to a single source for their most critical technology requirements. For more information, visit http://www.dyntek.com.

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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. Investors are cautioned that forward-looking statements made in this press release, involve known and unknown risks and uncertainties that could cause actual results to materially differ from the forward-looking statements. Such risks and uncertainties  include, among others, our success in reaching target markets for services and products in a highly competitive market; our ability to maintain existing customers and attract future customers; our ability to finance and sustain operations, including our ability to comply with the terms of the revolving line of credit and the Company’s other existing and future indebtedness; our ability to achieve profitability and positive cash flow from operations; our ability to maintain business relationships with IT product vendors; the size and timing of additional significant orders for our products and services and our ability to fulfill such orders; the continuing desire of state and local governments to outsource to private contractors and the availability of budgets to place orders for our products and services; our ability to retain skilled professional staff and certain key executives; the performance of our government and commercial technology services; and the continuation of general economic and business conditions that are conducive to outsourcing of IT services. We have no obligation to publicly revise any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.

(EBITDA presentation)
(Unaudited, in thousands, except share and per share data)
    Quarter Ended December 31,     Six Months Ended  December 31
    PYQ Ended December 31,   PYTD Six Months Ended December 31,
      2018     2018       2017       2017  
Product revenues   $ 40,067   $ 85,310     $ 29,705     $ 70,541  
Service revenues     7,580     16,936       8,214       15,371  
TOTAL REVENUES     47,647     102,246       37,918       85,911  
COST OF REVENUES                
Cost of products     33,703     70,469       24,553       57,839  
Cost of services      6,637     14,397        6,864       12,933  
TOTAL COST OF REVENUES     40,340     84,866       31,417       70,772  
GROSS PROFIT     7,307     17,381       6,501       15,139  
OPERATING EXPENSES                
Selling     4,274     9,695       4,439       9,638  
General and administrative     1,548     3,007       1,095       4,190  
Depreciation and amortization     102     181       33       65  
TOTAL OPERATING EXPENSES     5,924     12,882       5,567       13,893  
INCOME FROM OPERATIONS     1,383     4,498       934       1,246  
EBITDA     1,716     4,923       1,026       3,056  
OTHER INCOME (EXPENSE)                
  Interest expense     3     (141 )     (150 )     (333 )
TOTAL OTHER EXPENSE     3     (141 )     (150 )     (333 )
INCOME BEFORE INCOME TAXES     1,386     4,357       784       913  
  Income tax provision     402     1,263       314       365  
NET INCOME   $ 984   $ 3,093       $ 470     $ 548  
  NET INCOME PER SHARE:                
  Basic   $ 0.43   $ 1.34     $ 0.21     $ 0.24  
  Diluted   $ 0.41   $ 1.29     $ 0.20     $ 0.23  
  Basic     2,304,692     2,304,692       2,255,724       2,256,682  
  Diluted     2,387,966     2,389,148       2,320,249       2,340,162  

For more information, contact:
Linda Ford
DynTek, Inc.


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