IRVINE, Calif., Sept. 10, 2018 (GLOBE NEWSWIRE) -- DynTek, Inc. (DYNE.OTC), a leading provider of professional technology services, today announced results for its fourth fiscal quarter and for the fiscal year ended June 30, 2018. The 2018 audited financial statements and notes thereto are available on the OTC website under our symbol, DYNE.
Fiscal Year Ended June 30, 2018
DynTek reported revenues of $169,816,000 for the year ended June 30, 2018, an increase of $7,763,000 or 4.8%, from $162,053,000 in the prior year ended June 30, 2017. Gross profit of $31,540,000 for the year ended June 30, 2018 increased $4,477,000 or 16.5% as compared to $27,063,000 in the prior year ended June 30, 2017. Gross margin increased 190 basis points in FY2018 from 16.7% to 18.6%. The year over year revenue and gross profit increase is primarily attributable to continued growth of product transactions at higher margins. Product revenues accounted for 81.6% of total revenues during the current fiscal year.
Total operating expenses were $25,330,000 in the year ended June 30, 2018, an increase of $4,016,000 or 18.8%, as compared to $21,314,000 in the prior year ended June 30, 2017. This increase over prior year is primarily due to increased selling expense in relation to higher revenue and gross profit.
DynTek reported EBITDA of $7,099,000 for the year ended June 30, 2018, an increase of $992,000 or 16.2%, as compared to $6,107,000 in the prior year. Net income was $2,196,000 for the year ended June 30, 2018, or $0.93 per diluted share, a decrease of $302,000, or 12.1%, and $0.12 per diluted share, over the net income of $2,498,000 and $1.05 per diluted share in the year ended June 30, 2017. The Company's current year annual effective income tax rate of 61% was significantly impacted by the December 31, 2017 Tax Cuts and Jobs Act, as its net deferred income tax assets were re-measured at the new lower federal tax rates resulting in a $1,000,000 one-time noncash expense.
"Our team achieved both record revenues and profitability in Fiscal Year 2018 helping our government, education, healthcare and enterprise clients leverage technology to digitally transform their organizations and protect their critical infrastructure and data," said Ron Ben-Yishay, DynTek's chief executive officer. "We expect to continue to see increased demand in cyber security, cloud computing, data center transformation and modern workplace projects throughout Fiscal Year 2019 as well."
Fourth Fiscal Quarter Ended June 30, 2018
DynTek reported revenues of $49,204,000 for the fourth fiscal quarter ended June 30, 2018, a decrease of $5,529,000 or 10.1%, from $54,733,000 in the prior fourth quarter ended June 30, 2017. Gross profit was $9,787,000 for the fourth fiscal quarter ended June 30, 2018, an increase of $1,229,000 or 14.4%, from $8,558,000 in the prior year fourth quarter ended June 30, 2017. The quarter over prior year quarter improvement in gross profit is primarily attributable to the price and mix of large product orders.
Total operating expenses were $6,035,000 in the fourth fiscal quarter ended June 30, 2018, an increase of $334,000 or 5.9%, as compared to $5,701,000 in the prior year fourth quarter ended June 30, 2017. This increase quarter over prior year quarter is primarily due to year to date commission expense for increased revenue in 2018.
DynTek reported EBITDA of $2,691,000 for the fourth fiscal quarter ended June 30, 2018, a decrease of $260,000 or 8.8%, as compared to $2,951,000 in the prior year fourth quarter. Net income was $1,533,000 for the fourth fiscal quarter of 2018, or $0.64 per diluted share, an increase of $158,000 or 11.5%, over net income of $1,375,000 and $0.58 per diluted share in the fourth quarter of 2017.
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 principles (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.
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.
|DYNTEK, INC. AND SUBSIDIARY|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|(Unaudited, in thousands, except share and per share data)|
|Fiscal Year Ended|
|Fiscal Year Ended|
|COST OF REVENUES|
|Cost of products||32,513||111,145||39,230||108,895|
|Cost of services||6,904||27,131||6,945||26,095|
|TOTAL COST OF REVENUES||39,417||138,276||46,175||134,990|
|General and administrative||406||5,875||1,290||4,274|
|Depreciation and amortization||74||173||34||167|
|TOTAL OPERATING EXPENSES||6,035||25,330||5,701||21,314|
|INCOME FROM OPERATIONS||3,752||6,210||2,857||5,749|
|OTHER INCOME (EXPENSE):|
|TOTAL OTHER EXPENSE||(135||)||(576||)||(198||)||(1,240||)|
|INCOME BEFORE INCOME TAXES||3,617||5,634||2,659||4,510|
|Income tax provision||(2,084||)||(3,438||)||(1,284||)||(2,012||)|
|NET INCOME PER SHARE:|
|WEIGHTED AVERAGE NUMBER OF SHARES:|
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