DYNE - DynTek Announces Results for the First Quarter Fiscal Year 2019

Company Delivers Record EBITDA of $3.2 Million

IRVINE, Calif., Oct. 25, 2018 (GLOBE NEWSWIRE) -- DynTek, Inc. (DYNE.OTC), a leading provider of professional technology services, today announced results for its first fiscal quarter ended September 30, 2018. 

First Quarter Fiscal 2019 Results

For the first quarter ended September 30, 2018 as compared to the prior year first quarter ended September 30, 2017.

• Revenues increased 13.8% to $54.6 million
• Gross profit increased 16.6% to $10.1 million
• Total operating expenses decreased 16.4% to $6.9 million
• Net earnings increased >100% to $2.1 million
• Diluted earnings per share increased to $0.88
• EBITDA increased 58.0% to $3.2 million

Management Comment

First quarter results reflect higher revenue and gross profit performance across our product mix, with the most favorable increases in the demand for data center upgrades. Gross profit rose 16.6% to $10.1 million, from $8.6 million.  Gross margin improved 50 basis points to 18.5%, compared with 18.0% last year.  The reduction in operating expenses was due in a large part to the prior year stock option buyback charge of $1.4 million which was reclassed to Equity at year end.    Prior year operating expenses without this charge were $6.9 million, equal to the current year despite continued growth in revenues.  Net earnings for the first quarter on a comparative basis were 42% higher that prior year earnings adjusted for the stock option buyback charge.  EBITDA rose 58.0% from $2.0 million to $3.2 million, driven primarily by the increase in gross profit, while controlling expenses.

“The team delivered a record quarter, with a key focus on increased profitability as evidenced by our record EBITDA results,” said Ron Ben-Yishay, DynTek’s chief executive officer.  “Our performance this quarter was driven by our customers’ growing needs to modernize data centers and IT infrastructure, both on-premises and in the cloud.  In addition, we continue to see increasing demand for cybersecurity solutions, as our customers face new threat vectors.”

EBITDA
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.

For more information, contact:
Linda Ford
DynTek, Inc.
949-271-6705
linda.ford@dyntek.com