For the first quarter of fiscal 2009 the Company reported revenues of $10.8 million, compared to $12.4 million in the prior-year quarter. Selling, general & administrative (SG&A) expenses decreased to $4.4 million in the three months ended September 30, 2008, compared to $4.6 million, in the same period of the prior fiscal year.
Net income for the three months ended September 30, 2008 was $154,000, or $0.01 per fully diluted share, compared to net income of $489,000, or $0.02 per fully diluted share, in the same period in the prior year. Adjusted EBITDA (as defined) decreased to $448,000 in the first quarter of fiscal 2009, from adjusted EBITDA of $959,000 in the prior year period.
George Davis, President and Chief Executive Officer of Avatech Solutions, commented, “The unprecedented macroeconomic pressures that have weakened the building and manufacturing sectors, significantly impacted our performance for the September 2008 quarter. During this time of uncertainty, our customers are faced with considerable challenges that are limiting their ability to move forward with technology upgrades and engineering support services. Due to our efforts over the last year to improve our fundamentals with an emphasis on expense and cash management we were able to deliver a sound quarter in the face of a difficult economic environment. This quarter’s highlights include delivering our fifth consecutive quarter of profitability, generating free cash flow and maintaining a sound balance sheet with $4.3 million in cash with no debt. We are maintaining stability and market share in our business due to the efforts of our dedicated software sales and engineering services teams, and a diverse client base.”
“In addition, over the past few quarters we have looked to diversify our revenue by dedicating more resources towards selling professional services in the Architecture, Engineering and Construction (AEC) and Manufacturing verticals. We expect these efforts to provide incremental support for our business model on a going forward basis. It is our goal to prudently leverage our strong financial position during this difficult market environment to ensure that we are uniquely positioned to come out strong when the economy eventually rebounds,” concluded Mr. Davis.
Conference Call Information
Avatech Solutions will hold a conference call to discuss its first quarter results at 11:00 a.m. ET on November 14, 2008. The dial-in number for the conference call is (888) 680-0865 (Domestic) or (617) 213-4853 (International), and enter the passcode (91800494). A replay of the call will also be available through November 21, 2008 and can be accessed by dialing (888) 286-8010 (Domestic) or (617) 801-6888 (International), and enter the passcode (17476623).
A live webcast of the call will be broadcast in the Investor Relations section of the Company’s website, http://www.avatech.com. For those who cannot listen to the live broadcast, an audio replay of the call will also be available on the site for a limited time.
Note Regarding Use of Non-GAAP Financial Measure
This news release contains the non-GAAP measure Adjusted EBITDA. Adjusted EBITDA represents earnings (or losses) before interest, income taxes, depreciation and amortization, and stock-based compensation expense.
Adjusted EBITDA is used by management, analysts, investors and other interested parties in evaluating our operating performance compared to that of other companies in our industry, as the calculation of EBITDA as adjusted eliminates the effect of financing, income taxes, stock-based compensation costs, the accounting effects of capital spending and certain other merger related expenses, which items may vary from different companies for reasons unrelated to overall operating performance.
Avatech believes this non-GAAP measure provides useful information to both management and investors by excluding certain expenses that may not be indicative of its core operating results. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measure included in this press release has been reconciled to the GAAP results in the accompanying table.
About Avatech Solutions
Avatech Solutions, Inc. (OTCBB: AVSO) is America’s leading professional services company for design and engineering technologies. Avatech advances the way organizations design, develop, and manage building, infrastructure, and manufacturing projects. Fortune 500 and Engineering News Record's Top 100 companies work with Avatech to gain a competitive advantage through technology consulting, implementation, training, and support services. One of the world’s largest integrators of Autodesk software, Avatech designs systems that accelerate innovation while improving quality and profitability. For more information please visit www.avatech.com.
Forward-looking Statement
