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
This press release contains forward-looking statements about the expectations, beliefs, plans, intentions, and strategies of Avatech Solutions, Inc. There are a number of important factors that could cause actual results to differ materially from those anticipated by any forward-looking information. Statements that are not historical in nature, including those that include the words “goal,” “expect,” “anticipate,” “estimate,” “should,” “believe,” “intend,” and similar expressions, are based on current expectations, estimates and projections about, among other things, the industry and the markets in which Avatech operates, and they are not guarantees of future performance. Whether actual results will conform to expectations and predictions is subject to known and unknown risks and uncertainties, including risks and uncertainties discussed in this report; general economic, market, or business conditions; changes in interest rates, and demand for our products and services; changes in our competitive position or competitive actions by other companies; the ability to manage growth; changes in laws or regulations or policies of federal and state regulators and agencies; and other circumstances beyond our control. Consequently, all of the forward-looking statements made in this document are qualified by these cautionary statements, and there can be no assurance that the actual results anticipated will be realized, or, if substantially realized, will have the expected consequences on our business or operations.
| Avatech Solutions, Inc. | ||||||||||||||||
| Reconciliation of non-GAAP financial measure | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| 6/30/2008 | 6/30/2007 | 6/30/2008 | 6/30/2007 | |||||||||||||
| GAAP net income (loss) | $ | 742,000 | $ | (874,000 | ) | $ | 3,091,000 | $ | (555,000 | ) | ||||||
| Provision for (benefit) from income taxes | (296,000 | ) | 27,000 | 493,000 | 227,000 | |||||||||||
| Income (loss) before income taxes | 446,000 | (847,000 | ) | 3,584,000 | (328,000 | ) | ||||||||||
| Stock-based compensation | 204,000 | 61,000 | 499,000 | 739,000 | ||||||||||||
| Interest income | (21,000 | ) | (19,000 | ) | (114,000 | ) | (62,000 | ) | ||||||||
| Interest expense | 9,000 | 5,000 | 28,000 | 198,000 | ||||||||||||
| Depreciation and amortization | 170,000 | 174,000 | 693,000 | 689,000 | ||||||||||||
| Adjusted EBITDA | $ | 808,000 | $ | (626,000 | ) | $ | 4,690,000 | $ | 1,236,000 | |||||||
|
Note 1 - Management uses adjusted EBITDA, a non-GAAP measure, to evaluate the Company's operating performance and compare the Company's current results with those for prior periods, but cautions that they should not be considered as a substitute for disclosures made in accordance with GAAP |
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| Avatech Solutions, Inc. | ||||||||
| Summary Consolidated Financial Data | ||||||||
| Three Months Ended | Twelve Months Ended | |||||||
| June 30, | June 30, | |||||||
| 2008 | 2007 | 2008 | 2007 | |||||
| Revenues- | ||||||||
| Product sales | $6,690,000 | $6,511,000 | $27,650,000 | $30,125,000 | ||||
| Service revenue | 2,728,000 | 2,922,000 | 11,363,000 | 10,689,000 | ||||
| Commission revenue | 2,126,000 | 2,061,000 | 10,631,000 | 9,721,000 | ||||
| Total revenues | 11,544,000 | 11,494,000 | 49,644,000 | 50,535,000 | ||||
| Cost of revenues- | ||||||||
| Cost of product sales | 4,529,000 | 4,545,000 | 18,801,000 | 19,963,000 | ||||
| Cost of service revenue | 2,016,000 | 1,975,000 | 8,145,000 | 7,416,000 | ||||
| Total cost of revenues | 6,545,000 | 6,520,000 | 26,946,000 | 27,379,000 | ||||
| Gross margin | 4,999,000 | 4,974,000 | 22,698,000 | 23,156,000 | ||||
| Operating income (loss) | 415,000 | (860,000) | 3,498,000 | (192,000) | ||||
| Net income (loss) | 742,000 | (874,000) | 3,091,000 | (555,000) | ||||
| Earnings (loss) per share: | ||||||||
| Basic | $ 0.03 | $ (0.07) | $ 0.16 | $ (0.07) | ||||
| Diluted | $ 0.03 | $ (0.07) | $ 0.15 | $ (0.07) | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 16,370,186 | 15,287,598 | 16,166,067 | 14,246,390 | ||||
| Diluted | 16,643,517 | 15,287,598 | 20,121,896 | 14,246,390 | ||||
| June 30, | June 30, | |||||||
| 2008 | 2007 | |||||||
| Current assets | $13,955,000 | $10,840,000 | ||||||
| Property and equipment | 781,000 | 934,000 | ||||||
| Other long-term assets | 7,860,000 | 7,800,000 | ||||||
| Total assets | $22,596,000 | $19,574,000 | ||||||
| Current liabilities | $9,425,000 | $9,725,000 | ||||||
| Series F convertible preferred stock | 3,629,000 | 3,629,000 | ||||||
| Stockholders' equity | 9,542,000 | 6,220,000 | ||||||
| Total liabilities and stockholders' equity | $22,596,000 | $19,574,000 | ||||||
