Software Revenue Reported at $1.2 Million, up 222% from Q1 1999
Gross Margins Improved Sequentially to 40.4% from Q4 1999
NEWPORT BEACH, Calif., May 4 /PRNewswire/ -- Emergent Information
Technologies, Inc. (Nasdaq: EITI) reported record quarterly revenues of
$31.6 million and earnings per share of $0.04 for the three months ended
March 31, 2000. Emergent, a leading provider of IT solutions, modeling and
simulation services, and systems engineering, was formerly known as SM&A
Corporation (Nasdaq: WINS).
Revenues for the first quarter of 2000 climbed to $31.6 million, compared
to $25.3 million for the same period of 1999, representing an increase of
24.9%. Emergent's gross margin percentage for the quarter ended
March 31, 2000 improved to 40.4% from 34.6% reported in the fourth quarter of
1999. Net income for the first quarter was $663,000, or $0.04 per basic and
diluted share, when compared to $3.0 million, or $0.14 per basic and diluted
share, a decrease of 78.9% from the comparable period last year due. During
the past twelve months, the Company incurred increased infrastructure costs in
support of its growth strategy.
Mr. Michael Piraino, President and CEO, discussed the first quarter's
results by saying, "We achieved our ninth consecutive quarter of record
revenues since going public, exceeding last year's first quarter revenues by
almost 25%. More importantly, our software revenue (licensing fees and
royalty revenue) reached $1.2 million, a 222% increase over the first quarter
of 1999. This is a key indicator of success in the strategic direction we are
taking Emergent and truly validates our continuing investment in proprietary
software product technologies is beginning to pay off. We are convinced that
much of our future revenue growth, gross margin expansion and improvement in
profitability will be generated as a result of successfully developing,
marketing and selling software to the expanding telecommunications and
healthcare markets."
Mr. Piraino went on to say, "The first quarter of 2000 also represents a
dramatic improvement over our fourth quarter of 1999 where we posted an
operating loss for the first time in our history as a public company. The
investments made in the fourth quarter in software development costs and
infrastructure related expenses have created a stable platform for
profitability into the future."
In a separate release dated May 4, the Company announced three strategic
initiatives: the change of its name from SM&A Corporation to Emergent
Information Technologies, Inc., the expansion of its board of directors from
five to seven, and the promotion of Michael Piraino to Chief Executive Officer
and Ajay Patel to Chief Operating Officer.
Conference call
Emergent Information Technologies is hosting a conference call today,
Thursday, May 4, 2000, at 11:00 a.m. EDT. The conference call will be
accessible on the Internet through Vcall at http://www.vcall.com . To listen to the
live call, please go to the Web site at least 15 minutes early to register,
download and install any necessary audio software. For those who can not
listen to the live Web broadcast, a replay will be available shortly after the
call.
About Emergent
Emergent Information Technologies, Inc. (formerly SM&A Corporation) is a
leading provider of IT solutions, modeling and simulation services, and
systems engineering to business and government. Its wholly owned subsidiary,
Steven Myers & Associates, Inc. (SM&A), provides proposal management services.
Statements herein concerning the company's growth and strategies may include
forward-looking statements. The company's actual results may differ
materially from those suggested as a result of various factors. Interested
parties should refer to the disclosure set forth under the caption "Risk
Factors" and elsewhere in the company's Form 10-K/A for the year ended
December 31, 1999, for additional information regarding risks affecting the
company's financial condition and results of operations. Additional
information on Emergent is now available via the Internet at
http://www.emergent-IT.com .
Emergent Information Technologies, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
2000 1999
Net revenues $31,587 $25,314
Cost of revenues 18,830 14,430
Gross margin 12,757 10,884
Selling, general & administrative expenses 9,201 5,481
Software development costs 1,279 1,168
Amortization of goodwill and other intangibles 521 345
11,001 6,994
Operating income 1,756 3,890
Interest expense, net 593 39
Profit before taxes 1,163 3,929
Income tax expense 500 1,599
Net income $663 $2,330
Net income per share:
Basic $0.04 $0.14
Diluted $0.04 $0.14
Weighted average common shares outstanding:
Basic 16,181 16,515
Diluted 16,231 16,927
Emergent Information Technologies, Inc.
Consolidated Balance Sheet
(in thousands)
March 31, December 31,
2000 1999
(unaudited)
Assets
Cash and cash equivalents $1,376 $1,226
Accounts receivable, net 26,132 22,676
Costs and estimated earnings, in excess
of billings on contracts in progress, net 9,641 7,851
Prepaid expenses and other current assets 7,388 6,571
Total current assets 44,537 38,324
Property and equipment, net 5,764 5,636
Other assets 4,433 4,104
Goodwill 55,953 48,778
Total assets $110,327 $96,842
Liabilities & Shareholders' Equity
Trade accounts payable $4,535 $3,475
Accrued salaries, wages and payroll taxes 8,432 6,093
Other liabilities 8,982 6,532
Total current liabilities 21,949 16,100
Other long-term liabilities 1,403 1,269
Long-term debt 35,856 29,017
Total liabilities 59,208 46,386
Common stock 161 161
Additional paid-in capital 45,285 45,285
Retained earnings 5,673 5,010
Total shareholders' equity 51,119 50,456
Total liabilities and shareholders' equity $110,327 $96,842
SOURCE Emergent Information Technologies, Inc.
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Related links:
http://www.emergent-IT.com
CONTACT:
Michael Piraino, President and CEO of
Emergent Information Technologies, Inc., 949-975-1487, or General
Information, Moira Conlon of The Financial Relations Board,
310-442-0599
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