CIMdata PLM Industry Summary Online Archive
28 September 2007
Financial News
Avatech Solutions Announces Fourth Quarter and Year End Results
Avatech Solutions, Inc. announced financial results for its fourth quarter and fiscal year ended June 30, 2007.
For the year ended June 30, 2007, the Company reported revenues of approximately $50.5 million, a 27.6% increase over 2006 revenues of approximately $39.6 million. The Company generated growth in all three of its revenue categories, led by service revenue, which rose 44.5% to $10.7 million. Avatech reported a net loss for fiscal 2007 of $555,000, or $0.07 per fully diluted share, which included onetime charges to earnings of $1.3 million related primarily to severance costs and the closing of two offices. This compared to net income of $2.2 million, or $0.12 per fully diluted share, for fiscal year 2006. Excluding the onetime charges, the Company would have earned net income of $745,000 in fiscal 2007.
For the fourth quarter, the Company reported revenues of $11,494,000, a 15.8% increase over the prior-year period, when revenues totaled $9,929,000. For the three months ended June 30, 2007, Avatech reported a net loss of $874,000, or $0.07 per fully diluted share, which included onetime charges of $500,000 related to severance costs and the closing of two offices. This compared to a net loss of $84,000, or $0.00 per fully diluted share, in the same period of the prior year.
President and Chief Executive Officer George Davis commented, "During the second half of fiscal 2007, we had to work against the headwinds of Autodesk's new incentive program and the restructuring of our own operations. Despite these hurdles, we completed an important acquisition, increased revenue by 27.6% and grew services income by 44.5% in fiscal 2007. Moreover, excluding the onetime charges we incurred through our realignment, Avatech would have been profitable for the year. Notwithstanding these accomplishments, we are disappointed with the reported loss and are committed to returning the Company to consistent profitability beginning in fiscal 2008.
"The many initiatives we have implemented to increase productivity, efficiency and communication provide a solid platform going forward. Our operational restructuring and cost reduction program is on track and is expected to save the Company in excess of $2.5 million annually. Our organizational realignment is also helping us strengthen fiscal accountability at all levels. In addition, we are beginning to realize increased gross margin levels as a result of the changes we have made in our sales programs to improve our performance under Autodesk's new incentive program.
"After a year of transition and change marked by a new Chairman, new CEO, organizational streamlining and strategic re-focus, we are confident that Avatech's 2008 financial performance will reflect this progress. This will be a year of focus, with the bottom line taking precedence. We expect to be profitable in the first quarter of 2008 and to deliver modest revenue growth for the year. Based on the business model we have developed, we also expect to be profitable throughout the year."
Avatech Chairman Thom Waye added, "Our march towards profitability and diversification of revenues continues. We realized a 44.5% increase in services revenue in 2007 and expect to see this critically important revenue source continue to grow in 2008. The management team has identified many opportunities for expanding our engineering consultancy business and will continue our drive toward differentiated revenues while, as stated above, remaining focused on achieving sustained profitability. This will clearly drive more value to our customers, our employees and our shareholders, which is our primary mission."
Conference Call Information
Avatech will hold a conference call to discuss its fourth quarter results at 11:00 a.m. Eastern Time on Friday, September 28, 2007. A replay of the call will also be available through Friday, October 5, 2007, and can be accessed by dialing (706) 645-9291, conference ID #17415697. An audio replay of the conference call will be available in the Investor Relations section of the Company's Web site, http://www.avatech.com/ .
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