-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ODNMQP/E7TEOP64dHaCRJdHB1xP4axy1GpXzZ05t9NJ0cC+wK98H75k38SulFlOR lzvJUPMb4qJrvFaqqm/1YQ== 0000930661-02-000483.txt : 20020414 0000930661-02-000483.hdr.sgml : 20020414 ACCESSION NUMBER: 0000930661-02-000483 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020213 ITEM INFORMATION: Other events FILED AS OF DATE: 20020214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EDGEWATER TECHNOLOGY INC/DE/ CENTRAL INDEX KEY: 0001017968 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 710788538 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20971 FILM NUMBER: 02549142 BUSINESS ADDRESS: STREET 1: 302 EAST MILLSAP ROAD CITY: FAYETTEVILLE STATE: AR ZIP: 72703 BUSINESS PHONE: 5019736000 MAIL ADDRESS: STREET 1: 302 EAST MILLSAP ROAD CITY: FAYETTEVETTE STATE: AR ZIP: 72703 FORMER COMPANY: FORMER CONFORMED NAME: STAFFMARK INC DATE OF NAME CHANGE: 19960702 8-K 1 d8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 13, 2002 EDGEWATER TECHNOLOGY, INC. -------------------------- (Exact name of registrant as specified in its charter) Delaware 0-20971 71-0788538 --------------------- --------------------- ---------------- (State or other jurisdiction of (Commission File Number) ( I.R.S. Employer incorporation or organization) Identification No.) 20 Harvard Mills Square, Wakefield Massachusetts 01880 ------------------------------------------------------ (Address of principal executive offices) (zip code) Registrant's telephone number, including area code (781) 246-3343 ----------------------------------------------------------------- Not Applicable -------------- (Former name or former address, if changed since last report) Item 5. Other Events Attached as an exhibit to this Form 8-K is a copy of a Edgewater Technology, Inc. press release which was disseminated publicly on February 13, 2002. (c) Exhibits. The following exhibit is filed with this Form 8-K: 99.1 Edgewater Technology, Inc. Press Release dated February 13, 2002. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. EDGEWATER TECHNOLOGY, INC. (Registrant) Date: February 13, 2002 By: /s/ Kevin Rhodes ----------------------- Kevin Rhodes Chief Financial Officer 3 EXHIBIT INDEX 99.1 Edgewater Technology, Inc. Press Release dated February 13, 2002. 4 EX-99.1 3 dex991.txt PRESS RELEASE DATED 2/13/2002 EXHIBIT 99.1 Contacts: Kevin Rhodes, Chief Financial Officer Kim Levy/Susan Burns Barbara Warren-Sica, Investor Relations Citigate Sard Verbinnen (781) 246-3343 (212) 687-8080 Edgewater TechnologY Announces Results for Fourth Quarter and Full Year 2001 --------------------------------------------------- Wakefield, MA, February 13, 2002 -- Edgewater Technology, Inc. (NASDAQ: EDGW, www.edgewater.com, "Edgewater Technology" or the "Company") today reported financial results for the fourth quarter and fiscal year ended December 31, 2001. Fourth Quarter Results Revenue from operations for the fourth quarter was $6.1 million, compared to revenue of $8.2 million for the same period last year. Gross profit from operations for the fourth quarter 2001 was $2.4 million, compared to $3.8 million for the same period last year. Selling, general & administrative (SG&A) expense for the fourth quarter was $2.3 million, which is consistent with expenses during the previous quarter and $1.8 million less than a year ago. Earnings before interest, taxes, depreciation and amortization ("EBITDA") from continuing operations was $0.1 million in the fourth quarter, compared to $(0.3) million for the same period last year. Net loss from continuing operations for the fourth quarter was $1.0 million, compared to net loss from continuing operations of $1.3 million for the same period last year. Net Loss, including discontinued operations, was $1.6 million for the fourth quarter, compared a net loss of $7.9 million during the same period in 2000. Full-Year Consolidated Results Edgewater Technology reported revenue for 2001 of $26.6 million, compared with $31.8 million for the prior year, down 16.3%. Gross profit for fiscal 2001 was $10.8 million, or 40.8% of revenues, compared to $16.0 million, or 50.2% of revenues, in the year-earlier period. EBITDA from continuing operations was $0.3 million for the year ending December 31, 2001, compared to $1.6 million for 2000. Net loss from continuing operations was $3.7 million, or $0.29 per share for 2001, compared to net loss from continuing operations of $1.7 million, or $0.06 per share, in 2000. Net income was $2.0 million or $0.15 per share in 2001, compared to a net loss of $51.2 million or $1.75 per share in 2000. This loss in 2000 was primarily due to gains on the sales of divisions recognized in each period, which was more than offset by significant losses from discontinued operations. Effective January 1, 2002, as the result of a change in generally accepted accounting principles, goodwill will no longer be amortized. Our results of operations for the three months and year ending December 31, 2001, excluding goodwill amortization, would have resulted in net income from continuing operations of $.1 million or $.01 per share and $.7 million or $.05 per share, respectively. "Overall, the year 2001 was a difficult one. Not only were we affected by the shifting economy and the shakeout in the IT sector, but we also faced the challenges associated with the murder of seven of our employees in December, 2000," said Shirley Singleton, President and CEO of Edgewater Technology. "Despite these challenges, we added 17 new clients during the year and exited 2001 with revenue backlog of $12.3 million, which is 14% greater than the $10.8 million year-end backlog reported a year ago. In addition, the company was cash flow positive for 2001, the direct result of our solid business fundamentals, including a disciplined infrastructure, mature internal processes and a strong balance sheet. This was achieved while we retained our consultant base anticipating an up-tick in the economy, but resulting in a larger bench and lower utilization and gross profit." Singleton added, "As we enter 2002, we are still seeing signs of delays and deferrals as clients continue to re-evaluate their IT spending, although sales activity levels appear to be increasing. In addition to the issue of a struggling economy, the Company must also contend with the distractions associated with the upcoming murder trial. For these reasons, we expect to see revenues tracking lower in the first half of 2002, but continue to remain hopeful for the second half of the year. Given this, we will continue to evaluate key metrics of backlog, utilization, and the sales pipeline and we are prepared to take appropriate steps to maintain our commitment to sound fiscal management." Singleton continued, "2001 also marked a year of transition for Edgewater Technology, with the relocation of our corporate headquarters from Fayetteville, Arkansas to Wakefield, Massachusetts. With the transition complete, we will maintain our focus on developing new client relationships in 2002, with an emphasis on partnerships that bring a total solution to our clients while maintaining our competitive advantage. American Student Assistance, one of our partners, is coupling their specific industry expertise with Edgewater Technology's proficiency in technology to deploy large-scale solutions to third parties." Singleton concluded, "We will continue to leverage our vertical and practice area expertise while continuing to evaluate strategic opportunities that would augment our vertical businesses and/or increase our geographic presence. While we have explored many acquisition possibilities, we intend to be selective and look for opportunities that have a sound basis and will be beneficial to our shareholders." Significant Events Completed During 2001 . Issuer Tender Offer. On January 30, 2001, the Company completed an issuer tender offer and repurchased 16.25 million shares for $130 million, reducing our share count down from 29.5 million shares to 13 million shares. . Closing of ClinForce Transaction. On March 16, 2001, the Company completed the sale of its wholly-owned subsidiaries, ClinForce, Inc. and CFRC, Inc. to Cross Country TravCorps, Inc. for $31 million in cash before fees and expenses, subject to post-closing adjustments. A positive post-closing working capital adjustment was determined on July 18, 2001, resulting in our receipt of an additional $1.4 million in cash for overall gross transaction proceeds of $32.4 million. . Transition of Corporate Headquarters. The Company completed transition of its corporate headquarters from Fayetteville, Arkansas to Wakefield, Massachusetts. . Other Share Repurchases. During 2001, not including the tender offer, the Company repurchased 922,500 shares for $3.7 million. As a result of both the tender offer and the continuing stock repurchase program, Edgewater Technology has reduced shares outstanding from 28.7 million shares of common stock outstanding to 11.6 million shares as of December 31, 2001. The Company is authorized to repurchase up to an additional $20 million worth of the Company's outstanding common stock through August, 2003, unless shortened or extended by its Board of Directors. . Singleton Elected to Board of Directors. During the Annual Stockholders' Meeting on June 6, 2001, Shirley Singleton, the Company's President, was elected to the Board of Directors. . Tax Refund. On August 9, 2001, the Company received a tax refund for the amount of $15.8 million and an additional tax refund for $0.3 million on September 5, 2001. . Transition Plan Completed. Singleton Appointed to CEO; Rhodes Appointed to CFO. On January 9, 2002, the Company that announced the final step of the transition plan was completed with the appointment of Shirley Singleton to Chief Executive Officer (CEO) and Kevin Rhodes to Chief Financial Officer (CFO). 5 About Edgewater Technology, Inc. Founded in 1992, Edgewater Technology, Inc. is an award-winning consulting and systems integration firm that specializes in tailored technology solutions for middle-market companies. Headquartered in Wakefield, Massachusetts, the company has taken a partnership approach with its clients, targeting strategic, mission-critical applications. Edgewater Technology services its client base by leveraging a combination of leading-edge technologies and proven reengineering techniques provided by its network of national solutions centers strategically positioned across the United States. For further information, visit www.edgewater.com or call 781-246-3343. 6 Selected Financial Data: EDGEWATER TECHNOLOGY, INC. Statements of Operation (In thousands, except per share amounts)
(Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2001 2000 2001 2000 ------------ ------------ ------------ -------------- Revenues (1) $6,053 $8,172 $26,574 $31,799 Cost of services 3,677 4,416 15,733 15,834 ------------ ------------ ------------ -------------- Gross profit 2,376 3,756 10,841 15,965 Selling, general and administrative 2,256 4,048 10,551 14,411 ------------ ------------ ------------ -------------- EBITDA 120 (292) 290 1,554 Depreciation and amortization 1,356 1,817 5,465 5,078 ------------ ------------ ------------ -------------- Operating (loss) income (1,236) (2,109) (5,175) (3,524) Interest income (expense) and other, net 338 1,939 2,090 3,078 ------------ ------------ ------------ -------------- Loss before income taxes (898) (170) (3,085) (446) Income tax provision 101 1,156 593 1,234 ------------ ------------ ------------ -------------- Net loss from continuing operations (999) (1,326) (3,678) (1,680) (Loss) income from discontinued operations (562) (7,065) (904) (113,535) Gain (loss) on sale of divisions - 811 6,514 64,368 (Loss) Income from Extraordinary Item - (360) (27) (360) ------------ ------------ ------------ -------------- Net (loss) income ($1,561) ($7,940) $1,905 ($51,207) ============ ============ ============ ============== BASIC AND DILUTED EARNINGS PER SHARE From continuing operations ($0.09) ($0.05) ($0.29) ($0.06) Net income ($0.14) ($0.28) $0.15) ($1.75) ============ ============ ============ ============== Proforma continuing operations (2) $0.01 $0.01 $0.05 $0.09 ============ ============ ============ ============== AVERAGE SHARES OUTSTANDING 11,605 28,686 12,858 29,212
(1) Revenues and Cost of Services have been adjusted in accordance with Emerging Issues Task Force No. D-103, "Income Statement Characterization of Reimbursements Received for "Out of Pocket" Expenses Incurred. (2) Effective January 1, 2002, as the result of a change in generally accepted accounting principles, goodwill will no longer be amortized. Proforma EPS excludes goodwill amortization expense of $1.1 million and $1.6 million for the three months ended December 31, 2001 and 2000, respectively; and excludes goodwill amortization expense of $4.3 million for the twelve months ended December 31, 2001 and 2000. Summary Balance Sheet Information at December 31, 2001 (In thousands) (Unaudited) Assets Liabilities and Equity - ------ ---------------------- Cash and Cash Equivalents $ 51,501 Accounts Payable & Accrued Reserves $ 6,785 Accounts Receivable, Net 4,045 Accrued Payroll & Liabilities 629 Fixed Assets, Net 2,056 Long Term Liabilities & Other 441 Deferred Tax Asset 22,523 Stockholders Equity 104,992 ---------- Intangible Assets 31,807 Liabilities & Shareholders Equity $ 112,847 ========== Prepaid and Other Assets 915 Shares Outstanding 11,594 --------- Total Assets $ 112,847 =========
# # # 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, including statements made with respect to our 2002 outlook concerning utilization, revenues, sales, and cash flow, as well growth opportunities and plans The forward looking statements included in the Press Release relate to future events or our future financial conditions or performance, Words such as "helping," "hopeful," "will," "obtain," "seek," "reduce," "improve," "going," "view," "prospects," "expect," "intend," "provide," "begin," "focus," "believe," "continue," and "sustain," or the negative thereof or variations thereon and similar expressions are intended to identify forward-looking statements. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on our current plans or assessments that are believed to be reasonable as of the date of this Press Release. Factors that may cause actual results, goals, targets or objectives to differ materially from those contemplated, projected, forecast, estimated, anticipated, planned or budgeted in such forward-looking statements include, among others, the following possibilities: (1) changes in industry trends, such as decline in the demand for ebusiness services and/or information technology services; (2) failure to obtain new customers or retain significant existing customers; (3) loss of key executives; (4) general economic and business conditions (whether foreign, national, state or local) which include but are not limited to changes in interest or currently exchange rates and the overall demand for ebusiness services and/or spending for information technology services; (5) failure of the general economy or IT services spending to rebound or otherwise improve; (6) lack of available growth opportunities; (7) the inability to maintain, sustain or grow revenues; (8)the strength or visibility of the Company's backlog of business of $12.3 million; and (9) any changes in ownership of the Company or otherwise that would result in a limitation on the use of the net operating loss carry forward under applicable tax laws. Actual events or results may differ materially from those discussed, contemplated, forecasted, estimated, anticipated, planned or implied in the forward-looking statements as a result of the various factors described above and those further set forth (A) under the headings "Summary - Risks of Not Approving the Transaction", "Summary - Recent Events", "Edgewater Following Completion of the Transaction", "Factors Affecting Edgewater Following the Transaction" and "Forward looking Statements" in the Company's Proxy Statement filed with the Securities and Exchange Commission on February 6, 2001 and (B) under the heading "Business- Factors Affecting Finances, Business Prospects and Stock Volatility" in the Company's Form 10-K filed with the Securities and Exchange Commission on March 30, 2001. # # # 8 -----END PRIVACY-ENHANCED MESSAGE-----