-----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, R+Hr9+9QxH2/YrNaJi4U6fwy4qqQuFwEbT9p+Y/G8556KVPHzhBastRoPci6ZR4z tMO9c3ZAmZ3A4ZIunJXvzg== 0001157523-04-009500.txt : 20041020 0001157523-04-009500.hdr.sgml : 20041020 20041020111408 ACCESSION NUMBER: 0001157523-04-009500 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041020 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20041020 DATE AS OF CHANGE: 20041020 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EDGEWATER TECHNOLOGY INC/DE/ CENTRAL INDEX KEY: 0001017968 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] 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: 041086688 BUSINESS ADDRESS: STREET 1: 20 HARVARD MILL SQUARE CITY: WAKEFIELD STATE: MA ZIP: 01880 BUSINESS PHONE: 781-213-9854 MAIL ADDRESS: STREET 1: 20 HARVARD MILL SQUARE CITY: WAKEFIELD STATE: MA ZIP: 01880 FORMER COMPANY: FORMER CONFORMED NAME: STAFFMARK INC DATE OF NAME CHANGE: 19960702 8-K 1 a4745660.txt EDGEWATER TECHNOLOGY, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 20, 2004 EDGEWATER TECHNOLOGY, INC. (Exact name of registrant as specified in its charter) Delaware 0-20971 71-0788538 (State or other jurisdiction of (Commission File No.) (IRS Employer incorporation) Identification No.) 20 Harvard Mill Square Wakefield, Massachusetts 01880 Registrant's telephone number, including area code: (781) 246-3343 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2-(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On October 20, 2004, Edgewater Technology, Inc. (the "Company") reported its results of operations for its third quarter ended September 30, 2004. A copy of the press release issued by the Company concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference in its entirety. The information contained herein and in the accompanying exhibit is being "furnished," as opposed to being "filed" pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act") and shall not be incorporated hereafter by reference into any filing of the Company, where made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report, including the exhibit incorporated hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (a) Exhibits. Exhibit Number Description of Exhibit - -------------- ---------------------- 99.1 Edgewater Technology, Inc. Press Release dated October 20, 2004. * * * 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 the expected revenue and accretive impacts of the Ranzal acquisition, as well as statements regarding our sales pipeline, and estimated third quarter 2004 revenues and 2004 fiscal year revenues sales and operating results. The forward looking statements included in the Press Release relate to future events or our future financial conditions or performance, Words such as "targeting," "expected," "will," "are," "provide," "continue," "remain," "optimistic" 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) the inability to promptly and effectively integrate Ranzal into the Company's operations, culture and back office administrative support areas; (2) loss of one or more key customers or key employees (3) changes in industry trends, such as decline in the demand for business intelligence and performance management solutions, custom development and system integration services and/or spending delays with existing information technology services projects; (4) failure to obtain new customers or retain significant existing customers; (5) loss of key executives; (6) 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 information technology services and/or spending delays for existing information technology services; (7) failure of the general economy or IT services spending to rebound or otherwise improve; (8) lack of available growth opportunities; (9) the inability to maintain, sustain or grow revenues; (10) failure of middle-market companies to spend amounts on IT projects, whether short-term or long-term; and (11) 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 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, 2004. 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. Dated: October 20, 2004 EDGEWATER TECHNOLOGY, INC. By: /s/ Kevin R. Rhodes ------------------- Name: Kevin R. Rhodes Title: Chief Financial Officer (Principal Financial and Accounting Officer) EX-99.1 2 a4745660ex991.txt EDGEWATER TECHNOLOGY, INC. Exhibit 99.1 Edgewater Technology, Inc. Reports Third Quarter 2004 Financial Results WAKEFIELD, Mass.--(BUSINESS WIRE)--Oct. 20, 2004--Custom development and system integration consulting firm, Edgewater Technology, Inc. (NASDAQ: EDGW, www.edgewater.com, "Edgewater Technology" or the "Company") today announced financial results for the third quarter ended September 30, 2004. Third Quarter Results Actual financial results and utilization for the September 30, 2004 quarter were as follows: -- Revenue amounted to $4.9 million, compared to $6.1 million in the second quarter of 2004 and $6.9 million for the third quarter of 2003; -- Gross profit was $1.5 million, compared to $2.4 million in the second quarter of 2004 and $3.2 million for the third quarter of 2003; -- Gross profit margin was 30%, compared to 39% in the second quarter of 2004 and 46% for the third quarter of 2003; -- Utilization was 66% for the third quarter, compared to 71% during the second quarter of 2004 and 80% for the third quarter of 2003, and; -- Net loss was ($1.02) million, or ($0.09) per share, compared to net loss of ($0.04) million, or ($0.004) per share for the second quarter of 2004 and net income during the third quarter of 2003 of $0.2 million or $0.01 per share. First Nine Months of 2004 Actual financial results and utilization for the first nine months of 2004 were as follows: -- Revenue amounted to $17.5 million, compared to $18.3 million during the first nine months of 2003; -- Gross profit amounted to $6.5 million, compared to $8.5 million during the first nine months of 2003; -- Gross profit margin amounted to 37%, compared to 46% during the first nine months of 2003; -- Utilization was 73%, compared to 80% during the first nine months of 2003, and; -- Net loss was ($1.0) million, or ($0.09) per share, compared to net income for the first nine months of 2003 of $0.4 million, or $0.03 per share. "As we mentioned during our second quarter 2004 financial results conference call and within a recent press release, customer delays in approving spending for new IT initiatives did affect us during the third quarter," commented Shirley Singleton, President and CEO of Edgewater Technology. "Despite a healthy sales pipeline, closure of several client engagements did not occur until late in the quarter. As a consequence, we also anticipate that the delays will affect our full year revenues for 2004, which we expect will approximate 2003 levels. This would likely result in an operating loss for 2004, which could be approximately $1.0 million, assuming actual 2004 revenues come in at a level comparable to 2003 revenues." Ms. Singleton continued, "Nonetheless, we remain enthusiastic about our organic sales pipeline and the full year 2005 effects of the Ranzal & Associates acquisition which was completed on October 4th. Ranzal strengthens our capabilities in strategy and design, solidifies our east coast presence, and expands our vertical expertise and service offerings to the middle market, in particular in the high-growth area of Business Performance Management (BPM). In addition, it provides Edgewater and Ranzal with the opportunity to provide a combined, more robust custom development and BPM service offering to existing and prospective clients, while adding additional scale to Edgewater in 2005 and thereafter." Conference Call Edgewater Technology will host a conference call today, Wednesday, October 20, at 10:00 a.m. (EST) to discuss the Company's third quarter 2004 results. To listen to the call, you can participate by Web cast at www.edgewater.com - Investor Relations section or you can dial 800-967-7188 approximately 15 minutes prior to start of the call. A replay of the call can be accessed via www.edgewater.com - Investor Relations section or by dialing 888-203-1112 or 719-457-0820 (passcode 844672) from 1:00 p.m. ET Wednesday, October 20 through 11:59 p.m. ET Wednesday, October 27. About Edgewater Technology Founded in 1992, Edgewater Technology is an award-winning consulting firm that specializes in combining strategic consulting, technical knowledge, and industry domain expertise to develop technology solutions that assist primarily middle-market companies and divisions of Global 2000 companies to align their processes with their purposes. This approach not only promotes increased efficiency, but also supports increased effectiveness. Targeting strategic, mission-critical applications, the Company collaborates with customers to translate business goals into technical strategies. Headquartered in Wakefield, Massachusetts, the Company services its client base throughout its network of strategically positioned solutions centers. For further information, visit www.edgewater.com or call 781-246-3343. Selected Financial Data: EDGEWATER TECHNOLOGY, INC. Statements of Operations (In thousands, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2004 2003 2004 2003 ---------- ------- -------- -------- Service revenues $4,893 $6,934 $17,453 $18,281 Cost of services 3,401 3,729 10,972 9,816 ---------- ------- -------- -------- Gross profit 1,492 3,205 6,481 8,465 Selling, general and administrative 2,475 2,783 7,252 7,457 Depreciation and amortization expense 204 262 594 689 ---------- ------- -------- -------- Operating (loss) income (1,187) 160 (1,365) 319 Interest income and other, net 156 94 370 323 ---------- ------- -------- -------- (Loss) income before income taxes (1,031) 254 (995) 642 Income (benefit) tax provision (14) 102 - 257 ---------- ------- -------- -------- Net (loss) income $(1,017) $152 $(995) $385 ========== ======= ======== ======== BASIC AND DILUTED EARNINGS PER SHARE Net (loss) income, basic $(0.09) $0.01 $(0.09) $0.03 ========== ======= ======== ======== Net (loss) income, diluted $(0.09) $0.01 $(0.08) $0.03 ========== ======= ======== ======== Weighted Average Shares Outstanding - Basic 11,296 11,393 11,374 11,409 ========== ======= ======== ======== Weighted Average Shares Outstanding - Diluted 11,795 11,701 12,102 11,564 ========== ======= ======== ======== EDGEWATER TECHNOLOGY, INC. Summary Balance Sheet Information (In thousands) September 30, December 31, 2004 2003 (Unaudited) (Unaudited) --------------- ------------- Assets - ----------------------------------------- Cash and marketable securities $41,249 $44,259 Accounts receivable, net 3,315 3,532 Fixed assets, net 1,258 1,309 Deferred tax asset, net 22,213 22,175 Intangible assets, net 12,824 13,135 Prepaid expenses and Other assets 1,910 2,121 --------------- ------------- Total Assets $82,769 $86,531 =============== ============= Liabilities and Equity - ----------------------------------------- Accounts payable & Accrued liabilities $3,005 $3,554 Accrued payroll & related liabilities 603 2,009 Other liabilities 38 84 Stockholders' Equity 79,123 80,884 --------------- ------------- Total Liabilities & Stockholders' Equity $82,769 $86,531 =============== ============= Shares Outstanding 11,233 11,366 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 the expected revenue and accretive impacts of the Ranzal acquisition, as well as statements regarding our sales pipeline, and estimated third quarter 2004 revenues and 2004 fiscal year revenues sales and operating results. The forward looking statements included in the Press Release relate to future events or our future financial conditions or performance, Words such as "targeting," "expected," "will," "are," "provide," "continue," "remain," "optimistic" 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) the inability to promptly and effectively integrate Ranzal into the Company's operations, culture and back office administrative support areas; (2) loss of one or more key customers or key employees (3) changes in industry trends, such as decline in the demand for business intelligence and performance management solutions, custom development and system integration services and/or spending delays with existing information technology services projects; (4) failure to obtain new customers or retain significant existing customers; (5) loss of key executives; (6) 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 information technology services and/or spending delays for existing information technology services; (7) failure of the general economy or IT services spending to rebound or otherwise improve; (8) lack of available growth opportunities; (9) the inability to maintain, sustain or grow revenues; (10) failure of middle-market companies to spend amounts on IT projects, whether short-term or long-term; and (11) 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 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, 2004. CONTACT: Edgewater Technology, Inc. Kevin R. Rhodes, 781-246-3343 Chief Financial Officer or Barbara Warren-Sica, 781-246-3343 Investor Relations -----END PRIVACY-ENHANCED MESSAGE-----