-----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, OpTb9AQ8hpn7OgR249VOIULK2Cm1GMPZYctTLbTC2Ifod9UjMp0J0kaSokm7BDc/ IIQ9GtR5F/oU4OEUeLvEhg== 0001157523-05-006277.txt : 20050720 0001157523-05-006277.hdr.sgml : 20050720 20050720083523 ACCESSION NUMBER: 0001157523-05-006277 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050720 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050720 DATE AS OF CHANGE: 20050720 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: 05962770 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 a4933758.txt EDGEWATER TECHNOLOGY, INC. 8-K - -------------------------------------------------------------------------------- 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): July 20, 2005 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 July 20, 2005, Edgewater Technology, Inc. (the "Company") reported its results of operations for its second quarter ended June 30, 2005. 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 July 20, 2005. * * * 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 fiscal 2005 outlook. The forward looking statements included in the Press Release relate to future events or our future financial conditions or performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "believe," "anticipate," "future," "forward," "potential," "estimate," "encourage," "opportunity," "goal," "objective," "quality," "growth," "leader," "could", "expect," "intend," "plan," "planned" "expand," "focus," "build," "through," "strategy," "expiration," "provide," "offer," "maximize," "allow," "allowed," "represent," "commitment," "create," "implement," "result," "seeking," "increase," "add," "establish," "pursue," "feel," "work," "perform," "make," "continue," "can," "will," "ongoing," "include" or the negative of such terms or comparable terminology. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on our current plans or assessments which 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, forecasted, estimated, anticipated, planned or budgeted in such forward-looking statements include, among others, the following possibilities: (1) inability to execute upon growth objectives, including growth in entities acquired by our Company; (2) failure to obtain new customers or retain significant existing customers; (3) the loss of one or more key executives and/or employees; (4) changes in industry trends, such as a decline in the demand for Business Intelligence ("BI") and Corporate Performance Management ("CPM") solutions, custom development and system integration services and/or delays in industry-wide information technology ("IT") spending, whether on a temporary or permanent basis and/or delays by customers in initiating new projects or existing project milestones; (5) adverse developments and volatility involving geopolitical or technology market conditions; (6) unanticipated events or the occurrence of fluctuations or variability in the matters identified under "Critical Accounting Policies"; (7) failure of our sales pipeline to be converted to billable work and recorded as revenue; (8) failure of the middle market and the needs of middle-market enterprises for business services to develop as anticipated; (9) inability to recruit and retain professionals with the high level of information technology skills and experience needed to provide our services; (10) failure to expand outsourcing services to generate additional revenue; (11) any changes in ownership of the Company or otherwise that would result in a limitation of the net operating loss carry forward under applicable tax laws; (12) the failure of the marketplace to embrace CPM or BI services; and/or (13) the failure to obtain remaining predecessor entity tax records that are not in our control and/or successfully resolve remaining outstanding IRS matters relating to our former staffing businesses. In evaluating these statements, you should specifically consider various factors described above as well as the risks outlined under Item I "Business - Factors Affecting Finances, Business Prospects and Stock Volatility" in our 2004 Annual Report on Form 10-K filed with the SEC on March 29, 2005. These factors may cause our actual results to differ materially from those contemplated, projected, anticipated, planned or budgeted in any such forward-looking statements. Although we believe that the expectations in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, growth, earnings per share or achievements. However, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements. We are under no duty to update any of the forward-looking statements after the date of this Press Release to conform such statements to actual results. 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: July 20, 2005 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 a4933758ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Edgewater Technology Reports Financial Results for Second Quarter 2005; Achieves Double-Digit Revenue Growth & Improves Profitability by 109% WAKEFIELD, Mass.--(BUSINESS WIRE)--July 20, 2005--A technology management consulting firm specializing in providing premium IT services, Edgewater Technology, Inc. (NASDAQ: EDGW, www.edgewater.com, "Edgewater Technology" or the "Company"), today announced financial results for its second quarter ended June 30, 2005. Second Quarter Results Actual financial results and utilization for the quarter ended June 30, 2005: -- Total revenue increased 17.9% to $10.6 million, compared to $9.0 million in the first quarter of 2005 and increased 72.0%, compared to revenue of $6.1 million during the second quarter of 2004; -- Service revenue increased 13.2% to $9.4 million, compared to $8.3 million in the first quarter of 2005 and increased 55.4%, compared to revenue of $6.1 million during the second quarter of 2004; -- Gross profit increased 20.2% to $4.6 million, or 43.5% of revenues, compared to $3.8 million, or 42.6% of revenues, in the first quarter of 2005 and increased 90.7%, compared to $2.4 million, or 39.2% of revenues, during the second quarter of 2004; -- Gross profit margin related to service revenue was 48.6%, compared to 45.8% in the first quarter of 2005 and 39.8% in the second quarter of 2004; -- Utilization was 84.0%, compared to 81.5% during the fist quarter of 2005 and 71.3% for the second quarter of 2004; -- Net income amounted to $0.4 million, or $0.04 per diluted share, compared to $0.2 million, or $0.02 per diluted share, in the first quarter of 2005. Net loss was ($0.04) million, or ($0.004) per diluted share, in the second quarter of 2004; and -- Cash flow used in operating activities was ($0.2) million in the second quarter of 2005, compared to cash flow provided by operating activities of $1.4 million during the first quarter of 2005 and cash flow used in operating activities of ($0.5) million during the second quarter of 2004. First Six Months of 2005 Actual financial results and utilization for the six months ended June 30, 2005: -- Total revenue increased 55.4% to $19.5 million, compared to $12.6 during the first six months of 2004; -- Service revenue increased 42.6% to $17.7 million, compared to $12.4 during the first six months of 2004; -- Gross profit increased 68.6% to $8.4 million, or 43.1% of revenues, compared to $5.0 million, or 39.7% of revenues during the first six months of 2004; -- Gross profit margin related to service revenue was 47.3%, compared to 40.2% during the first six months of 2004; -- Utilization was 82.8%, compared to 73.4% during the first six months of 2004; -- Net income amounted to $0.6 million, or $0.06 per diluted share, compared to net income of $0.02 million, or $0.002 per diluted share during the first six months of 2004; and -- Cash flow provided by operating activities was $1.2 million during the first six months of 2005, compared to cash flow used in operating activities of ($2.0) million during the first six months of 2004. "We are pleased with the improvement in our key operating and financial metrics for the third consecutive quarter," stated Shirley Singleton, President & CEO of Edgewater Technology. "Our second quarter financials are a result of strong organic growth as well as the solid performance of our recent acquisition of Ranzal & Associates." Singleton continued, "While seasonality has traditionally played a role in the third quarter, we are optimistic that our pipeline can support continued revenue growth in the third quarter." Conference Call Edgewater Technology will host a conference call on Wednesday, July 20, at 10:00 a.m. (ET) to discuss second-quarter 2005 financial results. To listen to the call, you can participate by webcast at www.edgewater.com - Investor Relations section or you can dial 866-901-5247 (passcode 17660311) approximately 10 minutes prior to the call start. A replay of the call can be accessed via www.edgewater.com - Investor Relations section or by dialing 888-286-8010 (passcode 40021003) from 12:00 p.m. (ET) Wednesday, July 20 through 11:59 p.m. (ET) Wednesday, July 27. About Edgewater Technology, Inc. Edgewater Technology, Inc. is an innovative technology management consulting firm. We provide a unique blend of premium IT services by leveraging our proven industry expertise in strategy, technology and corporate performance management. Headquartered in Wakefield, MA, we go to market by vertical industry and provide our clients with a wide range of business and technology offerings. To learn more, visit www.edgewater.com or call 800-410-4014. Selected Financial Data: EDGEWATER TECHNOLOGY, INC. Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2005 2004 2005 2004 ------- ------- ------- ------- Revenue: Service revenues $ 9,408 $ 6,055 $17,717 $12,423 Software 744 - 1,018 - Reimbursable expenses 407 83 783 137 ------- ------- ------- ------- Total revenue 10,559 6,138 19,518 12,560 Cost of revenue: Project and personnel costs 4,832 3,647 9,333 7,434 Software costs 728 - 989 - Reimbursable expenses 407 83 783 137 ------- ------- ------- ------- Total cost of revenue 5,967 3,730 11,105 7,571 ------- ------- ------- ------- Gross profit 4,592 2,408 8,413 4,989 Selling, general and administrative 3,920 2,395 7,375 4,777 Depreciation and amortization expense 246 197 550 390 ------- ------- ------- ------- Operating income (loss) 426 (184) 488 (178) Interest income and other, net 227 113 479 214 ------- ------- ------- ------- Income (loss) before income taxes 653 (71) 967 36 Provision for Income taxes 261 (28) 387 14 ------- ------- ------- ------- Net income (loss) $ 392 $ (43) $ 580 $ 22 ======= ======= ======= ======= BASIC AND DILUTED EARNINGS (LOSS) PER SHARE: Basic and diluted earnings (loss) per share $ 0.04 $ (0.00) $ 0.06 $ 0.00 ======= ======= ======= ======= Weighted Average Shares Outstanding - Basic 10,321 11,435 10,331 11,413 ======= ======= ======= ======= Weighted Average Shares Outstanding - Diluted 10,628 11,435 10,697 12,288 ======= ======= ======= ======= EDGEWATER TECHNOLOGY, INC. Summary Consolidated Balance Sheet Information (In thousands) June 30, December 31, 2005 2004 (Unaudited) (Audited) ------------ ------------ Assets - ------ Cash and marketable securities $ 32,475 $ 33,908 Accounts receivable, net 7,774 5,272 Fixed assets, net 1,284 1,364 Deferred taxes, net 21,884 22,213 Intangible assets, net 17,296 16,628 Prepaid expenses and other assets 766 2,317 ------------ ------------ Total Assets $ 81,479 $ 81,702 ============ ============ Liabilities and Stockholders' Equity - ------------------------------------ Accounts payable and accrued liabilities $ 3,301 $ 3,650 Accrued payroll and related liabilities 1,828 1,091 Deferred revenue and other liabilities 542 365 Stockholders' Equity 75,808 76,596 ------------ ------------ Total Liabilities and Stockholders' Equity $ 81,479 $ 81,702 ------------ ------------ Shares Outstanding 10,353 10,549 ============ ============ 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 fiscal 2005 outlook. The forward looking statements included in the Press Release relate to future events or our future financial conditions or performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "believe," "anticipate," "future," "forward," "potential," "estimate," "encourage," "opportunity," "goal," "objective," "quality," "growth," "leader," "could", "expect," "intend," "plan," "planned" "expand," "focus," "build," "through," "strategy," "expiration," "provide," "offer," "maximize," "allow," "allowed," "represent," "commitment," "create," "implement," "result," "seeking," "increase," "add," "establish," "pursue," "feel," "work," "perform," "make," "continue," "can," "will," "ongoing," "include" or the negative of such terms or comparable terminology. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on our current plans or assessments which 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, forecasted, estimated, anticipated, planned or budgeted in such forward-looking statements include, among others, the following possibilities: (1) inability to execute upon growth objectives, including growth in entities acquired by our Company; (2) failure to obtain new customers or retain significant existing customers; (3) the loss of one or more key executives and/or employees; (4) changes in industry trends, such as a decline in the demand for Business Intelligence ("BI") and Corporate Performance Management ("CPM") solutions, custom development and system integration services and/or delays in industry-wide information technology ("IT") spending, whether on a temporary or permanent basis and/or delays by customers in initiating new projects or existing project milestones; (5) adverse developments and volatility involving geopolitical or technology market conditions; (6) unanticipated events or the occurrence of fluctuations or variability in the matters identified under "Critical Accounting Policies"; (7) failure of our sales pipeline to be converted to billable work and recorded as revenue; (8) failure of the middle market and the needs of middle-market enterprises for business services to develop as anticipated; (9) inability to recruit and retain professionals with the high level of information technology skills and experience needed to provide our services; (10) failure to expand outsourcing services to generate additional revenue; (11) any changes in ownership of the Company or otherwise that would result in a limitation of the net operating loss carry forward under applicable tax laws; (12) the failure of the marketplace to embrace CPM or BI services; and/or (13) the failure to obtain remaining predecessor entity tax records that are not in our control and/or successfully resolve remaining outstanding IRS matters relating to our former staffing businesses. In evaluating these statements, you should specifically consider various factors described above as well as the risks outlined under Item I "Business - Factors Affecting Finances, Business Prospects and Stock Volatility" in our 2004 Annual Report on Form 10-K filed with the SEC on March 29, 2005. These factors may cause our actual results to differ materially from those contemplated, projected, anticipated, planned or budgeted in any such forward-looking statements. Although we believe that the expectations in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, growth, earnings per share or achievements. However, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements. We are under no duty to update any of the forward-looking statements after the date of this Press Release to conform such statements to actual results. CONTACT: Edgewater Technology, Inc. Kevin Rhodes, Chief Financial Officer Barbara Warren-Sica, Investor Relations 781-246-3343 ir@edgewater.com -----END PRIVACY-ENHANCED MESSAGE-----