BALTIMORE--(BUSINESS WIRE)--Avatech Solutions, Inc. (OTCBB:AVSO), the nationwide technology experts
for design, engineering, and facilities management, today announced
financial results for its first quarter ended September 30, 2006.
Total revenue grew 30.6% over the same quarter in the prior fiscal year
and totaled $12,045,000 compared to $9,227,000 in the prior period. For
the three months ended September 30, 2006, Avatech reported net income
of $36,000, or $0.00 per fully diluted share, compared to net income of
$166,000, or $0.01 per fully diluted share, in the same period last year.
The Company noted that its services revenue was ahead of its plan,
increasing 40.6% from the same period in fiscal year 2006 and that its
commission revenue increased 88.2% from year to year. While a portion of
the increases in services and commission revenue is attributable to the
May 2006 acquisition of Sterling Systems & Consulting, Inc., the Company
showed strong organic growth in these revenue categories.
Chief Executive Officer Scotty Walsh commented, “Our
business followed its normal seasonal trends in fiscal 2007, with the
first quarter being a slower period in terms of revenues and earnings
than the Company’s second and third fiscal
quarters. We are pleased with the contributions of the Sterling
business, which met our internal goals for the period, and by the marked
increase in Service revenue, which rose to $2.6 million, the highest
revenue level the Services business has ever realized. These
accomplishments support our goal of transitioning Avatech to a more
diversified services and solutions provider.
“Over the past year, we have gradually been
shapingand building Avatech’s sales
and technical staff as part of our strategy to create four distinct
industry-focused business units – Building
Solutions, Infrastructure and Civil Engineering Solutions, Manufacturing
Solutions, and Facilities Management Solutions –
that can serve their customers with increased breadth and depth of
knowledge. The cost of hiring these additional personnel is reflected in
our higher SG&A, which negatively impacted the company’s
profitability for the first quarter. Demand in our markets continues to
be strong, particularly in the 3D design arena, and we are making every
effort to bring our new staff to full productivity as quickly as
possible.
"We believe Avatech is off to a good start on achieving our full-year
revenue target of $55 to $60 million, excluding additional acquisitions,
and we remain focused on improving our operating margins by expanding
and diversifying our range of products, taking full advantage of
cross-selling opportunities, growing our geographic footprint, and
increasing our service-oriented business.”
Conference Call Information
Avatech will hold a conference call to discuss its first-quarter results
at 11:00 a.m. Eastern Time on Wednesday, November 15, 2006. The dial-in
number for the conference call is (866) 634-2258. (For international
callers, the dial-in number is 706-643-9926.) A replay of the call will
also be available through Wednesday, November 22, 2006, and can be
accessed by dialing (706) 645-9291, conference ID #1583005. 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.
About Avatech Solutions
Avatech Solutions, Inc. (OTCBB:AVSO) is the recognized leader in design
and engineering technology with unparalleled expertise in design
automation, data management and process optimization for the
manufacturing, engineering, building design and facilities management
markets. Headquartered in Owings Mills, Maryland, the company
specializes in consulting, software systems integration and
implementation, standards development and deployment, education, and
technical support. Avatech is one of the largest integrators of Autodesk
software worldwide and a leading provider of PLM solutions. The company’s
clients include industry leaders from Fortune 500 and Engineering News
Record’s Top 100 companies. Visit http://www.avatech.com
for more information.
Forward-looking Statement
This press release contains forward-looking statements about the
expectations, beliefs, plans, intentions, and strategies of Avatech
Solutions, Inc. There are a number of important factors that could cause
actual results to differ materially from those anticipated by any
forward-looking information. Statements that are not historical in
nature, including those that include the words “goal,”“expect,”“anticipate,”“estimate,”“should,”“believe,”“intend,”
and similar expressions, are based on current expectations, estimates
and projections about, among other things, the industry and the markets
in which Avatech operates, and they are not guarantees of future
performance. Whether actual results will conform to expectations and
predictions is subject to known and unknown risks and uncertainties,
including risks and uncertainties discussed in this report; general
economic, market, or business conditions; changes in interest rates, and
demand for our products and services; changes in our competitive
position or competitive actions by other companies; the ability to
manage growth; changes in laws or regulations or policies of federal and
state regulators and agencies; and other circumstances beyond our
control. Consequently, all of the forward-looking statements made in
this document are qualified by these cautionary statements, and there
can be no assurance that the actual results anticipated will be
realized, or, if substantially realized, will have the expected
consequences on our business or operations.
