SOURCE: Brookside Technology Holdings Corp.

August 17, 2009 06:00 ET

Brookside Technology Holdings Reports 2nd Quarter Financial Results

TAMPA, FL--(Marketwire - August 17, 2009) - Brookside Technology Holdings Corp. (OTCBB: BKSD), a provider of converged VoIP, data, video and wireless business communications systems, today announced financial results for the quarter and six months ended June 30, 2009.

Michael Nole, Chairman and CEO of Brookside, commented, "We are pleased to report total revenues from operations were $4,544,051 compared to $4,533,447 reported for the same period in 2008, representing an increase of $10,604. While it's certainly been a challenging first half to 2009, we are seeing indicators that have us encouraged as we move forward. During the second quarter, we recognized positive results attributed to our company focus and initiatives to manage costs in line with estimated revenues. Evidence of this is displayed in our financial results. While second quarter revenue was ahead of revenue for the same period in 2008, it was slightly less compared to first quarter revenue. However, net loss of $1,032,224 in the second quarter 2009 decreased $295,754 from $1,327,978 in the first quarter 2009. These net losses include a significant amount of non-cash expenses such as amortization of warrants, loan discounts, deferred finances charges and intangibles of $619,003 for the second quarter 2009 and $606,928 for the first quarter 2009."

Earnings before interest, taxes, depreciation and amortization ("EBITDA"), a non-GAAP measure whereby interest expense, income taxes, depreciation and amortization are added back to the net loss to approximate cash flow, improved from ($383,363) for quarter ended March 31, 2009 to ($334) for the quarter ended June 30, 2009. Brookside makes use of EBITDA (earnings before interest, taxes, depreciation and amortization) as a financial measure because it believes it is a useful performance indicator. EBITDA is not a recognized term under generally accepted accounting principles ("GAAP") and should not be considered as an alternative to net income/loss or net cash provided by operating activities. A reconciliation of EBITDA to net loss is set forth below:

Reconciliation of GAAP Net Loss to EBITDA
(Dollars in thousands)

                                          Quarter Ended
                                 June 30, 2009    March 31, 2009
                                 -------------    --------------
GAAP net loss:                   $  (1,032,224)   $   (1,327,978)
Adjustments:
Interest expense, net                  479,446           432,809
Depreciation and amortization          552,444           511,806
EBITDA                           $        (334)   $     (383,363)

Mr. Nole continued, "With the market improving, positive organizational changes, continued management of our costs, financial support from our lenders and our customers further recognizing the intrinsic value of VoIP communications, we see this as a time to help our customers leverage technology to render maximum results with minimum effort, expense and waste. Our multifaceted and differentiated Telefficiency™ approach combines a strategic mix of consultation and technology solutions to improve business performance from enhancing customer service, increasing sales, and controlling operating costs."

Mr. Nole concluded, "With an updated amendment to our Chatham Senior Credit Agreement, the Company has the support from both Chatham and Vicis, the Company's largest shareholder, to continually develop its business plan as a industry consolidator and provider of converged Voice over IP (VoIP), data, video, and wireless (Wi-Fi) business communications systems."

Cost of Sales and Gross Margins

Cost of sales was $1,696,552 for the quarter ended June 30, 2009 compared to $2,250,924 for the quarter ended June 30, 2008, a decrease of $554,372 or 25%. As a percentage of sales, cost of sales was 37% and 50% for the quarters ended June 30, 2009 and 2008, respectively. Cost of sales was $3,972,732 for the six months ended June 30, 2009 compared to $4,480,805 for the six months ended June 30, 2008, a decrease of $508,073 or 11%. As a percentage of sales, cost of sales was 42% and 51% for the six months ended June 30, 2009 and 2008, respectively.

Accordingly, our gross margin was 63% for the quarter ended June 30, 2009 compared to 50% for the quarter ended June 30, 2008. Our gross margin was 58% for the six months ended June 30, 2009 compared to 49% for the quarter ended June 30, 2008. The significant improvement in gross margin percentage is due primarily to the Company's multifaceted and differentiated Telefficiency™ approach that combines a strategic mix of consultation and technology solutions to improve business performance from enhancing customer service, increasing sales, and controlling operating costs.

General and Administrative Expenses

General and administrative expenses were $2,840,295 and $2,116,496 for the quarters ended June 30, 2009 and 2008, respectively. General and administrative expenses were $5,950,392 and $3,860,986 for the six months ended June 30, 2009 and 2008, respectively.

Detail of the above can be found in our SEC Form 10Q filed on August 14th at this location: http://idea.sec.gov/Archives/edgar/data/1367001/000095014409002769/g18314e10vk.htm

About Brookside Technology Holdings Corp.

Brookside Technology Holdings Corp., through its subsidiary Companies, is a leading provider of converged Voice over IP (VoIP), data, video, and wireless (Wi-Fi) Business communications systems. Specializing in analyzing, designing, selling, and implementation, Brookside offers a unique portfolio of products and services that solve today's telecommunications challenges by combining technology, business, and financial solutions. Brookside's customers include both commercial and state/government organizations of all types and sizes throughout the United States. The Company seeks to grow organically and through the acquisition of complementary businesses looking to capitalize on the highly specialized growth market of providing turnkey converged voice and data solutions. With a proven track record of acquiring profitable businesses at attractive valuations, Brookside plans to leverage its expanding capabilities and combined customer bases of its portfolio companies. Additional information on the company can be found at www.brooksideus.com.

Forward-Looking Statement: Except for factual statements made herein, the information contained in this press release consists of forward-looking statements that involve risks and uncertainties, including the effect of changing economic conditions, customer acceptance of products and other risks and uncertainties. As previously disclosed in its SEC filings, such forward-looking statements are not guarantees of performance, and the Company's results could differ materially from those contained in such statements. These forward-looking statements speak only as of the date of this release, and the Company undertakes no obligation to publicly update any forward-looking statements to reflect new information, events or circumstances after the date of this release.

Contact Information

  • Brookside Contact:
    Nicholas Salerno
    ANA Consultants, LLC
    (941)-232-5833