SOURCE: DynTek Services, Inc.

DynTek Services, Inc.

September 22, 2016 16:45 ET

DynTek Announces Results for Fiscal Year 2016 and Declares a Quarterly Dividend

Company Reports 18% Increase in Annual Revenues, a 16% Increase in Annual Gross Profit, and Over 29% Increase in Annual EBITDA; Company Declares Dividend of $0.15 per Share

NEWPORT BEACH, CA--(Marketwired - Sep 22, 2016) - DynTek, Inc. (OTC PINK: DYNE), a leading provider of professional technology services, today announced results for its fourth fiscal quarter and for fiscal year ended June 30, 2016. The 2016 audited financial statements and notes thereto are available on the OTC website under our symbol, DYNE. DynTek has restated its 2014 and 2015 financial statements to correct historical income tax accounting of non-cash interest items.

Fiscal Year Ended June 30, 2016

DynTek reported revenues of $176,932,000 for the year ended June 30, 2016, an increase of $26,972,000 or 18.0%, from $149,960,000 in the prior year ended June 30, 2015. Gross profit of $28,704,000 for the year ended June 30, 2016 increased $4,026,000 or 16.3% as compared to $24,678,000 in the prior year ended June 30, 2015. This year over year revenue and gross profit increase is primarily attributable to several multi-million dollar deals with government customers in the New York district.

Total operating expenses were $23,059,000 in the year ended June 30, 2016, an increase of $2,753,000 or 13.6%, as compared to $20,306,000 in the prior year ended June 30, 2015. This increase over prior year is primarily due to increased selling expense in relation to increased revenue and earnings.

DynTek reported EBITDA of $6,561,000 for the year ended June 30, 2016, an increase of $1,503,000 or 29.7%, as compared to $5,058,000 in the prior year. Net income was $2,915,000 for the year ended June 30, 2016, or $1.27 per diluted share, a decrease of $2,360,000, or 44.7%, and $1.05 per diluted share, over the restated net income of $5,275,000 and $2.32 per diluted share in the year ended June 30, 2015, primarily due to an income tax benefit in fiscal year 2015 related to the elimination of a prior uncertain tax position.

"This fiscal year featured so many key highlights for our organization including record revenue and profit, the successful delivery of several large and complex customer engagements, and winning Intel Security's Partner of the Year, Americas," said Ron Ben-Yishay, DynTek's chief executive officer. "We are extremely proud of our team's ability to continue to grow and develop the business. We have a keen focus on architecting and implementing technology solutions that satisfy our client's biggest needs and challenges in area such as cybersecurity, data center optimization and cloud computing."

Fourth Fiscal Quarter Ended June 30, 2016

DynTek reported revenues of $50,511,000 for the fourth fiscal quarter ended June 30, 2016, an increase of $13,930,000 or 38.1%, from $36,581,000 in the prior fourth quarter ended June 30, 2015. Gross profit was $9,262,000 for the fourth fiscal quarter ended June 30, 2016, an increase of $2,585,000 or 38.7%, from $6,677,000 in the prior year fourth quarter ended June 30, 2015. This quarter over prior year quarter increase is attributable to a significant multi-million dollar deal in the New York district that impacted revenue by $13.9 million in the fourth quarter of 2016.

Total operating expenses were $7,175,000 in the fourth fiscal quarter ended June 30, 2016, an increase of $1,412,000 or 24.5%, as compared to $5,763,000 in the prior year fourth quarter ended June 30, 2015. This increase quarter over prior year quarter is primarily due to higher selling and general and administrative expenses associated with higher gross profit and earnings.

DynTek reported EBITDA of $2,704,000 for the fourth fiscal quarter ended June 30, 2016, an increase of $1,366,000 or 102.1%, as compared to $1,338,000 in the prior year fourth quarter. Net income was $1,341,000 for the fourth fiscal quarter of 2016, or $0.58 per diluted share, a decrease of $2,413,000 or 64.3% and $1.06 per diluted share, over the restated net income of $3,754,000 and $1.64 per diluted share in the fourth fiscal quarter of 2015, primarily due to an income tax benefit in fiscal year 2015 related to the elimination of the prior uncertain tax position.

Dividend

On September 21, 2016, based on continued strong performance, DynTek's Board of Directors declared another quarterly dividend of $0.15 per share of common stock to be paid on October 13, 2016 to shareholders of record at the close of business on October 3, 2016. The dividend represents a 33% increase over last quarter's dividend. The Company had 2,264,390 shares of common stock issued and outstanding as of September 21, 2016.

EBITDA
The Company defines EBITDA as net income from operations before interest, taxes, depreciation and amortization, and stock-based compensation. Other companies may calculate EBITDA differently. Although EBITDA is a widely used financial indicator of a company's ability to service debt, it is not a recognized measure for financial statement presentation under generally accepted accounting principles (GAAP). EBITDA should not be considered in isolation or as superior or as an alternative to net income or to cash flows from operating activities as determined in accordance with GAAP. Nonetheless, the Company believes that EBITDA provides useful supplemental information for investors and others to measure operating performance, especially in situations where a company has significant non-cash operating expenses that are not indicative of core business operating results. EBITDA is widely used in the IT services industry to analyze comparable company performance, and management of the Company also uses EBITDA, in addition to GAAP information, as a measure of operating performance for assessing its business units.

About DynTek
DynTek is a leading provider of professional technology services to mid-market companies, such as state and local governments, educational institutions and commercial entities in the largest IT markets nationwide. From virtualization and cloud computing to unified communications and collaboration, DynTek provides professional technology solutions across the three core areas of our customers' technical environment: Infrastructure/Data Center, Microsoft Platforms, End Point Computing. DynTek's multidisciplinary approach allows our clients to turn to a single source for their most critical technology requirements. For more information, visit http://www.dyntek.com.

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Forward Looking Statements
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. Investors are cautioned that forward-looking statements made in this press release, involve known and unknown risks and uncertainties that could cause actual results to materially differ from the forward-looking statements. Such risks and uncertainties include, among others, our success in reaching target markets for services and products in a highly competitive market; our ability to maintain existing customers and attract future customers; our ability to finance and sustain operations, including our ability to comply with the terms of the revolving line of credit and the Company's other existing and future indebtedness; our ability to achieve profitability and positive cash flow from operations; our ability to maintain business relationships with IT product vendors; the size and timing of additional significant orders for our products and services and our ability to fulfill such orders; the continuing desire of state and local governments to outsource to private contractors and the availability of budgets to place orders for our products and services; our ability to retain skilled professional staff and certain key executives; the performance of our government and commercial technology services; and the continuation of general economic and business conditions that are conducive to outsourcing of IT services. We have no obligation to publicly revise any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.

   
DYNTEK, INC. AND SUBSIDIARY  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(EBITDA presentation)  
(Unaudited, in thousands, except share and per share data)  
                         
    Quarter Ended
June 30,
2016
    Fiscal Year Ended June 30,
2016
    Quarter Ended
June 30,
2015 (restated)
    Fiscal Year Ended
 June 30,
2015 (restated)
 
                                 
REVENUES                                
  Product revenues   $ 41,728     $ 143,255     $ 27,532     $ 115,612  
  Service revenues     8,783       33,677       9,049       34,348  
  TOTAL REVENUES     50,511       176,932       36,581       149,960  
                                 
COST OF REVENUES                                
  Cost of products     34,517       121,041       22,177       96,830  
  Cost of services     6,732       27,187       7,727       28,452  
  TOTAL COST OF REVENUES     41,249       148,228       29,904       125,282  
GROSS PROFIT     9,262       28,704       6,677       24,678  
                                 
OPERATING EXPENSES                                
  Selling     5,183       17,845       4,192       15,761  
  General and administrative     1,947       5,034       1,532       4,404  
  Depreciation and amortization     45       180       39       140  
  TOTAL OPERATING EXPENSES     7,175       23,059       5,763       20,306  
                                 
INCOME FROM OPERATIONS     2,087       5,645       914       4,372  
                                 
EBITDA     2,704       6,561       1,338       5,058  
                                 
OTHER INCOME (EXPENSE)                                
  Interest expense     (251 )     (1,186 )     (283 )     (1,205 )
TOTAL OTHER EXPENSE     (251 )     (1,186 )     (283 )     (1,205 )
                                 
INCOME BEFORE INCOME TAXES     1,836       4,459       632       3,167  
  Income tax (provision) benefit     (495 )     (1,544 )     3,122       2,108  
NET INCOME   $ 1,341     $ 2,915     $ 3,754     $ 5,275  
                                 
NET INCOME PER SHARE:                                
  Basic   $ 0.60     $ 1.31     $ 1.73     $ 2.43  
  Diluted   $ 0.58     $ 1.27     $ 1.64     $ 2.32  
                                 
WEIGHTED AVERAGE NUMBER OF SHARES:                                
  Basic     2,221,056       2,219,155       2,173,165       2,171,799  
  Diluted     2,314,948       2,296,567       2,283,605       2,270,625  
                                   

Contact Information

  • For more information, contact:
    Linda Ford
    DynTek, Inc.
    949-271-6705
    Email Contact