SOURCE: enherent Corporation

March 29, 2007 16:56 ET

enherent Corp. Announces Record Quarterly Earnings Results Since Merger With Dynax

ROSELAND, NJ -- (MARKET WIRE) -- March 29, 2007 -- enherent Corp. (OTCBB: ENHT) (www.enherentcorp.com), an information technology services company, today announced its results for the fourth quarter of 2006 and the year ended December 31, 2006. On April 1, 2005, enherent merged with Dynax Solutions, Inc. ("Dynax"). The Company recorded net income for the quarter ended December 31, 2006 of approximately $141,000 which represented its highest level since the merger with Dynax.

Fourth Quarter 2006 Financial Results

Revenues for the fourth quarter ended December 31, 2006 were $8.1 million, compared to revenues of $8.4 million in the quarter ended December 31, 2005. The decrease was attributable primarily to lower revenues from the sale of hardware and software products during the quarter. However, net income increased to approximately $141,000, or $.00 per diluted share, for the fourth quarter as compared to net income of approximately $46,000, or $.00 per diluted share, for the comparable quarter of 2005. The increase in net income resulted primarily from lower expenses during the quarter and the continuing improvement in operating efficiencies.

Full Year 2006 Financial Results

Revenues for the year ended December 31, 2006 were $30.1 million compared to $27.3 million in the year ended December 31, 2005. The increase was attributable primarily to the additional revenues generated from the merger with Dynax. The Company reported net loss of approximately $298,000, or $(.01) per diluted share, for the year ended December 31, 2006 compared with a net loss of approximately $743,000, or $(.02) per diluted share, for the year ended December 31, 2005. The net loss decrease was due primarily to non-recurring expenses incurred during the year ended December 31, 2005 pertaining to the merger, partially offset by higher interest charges and stock-based compensation expenses incurred during 2006.

Pamela Fredette, Chairman, CEO and President, commenting on the financial results for 2006, said, "We are pleased to have posted our highest quarterly profit since completion of the merger between enherent and Dynax in April 1, 2005. In addition, the Company continues its positive financial trend as we reached profitability for the fifth time over the last six quarterly reporting periods. As we strengthen financially, we believe our prospects for realizing shareholder value have also improved. Our focus continues to be on organic growth, exploring new lines of business and making strategic acquisitions."

Forward-Looking and Cautionary Statements

Except for the historical information and discussions contained herein, statements contained in this release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on certain assumptions and analyses made by the Company derived from its experience and perceptions. Actual results and developments may vary materially from those described because they are subject to a number of known and unknown risks and uncertainties. Such risks and uncertainties include, but are not limited to, future demand for the Company's services; general economic, market and business conditions; the Company's ability to increase the amount of services rendered to existing clients and develop new clients and reduce costs of providing services; the Company's ability to recruit and retain IT professionals; and various other factors discussed in the Company's filings with the Securities and Exchange Commission including those set forth under Item 1A of the Company's recent Form 10-K. The Company disclaims any intention or obligation to revise any forward-looking statements whether as a result of new information, future developments, or otherwise.

                  ENHERENT CORP. AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS
                  AS OF DECEMBER 31, 2006 AND 2005


                                                December 31,   December 31,
                                                    2006          2005
                                               ------------   ------------
                    ASSETS

Current assets:
Cash and cash equivalents                      $    631,656   $    320,574
Accounts receivable, net                          4,320,334      4,996,626
Prepaid and refundable taxes                              -         18,427
Prepaid expenses and other current assets           134,854        254,756
                                               ------------   ------------

Total current assets                              5,086,844      5,590,383

Furniture, equipment and improvements, net          174,506        255,375

Goodwill                                          4,334,278      4,334,278
Other intangible assets, net                        325,000        425,000
Deferred financing costs, net                        85,812        123,952
Other assets                                         31,376         24,689
                                               ------------   ------------

TOTAL                                          $ 10,037,816   $ 10,753,677
                                               ============   ============

                    LIABILITIES

Current liabilities:
Revolving credit facility                      $  2,852,628   $  3,465,519
Current portion of long-term debt                   758,335        312,521
Accounts payable and accrued expenses             3,186,815      3,302,094
Deferred revenue                                    171,275        143,898
Accrued compensation and benefits                   853,979        605,187
                                               ------------   ------------

Total current liabilities                         7,823,032      7,829,219
                                               ------------   ------------

Long-term liabilities:
Long-term debt, net of current portion above      3,234,184      3,817,883
Noncurrent rent payable                                   -         18,261
                                               ------------   ------------

Total long-term liabilities                       3,234,184      3,836,144
                                               ------------   ------------

Total liabilities                                11,057,216     11,665,363
                                               ------------   ------------

Commitments and contingencies

                CAPTIAL DEFICIENCY

Preferred stock, $.001 par value;
 authorized - 10,000,000 shares, issued-none              -              -
Common stock, $.001 par value, authorized -
 101,000,000 shares, issued and
 outstanding - 50,361,451 shares in 2006
 and 50,341,451 shares in 2005                       50,361         50,341
Additional paid-in capital                       27,256,889     27,091,409
Unearned compensation on restricted stock                 -        (24,295)
Accumulated deficit                             (28,326,650)   (28,029,141)
                                               ------------   ------------
Total capital deficiency                         (1,019,400)      (911,686)
                                               ------------   ------------

       TOTAL                                   $ 10,037,816   $ 10,753,677
                                               ============   ============



                    ENHERENT CORP. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS
         FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004


                                      2006          2005          2004*
                                  ------------  ------------  ------------

Revenues:
Service revenue                   $ 27,486,679  $ 23,788,329  $ 14,376,625
Equipment and software revenue       2,633,509     3,532,314     4,024,282
                                  ------------  ------------  ------------

Total revenues                      30,120,188    27,320,643    18,400,907
                                  ------------  ------------  ------------

Cost of revenues:
Cost of services                    21,084,983    17,966,654    10,819,807
Cost of equipment and software       2,026,493     2,724,268     3,330,868
                                  ------------  ------------  ------------

Cost of revenues                    23,111,476    20,690,922    14,150,675
                                  ------------  ------------  ------------

Gross profit                         7,008,712     6,629,721     4,250,232
                                  ------------  ------------  ------------

Operating expenses:
Selling, general and
 administrative                      6,242,670     5,813,944     4,170,406
Nonrecurring merger related
 expenses                                    -       573,227             -
Depreciation and amortization
 expense                               296,955       326,120       264,778
                                  ------------  ------------  ------------

Total operating expenses             6,539,625     6,713,291     4,435,184
                                  ------------  ------------  ------------

Operating income (loss)                469,087       (83,570)     (184,952)

Interest expense                      (738,596)     (642,935)     (465,202)
                                  ------------  ------------  ------------

Loss before income taxes              (269,509)     (726,505)     (650,154)

Provision for income taxes             (28,000)      (17,000)      (25,922)
                                  ------------  ------------  ------------

NET LOSS                          $   (297,509) $   (743,505) $   (676,076)
                                  ============  ============  ============
Basic and diluted net loss per
 share                            $      (0.01) $      (0.02) $      (0.03)
                                  ============  ============  ============
Number of shares used in
 computing basic and diluted
 net loss per share                 50,361,173    43,175,973    20,905,370
                                  ============  ============  ============

Contact Information