CIMdata PLM Industry Summary Online Archive

29 September 2004

Financial News

Avatech Solutions Announces Fourth Quarter and 2004 Year-End Results

Avatech Solutions, Inc. announced results for the fourth quarter and 2004 year-end, highlighted by continued improvement in product sales, new sales channels and its ongoing transition from a value-added reseller to a diversified services and solutions provider.

Avatech reported net revenues for the fourth quarter of 2004 were $6.4 million, a 17.9 percent increase compared to the $5.4 million in revenues reported in the same period last year. The Company also reported an increase in deferred revenue of $202,163 for the quarter, primarily related to an increase in sales of its Product Lifecycle Management (PLM) software and services. Avatech said higher product sales and increased marketing in its core Design Automation (DA) segment, as well as growth in its emerging PLM and Facilities Management (FM) software solutions, drove the increase.

During the fourth quarter of 2004, the Company decreased its losses substantially compared to the same period last year. For the fourth quarter, Avatech reported a net loss of $598,376, or $0.06 per basic share, versus a net loss of $3.3 million, or $0.41 per basic share, for the fourth quarter of 2003. Avatech attributed the improvement to higher sales, as well as its stringent cost controls and ability to better leverage its sales and service infrastructure.

Avatech's total revenues for fiscal 2004 climbed to $28.0 million, a 24.2 percent increase over the $22.5 million in revenues for 2003. Deferred revenue increased $219,673 to $956,636 for fiscal year 2004, and will be recognized over the next 12 to 18 months. The Company's net losses were reduced from $3.8 million in 2003, to $926,765 in 2004. Net loss per share for the Company decreased from $0.48 per basic share in 2003, to $0.11 per basic share in 2004. Not including a $2.0 million debt forgiveness in 2003, the Company's loss would have been $5.8 million, or $0.72 per basic share. The Company reported that SG&A (selling, general and administrative) costs as a percentage of sales declined to 39.6 percent in 2004, versus 54.2 percent in 2003.

"I'm pleased with our fourth quarter and fiscal year results, as Avatech's trend lines continue to move in the right direction with improving sales, significant reduction in losses, expanded product offerings and important customer wins," said Scotty Walsh, CEO of Avatech Solutions. "In 2003, our focus was to right the ship-and we did just that. In 2004, we began transitioning the Company from a value-added reseller to a diversified service and solution provider-and we believe we are well on our way.

"During the year, we also added critical new people to the executive management team and completed our board restructuring, adding unique expertise and a wealth of knowledge to our organization," added Walsh.

Highlights

•  Revenues for the quarter rose 17.9 percent to $6.4 million. The increase included a 30.1 percent increase in product sales and a 13.4 percent increase in commission revenues, partially offset by a 4.8 percent decline in service revenue.

•  Key customer additions during the quarter included:

•  EMCO, a leading manufacturer of storm and screen doors, chose Avatech as its design automation systems integrator.

•  The Durrant Group, a global architecture, engineering, and construction management firm, chose Avatech and Autodesk Consulting services to assist in its software decision-making process, implementation and training.

•  Manufacturing companies, such as YORK Refrigeration Systems, Alliance Machines Systems International, R.A. Jones & Company and West Bay SonShip Yachts turned to Avatech for SMARTEAM PLM solutions to help them improve their business processes, reduce costs, fuel innovation and shorten time-to-market.

"We are focused on advancing our three product groups-design automation, facilities and asset management and product lifecycle management-to become the top reseller and service provider in these categories," said Walsh.

"Looking ahead, we have four goals for 2005. First, to bolster our middle management and customer-facing account executives to increase our market share. Second, to make measurable progress toward our goal of reaching a $100-million run rate by 2008 through organic growth and targeted acquisitions that complement our diversification strategy. Third, to continue to invest in employee education to help enrich their experience and add client value-a key part of the Avatech difference. And finally, continue to transform the Company into a diversified service and solution provider," said Walsh. "We are confident these initiatives will not only fuel the top line, but also return Avatech to profitability."

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. A description of risks and uncertainties attendant to Avatech and its industry, and other factors that could affect the Company's financial results, are included in its Securities and Exchange Commission filings, including, but not limited to, the annual report on Form 10-K for the fiscal year ending June 30,2004 and other Securities and Exchange Commission filings.

 

Become a member of the CIMdata PLM Community to receive your daily PLM news and much more.

Tell us what you think of the CIMdata Newsletter. Send your feedback.

CIMdata is committed to your privacy. Your personal information will never be sold or shared outside of CIMdata without your express permission.

Subscribe