CIMdata PLM Industry Summary Online Archive
16 February 2005
Financial News
Avatech Solutions Announces Second Quarter 2005 Results
Avatech Solutions, Inc . announced results for the second quarter ended December 31, 2004, highlighted by the Company's return to profitability, double-digit increases in consulting services and substantial progress toward fiscal 2005 goals.
Avatech reported revenues for the second quarter of fiscal 2005 of $8.2 million, a 4.1 percent increase compared to revenues of $7.9 million for the second quarter of fiscal 2004. When compared to the first quarter of fiscal 2005, revenues for the second quarter increased 21.2 percent.
The Company also returned to profitability, posting second quarter net income of $9,483 following a first quarter loss of $813,448. The Company's deferred revenue declined 3.9 percent to $982,514 million for the second quarter of fiscal 2005, primarily due to Product Lifecycle Management (PLM) software and services related revenue recognized during the second quarter.
During the second quarter of fiscal 2005, Avatech reported net income of $9,482,compared to net income of $4,725 for the same period last fiscal year. Avatech said improvements in consulting services and commission revenues, which were fueled by increased sales in Autodesk Subscription software maintenance agreements, drove the increase in net income. Product sales for the fourth quarter were consistent with the same period last fiscal year due.
"During the second quarter, we made substantial progress toward our fiscal 2005 goals-we hired 21 new customer-facing account executives and technical resources, increased service revenues, invested in employee education to enrich the customer experience and continued to transform Avatech into a diversified service and solution provider," said Scotty Walsh, CEO of Avatech Solutions. "We continue to take an aggressive approach toward expanding our customer outreach efforts, and our hard work is beginning to take hold. Our consulting services are building traction as customers are increasingly turning to us to meet their needs for product integration, service and support."
Second Quarter 2005 Highlights
• When compared to the first quarter of fiscal 2005, revenues for the second quarter increased 21.2 percent.
• Revenues for the quarter rose 4.1 percent to $8.2 million. The increase included a 14.3 percent increase in commission revenues and an 11.7 percent increase in consulting services, partially offset by a 0.6 percent decline in product sales.
• For the second quarter of fiscal 2005, product sales were $5.2 million, commission revenues were $1.6 million and consulting services were $1.4 million.
• Income from operations for the second quarter of fiscal 2005 climbed to $160,277 versus $142,011 for the same period last fiscal year.
• Gross margins for the quarter were 43 percent, a nearly seven percentage point increase compared to the second quarter of fiscal 2004.
Walsh concluded: "During the first half of the year, we made significant investments in the Company, building a solid foundation for future growth-and we are beginning to see the return on those investments. Sales productivity is rising, we're lowering our product-to-services revenue mix and order backlog has increased."
"We have created a strong and increasingly diverse product and service offering, and our top priority for the remainder of fiscal 2005 is on execution and meeting our target of positive operating income on a revenue range of $16 million to $18 million."
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