CIMdata PLM Industry Summary Online Archive
May 18, 2010
Financial News
Avatech Third Quarter Financials Report Strong Growth in Revenues and Bottom Line
Avatech Solutions, Inc. announced financial results for its third fiscal quarter and for the nine months ended March 31, 2010.
Avatech reported that its total revenues increased 5%, to $8.4 million, when compared to the third quarter of the prior fiscal year—the first year-over-year increase since June 2008. Leading this increase were product sales and commission revenues, which saw increases of 10.5% and 24.9% respectively over the levels reported in the third quarter of last fiscal year. Due to a favorable revenue mix and the achievement of sales rebates from its principal supplier, the Company earned an overall gross margin of 58.4% compared with 50.0% for the quarter ended March 31, 2009. Operating expenses as a percentage of revenues were down when compared to those of the prior quarter and when compared to the same quarter in the prior fiscal year. As a result, for the third quarter of fiscal 2010, the Company reported net income of $592,000, or $0.03 per fully diluted share, as compared with a net loss of $(146,000), or $(0.01) per fully diluted share, for the quarter ended March 31, 2009. Adjusted EBITDA (as defined) was $1,154,000, compared with $106,000 in the prior year period.
For the nine months ended March 31, 2010, total revenues were $23.9 million, compared to $28.2 million in the prior-year period. The Company’s overall gross margin percentage increased to 54.7% from 45.7% for the same nine months in the prior fiscal year. Operating income increased 90% to $2.1 million and Adjusted EBITDA (as defined) for the nine month period ended March 31, 2010 was $2,640,000, compared with $401,000 in the prior year period.
"We are very pleased that these outstanding results reflect not only the continued progress of the recovery of the overall economy, but also the steps that we have taken in response to changes in our business levels. This is the third consecutive quarter of profitability and each quarter’s results have been better than the prior quarter, with this period 23% higher than our December quarter," commented Lawrence Rychlak, President and Chief Financial Officer of Avatech Solutions. "The resulting cash flows enabled us to complete the redemption of the remaining outstanding Series F Preferred stock while still increasing our available cash to $3.6 million giving Avatech an even stronger financial position."
"We enter our fourth quarter with continued optimism about our markets and our ability to provide solutions to our customers that enable them to grow and prosper, while at the same time providing an appropriate level of return for our shareholders," concluded Rychlak.
George Davis, Chief Executive Officer added, "These strong results validate the path that we have chosen and the tactics and strategies that we have implemented and will help us maintain our leadership position in the markets in which we operate. Our recent history of net income and good cash flows, along with our healthy balance sheet, provides us a solid foundation for pursuing our future strategies and may open up new opportunities for us. We remain focused and committed to fully serving the needs of our customers, ensuring a vibrant and rewarding experience for all of Avatech’s employees, and pursuing strategies that enhance shareholder value."
Conference Call Information
Avatech Solutions will hold a conference call to discuss its fiscal 2010 third quarter results at 10 a.m. ET on May 17, 2010. A replay of the call will also be available through May 24, 2010, and can be accessed by dialing (888) 286-8010 (domestic) or (617) 801-6888 (international), and then entering the passcode 93175819.
A live Webcast of the conference call will be available to all investors in the Investor Relations section of the Company's website, http://www.avatech.com. For those who cannot listen to the live broadcast, an audio replay of the call will also be available on the Company’s site for a limited time.
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