For the fourth quarter of fiscal 2008, the Company reported revenues of $11.5 million, compared to $11.5 million in the prior-year quarter. Selling, general & administrative (SG&A) expenses were approximately $4.4 million, or 38% of sales, compared to $5.7 million, or 49% of sales, in the prior year quarter. Net income for the three months ended June 30, 2008 was $742,000, or $0.03 per fully diluted share, compared to a net loss of $(874,000), or $(0.07) per fully diluted share, in the same period in the prior year. Adjusted EBITDA (as defined) increased to $808,000 in the fourth quarter of fiscal 2008, from negative adjusted EBITDA of $(626,000) in the prior period.
For the fiscal year ended June 30, 2008, the Company reported revenues of $49.6 million, compared to $50.5 million in the prior year. During the year, Avatech increased Service revenue by 6% to $11.4 million as a result of the Company’s increased focus on growing this business to diversify its revenue base. SG&A expense was $18.5 million, or 37% of sales, compared to $22.7 million, or 45% of sales, in the prior year. For the year ended June 30, 2008, the Company reported net income of $3.1 million, or $0.15 per fully diluted share, compared to a net loss of $(555,000), or $(0.07) per fully diluted share for fiscal year 2007. Adjusted EBITDA increased to $4.7 million in fiscal 2008, as compared to adjusted EBITDA of $1.2 million in fiscal 2007.
George Davis, President and Chief Executive Officer of Avatech Solutions, commented, “In fiscal 2008 we returned to profitability with record net income and strengthened our balance sheet, which includes increasing our cash position more than three-fold since the beginning of the year. These achievements are the result of our new strategy implemented at the end of fiscal 2007 to improve productivity, diversify revenue with an expanded focus on services, all while reducing operating expenses throughout the Company. I am especially pleased with our ability to achieve record profitability in fiscal 2008 when considering the challenging macro-economic environment that had both direct and indirect impacts on our U.S. based design engineering markets throughout the year.”
“Looking forward to fiscal 2009, we expect that macro-economic pressures will continue to exist requiring that we prudently manage our plans; maintaining focus on our fundamentals while we engage in efforts to return to top line revenue growth. Our efforts over the last year have significantly improved our financial baseline which uniquely positions us to execute on our strategy. We are moving forward with plans that will support our top-line growth initiatives by expanding both our software sales and engineering services teams, in anticipation that we will see positive results as the year progresses. We remain focused on establishing Avatech as the “Go To” company for design engineering technology, service and support. Since being launched in May 2008, our Manufacturing Consulting Services Group has established a solid pipeline of incremental services business in line with our stated objectives. We believe that through a combination of maintaining and profitably growing our core business and prudently engaging in diverse yet complimentary strategic initiatives, we will continue to position Avatech for a strong future,” concluded Mr. Davis.
“The turnaround at Avatech was achieved with exceptional commitment and hard work by the company’s management team and employees, and was attained via great attention to detail and a bottom line orientation,” noted Thom Waye, Chairman of the Board. “As a major shareholder in the company I could not have asked for better financial performance than what was accomplished this past year. Although we have entered turbulent economic times, with a strong balance sheet and reduced operating costs, the company is well positioned to work toward achieving revenue growth and continued profitability in Fiscal 2009.”
Conference Call Information
Avatech Solutions will hold a conference call to discuss its fiscal fourth quarter and year end results at 11:00 a.m. ET on September 29, 2008. The dial-in number for the conference call is 888.680.0865 (Domestic) or 617.213.4853 (International), and enter the passcode (96245152). A replay of the call will also be available through October 6, 2008 and can be accessed by dialing 888.286.8010 (Domestic) or 617. 801.6888 (International), and enter the passcode (35013558).
A live webcast of the call will be broadcast 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 site for a limited time.
Note Regarding Use of Non-GAAP Financial Measure
This news release contains the non-GAAP measure Adjusted EBITDA.
Adjusted EBITDA represents earnings (or losses) before interest, income
taxes, depreciation and amortization, and stock-based compensation