OAO Technology Solutions, Inc. Announces New CEO, Two Acquisitions, And Revises Second Quarter 1998 Earnings Estimates
GREENBELT, Md., June 26 /PRNewswire/ -- OAO Technology Solutions, Inc. (Nasdaq: OAOT), a leading Information Technology (IT) solutions and professional services company, announced today that it has named Gregory A. Pratt Chief Executive Officer effective July 1, 1998, succeeding William R. Hill, who will continue to serve on the Board of Directors of OAOT.
Prior to joining OAOT, Mr. Pratt was Chief Executive Officer of Enterprise Technology Group ("ETG"), a company he founded in 1997 to provide integration, implementation and training services for SAP and Microsoft(TM) applications. Prior to ETG, Mr. Pratt was President and Chief Operating Officer for Intelligent Electronics from 1992 to 1996, a provider of information technology products, services and solutions to corporate customers, educational institutions and governmental agencies in the United States. Mr. Pratt was instrumental in defining and leading Intelligent Electronics's strategic repositioning as a services company. Intelligent Electronics had annual sales in 1997 of $3.3 billion. Mr. Pratt comes to OAOT with 20 years of Information Technology industry experience and has an MBA from the University of Pennsylvania's Wharton School of Business.
In commenting on the transition to a new Chief Executive Officer, Mr. William Hill said, "I am very proud of what we have been able to accomplish over the past six years. I now realize that it is time for new leadership with a more diversified Information Technology background to build on these accomplishments."
"OAO Technology Solutions is a company with a solid base of Information Technology accomplishments," said Mr. Pratt. "I look forward to continuing to diversify its service offerings through accelerated internal growth, maximizing the potential of recent acquisitions, and continued targeted acquisitions."
As previously discussed in the Company's May 11, 1998, news release, the Company and its Board of Directors continue to take aggressive actions to reposition the business for the future. Actions completed to date include the following:
1. The Company has entered into a Letter of Intent to acquire OAO
Services, Inc., a national provider of IT Staffing Augmentation
Services with annual revenues of approximately $60 million, in a cash
transaction. A significant portion of the potential purchase price
will be contingent upon future earnings of the Company. With this
acquisition, proforma 1997 annual sales would have been approximately
140 million, compared with $84 million for the Company alone. This
complementary acquisition will position the Company to enter into a
new line of business while growing existing lines of business, provide
a recruiting mechanism for staffing projects, provide capabilities to
assist in the execution of certain projects, and benefit the Company
strategically as part of its ongoing diversification strategy.
2. The Company also has entered into a Letter of Intent to acquire ETG, a
provider of Enterprise Resource Planning integration, implementation
and training services, in a stock transaction. As a result of this
acquisition, ETG provides OAOT with the nucleus for creating an
Enterprise Resource Planning business. The business will initially be
focused on SAP and Microsoft applications. Commenting on the
acquisition, Chairman of OAO Technology Solutions Board of Directors,
Jerry Johnson, said, "The acquisitions of ETG and OAO Services, and
the recent acquisitions of the MC400 line of business and DHR
Technologies complement OAOT's core systems management business and
position us to aggressively grow in 4 lines of business:
-- Software Engineering and Applications Maintenance
-- Health Care Solutions
-- Technical Staffing Augmentation
-- Enterprise Resource Planning software application services.
We are excited about the vision that Greg brings to OAOT and his breadth of management experience to execute that vision."
3. The Company also announced today that it expects to incur a loss of
approximately ($0.16) per share (diluted) in the quarter ending June
30, 1998. The majority, approximately ($0.09) per share, of this
expected loss is associated with reserves established for
uncollectible accounts receivable expected to be recorded in the
quarter. The remainder of the anticipated loss is associated with
operations primarily due to: 1) continued investment to expand the
recently launched Canadian Applications Development and Maintenance
"North Shore" Solution; 2) continued pricing pressures and lack of
revenue growth in the Company's core outsourcing business; 3) lower
second quarter revenues and earnings from the Company's HealthCare
Solutions division (MC400) compared to first quarter results because
of sales and delivery resource constraints for which corrective action
was initiated as described below; and 4) costs associated with
severance, cost reduction, and management restructuring actions
described below that were completed during the quarter.
4. In June 1998, the Company completed certain cost reduction actions
including layoffs and salary reductions. These actions are expected
to result in annualized pre-tax savings in excess of $1 million.
5. The Company expanded sales and delivery resources for its MC400
Managed Care software product line, positioning it for increased
growth in the second half of 1998.
The Company is aggressively pursuing additional initiatives to reduce costs, diversify its customer base and expand the business, including pursuit of potential acquisitions and other new business opportunities. Some of these initiatives, if successful, could result in up-front costs that could impact the Company's earnings for the balance of 1998.
OAO Technology Solutions, Inc. provides clients with a wide range of IT solutions and professional services, including systems and software engineering, the operation of large-scale megaplexes and networks, distributed systems management, applications development and maintenance and other IT services, as well as state-of-the-art software systems for the managed care marketplace.
OAO Technology Solutions, Inc. is a Safeguard Scientifics, Inc. (NYSE: SFE) partnership company. Visit the Company's web site, www.oaot.com, for further company news and information.
SAFE HARBOR STATEMENT: This news release contains statements that are forward-looking statements within the meaning of applicable federal securities laws and are based upon the Company's current expectations and assumptions that are subject to a number of risks and uncertainties that would cause actual results to differ materially from those anticipated.
SOURCE OAO Technology Solutions, Inc.
CO: OAO Technology Solutions, Inc.
ST: Maryland
IN: CPR FIN HEA
SU: PER TNM ERP
06/26/98 08:56 EDT prnewswire.com |
