FARMINGTON HILLS, Mich., July 22 /PRNewswire/ -- Data Systems Network
Corporation (OTC Bulletin Board: DSYS) announced today second quarter 1999 net
income before discontinued operations of $534,066 or $.11 per share, compared
to net income before discontinued operations of $232,263 or $.05 per share,
during the same quarter one year ago. For the six months ended June 30, 1999
net income before discontinued operations was $764,371 or $.16 per share,
compared to a net loss before discontinued operations of $1,007,386 or $.21
per share for the six months ended June 30, 1998.
Revenue totaled $13.2 million in the second quarter of 1999, compared to
$26.4 million during the same quarter a year ago. The decrease was the result
of the expiration of the Company's blanket product purchase order with the
State of Michigan on September 30, 1998 and the completion of certain non-
recurring project work. In addition, the Company is focusing on higher margin
service opportunities and cost reduction strategies rather than on gross
revenues.
The Company settled its shareholder class action lawsuit during the second
quarter and the federal court dismissed the action. In accordance with the
settlement agreement, the Company's insurer paid cash into the settlement fund
and the Company exercised its option to issue common stock to the fund in lieu
of cash. As a result, the Company reversed a settlement accrual it previously
had established. Offsetting the reversal of the accrual, the Company closed
two non-productive sales offices and wrote off surplus office equipment.
Michael Grieves, CEO, stated, "The focus of our people is on business
where we add significant value. Our emphasis will continue to be on the
growth of profitable service business rather than simply top line revenues.
Since 1996, our service business has grown from $6.4 million per year to our
current run rate of approximately $20.6 million, a 223.2% increase. The
foundation for continued improvement has been set."
Data Systems provides computer network services and products that enable
the control of complex distributed computing environments, allowing companies
to capitalize on their investments in technology and people. Data Systems
also provides a wide range of network integration services including
installation, consultation, technical support and training.
This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to
be covered by the safe harbors created hereby. Forward-looking statements are
subject to a number of uncertainties and risks. Such uncertainties and risks
include, among others, government regulation, general economic and business
conditions. Actual events, circumstances, effects and results may be
materially different from the results, performance or achievements expressed
or implied by the forward-looking statements. Consequently, the forward
looking statements contained herein should not be regarded as representations
by Data Systems Network Corporation, or any other person, that the projected
outcomes can or will be achieved.
DATA SYSTEMS NETWORK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months For the Six Months
Ended June 30, Ended June 30,
Unaudited Unaudited Unaudited Unaudited
1999 1998 1999 1998
REVENUES:
Product revenue $8,141,758 $20,705,062 $17,219,863 $34,587,629
Service revenue 5,073,368 5,707,828 10,343,779 10,558,093
Total revenues $13,215,126 $26,412,890 $27,563,642 $45,145,722
COST OF REVENUES:
Cost of products 6,782,037 16,549,672 13,552,844 27,724,248
Cost of services 3,657,699 4,971,218 7,989,115 9,478,128
Total cost of revenues $10,439,736 $21,520,890 $21,541,959 $37,202,376
GROSS PROFIT 2,775,390 4,892,000 6,021,683 7,943,346
OPERATING EXPENSES:
Selling expenses 1,416,456 2,496,724 3,185,933 4,989,852
General and administrative
expenses 1,466,482 2,108,594 2,652,777 3,741,150
Total operating
expenses $2,882,938 $4,605,318 $5,838,710 $8,731,002
INCOME/(LOSS) FROM
OPERATIONS (107,548) 286,682 182,973 (787,656)
OTHER INCOME (EXPENSE):
Shareholder Settlement 1,137,500 - 1,137,500 -
Loss on Sale of
Equipment (385,419) - (385,419) -
Interest income/(expense)(110,546) (164,325) (188,936) (334,228)
Other income/(expense) 79 109,906 18,253 114,498
641,614 $(54,419) $581,398 $(219,730)
Income/(Loss) before discontinued
operations 534,066 232,263 764,371 (1,007,386)
Income /(Loss) from operations of Unified Network
Services - 906,711 - (80,750)
NET INCOME /(LOSS) $534,066 $1,138,974 $764,371 $(1,088,136)
Income/(Loss) per common share - basic and diluted
Continuing operations $0.11 $0.05 $0.16 $(0.21)
Discontinued operations - 0.18 - (0.02)
Net gain / (loss) per common
share $0.11 $0.23 $0.16 $(0.22)
Weighted average shares
outstanding 4,930,653 4,859,224 4,895,156 4,858,874
SOURCE Data Systems Network Corporation
CO: Data Systems Network Corporation
ST: Michigan
IN: CPR
SU: ERN
07/22/99 18:15 EDT prnewswire.com |
