Here's the NTPL financial statement -- minus the actual "table of figures," because it doesn't format well here. Anyone wanting to see those tables should use this link to the actual PR: biz.yahoo.com -- other than that, the full text follows. Should be interesting to see the reaction, since I suspect the results could be read more than one way (and since the price actually fell today, ahead of the earnings-PR)...
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Tuesday March 28, 4:22 pm Eastern Time
Netplex Ends Year with 86 Percent Increase in e-Business Solutions Revenue -- e-Business Fourth Quarter Revenue Increased 34 Percent Over Previous Year
RESTON, Va.--(BUSINESS WIRE)--March 28, 2000-- Company Takes $2.9 Million Write-Down of Acquisition-Related Assets
Company Recently Agreed to Terms for a $10 Million Private Placement
The Netplex Group, Inc. (Nasdaq: NTPL - news) today announced results for its fourth quarter ended December 31, 1999.
The Company reported revenue of $22.1 million compared to $18.0 million for the fourth quarter of 1998. Revenue for the Company's e-Solutions group totaled $12 million (including inter-company e-consulting services provided to Contractor's Resources of $568,000), a thirty-four percent increase over the previous year's fourth quarter level of $9.0 million.
The Company also reported a loss for the fourth quarter of $6.2 million, which includes a $2.9 million charge for write-downs of intangible and other assets related to prior acquisitions; a $1.1 million investment in infrastructure development within its Contractor's Resources subsidiary; and other one-time charges and adjustments totaling $906,000.
This compares with a net profit of $89,000 for the same period in 1998. Excluding these items, and before interest, taxes, depreciation and amortization (EBITDA), the loss for the current fourth quarter was $238,000 compared to an EBITDA of $593,000 for the same period in the previous year.
For the full year, the Company reported revenue of $87.8 million, an increase of 43% over the previous year level of $61.3 million. Revenue from Netplex's e-Solutions business increased 86 percent, reaching $49.2 million. The Company's Contractor's Resources subsidiary reported gross revenue of $38.6 million compared to $34.9 million for the same period in 1998.
``The results this quarter reflect a number of positive developments within Netplex, that we expect will produce outstanding long-term benefits for shareholders,' commented Gene Zaino, Netplex's chairman and CEO. ``In preparation for a strategically planned promotion of Contractor's Resources Internet-based Techcellence service, we developed and installed an infrastructure to support a significantly larger base of members. In addition, we are building a marketing capability designed to reach the independent contractor marketplace, which the Department of Labor currently estimates to represent about 2 million professionals. We also utilized Netplex's e-Solutions resources in the development of the Techcellence web initiative. The missed revenue associated with this development work is estimated at $568,000, while the related costs were $170,000. These investments are critical to achieving the level of success that we have planned for Contractor's Resources' Techcellence business and, while this investment has impeded our near-term bottom-line results, we believe its mid- to long-term impact has the potential to be an enormous contributor to Netplex's future.'
The Company's pro-forma financial information, after giving effect to the inclusion of the unbilled revenues related to the development of the Techcellence Web initiative and associated costs, the investment in infrastructure for Contractor's Resources, and the special adjustments related to the write-down of intangibles and other one-time charges mentioned above, is as follows:
(((This section cut-out from this post, for formatting reasons)))
To provide a consistent and accurate reflection of Netplex's gross profits, the ``non-productive' time of billable professionals has been included in cost of sales, thereby slightly reducing the gross margin rates, while providing a corresponding reduction in operating expenses. The Company believes the new format provides a more accurate measurement of productivity.
This modification has a slight downward impact on Netplex's gross margins, however, the Company believes the results provide a more accurate measurement of its productivity.
The Contractor's Resources consecutive quarter growth was 17%, which reflects new membership growth as well as increased revenue per member. Since introducing Contractor's Resources Internet service, Techcellence(TM) in January, there have been over 10,000 unique visitors who have spent an average of 22 minutes visiting the site.
Netplex's marketing efforts to date have been concentrated in the Washington D.C. region. The Company intends to expand its marketing efforts to other areas where demographics include a high concentration of independent IT professionals.
To augment this effort Netplex intends to aggressively expand its strategic marketing partnership program with Web-based technology marketplaces such as job boards, online job fairs, B2B e-commerce sites focused on the service sector, etc.
In December, Netplex announced its alliance with SkillsVillage.com, an online community that enhances the relationship between contractors, staffing companies, and corporations by matching IT contractors with projects. Netplex is actively pursuing additional online relationships for its Techcellence service.
The objective of these relationships is to both drive membership interest as well as enhance its service offerings to further strengthen its membership satisfaction and retention rate. As it creates these relationships, Netplex is committed to managing the growth of the Techcellence infrastructure in order to preserve the existing high degree of member satisfaction.
``Netplex's e-business consecutive quarterly revenue growth does not reflect the build-up of sales and marketing professionals that was accomplished during the fourth quarter, which will begin to show signs of progress towards the second quarter 2000,' added Pamela Fredette, Netplex's President. ``We upgraded the quality of our sales team to support our strategic plans to escalate the value of Netplex's sales mix. During this process, we disengaged our sales effort focused on lower-end projects, and added highly experienced technical personnel to improve Netplex's quality of business. We are targeting larger contract value services projects to improve our product mix, which, in addition to lengthening our normal sales cycle, requires a more qualified sales force. Our efforts are showing signs of great progress. Netplex's prospect-adjusted pipeline has grown from $15 million at the end of the fourth quarter, to $26 million today, which includes seven deals valued in excess of $1 million each.'
During the quarter, Netplex added John Paglione to its management team as Executive Vice President of its e-Infrastructure Services division. Over the course of the last two quarters, Netplex has increased its sales force to 28 professionals, an increase of 12 from the end of 1998.
Financing
Today, the Company also signed an agreement for a $10 million private financing consisting of convertible preferred stock, which was placed with two institutional investors. The preferred stock earns dividends at the rate of seven percent per year, is convertible at 120% of market, and includes additional warrants. ``This financing strengthens our balance sheet and provides Netplex with record levels of liquidity to enable us to fund our future expansion,' commented Walton Bell, Netplex's chief financial officer.
Conference Call
Netplex management has scheduled a conference call to provide further insights regarding the financial results and to respond to investor questions, today, Tuesday, March 28 at 4:30 p.m. (EDT). The dial-in number is:
1-888-209-3914
Reservation No.: 14794429
The conference will be recorded and will be available for replay for 24 hours beginning at 6:30 p.m. The dial-in and reservation numbers are:
1-800-633-8284
Reservation No.: 14794429
The conference call can also be accessed through the Internet at Vcall (www.vcall.com).
About The Netplex Group, Inc.
Netplex (Nasdaq: NTPL - news; www.netplexgroup.com) creates e-business solutions that combine industry-specific business strategies; interactive digital marketing; user-centric applications and data systems; and secure, high-performance Internet systems infrastructure.
Netplex's complete spectrum of ``industrial strength' e-solutions positions customers with vision, confidence, and continuing competitive advantage.
About Contractor's Resources
Contractor's Resources (``CR') is a business-to-business (B2B) service designed to provide the financial infrastructure, resources, and business services that help Information Technology (IT) professionals build careers as independent contractors.
Launched by Netplex in 1999 as an integrated online service under the brand name Techcellence(TM), Contractor's Resources serves as a ``virtual corporate office' for its member contractors by providing the services of a full corporate administration staff.
These services include contract review, time sheet administration, billing and collections, health benefits, retirement plans, wealth-building financial strategies, and tax administration.
Netplex and the Netplex logo are trademarks of The Netplex Group, Inc. |
