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Tuesday October 27, 7:30 am Eastern Time
Company Press Release
SOURCE: Data Dimensions, Inc.
Data Dimensions Reports Third Quarter
Earnings, Excluding Acquisition Costs, Grew 190
Percent on Revenue Increase of 95 Percent
BELLEVUE, Wash., Oct. 27 /PRNewswire/ -- Data Dimensions, Inc. (DDI) (Nasdaq:
DDIM - news) today announced financial results for the third quarter and nine months
ended September 30, 1998. All financial results presented include the results of the
acquisition of ST Labs, Inc. which was accounted for as a pooling of interests.
Revenues for the third quarter of 1998 were $34.4 million, a 95 percent increase over
revenues of $17.6 million in the third quarter of 1997. Excluding acquisition costs, net
income reached $4.4 million, or $0.33 per diluted share, in the quarter compared with $1.5
million, or $0.11 per diluted share in 1997. Including acquisition costs of $757,000, third
quarter 1998 net income increased 159 percent to $3.9 million, or $0.29 per diluted share.
For the nine months ended September 30, 1998, revenues increased 90 percent to $ 82.8
million from $43.5 million in the comparable period of 1997. Excluding acquisition costs,
net income for the nine month period was $6.8 million, or $0.51 per diluted share
compared to $1.9 million, or $0.15 per diluted share, for the comparable period of 1997.
Including acquisition costs, net income was $6.4 million, or $0.47 per diluted share, an
increase of 231 percent over 1997.
''This was an extremely strong quarter. I am most pleased with our ability to maintain gross
margins and control our expense levels in the face of our rapid revenue growth,'' said Larry
Martin, DDI's president and chief executive officer.
The company's operating margin, excluding acquisition costs, grew to 20 percent in the
three month period ended September 30, 1998, up from 14 percent in the same period of
1997.
''Our Year 2000 business continues to grow and we are seeing greater interest in our
Independent Verification and Validation (IV&V) services and systems testing. Going
forward, DDI's strengths in process management, quality assurance and testing, and
outsourcing will continue to provide our clients with innovative, value-added information
technology solutions,'' said Martin.
Gordon Gardiner, executive vice president and chief financial officer, added, ''There were a
number of positive aspects to the third quarter, including adding over 100 technical
consultants, completing the ST Labs acquisition and executing on our cost containment
programs. We continue to implement those processes and systems that will support DDI's
future growth.''
About Data Dimensions
Data Dimensions, Inc., provides expertise in process management through value-added
consulting services and related products for the design, implementation, test and
maintenance of enterprise-wide information technology systems. Based in Bellevue,
Washington, Data Dimensions is an international company assisting business and
government to plan and execute information technology solutions from the mainframe to
the desktop. For more information about DDI, its services and products, visit DDI's Web
site at www.data-dimensions.com.
This press release contains forward-looking statements concerning DDI's current
expectations including future growth, service offerings, and operations. These
forward-looking statements are subject to risks and uncertainties and the company's actual
results may vary materially depending on various factors such as the overall demand for
Information Technology consulting services, the attraction and retention of employees, and
the successful management and completion of client projects. For additional information
concerning risks associated with DDI's business and operating results, see the company's
Form 10K-SB for the most recently ended fiscal year, under the heading, ''Management's
Discussion and Analysis of Financial Condition and Results of Operations-Forward
Looking Statements and Associated Risks.''
DATA DIMENSIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Month Period Nine Month Period
Ended September 30, Ended September 30,
1998 1997 1998 1997
Revenue
Knowledge
Consulting $29,006 $14,528 $71,131 $34,301
Information
Services 4,169 1,772 8,555 5,505
Knowledge Transfer 702 769 2,057 1,757
International 571 579 1,066 1,933
Total revenue 34,448 17,648 82,809 43,496
Direct costs 19,391 9,490 46,889 23,771
Gross margin 15,057 8,158 35,920 19,725
General,
administrative
and selling expenses 8,058 5,658 24,452 16,202
Acquisition costs 757 -- 757 --
Income from operations 6,242 2,500 10,711 3,523
Other income (expense) 33 (9) (182) 100
Earnings before
income tax 6,275 2,491 10,529 3,623
Income tax provision 2,327 966 4,177 1,706
Net income $ 3,948 $ 1,525 $ 6,352 $ 1,917
Net income per
share-basic $0.29 $0.12 $0.48 $0.15
Net income per
share-diluted $0.29 $0.11 $0.47 $0.15
Weighted average
shares
outstanding-basic 13,398 13,001 13,319 12,752
Weighted average
shares
outstanding-diluted 13,474 13,389 13,469 13,159
DATA DIMENSIONS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30, December 31,
1998 1997
Current assets:
Cash and cash equivalents $611 $4,734
Investment securities
available for sale -- 986
Accounts receivable, net 36,097 18,730
Prepaid and other
current assets 2,757 1,024
Deferred income taxes -- 247
Total current assets 39,465 25,721
Equipment and
furniture, net 6,691 4,668
Investment in
product development, net 1,185 1,635
Other assets 854 1,696
Total assets $48,195 $33,720
Line of credit
borrowings $3,500 $1,200
Accounts payable 4,720 3,916
Advance billings 276 1,431
Accrued compensation
and commissions 5,457 3,478
Other accrued liabilities 4,167 2,528
Dividends payable 434 1,000
Current portion of
capital lease obligations 575 287
Deferred income taxes 3,911 --
Current portion
of notes payable -- 1,397
Total current
liabilities 23,040 15,237
Notes payable, net of
current obligations -- 491
Capital lease obligations,
net of current portion 1,113 483
Other noncurrent obligations 81 166
Total liabilities 24,234 16,377
Stockholders' equity:
Common stock and
additional
paid-in capital 23,859 23,323
Treasury stock, at cost (3,034) (2,971)
Retained earnings
(deficit) 3,252 (3,099)
Cumulative translation
adjustment (116) 90
Total stockholders'
equity 23,961 17,343
Total liabilities
and stockholders' equity $48,195 $33,720
SOURCE: Data Dimensions, Inc. |
