ZMAX CORPORATION Announces 607% Revenue Growth in 1998
GERMANTOWN, Md.--(BUSINESS WIRE)--ZMAX CORPORATION (NASDAQ Small Cap:ZMAX - news) today announced financial results for the year and quarter ended December 31, 1998.
For the year, revenues increased from $1.4 million in 1997 to $9.9 million in 1998-an increase of 607%. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $0.7 million, or $0.07 a share in 1998 compared to a negative EBITDA of $4.5 million or $0.82 a share in 1997.
Excluding a one-time, non-recurring, non-cash charge related to an agreement with an employee, EBITDA in 1998 was $1.3 million, or $0.12 a share, representing an improvement of $5.8 million over the comparable figure in 1997.
Net income, excluding the one-time charge, was $0.3 million, or $0.02 per share, in 1998 compared to a net loss of $14.2 million, or $2.58 per share, in 1997. Inclusive of the one-time charge, the net loss in 1998 was $0.3 million, or $0.03 per share.
For the quarter ended December 31, 1998, revenues were $3.3 million, compared to revenues of $0.9 million in the same quarter of 1997-an increase of 267%. EBITDA, excluding the one-time charge, for the fourth quarter of 1998 was $0.5 million, or $0.05 a share, compared to the negative EBITDA of $0.8 million, or $0.11 a share, for the fourth quarter of 1997.
Net income, excluding the one-time charge, was $0.3 million, or $0.02 per share, for the fourth quarter of 1998 compared to a net loss of $8.6 million or $1.28 per share, for the fourth quarter of 1997. Inclusive of the one-time charge, the 1998 fourth quarter net loss was $0.3 million, or $0.02 per share.
The Company said that the one-time, non-recurring, non-cash charge of approximately $0.5 million recorded during the fourth quarter of 1998 related to an exchange of stock made in connection with an agreement with an employee. This transaction was not dilutive and had no impact on the Company's assets, liabilities, or stockholders' equity and may result in a tax benefit for 1999.
Michael C. Higgins, president and chief executive officer of ZMAX, said that the Company began 1998 with the expectation that it would achieve strong internal growth from the core Year 2000 software and services business, as well as expand into broader areas of information technology (IT) consulting.
''We expected that we would accelerate efforts to expand into other high-growth segments of the IT market as the year progressed,'' he notes. ''We achieved our goals, generating strong internal growth, extending our IT service offerings, and completing our first acquisition, Eclipse Information Systems.''
James T. McCubbin, vice president and chief financial officer, added that, on a pro forma basis, assuming the Eclipse acquisition had occurred on January 1, 1997, pro forma revenues for 1998 were 17.9 million, a 163% increase over pro forma revenues of $6.8 million.
McCubbin says, ''We completed 1998 with a record of solid revenue growth and a strong balance sheet and have entered 1999 with a healthy client list further strengthened by the Eclipse acquisition.''
The Company has scheduled an investor conference call to review the year's results and to discuss its plans for 1999. The conference call will take place on Thursday, March 11 at 4:00 p.m. EST and can be accessed by dialing 800/290-2715.
A replay of the conference call will be available from 6:00 p.m. the same day until 6:00 p.m. Friday. To hear the replay, dial 800/633-8284, and enter reservation number 11955551.
Plans for 1999
Some of the Company's goals for 1999 include:
-- Generating an internal growth rate of 50% -- Identifying and completing one to two acquisitions that will
expand IT capabilities and regional presence, and will be
accretive to earnings -- Achieving revenues (internal growth plus acquisitions) totaling
$40 to $50 million -- Expanding the number of high-quality international partnerships -- Investing in the expansion of a number of new regional offices
that will market ZMAX's portfolio of IT services.
''ZMAX has entered 1999 with a legacy of stellar-and satisfied-customers, and with a top-notch Board of Directors led by (Melvin A.) Mac McCubbin,'' notes Higgins. ''We are extremely excited about our prospects for 1999, both in terms of broadening our existing Year 2000 services and extending our new capabilities to a variety of existing and new customers while actively seeking other acquisitions that will complement our services and extend our reach into new geographic regions.''
ZMAX Corporation is an IT consulting and re-engineering company.
Statements made in this press release that are not historical or current facts are ''forward looking statements'' made pursuant to the safe harbor provisions of federal securities laws.
Forward looking statements represent management's best judgment as to what may occur in the future, but are subject to certain risks and uncertainties that could cause actual results and events to differ materially from those presently anticipated or projected.
Such factors include adverse economic conditions, entry of new and strong competitors, inadequate capital, unexpected costs, and failure to capitalize upon access of new clientele.
Specific risks and uncertainties which may affect forward looking statements about the business and prospects include the possibility that a competitor will develop a more comprehensive or less expensive service or solution to ZMAX's services or projects and delays in the market awareness of ZMAX and its project and service solutions.
These factors and others are discussed in the ''Management Discussion and Analysis'' section of ZMAX's Annual Report on Form 10-K for the fiscal year ended December 31, 1997, to which reference should be made.
ZMAX CORPORATION is quoted on the NASDAQ Small Cap exchange under the symbol of ''ZMAX'' and on the Frankfurt and Berlin Stock Exchanges under the symbol of ''ZMX''
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Contact:
For Investor Information:
Investor Communications Co. 800/416-0811 or 800/547-0443
www.iccinfo.com
or
The Poretz Group
Karen Vahouny, 703/506-1778 x224
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