ZMAX Corporation Announces Quarterly Revenue Growth Of 184% and EPS Growth of 300%
GERMANTOWN, Md.--(BUSINESS WIRE)--July 22, 1999--ZMAX Corporation (NASDAQ: ZMAX - news) today reported that revenues for the quarter ended June 30, 1999, were $7.1 million, an increase of 184% over revenues of $2.5 million for the same quarter of 1998.
Net income increased from $234,000, or $0.02 per share, in the second quarter of last year to $1.0 million, or $0.08 per share, for the second quarter of 1999.
For the six months ended June 30, 1999, revenues were $12.2 million, an increase of 205% over revenues of $4.0 million for the same period last year. Net income for the first six months of 1999 was $752,000, or $0.06 per share, compared to ($448,000), or ($0.05) per share, for the first six months of 1998.
The Company's earnings before interest, taxes, depreciation and amortization (EBITDA) increased from $446,000 in the second quarter of 1998 to $1.4 million in the second quarter of this year, an increase of 214%.
''We had an outstanding quarter and we achieved record results,'' says Michael C. Higgins, president and chief executive officer. ''We've been able to capitalize on our customers' Year 2000 needs, while reinvesting in our information technology consulting business and laying a strong foundation for continued growth in the future.''
According to James McCubbin, vice president and chief financial officer, ''We had projected that the Company would be profitable in the second quarter, and both our revenue and earnings-per-share results came in right on target.''
In the first quarter of 1999, the Company announced an aggressive growth plan and specific priorities for 1999, which included 1) building a corporate infrastructure that would operate the Company from a centralized platform and easily accommodate future acquisitions, 2) reducing reliance on Year 2000 revenues as the Company transitions to an IT consulting firm, and 3) growing aggressively, achieving a 50% internal growth rate and making one to two acquisitions this year.
According to Higgins, ''We have developed our infrastructure so that we now can assimilate upcoming acquisitions in a smooth and seamless manner. For the balance of the year, we're planning to continue to make investments in opening new offices, in order to serve our current clients from a local base and to stimulate sales to new customers, as well as to continue to make strategic acquisitions. We're also planning a new corporate identity program based on a new name that will better project our strategy and market focus.''
The Company's second priority was to reduce Year 2000 revenues as a percentage of total sales. ZMAX reduced this percentage from 100% in the first half of 1998 to 50% in the first half of this year, while also increasing revenues to record levels.
''Our third goal is to grow aggressively,'' Higgins continues, ''and we're very proud of our performance in the second quarter as a solid execution of our internal growth plan. We have a strong financial position from which to make our targeted acquisitions, and we currently are reviewing several prospective candidates. Our Y2K business, while not strategic, is generating high profit margins and cash flow, which will be very useful in making future acquisitions. We also have a healthy and improving working capital position and virtually no debt, and we plan to engage an investment banker who can help us accelerate the acquisition process.''
The Company will host an investor conference call to review the quarter's financial and operational results on Thursday, July 22, at 4 p.m. EDT. The conference call can be accessed by dialing 800-621-5346; international callers can dial 212-748-2714.
A replay of the call will be available from 6 p.m. the same day until 6 p.m. the following day. The replay phone number is 800-633-8284 for U.S. callers and 619-812-6440 for international callers, using reservation number 12805238.
Headquartered in Germantown, Maryland, ZMAX Corporation is an information technology consulting firm. The Company's IT services include enterprise resource planning implementation, client server development, e-business, and Year 2000 software and services.
ZMAX CORPORATION AND SUBSIDIARIES
Consolidated Statement Of Operations
For The Three & Six Months Ended June 30, 1999 and 1998
Three Months Ended June 30, Six Months Ended June 30,
1999 1998 1999 1998
-------------------------- --------------------------
Unaudited Unaudited
Revenues $ 7,078,731 $ 2,502,779 $12,185,376 $ 4,027,103
Operating expenses:
Cost of sales 2,764,670 843,015 5,207,241 1,309,823
Research and
development 112,255 83,935 280,170 211,622
Sales and
marketing 670,346 276,037 1,217,326 541,546
General and
administrative 2,142,846 853,527 3,968,420 1,910,632
Depreciation and
amortization 414,294 304,239 821,202 625,881
----------- ----------- ----------- -----------
Income (loss) from
operations: 974,320 142,026 691,017 (572,401)
----------- ----------- ----------- -----------
Other income
(expense): 28,797 91,979 61,091 124,675
Net income
(loss) $ 1,003,117 $ 234,005 $ 752,108 $ (447,726)
============= =========== ============= ============
Basic net income
(loss) per share $ 0.08 $ 0.02 $ 0.06 $ (0.05)
============ ============ =========== ===========
Basic weighted
average shares
outstanding: 12,949,913 11,249,913 12,949,913 9,849,913
Diluted net income
(loss) per share $ 0.08 $ 0.02 $ 0.06 $ (0.05)
============= ============= =========== ===========
Diluted weighted
average shares
outstanding: 12,972,653 11,488,002 13,034,804 9,849,913
ZMAX CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
As of June 30, 1999 and December 31, 1998
June 30, December 31,
1999 1998
-------------- ---------------
Unaudited Unaudited
Cash and cash equivalents $ 4,242,489 $ 4,521,126
Accounts receivable, net 4,605,506 2,545,659
Prepaid expenses and
other current assets 308,383 127,952
------------- ---------------
Total current assets 9,156,378 7,194,737
Property and equipment, net 598,791 477,870
Intangible assets 8,886,654 9,740,217
Other assets 85,582 33,538
-------------- ---------------
Total assets $18,727,405 $17,446,362
=============== ===============
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities 2,141,643 1,631,593
Long-term capital lease obligation,
net of current portion 53,602 34,716
---------------- ---------------
Total liabilities 2,195,245 1,666,309
Total shareholders' equity 16,532,160 15,780,053
---------------- ---------------
Total liabilities &
shareholders' equity $18,727,405 $17,446,362
================ ===============
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.
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, 1998, 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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