Attached files
file | filename |
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8-K - FTE Networks, Inc. | v205813_8k.htm |
EX-99.2 - FTE Networks, Inc. | v205813_ex99-2.htm |
Exhibit
99.1
|
Contact:
Bruce
Widener, CEO
502-657-3507
investors@askbeacon.com
Porter,
LeVay & Rose, Inc.
Marlon
Nurse, V.P. – Investor Relations
212-564-4700
Geralyn
DeBusk, President or Hala Elsherbini, COO
Halliburton
Investor Relations
972-458-8000
|
Beacon
Enterprise Solutions Reports Fiscal 2010 Financial Results
—
Net Sales Increase 39% for The Year —
—
Gross Profit Margins Increase 144 Basis Points to 42% For the Year
—
—
Conference Call To Be Held Today at 10:00 A.M. Eastern Time —
LOUISVILLE, KY, December 17, 2010
— Beacon Enterprise Solutions Group, Inc. (OTC BB: BEAC)
(www.askbeacon.com) an
emerging global leader in the design, implementation and management of high
performance Information Technology Systems (ITS), reports financial results for
the fourth fiscal quarter and year ended September 30, 2010. Fourth
quarter and full year results reflect the impact of the discontinued operations
of the Company’s Swiss based subsidiary.
Financial
Highlights for the Fiscal 2010 Full Year:
|
·
|
Net
sales from continuing operations increased 39% to $14.0 million compared
with $10.1 million in fiscal 2009;
|
|
·
|
Net
sales from discontinued operations totaled an additional $17 million in
fiscal 2010 and an additional $1 million in fiscal
2009;
|
|
·
|
Gross
profit for fiscal 2010 was $5.9 million, more than double the $2.8 million
reported last year;
|
|
·
|
North
American gross profit margin was 37% compared with 28% in the fiscal
2009;
|
|
·
|
Blended
North American and European gross profit margins were
42%;
|
|
·
|
Adjusted
EBITDA for the year was negative $2.1 million compared to negative $3.4
million in 2009; and
|
|
·
|
Loss
from continuing operations for the year was $10.4 million, which included
a $4.4 million non-cash charge, compared with a loss from continuing
operations of $6.8 million in fiscal
2009.
|
Bruce
Widener, Chairman and CEO of Beacon Enterprise Solutions said, “Fiscal 2010 was
a year of growth and introspection as we implemented changes to our
operations. Toward the end of the fiscal year, we made the strategic
decision to focus on our four core segments of higher-margin professional
services, eliminating our lower-margin, general contracting
business. We have also expanded our à la carte services to our
existing major national, multi-national and global clients who have not
contracted for infrastructure managed services. We have accomplished
this by reorganizing our sales and marketing on the sale of individual
infrastructure services and the global managed services offering. The
reorganization of the professional services team structure also permits Beacon
to accommodate branch level services delivery to potential global
clients.”
Mr.
Widener concluded, “As we perform against our Project Backlog, which continues
to exceed $76 million, and seek new, higher-margin business opportunities, we
remain confident that 2011 will be an important, breakthrough year for our
company. With continued strong business flow from new and existing
Fortune 500 clients, supported by our additional credit facility, we expect to
transition to profitability in fiscal 2011. We remain confident, that with our
new, strategic focus and strengthened management team, that we are on the right
track for solid performance in 2011.”
Conference
Call Today at 10:00 a.m. Eastern Time
Beacon
Enterprise solutions will host a conference call today at 10:00 a.m. Eastern
Time. Participants on the call will include Bruce Widener, Chairman
and Chief Executive Officer; Michael Grendi, Chief Financial Officer; and Jerry
Bowman, Chief Operating Officer. The teleconference can be accessed
by calling 888-495-3916 and entering conference
ID # 29088278. Participants outside of the U.S. and Canada can join
by calling 706-634-7530 and entering the same conference ID. Please dial in 15
minutes prior to the beginning of the call. The conference call will
be simultaneously webcast and available on the company's website, http://www.askbeacon.com,
under the "Investor Relations" tab. A digital recording of the conference
call will be available for replay two hours after the end of the call's
completion until 11:59 p.m. EST on Sunday, December 19, 2010 by calling
706-645-9291 and entering conference ID # 29088278.
Non-GAAP
Financial Measure:
In
addition to presenting financial results in accordance with generally accepted
accounting principles, or GAAP, this earnings release also presents adjusted
earnings before interest, taxes, depreciation and amortization, share based
payments, deemed and contractual dividends, and expenses that management
believes will not recur in future periods, including certain investor relations,
subcontractor, and acquisition-related expenses (“Adjusted EBITDA”). Adjusted
EBITDA is calculated by deducting operating and other expenses from operating
income and excluding amounts related to interest expense, income tax expense or
benefit, depreciation expense, amortization expense, non-cash share-based
payments, deemed and contractual dividends, certain investor relations expenses,
certain subcontractor expenses, acquisition-related expenses and any gain or
loss on disposal of assets. Although we will continue to expend significant
resources on investor relations in the future, management believes that certain
investor relations expenses incurred in the current fiscal year are unusually
high as we build investor awareness, and that a portion of these expenses will
not recur in future years. Certain subcontractor expenses are
impacting our current fiscal year as we open markets through Beacon certified
subcontractors who will be replaced by Beacon personnel over the coming months
as Beacon serves markets of sufficient size to support internal
operations. In addition, this earnings release also presents Beacon’s
net loss and net loss per share with adjustments to exclude a one-time, non-cash
charge relating to the change in fair value of warrants as described above
(“Adjusted Net Loss”). Beacon believes these non-GAAP financial
measures provide investors with additional insight into our ongoing operating
performance. This non-GAAP financial measure should be considered in conjunction
with, but not as a substitute for, the financial information presented in
accordance with GAAP.
Aggregate
Future Value of Backlog:
Aggregate
Future Value of Backlog reflects the projected revenue impact of existing
engagements over a one to four year period and is subject to change as work is
completed and/or the scope of various engagements changes over time.
Backlog includes the projected value of recently announced, multi-year ITS
managed services engagements as well as short-term projects for which the
Company has been engaged to provide network design, engineering, implementation
and/or project management services.
About
Beacon Enterprise Solutions Group
Beacon
Enterprise Solutions Group is an emerging global leader in the design,
implementation and management of high performance Information Technology Systems
("ITS") infrastructure solutions. Beacon offers fully integrated, turnkey
IT infrastructure solutions capable of fully servicing the largest companies in
the world as they increasingly outsource to reduce costs while optimizing
critical IT design and infrastructure management. Through an integrated team
approach, Beacon offers a broad range of products and services including IT
infrastructure design, implementation and management, application development
and voice/data/security system integration, installation and maintenance.
Beacon's client roster includes state and local agencies, educational
institutions, and over 4,000 companies ranging in size from mid-sized companies
to the Fortune 500. Beacon is headquartered in Louisville, Kentucky, with a
regional headquarters in Dublin, Ireland, Prague, Czech Republic and personnel
located throughout the United States and Europe.
For
additional information, please visit Beacon’s corporate website: www.askbeacon.com
This
press release may contain “forward looking statements.” Expressions of future
goals and similar expressions reflecting something other than historical fact
are intended to identify forward-looking statements, but are not the exclusive
means of identifying such statements. These forward-looking
statements may include, without limitation, statements about our market
opportunity, strategies, competition, expected activities and expenditures as we
pursue our business plan. Although we believe that the expectations
reflected in any forward looking statements are reasonable, we cannot predict
the effect that market conditions, customer acceptance of products, regulatory
issues, competitive factors, or other business circumstances and factors
described in our filings with the Securities and Exchange Commission may have on
our results. The company undertakes no obligation to revise or update
any forward-looking statements in order to reflect events or circumstances that
may arise after the date of this press release.
Financial
Tables Follow
Beacon
Enterprise Solutions Group, Inc. and Subsidiaries
Consolidated
Balance Sheets
(all
amounts in 000's except share data)
September 30,
|
September 30,
|
|||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 246 | $ | 227 | ||||
Accounts
receivable, net
|
4,535 | 3,069 | ||||||
Inventory,
net
|
557 | 605 | ||||||
Prepaid
expenses and other current assets
|
357 | 388 | ||||||
Current
assets of discontinued operations
|
133 | 958 | ||||||
Total
current assets
|
5,828 | 5,247 | ||||||
Property
and equipment, net
|
420 | 336 | ||||||
Goodwill
|
2,792 | 2,792 | ||||||
Other
intangible assets, net
|
3,011 | 3,342 | ||||||
Other
assets
|
20 | 117 | ||||||
Assets
of discontinued operations
|
- | 980 | ||||||
Total
assets
|
$ | 12,071 | $ | 12,814 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||
Current
liabilities:
|
||||||||
Short
term credit obligations
|
$ | - | $ | 550 | ||||
Convertible
notes payable
|
- | 298 | ||||||
Bridge
notes (net of $0 and $33 discounts)
|
100 | 167 | ||||||
Current
portion of long-term debt
|
379 | 475 | ||||||
Accounts
payable
|
2,971 | 2,074 | ||||||
Accrued
expenses
|
880 | 2,626 | ||||||
Current
liabilities of discontinued operations
|
8,558 | 525 | ||||||
Total
current liabilities
|
12,888 | 6,715 | ||||||
Non-current
Line of Credit - related party
|
630 | - | ||||||
Long-term
debt, less current portion
|
403 | 802 | ||||||
Deferred
tax liability
|
153 | 103 | ||||||
Total
liabilities
|
14,074 | 7,620 | ||||||
Stockholders'
equity (deficiency)
|
||||||||
Preferred
Stock: $0.01 par value, 5,000,000 shares authorized, 1,041 and 3,436
shares outstanding in the following classes:
|
||||||||
Series
A convertible preferred stock, $1,000 stated value, 4,500 shares
authorized, 30 and 1,984 shares issued and outstanding at June 30, 2010
and September 30, 2009, respectively, (liquidation preference
$93)
|
30 | 1,984 | ||||||
Series
A-1 convertible preferred stock, $1,000 stated value, 1,000 shares
authorized, 311 and 752 shares issued and outstanding, at September 30,
2010 and 2009, respectively (liquidation preference $432)
|
311 | 752 | ||||||
Series
B convertible preferred stock, $1,000 stated value, 4,000 shares
authorized, 700 shares issued and outstanding atSeptember 30, 2010 and
2009, respectively (liquidation preference $967)
|
700 | 700 | ||||||
Common
stock, $0.001 par value 70,000,000 shares authorized, 37,376,396 and
24,655,990 shares issued and outstanding at September 30, 2010 and 2009,
respectively.
|
37 | 25 | ||||||
Additional
paid in capital
|
37,137 | 17,977 | ||||||
Accumulated
deficit
|
(39,711 | ) | (16,254 | ) | ||||
Accumulated
other comprehensive (loss) income
|
(507 | ) | 10 | |||||
Total
stockholders' equity (deficiency)
|
(2,003 | ) | 5,194 | |||||
Total
liabilities and stockholders' equity (deficiency)
|
$ | 12,071 | $ | 12,814 |
Beacon
Enterprise Solutions Group, Inc. and Subsidiaries
Consolidated
Statements of Operations
(all
amounts in 000's except share data)
For the Three
|
For the Three
|
For the
|
For the
|
|||||||||||||
months ended
|
months ended
|
year to date
|
year to date
|
|||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
sales
|
$ | 4,309 | $ | 2,995 | $ | 13,996 | $ | 10,113 | ||||||||
Cost
of goods sold
|
306 | 1,501 | 1,558 | 4,393 | ||||||||||||
Cost
of services
|
2,798 | 971 | 6,522 | 2,905 | ||||||||||||
Gross
profit
|
1,204 | 523 | 5,916 | 2,815 | ||||||||||||
Operating
expense
|
||||||||||||||||
Salaries
and benefits
|
1,472 | 1,265 | 6,036 | 4,373 | ||||||||||||
Selling,
general and administrative
|
1,657 | 1,668 | 5,559 | 4,242 | ||||||||||||
Total
operating expense
|
3,129 | 2,933 | 11,595 | 8,615 | ||||||||||||
Loss
from operations
|
(1,925 | ) | (2,410 | ) | (5,679 | ) | (5,800 | ) | ||||||||
Other
(expenses) income
|
||||||||||||||||
Other
expense
|
154 | (243 | ) | (259 | ) | (904 | ) | |||||||||
Change
in fair value of warrants
|
- | - | (4,373 | ) | - | |||||||||||
Total
other expenses
|
154 | (243 | ) | (4,632 | ) | (904 | ) | |||||||||
Net
(loss) before income taxes
|
(1,771 | ) | (2,653 | ) | (10,311 | ) | (6,703 | ) | ||||||||
Income
tax benefit
|
(106 | ) | (58 | ) | (63 | ) | (58 | ) | ||||||||
(Loss)
from continuing operations
|
(1,877 | ) | (2,711 | ) | (10,374 | ) | (6,762 | ) | ||||||||
(Loss
from discontinued operations
|
(1,002 | ) | 492 | (8,181 | ) | 492 | ||||||||||
Net
(loss)
|
(2,878 | ) | (2,219 | ) | (18,555 | ) | (6,270 | ) | ||||||||
Series
A, A-1 and B Preferred Stock:
|
||||||||||||||||
Contractual
dividends
|
(19 | ) | (136 | ) | (175 | ) | (548 | ) | ||||||||
Deemed
dividends related to beneficial conversion feature
|
(6 | ) | (79 | ) | (99 | ) | (266 | ) | ||||||||
Net
(loss) available to common stockholders
|
$ | (2,904 | ) | $ | (2,434 | ) | $ | (18,829 | ) | $ | (7,084 | ) | ||||
Net
loss per share to common stockholders - basic and diluted
|
||||||||||||||||
Net
loss per share from continuing operations
|
(0.06 | ) | (0.14 | ) | (0.32 | ) | (0.41 | ) | ||||||||
Net
loss per share from discontinued operations
|
(0.03 | ) | 0.02 | (0.25 | ) | 0.03 | ||||||||||
$ | (0.09 | ) | $ | (0.12 | ) | $ | (0.57 | ) | $ | (0.38 | ) | |||||
Weighted
average shares outstanding basic and diluted
|
30,258,763 | 20,062,364 | 32,254,769 | 16,482,449 | ||||||||||||
Other
Comprehensive income, net of tax
|
||||||||||||||||
Net
Loss
|
$ | (2,904 | ) | $ | (2,435 | ) | $ | (18,829 | ) | $ | (7,084 | ) | ||||
Foreign
currency translations adjustment
|
20 | - | (28 | ) | - | |||||||||||
Comprehensive
loss
|
$ | (2,884 | ) | $ | (2,435 | ) | $ | (18,857 | ) | $ | (7,084 | ) | ||||
Adjusted EBITDA
|
||||||||||||||||
Loss
from operations
|
(1,925 | ) | (2,410 | ) | (5,679 | ) | (5,800 | ) | ||||||||
Investor
relations adjustments
|
142 | 610 | 589 | 1,062 | ||||||||||||
Non-recurring
costs
|
113 | - | 1,014 | - | ||||||||||||
Share
based payments
|
250 | 267 | 1,381 | 722 | ||||||||||||
Depreciation
and Amortization
|
62 | 158 | 589 | 613 | ||||||||||||
Adjusted
EBITDA
|
(1,357 | ) | (1,375 | ) | (2,106 | ) | (3,403 | ) |