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Edgewater Releases Preliminary 2010 Financial Results

Stocks in this article: EDGW

WAKEFIELD, Mass., March 2, 2011 (GLOBE NEWSWIRE) -- Edgewater Technology, Inc. (Nasdaq:EDGW) ( www.edgewater.com , "Edgewater" or the "Company"), a consulting firm that brings a synergistic blend of specialty services to its clients in the areas of business advisory, analytics, data management and technology, today announced financial results for its fourth quarter and fiscal year ended December 31, 2010, which results are preliminary and subject to a final review as it relates to software product revenue recognition.

Fourth Quarter Results

Preliminary financial results and utilization for the quarter ended December 31, 2010:

  • Total revenue increased 107% to $23.5 million compared to $11.4 million in the fourth quarter of 2009;
  • Service revenue increased 65% to $17.7 million compared to service revenue of $10.7 million in the fourth quarter of 2009;
  • Gross profit was $9.0 million, or 38.0% of total revenue, compared to $4.1 million, or 36.2% of total revenue in the fourth quarter of 2009;
  • Gross profit margin related to service revenue was 39.5% compared to 38.4% in the fourth quarter of 2009;
  • Utilization was 75.6% compared to 66.5% for the fourth quarter of 2009;
  • Net income (loss) was $675 thousand, or $0.06 per diluted share, compared to $(1.9) million, or $(0.15) per diluted share, in the fourth quarter of 2009;    
  • Adjusted EBITDA amounted to $1.5 million, or $0.12 per diluted share, compared to $(165) thousand, or $(0.01) per diluted share, in the fourth quarter of 2009; and
  • Cash flow provided by operating activities was $1.6 million compared to cash flow provided by operating activities of $57 thousand during the fourth quarter of 2009.

Full Year Results

Preliminary financial results and utilization for the fiscal year ended December 31, 2010:

  • Total revenue increased 76.8% to $88.5 million compared to $50.1 million in fiscal 2009;
  • Service revenue increased 49.3% to $68.8 million compared to $46.1 million in fiscal 2009;
  • Gross profit was $32.1 million, or 36.2% of total revenue, compared to $16.1 million, or 32.1% of total revenue in fiscal 2009;
  • Gross profit margin related to service revenue was 38.1% compared to 34.5% in fiscal 2009;
  • Utilization was 73.5% compared to 65.5% in fiscal 2009;
  • Net loss amounted to $(22.7) million, or $(1.86) per diluted share, compared to net loss of $(3.8) million, or $(0.32) per diluted share, in fiscal 2009. Our 2010 full year net loss was primarily the result of a third quarter non-cash charge of $21.9 million in connection with an increase to our previously established deferred tax valuation allowance;
  • Adjusted EBITDA amounted to $3.4 million, or $0.28 per diluted share, compared to Adjusted EBITDA of $(1.7) million, or $(0.14) per diluted share, in fiscal 2009; and
  • Cash flow provided by operating activities was $698 thousand compared to cash flow used in operating activities of $(243) thousand in fiscal 2009.

We are issuing these preliminary results because we are in the process of completing a final review of our software product revenue recognition procedures. We will issue our final financial results for the fourth quarter and full year 2010 upon the completion of this review, which will occur before the filing of our Annual Report on Form 10-K, which is due on March 31, 2011.

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