Edgewater Technology Inc. ( EDGW) Q4 2010 Earnings Call March 2, 2011 10:00 am ET Executives Shirley Singleton – Chairman, President, Chief Executive Officer Timothy Oakes – Chief Financial Officer David Clancey – Executive Vice President, Chief Strategy and Technology Officer Paul McNeice – Director of Finance Analysts Arnie Ursaner – CJS Securities Presentation Operator
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The statements made during today’s call are made only as of today’s call and the Company undertakes no obligation to update the forward-looking statements to reflect subsequent events or circumstances.With that, I will now turn the call over to Shirley. Shirley Singleton Thanks, Paul. Good morning everyone. Before we start with our comments, I wanted to—Tim, I was wondering if you could clarify for everyone on the phone why our results are preliminary. Timothy Oakes Sure, Shirley. You know, from an issuance point of view, we typically issue final results as part of our quarterly or year-end earnings calls. This time, obviously, we have designated these financial statements or the operational performance as preliminary. Edgewater has historically been a services-based company, and over the past year we have introduced new elements to our revenue streams, most notably as it relates to software product revenue and other elements that touch product software revenue, whether it be PCS, et cetera. As we go through our year and we look at our software revenue, we don’t have a long-term historical track record in terms of having similar transaction types, such as our services which do go in time and we are able to document and demonstrate and build models sort of supporting the fair value of the services that we offer. If we evaluate our software on a standalone basis, because we don’t have that track record, it takes us some time to put together a model upon which we can value and support the revenue we recognize on these transactions. So as it relates to our earnings call today, we have not quite fully completed our documentation behind our valuation model related to the fair value of the individual elements, so we have taken the position of issuing preliminary financial results which will be followed with financial results once we can complete that documentation process.
As it relates to the results today, we believe the results are supportive of the positions we have taken, but for us we want to make sure that documentation process, given the lack of a long-term history in this area, is fully completed before we come out and say that they’re final results.As it relates to the completion of this process, we would anticipate that we should be able to complete this process on or before the filing of our 10-K, which is due on March 31. We do not anticipate that this process will cause a delay in the filing of our K, and that it will be filed on time. Shirley Singleton Okay, thanks. Well, you can tell by the results we finished the year strong. We’re so pleased with our performance. We have better than 20% year-over-year organic growth in our core offerings that we put up in the fourth quarter. During Q4, we secured business from 30 new customers, and some of the customer names I think you’re going to recognize. One is Chobani Yogurt, a fast-growing Greek yogurt that’s out in the market. Google is a new customer. The Music Publishers of Canada, the Volkswagen Group, Green Mountain Coffee, GlaxoSmithKline – this is just to name a few. We’re very pleased with our progress, so let’s have Tim get into all the great details. Timothy Oakes All right. Thank you, Shirley. Again, just going back to that first foray into the preliminary results, anything we talk about with respect to our prepared remarks as it relates to financial performance are obviously based upon the currently presented preliminary results. Similar to our prior quarter calls, comments with respect to our preliminary fourth quarter performance will continue to be more focused upon the sequential quarterly change in performance as opposed to the year-over-year changes. Year-over-year changes in our financial performance are significantly influenced from a year-over-year comparison perspective by the December 2009 Fullscope acquisition. Read the rest of this transcript for free on seekingalpha.com