You are herePress Release / enherent Corp. Reports 2006 Fourth Quarter and Year-End Results
enherent Corp. Reports 2006 Fourth Quarter and Year-End Results
For Immediate Release
Roseland, New Jersey (March 29, 2007) - enherent Corp (OTC BB: ENHT, www.enherentCorp.com), (the "Company"), an information technology services company, today announced its results for the fourth quarter of 2006 and the year ended December 31, 2006. On April 1, 2005, enherent merged with Dynax Solutions, Inc. ("Dynax"). The Company recorded net income for the quarter ended December 31, 2006 of approximately $141,000 which represented its highest level since the merger with Dynax.
Fourth Quarter 2006 Financial Results
Revenues for the fourth quarter ended December 31, 2006 was $8.1 million, compared to revenues of $8.4 million in the quarter ended December 31, 2005. The decrease was attributable primarily to lower revenues from the sale of hardware and software products during the quarter. However, net income increased to approximately $141,000, or $.00 per diluted share, for the fourth quarter as compared to net income of approximately $46,000, or $.00 per diluted share, for the comparable quarter of 2005. The increase in net income resulted primarily from lower expenses during the quarter and the continuing improvement in operating efficiencies.
Full Year 2006 Financial Results
Revenues for the year ended December 31, 2006 were $30.1 million compared to $27.3 million in the year ended December 31, 2005. The increase was attributable primarily to the additional revenues generated from the merger with Dynax. The Company reported a net loss of approximately $298,000, or $(.01) per diluted share, for the year ended December 31, 2006 compared with a net loss of approximately $743,000, or $(.02) per diluted share, for the year ended December 31, 2005. The net loss decrease was due primarily to non-recurring expenses incurred during the year ended December 31, 2005 pertaining to the merger, partially offset by higher interest charges and stock-based compensation expenses incurred during 2006.
Pamela Fredette, Chairman, CEO and President, commenting on the financial results for 2006, said "We are pleased to have posted our highest quarterly profit since completion of the merger between enherent and Dynax in April 1, 2005. In addition, the Company continues its positive financial trend as we reached profitability for the fifth time over the last six quarterly reporting periods. As we strengthen financially, we believe our prospects for realizing shareholder value have also improved. Our focus continues to be on organic growth, exploring new lines of business and making strategic acquisitions."
About enherent
enherent Corp. (OTCBB:ENHT) is an information technology professional services firm providing its clients with (a) consultative and technology staffing resources; and (b) teams of technical consultants trained in the delivery of solutions related to systems integration, network and security, and application services. enherent also provides solutions outsourcing involving software development. enherent customers can be found in many different industry segments, from the Fortune 500 to middle-market enterprises. The company, headquartered in New Jersey, operates throughout the northeastern United States and has sales locations in Connecticut, New York City, Long Island, N.Y. For more information visit www.enherentcorp.com.
Forward-Looking and Cautionary Statements
Except for the historical information and discussions contained herein, statements contained in this release may constitute "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on certain assumptions and analyses made by the Company derived from its experience and perceptions. Actual results and developments may vary materially from those described because they are subject to a number of known and unknown risks and uncertainties. Such risks and uncertainties include, but are not limited to, future demand for the Company's services; general economic, market and business conditions; the Company’s ability to increase the amount of services rendered to existing clients and develop new clients and reduce costs of providing services; the Company’s ability to recruit and retain IT professionals; and various other factors discussed in the Company's filings with the Securities and Exchange Commission including those set forth under Item 1A of the Company's recent Form 10-K. The Company disclaims any intention or obligation to revise any forward-looking statements whether as a result of new information, future developments, or otherwise.
Contact Information:
Lori Stanley
enherent Corp.
(973) 795-1290
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| ENHERENT CORP. AND SUBSIDIARIES | |||
| CONSOLIDATED BALANCE SHEETS | |||
| AS OF DECEMBER 31, 2006 AND 2005 | |||
| December 31, | December 31, | ||
| 2006 | 2005 | ||
| ASSETS | |||
| Current assets: | |||
| Cash and cash equivalents | $ 631,656 | $ 320,574 | |
| Accounts receivable, net | 4,320,334 | 4,996,626 | |
| Prepaid and refundable taxes | - | 18,427 | |
| Prepaid expenses and other current assets | 134,854 | 254,756 | |
| Total current assets | 5,086,844 | 5,590,383 | |
| Furniture, equipment and improvements, net | 174,506 | 255,375 | |
| Goodwill | 4,334,278 | 4,334,278 | |
| Other intangible assets, net | 325,000 | 425,000 | |
| Deferred financing costs, net | 85,812 | 123,952 | |
| Other assets | 31,376 | 24,689 | |
| TOTAL | $ 10,037,816 | $ 10,753,677 | |
| LIABILITIES | |||
| Current liabilities: | |||
| Revolving credit facility | $ 2,852,628 | $ 3,465,519 | |
| Current portion of long-term debt | 758,335 | 312,521 | |
| Accounts payable and accrued expenses | 3,186,815 | 3,302,094 | |
| Deferred revenue | 171,275 | 143,898 | |
| Accrued compensation and benefits | 853,979 | 605,187 | |
| Total current liabilities | 7,823,032 | 7,829,219 | |
| Long-term liabilities: | |||
| Long-term debt, net of current portion above | 3,234,184 | 3,817,883 | |
| Noncurrent rent payable | - | 18,261 | |
| Total long-term liabilities | 3,234,184 | 3,836,144 | |
| Total liabilities | 11,057,216 | 11,665,363 | |
| Commitments and contingencies | |||
| CAPTIAL DEFICIENCY | |||
| Preferred stock, $.001 par value; authorized - 10,000,000 shares, issued-none | - | ||
| Common stock, $.001 par value, authorized - 101,000,000 shares, | |||
| issued and outstanding – 50,361,451 shares in 2006 | |||
| and 50,341,451 shares in 2005 | 50,361 | 50,341 | |
| Additional paid-in capital | 27,256,889 | 27,091,409 | |
| Unearned compensation on restricted stock | - | (24,295) | |
| Accumulated deficit | (28,326,650) | (28,029,141) | |
| Total capital deficiency | (1,019,400) | (911,686) | |
| TOTAL | $ 10,037,816 | $ 10,753,677 | |
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| ENHERENT CORP. AND SUBSIDIARIES | |||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||
| FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004 | |||
| 2006 | 2005 | 2004* | |
| Revenues: | |||
| Service revenue | 27,486,679 | $ 23,788,329 | $ 14,376,625 |
| Equipment and software revenue | 2,633,509 | 3,532,314 | 4,024,282 |
| Total revenues | 30,120,188 | 27,320,643 | 18,400,907 |
| Cost of revenues: | |||
| Cost of services | 21,084,983 | 17,966,654 | 10,819,807 |
| Cost of equipment and software | 2,026,493 | 2,724,268 | 3,330,868 |
| Cost of revenues | 23,111,476 | 20,690,922 | 14,150,675 |
| Gross profit | 7,008,712 | 6,629,721 | 4,250,232 |
| Operating expenses: | |||
| Selling, general and administrative | 6,242,670 | 5,813,944 | 4,170,406 |
| Non-recurring merger related expenses | - | 573,227 | - |
| Restructuring charges | - | - | |
| Depreciation and amortization expense | 296,955 | 326,120 | 264,778 |
| Total operating expenses | 6,539,625 | 6,713,291 | 4,435,184 |
| Operating loss | 469,087 | (83,570) | (184,952) |
| Other income (expenses): | |||
| Interest expense | (738,596) | (642,935) | (465,202) |
| Forgiveness of debt | - | - | |
| Recapitalization costs | - | - | |
| Loss before income taxes | (269,509) | (726,505) | (650,154) |
| Provision for income taxes | (28,000) | (17,000) | (25,922) |
| NET LOSS | (297,509) | $ (743,505) | $ (676,076) |
| Basic and diluted net loss per share | $(0.01) | $ (0.02) | $ (0.03) |
| Number of shares used in computing basic and diluted net loss per share | 50,361,173 | 43,175,973 | 20,905,370 |
| * Dynax Solutions, Inc. and subsidiaries (See Notes 1 and 3 to the consolidated financial statements) | |||
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