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DynTek Announces Results for the Third Quarter and Year-to-Date Period Ended March 31, 2014


April 28, 2014 - Newport Beach, CA

DynTek, Inc. (PINKSHEETS: DYNE), a leading provider of professional technology services, today announced results for its fiscal year 2014 third quarter and nine months ended March 31, 2014.

Year-to-Date Period Ended March 31, 2014

DynTek reported revenues of $107,114,000 and gross profit of $18,490,000 for the nine months ended March 31, 2014 compared to revenues of $95,648,000 and gross profit of $16,117,000 in the prior year nine months ended March 31, 2013. The $11,466,000 or 12% revenue growth, and the $2,373,000 or 15% gross profit growth, are primarily attributable to several multi-million dollar deals with government customers in the New York district and government and commercial customers in the Newport Beach district in the second quarter of fiscal 2014.

Total operating expenses were $14,805,000 for the nine months ended March 31, 2014 compared to $12,892,000 in the prior year nine months ended March 31, 2013. The $1,913,000 or 15% increase year over year is primarily due to sales commissions on higher revenue levels and investments in additional sales representatives.

DynTek reported EBITDA of $4,092,000 for the nine months ended March 31, 2014, compared to $3,472,000 in the prior year nine months ended March 31, 2013, an increase of $620,000 or 18% year over year. Net income was $2,768,000 for the nine months ended March 31, 2014, or $1.26 per diluted share, an increase of $178,000 or $0.03 per diluted share, over net income of $2,590,000 or $1.23 per diluted share, in the nine months ended March 31, 2013.

Third Fiscal Year 2014 Quarter Ended March 31, 2014

DynTek reported revenues of $26,834,00 and gross profit of $4,901,000 for the third fiscal quarter ended March 31, 2014 compared to revenues of $27,429,000 and gross profit of $5,047,000 in the prior year third fiscal quarter ended March 31, 2013. Total operating expenses were $4,424,000 in the third fiscal quarter ended March 31, 2014 compared to $4,208,000 in the prior year third quarter ended March 31, 2013.

DynTek reported EBITDA of $725,000 for the third fiscal quarter ended March 31, 2014, compared to $919,000 in the prior year third quarter, a decrease of $194,000 or 21%. Net income was $206,000 for the third fiscal quarter of 2014, or $0.09 per diluted share, a decrease of $656,000 or $0.32 per diluted share, over net income of $862,000 or $0.41 per diluted share, in the third quarter of 2013.

"We have had strong year-to-date growth across our regions and technology practices," said Ron Ben-Yishay, DynTek's chief executive officer. "We continue to focus on the growth and expansion of our cloud offerings and managed services, which present new and innovative ways for our customers to leverage technology as a service. In addition, as new security attacks continue to burden the market, we expect continued growth in our security services, which provide our customers with new, sophisticated lines of defense from next generation security threats."

EBITDA
The Company defines EBITDA as net income from operations before interest, taxes, depreciation and amortization, and stock-based compensation. Other companies may calculate EBITDA differently. Although EBITDA is a widely used financial indicator of a company's ability to service debt, it is not a recognized measure for financial statement presentation under generally accepted accounting procedures (GAAP). EBITDA should not be considered in isolation or as superior or as an alternative to net income or to cash flows from operating activities as determined in accordance with GAAP. Nonetheless, the Company believes that EBITDA provides useful supplemental information for investors and others to measure operating performance, especially in situations where a company has significant non-cash operating expenses that are not indicative of core business operating results. EBITDA is widely used in the IT services industry to analyze comparable company performance, and management of the Company also uses EBITDA, in addition to GAAP information, as a measure of operating performance for assessing its business units.

About DynTek
DynTek is a leading provider of professional technology services to mid-market companies, such as state and local governments, educational institutions and commercial entities in the largest IT markets nationwide. From virtualization and cloud computing to unified communications and collaboration, DynTek provides professional technology solutions across the three core areas of our customers' technical environment: Infrastructure/Data Center, Microsoft Platforms, End Point Computing. DynTek's multidisciplinary approach allows our clients to turn to a single source for their most critical technology requirements. For more information, visit http://www.dyntek.com.

Follow Us Online:
Twitter: @DynTek
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Forward Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Investors are cautioned that forward-looking statements made in this press release, such as statements relating to the effect that the adoption of the revolving line of credit will have on our business and our intended use of funds borrowed under the revolving line of credit, involve known and unknown risks and uncertainties that could cause actual results to materially differ from the forward-looking statements. Such risks and uncertainties include, among others, our success in reaching target markets for services and products in a highly competitive market; our ability to maintain existing customers and attract future customers; our ability to finance and sustain operations, including our ability to comply with the terms of the revolving line of credit and the Company's other existing and future indebtedness; our ability to achieve profitability and positive cash flow from operations; our ability to maintain business relationships with IT product vendors; the size and timing of additional significant orders for our products and services and our ability to fulfill such orders; the continuing desire of state and local governments to outsource to private contractors and the availability of budgets to place orders for our products and services; our ability to retain skilled professional staff and certain key executives; the performance of our government and commercial technology services; and the continuation of general economic and business conditions that are conducive to outsourcing of IT services. We have no obligation to publicly revise any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.



DYNTEK, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(EBITDA presentation)
(Unaudited, in thousands, except share and per share data)

Quarter Nine Months Quarter Nine Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
2014 2014 2013 2013
----------- ----------- ----------- -----------

REVENUES
Product revenues $ 18,642 $ 83,315 $ 19,337 $ 70,908
Service revenues 8,192 23,799 8,093 24,740
----------- ----------- ----------- -----------
TOTAL REVENUES 26,834 107,114 27,429 95,648
----------- ----------- ----------- -----------

COST OF REVENUES
Cost of products 15,675 69,662 15,877 59,816
Cost of services 6,258 18,962 6,505 19,715
----------- ----------- ----------- -----------
TOTAL COST OF REVENUES 21,933 88,624 22,382 79,530
----------- ----------- ----------- -----------
GROSS PROFIT 4,901 18,490 5,047 16,117
----------- ----------- ----------- -----------

OPERATING EXPENSES:
Selling 3,461 11,646 3,199 9,669
General and
administrative 936 3,094 986 3,149
Depreciation and
amortization 27 65 23 74
----------- ----------- ----------- -----------
TOTAL OPERATING
EXPENSES 4,424 14,805 4,208 12,892
----------- ----------- ----------- -----------

INCOME FROM OPERATIONS 477 3,685 839 3,225

EBITDA 725 4,092 919 3,472

OTHER INCOME (EXPENSE):
Interest expense (254) (681) (225) (693)
Other income (expense),
net - - 9 9
----------- ----------- ----------- -----------
TOTAL OTHER EXPENSE (254) (681) (216) (684)
----------- ----------- ----------- -----------

INCOME BEFORE INCOME
TAXES 223 3,004 623 2,541
Income tax (provision)
benefit (17) (236) 239 48
----------- ----------- ----------- -----------

NET INCOME $ 206 $ 2,768 $ 862 $ 2,590
=========== =========== =========== ===========

NET INCOME PER SHARE:
Basic $ 0.10 $ 1.30 $ 0.41 $ 1.24
=========== =========== =========== ===========
Diluted $ 0.09 $ 1.26 $ 0.41 $ 1.23
=========== =========== =========== ===========

WEIGHTED AVERAGE NUMBER
OF SHARES:
Basic 2,127,601 2,126,490 2,094,202 2,091,836
=========== =========== =========== ===========
Diluted 2,216,261 2,188,860 2,121,708 2,112,829
=========== =========== =========== ===========


For more information, contact:
Linda Ford
DynTek, Inc.
949-271-6705
Email Contact

MarketWire

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