Edgewater Technology Inc. Fourth Quarter Earnings

Edgewater Technology Inc. Fourth Quarter Earnings

Edgewater Technology, Inc. (NASDAQ: EDGW), a top consulting firm that is known for providing product-based consulting as well as traditional consulting services, announced its fourth quarter earnings along with the results for full year 2012.

Fourth Quarter Earnings Report

According to the report, the company generated $3.9 million in cash flow from operations in the fourth quarter of 2012. The cash outflow was registered at $25,000 in the corresponding quarter of 2011. The increase in cash and cash equivalent stands at $16.7 million; as compared to $10.03 million in the same quarter of 2011. The firm repurchased 126,000 shares at $3.65 per share: total worth $461,000.

The total revenue for Edgewater Technology, Inc. reported in Q4 of 2012 was $24.2 million compared to $26.4 million in the previous year’s same quarter. Service revenue was $19.5 million as compared to $20.8 million in the last quarter of 2011. The gross profit of the company slipped slightly to come in at $8.4 million, compared to the fourth quarter figure of $9.9 million in 2011. The margin in gross profit in regard to service revenue was at 36 percent compared to 41.6 percent in Q4 of 2011.

The fourth quarter net income for Edgewater was reported at $345,000 as compared to previous year’s same quarter net income at $1.9 million. The net loss of Q4 2011 also included a non-cash lease abandonment charge of $2.2 million. The adjusted EBITDA was reported $1.4 million, $0.12 per diluted share and 5.7 percent of total revenue, compared to the last quarter’s adjusted EBITDA of 1.6 million, $0.14 per diluted share and 6.2 percent of total revenue in 2011.

Full year 2012 results

In the company’s financial year 2012, the organic service revenue was increased by 5 percent to $83.1 million compared to $79.2 million a year earlier. The company, from operations, generated $8.8 million in cash flow compared to previous year’s $5.8 million. Edgewater repurchased a total 694,000 shares worth $ 2.6 million at $3.81 per share.

The company’s sale of software and intellectual property to Microsoft Corporation (NASDAQ: MSFT) was recorded at $3.25 million. Microsoft entered into an agreement with Edgewater for more training services and development projects. Total revenue dipped to $100.9 million in comparison with $102.4 million, a year earlier. The revenue generated in 2011 also included process related royalties worth $2.7 million, but no royalties recurred in 2012.

The service revenue for the company in 2012 appreciated by 4.9 percent to stand at $83.1 million as compared to the previous year’s  $79.2 million. The gross profit recorded $35.3 million and that was 35 percent of total revenue. In 2011 the gross profit was $38.7 million, 37.8 percent of total revenue. The net income in 2012 was $1.4 million in comparison with $344,000 of 2011. In 2012, the adjusted EBITDA reported $5.7 million, which was 5.6 percent of total revenue compared to adjusted EBITDA of $7.9 million in 2011, which was 7.7 percent of total revenue.

The company said that the strength of the first two quarters of 2012 was enough to make up for the quietness in the remaining two quarters of the year, which resulted into 5 percent growth in organic service revenue in 2012.