DynTek Announces Results for Fiscal Year 2014

NEWPORT BEACH, CA--(Marketwired - Sep 15, 2014) - DynTek, Inc. (PINKSHEETS: DYNE) a leading provider of professional technology services, today announced results for its fourth fiscal quarter and fiscal year ended June 30, 2014. The 2014 audited financial statements and notes thereto are available on the OTC website under our symbol, DYNE.

Fiscal Year Ended June 30, 2014

DynTek reported revenues of $145,957,000 for the year ended June 30, 2014, an increase of $15,610,000, or 12% from $130,347,000 for the prior year ended June 30, 2013. Gross profit increased to $25,026,000 for the year ended June 30, 2014, an increase of $3,196,000, or 15%, from $21,830,000 for the prior year ended June 30, 2013. Total operating expenses were $20,398,000 for the year ended June 30, 2014 compared to $17,859,000 for the prior year ended June 30, 2013, primarily attributable to higher selling expenses associated with higher revenues and higher stock compensation expense.

DynTek reported EBITDA of $5,550,000 for the year ended June 30, 2014, an increase of $1,036,000, or 23% from $4,514,000 for the prior year ended June 30, 2013. Net income for the year ended June 30, 2014 was $1,778,000 or $0.79 per diluted share, a decrease of $1,599,000 or $0.81 per diluted share, over the prior year ended June 30, 2013 net income of $3,377,000 or $1.60 per diluted share, primarily related to a large non-cash deferred income tax provision related to the use of net operating losses.

Fourth Fiscal Quarter Ended June 30, 2014

DynTek reported revenues of $38,843,000 for the fourth quarter ended June 30, 2014, an increase of $4,143,000, or 12% from $34,700,000 for the prior year fourth quarter ended June 30, 2013. Gross profit for the fourth quarter ended June 30, 2014 was $6,535,000, an increase of $822,000, or 14%, from $5,713,000 for the prior year fourth quarter. Operating expenses increased by $627,000 to $5,594,000 in the fourth quarter ended June 30, 2014 compared to $4,967,000 in the prior year fourth quarter, primarily attributable to higher selling expenses associated with higher revenues and higher stock compensation expense.

DynTek reported EBITDA of $1,458,000 for the fourth quarter ended June 30, 2014, an increase of $416,000, or 40% from $1,042,000 for the prior fourth fiscal quarter ended June 30, 2013. Net loss for the fourth fiscal quarter of 2014 was $990,000, or $0.44 per diluted share, a decrease of $1,782,000 or $0.81 per diluted share, over the net income for the prior year fourth fiscal quarter of $792,000, or $0.37 per diluted share, primarily related to a large non-cash deferred income tax provision related to the use of net operating losses.

"The DynTek team continues to drive double digit top line and EBITDA growth by expanding our practice breadth in our key clients, new customer acquisitions and developing new geographical territories," said Ron Ben-Yishay, DynTek's chief executive officer. "In Fiscal Year 2015 we expect to derive additional growth through the development of solution offerings to support emerging technologies and customer demand, such as cloud computing and managed services."

EBITDA
The Company defines EBITDA as 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.

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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, 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 Ended June 30,				Fiscal Year Ended June 30,				Quarter Ended June 30,				Fiscal Year  Ended June 30,
			2014				2014				2013				2013
REVENUES
	Product revenues		$	29,743			$	113,058			$	25,689			$	96,596
	Service revenues			9,099				32,899				9,011				33,751
	TOTAL REVENUES			38,843				145,957				34,700				130,347
COST OF REVENUES
	Cost of products			25,406				95,068				21,974				81,790
	Cost of services			6,901				25,863				7,012				26,727
	TOTAL COST OF REVENUES			32,307				120,931				28,987				108,517
GROSS PROFIT				6,535				25,026				5,713				21,830
OPERATING EXPENSES
	Selling			3,852				15,498				3,577				13,247
	General and administrative			1,708				4,801				1,367				4,518
	Depreciation and amortization			34				99				22				96
	TOTAL OPERATING EXPENSES			5,594				20,398				4,967				17,861
INCOME FROM OPERATIONS				941				4,627				746				3,970
EBITDA				1,458				5,550				1,042				4,514
OTHER INCOME (EXPENSE)
	Interest expense			(323	)			(1,005	)			(203	)			(896	)
	Other income (expense)			-				-				-				6
TOTAL OTHER EXPENSE				(323	)			(1,005	)			(203	)			(890	)
INCOME BEFORE INCOME TAX				618				3,622				543				3,080
	Income tax provision (benefit)			1,608				1,844				(249	)			(297	)
NET INCOME (LOSS)			$	(990	)		$	1,778			$	792			$	3,377
NET INCOME (LOSS) PER SHARE:
	Basic		$	(0.46	)		$	0.84			$	0.38			$	1.61
	Diluted		$	(0.44	)		$	0.79			$	0.37			$	1.60
WEIGHTED AVERAGE NUMBER OF SHARES:
	Basic			2,135,934				2,128,851				2,094,202				2,092,368
	Diluted			2,230,804				2,248,771				2,121,859				2,115,339