DynTek Announces Results for the Fiscal Year 2015

NEWPORT BEACH, CA--(Marketwired - Sep 28, 2015) - DynTek, Inc. (OTC PINK: DYNE), a leading provider of professional technology services, today announced results for its fourth fiscal quarter and for fiscal year ended June 30, 2015. The 2015 audited financial statements and notes thereto are available on the OTC website under our symbol, DYNE.

Fiscal Year Ended June 30, 2015

DynTek reported revenues of $159,274,000 for the year ended June 30, 2015, an increase of $13,317,000 or 9.1%, from $145,957,000 in the prior year ended June 30, 2014. Gross profit of $24,678,000 for the year ended June 30, 2015 decreased $348,000 or 1.4% as compared to $25,026,000 in the prior year ended June 30, 2014. This year over year revenue increase with less gross profit is the result of incremental revenue generated from product orders which typically carry lower margin than services.

Total operating expenses were $20,306,000 in the year ended June 30, 2015, a decrease of $92,000 or 0.5%, as compared to $20,398,000 in the prior year ended June 30, 2014. This decrease over prior year is primarily due to lower general and administrative expenses.

DynTek reported EBITDA of $5,058,000 for the year ended June 30, 2015, a decrease of $492,000 or 8.9%, as compared to $5,550,000 in the prior year. Net income was $6,457,000 for the year ended June 30, 2015, or $2.84 per diluted share, an increase of $4,679,000, 263.2% and $2.05 per diluted share, over the net income of $1,778,000 and $0.79 per diluted share in the year ended June 30, 2014. The Company recognized an income tax benefit in fiscal year 2015 due to the elimination of the previously reported uncertain tax position which allowed for the release of a deferred tax asset valuation allowance.

"Our team is proud to post another strong financial performance for fiscal year 2015," said Ron Ben-Yishay, DynTek's chief executive officer. "We are off to a strong start in fiscal year 2016, with expansion into adjacent territories such as the Connecticut, Northern California and San Diego markets. We have made strategic new hires in our sales and technical teams to help us address growing marketing demand in our core geographies and solution offerings. Our investments are strongly centered on solution development in areas such as cloud computing, managed services, security and data center optimization, which align with our client's key business drivers of increased productivity, client satisfaction and data management and protection."

Fourth Fiscal Quarter Ended June 30, 2015

DynTek reported revenues of $45,895,000 for the fourth fiscal quarter ended June 30, 2015, an increase of $7,052,000 or 18.2%, from $38,843,000 in the prior fourth quarter ended June 30, 2014. Gross profit was $6,677,000 for the fourth fiscal quarter ended June 30, 2015, an increase of $142,000 or 2.2%, from $6,535,000 in the prior year fourth quarter ended June 30, 2014. This quarter over quarter increase is attributable to several large dollar product sales recorded this quarter.

Total operating expenses were $5,763,000 in the fourth fiscal quarter ended June 30, 2015, an increase of $169,000 or 3.1%, as compared to $5,594,000 in the prior year fourth quarter ended June 30, 2014. This increase quarter over prior year quarter is primarily due to higher selling expenses associated with higher gross profit and earnings, respectively, and partially offset by lower stock compensation charges within general and administration expenses.

DynTek reported EBITDA of $1,338,000 for the fourth fiscal quarter ended June 30, 2015, a decrease of $120,000 or 8.3%, as compared to $1,458,000 in the prior year fourth quarter. Net income was $4,936,000 for the fourth fiscal quarter of 2015, or $2.16 per diluted share, an increase of $5,926,000 or 598.6% and $2.6 per diluted share, over the net loss of $990,000 and $(0.44) per diluted share in the fourth fiscal quarter of 2014, primarily due to an income tax benefit in fiscal year 2015 related to the elimination of the prior uncertain tax position and the release of deferred tax asset valuation allowance.

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 principles (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,
		2015			2015			2014				2014
REVENUES
	Product revenues	$	36,846		$	124,925		$	29,743			$	113,058
	Service revenues		9,049			34,348			9,099				32,899
	TOTAL REVENUES		45,895			159,274			38,843				145,957
COST OF REVENUES
	Cost of products		31,491			106,145			25,406				95,068
	Cost of services		7,727			28,452			6,901				25,863
	TOTAL COST OF REVENUES		39,218			134,596			32,307				120,931
GROSS PROFIT			6,677			24,678			6,535				25,026
OPERATING EXPENSES
	Selling		4,192			15,761			3,852				15,498
	General and administrative		1,532			4,404			1,708				4,801
	Depreciation and amortization		39			140			34				99
	TOTAL OPERATING EXPENSES		5,763			20,306			5,594				20,398
INCOME FROM OPERATIONS			914			4,372			941				4,627
EBITDA			1,338			5,058			1,458				5,550
OTHER INCOME (EXPENSE)
	Interest expense		(283	)		(1,205	)		(323	)			(1,005	)
TOTAL OTHER EXPENSE			(283	)		(1,205	)		(323	)			(1,005	)
INCOME BEFORE INCOME TAXES			632			3,167			618				3,622
	Income tax (benefit) provision		(4,304	)		(3,290	)		1,608				1,844
NET INCOME		$	4,936		$	6,457		$	(990	)		$	1,778
NET INCOME PER SHARE:
	Basic	$	2.27		$	2.97		$	(0.46	)		$	0.84
	Diluted	$	2.16		$	2.84		$	(0.44	)		$	0.79
WEIGHTED AVERAGE NUMBER OF SHARES:
	Basic		2,173,165			2,171,799			2,135,934				2,128,851
	Diluted		2,283,605			2,270,625			2,230,804				2,248,771