DynTek Announces Results for the Fourth Quarter and Fiscal Year 2012

NEWPORT BEACH, CA--(Marketwire - Sep 26, 2012) - 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, 2012. The 2012 audited consolidated financial statements and notes thereto are available under DYNE.PK.

Fourth Fiscal Quarter Ended June 30, 2012

DynTek reported revenues of $39,860,000 for the fourth quarter ended June 30, 2012, an increase of 5% from $37,854,000 in the fourth quarter ended June 30, 2011. Gross profit increased to $6,707,000 for the fourth quarter ended June 30, 2012, an increase of $1,046,000 or 18% from $5,661,000 for the prior fourth fiscal quarter. Total operating expenses increased to $5,696,000 in the fourth fiscal quarter ended June 30, 2012 compared to $4,662,000 in the prior fourth quarter ended June 30, 2011.

DynTek reported positive EBITDA of $1,397,000 for the fourth fiscal quarter ended June 30, 2012, an increase of $35,000 or 3% from $1,362,000 for the prior fourth fiscal quarter ended June 30, 2011. Net income is $812,000 for the fourth fiscal quarter of 2012, a decrease of $3,019,000 or 79% from $3,831,000 from the fourth fiscal quarter of 2011. The decrease in net income is primarily due to a $2,863,000 income tax benefit recorded in the fourth fiscal quarter of 2011 from a release of deferred tax asset valuation allowance.

Fiscal Year Ended June 30, 2012

DynTek reported revenues of $117,363,000 for the year ended June 30, 2012, a decrease of 5% from $123,801,000 in the year ended June 30, 2011. Gross profit slightly decreased to $20,662,000 for the year ended June 30, 2012, a decrease of $51,000 or 0.2% from $20,713,000 for the prior year ended June 30, 2011. The year over year revenue reduction was primarily attributable to a significant multi million dollar one-time deal that impacted revenue by $15,176,000 in fiscal year 2011. Total operating expenses increased to $17,207,000 in fiscal year ended June 30, 2012 compared to $16,192,000 in the prior year ended June 30, 2011.

DynTek reported positive EBITDA of $3,991,000 for the year ended June 30, 2012, a decrease of $1,058,000 or 21% from $5,049,000 for the prior year ended June 30, 2011. Net income is $2,388,000 for the fiscal year ended June 30, 2012, a decrease from the net income of $5,633,000 for the prior year ended June 30, 2011. Decrease in net income is primarily due to a $2,741,000 tax benefit recorded in the prior fiscal year from a release of deferred tax asset valuation allowance. 

"We had a strong fiscal year 2012, delivering a 37% growth in revenue from fiscal year 2010," said Ron Ben-Yishay, DynTek's chief executive officer. "When factoring in large, one-time deals realized in fiscal year 2011, our core business stream is growing at an aggressive clip. We anticipate increasing demand in fiscal 2013 as organizations continue the adoption of new Microsoft product releases, such as Windows Server 2012, System Center 2012, Lync and more, and as organizations continue to invest in technology projects around virtualization, security and the data center. In addition, our managed services offering is growing at a rapid pace and we expect that as it continues to mature, this offering will be a key catalyst to our growth in the upcoming year."

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 Platform, 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, 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 Ended June 30,				Fiscal Year Ended June 30,				Quarter Ended June 30,				Fiscal Year Ended June 30,
				2012				2012				2011				2011
REVENUES
		Product revenues		$	31,347			$	86,078			$	29,871			$	92,900
		Service revenues			8,513				31,285				7,983				30,901
		TOTAL REVENUES			39,860				117,363				37,854				123,801
COST OF REVENUES
		Cost of products			26,651				72,650				26,143				79,145
		Cost of services			6,502				24,051				6,050				23,943
		TOTAL COST OF REVENUES			33,154				96,701				32,193				103,088
GROSS PROFIT					6,707				20,662				5,661				20,713
OPERATING EXPENSES
		Selling			3,799				11,765				3,023				11,191
		General and administrative			1,866				5,317				1,608				4,870
		Depreciation and amortization			31				125				31				131
		TOTAL OPERATING EXPENSES			5,696				17,207				4,662				16,192
INCOME FROM OPERATIONS					1,011				3,455				999				4,521
EBITDA					1,397				3,991				1,362				5,049
OTHER INCOME (EXPENSE)
	Interest expense				(189	)			(939	)			(31	)			(1,615	)
	Other income (expense), net																(14	)
TOTAL OTHER EXPENSE					(189	)			(939	)			(31	)			(1,629	)
INCOME BEFORE INCOME TAXES					822				2,516				968				2,892
	Income tax benefit (provision)				(10	)			(128	)			2,863				2,741
NET INCOME				$	812			$	2,388			$	3,831			$	5,633
NET INCOME PER SHARE:
	Basic			$	0.40			$	1.17			$	1.99			$	2.92
	Diluted			$	0.40			$	1.15			$	1.93			$	2.86
WEIGHTED AVERAGE NUMBER OF SHARES:
	Basic				2,033,325				2,033,325				1,927,915				1,927,915
	Diluted				2,047,149				2,073,837				1,983,232				1,968,523