BEACON ENTERPRISE SOLUTIONS REPORTS RESULTS FOR FISCAL THIRD QUARTER 2012
LOUISVILLE, KY, August 14, 2012 — Beacon Enterprise Solutions Group, Inc. (OTCBB: BEAC) (www.askbeacon.com), an emerging global leader in the design, implementation and management of high performance Information Technology Systems (“ITS”) infrastructure solutions, reports fiscal third quarter financial results for the period ended June 30, 2012, which are discussed below:
Financial Highlights for the Fiscal Third Quarter and Nine Months ended June 30, 2012:
o Net sales increased 4% to $3.4 million, as compared with $3.3 million in the prior quarter. For the nine months ended, Net Sales were $12.8 million in fiscal 2012, as compared to $13.5 million in fiscal 2011;
o For the nine months ended, gross profit increased slightly from $4.6 million to $4.7 million in fiscal 2012 compared to fiscal 2011;
o Gross profit margins increased 3 basis points to 37% from 34% for the nine months ended June 30, 2012, as compared to the same period in fiscal 2011;
o Total operating expenses for the quarter decreased 4% to $2.4 million, from $2.5 million in the prior quarter, excluding the non-cash intangible impairment charge of $2.1 million recorded in the fiscal third quarter.
“While we continued to experience challenges in the third quarter, we have remained focused on service delivery and continued to develop sales and operational talent,” commented Bruce Widener, Chairman and CEO of Beacon. “Each day our employees provide a unique and valuable service to our clients, which include some of the largest corporations in the world. Our employees are working on numerous ongoing client projects; we’re continuing to pursue new business within and beyond our existing client base; and we’re committed to working through our current difficulties and returning to operational profitability.”
“Our recent decline in net sales, which began in the fiscal second quarter, occurred as we were in the process of refinancing our Senior Secured Notes and negatively impacted our ability to complete the refinancing as planned,” stated S. Scott Fitzpatrick, Vice President, Corporate Controller and Treasurer. “Principal payments related to our Senior Secured Notes began to come due in June 2012. We were not able to meet all of the required obligations. We have been engaged in ongoing discussions regarding our Senior Secured Note holders; and are in the process of negotiating an extended payment schedule related to the payments that have come and are coming due. In addition, we are in the process of obtaining additional financing to fulfill our obligations and provide future working capital. As filed on Form 8-K on June 29, 2012, we recently obtained $0.6 million in new debt financing. However, it will be essential for us to obtain additional financing to meet our obligations in the fourth quarter; and for rest of the calendar year. Needless to say, these negotiations are complex and sensitive and we will continue to update shareholders, as appropriate, as the process continues and is complete.
“During the third quarter of fiscal 2012,” continued Mr. Fitzpatrick, “we determined that a portion of our intangible assets were impaired. This determination has resulted in a $2.1 million non-cash charge to earnings in the period. These assets related to amounts recorded as part of the initial acquisitions made to form Beacon in 2007. Our balance in Other Intangible Assets has been reduced to $0.7 million as a result of the charge.”
About Beacon Enterprise Solutions Group, Inc.
Beacon Enterprise Solutions Group is an emerging global leader in the design, implementation and management of high performance Information Technology Systems (“ITS”) infrastructure solutions. Beacon offers fully integrated, turnkey IT infrastructure solutions capable of fully servicing the largest companies in the world as they increasingly outsource to reduce costs while optimizing critical IT design and infrastructure management. Beacon is headquartered in Louisville, Kentucky, with regional headquarters in Cincinnati, Ohio, Dublin, Ireland, Prague, Czech Republic and personnel located throughout the United States and Europe.
For additional information, please visit Beacon’s corporate website: www.askbeacon.com
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