Beacon Enterprise Solutions Reports Results for Fiscal Second Quarter 2012

  Beacon Enterprise Solutions Reports Results for Fiscal Second Quarter 2012

-- Conference Call To Be Held Today at 10:00 A.M. Eastern Time --

PR Newswire

LOUISVILLE, Ky., May 2, 2012

LOUISVILLE, Ky., May 2, 2012 /PRNewswire/ -- 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 second
quarter financial results for the period ended March 31, 2012, which are
discussed below:

(Logo: http://photos.prnewswire.com/prnh/20101021/DA85933LOGO)

Financial Highlights for the Fiscal Second Quarter and Six Months ended March
31, 2012:

  oNet sales increased 4% for the six months ended to $9.3 million from $9.0
    million in the corresponding year-ago period;
  oFor the six months ended gross profit increased 38% from $2.6 million to
    $3.6 million in fiscal 2011 compared to fiscal 2012;
  oGross profit margins increased 9 basis points to 37% from 28% in Q2
    compared with the same period in 2011;
  oFor the six-month period, gross profit margins improved to 38% as compared
    with 29% in the comparable year-ago period;
  oTotal operating expenses for the quarter decreased 13% to $2.5 million
    from $2.8 million in the year-ago second quarter;
  oEBIT (Earnings Before Interest and Taxes) increased for both the three and
    six month periods in 2012 as compared with 2011, improving 15% for the
    quarter and 59% for the six months ended.

"While we have experienced a challenging most recent quarter, I am very proud
of the leadership team we have in place," commented Bruce Widener, Chairman
and CEO of Beacon. "Our recently announced leadership and positioning changes
do not represent a radical shift in how we go to market. These changes
represent a continuation of the building process we began two years ago to
move from a tactical vendor, used on an as-needed basis, to a strategic
business partner of our Fortune 1000 clients. Beacon is now better positioned
to continue to grow its business, strengthen our client relationships and
expand our capabilities despite the challenges in the global market place."

"Today we have a stronger Beacon team and an impressive customer base that
expects nothing less than consistent and reliable execution," stated Paris
Arey, Executive Vice President Sales and Marketing. "The Beacon Solution's
portfolio will enable the infrastructure layer to become business relevant by
increasing IT implementation and accelerating their business impact. Beacon
is leveraging our 5-year history of cost-effectively managing the IT
infrastructure and proven service capabilities for organic growth. Market
dynamics are requiring CIOs to play a larger roll in business responsiveness
and decisions in which the IT infrastructure supports. I am optimistic the
second half of the year (fiscal 2012) will be better than the first half of
the year. We expect progress in all areas of our business and anticipate
year-over-year improvements. This will position Beacon for a strong 2013."

"Enterprises around the world are becoming more in tune with the fact the
physical IT infrastructure is the first step in enabling any enterprise
service change," added Michael Martin, Executive Vice President Global
Services. "The impact we've had with our existing client base is they value
Beacon's focus on simplifying the challenges associated with the delivery of
physical infrastructure. This unique offering allows predictable, consistent
standards implementation on a global scale, reducing design and deployment
time to accelerate the delivery of business solutions."

"Despite the challenging revenue environment we experienced in the second
quarter, we have positioned the Company to be profitable and cash flow
positive in the future," stated S. Scott Fitzpatrick, Vice President Corporate
Controller and Treasurer. "Our comparisons with the previous fiscal year for
the six-month periods remain favorable for revenue, margin percent and
operating expenses. We will continue to maintain our capacity to grow in
order to take advantage of the measures we have implemented over the past year
for sustained profitability as we achieve our revenue goals."

"For the prior quarter and six months, gross profit margins increased 9 basis
points to 37 and 38 respectively for each period," concluded Mr. Fitzpatrick.
"We expect our improvements in gross margin to remain consistent in the second
half of the year. We continue to address our cost structure and realized an
improvement in operating costs equating to a 13% reduction. It should also be
pointed out that our cash position remained neutral and consistent with the
year-end2012 levels."

Earnings Conference Call Today, Wednesday, May 2, 2012 @ 10:00 a.m. EDT:

Beacon's Management will hold a conference call today, Wednesday, May 2, 2012
at 10:00 a.m. EDT to discuss its fiscal second quarter 2012 financial results
for the period ending March 31, 2012. Participants on the call will include
Bruce Widener, Chairman and CEO; Paris Arey, Executive Vice President Sales
and Marketing; Michael Martin, Executive Vice President Global Services and S.
Scott Fitzpatrick, Vice President Corporate Controller and Treasurer. The
teleconference can be accessed by calling 888-495-3916  and entering
conference ID # 74625231. Participants outside of the U.S. and Canada can
join by calling 706-634-7530 and entering the same conference ID. Please dial
in 15 minutes prior to the beginning of the call. The conference call will
be simultaneously webcast and available on the company's website,
http://www.askbeacon.com, under the "Investor Relations" tab. A digital
recording of the conference call will be available for replay two hours after
the end of the call's completion until 11:59 p.m. EDT on Friday, May 4, 2012
by calling 404-537-3406 and entering conference ID # 74625231.

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

This press release may contain "forward-looking statements." Expressions of
future goals and similar expressions reflecting something other than
historical fact are intended to identify forward-looking statements, but are
not the exclusive means of identifying such statements. These forward-looking
statements may include, without limitation, statements about our market
opportunity, strategies, competition, expected activities and expenditures as
we pursue our business plan. Although we believe that the expectations
reflected in any forward looking statements are reasonable, we cannot predict
the effect that market conditions, customer acceptance of products, regulatory
issues, competitive factors, or other business circumstances and factors
described in our filings with the Securities and Exchange Commission may have
on our results. The company undertakes no obligation to revise or update any
forward-looking statements in order to reflect events or circumstances that
may arise after the date of this press release.

-- Financial Tables Follow --

Beacon Enterprise Solutions Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(all amounts in 000's except share data)
                                            March 31,         September 30,
                                            2012              2011
ASSETS                                      (unaudited)
Current assets:
 Cash and cash equivalents                  $      893  $      861
 Accounts receivable, net                   2,985             3,752
 Inventory, net                             -                 -
 Prepaid expenses and other current assets  2,048             1,345
   Total current assets                     5,926             5,958
Property and equipment, net                 268               249
Goodwill                                    2,792             2,792
Other intangible assets, net                2,776             2,905
Other assets                                40                18
 Total assets                               $    11,802    $    11,922
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Bridge note - related party                $      100  $      100
 Note payable                               300               -
 Current portion of long-term debt          94                180
 Senior secured notes payable               4,196             2,952
 Accounts payable                           2,427             3,204
 Accrued expenses and other current         2,326             1,691
 liabilities
   Total current liabilities                9,443             8,127
Long-term debt, less current portion        -                 24
Deferred tax liability                      241               212
 Total liabilities                          9,684             8,363
Commitments and contingencies (Note 6)
Stockholders' equity
 Preferred Stock: $0.01 par value,
 5,000,000 shares
   authorized, 1,598 and 1,491 shares
   outstanding in the
   following classes:
   Series A convertible preferred stock,
   $1,000 stated value,
    4,500 shares authorized, 30 shares
   issued and outstanding
    at March 31, 2012 and September 30,
   2011 respectively,
    (liquidation preference $99)           30                30
   Series A-1 convertible preferred stock,
   $1,000 stated value,
    1,000 shares authorized, 311 shares
   issued and outstanding
    at March 31, 2012 and September 30,
   2011 respectively,
    (liquidation preference $492)          311               311
   Series B convertible preferred stock,
   $1,000 stated value,
    4,000 shares authorized, 700 shares
   issued and outstanding
    at March 31, 2012 and September 30,
   2011 respectively,
    (liquidation preference $1,048)        700               700
   Series C-1 convertible preferred stock,
   $1,500 stated value,
    400 shares authorized, 350 issued and
   outstanding
    at March 31, 2012 and September 30,
   2011, respectively
    (liquidation preference $724)          525               525
   Series C-2 convertible preferred stock,
   $1,500 stated value,
    2,000 shares authorized, 100 issued
   and outstanding
    at March 31, 2012 and September 30,
   2011, respectively
    (liquidation preference $204)          150               150
   Series C-3 convertible preferred stock,
   $1,500 stated value,
    110 shares authorized, 107 issued and
   outstanding
    at March 31, 2012 (liquidation         160               -
   preference $211)
 Common stock, $0.001 par value 70,000,000
 shares authorized
   37,611,396 and 37,376,396 shares issued
   and outstanding
   at March 31, 2012 and September 30,      38                38
   2011, respectively.
 Additional paid in capital                 38,840            38,342
 Accumulated deficit                        (38,747)          (36,583)
 Accumulated other comprehensive income     111               46
   Total stockholders' equity              2,118             3,559
 Total liabilities and stockholders'        $    11,802    $    11,922
 equity





Beacon Enterprise Solutions Group, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
(all amounts in 000's except share and per share data)
                            For the     For the     For the Six  For the Six
                            Three       Three
                            Months      Months      Months       Months
                            Ended       Ended       Ended        Ended
                            March 31,   March 31,   March 31,    March 31,
                            2012        2011        2012         2011
Net sales                   $        $        $         $   
                            3,317       5,003       9,319        8,977
      Cost of goods sold    41          350         118          626
      Cost of services      2,034       3,253       5,642        5,776
  Total cost of sales and   2,075       3,603       5,760        6,402
  services
  Gross profit              1,242       1,400       3,559        2,575
                            37%         28%         38%          29%
Operating expenses
      Salaries and          1,433       1,863       2,897        3,538
      benefits
      Selling, general and  1,042       980         1,824        1,868
      administrative
      Total operating       2,475       2,843       4,721        5,406
      expenses
Loss from operations        (1,233)     (1,443)     (1,162)      (2,831)
Other expenses
  Interest expense          (159)       (77)        (291)        (133)
  Effect of foreign         57          88          (170)        (14)
  currency transaction
  Amortization of deferred  (167)       (69)        (399)        (84)
  finance fees
  Other expenses            (24)        (207)       (39)         (319)
      Total other expenses  (293)       (265)       (899)        (550)
Net loss before income      (1,526)     (1,708)     (2,061)      (3,381)
taxes
Income tax (expense)        2           (126)       (30)         (88)
benefit
Loss from continuing        (1,524)     (1,834)     (2,091)      (3,469)
operations
Income from discontinued    -           -           -            7,892
operations
Net (loss) income           (1,524)     (1,834)     (2,091)      4,423
Preferred Stock:
  Contractual dividends     (44)        (19)        (73)         (38)
Net (loss) income           $         $         $          $   
available to common         (1,568)     (1,853)    (2,164)     4,385
stockholders
Net loss per share to
common stockholders -
basic and diluted
  Net loss per share from   $        $        $         $   
  continuing operations     (0.04)     (0.05)     (0.06)      (0.09)
  Net (loss) income per
  share from discontinued   -           -           -            0.21
  operations
                            $        $        $         $    
                            (0.04)     (0.05)     (0.06)      0.12
Weighted average shares
outstanding
  basic and diluted         37,611,396  37,376,396  37,611,396   37,376,396
Other comprehensive
income, net of tax
  Net (loss) income        $         $         $          $   
                            (1,568)    (1,853)    (2,164)     4,385
  Foreign currency          99          (43)        99           545
  translation adjustment
  Comprehensive (loss)      $         $         $          $   
  income                   (1,469)    (1,896)    (2,065)     4,930
Income (loss) from          (1,233)     (1,443)     (1,162)      (2,831)
operations
  Depreciation and          111         126         223          258
  amortization
EBITDA                      (1,122)     (1,317)     (939)        (2,573)
  Other Adjustments
  Non-cash investor         67          22          132          81
  relations
  Non-cash share based      247         257         499          533
  compensation
  Non-recurring costs       38          191         111          370
Adjusted EBITDA             $       $       $        $  
                            (771)       (847)       (197)        (1,589)







SOURCE Beacon Enterprise Solutions Group, Inc.
 
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