Beacon Enterprise Solutions Reports Results For Fiscal Third Quarter 2012

  Beacon Enterprise Solutions Reports Results For Fiscal Third Quarter 2012  PR Newswire  LOUISVILLE, Ky., Aug. 14, 2012  LOUISVILLE, Ky., Aug. 14, 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 third quarter financial results for the period ended June 30, 2012, which are discussed below:  (Logo: http://photos.prnewswire.com/prnh/20101021/DA85933LOGO)  Financial Highlights for the Fiscal Third Quarter and Nine Months ended June 30, 2012:    oNet 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;   oFor the nine months ended, gross profit increased slightly from $4.6     million to $4.7 million in fiscal 2012 compared to fiscal 2011;   oGross 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;   oTotal 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  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)                                                 June 30,        September 30,                                                 2012            2011 ASSETS                                          (unaudited) Current assets:  Cash and cash equivalents                      $      75  $     861  Accounts receivable, net                       2,030           3,752  Inventory, net                                 -               -  Prepaid expenses and other current assets      1,535           1,345     Total current assets                        3,640           5,958 Property and equipment, net                     220             249 Goodwill                                        2,791           2,792 Other intangible assets, net                    650             2,905 Other assets                                    19              18  Total assets                                   $   7,320    $   11,922 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:  Bridge note - related party                    $     100   $     100  Note payable                                   300             -  Current portion of long-term debt              59              180  Senior secured notes payable                   3,550           2,952  Accounts payable                               2,536           3,204  Accrued expenses and other current liabilities 2,000           1,691     Total current liabilities                   8,545           8,127 Long-term debt, less current portion            -               24 Deferred tax liability                          256             212  Total liabilities                              8,801           8,363 Commitments and contingencies (Note 6) Stockholders' equity (deficiency)    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 June 30, 2012 and September 30, 2011     respectively,     (liquidation preference $100)               30              30    Series A-1 convertible preferred stock,    $1,000 stated value,     1,000 shares authorized, 311 shares issued     and outstanding     at June 30, 2012 and September 30, 2011     respectively,     (liquidation preference $507)               311             311    Series B convertible preferred stock, $1,000    stated value,     4,000 shares authorized, 700 shares issued     and outstanding     at June 30, 2012 and September 30, 2011     respectively,     (liquidation preference $1,070)             700             700    Series C-1 convertible preferred stock,    $1,500 stated value,     400 shares authorized, 350 issued and     outstanding     at June 30, 2012 and September 30, 2011,     respectively     (liquidation preference $735)               525             525    Series C-2 convertible preferred stock,    $1,500 stated value,     2,000 shares authorized, 100 issued and     outstanding     at June 30, 2012 and September 30, 2011,     respectively     (liquidation preference $207)               150             150    Series C-3 convertible preferred stock,    $1,500 stated value,     110 shares authorized, 107 issued and     outstanding     at June 30, 2012 (liquidation preference    160             -     $214)    Common stock, $0.001 par value 70,000,000    shares authorized     37,611,396 and 37,611,396 shares issued and     outstanding     at June 30, 2012 and September 30, 2011,    38              38     respectively.  Additional paid in capital                     39,024          38,342  Accumulated deficit                            (42,587)        (36,583)  Accumulated other comprehensive income         168             46    Total stockholders' equity (deficiency)      (1,481)         3,559  Total liabilities and stockholders' equity     $   7,320    $   11,922  (deficiency)  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      For the                            Three         Three         Nine         Nine                            Months Ended  Months Ended  Months       Months                                                        Ended        Ended                            June 30,      June 30,      June 30,     June 30,                            2012          2011          2012         2011 Net sales                  $          $          $         $                              3,446        4,502         12,765      13,479       Cost of goods sold   176           181           294          806       Cost of services     2,176         2,309         7,818        8,084   Total cost of sales and  2,352         2,490         8,112        8,890   services   Gross profit             1,094         2,012         4,653        4,589 Operating expenses       Salaries and         1,229         758           4,126        4,296       benefits       Selling, general     1,135         1,302         2,953        3,172       and administrative       Impairment of        2,062         -             2,062        -       intangible assets       Total operating      4,426         2,060         9,141        7,468       expenses Loss from operations       (3,332)       (48)          (4,488)      (2,879) Other expenses   Interest expense         (130)         (128)         (421)        (261)   Effect of foreign        (109)         (8)           (279)        (3)   currency transaction   Amortization of          (156)         (83)          (555)        (167)   deferred finance fees   Other expenses           (62)          (54)          (107)        (392)       Total other          (457)         (273)         (1,362)      (823)       expenses Net loss before income     (3,789)       (321)         (5,850)      (3,702) taxes Income tax expense         (14)          (75)          (44)         (164) Loss from continuing       (3,803)       (396)         (5,894)      (3,866) operations Income from discontinued   -             -             -            7,892 operations Net (loss) income          (3,803)       (396)         (5,894)      4,026 Preferred Stock:   Contractual dividends    (35)          (26)          (110)        (64) Net (loss) income          $          $          $        $    available to common        (3,838)       (422)        (6,004)      3,962 stockholders Net loss per share to common stockholders - basic and diluted   Net loss per share from  $          $          $        $      continuing operations    (0.10)       (0.01)        (0.16)      (0.10)   Net (loss) income per   share from discontinued  -             -             -            0.21   operations                            $          $          $        $                                (0.10)       (0.01)        (0.16)      0.11 Weighted average shares outstanding   basic and diluted        37,611,396    37,378,868    37,611,396   37,377,220 Other comprehensive income, net of tax   Net (loss) income       $          $          $        $                               (3,838)       (422)        (6,004)      3,962   Foreign currency         (57)          (8)           (122)        545   translation adjustment   Comprehensive (loss)     $          $          $        $      income                  (3,895)       (430)        (6,126)      4,507 Income (loss) from         $          $         $        $    operations                 (3,332)       (48)         (4,488)      (2,879)   Depreciation and         109           125           332          383   amortization EBITDA                     $          $        $        $                               (3,223)       77            (4,156)      (2,496)   Other Adjustments   Non-cash investor        $         $        $       $       relations                106          56            238         137   Non-cash share based     184           304           683          837   compensation   Non-cash impairment      2,062         -             2,062        -   expense   Non-recurring costs      250           (453)         361          (83) Adjusted EBITDA            $         $         $       $                               (621)         (16)         (812)        (1,605)  SOURCE Beacon Enterprise Solutions Group, Inc.  Website: http://www.askbeacon.com Contact: Bruce Widener, CEO, +1-502-657-3507, investors@askbeacon.com, or Porter, LeVay & Rose, Inc., Michael Porter, President, +1-212-564-4700, or Halliburton Investor Relations, Geralyn DeBusk, President, or Hala Elsherbini, COO, +1-972-458-8000  
Press spacebar to pause and continue. Press esc to stop.