Edgewater Technology Inc. (EDGW, Financial) filed Quarterly Report for the period ended 2009-09-30.
Edgewater Technology Inc. is an e-business consulting and systems integration firm that specializes in providing middle-market companies with tailored solutions for today's Internet-centric environment. Edgewater has taken a partnership approach with its clients targeting strategic mission-critical applications. Edgewater Technology services its client base by leveraging a combination of leading-edge technologies and proven reengineering techniques provided by its network of national solutions centers strategically positioned across the United States. Edgewater Technology Inc. has a market cap of $34.8 million; its shares were traded at around $2.85 with and P/S ratio of 0.5.
Net cash flow provided during the three months ended September 30, 2008 was attributable to cash inflows of $788 thousand from current quarter operating income, $853 thousand in depreciation and amortization and $700 thousand in collections of accounts receivable balances. Additional positive inflows during the current quarter related to an increase of $345 thousand in accruals related to salaries and wages, commissions and payment to be made under the Companys 2008 performance-based bonus plans and $299 thousand in stock-based compensation. These inflows were offset by a decrease in accounts payable balances of $618 thousand.
Cash (used in) provided by operating activities was $(300) thousand and $2.3 million for the nine months ended September 30, 2009 and 2008, respectively. Net cash used in operating activities during the nine months ended September 30, 2009 was the result of outflows attributable to the reported year-to-date operating loss of $2.0 million, an increase in the Companys deferred tax assets of $1.4 million in connection with the reported year-to-date net loss, a $926 thousand increase in prepaid expenses in connection with the annual renewal of the Companys current year insurance premiums and the pre-payment of 2009 estimated income taxes, $1.3 million in net payments of salaries and wage-related expenses including bonus payments under the Companys 2008 performance-based bonus and commission plans and a $867 thousand decrease in accounts payable and accrued expenses. These outflows were largely offset by positive inflows of cash including a $2.9 million decrease in accounts receivable, $2.1 million in depreciation and amortization expense and $907 thousand in stock-based compensation.
Net cash provided by operating activities during the nine months ended September 30, 2008 was the result of inflows of $1.1 million in connection with our 2008 year-to-date results of operations, which is reported as our 2008 net loss of $(19.1) million, net of the $24.7 million second quarter impairment charge and the $(4.5) million increase in our deferred tax assets in connection with our 2008 impairment charge and related net loss. Additionally, we had positive cash flows of $2.9 million in depreciation and amortization expense, of which a significant portion of the amortization expense related to the 2007 Acquisitions, and $1.2 million in stock-based compensation. These inflows were offset by a decrease of $1.0 million in accounts payable balances and $1.8 million in net payments of salaries and wage-related expenses including bonus payments under the Companys 2007 performance-based bonus plans and commissions.
Net cash (used in) provided by investing activities was $(1.6) million and $848 thousand during the nine months ended September 30, 2009 and 2008, respectively. Cash used in investing activities for the nine months ended September 30, 2009 was primarily the result of $1.6 million in net purchases of marketable securities. Cash provided by investing activities for the nine months ended September 30, 2008 was attributable to $2.2 million in net redemptions of marketable securities, which were offset by the $1.0 million contingent earnout consideration paid in connection with the Alecian acquisition and capital expenditures of $277 thousand.
Our combined cash and cash equivalents increased (decreased) by $925 thousand and $(1.7) million during the three-month periods ended September 30, 2009 and 2008, respectively. Our combined cash and cash equivalents (decreased) increased by $(2.4) million and $365 thousand during the nine-month periods ended September 30, 2009 and 2008, respectively. These net changes to the Companys reported cash and cash equivalent balances are reflective of the sources and uses of cash described above. The aggregate of cash, cash equivalents and marketable securities was $23.6 million and $20.8 million as of September 30, 2009 and 2008, respectively.
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Edgewater Technology Inc. is an e-business consulting and systems integration firm that specializes in providing middle-market companies with tailored solutions for today's Internet-centric environment. Edgewater has taken a partnership approach with its clients targeting strategic mission-critical applications. Edgewater Technology services its client base by leveraging a combination of leading-edge technologies and proven reengineering techniques provided by its network of national solutions centers strategically positioned across the United States. Edgewater Technology Inc. has a market cap of $34.8 million; its shares were traded at around $2.85 with and P/S ratio of 0.5.
Highlight of Business Operations:
Billable Consultants; Staff Data. Our billable consultant and total employee headcount as of September 30, 2009 was 185 and 244, respectively, compared to 261 and 326, respectively, at the end of the third quarter of 2008. This reflects in part the effect of carefully considered workforce reductions and, to a lesser extent, natural attrition. During 2009, the Company enacted cost savings measures consisting of billable workforce reductions and selling, general and administrative cost reductions. These cost saving measures resulted in severance obligations totaling $387 thousand, of which $360 thousand has been paid during the second and third quarters, with the remaining $27 thousand scheduled to be paid during the fourth quarter of 2009. Severance costs recorded to cost of revenue and selling, general and administrative expenses totaled $375 thousand and $12 thousand, respectively. These cost savings measures should contribute towards annualized savings of approximately $3.9 million, from which the Company began to recognize a benefit during the third quarter of 2009.Net cash flow provided during the three months ended September 30, 2008 was attributable to cash inflows of $788 thousand from current quarter operating income, $853 thousand in depreciation and amortization and $700 thousand in collections of accounts receivable balances. Additional positive inflows during the current quarter related to an increase of $345 thousand in accruals related to salaries and wages, commissions and payment to be made under the Companys 2008 performance-based bonus plans and $299 thousand in stock-based compensation. These inflows were offset by a decrease in accounts payable balances of $618 thousand.
Cash (used in) provided by operating activities was $(300) thousand and $2.3 million for the nine months ended September 30, 2009 and 2008, respectively. Net cash used in operating activities during the nine months ended September 30, 2009 was the result of outflows attributable to the reported year-to-date operating loss of $2.0 million, an increase in the Companys deferred tax assets of $1.4 million in connection with the reported year-to-date net loss, a $926 thousand increase in prepaid expenses in connection with the annual renewal of the Companys current year insurance premiums and the pre-payment of 2009 estimated income taxes, $1.3 million in net payments of salaries and wage-related expenses including bonus payments under the Companys 2008 performance-based bonus and commission plans and a $867 thousand decrease in accounts payable and accrued expenses. These outflows were largely offset by positive inflows of cash including a $2.9 million decrease in accounts receivable, $2.1 million in depreciation and amortization expense and $907 thousand in stock-based compensation.
Net cash provided by operating activities during the nine months ended September 30, 2008 was the result of inflows of $1.1 million in connection with our 2008 year-to-date results of operations, which is reported as our 2008 net loss of $(19.1) million, net of the $24.7 million second quarter impairment charge and the $(4.5) million increase in our deferred tax assets in connection with our 2008 impairment charge and related net loss. Additionally, we had positive cash flows of $2.9 million in depreciation and amortization expense, of which a significant portion of the amortization expense related to the 2007 Acquisitions, and $1.2 million in stock-based compensation. These inflows were offset by a decrease of $1.0 million in accounts payable balances and $1.8 million in net payments of salaries and wage-related expenses including bonus payments under the Companys 2007 performance-based bonus plans and commissions.
Net cash (used in) provided by investing activities was $(1.6) million and $848 thousand during the nine months ended September 30, 2009 and 2008, respectively. Cash used in investing activities for the nine months ended September 30, 2009 was primarily the result of $1.6 million in net purchases of marketable securities. Cash provided by investing activities for the nine months ended September 30, 2008 was attributable to $2.2 million in net redemptions of marketable securities, which were offset by the $1.0 million contingent earnout consideration paid in connection with the Alecian acquisition and capital expenditures of $277 thousand.
Our combined cash and cash equivalents increased (decreased) by $925 thousand and $(1.7) million during the three-month periods ended September 30, 2009 and 2008, respectively. Our combined cash and cash equivalents (decreased) increased by $(2.4) million and $365 thousand during the nine-month periods ended September 30, 2009 and 2008, respectively. These net changes to the Companys reported cash and cash equivalent balances are reflective of the sources and uses of cash described above. The aggregate of cash, cash equivalents and marketable securities was $23.6 million and $20.8 million as of September 30, 2009 and 2008, respectively.
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