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Conversion Services International Announces 2004 Results
EAST HANOVER, NJ (April 13, 2005) – Conversion Services International, Inc. (OTCBB: CSII; "CSI"), a premier professional services firm exclusively focused on delivering the value in strategic consulting, business intelligence, data warehousing and data management solutions to Global 2000 organizations and other businesses, today announced results of operations for the fourth quarter and fiscal year ended December 31, 2004.
CSI reported $6.5 million in revenues for the fourth quarter of 2004 and $25.2 million in revenues for the fiscal year of 2004 compared to $3.8 million and $14.4 million, respectively, during comparable periods in 2003. The $10.8 million or 75% increase in revenues for the fiscal year ended December 31, 2004 over the 2003 level is due primarily to the acquisitions of DeLeeuw Associates, Inc. and Evoke Software Corporation in 2004. In accordance with GAAP, CSI performed its annual impairment review and recorded a non-cash charge for goodwill impairment of $23.6 million related to acquisitions made during 2004. As a result, net loss for the fourth quarter of 2004 was $28.6 million compared to a net loss of $0.2 million during the fourth quarter of 2003. Net loss for the fiscal year ended December 31, 2004 was $32.9 million compared to a net loss of $0.3 million during the comparable period of 2003.
2004 was CSI’s first year as a public entity (following its reverse merger into LCS Group, Inc. in January 2004), and as a result, CSI incurred certain expenses inherent to being a public company. Those expenses were associated with increased compliance requirements, hiring senior management and other operating costs. In addition, CSI launched its business development and marketing initiatives during the year, and incurred related expenses. CSI believes that these efforts will benefit its performance in 2005 and beyond.
Scott Newman, CSI’s President, Chief Executive Officer and Chairman, commented, “We are very pleased with the revenue growth achieved in 2004, which was driven by our business intelligence initiatives with Global 2000 companies. In the final quarter of 2004, revenues rose 71% to $6.5 million from $3.8 million in the fourth quarter of 2003, and we secured 32 new consulting engagements from Fortune 1000 companies, which positions us well for 2005.”
Mr. Newman continued, "In line with our acquisition strategy, during 2004 we completed three transactions. Also during the year, we strengthened our financial position. We replaced a $3 million credit facility with a $6 million facility that carries more favorable terms, and obtained $5 million in restricted cash via issuance of a convertible term note from an institutional investor to fund our acquisition strategy. Subsequently, we issued $1 million in subordinated secured convertible notes, $2 million in unsecured convertible notes and raised $1.75 million in a private sale of our common stock."
Mr. Newman concluded, "We remain optimistic about CSI's long-term prospects as we continue to pursue growth within data warehousing and business intelligence, both organically and through strategic acquisitions."
CSI's complete financial reports for the year ended December 31, 2004 are included in its Annual Report on Form 10-KSB filed today with the Securities and Exchange Commission.
About Conversion Services International, Inc.
A Note on Forward-Looking Statements
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