Justice Sirikah

Avatech Solutions, Inc. (OTCBB: AVSO) Swings To the Red in Q4, But With Dignity

by Justice Sirikah September 28, 2009
avso_logo.jpg  It only took a penny’s advance for the share price of Avatech Solutions, Inc. (AVSO.ob, or OTCBB: AVSO) to arrive at a fresh 10-month high on Monday, prompted by a firm balance sheet achieved under immense economic challenges in the fourth fiscal quarter. The upside of the accounts for the quarter, however, piggybacked a 38 percent revenue deceleration and swift fall of earnings over the period to June, which the software company linked to the affects of recession on the construction and manufacturing markets.

  Although a careful assessment of Avatech’s financial statements confirmed tranquillity with a cash balance of $2.7 million, and long-term liabilities of $160,000, along with repayments of $2 million of Series F Preferred Stock, the firm said its revenues continued to weaken at $7.2 million during the three months to June, 30 percent down from 11.5 million of the comparable period of 2008. For the full fiscal year, the company’s revenues slumped 29 percent to $35.4 million, versus $49.6 million booked in the prior fiscal year.

  In the just ended period, the Baltimore-based company watched helplessly as its previous fourth quarter income of $742,000 ($0.03 per fully diluted share) slipped through their hands to a net loss of $97,000 ($0.01 per fully diluted share). The disparity in the recent annual loss in comparison to previous year’s gains was even wider at $313,000 ($0.05 per share) and $3 million ($0.15 per share), respectively.

  “The building and manufacturing markets were significantly impacted by the global recession throughout fiscal 2009, which resulted in an unprecedented reduction in spending on the types of software and services we provide”, commented George Davis, president and CEO of Avatech during a conference call. He added that the company could not have managed to preserve cash and minimise loss if it wasn’t for its cost reduction exploits to even out the challenging times.

  Shares of Avatech moved up 1.56 percent to close Monday’s trading at $0.65, from Friday’s $0.64. The stock is, nevertheless, still a long way from a record 52-week peak of $0.97, struck at the beginning of October, 2008.

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