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CHYS - NEWS - 314% increase in revenue for first quarter.

Charys Holding Company Reports Record First Quarter Revenue for Second Year in a Row; 2007 First Qtr. Revenue Increases 314% over Previous Year's First Qtr.
(Business Wire 09/14 14:52:05)

Business Editors

ATLANTA--(BUSINESS WIRE)--Sept. 14, 2006--
Charys Holding Company, Inc. ("Charys") (OTCBB: CHYS.OB)
today announced operating results for its fiscal 2007 first quarter
ended July 31, 2006. Net revenue from operating platforms for the
quarter increased 314% to over $25 million as compared to $6.1 million
for the same period in fiscal 2006. Increased net revenue for the
quarter is directly attributable to the inclusion of the acquisitions
made in the third and fourth quarter of 2006 and the inclusion of the
first quarter operating results of the recently acquired subsidiaries
of Crochet and Borel Services, Inc. ("C&B"), LFC Inc. and Digital
Communications Services. These results do not include any revenues
from the recently announced acquisitions of Complete Tower Sources,
Inc. ("CTSI") and Mitchell Site Acquisition, Inc. ("MSAI"), which will
be part of the quarter ended October 31, 2006. Gross margin increased
to 30% for the first quarter of fiscal 2007 from 21% in the same
period of 2006.
Billy V. Ray, Jr., Chairman and CEO of Charys, commented that "The
Charys management team has successfully implemented the initial phase
of its business plan. Now we have moved into the second stage of
building our operational platforms and capitalizing on the organic
growth opportunities that are embedded in our customer base. In the
second quarter of 2007 we expect, that the acquisitions of CTSI and
MSAI and a full quarter of revenue from Ayin Tower Management Services
Inc. will add revenue of approximately $7 million. In addition, based
on preliminary August results, we expect to see a further increase in
our gross profit margins as a result of the continued improvement in
operational results at CCI, Inc. ("CCI")."
"Charys has achieved marked gains in key business performance
categories, and even though the first fiscal quarter is traditionally
the slowest for our disaster remediation platform, C&B provided 69% of
the operating profit, with their year-to-date revenue 50% ahead of the
same period last year. The second and third fiscal 2007 quarters are
normally the strongest revenue quarters for the disaster remediation
market segment, dependent on the severity of the hurricane season."

Selected results of operations, excluding Holding Company costs,
for the three months ended July 31, 2006 and 2005 are as follows:

-0-
*T
Operating Platform Results of Operations
Excluding Holding Company Cost
(In thousands, except per share data)

2007 2006
Net Revenue $25,045 $6,055
Gross Profit $7,409 $1,241
EBITDA $3,131 $152
Operating Profit $2,099 $23
*T

Charys reported quarterly net earnings from operations of $2.1
million or $.09 per share ($.05 per share on a fully diluted basis),
excluding Holding Company costs, as compared to $23,000 for the
quarter ended July 31, 2005.
Interpreting the results, Mr. Ray explained: "With the explosive
growth of Charys, and the complexities of the acquisition and
financing related accounting that has made this growth possible it is
helpful to look into the results of the operating platforms minus the
costs associated with financing and acquisitions activities and focus
on the subsidiary operating results (in the table above). For
instance, our results include one-time costs associated with the
multiple acquisitions and financing fees, along with amortization of
non-cash costs associated with warrants and options issued to support
the acquisition and financing activities, which obscure the operating
results of the platforms. Also, the balance sheet reflects short-term
debt associated with Seller's notes and payments from the
acquisitions, predominantly held by large Charys shareholders, which
we intend to refinance with long term debt. When reclassifying these
amounts due to Sellers, Charys demonstrates a very strong positive
working capital position of $19.9 million."
"With the continued growth in revenues and increasing operational
efficiencies along with the recently completed $35 million Revolving
Credit Facility and $20 million Subordinated Convertible Debt
financing, Charys has positioned itself to successfully execute the
next phase of its business strategy," Mr. Ray said.
Mr. Ray's insights are illustrated in the following representation
of the Charys Balance Sheet as of July 31, 2006, which are based on
the above assumptions.

-0-
*T

Operating Balance Sheet
Reclassifying Sellers Notes to Long Term Debt

As Reported at Pro Forma Pro Forma at
July 31, 2006 Adjustments July 31, 2006

Assets
Total Current Assets $ 88,484 $ - $ 88,484

Property Plant and
Equipment $ 15,898 $ - $ 15,898

Other Assets $ 181,984 $ - $ 181,984

Total Assets $ 286,366 $ - $ 286,366

Liabilities and Net Equity

Current Liabilities

Accounts Payable $ 30,873 $ - $ 30,873
Accrued Expenses $ 11,345 $ - $ 11,345
Billings in Excess of
Profit $ 1,091 $ - $ 1,091
Deferred Revenue $ 1,392 $ - $ 1,392
Short-Term Borrowings $ 22,723 $ - $ 22,723
Notes Payable- current
portion $ 68,817 $ (67,484) $ 1,333


Total Current Liabilities $ 136,241 $ (67,484) $ 68,757

Long Term Liabilities

Long Term Debt $ 2,457 $ 67,484 $ 69,941
Other Liabilities
Mandatory Redeemable
Preferred Stock $ 13,000 $ - $ 13,000

Total Liabilities $ 151,698 $ - $ 151,698


Total Shareholders Equity $ 134,668 $ - $ 134,668

Total Liabilities and
Shareholders Equity $ 286,366 $ - $ 286,366

Net working Capital $ (47,757) $ 67,484 $ 19,727

*T

Reported Net Revenue for the first fiscal quarter 2007 increased
314% to $25.1 million as compared to $6.1 million for the same period
in fiscal 2006. Charys reported operating loss of $119 thousand for
the quarter ended July 31, 2006, as compared to an operating loss of
$297 thousand for the same period in fiscal year 2006.

Selected results of operations for the three months ended July 31,
2006 and 2005 are as follows:

-0-
*T

Consolidated Financial Results of Operations
(In thousands, except per share data)

2007 2006

Net Revenue $ 25,045 $ 6,055
Gross Profit $ 7,408 $ 1,241
EBITDA $ 1,631 $ (167)
Operating Profit $ (119) $ (297)
*T

-0-
*T

Consolidated Balance Sheet

Assets July 31, 2006 July 31, 2005

Cash $ 3,184 $ 116
Account Receivable $ 74,362 $ 3,325
Cost and Profits in Excess of Billings $ 5,070 $ 2,205
Other Current Assets $ 5,868 $ 1,082

Total Current Assets $ 88,484 $ 6,728

Property Plant and Equipment $ 15,898 $ 665

Other Assets $ 183,317 $ 7,048

Total Assets $ 287,699 $ 14,441

Liabilities and Net Equity

Current Liabilities

Accounts Payable $ 30,873 $ 3,402
Accrued Expenses $ 11,345 $ 2,356
Billings in Excess of Profit $ 1,091 $ 294
Deferred Revenue $ 1,392
Short-Term Borrowings $ 22,723 $ 2,782
Notes Payable - including Amounts due
Sellers $ 68,679 $ 30


Total Current Liabilities $ 136,103 $ 8,864

Long Term Liabilities

Long Term Debt $ 2,595 $ 781
Other Liabilities $ 2,679
Mandatory Redeemable Preferred Stock $ 13,000

Total Liabilities $ 151,698 $ 12,324


Total Shareholders Equity $ 136,001 $ 2,117

Total Liabilities and Shareholders
Equity $ 287,699 $ 14,441
*T

Financing activity generated non-cash charges and premium
redemption charges of $2.694 million including a warrant amortization
cost using the Black-Scholes method of calculation of $872,600, on the
Series D Preferred, for the period July 31, 2006. Net earnings after
interest and amortization expenses for the period were negative $3,350
million or a loss of $0.15 per share, excluding non-cash and premium
redemption charges net earnings after interest and amortization
charges was a negative $657 thousand or $.02 per share.

An earnings report conference call is being scheduled, with the
date, time and call-in number to be announced next week.

About Charys Holding Company, Inc.

Headquartered in Atlanta, Georgia, Charys Holding Company, Inc.
(OTC Bulletin Board: CHYS.OB) is a publicly traded company focusing on
the Integrated Infrastructure Services Market. This market segment is
fundamentally focused on environmental remediation and on upgrading
the underpinning, infrastructure, and back office operations of the
telecommunication, cable, electric, and Internet industries serving
consumers, businesses and government entities. Charys' principal
strategy is to acquire, through mergers and acquisitions, companies
that support this underserved segment. Charys subsidiaries include:
Viasys Services, Inc., Personnel Resources of Georgia, Inc., Method
IQ, Inc., CCI Telecom, Inc., Aeon Technologies, Inc., Digital
Communication Services, Inc., Ayin Holding Company, Inc., Crochet &
Borel Services, Inc., Complete Tower Sources, Inc., and Mitchell Site
Acq. Inc.

For more information about Charys visit http://www.charys.com.

About Corporate Evolutions, Inc.

Headquartered in New York City, Corporate Evolutions, Inc. is the
ultimate concierge service in the financial industry. Corporate
Evolutions, Inc. specialize in providing a multi-faceted suite of
services custom designed to each of our client's needs in order to
increase market awareness and facilitate corporate growth.
Specializing in corporate communications, Corporate Evolutions, Inc.
works in close partnership with our clients to achieve maximum
presence in the Wall Street community by leveraging our existing
relationships with our broad based network of broker-dealers, fund
managers, and Investment funds.

For more information visit:
http://www.corporateevolutions.com/chys.php and
http://www.corporateevolutions.com/

NOTE: The names of actual companies and products mentioned herein
may be the trademarks of their respective owners.

Some statements in this release, including statements regarding
management's expectations for future financial results and access to
capital markets, are forward-looking statements. Investors are
cautioned that these forward-looking statements regarding Charys
Holding Company, Inc. and its subsidiaries and its and their
operations and financial results involve risks and uncertainties,
including without limitation risks of accessing capital markets on
terms acceptable to Charys, downturns in economic conditions generally
and in the telecommunications and data communications markets; risks
in product development and market acceptance of and demand for Charys
products; risks of failing to attract and retain key managerial and
technical personnel; risks associated with competition and competitive
pricing pressures; risks associated with investing in new businesses;
risks related to intellectual property rights and litigation; risks in
technology development and commercialization.



KEYWORD: NORTH AMERICA GEORGIA UNITED STATES
INDUSTRY KEYWORD: TECHNOLOGY ELECTRONIC DESIGN AUTOMATION INTERNET NETWORKS TELECOMMUNICATIONS PROFESSIONAL SERVICES BANKING FINANCE EARNINGS
SOURCE: Charys Holding Company, Inc.


CONTACT INFORMATION:
Charys Holding Company, Inc.
Main Phone: [phone]
Fax: [phone]
[e-mail]
or
Corporate Evolutions, Inc.
Investor Relations:
Fred Lande, 516-482-6565
Fax: [phone]
[e-mail]


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