Digital Fusion, Inc. (fka DIGF)

[yielddude]

Digital Fusion Releases Second Quarter 2007 Results

HUNTSVILLE, ALABAMA. – September 12, 2007 Digital Fusion, Inc. (DIGF.PK), an information technology (“IT”), research and engineering, and acquisition and business support services provider today announced financial results for the second quarter ended June 29, 2007.
Second Quarter 2007 Highlights
• Revenue of $11.6 million, an increase of $3 million over same quarter in the previous year
• Earnings before interest, taxes, share-based compensation, depreciation and amortization (EBITDA) of $694,000, an increase of $272,000 or 64.5% over same quarter in the previous year

Financial Comparisons
On January 1, 2007, Digital Fusion, Inc. elected to change its accounting period. The election changes the financial reporting period to a 52-53-week year. For 2007, Digital Fusion will have the following quarterly reporting periods: 1) twelve weeks ended March 23, 2007, 2) fourteen weeks ended June 29, 2007, 3) twelve weeks ended September 21, 2007, and 4) fourteen weeks ended December 28, 2007.
The financial reporting period ended June 29, 2007 is a 14-week period compared to the previous year’s 13-week period (three months) ended June 30, 2006.
For the fourteen weeks ended June 29, 2007, revenues increased to $11.6 million compared to $8.6 million for the second quarter of 2006. For the quarter, GAAP net income was $10,000 and earnings per share was $0.00, compared to GAAP net loss of $305,000 and loss per share of $0.03 for the second quarter of 2006.
For the twenty-six weeks ended June 29, 2007, revenues increased to $20.7 million compared to $15.7 million for the six months ended June 30, 2006. For the twenty-six weeks ended June 30, 2007, GAAP net loss was $90,000 and loss per share, was $0.01 compared to GAAP net loss of $469,000 and loss per share of $0.04 for the six months ended June 30, 2006.

Business Discussion
Service revenue increased approximately $2.3 million in the second quarter of 2007 compared to the same quarter in the previous year. The increase in service revenues during the second quarter of 2007 compared to the same quarter in the previous year was primarily related to the increase in the number of billable employees, the NASA Marshall Space Flight Center contract, and growth in engineering and IT services. Reimbursed costs revenue increased $822,000 in the second quarter of 2007 compared to the second quarter of 2006. The increase in reimbursed cost revenue is primarily related to an increase in sub-contract activity and purchases made for customers. Product revenue decreased approximately $64,000 in the second quarter of 2007 compared to the same quarter of the previous year. The decrease in product revenue resulted from a reduction of software re-sales to governmental organizations. Reselling software is not something the company is focused on, and product revenue is not expected to be significant in the future.

Management Comments
“The second quarter met our expectations and the trend lines are looking up in regards to revenue and EBITDA. I remain confident that the second half of the year will continue to reflect positive trends, particularly in terms of potential new customers and an expanding scope of operations with our
current customer base. We are on track in achieving our annual financial goals, and I’m very pleased that we had GAAP net income in the second quarter.”, said Lt. Gen. (Ret.) Frank Libutti, Chairman of the Board and Chief Executive Officer of Digital Fusion.

http://www.digitalfusion.com/Company/Investors/EarningsReleases/Q2-2007_Earnings_Release_Final.pdf