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DynTek Announces Results for the Second Fiscal Quarter and Year-to-Date Period Ended December 31, 2012

Company Continues Growth in Revenues and Earnings

NEWPORT BEACH, CA -- (Marketwire) -- 01/28/13 -- DynTek, Inc. (PINKSHEETS: DYNE), a leading provider of professional technology services, today announced results for the quarter and six months ended December 31, 2012.

Second Fiscal Quarter Ended December 31, 2012

DynTek reported revenues of $31,868,000 for the second quarter ended December 31, 2012, an increase of 24% from $25,669,000 in the second quarter ended December 31, 2011. Gross profit increased to $5,514,000 for the second quarter ended December 31, 2012, an increase of $1,512,000 or 38% from $4,002,000 for the prior second fiscal quarter. Total operating expenses increased to $4,230,000 in the second quarter ended December 31, 2012 compared to $3,546,000 in the prior second quarter ended December 31, 2011, primarily attributable to higher selling expense associated with higher revenues.

DynTek reported positive EBITDA of $1,399,000 for the second fiscal quarter ended December 31, 2012, an increase of $889,000 or 174% from $510,000 for the prior second fiscal quarter ended December 31, 2011. Net income is $944,000 for the second fiscal quarter of 2013, an increase of $864,000 over the $80,000 for the second fiscal quarter of 2012.

Year-to-Date Period Ended December 31, 2012

DynTek reported revenues of $68,219,000 for the six months ended December 31, 2012, an increase of 28% from $53,222,000 in the six months ended December 31, 2011. Gross profit also increased to $11,070,000 for the six months ended December 31, 2012, an increase of $1,620,000 or 17% from $9,450,000 for the prior six months ended December 31, 2011. Total operating expenses increased to $8,684,000 in the six months ended December 31, 2012 compared to $7,601,000 in the prior six months ended December 31, 2011, primarily attributable to higher selling expense associated with higher revenues.

DynTek reported positive EBITDA of $2,554,000 for the six months ended December 31, 2012, an increase of $613,000 or 32% from $1,941,000 for the prior six months ended December 31, 2011. Net income is $1,728,000 for the six months ended December 31, 2012, an increase of $1,042,000 over the prior six months ended December 31, 2011.

"DynTek is driving double and triple digit growth on both the top and bottom lines, highlighting that our investments are performing and we are controlling costs in line with growth," said Ron Ben-Yishay, DynTek's chief executive officer. "Our focus continues to be on sustaining our organic growth across all regions and technology areas through key investments in technical talent, sales and marketing and customer service."

EBITDA
The Company defines EBITDA as net income from operations before interest, taxes, depreciation and amortization, and stock-based compensation. Other companies may calculate EBITDA differently. Although EBITDA is a widely used financial indicator of a company's ability to service debt, it is not a recognized measure for financial statement presentation under generally accepted accounting procedures (GAAP). EBITDA should not be considered in isolation or as superior or as an alternative to net income or to cash flows from operating activities as determined in accordance with GAAP. Nonetheless, the Company believes that EBITDA provides useful supplemental information for investors and others to measure operating performance, especially in situations where a company has significant non-cash operating expenses that are not indicative of core business operating results. EBITDA is widely used in the IT services industry to analyze comparable company performance, and management of the Company also uses EBITDA, in addition to GAAP information, as a measure of operating performance for assessing its business units.

About DynTek
DynTek is a leading provider of professional technology services to mid-market companies, such as state and local governments, educational institutions and commercial entities in the largest IT markets nationwide. From virtualization and cloud computing to unified communications and collaboration, DynTek provides professional technology solutions across the three core areas of our customers' technical environment: Infrastructure/Data Center, Microsoft Platform, End Point Computing. DynTek's multidisciplinary approach allows our clients to turn to a single source for their most critical technology requirements. For more information, visit http://www.dyntek.com.

Follow Us Online:
Twitter: @DynTek
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DynTek on LinkedIn

Forward Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Investors are cautioned that forward-looking statements made in this press release, such as statements relating to the effect that the adoption of the revolving line of credit will have on our business and our intended use of funds borrowed under the revolving line of credit, involve known and unknown risks and uncertainties that could cause actual results to materially differ from the forward-looking statements. Such risks and uncertainties include, among others, our success in reaching target markets for services and products in a highly competitive market; our ability to maintain existing customers and attract future customers; our ability to finance and sustain operations, including our ability to comply with the terms of the revolving line of credit and the Company's other existing and future indebtedness; our ability to achieve profitability and positive cash flow from operations; our ability to maintain business relationships with IT product vendors; the size and timing of additional significant orders for our products and services and our ability to fulfill such orders; the continuing desire of state and local governments to outsource to private contractors and the availability of budgets to place orders for our products and services; our ability to retain skilled professional staff and certain key executives; the performance of our government and commercial technology services; and the continuation of general economic and business conditions that are conducive to outsourcing of IT services. We have no obligation to publicly revise any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.

                        DYNTEK, INC. AND SUBSIDIARY
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                           (EBITDA presentation)
         (Unaudited, in thousands, except share and per share data)

                                  Six Months      Quarter       Six Months
                 Quarter Ended      Ended           Ended         Ended
                  December 31,   December 31,   December 31,   December 31,
                      2012           2012           2011           2011
                 -------------  -------------  -------------  -------------
REVENUES
 Product
  revenues       $      23,773  $      51,571  $      18,736  $      37,933
 Service
  revenues               8,095         16,647          6,933         15,289
                 -------------  -------------  -------------  -------------
 TOTAL REVENUES         31,868         68,219         25,669         53,222
                 -------------  -------------  -------------  -------------

COST OF REVENUES
 Cost of
  products              19,748         43,939         16,293         32,042
 Cost of
  services               6,606         13,209          5,374         11,730
                 -------------  -------------  -------------  -------------
 TOTAL COST OF
  REVENUES              26,354         57,148         21,667         43,772
                 -------------  -------------  -------------  -------------
GROSS PROFIT             5,514         11,070          4,002          9,450
                 -------------  -------------  -------------  -------------

OPERATING
 EXPENSES
 Selling                 3,163          6,470          2,489          5,256
 General and
  administrative         1,042          2,163          1,024          2,283
 Depreciation
  and
  amortization              25             51             33             63
                 -------------  -------------  -------------  -------------
 TOTAL OPERATING
  EXPENSES               4,230          8,684          3,546          7,601
                 -------------  -------------  -------------  -------------

INCOME FROM
 OPERATIONS              1,285          2,386            456          1,849

EBITDA                   1,399          2,554            510          1,941

OTHER INCOME
 (EXPENSE)
 Interest
  expense                 (237)          (468)          (304)          (552)
                 -------------  -------------  -------------  -------------
TOTAL OTHER
 EXPENSE                  (237)          (468)          (304)          (552)
                 -------------  -------------  -------------  -------------

INCOME BEFORE
 INCOME TAX
 PROVISION               1,048          1,919            152          1,297
 Income tax
  provision               (104)          (191)           (72)          (610)
                 -------------  -------------  -------------  -------------
NET INCOME       $         944  $       1,728  $          80  $         686
                 =============  =============  =============  =============

NET INCOME PER
 SHARE:
 Basic           $        0.45  $        0.83  $        0.04  $        0.35
                 =============  =============  =============  =============
 Diluted         $        0.45  $        0.83  $        0.04  $        0.34
                 =============  =============  =============  =============

WEIGHTED AVERAGE
 NUMBER OF
 SHARES:
 Basic               2,093,188      2,090,653      1,978,802      1,971,900
                 =============  =============  =============  =============
 Diluted             2,093,188      2,090,653      2,035,766      2,023,589
                 =============  =============  =============  =============

For more information, contact:
Linda Ford
DynTek, Inc.
949-271-6705
Email Contact

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