Press Releases

MTM Technologies Achieves Fifth Consecutive Quarter of Positive EBITDA Results

• Quarterly Revenue of $69 million, up 132% and EBITDA of $2.0 million, up 146%, from Prior Year’s Quarter
• NEXL, Inc. Acquisition Completed
• Completed $25 Million Secured Debt Financing and $10 Million Preferred Equity Financing

STAMFORD, CT – February 13, 2006 – MTM Technologies, Inc. (NASDAQ: MTMC), a leading national provider of innovative IT solutions and services to Global 2000 and mid-size companies, today announced financial results for its third fiscal quarter ended December 31, 2005.

Quarterly Results:

Net revenue for the third quarter increased 132% from the comparable period in the prior year to $69.0 million, with strong growth in both product and service revenue.  The increase in net revenue from the third quarter of last year resulted primarily from the acquisition of Vector ESP, Inc. in the third fiscal quarter of last year, the acquisition of Info Systems, Inc. in the fourth fiscal quarter of last year, and the acquisition of NEXL, Inc. on December 1, 2005.

Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) for the third quarter was $2.0 million, as compared to EBITDA of $816,000 for the comparable period in the prior year.

Net loss for the third quarter of ($330,000), or ($0.04) per share, included $600,000 of amortization of intangible assets and debt discount.  For the comparable period in the prior year, the net loss of ($775,000), or ($0.13) per share, included $1.0 million of debt discount amortization.  

Year-to-Date Results:

Net revenue for the first nine months of the fiscal year increased 160% from the comparable period in the prior year to $165.6 million, with similar increases in both product and service revenue.  The increase in net revenue from the nine months of the last fiscal year resulted primarily from the Company’s acquisitions.

Adjusted earnings before interest, taxes, depreciation, and amortization (“adjusted EBITDA”) for the nine months was $4.8 million, as compared to an EBITDA loss of ($1.5) million for the comparable period in the prior year.  Reported EBITDA was adjusted to remove the effect of one-time charges of $1.2 million related primarily to the settlement of compensation arrangements with certain former executives of predecessor companies that occurred in the first fiscal quarter of this year.

Net loss for the first nine months of the fiscal year of ($4.9) million, or ($0.63) per share, included $1.7 million of amortization of intangible assets and $3.2 million of debt discount amortization and other non-cash interest expense.  For the comparable period in the prior year, net loss of ($4.1) million, or ($0.76) per share, included $1.0 million of debt discount amortization.

“Since we announced the build out of a leading national middle market IT solutions business approximately 24 months ago, we have grown our annual revenues from approximately $50 million to a current run rate of approximately $300 million.  We will continue to integrate our acquisitions and drive for further market penetration in all regions,” said Francis J. Alfano, MTM Technologies’ CEO.  “The acquisition of NEXL has substantially enhanced our presence in the key northeast market.  As with our other acquisitions, the integration of NEXL has gone very smoothly and we look forward to their contribution to our revenue and EBITDA growth.  With the $35 million of additional debt and equity financing we raised during the quarter and with our existing credit lines, our financial position is healthy, allowing us to fund both current operations and any near-term acquisitions.

“As we complete our fiscal year ending March 31, 2006, we have a strong and committed management team and the technical capabilities to continue the steady execution of our strategy to be the leading supplier of innovative IT solutions and services to medium sized customers in the United States,” continued Mr. Alfano.

MTM Technologies believes that EBITDA, which is not a recognized measure for financial presentation under United States generally accepted accounting principles (“GAAP”), provides investors and management with a useful supplemental measure of its operating performance by excluding the impact of interest, taxes, depreciation, and amortization.  EBITDA results should be evaluated in light of MTM Technologies' financial results prepared in accordance with GAAP.  A table reconciling net loss calculated in accordance with GAAP to EBITDA is included in the financial statements in this release.  EBITDA does not have any standardized definition and is therefore unlikely to be comparable to similar measures presented by other reporting companies.

About MTM Technologies, Inc.

MTM Technologies, Inc. is a leading national provider of innovative IT solutions and services to Global 2000 and mid-size companies.  Partnered with industry-leading technology providers such as Cisco, Citrix, Microsoft, HP, Sun Microsystems, EMC and Avaya, MTM Technologies’ practice areas include access infrastructure, IP telephony, enterprise storage, security and network and systems infrastructure.  Service areas include managed services, consulting, professional IT staffing and implementation.  For more information, visit http://mtm.com/.

“Safe Harbor” Statement Under The Private Securities Litigation Reform Act Of 1995

The statements contained in this release which are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks and uncertainties include the Company's entry into new commercial businesses, the risk of obtaining financing, recruiting and retaining qualified personnel, and other risks described in the Company's Securities and Exchange Commission filings.  The forward looking statements in this press release speak only as of the date hereof and the Company disclaims any obligation to provide updates, revisions or amendments to any forward looking statement to reflect changes in the Company’s expectations or future events.

For more information, contact:

Michael El-Hillow
MTM Technologies, Inc.
Phone: (203) 975-3750
Fax: (203) 975-3701
Email:   investorrelations@mtm.com