Press Releases

MTM TECHNOLOGIES, INC. ACHIEVES REVENUE OF $49.6 MILLION FOR THE QUARTER ENDED JUNE 30, 2005

• 225% Increase in Revenue Over Comparable Quarter and 32% Increase Over Prior Quarter
•  Service Revenue of $14.6 Million, a 386% Increase Over Comparable Quarter and a 28% Increase Over Prior Quarter
• Adjusted EBITDA Performance of $1.4 Million Versus an EBITDA Loss of ($2.0) Million in the Comparable Quarter a Year Ago, and Positive EBITDA of $1.1 Million in the Prior Quarter
• Thomas Wasserman of Constellation Ventures Joins Board of Directors

STAMFORD, CT – August 15, 2005 – MTM Technologies, Inc. (“MTM Technologies”) (NASDAQ: MTMC), a leading national computer and communications technology management company providing IT networking and data center services, including secure access, voice over internet protocol (VoIP), storage, security, collaboration, and messaging solutions, today announced financial results for its first fiscal quarter ended June 30, 2005.

 
Net revenue for the first quarter increased 225% from the comparable period in the prior year to $49.6 million and increased 32% from the fourth quarter.  Service revenue increased 386% from the comparable period in the prior year to $14.6 million and increased 28% from the fourth quarter.  The increase in net revenue from the first quarter of last year resulted primarily from the acquisitions of DataVox Technologies, Inc., Network Catalyst, Inc., Vector ESP, Inc., and Info Systems, Inc., all of which occurred after the first quarter of last year.  Additionally, the first quarter results include a full quarter of Info Systems’ operations, while the fourth quarter results only included one month.


Adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”) for the first quarter was $1.4 million, as compared to an EBITDA loss of ($2.0) million for the comparable period in the prior year and positive EBITDA of $1.1 million for the fourth quarter.  EBITDA for the first quarter has been 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.


Net loss for the first quarter was ($4.5) million, or ($.61) per share, as compared to a net loss of ($2.5) million, or ($.53) per share, for the comparable period in the prior year, and a net loss of ($3.6) million, or ($.53) per share, for the fourth quarter.  The increase in net loss from the first quarter of last year resulted primarily from a non-cash interest expense of $3.2 million related to convertible notes issued by MTM Technologies in December 2004 and March 2005.  This was offset in part by an increase in net revenues and an improvement in gross profit margins. 


“Early last year we announced our plan to build the preeminent national middle market IT solutions business using a selective acquisition strategy,” said Francis J. Alfano, MTM Technologies’ CEO.  “The significant growth and substantial operational improvements that we have achieved since last year demonstrate the success we have had in executing that strategy.  We continue to focus on revenue growth, especially service revenue, gross margin improvement and cost containment, as well as the continued integration of our acquired businesses. We have implemented a consistent set of sophisticated network solutions across our 21 offices. We look forward to driving significant growth in our business both through organic momentum and the acquisition of additional businesses.”


“Since the beginning of this fiscal year, we have completed an additional $9.0 million of equity financing from Pequot Ventures and Constellation Ventures,” continued Mr. Alfano.  “To date, the combined investment in the company by Pequot Ventures and Constellation Ventures is $50 million.  In addition, we have continued to grow our working capital facilities to meet the growing needs of the business.”


MTM Technologies also announced that Thomas Wasserman, a vice president of Constellation Ventures, has joined its Board of Directors.  Mr. Wasserman replaces Clifford Friedman as the Constellation Ventures representative on the Board of Directors.


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 computer and communications technology management company providing IT networking and data center services, including secure access, VOIP, storage, security, and messaging solutions.  MTM Technologies is an authorized reseller/partner and integrator for Avaya, Cisco Systems, Citrix, Microsoft, HP, Captaris, Check Point, CommVault Systems, Dell Computer, EMC, ISS, Nokia, Nortel, Packeteer, RSA Security, and Wyse.  For more information visit our web site at 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 fourth in or implied by forward-looking statements. These risks and uncertainties include MTM Technologies' entry into new commercial businesses, the risk of obtaining financing, recruiting and retaining qualified personnel, and other risks described in  MTM Technologies' Securities and Exchange Commission filings.  The forward-looking statements in this press release speak only as of the date hereof and  MTM Technologies disclaims any obligation to provide updates, revisions or amendments to any forward-looking statement to reflect changes in  MTM Technologies’ expectations or future events.

 
For More Information Contact:   

John F. Kohler                     
MTM Technologies, Inc.                  
Phone: (203) 975-3750                                                         
Fax: (203) 975-3701
Email: Investorrelations@mtm.com