Generates $1.4 Million in Operating Cash Flow

WAKEFIELD, Mass., Aug. 5, 2009 (GLOBE NEWSWIRE) -- A technology management consulting firm specializing in providing specialty information technology ("IT") services, Edgewater Technology, Inc. (Nasdaq:EDGW) (www.edgewater.com) ("Edgewater" or the "Company"), today announced financial results for its second quarter ended June 30, 2009.

 Second Quarter Results
  Financial results and utilization for the quarter ended June 30, 2009:
    * Total revenue decreased 38.6%, to $12.0 million, compared to
      $19.6 million in the second quarter of 2008;
    * Service revenue decreased 39.3%, to $11.0 million, compared
      to $18.1 million in the second quarter of 2008;
    * Gross profit was $3.1 million, or 26.0% of total revenue,
      compared to $7.6 million, or 39.0% of total revenue in the
      second quarter of 2008;
    * Gross profit margin related to service revenue was 28.2%,
      compared to 41.9% in the second quarter of 2008;
    * Utilization was 62.5%, compared to 76.6% during the second
      quarter of 2008;
    * Net loss was $(1.3) million, or $(0.11) per diluted share,
      compared to a net loss of $(20.1) million, or $(1.52) per
      diluted share, in the second quarter of 2008, which reflects
      $24.7 million in non-cash impairment charges recorded
      against the carrying value of certain goodwill and
      intangible assets during the second quarter of 2008;
    * Adjusted EBITDA amounted to $(1.5) million, or $(0.13) per
      diluted share, compared to $1.3 million, or $0.10 per
      diluted share, during the second quarter of 2008; and
    * Cash flow provided by operating activities was $1.4 million,
      compared to cash flow provided by operating activities of
      $3.6 million during the second quarter of 2008.
 
 First Six Months of 2009
  Financial results and utilization for the six months ended June 30,
  2009:
    * Total revenue decreased 31.1%, to $26.9 million, compared to
      $39.1 million during the first six months of 2008;
    * Service revenue decreased 31.9%, to $24.6 million, compared
      to $36.1 million during the first six months of 2008;
    * Gross profit was $7.8 million, or 28.9% of total revenue,
      compared to $15.1 million, or 38.5% of total revenue during
      the first six months of 2008;
    * Gross profit margin related to service revenue was 31.1%,
      compared to 41.3% during the first six months of 2008;
    * Utilization was 65.2%, compared to 76.9% during the first
      six months of 2008;
    * Net loss amounted to $(1.7) million, or $(0.14) per diluted
      share, compared to a net loss of $(19.9) million, or $(1.51)
      per diluted share, during the first six months of 2008,
      which reflects $24.7 million in non-cash impairment charges
      recorded against the carrying value of certain goodwill and
      intangible assets during the second quarter of 2008;
    * Adjusted EBITDA amounted to $(1.6) million, or $(0.13) per
      diluted share, compared to $2.5 million, or $0.19 per
      diluted share, during the first six months of 2008; and
    * Cash flow used in operating activities was $(1.0) million,
      compared to cash flow used in operating activities of $(0.1)
      million during the first six months of 2008.

Adjusted EBITDA and Adjusted EBITDA per Diluted Share are Non-GAAP financial measures. A reconciliation of these measures to their most directly comparable GAAP measures is included in the financial data accompanying this press release.

Business Trends; Outlook

"As discussed during our first quarter 2009 earnings call in early May, the unstable economic environment proved to be very challenging for the Company during the second quarter. Our results reflect the impact of the obstacles we had proactively identified and addressed in the early part of the second quarter," commented Shirley Singleton, Edgewater's Chairman, President and Chief Executive Officer.

Ms. Singleton continued, "In our first quarter of 2009 financial results release, we highlighted the fact that the Company had enacted further cost savings measures, including a reduction of our billable consultant and corporate staff, targeted at maintaining operating costs in line with near-term revenue expectations. The cost saving measures will provide a full benefit to the Company in the third quarter of 2009, as all of the costs associated with the recent staff reductions were included in the current quarter financial results."

Ms. Singleton concluded, "As we enter the third quarter of 2009, we continue our efforts to build our sales pipeline. We are monitoring our business closely and plan to strategically position the Company and its resources for future growth as the economy starts to recover. To that end, we have not found it necessary to initiate further staff reductions as the rate of the service revenue decline appears to be slowing and our business development activity has recently accelerated. While we anticipate the continued hesitation by some customers, both existing and prospective, to commit funding for planned projects during third quarter of 2009, we currently anticipate that service revenue during the third quarter of 2009 will be flat, as compared to the second quarter of 2009."

Second Quarter Conference Call Details

Edgewater has scheduled a conference call on Wednesday, August 5, at 10:00 a.m. (ET) to discuss its second quarter 2009 financial results and other matters. To listen to the call, you can participate by webcast on Edgewater's investor relations website at http://ir.edgewater.com or you can dial 800-289-0528. Investors are advised to dial into the call at least ten minutes prior to the call to register.

A replay of the call can be accessed via Edgewater's investor relations website at http://ir.edgewater.com or by dialing 888-203-1112 (domestic) or 719-457-0820 (international) (pass code 7456156) from 1:00 p.m. ET Wednesday, August 5 through 11:59 p.m. ET Tuesday, August 18.

About Edgewater Technology, Inc.

Edgewater is an innovative technology management consulting firm. We provide a unique blend of specialty IT services by leveraging our proven industry expertise in strategy, technology and enterprise performance management. Headquartered in Wakefield, MA, we typically go to market both vertically by industry and horizontally by product and technology specialty and provide our clients with a wide range of business and technology offerings. To learn more, visit www.edgewater.com or call 800-410-4014.

The Edgewater Technology logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3783

Safe Harbor for Forward-Looking and Cautionary 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, including statements made with respect to our 2009 outlook, future revenue, cost control efforts and customer spending outlook. The forward looking statements included in the Press Release relate to future events or our future financial conditions or performance.