Third Quarter Results

Financial results and utilization for the quarter ended September 30, 2009:

 * Total revenue decreased 35.8%, to $11.8 million, compared to
   $18.3 million in the third quarter of 2008;
 * Service revenue decreased 36.3%, to $10.9 million, compared to
   $17.0 million in the third quarter of 2008;
 * Gross profit was $4.2 million, or 35.6% of total revenue,
   compared to $7.5 million, or 40.7% of total revenue in the third
   quarter of 2008;
 * Gross profit margin related to service revenue was 38.6%,
   compared to 43.6% in the third quarter of 2008;
 * Utilization was 65.1%, compared to 71.9% during the third
   quarter of 2008;
 * Net loss was $(249) thousand, or $(0.02) per diluted share,
   compared to a net profit of $788 thousand, or $0.06 per diluted
   share, in the third quarter of 2008;
 * Adjusted EBITDA amounted to $53 thousand, or $0.00 per diluted
   share, compared to $1.5 million, or $0.12 per diluted share,
   during the third quarter of 2008; and
 * Cash flow provided by operating activities was $735 thousand,
   compared to cash flow provided by operating activities of $2.4
   million during the third quarter of 2008.

First Nine Months of 2009

Financial results and utilization for the nine months ended September 30, 2009:

 * Total revenue decreased 32.6%, to $38.7 million, compared to
   $57.4 million during the first nine months of 2008;
 * Service revenue decreased 33.3%, to $35.4 million, compared to
   $53.1 million during the first nine months of 2008;
 * Gross profit was $12.0 million, or 30.9% of total revenue,
   compared to $22.5 million, 39.2% of total revenue during the
   first nine months of 2008;
 * Gross profit margin related to service revenue was 33.4%,
   compared to 42.0% during the first nine months of 2008;
 * Utilization was 65.1%, compared to 75.2% during the first nine
   months of 2008;
 * Net loss amounted to $(2.0) million, or $(0.16) per diluted
   share, compared to a net loss of $(19.1) million, or $(1.46) per
   diluted share, during the first nine 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 $4.1 million, or $0.31 per diluted
   share, during the first nine months of 2008; and
 * Cash flow used in operating activities was $(300) thousand,
   compared to cash flow provided by operating activities of $2.3
   million during the first nine 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

"Our third quarter results reflect a stabilization of our operations, and that we have, in comparison to our second quarter of 2009 operating results, achieved an operating baseline against which we can evaluate the impact of strategic initiatives and actions," stated Shirley Singleton, Edgewater's Chairman, President and Chief Executive Officer.

"The cost savings measures we enacted in the first half of 2009 had the desired impact upon our third quarter operating results. We improved our gross margin, as a percentage of revenue, to 35.6%, as compared to 26.0% during the second quarter of 2009. Additionally, despite the downward pressure of summer vacations, we managed to improve our third quarter billable consultant utilization rate to 65.1%, as compared to 62.6% during the second quarter of 2009," continued Ms. Singleton.

Ms. Singleton concluded, "We are happy to see the signs of stabilization in our business as we enter the fourth quarter. We believe that our current backlog supports a service revenue level consistent with our reported third quarter service revenue. However, we are mindful that our ability to convert existing backlog into revenue may be impacted by potential cost cutting measures by our customers. During the fourth quarter of 2008, in direct response to the economic downturn, some of our customers implemented mandatory shutdowns during the last two weeks of the year, which reduced our anticipated revenue. Given this possibility and in conjunction with traditional seasonality, we anticipate that service revenue in the fourth quarter of 2009 will be flat to slightly down, as compared to the third quarter of 2009."

Third Quarter Conference Call Details

Edgewater has scheduled a conference call on Wednesday, November 4, at 10:00 a.m. (ET) to discuss its third 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 888-778-9053. 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 5402126) from 12:00 p.m. (ET) Wednesday, November 4 through 11:59 p.m. (ET) Wednesday, November 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.